10-KPeriod: FY2014

HCA Healthcare, Inc. Annual Report, Year Ended Dec 31, 2014

Filed February 26, 2015For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) reported strong financial performance for the fiscal year ended December 31, 2014. The company operates a substantial network of 166 hospitals and 113 freestanding surgery centers across 20 states and England. HCA's primary objective is to provide high-quality, cost-effective healthcare while driving growth and profitability. Key drivers for the year included an 8.0% increase in consolidated revenues, reaching $36.9 billion, fueled by a 3.8% rise in revenue per equivalent admission and a 4.0% increase in equivalent admissions. This growth was supported by increased patient volumes, reflected in a 2.9% rise in consolidated admissions and significant growth in emergency room visits. Despite increased operating expenses, particularly in salaries and benefits, the company managed to improve its net income attributable to HCA Holdings, Inc. by 20.5% to $1.875 billion. This was achieved through strategic cost management, favorable reimbursement changes, and a reduction in the provision for doubtful accounts, partly due to the impact of the Affordable Care Act's coverage expansion. HCA also actively managed its capital structure, repurchasing shares and refinancing debt, demonstrating a commitment to enhancing shareholder value.

Financial Highlights

45 data points
Beta

Revenue

$36.92B

Net Income

$1.88B

5.1% Net Margin

EPS (Diluted)

$4.16

Total Assets

$30.98B

Cash & Equivalents

$566.00M

Free Cash Flow

$2.27B

Financial Statements
Beta
Revenue$36.92B
Interest Expense$1.74B
Net Income$1.88B
EPS (Basic)$4.30
EPS (Diluted)$4.16
Shares Outstanding (Basic)435.67M
Shares Outstanding (Diluted)450.35M

Key Highlights

  • 1Consolidated revenues increased by 8.0% to $36.9 billion in 2014, driven by increased patient volumes and revenue per admission.
  • 2Net income attributable to HCA Holdings, Inc. rose by 20.5% to $1.875 billion in 2014.
  • 3The company operated 166 hospitals and 113 freestanding surgery centers, indicating a significant scale of operations.
  • 4Same-facility revenues grew by 6.9%, reflecting strong performance in existing markets.
  • 5Emergency room visits saw a substantial increase of 6.9% on a consolidated basis, indicating growing demand for urgent care services.
  • 6HCA actively managed its debt, redeeming significant portions of its outstanding notes and reducing its overall interest expense.
  • 7The provision for doubtful accounts decreased by $689 million, suggesting an improvement in the collectability of patient receivables, potentially linked to healthcare coverage expansion.

Frequently Asked Questions

HCA Healthcare's consolidated revenues increased by 8.0% to $36.918 billion in 2014 compared to the prior year. This growth was driven by a combination of factors, including a 4.0% increase in equivalent admissions (a measure of combined inpatient and outpatient volume) and a 3.8% increase in revenue per equivalent admission. Same-facility revenues also showed robust growth of 6.9%.

HCA Healthcare actively managed its debt in 2014 by refinancing a significant portion of its outstanding notes. The company issued $3.5 billion in new notes and used the proceeds to redeem $2.75 billion of existing senior secured notes. Later in the year, it issued another $2.0 billion in notes and used proceeds to redeem $1.4 billion of existing senior secured notes. These actions aimed to optimize the company's debt maturity profile and interest expense. Additionally, HCA repurchased approximately 28.6 million shares of its common stock under an authorized share repurchase program.

The filing indicates that the expansion of health insurance coverage under the Affordable Care Act (ACA) may have positively impacted HCA. The company noted a decline in uninsured patient admissions and emergency room visits, attributing this partly to previously uninsured patients obtaining coverage through health insurance exchanges and Medicaid expansion programs. This potentially contributed to a decrease in the provision for doubtful accounts and an increase in revenue from insured patients.

The primary operating expenses for HCA were salaries and benefits, supplies, and other operating expenses. Salaries and benefits represented 45.1% of revenues in 2014, a slight decrease from 45.8% in 2013. Supplies accounted for 17.0% of revenues in 2014, down from 17.5% in 2013. Other operating expenses remained stable at 18.2% of revenues in both years. Despite increased operating costs, the company's revenue growth and improved revenue per equivalent admission helped to offset these pressures, leading to an increase in net income.