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-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-11239

HCA Healthcare, Inc.

(Exact name of registrant as specified in its charter)

Delaware | 27-3865930
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
One Park Plaza Nashville, Tennessee | 37203
(Address of principal executive offices) | (Zip Code)

(615) 344-9551

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Voting common stock, $.01 par value | HCA | New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ | Accelerated filer | ☐
Non-accelerated filer | ☐ | Smaller reporting company | ☐
Emerging growth company | ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class of Common Stock | Outstanding at October 28, 2024
Voting common stock, $.01 par value | 253,297,100 shares

Form 10-Q

September 30, 2024

|  | Page of Form 10-Q
Part I. | Financial Information |
Item 1. | Financial Statements (Unaudited): |
| Condensed Consolidated Income Statements — for the quarters and nine months ended September 30, 2024 and 2023 | 3
| Condensed Consolidated Comprehensive Income Statements — for the quarters and nine months ended September 30, 2024 and 2023 | 4
| Condensed Consolidated Balance Sheets — September 30, 2024 and December 31, 2023 | 5
| Condensed Consolidated Statements of Stockholders’ Equity (Deficit) — for the quarters and nine months ended September 30, 2024 and 2023 | 6
| Condensed Consolidated Statements of Cash Flows — for the nine months ended September 30, 2024 and 2023 | 7
| Notes to Condensed Consolidated Financial Statements | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 29
Item 4. | Controls and Procedures | 29
Part II. | Other Information |
Item 1. | Legal Proceedings | 29
Item 1A. | Risk Factors | 29
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 29
Item 5. | Other Information | 30
Item 6. | Exhibits | 30
Signatures | 31

2

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Unaudited

(Dollars in millions, except per share amounts)

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Revenues |  | $ | 17,487 |  |  | $ | 16,213 |  |  | $ | 52,318 |  |  | $ | 47,665 |
Salaries and benefits |  |  | 7,861 |  |  |  | 7,556 |  |  |  | 23,253 |  |  |  | 21,917 |
Supplies |  |  | 2,657 |  |  |  | 2,417 |  |  |  | 7,962 |  |  |  | 7,318 |
Other operating expenses |  |  | 3,717 |  |  |  | 3,379 |  |  |  | 10,946 |  |  |  | 9,316 |
Equity in (earnings) losses of affiliates |  |  | (15 | ) |  |  | (19 | ) |  |  | (13 | ) |  |  | 6 |
Depreciation and amortization |  |  | 842 |  |  |  | 769 |  |  |  | 2,456 |  |  |  | 2,288 |
Interest expense |  |  | 515 |  |  |  | 483 |  |  |  | 1,533 |  |  |  | 1,447 |
Losses (gains) on sales of facilities |  |  | 4 |  |  |  | (2 | ) |  |  | (209 | ) |  |  | 12 |
|  |  | 15,581 |  |  |  | 14,583 |  |  |  | 45,928 |  |  |  | 42,304 |
Income before income taxes |  |  | 1,906 |  |  |  | 1,630 |  |  |  | 6,390 |  |  |  | 5,361 |
Provision for income taxes |  |  | 424 |  |  |  | 355 |  |  |  | 1,419 |  |  |  | 1,131 |
Net income |  |  | 1,482 |  |  |  | 1,275 |  |  |  | 4,971 |  |  |  | 4,230 |
Net income attributable to noncontrolling interests |  |  | 212 |  |  |  | 196 |  |  |  | 649 |  |  |  | 595 |
Net income attributable to HCA Healthcare, Inc. |  | $ | 1,270 |  |  | $ | 1,079 |  |  | $ | 4,322 |  |  | $ | 3,635 |
Per share data: |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings |  | $ | 4.94 |  |  | $ | 3.98 |  |  | $ | 16.57 |  |  | $ | 13.26 |
Diluted earnings |  | $ | 4.88 |  |  | $ | 3.91 |  |  | $ | 16.37 |  |  | $ | 13.07 |
Shares used in earnings per share calculations (in millions): |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 256.763 |  |  |  | 271.173 |  |  |  | 260.770 |  |  |  | 274.171 |
Diluted |  |  | 259.917 |  |  |  | 275.424 |  |  |  | 263.987 |  |  |  | 278.173 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Unaudited

(Dollars in millions)

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income |  | $ | 1,482 |  |  | $ | 1,275 |  |  | $ | 4,971 |  |  | $ | 4,230 |
Other comprehensive income (loss) before taxes: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation |  |  | 55 |  |  |  | (35 | ) |  |  | 48 |  |  |  | 3 |
Unrealized gains (losses) on available-for-sale securities |  |  | 13 |  |  |  | (7 | ) |  |  | 10 |  |  |  | (5 | )
Defined benefit plans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Pension costs included in salaries and benefits |  |  | (1 | ) |  |  | 1 |  |  |  | (1 | ) |  |  | 1 |
|  |  | (1 | ) |  |  | 1 |  |  |  | (1 | ) |  |  | 1 |
Other comprehensive income (loss) before taxes |  |  | 67 |  |  |  | (41 | ) |  |  | 57 |  |  |  | (1 | )
Income taxes (benefits) related to other comprehensive income items |  |  | 12 |  |  |  | (6 | ) |  |  | 10 |  |  |  | — |
Other comprehensive income (loss) |  |  | 55 |  |  |  | (35 | ) |  |  | 47 |  |  |  | (1 | )
Comprehensive income |  |  | 1,537 |  |  |  | 1,240 |  |  |  | 5,018 |  |  |  | 4,229 |
Comprehensive income attributable to noncontrolling interests |  |  | 212 |  |  |  | 196 |  |  |  | 649 |  |  |  | 595 |
Comprehensive income attributable to HCA Healthcare, Inc. |  | $ | 1,325 |  |  | $ | 1,044 |  |  | $ | 4,369 |  |  | $ | 3,634 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(Dollars in millions)

|  | September 30, 2024 |  |  | December 31, 2023 |
ASSETS |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,888 |  |  | $ | 935 |
Accounts receivable |  |  | 9,915 |  |  |  | 9,958 |
Inventories |  |  | 1,776 |  |  |  | 2,021 |
Other |  |  | 2,083 |  |  |  | 2,013 |
|  |  | 16,662 |  |  |  | 14,927 |
Property and equipment, at cost |  |  | 61,750 |  |  |  | 58,548 |
Accumulated depreciation |  |  | (32,703 | ) |  |  | (30,833 | )
|  |  | 29,047 |  |  |  | 27,715 |
Investments of insurance subsidiaries |  |  | 553 |  |  |  | 477 |
Investments in and advances to affiliates |  |  | 705 |  |  |  | 756 |
Goodwill and other intangible assets |  |  | 9,982 |  |  |  | 9,945 |
Right-of-use operating lease assets |  |  | 2,201 |  |  |  | 2,207 |
Other |  |  | 309 |  |  |  | 184 |
|  | $ | 59,459 |  |  | $ | 56,211 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Accounts payable |  | $ | 4,235 |  |  | $ | 4,233 |
Accrued salaries |  |  | 2,164 |  |  |  | 2,127 |
Other accrued expenses |  |  | 3,819 |  |  |  | 3,871 |
Long-term debt due within one year |  |  | 4,682 |  |  |  | 2,424 |
|  |  | 14,900 |  |  |  | 12,655 |
Long-term debt, less debt issuance costs and discounts of $378 and $333 |  |  | 38,283 |  |  |  | 37,169 |
Professional liability risks |  |  | 1,584 |  |  |  | 1,557 |
Right-of-use operating lease obligations |  |  | 1,924 |  |  |  | 1,903 |
Income taxes and other liabilities |  |  | 1,982 |  |  |  | 1,867 |
Stockholders’ equity: |  |  |  |  |  |
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 254,517,700 shares — 2024 and 265,537,300 shares — 2023 |  |  | 3 |  |  |  | 3 |
Accumulated other comprehensive loss |  |  | (378 | ) |  |  | (425 | )
Retained deficit |  |  | (1,807 | ) |  |  | (1,352 | )
Stockholders’ deficit attributable to HCA Healthcare, Inc. |  |  | (2,182 | ) |  |  | (1,774 | )
Noncontrolling interests |  |  | 2,968 |  |  |  | 2,834 |
|  |  | 786 |  |  |  | 1,060 |
|  | $ | 59,459 |  |  | $ | 56,211 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Unaudited

(Dollars in millions)

