10-QPeriod: Q2 FY2014

HCA Healthcare, Inc. Quarterly Report for Q2 Ended Jun 30, 2014

Filed August 5, 2014For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) reported a strong second quarter for 2014, with revenues increasing by 9.2% year-over-year to $9.230 billion. This growth was driven by a 5.4% increase in revenue per equivalent admission and a 3.6% increase in equivalent admissions. Net income attributable to HCA Holdings, Inc. rose by 14.3% to $483 million, or $1.07 per diluted share. The company benefited from a significant increase in Medicaid revenues related to the Texas Medicaid Waiver Program and a reduction in the provision for doubtful accounts, attributed to more patients gaining coverage through health insurance exchanges and Medicaid expansion. Despite a substantial $226 million loss on debt retirement, the company demonstrated improved operational performance and solid revenue growth.

Financial Highlights

45 data points
Beta

Revenue

$9.23B

Net Income

$483.00M

5.2% Net Margin

EPS (Diluted)

$1.07

Total Assets

$29.82B

Cash & Equivalents

$658.00M

Free Cash Flow

$737.00M

Financial Statements
Beta
Revenue$9.23B
Interest Expense$427.00M
Net Income$483.00M
EPS (Basic)$1.10
EPS (Diluted)$1.07
Shares Outstanding (Basic)438.83M
Shares Outstanding (Diluted)453.01M

Key Highlights

  • 1Revenues increased 9.2% to $9.230 billion in Q2 2014 compared to Q2 2013, driven by higher revenue per equivalent admission and increased patient volumes.
  • 2Net income attributable to HCA Holdings, Inc. grew by 14.3% to $483 million ($1.07 per diluted share) in Q2 2014, compared to $423 million ($0.91 per diluted share) in Q2 2013.
  • 3The provision for doubtful accounts decreased by $295 million, reflecting a favorable shift in patient insurance coverage due to health insurance exchanges and Medicaid expansion.
  • 4A one-time loss of $226 million ($0.32 per diluted share) was recorded due to the retirement of debt in Q2 2014.
  • 5Operating expenses as a percentage of revenue improved slightly, with salaries and benefits and supplies showing favorable trends.
  • 6The company repurchased approximately 14.6 million shares of common stock during the quarter, demonstrating a commitment to shareholder returns.
  • 7Capital expenditures for the first six months of 2014 were $913 million, with full-year 2014 capital expenditure estimates approaching $2.2 billion, indicating continued investment in facilities.

Frequently Asked Questions

Revenue growth was primarily driven by a 5.4% increase in revenue per equivalent admission and a 3.6% increase in equivalent admissions. This growth was supported by improvements in patient volumes, including increased emergency department visits and inpatient surgeries.

The provision for doubtful accounts decreased significantly by $295 million in the second quarter of 2014 compared to the same period in 2013. This decrease is attributed to a decline in uninsured admissions, which is believed to be a result of previously uninsured patients obtaining coverage through health insurance exchanges and Medicaid expansion programs.

The most significant one-time item was a loss of $226 million related to the retirement of debt during the second quarter of 2014. Additionally, the company recorded $142 million in Medicaid revenues related to reimbursements from the Texas Medicaid Waiver Program for a prior program year.

HCA Healthcare plans to continue investing in its facilities, with capital expenditures estimated to approximate $2.2 billion for the full year 2014. Projects under construction at June 30, 2014, had estimated additional costs of approximately $2.04 billion over the next five years.