10-QPeriod: Q2 FY2016

HCA Healthcare, Inc. Quarterly Report for Q2 Ended Jun 30, 2016

Filed August 4, 2016For Securities:HCA

Summary

HCA Healthcare, Inc. reported strong financial performance for the second quarter and first six months of 2016, with revenues increasing by 4.3% and 5.1% respectively, compared to the prior year periods. Net income attributable to HCA Holdings, Inc. also saw significant growth, up 29.8% for the quarter and 23.1% for the six-month period, driven by increased patient volumes and revenue per equivalent admission. The company continued its share repurchase program, demonstrating a commitment to returning capital to shareholders. While operational performance was robust, investors should note the ongoing legal proceedings, particularly the Health Midwest litigation, which resulted in a significant accrued liability. The company's substantial debt load remains a key consideration for financial health. Despite these factors, HCA Healthcare's financial results indicate a healthy operational performance and a positive outlook for the period.

Financial Highlights

43 data points
Beta

Net Income

$658.00M

EPS (Diluted)

$1.65

Total Assets

$33.20B

Cash & Equivalents

$691.00M

Free Cash Flow

$686.00M

Financial Statements
Beta
Interest Expense$427.00M
Net Income$658.00M
EPS (Basic)$1.70
EPS (Diluted)$1.65
Shares Outstanding (Basic)386.41M
Shares Outstanding (Diluted)398.66M

Key Highlights

  • 1Revenues increased by 4.3% to $10.319 billion for Q2 2016 and by 5.1% to $20.579 billion for the first six months of 2016, compared to the prior year periods.
  • 2Net income attributable to HCA Holdings, Inc. grew significantly, up 29.8% to $658 million for Q2 2016 and 23.1% to $1.352 billion for the first six months of 2016.
  • 3Diluted EPS rose to $1.65 for Q2 2016 and $3.34 for the first six months of 2016, up from $1.18 and $2.54, respectively, in the prior year periods.
  • 4The company actively engaged in share repurchases, buying back 24.4 million shares in the first six months of 2016.
  • 5Operating cash flow saw a substantial increase of $673 million in the first six months of 2016 compared to the same period in 2015.
  • 6The company's substantial long-term debt of $31.228 billion as of June 30, 2016, remains a key financial consideration.

Frequently Asked Questions

HCA Healthcare demonstrated strong operational performance with increased revenues and net income in the second quarter and first six months of 2016. Revenue growth was driven by higher patient volumes and revenue per equivalent admission. The company also actively repurchased shares and generated significant operating cash flow. However, the company carries a substantial amount of debt, and there are ongoing legal proceedings that could impact financial results.

Revenue growth is primarily driven by increases in patient volumes (admissions and equivalent admissions) and an increase in revenue per equivalent admission. For the second quarter of 2016, consolidated revenues grew by 4.3% due to a 1.9% increase in equivalent admissions and a 2.4% increase in revenue per equivalent admission.

HCA Healthcare continues to actively repurchase its common stock under an authorized share repurchase program. In the first six months of 2016, the company repurchased approximately 24.4 million shares, indicating a strategy to return capital to shareholders.

Yes, HCA Healthcare is involved in significant legal proceedings, most notably the Health Midwest litigation, which has resulted in a substantial accrued liability of $458 million as of June 30, 2016, including damages, costs, and interest. The company is also subject to various government investigations and legal and regulatory proceedings common in the healthcare industry.