|  | Equity (Deficit) Attributable to HCA Healthcare, Inc. |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Capital |  |  | Accumulated |  |  |  |  |  | Equity |  |  |  |
|  | Common Stock |  |  | in Excess |  |  | Other |  |  |  |  |  | Attributable to |  |  |  |
|  | Shares |  |  | Par |  |  | of Par |  |  | Comprehensive |  |  | Retained |  |  | Noncontrolling |  |  |  |
|  | (in millions) |  |  | Value |  |  | Value |  |  | Loss |  |  | Deficit |  |  | Interests |  |  | Total |
Balances, December 31, 2022 |  |  | 277.378 |  |  | $ | 3 |  |  | $ | — |  |  | $ | (490 | ) |  | $ | (2,280 | ) |  | $ | 2,694 |  |  | $ | (73 | )
Comprehensive income |  |  |  |  |  |  |  |  |  |  |  | 20 |  |  |  | 1,363 |  |  |  | 180 |  |  |  | 1,563 |
Repurchase of common stock |  |  | (3.340 | ) |  |  |  |  |  |  |  |  |  |  |  | (849 | ) |  |  |  |  |  | (849 | )
Share-based benefit plans |  |  | 1.902 |  |  |  |  |  |  |  |  |  |  |  |  | (87 | ) |  |  |  |  |  | (87 | )
Cash dividends declared ($0.60 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (168 | ) |  |  |  |  |  | (168 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (187 | ) |  |  | (187 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7 | ) |  |  | 40 |  |  |  | 33 |
Balances, March 31, 2023 |  |  | 275.940 |  |  |  | 3 |  |  |  | — |  |  |  | (470 | ) |  |  | (2,028 | ) |  |  | 2,727 |  |  |  | 232 |
Comprehensive income |  |  |  |  |  |  |  |  |  |  |  | 14 |  |  |  | 1,193 |  |  |  | 219 |  |  |  | 1,426 |
Repurchase of common stock |  |  | (3.311 | ) |  |  |  |  |  |  |  |  |  |  |  | (924 | ) |  |  |  |  |  | (924 | )
Share-based benefit plans |  |  | 0.303 |  |  |  |  |  |  |  |  |  |  |  |  | 72 |  |  |  |  |  |  | 72 |
Cash dividends declared ($0.60 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (165 | ) |  |  |  |  |  | (165 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (155 | ) |  |  | (155 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 |  |  |  | (27 | ) |  |  | (25 | )
Balances, June 30, 2023 |  |  | 272.932 |  |  |  | 3 |  |  |  | — |  |  |  | (456 | ) |  |  | (1,850 | ) |  |  | 2,764 |  |  |  | 461 |
Comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  | (35 | ) |  |  | 1,079 |  |  |  | 196 |  |  |  | 1,240 |
Repurchase of common stock |  |  | (4.167 | ) |  |  |  |  |  | (86 | ) |  |  |  |  |  | (1,065 | ) |  |  |  |  |  | (1,151 | )
Share-based benefit plans |  |  | 0.202 |  |  |  |  |  |  | 86 |  |  |  |  |  |  | 15 |  |  |  |  |  |  | 101 |
Cash dividends declared ($0.60 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (164 | ) |  |  |  |  |  | (164 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (155 | ) |  |  | (155 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (4 | ) |  |  | 29 |  |  |  | 25 |
Balances, September 30, 2023 |  |  | 268.967 |  |  |  | 3 |  |  |  | — |  |  |  | (491 | ) |  |  | (1,989 | ) |  |  | 2,834 |  |  |  | 357 |
Comprehensive income |  |  |  |  |  |  |  |  |  |  |  | 66 |  |  |  | 1,607 |  |  |  | 254 |  |  |  | 1,927 |
Repurchase of common stock |  |  | (3.647 | ) |  |  |  |  |  | (86 | ) |  |  |  |  |  | (832 | ) |  |  |  |  |  | (918 | )
Share-based benefit plans |  |  | 0.217 |  |  |  |  |  |  | 86 |  |  |  |  |  |  |  |  |  |  |  |  | 86 |
Cash dividends declared ($0.60 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (161 | ) |  |  |  |  |  | (161 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (143 | ) |  |  | (143 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 23 |  |  |  | (111 | ) |  |  | (88 | )
Balances, December 31, 2023 |  |  | 265.537 |  |  |  | 3 |  |  |  | — |  |  |  | (425 | ) |  |  | (1,352 | ) |  |  | 2,834 |  |  |  | 1,060 |
Comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  | (8 | ) |  |  | 1,591 |  |  |  | 211 |  |  |  | 1,794 |
Repurchase of common stock |  |  | (3.894 | ) |  |  |  |  |  |  |  |  |  |  |  | (1,187 | ) |  |  |  |  |  | (1,187 | )
Share-based benefit plans |  |  | 1.573 |  |  |  |  |  |  |  |  |  |  |  |  | (68 | ) |  |  |  |  |  | (68 | )
Cash dividends declared ($0.66 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (176 | ) |  |  |  |  |  | (176 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (152 | ) |  |  | (152 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7 |  |  |  | (8 | ) |  |  | (1 | )
Balances, March 31, 2024 |  |  | 263.216 |  |  |  | 3 |  |  |  | — |  |  |  | (433 | ) |  |  | (1,185 | ) |  |  | 2,885 |  |  |  | 1,270 |
Comprehensive income |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | 1,461 |  |  |  | 226 |  |  |  | 1,687 |
Repurchase of common stock |  |  | (4.217 | ) |  |  |  |  |  | (68 | ) |  |  |  |  |  | (1,312 | ) |  |  |  |  |  | (1,380 | )
Share-based benefit plans |  |  | 0.239 |  |  |  |  |  |  | 68 |  |  |  |  |  |  | 68 |  |  |  |  |  |  | 136 |
Cash dividends declared ($0.66 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (174 | ) |  |  |  |  |  | (174 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (186 | ) |  |  | (186 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (28 | ) |  |  | 14 |  |  |  | (14 | )
Balances, June 30, 2024 |  |  | 259.238 |  |  |  | 3 |  |  |  | — |  |  |  | (433 | ) |  |  | (1,170 | ) |  |  | 2,939 |  |  |  | 1,339 |
Comprehensive income |  |  |  |  |  |  |  |  |  |  |  | 55 |  |  |  | 1,270 |  |  |  | 212 |  |  |  | 1,537 |
Repurchase of common stock |  |  | (4.948 | ) |  |  |  |  |  | (88 | ) |  |  |  |  |  | (1,724 | ) |  |  |  |  |  | (1,812 | )
Share-based benefit plans |  |  | 0.228 |  |  |  |  |  |  | 88 |  |  |  |  |  |  |  |  |  |  |  |  | 88 |
Cash dividends declared ($0.66 per share) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (170 | ) |  |  |  |  |  | (170 | )
Distributions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (192 | ) |  |  | (192 | )
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (13 | ) |  |  | 9 |  |  |  | (4 | )
Balances, September 30, 2024 |  |  | 254.518 |  |  | $ | 3 |  |  | $ | — |  |  | $ | (378 | ) |  | $ | (1,807 | ) |  | $ | 2,968 |  |  | $ | 786 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Unaudited

(Dollars in millions)

|  | 2024 |  |  | 2023 |
Cash flows from operating activities: |  |  |  |  |  |
Net income |  | $ | 4,971 |  |  | $ | 4,230 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Increase (decrease) in cash from operating assets and liabilities: |  |  |  |  |  |
Accounts receivable |  |  | 55 |  |  |  | (168 | )
Inventories and other assets |  |  | 184 |  |  |  | (274 | )
Accounts payable and accrued expenses |  |  | 77 |  |  |  | 211 |
Depreciation and amortization |  |  | 2,456 |  |  |  | 2,288 |
Income taxes |  |  | (67 | ) |  |  | 61 |
Losses (gains) on sales of facilities |  |  | (209 | ) |  |  | 12 |
Amortization of debt issuance costs and discounts |  |  | 26 |  |  |  | 26 |
Share-based compensation |  |  | 275 |  |  |  | 205 |
Other |  |  | 187 |  |  |  | 166 |
Net cash provided by operating activities |  |  | 7,955 |  |  |  | 6,757 |
Cash flows from investing activities: |  |  |  |  |  |
Purchase of property and equipment |  |  | (3,590 | ) |  |  | (3,585 | )
Acquisition of hospitals and health care entities |  |  | (224 | ) |  |  | (281 | )
Sales of hospitals and health care entities |  |  | 312 |  |  |  | 183 |
Change in investments |  |  | (85 | ) |  |  | (30 | )
Other |  |  | — |  |  |  | (7 | )
Net cash used in investing activities |  |  | (3,587 | ) |  |  | (3,720 | )
Cash flows from financing activities: |  |  |  |  |  |
Issuance of long-term debt |  |  | 7,495 |  |  |  | 3,220 |
Net change in revolving credit facilities |  |  | (1,880 | ) |  |  | (1,420 | )
Repayment of long-term debt |  |  | (2,346 | ) |  |  | (691 | )
Distributions to noncontrolling interests |  |  | (530 | ) |  |  | (497 | )
Payment of debt issuance costs |  |  | (67 | ) |  |  | (31 | )
Payment of dividends |  |  | (525 | ) |  |  | (501 | )
Repurchase of common stock |  |  | (4,342 | ) |  |  | (2,901 | )
Other |  |  | (224 | ) |  |  | (234 | )
Net cash used in financing activities |  |  | (2,419 | ) |  |  | (3,055 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | 4 |  |  |  | 1 |
Change in cash and cash equivalents |  |  | 1,953 |  |  |  | (17 | )
Cash and cash equivalents at beginning of period |  |  | 935 |  |  |  | 908 |
Cash and cash equivalents at end of period |  | $ | 2,888 |  |  | $ | 891 |
Interest payments |  | $ | 1,405 |  |  | $ | 1,460 |
Income tax payments, net |  | $ | 1,486 |  |  | $ | 1,070 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BASIS OF PR ESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity

HCA Healthcare, Inc. is a holding company whose affiliates own and operate hospitals and related health care entities. The term “affiliates” includes direct and indirect subsidiaries of HCA Healthcare, Inc. and partnerships and joint ventures in which such subsidiaries are partners. At September 30, 2024, these affiliates owned and operated 187 hospitals, 125 freestanding surgery centers, 23 freestanding endoscopy centers and provided extensive outpatient and ancillary services. HCA Healthcare, Inc.’s facilities are located in 20 states and England. The terms “Company,” “HCA,” “we,” “our” or “us,” as used herein and unless otherwise stated or indicated by context, refer to HCA Healthcare, Inc. and its affiliates. The terms “facilities” or “hospitals” refer to entities owned and operated by affiliates of HCA and the term “employees” refers to employees of affiliates of HCA.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature.

The majority of our expenses are “costs of revenues” items. Costs that could be classified as general and administrative would include our corporate office costs, which were $111 million and $89 million for the quarters ended September 30, 2024 and 2023, respectively, and $301 million and $253 million for the nine months ended September 30, 2024 and 2023, respectively. Operating results for the quarter and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2023.

Revenues

Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges), and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

8

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenues (continued)

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 these 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, 2024 and 2023 are summarized in the following table (dollars in millions):

|  | Quarter |
|  | 2024 |  |  | Ratio |  |  | 2023 |  |  | Ratio |
Medicare |  | $ | 2,584 |  |  |  | 14.8 | % |  | $ | 2,560 |  |  |  | 15.8 | %
Managed Medicare |  |  | 2,949 |  |  |  | 16.9 |  |  |  | 2,535 |  |  |  | 15.6 |
Medicaid |  |  | 1,208 |  |  |  | 6.9 |  |  |  | 1,001 |  |  |  | 6.2 |
Managed Medicaid |  |  | 1,031 |  |  |  | 5.9 |  |  |  | 1,039 |  |  |  | 6.4 |
Managed care and insurers |  |  | 8,497 |  |  |  | 48.6 |  |  |  | 7,687 |  |  |  | 47.4 |
International (managed care and insurers) |  |  | 424 |  |  |  | 2.4 |  |  |  | 375 |  |  |  | 2.3 |
Other |  |  | 794 |  |  |  | 4.5 |  |  |  | 1,016 |  |  |  | 6.3 |
Revenues |  | $ | 17,487 |  |  |  | 100.0 | % |  | $ | 16,213 |  |  |  | 100.0 | %
|  | Nine Months |
|  | 2024 |  |  | Ratio |  |  | 2023 |  |  | Ratio |
Medicare |  | $ | 8,043 |  |  |  | 15.4 | % |  | $ | 7,865 |  |  |  | 16.5 | %
Managed Medicare |  |  | 8,888 |  |  |  | 17.0 |  |  |  | 7,635 |  |  |  | 16.0 |
Medicaid |  |  | 3,316 |  |  |  | 6.3 |  |  |  | 2,478 |  |  |  | 5.2 |
Managed Medicaid |  |  | 3,042 |  |  |  | 5.8 |  |  |  | 2,846 |  |  |  | 6.0 |
Managed care and insurers |  |  | 25,591 |  |  |  | 49.0 |  |  |  | 23,140 |  |  |  | 48.5 |
International (managed care and insurers) |  |  | 1,252 |  |  |  | 2.4 |  |  |  | 1,127 |  |  |  | 2.4 |
Other |  |  | 2,186 |  |  |  | 4.1 |  |  |  | 2,574 |  |  |  | 5.4 |
Revenues |  | $ | 52,318 |  |  |  | 100.0 | % |  | $ | 47,665 |  |  |  | 100.0 | %

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, 2024 and 2023 follows (dollars in millions):

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Patient care costs (salaries and benefits, supplies, other operating expense and depreciation and amortization) |  | $ | 15,077 |  |  | $ | 14,121 |  |  | $ | 44,617 |  |  | $ | 40,839 |
Cost-to-charges ratio (patient care costs as a percentage of gross patient charges) |  |  | 10.3 | % |  |  | 10.9 | % |  |  | 10.2 | % |  |  | 10.6 | %
Total uncompensated care |  | $ | 10,958 |  |  | $ | 9,042 |  |  | $ | 31,571 |  |  | $ | 25,516 |
Multiply by the cost-to-charges ratio |  |  | 10.3 | % |  |  | 10.9 | % |  |  | 10.2 | % |  |  | 10.6 | %
Estimated cost of total uncompensated care |  | $ | 1,138 |  |  | $ | 975 |  |  | $ | 3,220 |  |  | $ | 2,705 |

9

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenues (continued)

The total uncompensated care amounts include charity care of $4.001 billion and $3.531 billion, respectively, and the related estimated costs of charity care were $416 million and $382 million, respectively, for the quarters ended September 30, 2024 and 2023. The total uncompensated care amounts include charity care of $12.091 billion and $10.684 billion, respectively, and the related estimated costs of charity care were $1.233 billion and $1.133 billion, respectively, for the nine months ended September 30, 2024 and 2023.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 2 — ACQUISITIONS AND DISPOSITIONS

During the nine months ended September 30, 2024, we paid $112 million to acquire three hospital facilities in Texas (one hospital facility acquisition was effective October 1, 2024) and $112 million to acquire nonhospital health care entities. During the nine months ended September 30, 2023, we paid $83 million to acquire a hospital facility in Texas and $198 million to acquire nonhospital health care entities. Purchase price amounts have been allocated to the related assets acquired and liabilities assumed based upon their respective fair values.

During the nine months ended September 30, 2024, we received proceeds of $295 million for the sale of a hospital facility in California and $17 million related to sales of real estate and other health care entity investments. We recognized pretax gains of $209 million for these transactions. During the nine months ended September 30, 2023, we received proceeds of $162 million for the sale of two hospital facilities in Louisiana and $21 million related to sales of real estate and other health care entity investments. We recognized pretax losses of $12 million for these transactions.

NOTE 3 — INCOME TAXES

Our provisions for income taxes for the quarters ended September 30, 2024 and 2023 were $424 million and $355 million, respectively, and the effective tax rates were 25.0% and 24.8%, respectively. Our provisions for income taxes for the nine months ended September 30, 2024 and 2023 were $1.419 billion and $1.131 billion, respectively, and the effective tax rates were 24.7% and 23.7%, respectively. The increase in the effective tax rate for the nine months ended September 30, 2024 is related primarily to adjustments to our liability for unrecognized tax benefits. Our provisions for income taxes included tax benefits related to settlements of employee equity awards of $93 million and $89 million for the nine months ended September 30, 2024 and 2023, respectively.

Our gross unrecognized tax benefits were $720 million, excluding accrued interest and penalties of $261 million, as of September 30, 2024 ($639 million and $177 million, respectively, as of December 31, 2023). Unrecognized tax benefits of $465 million ($320 million as of December 31, 2023) would affect the effective tax rate, if recognized.

At September 30, 2024, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016, 2017 and 2018 federal income tax returns and the 2019 returns of certain affiliates. We are also subject to examination by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Depending on the resolution of any federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently unable to estimate the range of any possible change.

NOTE 4 — EARNINGS PER SHARE

We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding, plus the dilutive effect of outstanding equity awards, computed using the treasury stock method.

10

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4 — EARNINGS PER SHARE (continued)

The following table sets forth the computation of basic and diluted earnings per share for the quarters and nine months ended September 30, 2024 and 2023 (dollars and shares in millions, except per share amounts):

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income attributable to HCA Healthcare, Inc. |  | $ | 1,270 |  |  | $ | 1,079 |  |  | $ | 4,322 |  |  | $ | 3,635 |
Weighted average common shares outstanding |  |  | 256.763 |  |  |  | 271.173 |  |  |  | 260.770 |  |  |  | 274.171 |
Effect of dilutive incremental shares |  |  | 3.154 |  |  |  | 4.251 |  |  |  | 3.217 |  |  |  | 4.002 |
Shares used for diluted earnings per share |  |  | 259.917 |  |  |  | 275.424 |  |  |  | 263.987 |  |  |  | 278.173 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings |  | $ | 4.94 |  |  | $ | 3.98 |  |  | $ | 16.57 |  |  | $ | 13.26 |
Diluted earnings |  | $ | 4.88 |  |  | $ | 3.91 |  |  | $ | 16.37 |  |  | $ | 13.07 |

NOTE 5 — INVESTMENTS OF INSURANCE SUBSIDIARIES

A summary of our insurance subsidiaries’ investments at September 30, 2024 and December 31, 2023 follows (dollars in millions):

|  | September 30, 2024 |
|  |  |  |  | Unrealized Amounts |  |  |  |
|  | Amortized Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Debt securities |  | $ | 396 |  |  | $ | 2 |  |  | $ | (20 | ) |  | $ | 378 |
Money market funds and other |  |  | 270 |  |  |  | — |  |  |  | — |  |  |  | 270 |
|  | $ | 666 |  |  | $ | 2 |  |  | $ | (20 | ) |  |  | 648 |
Amounts classified as current assets |  |  |  |  |  |  |  |  |  |  |  | (95 | )
Investment carrying value |  |  |  |  |  |  |  |  |  |  | $ | 553 |

|  | December 31, 2023 |
|  |  |  |  | Unrealized Amounts |  |  |  |
|  | Amortized Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Debt securities |  | $ | 404 |  |  | $ | 1 |  |  | $ | (29 | ) |  | $ | 376 |
Money market funds and other |  |  | 188 |  |  |  | — |  |  |  | — |  |  |  | 188 |
|  | $ | 592 |  |  | $ | 1 |  |  | $ | (29 | ) |  |  | 564 |
Amounts classified as current assets |  |  |  |  |  |  |  |  |  |  |  | (87 | )
Investment carrying value |  |  |  |  |  |  |  |  |  |  | $ | 477 |

At September 30, 2024 and December 31, 2023, the investments in debt securities of our insurance subsidiaries were classified as “available-for-sale.” Changes in unrealized gains and losses that are not credit-related are recorded as adjustments to other comprehensive income (loss).

11

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5 — INVESTMENTS OF INSURANCE SUBSIDIARIES (continued)

Scheduled maturities of investments in debt securities at September 30, 2024 were as follows (dollars in millions):

|  | Amortized Cost |  |  | Fair Value |
Due in one year or less |  | $ | 34 |  |  | $ | 34 |
Due after one year through five years |  |  | 140 |  |  |  | 137 |
Due after five years through ten years |  |  | 155 |  |  |  | 143 |
Due after ten years |  |  | 67 |  |  |  | 64 |
|  | $ | 396 |  |  | $ | 378 |

The average expected maturity of the investments in debt securities at September 30, 2024 was 4.5 years, compared to the average scheduled maturity of 8.3 years. Expected and scheduled maturities may differ because the issuers of certain securities have the right to call, prepay or otherwise redeem such obligations prior to their scheduled maturity date.

NOTE 6 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820”), emphasizes fair value is a market-based measurement, and fair value measurements should be determined based on the assumptions market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

The investments of our insurance subsidiaries are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

The following tables summarize the investments of our insurance subsidiaries measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (dollars in millions):

|  | September 30, 2024 |
|  |  |  |  | Fair Value Measurements Using |
|  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Debt securities |  | $ | 378 |  |  | $ | — |  |  | $ | 378 |  |  | $ | — |
Money market funds and other |  |  | 270 |  |  |  | 270 |  |  |  | — |  |  |  | — |
Investments of insurance subsidiaries |  |  | 648 |  |  |  | 270 |  |  |  | 378 |  |  |  | — |
Less amounts classified as current assets |  |  | (95 | ) |  |  | (95 | ) |  |  | — |  |  |  | — |
|  | $ | 553 |  |  | $ | 175 |  |  | $ | 378 |  |  | $ | — |

12

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

|  | December 31, 2023 |
|  |  |  |  | Fair Value Measurements Using |
|  | Fair Value |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Debt securities |  | $ | 376 |  |  | $ | — |  |  | $ | 376 |  |  | $ | — |
Money market funds and other |  |  | 188 |  |  |  | 188 |  |  |  | — |  |  |  | — |
Investments of insurance subsidiaries |  |  | 564 |  |  |  | 188 |  |  |  | 376 |  |  |  | — |
Less amounts classified as current assets |  |  | (87 | ) |  |  | (87 | ) |  |  | — |  |  |  | — |
|  | $ | 477 |  |  | $ | 101 |  |  | $ | 376 |  |  | $ | — |

The estimated fair value of our long-term debt was $42.593 billion and $38.253 billion at September 30, 2024 and December 31, 2023, respectively, compared to carrying amounts, excluding debt issuance costs and discounts, aggregating $43.343 billion and $39.926 billion, respectively. The estimates of fair value are generally based on Level 2 inputs, including quoted market prices or quoted market prices for similar issues of long-term debt with the same maturities.

NOTE 7 — LONG-TERM DEBT

A summary of long-term debt at September 30, 2024 and December 31, 2023, including related interest rates at September 30, 2024, follows (dollars in millions):

| September 30, 2024 |  |  | December 31, 2023 |
Senior secured asset-based revolving credit facility | $ | — |  |  | $ | 1,880 |
Senior secured revolving credit facility |  | — |  |  |  | — |
Senior secured term loan facilities (effective interest rate of 6.3%) |  | 1,256 |  |  |  | 1,313 |
Other senior secured debt (effective interest rate of 4.3%) |  | 971 |  |  |  | 967 |
Senior secured debt |  | 2,227 |  |  |  | 4,160 |
Senior unsecured notes (effective interest rate of 5.1%) |  | 41,116 |  |  |  | 35,766 |
Debt issuance costs and discounts |  | (378 | ) |  |  | (333 | )
Total debt (average life of 11.1 years, rates averaging 5.1%) |  | 42,965 |  |  |  | 39,593 |
Less amounts due within one year |  | 4,682 |  |  |  | 2,424 |
| $ | 38,283 |  |  | $ | 37,169 |

During February 2024, we issued $4.500 billion aggregate principal amount of senior notes comprised of (i) $1.000 billion aggregate principal amount of 5.450% senior notes due 2031 (the “Existing 2031 Notes”), (ii) $1.300 billion aggregate principal amount of 5.600% senior notes due 2034, (iii) $1.500 billion aggregate principal amount of 6.000% senior notes due 2054 and (iv) $700 million aggregate principal amount of 6.100% senior notes due 2064. We used the net proceeds to repay borrowings under our asset-based revolving credit facility and for general corporate purposes. During March 2024, we repaid all of the $2.000 billion aggregate principal amount of 5.000% senior notes due 2024 at maturity.

During August 2024, we issued $3.000 billion aggregate principal amount of senior notes comprised of (i) $750 million aggregate principal amount of 5.450% senior notes due 2031 (the “New 2031 Notes”), (ii) $1.250 billion aggregate principal amount of 5.450% senior notes due 2034 and (iii) $1.000 billion aggregate principal amount of 5.950% senior notes due 2054. The New 2031 Notes represent a further issuance of our Existing 2031 Notes, issued during February 2024, and together with the New 2031 Notes, the aggregate principal amount of these notes is $1.750 billion. We used the net proceeds to repay borrowings under our asset-based revolving credit facility and for general corporate purposes.

13

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — CONTINGENCIES

We operate in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. We are also subject to claims and suits arising in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians’ staff privileges. In certain of these actions the claimants may seek punitive damages against us which may not be covered by insurance. We are also subject to claims by various taxing authorities for additional taxes and related interest and penalties. The resolution of any such lawsuits, claims or legal and regulatory proceedings could have a material, adverse effect on our results of operations, financial position or liquidity.

Health care companies are routinely subject to investigations by various governmental agencies. Under the federal False Claims Act (“FCA”), private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. Certain of our individual facilities have received, and from time to time, other facilities may receive, government inquiries from, and may be subject to investigation by, federal and state agencies. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a material, adverse effect on our results of operations, financial position or liquidity.

NOTE 9 — SHARE REPURCHASE TRANSACTIONS AND OTHER COMPREHENSIVE LOSS

During January 2024 and 2023, our Board of Directors authorized share repurchase programs for up to $6 billion and $3 billion, respectively, of our outstanding common stock. During the nine months ended September 30, 2024, we repurchased 13.059 million shares of our common stock at an average price of $332.49 per share through market purchases pursuant to the January 2023 authorization (which was completed during the first quarter of 2024) and the January 2024 authorization. At September 30, 2024, we had $2.433 billion of repurchase authorization available under the January 2024 authorization.

The components of accumulated other comprehensive loss are as follows (dollars in millions):

| Unrealized Losses on Available- for-Sale Securities |  |  | Foreign Currency Translation Adjustments |  |  | Defined Benefit Plans |  |  | Total |
Balances at December 31, 2023 | $ | (22 | ) |  | $ | (339 | ) |  | $ | (64 | ) |  | $ | (425 | )
Unrealized gains on available-for-sale securities, net of $2 income tax expense |  | 8 |  |  |  |  |  |  |  |  |  | 8 |
Foreign currency translation adjustments, net of $8 income tax expense |  |  |  |  | 40 |  |  |  |  |  |  | 40 |
Expense reclassified into operations from other comprehensive income |  |  |  |  |  |  |  | (1 | ) |  |  | (1 | )
Balances at September 30, 2024 | $ | (14 | ) |  | $ | (299 | ) |  | $ | (65 | ) |  | $ | (378 | )

NOTE 10 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. We operate in three geographically organized groups: the National, American and Atlantic Groups. At September 30, 2024, the National Group included 55 hospitals located in Alaska, California, Idaho, Indiana, Kentucky, Nevada, New Hampshire, North Carolina, Tennessee, Utah and Virginia; the American Group included 62 hospitals located in Colorado, central Kansas, Louisiana and Texas; and the Atlantic Group included 62 hospitals located in Florida, Georgia, northern Kansas, Missouri and South Carolina. We also operate eight hospitals in England, and these facilities are included in the Corporate and other group.

14

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — SEGMENT AND GEOGRAPHIC INFORMATION (continued)

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, gains and losses on sales of facilities, losses on retirement of debt, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. The geographic distributions of our revenues, equity in earnings and losses of affiliates, adjusted segment EBITDA and depreciation and amortization for the quarters and nine months ended September 30, 2024 and 2023 are summarized in the following table (dollars in millions):

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
National Group |  | $ | 4,891 |  |  | $ | 4,352 |  |  | $ | 14,503 |  |  | $ | 13,340 |
American Group |  |  | 6,019 |  |  |  | 5,491 |  |  |  | 17,911 |  |  |  | 16,226 |
Atlantic Group |  |  | 5,578 |  |  |  | 5,470 |  |  |  | 16,974 |  |  |  | 15,617 |
Corporate and other |  |  | 999 |  |  |  | 900 |  |  |  | 2,930 |  |  |  | 2,482 |
|  | $ | 17,487 |  |  | $ | 16,213 |  |  | $ | 52,318 |  |  | $ | 47,665 |
Equity in (earnings) losses of affiliates: |  |  |  |  |  |  |  |  |  |  |  |
National Group |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | (2 | )
American Group |  |  | (18 | ) |  |  | (13 | ) |  |  | (49 | ) |  |  | (35 | )
Atlantic Group |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | (2 | )
Corporate and other |  |  | 3 |  |  |  | (6 | ) |  |  | 36 |  |  |  | 45 |
|  | $ | (15 | ) |  | $ | (19 | ) |  | $ | (13 | ) |  | $ | 6 |
Adjusted segment EBITDA: |  |  |  |  |  |  |  |  |  |  |  |
National Group |  | $ | 1,087 |  |  | $ | 799 |  |  | $ | 3,259 |  |  | $ | 2,826 |
American Group |  |  | 1,378 |  |  |  | 1,210 |  |  |  | 4,118 |  |  |  | 3,662 |
Atlantic Group |  |  | 1,154 |  |  |  | 1,158 |  |  |  | 3,757 |  |  |  | 3,219 |
Corporate and other |  |  | (352 | ) |  |  | (287 | ) |  |  | (964 | ) |  |  | (599 | )
|  | $ | 3,267 |  |  | $ | 2,880 |  |  | $ | 10,170 |  |  | $ | 9,108 |
Depreciation and amortization: |  |  |  |  |  |  |  |  |  |  |  |
National Group |  | $ | 213 |  |  | $ | 206 |  |  | $ | 636 |  |  | $ | 621 |
American Group |  |  | 277 |  |  |  | 244 |  |  |  | 799 |  |  |  | 719 |
Atlantic Group |  |  | 271 |  |  |  | 249 |  |  |  | 790 |  |  |  | 735 |
Corporate and other |  |  | 81 |  |  |  | 70 |  |  |  | 231 |  |  |  | 213 |
|  | $ | 842 |  |  | $ | 769 |  |  | $ | 2,456 |  |  | $ | 2,288 |
Adjusted segment EBITDA |  | $ | 3,267 |  |  | $ | 2,880 |  |  | $ | 10,170 |  |  | $ | 9,108 |
Depreciation and amortization |  |  | 842 |  |  |  | 769 |  |  |  | 2,456 |  |  |  | 2,288 |
Interest expense |  |  | 515 |  |  |  | 483 |  |  |  | 1,533 |  |  |  | 1,447 |
Losses (gains) on sales of facilities |  |  | 4 |  |  |  | (2 | ) |  |  | (209 | ) |  |  | 12 |
Income before income taxes |  | $ | 1,906 |  |  | $ | 1,630 |  |  | $ | 6,390 |  |  | $ | 5,361 |

15

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Lookin g Statements

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, expected hurricane-related expenses and losses of revenues 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 conditions nationally and regionally in our markets, including inflation and economic and business conditions (and the impact thereof on the economy, financial markets and banking industry); changes in revenues due to declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, supply chain or other expenditures; workforce disruptions; supply shortages and disruptions (including as a result of geopolitical disruptions); and the impact of potential federal government shutdowns, (2) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (3) the impact of current and future federal and state health reform initiatives and possible changes to other federal, state or local laws and regulations affecting the health care industry, including, but not limited to, proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or establish a single-payer system (such reforms often referred to as “Medicare for All”), and the expiration of enhanced subsidies for individuals eligible to purchase insurance coverage through federal and state-based health insurance marketplaces, (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 required under the Pay-As-You-Go Act of 2010 as a result of the federal budget deficit impact of the American Rescue Plan Act of 2021, 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, attain expected levels of patient volumes and revenues, and control the costs of providing services, (7) possible changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state directed payments, that may impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (8) personnel-related capacity constraints, increases in wages and the ability to attract, utilize and retain qualified management and other personnel, including affiliated physicians, nurses and medical and technical support personnel, (9) the highly competitive nature of the health care business, (10) 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, (11) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (12) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (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) the emergence of and effects related to pandemics, epidemics and outbreaks of infectious diseases or other public health crises, including but not limited to developments related to COVID-19, (16) future divestitures which may result in charges and possible impairments of long-lived assets, (17) changes in business strategy or development plans, (18) delays in receiving payments for services provided, (19) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (20) the impact of known and unknown government investigations, litigation and other claims that may be made against us, (21) the impact of actual and potential cybersecurity incidents or security breaches involving us or our vendors and other third parties, including the data security incident disclosed in July 2023, (22) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and the impact of interoperability requirements, (23) the impact of natural disasters, such as hurricanes and floods, physical risks from climate change or similar events beyond our control, including Hurricanes Helene and Milton, (24) changes in U.S. federal, state, or foreign tax laws including interpretive guidance that may be issued by taxing authorities or other standard setting bodies, (25) the results of our efforts to use technology and resilience initiatives, including artificial intelligence and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience, (26) the impact of recent decisions of the U.S. Supreme Court regarding the actions of federal agencies, and (27) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2023 and our other filings with the Securities and Exchange Commission. As a consequence, current plans, anticipated actions and future financial position and results of operations may differ from those expressed in any forward-looking statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report, which forward-looking statements reflect management’s views only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Third Quarter 2024 Operations Summary

Revenues increased to $17.487 billion in the third quarter of 2024 from $16.213 billion in the third quarter of 2023. Net income attributable to HCA Healthcare, Inc. totaled $1.270 billion, or $4.88 per diluted share, for the quarter ended September 30, 2024, compared to $1.079 billion, or $3.91 per diluted share, for the quarter ended September 30, 2023. Third quarter results for 2024 include losses on sales of facilities of $4 million, or $0.02 per diluted share. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 259.917 million shares for the quarter ended September 30, 2024 and 275.424 million shares for the quarter ended September 30, 2023. During 2023 and the first nine months of 2024, we repurchased 14.465 million shares and 13.059 million shares, respectively, of our common stock.

Third quarter results for 2024 also included additional expenses and loss of revenues estimated at approximately $50 million, or $0.15 per diluted share, associated with the impact of Hurricane Helene on our Florida, Georgia and North Carolina facilities. Additionally, during the fourth quarter of 2024, we anticipate ongoing additional expenses and loss of revenues of approximately $200 million to $300 million, or $0.60 to $0.90 per diluted share, due to Hurricane Helene’s impact to our North Carolina facilities, as well as from Hurricane Milton, which impacted certain facilities in Florida during October. The impact to the third quarter of 2024 and estimates for the fourth quarter of 2024 do not include any insurance recoveries we may receive.

Revenues increased 7.9% on a consolidated basis and 7.1% on a same facility basis for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. The increase in consolidated revenues can be primarily attributed to the combined impact of a 2.8% increase in revenue per equivalent admission and a 5.0% increase in equivalent admissions. The same facility revenues increase primarily resulted from the combined impact of a 2.5% increase in same facility revenue per equivalent admission and a 4.5% increase in same facility equivalent admissions. We recorded revenues of $397 million during the quarter and nine months ended September 30, 2023 related to the Florida Medicaid hospital directed payment program for the year ended September 30, 2023.

During the quarter ended September 30, 2024, consolidated admissions and same facility admissions both increased 4.5% compared to the quarter ended September 30, 2023. Surgeries declined 0.8% on both a consolidated basis and on a same facility basis during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. Emergency department visits increased 4.4% on a consolidated basis and 4.6% on a same facility basis during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. Consolidated and same facility uninsured admissions declined 1.6% and 1.8%, respectively, for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023.

Cash flows from operating activities increased $1.036 billion, from $2.479 billion for the third quarter of 2023 to $3.515 billion for the third quarter of 2024. The increase in cash provided by operating activities was primarily related to positive changes in working capital items of $859 million, mainly from a decline in accounts receivable, and an increase in net income of $285 million, excluding the non-cash impact of gains and losses on sales of facilities and depreciation and amortization, partially offset by an increase of $190 million in income tax payments.

Results of Operations

Revenue/Volume Trends

Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges), and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or

17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

Revenues increased 7.9% from $16.213 billion in the third quarter of 2023 to $17.487 billion in the third quarter of 2024. 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, 2024 and 2023 are summarized in the following table (dollars in millions):

|  | Quarter |
|  | 2024 |  |  | Ratio |  |  | 2023 |  |  | Ratio |
Medicare |  | $ | 2,584 |  |  |  | 14.8 | % |  | $ | 2,560 |  |  |  | 15.8 | %
Managed Medicare |  |  | 2,949 |  |  |  | 16.9 |  |  |  | 2,535 |  |  |  | 15.6 |
Medicaid |  |  | 1,208 |  |  |  | 6.9 |  |  |  | 1,001 |  |  |  | 6.2 |
Managed Medicaid |  |  | 1,031 |  |  |  | 5.9 |  |  |  | 1,039 |  |  |  | 6.4 |
Managed care and insurers |  |  | 8,497 |  |  |  | 48.6 |  |  |  | 7,687 |  |  |  | 47.4 |
International (managed care and insurers) |  |  | 424 |  |  |  | 2.4 |  |  |  | 375 |  |  |  | 2.3 |
Other |  |  | 794 |  |  |  | 4.5 |  |  |  | 1,016 |  |  |  | 6.3 |
Revenues |  | $ | 17,487 |  |  |  | 100.0 | % |  | $ | 16,213 |  |  |  | 100.0 | %
|  | Nine Months |
|  | 2024 |  |  | Ratio |  |  | 2023 |  |  | Ratio |
Medicare |  | $ | 8,043 |  |  |  | 15.4 | % |  | $ | 7,865 |  |  |  | 16.5 | %
Managed Medicare |  |  | 8,888 |  |  |  | 17.0 |  |  |  | 7,635 |  |  |  | 16.0 |
Medicaid |  |  | 3,316 |  |  |  | 6.3 |  |  |  | 2,478 |  |  |  | 5.2 |
Managed Medicaid |  |  | 3,042 |  |  |  | 5.8 |  |  |  | 2,846 |  |  |  | 6.0 |
Managed care and insurers |  |  | 25,591 |  |  |  | 49.0 |  |  |  | 23,140 |  |  |  | 48.5 |
International (managed care and insurers) |  |  | 1,252 |  |  |  | 2.4 |  |  |  | 1,127 |  |  |  | 2.4 |
Other |  |  | 2,186 |  |  |  | 4.1 |  |  |  | 2,574 |  |  |  | 5.4 |
Revenues |  | $ | 52,318 |  |  |  | 100.0 | % |  | $ | 47,665 |  |  |  | 100.0 | %

Consolidated and same facility revenue per equivalent admission increased 2.8% and 2.5%, respectively, in the third quarter of 2024, compared to the third quarter of 2023. Consolidated and same facility equivalent admissions increased 5.0% and 4.5%, respectively, in the third quarter of 2024, compared to the third quarter of 2023. Consolidated and same facility outpatient surgeries both declined 2.0%, in the third quarter of 2024, compared to the third quarter of 2023. Consolidated and same facility inpatient surgeries increased 1.7% and 1.6%, respectively, in the third quarter of 2024, compared to the third quarter of 2023. Consolidated and same facility emergency department visits increased 4.4% and 4.6%, respectively, in the third quarter of 2024, compared to the third quarter of 2023.

18

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

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, 2024 and 2023 follows (dollars in millions):

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Patient care costs (salaries and benefits, supplies, other operating expense and depreciation and amortization) |  | $ | 15,077 |  |  | $ | 14,121 |  |  | $ | 44,617 |  |  | $ | 40,839 |
Cost-to-charges ratio (patient care costs as a percentage of gross patient charges) |  |  | 10.3 | % |  |  | 10.9 | % |  |  | 10.2 | % |  |  | 10.6 | %
Total uncompensated care |  | $ | 10,958 |  |  | $ | 9,042 |  |  | $ | 31,571 |  |  | $ | 25,516 |
Multiply by the cost-to-charges ratio |  |  | 10.3 | % |  |  | 10.9 | % |  |  | 10.2 | % |  |  | 10.6 | %
Estimated cost of total uncompensated care |  | $ | 1,138 |  |  | $ | 975 |  |  | $ | 3,220 |  |  | $ | 2,705 |

Same facility uninsured admissions in 2024, compared to 2023, declined 1.8% in the third quarter, increased 3.5% in the second quarter and increased 2.4% in the first quarter. Same facility uninsured admissions in 2023, compared to 2022, increased 3.2% in the fourth quarter, increased 3.3% in the third quarter, declined 6.6% in the second quarter and declined 1.1% in the first quarter.

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, 2024 and 2023 are set forth in the following table.

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Medicare |  |  | 19 | % |  |  | 20 | % |  |  | 20 | % |  |  | 21 | %
Managed Medicare |  |  | 26 |  |  |  | 25 |  |  |  | 26 |  |  |  | 25 |
Medicaid |  |  | 4 |  |  |  | 4 |  |  |  | 4 |  |  |  | 4 |
Managed Medicaid |  |  | 12 |  |  |  | 13 |  |  |  | 11 |  |  |  | 13 |
Managed care and insurers |  |  | 32 |  |  |  | 31 |  |  |  | 32 |  |  |  | 30 |
Uninsured |  |  | 7 |  |  |  | 7 |  |  |  | 7 |  |  |  | 7 |
|  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %

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, 2024 and 2023 are set forth in the following table.

|  | Quarter |  |  | Nine Months |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Medicare |  |  | 20 | % |  |  | 21 | % |  |  | 20 | % |  |  | 22 | %
Managed Medicare |  |  | 18 |  |  |  | 17 |  |  |  | 19 |  |  |  | 18 |
Medicaid |  |  | 11 |  |  |  | 10 |  |  |  | 10 |  |  |  | 8 |
Managed Medicaid |  |  | 6 |  |  |  | 7 |  |  |  | 6 |  |  |  | 7 |
Managed care and insurers |  |  | 45 |  |  |  | 45 |  |  |  | 45 |  |  |  | 45 |
|  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %

At September 30, 2024, we had 98 hospitals in the states of Texas and Florida. During the quarter ended September 30, 2024, 59% of our admissions and 51% of our revenues were generated by these hospitals. Uninsured admissions in Texas and Florida represented 74% of our uninsured admissions during the quarter ended September 30, 2024.

19

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

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 state Medicaid programs use, or have applied to use, waivers granted by the Centers for Medicare & Medicaid Services (“CMS”) to implement Medicaid expansion, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards. We receive supplemental payments in several states. These supplemental payment programs are regularly reviewed by certain government agencies, and some states have made requests to CMS to modify their existing supplemental payment programs. In May 2024, CMS issued a final rule related to Medicaid managed care programs that addresses access, financing and quality within these programs. This final rule addresses aspects of state directed program arrangements with new and updated requirements to ensure a more consistent and transparent approach for participating states. The various elements of the rule take effect between issuance and early 2028. It is possible that these developments, reviews and requests will result in the restructuring of or other significant changes to supplemental payment programs. We are unable to estimate the financial impact that program structure modifications and other program changes, if any, may have on our results of operations.

Key Performance Indicators

We present certain metrics and statistical information that management uses when assessing our results of operations. We believe this information is useful to investors as it provides insight to how management evaluates operational performance and trends between reporting periods. Information on how these metrics and statistical information are defined is provided in the following tables summarizing operating results and operating data.

Operating Results Summary

The following is a comparative summary of results of operations for the quarters and nine months ended September 30, 2024 and 2023 (dollars in millions):

|  | Quarter |
|  | 2024 |  |  | 2023 |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Revenues |  | $ | 17,487 |  |  |  | 100.0 |  |  | $ | 16,213 |  |  |  | 100.0 |
Salaries and benefits |  |  | 7,861 |  |  |  | 45.0 |  |  |  | 7,556 |  |  |  | 46.6 |
Supplies |  |  | 2,657 |  |  |  | 15.2 |  |  |  | 2,417 |  |  |  | 14.9 |
Other operating expenses |  |  | 3,717 |  |  |  | 21.2 |  |  |  | 3,379 |  |  |  | 20.8 |
Equity in earnings of affiliates |  |  | (15 | ) |  |  | (0.1 | ) |  |  | (19 | ) |  |  | (0.1 | )
Depreciation and amortization |  |  | 842 |  |  |  | 4.9 |  |  |  | 769 |  |  |  | 4.7 |
Interest expense |  |  | 515 |  |  |  | 2.9 |  |  |  | 483 |  |  |  | 3.0 |
Losses (gains) on sales of facilities |  |  | 4 |  |  |  | — |  |  |  | (2 | ) |  |  | — |
|  |  | 15,581 |  |  |  | 89.1 |  |  |  | 14,583 |  |  |  | 89.9 |
Income before income taxes |  |  | 1,906 |  |  |  | 10.9 |  |  |  | 1,630 |  |  |  | 10.1 |
Provision for income taxes |  |  | 424 |  |  |  | 2.4 |  |  |  | 355 |  |  |  | 2.2 |
Net income |  |  | 1,482 |  |  |  | 8.5 |  |  |  | 1,275 |  |  |  | 7.9 |
Net income attributable to noncontrolling interests |  |  | 212 |  |  |  | 1.2 |  |  |  | 196 |  |  |  | 1.2 |
Net income attributable to HCA Healthcare, Inc. |  | $ | 1,270 |  |  |  | 7.3 |  |  | $ | 1,079 |  |  |  | 6.7 |
% changes from prior year: |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 7.9 | % |  |  |  |  |  | 8.3 | % |  |  |
Income before income taxes |  |  | 17.0 |  |  |  |  |  |  | (4.4 | ) |  |  |
Net income attributable to HCA Healthcare, Inc. |  |  | 17.7 |  |  |  |  |  |  | (4.9 | ) |  |  |
Admissions(a) |  |  | 4.5 |  |  |  |  |  |  | 2.8 |  |  |  |
Equivalent admissions(b) |  |  | 5.0 |  |  |  |  |  |  | 4.5 |  |  |  |
Revenue per equivalent admission |  |  | 2.8 |  |  |  |  |  |  | 3.6 |  |  |  |
Same facility % changes from prior year(c): |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 7.1 |  |  |  |  |  |  | 7.9 |  |  |  |
Admissions(a) |  |  | 4.5 |  |  |  |  |  |  | 3.4 |  |  |  |
Equivalent admissions(b) |  |  | 4.5 |  |  |  |  |  |  | 4.1 |  |  |  |
Revenue per equivalent admission |  |  | 2.5 |  |  |  |  |  |  | 3.6 |  |  |  |

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Operating Results Summary (continued)

|  | Nine Months |
|  | 2024 |  |  | 2023 |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Revenues |  | $ | 52,318 |  |  |  | 100.0 |  |  | $ | 47,665 |  |  |  | 100.0 |
Salaries and benefits |  |  | 23,253 |  |  |  | 44.4 |  |  |  | 21,917 |  |  |  | 46.0 |
Supplies |  |  | 7,962 |  |  |  | 15.2 |  |  |  | 7,318 |  |  |  | 15.4 |
Other operating expenses |  |  | 10,946 |  |  |  | 21.0 |  |  |  | 9,316 |  |  |  | 19.5 |
Equity in (earnings) losses of affiliates |  |  | (13 | ) |  |  | — |  |  |  | 6 |  |  |  | — |
Depreciation and amortization |  |  | 2,456 |  |  |  | 4.7 |  |  |  | 2,288 |  |  |  | 4.9 |
Interest expense |  |  | 1,533 |  |  |  | 2.9 |  |  |  | 1,447 |  |  |  | 3.0 |
Losses (gains) on sales of facilities |  |  | (209 | ) |  |  | (0.4 | ) |  |  | 12 |  |  |  | — |
|  |  | 45,928 |  |  |  | 87.8 |  |  |  | 42,304 |  |  |  | 88.8 |
Income before income taxes |  |  | 6,390 |  |  |  | 12.2 |  |  |  | 5,361 |  |  |  | 11.2 |
Provision for income taxes |  |  | 1,419 |  |  |  | 2.7 |  |  |  | 1,131 |  |  |  | 2.3 |
Net income |  |  | 4,971 |  |  |  | 9.5 |  |  |  | 4,230 |  |  |  | 8.9 |
Net income attributable to noncontrolling interests |  |  | 649 |  |  |  | 1.2 |  |  |  | 595 |  |  |  | 1.3 |
Net income attributable to HCA Healthcare, Inc. |  | $ | 4,322 |  |  |  | 8.3 |  |  | $ | 3,635 |  |  |  | 7.6 |
% changes from prior year: |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 9.8 | % |  |  |  |  |  | 6.5 | % |  |  |
Income before income taxes |  |  | 19.2 |  |  |  |  |  |  | 1.6 |  |  |  |
Net income attributable to HCA Healthcare, Inc. |  |  | 18.9 |  |  |  |  |  |  | 2.0 |  |  |  |
Admissions(a) |  |  | 5.8 |  |  |  |  |  |  | 2.7 |  |  |  |
Equivalent admissions(b) |  |  | 6.0 |  |  |  |  |  |  | 5.0 |  |  |  |
Revenue per equivalent admission |  |  | 3.6 |  |  |  |  |  |  | 1.4 |  |  |  |
Same facility % changes from prior year(c): |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 8.6 |  |  |  |  |  |  | 6.4 |  |  |  |
Admissions(a) |  |  | 5.5 |  |  |  |  |  |  | 3.3 |  |  |  |
Equivalent admissions(b) |  |  | 4.9 |  |  |  |  |  |  | 5.1 |  |  |  |
Revenue per equivalent admission |  |  | 3.5 |  |  |  |  |  |  | 1.2 |  |  |  |

(a)
Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume.
(b)
Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation “equates” outpatient revenues to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume.
(c)
Same facility information excludes the operations of hospitals and their related facilities which were either acquired or divested during the current and prior period.

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Quarters Ended September 30, 2024 and 2023

Revenues increased to $17.487 billion in the third quarter of 2024 from $16.213 billion in the third quarter of 2023. Net income attributable to HCA Healthcare, Inc. totaled $1.270 billion, or $4.88 per diluted share, for the quarter ended September 30, 2024, compared to $1.079 billion, or $3.91 per diluted share, for the quarter ended September 30, 2023. Third quarter results for 2024 include losses on sales of facilities of $4 million, or $0.02 per diluted share. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 259.917 million shares for the quarter ended September 30, 2024 and 275.424 million shares for the quarter ended September 30, 2023. During 2023 and the first nine months of 2024, we repurchased 14.465 million shares and 13.059 million shares, respectively, of our common stock.

Revenues increased 7.9% on a consolidated basis and 7.1% on a same facility basis for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. The increase in consolidated revenues can be primarily attributed to the combined impact of a 2.8% increase in revenue per equivalent admission and a 5.0% increase in equivalent admissions. The same facility revenues increase primarily resulted from the combined impact of a 2.5% increase in same facility revenue per equivalent admission and a 4.5% increase in same facility equivalent admissions.

Salaries and benefits, as a percentage of revenues, were 45.0% in the third quarter of 2024 and 46.6% in the third quarter of 2023. Salaries and benefits were favorably impacted by a 17.8% decline in contract labor during the third quarter of 2024, compared to the third quarter of 2023. Salaries and benefits per equivalent admission declined 0.9% in the third quarter of 2024, compared to the third quarter of 2023. Same facility salaries and benefits per full time equivalent increased 1.1% for the third quarter of 2024, compared to the third quarter of 2023. We continue to utilize certain contract, overtime and other premium rate labor costs to support our clinical staff and patients. While these costs have declined compared to the prior year period, future costs may be affected by labor market conditions and other factors.

Supplies, as a percentage of revenues, were 15.2% in the third quarter of 2024 and 14.9% in the third quarter of 2023. Supply costs per equivalent admission increased 4.8% in the third quarter of 2024, compared to the third quarter of 2023. Supply costs per equivalent admission increased 6.8% for medical devices, 1.6% for pharmacy supplies and 4.4% for general medical and surgical items in the third quarter of 2024, compared to the third quarter of 2023.

Other operating expenses, as a percentage of revenues, were 21.2% in the third quarter of 2024 and 20.8% in the third quarter of 2023. 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 0.4% increase in other operating expenses, as a percentage of revenues, for the third quarter of 2024, compared to the third quarter of 2023, was primarily related to increased costs for professional fees and state provider fees in certain states, in addition to higher repairs and maintenance expense related to the response to Hurricane Helene at impacted hospitals, primarily in North Carolina. 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. Provisions for losses related to professional liability risks were $157 million and $145 million for the third quarters of 2024 and 2023, respectively.

Equity in earnings of affiliates was $15 million and $19 million in the third quarters of 2024 and 2023, respectively.

Depreciation and amortization increased $73 million, from $769 million in the third quarter of 2023 to $842 million in the third quarter of 2024. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Interest expense was $515 million in the third quarter of 2024 and $483 million in the third quarter of 2023. Our average debt balance was $41.846 billion for the third quarter of 2024, compared to $38.881 billion for the third quarter of 2023. The average effective interest rate for our debt was 4.9% for both of the quarters ended September 30, 2024 and 2023.

During the third quarters of 2024 and 2023, we recorded losses on sales of facilities of $4 million and gains on sales of facilities of $2 million, respectively.

The effective tax rates were 25.0% and 24.8% for the third quarters of 2024 and 2023, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships.

22

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Quarters Ended September 30, 2024 and 2023 (continued)

Net income attributable to noncontrolling interests increased from $196 million for the third quarter of 2023 to $212 million for the third quarter of 2024.

Nine Months Ended September 30, 2024 and 2023

Revenues increased to $52.318 billion in the first nine months of 2024 from $47.665 billion in the first nine months of 2023. Net income attributable to HCA Healthcare, Inc. totaled $4.322 billion, or $16.37 per diluted share, for the nine months ended September 30, 2024, compared to $3.635 billion, or $13.07 per diluted share, for the nine months ended September 30, 2023. Results for the first nine months of 2024 and 2023 include gains on sales of facilities of $209 million, or $0.61 per diluted share, and losses on sales of facilities of $12 million, or $0.07 per diluted share, respectively. Our provision for income taxes for the first nine months of 2024 and 2023 included tax benefits of $93 million, or $0.35 per diluted share, and $89 million, or $0.32 per diluted share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 263.987 million shares for the nine months ended September 30, 2024 and 278.173 million shares for the nine months ended September 30, 2023. During 2023 and the first nine months of 2024, we repurchased 14.465 million shares and 13.059 million shares, respectively, of our common stock.

Revenues increased 9.8% on a consolidated basis and 8.6% on a same facility basis for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in consolidated revenues can be primarily attributed to the combined impact of a 3.6% increase in revenue per equivalent admission and a 6.0% increase in equivalent admissions. The same facility revenues increase primarily resulted from the combined impact of a 3.5% increase in same facility revenue per equivalent admission and a 4.9% increase in same facility equivalent admissions.

Salaries and benefits, as a percentage of revenues, were 44.4% in the first nine months of 2024 and 46.0% in the first nine months of 2023. Salaries and benefits were favorably impacted by a 21.9% decline in contract labor during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Salaries and benefits per equivalent admission increased 0.1% in the first nine months of 2024, compared to the first nine months of 2023. Same facility salaries and benefits per full time equivalent increased 1.7% for the first nine months of 2024, compared to the first nine months of 2023. We continue to utilize certain contract, overtime and other premium rate labor costs to support our clinical staff and patients. While these costs have declined compared to the prior year period, future costs may be affected by labor market conditions and other factors.

Supplies, as a percentage of revenues, were 15.2% in the first nine months of 2024 and 15.4% in the first nine months of 2023. Supply costs per equivalent admission increased 2.7% in the first nine months of 2024, compared to the first nine months of 2023. Supply costs per equivalent admission increased 4.3% for medical devices and 3.0% for general medical and surgical items and declined 2.1% for pharmacy supplies in the first nine months of 2024, compared to the first nine months of 2023.

Other operating expenses, as a percentage of revenues, were 21.0% in the first nine months of 2024 and 19.5% in the first nine months of 2023. 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 1.5% increase in other operating expenses, as a percentage of revenues, for the first nine months of 2024, compared to the first nine months of 2023, was primarily related to increased costs for professional fees and state provider fees in certain states. 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. Provisions for losses related to professional liability risks were $469 million and $433 million for the first nine months of 2024 and 2023, respectively.

Equity in earnings of affiliates was $13 million and equity in losses of affiliates was $6 million in the first nine months of 2024 and 2023, respectively.

Depreciation and amortization increased $168 million, from $2.288 billion in the first nine months of 2023 to $2.456 billion in the first nine months of 2024. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Nine Months Ended September 30, 2024 and 2023 (continued)

Interest expense was $1.533 billion in the first nine months of 2024 and $1.447 billion in the first nine months of 2023. Our average debt balance was $40.901 billion for the first nine months of 2024 compared to $38.695 billion for the first nine months of 2023. The average effective interest rate for our debt was 5.0% for both of the nine months ended September 30, 2024 and 2023.

During the first nine months of 2024 and 2023, we recorded gains on sales of facilities of $209 million and losses on sales of facilities of $12 million, respectively. The gain for 2024 was primarily related to the sale of a hospital facility in California.

The effective tax rates were 24.7% and 23.7% for the first nine months of 2024 and 2023, 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 first nine months of 2024 is related primarily to adjustments to our liability for unrecognized tax benefits. Our provisions for income taxes for the first nine months of 2024 and 2023 included tax benefits of $93 million and $89 million, respectively, related to employee equity award settlements.

Net income attributable to noncontrolling interests increased from $595 million for the first nine months of 2023 to $649 million for the first nine months 2024. The increase in net income attributable to noncontrolling interests related primarily to the operations of one of our Texas markets.

Liquidity and Capital Resources

Cash provided by operating activities totaled $7.955 billion for the first nine months of 2024 compared to $6.757 billion for the first nine months of 2023. The $1.198 billion increase in cash provided by operating activities, for the first nine months of 2024 compared to the first nine months of 2023, related primarily to an increase in net income of $798 million, excluding the non-cash impact of gains and losses on sales of facilities, depreciation and amortization and share-based compensation, and positive changes in working capital items of $547 million, mainly from a decline in inventories and other assets, partially offset by an increase in income tax payments of $416 million. The combination of interest payments and net income tax payments in the first nine months of 2024 and 2023 totaled $2.891 billion and $2.530 billion, respectively. Working capital totaled $1.762 billion at September 30, 2024 and $2.272 billion at December 31, 2023 (decline was primarily due to the $2.258 billion increase in long-term debt due within one year, offset by a $1.953 billion increase in cash and cash equivalents).

Cash used in investing activities was $3.587 billion in the first nine months of 2024 compared to $3.720 billion in the first nine months of 2023. Excluding acquisitions, capital expenditures were $3.590 billion in the first nine months of 2024 and $3.585 billion in the first nine months of 2023. Planned capital expenditures are expected to approximate $5 billion in 2024. At September 30, 2024, there were projects under construction which had estimated additional costs to complete and equip over the next five years of approximately $4.7 billion. We expect to finance capital expenditures with internally generated and borrowed funds.

Cash used in financing activities totaled $2.419 billion in the first nine months of 2024, compared to $3.055 billion in the first nine months of 2023. 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. During the first nine months of 2023, net cash flows used in financing activities included a net increase of $1.109 billion in our indebtedness, payment of dividends of $501 million, repurchase of common stock of $2.901 billion and distributions to noncontrolling interests of $497 million.

During February 2024, we issued $4.500 billion aggregate principal amount of senior notes comprised of (i) $1.000 billion aggregate principal amount of 5.450% senior notes due 2031 (the “Existing 2031 Notes”), (ii) $1.300 billion aggregate principal amount of 5.600% senior notes due 2034, (iii) $1.500 billion aggregate principal amount of 6.000% senior notes due 2054 and (iv) $700 million aggregate principal amount of 6.100% senior notes due 2064. We used the net proceeds to repay borrowings under our asset-based revolving credit facility and for general corporate purposes. During March 2024, we repaid all of the $2.000 billion aggregate principal amount of 5.000% senior notes due 2024 at maturity.

24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

During August 2024, we issued $3.000 billion aggregate principal amount of senior notes comprised of (i) $750 million aggregate principal amount of 5.450% senior notes due 2031 (the “New 2031 Notes”), (ii) $1.250 billion aggregate principal amount of 5.450% senior notes due 2034 and (iii) $1.000 billion aggregate principal amount of 5.950% senior notes due 2054. The New 2031 Notes represent a further issuance of our Existing 2031 Notes, issued during February 2024, and together with the New 2031 Notes, the aggregate principal amount of these notes is $1.750 billion. We used the net proceeds to repay borrowings under our asset-based revolving credit facility and for general corporate purposes.

We have significant debt service requirements. Our debt totaled $42.965 billion at September 30, 2024. Our interest expense was $1.533 billion for the first nine months of 2024 and $1.447 billion for the first nine months of 2023.

In addition to cash flows from operations, available sources of capital include amounts available under our senior secured credit facilities ($7.986 billion available as of both September 30, 2024 and October 28, 2024) and anticipated access to public and private debt markets.

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay claims, totaled $648 million and $564 million at September 30, 2024 and December 31, 2023, respectively. An insurance subsidiary maintained net reserves for professional liability risks of $120 million and $121 million at September 30, 2024 and December 31, 2023, respectively. Our facilities are insured by our insurance subsidiary for losses up to $80 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 $1.980 billion and $1.926 billion at September 30, 2024 and December 31, 2023, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $547 million. We estimate that approximately $517 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

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.

Market Risk

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 $648 million at September 30, 2024. 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, 2024, we had unrealized losses of $18 million on the insurance subsidiaries’ investments.

We are exposed to market risk related to market illiquidity. Investments in debt and equity securities held by our insurance subsidiaries could be impaired by the inability to access the capital markets. Should the insurance subsidiaries require significant amounts of cash in excess of normal cash requirements to pay claims and other expenses on short notice, we may have difficulty selling these investments in a timely manner or be forced to sell them at a price less than what we might otherwise have been able to in a normal market environment. We may be required to recognize credit-related impairments on our investment securities in future periods should issuers default on interest payments or should the fair market valuations of the securities deteriorate due to ratings downgrades or other issue-specific factors.

We are also exposed to market risk related to changes in interest rates. With respect to our interest-bearing liabilities, approximately $1.256 billion of our debt at September 30, 2024 was subject to variable rates of interest, while the remaining debt balance of $41.709 billion at September 30, 2024 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 primarily of amounts outstanding under the senior secured credit facilities. The average effective interest rate for our debt was 5.0% for both of the nine months ended September 30, 2024 and 2023.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Market Risk (continued)

The estimated fair value of our long-term debt was $42.593 billion at September 30, 2024. 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 $13 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.

We are exposed to currency translation risk related to our foreign operations. We currently do not consider the market risk related to foreign currency translation to be material to our consolidated financial statements or our liquidity.

Tax Examinations

At September 30, 2024, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016, 2017 and 2018 federal income tax returns and the 2019 returns for certain affiliates. We are also subject to examination by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Management believes HCA Healthcare, Inc. and its predecessors, 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.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Operating Data |
|  | 2024 |  |  | 2023 |
Number of hospitals in operation at: |  |  |  |  |  |
March 31 |  |  | 188 |  |  |  | 180 |
June 30 |  |  | 188 |  |  |  | 182 |
September 30 |  |  | 187 |  |  |  | 183 |
December 31 |  |  |  |  |  | 186 |
Number of freestanding outpatient surgical centers in operation at: |  |  |  |  |  |
March 31 |  |  | 121 |  |  |  | 126 |
June 30 |  |  | 123 |  |  |  | 126 |
September 30 |  |  | 125 |  |  |  | 126 |
December 31 |  |  |  |  |  | 124 |
Licensed hospital beds at(a): |  |  |  |  |  |
March 31 |  |  | 49,724 |  |  |  | 48,891 |
June 30 |  |  | 49,844 |  |  |  | 49,063 |
September 30 |  |  | 49,890 |  |  |  | 49,279 |
December 31 |  |  |  |  |  | 49,588 |
Weighted average beds in service(b): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 42,564 |  |  |  | 41,684 |
Second |  |  | 42,624 |  |  |  | 41,802 |
Third |  |  | 42,640 |  |  |  | 41,927 |
Fourth |  |  |  |  |  | 42,072 |
Year |  |  |  |  |  | 41,873 |
Average daily census(c): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 30,567 |  |  |  | 29,310 |
Second |  |  | 29,259 |  |  |  | 28,116 |
Third |  |  | 29,247 |  |  |  | 28,396 |
Fourth |  |  |  |  |  | 29,069 |
Year |  |  |  |  |  | 28,721 |
Admissions(d): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 560,869 |  |  |  | 525,235 |
Second |  |  | 554,456 |  |  |  | 522,996 |
Third |  |  | 562,100 |  |  |  | 537,943 |
Fourth |  |  |  |  |  | 544,554 |
Year |  |  |  |  |  | 2,130,728 |
Equivalent admissions(e): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 981,521 |  |  |  | 916,535 |
Second |  |  | 994,835 |  |  |  | 938,834 |
Third |  |  | 1,006,106 |  |  |  | 958,504 |
Fourth |  |  |  |  |  | 974,561 |
Year |  |  |  |  |  | 3,788,434 |
Average length of stay (days)(f): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 5.0 |  |  |  | 5.0 |
Second |  |  | 4.8 |  |  |  | 4.9 |
Third |  |  | 4.8 |  |  |  | 4.9 |
Fourth |  |  |  |  |  | 4.9 |
Year |  |  |  |  |  | 4.9 |

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

|  | 2024 |  |  | 2023 |
Emergency room visits(g): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 2,428,914 |  |  |  | 2,252,669 |
Second |  |  | 2,414,960 |  |  |  | 2,294,205 |
Third |  |  | 2,446,962 |  |  |  | 2,343,514 |
Fourth |  |  |  |  |  | 2,452,395 |
Year |  |  |  |  |  | 9,342,783 |
Outpatient surgeries(h): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 252,835 |  |  |  | 255,971 |
Second |  |  | 258,967 |  |  |  | 263,601 |
Third |  |  | 249,364 |  |  |  | 254,557 |
Fourth |  |  |  |  |  | 270,286 |
Year |  |  |  |  |  | 1,044,415 |
Inpatient surgeries(i): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 133,398 |  |  |  | 130,460 |
Second |  |  | 135,860 |  |  |  | 132,447 |
Third |  |  | 135,803 |  |  |  | 133,521 |
Fourth |  |  |  |  |  | 132,417 |
Year |  |  |  |  |  | 528,845 |
Days revenues in accounts receivable(j): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 53 |  |  |  | 50 |
Second |  |  | 53 |  |  |  | 50 |
Third |  |  | 52 |  |  |  | 52 |
Fourth |  |  |  |  |  | 53 |
Outpatient revenues as a % of patient revenues(k): |  |  |  |  |  |
Quarter: |  |  |  |  |  |
First |  |  | 37 | % |  |  | 38 | %
Second |  |  | 38 | % |  |  | 40 | %
Third |  |  | 38 | % |  |  | 37 | %
Fourth |  |  |  |  |  | 38 | %
Year |  |  |  |  |  | 38 | %

(a)
Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency.
(b)
Represents the average number of beds in service, weighted based on periods owned.
(c)
Represents the average number of patients in our hospital beds each day.
(d)
Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume.
(e)
Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation “equates” outpatient revenues to the volume measure (admissions) used to measure inpatient volume resulting in a general measure of combined inpatient and outpatient volume.
(f)
Represents the average number of days admitted patients stay in our hospitals.
(g)
Represents the number of patients treated in our emergency rooms.
(h)
Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries.
(i)
Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management and endoscopy procedures are not included in inpatient surgeries.
(j)
Revenues per day is calculated by dividing revenues for the quarter by the days in the quarter. Days revenues in accounts receivable is then calculated as accounts receivable at the end of the quarter divided by revenues per day.
(k)
Represents the percentage of patient revenues related to patients who are not admitted to our hospitals.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by this item is provided under the caption “Market Risk” under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

HCA’s management, with the participation of HCA’s chief executive officer and chief financial officer, has evaluated the effectiveness of HCA’s disclosure controls and procedures as of September 30, 2024. Based on that evaluation, HCA’s chief executive officer and chief financial officer concluded that HCA’s disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control Over Financial Reporting

During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in “Note 8 – Contingencies” in the notes to condensed consolidated financial statements is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Reference is made to the factors set forth under the caption “Forward-Looking Statements” in Part I, Item 2 of this quarterly report on Form 10-Q and other risk factors described in our annual report on Form 10-K for the year ended December 31, 2023, which are incorporated herein by reference. There have not been any material changes to the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During January 2024 and January 2023, our Board of Directors authorized share repurchase programs for up to $6 billion and $3 billion, respectively, of our outstanding common stock. During the quarter ended September 30, 2024, we repurchased 4,948,753 shares of our common stock at an average price of $362.74 per share through market purchases pursuant to the January 2024 authorization. At September 30, 2024, we had $2.433 billion of repurchase authorization available under the January 2024 authorization.

The following table provides certain information with respect to our repurchases of common stock from July 1, 2024 through September 30, 2024 (dollars in billions, except per share amounts).

Period |  | Total Number of Shares Purchased |  |  | Average Price Paid per Share |  |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  |  | Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs |
July 2024 |  |  | 1,743,625 |  |  | $ | 329.78 |  |  |  | 1,743,625 |  |  | $ | 3.653 |
August 2024 |  |  | 1,886,994 |  |  | $ | 369.76 |  |  |  | 1,886,994 |  |  | $ | 2.956 |
September 2024 |  |  | 1,318,134 |  |  | $ | 396.31 |  |  |  | 1,318,134 |  |  | $ | 2.433 |
Total for third quarter 2024 |  |  | 4,948,753 |  |  | $ | 362.74 |  |  |  | 4,948,753 |  |  |  |

On October 24, 2024, our Board of Directors declared a quarterly dividend of $0.66 per share on our common stock, payable on December 27, 2024 to stockholders of record at the close of business on December 13, 2024. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors. Our ability to declare future dividends may also from time to time be limited by the terms of our debt agreements.

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ITEM 5. OTHER INFORMATION

(c) During the three months ended September 30, 2024, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934 (the “Exchange Act”)) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

(a) List of Exhibits:

4.1 | — | Supplemental Indenture No. 41, dated as of August 12, 2024, among HCA Inc., HCA Healthcare, Inc., CSC Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on August 12, 2024, and incorporated herein by reference).
4.2 | — | S upplemental Indenture No. 42, dated as of August 12, 2024, among HCA Inc., HCA Healthcare, Inc., CSC Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on August 12, 2024, and incorporated herein by reference).
4.3 | — | Supplemental Indenture No. 43, dated as of August 12, 2024, among HCA Inc., HCA Healthcare, Inc., CSC Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.6 to the Company’s Current Report on Form 8-K filed on August 12, 2024, and incorporated herein by reference).
4.4 | — | Form of 5.450% Senior Notes due 2034 (included in Exhibit 4.2).
4.5 | — | Form of 5.950% Senior Notes due 2054 (included in Exhibit 4.3).
22 | — | List of Subsidiary Guarantors and Pledged Securities.
31.1 | — | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 | — | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 | — | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 | — | The following financial information from our quarterly report on Form 10-Q for the quarter ended September 30, 2024 filed with the SEC on October 31, 2024, formatted in Inline Extensible Business Reporting Language: (i) the condensed consolidated balance sheets at September 30, 2024 and December 31, 2023, (ii) the condensed consolidated income statements for the quarters and nine months ended September 30, 2024 and 2023, (iii) the condensed consolidated comprehensive income statements for the quarters and nine months ended September 30, 2024 and 2023, (iv) the condensed consolidated statements of stockholders’ equity (deficit) for the quarters and nine months ended September 30, 2024 and 2023, (v) the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 and (vi) the notes to condensed consolidated financial statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104 | — | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HCA Healthcare, Inc.
By: | /S/ M ICHAEL A. M ARKS
| Michael A. Marks
| Executive Vice President and Chief Financial Officer

Date: October 31, 2024

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