10-QPeriod: Q1 FY2022

HCA Healthcare, Inc. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 3, 2022For Securities:HCA

Summary

HCA Healthcare, Inc. reported a revenue increase of 6.9% to $14.945 billion for the first quarter of 2022, compared to $13.977 billion in the prior year period. This growth was driven by a combination of increased revenue per equivalent admission and higher equivalent admissions. However, net income attributable to HCA Healthcare, Inc. saw a decrease of 10.6% to $1.273 billion ($4.14 per diluted share) from $1.423 billion ($4.14 per diluted share) in the first quarter of 2021. The company experienced an increase in operating expenses, particularly in salaries and benefits, which rose as a percentage of revenue, and other operating expenses impacted by inflation. Despite the decline in net income, the company demonstrated robust activity in managing its capital structure. HCA Healthcare repurchased approximately $2.1 billion of its common stock in the quarter and issued $6 billion in senior secured notes. Cash flow from operations decreased significantly primarily due to changes in working capital, including a payment for deferred payroll taxes. Management believes existing liquidity and access to capital markets are sufficient to meet its needs over the next 12 months.

Financial Highlights

46 data points
Beta

Revenue

$14.95B

Net Income

$1.27B

8.5% Net Margin

EPS (Diluted)

$4.14

Total Assets

$52.21B

Cash & Equivalents

$2.37B

Free Cash Flow

$484.00M

Financial Statements
Beta
Revenue$14.95B
Operating Expenses$13.13B
Interest Expense$408.00M
Net Income$1.27B
EPS (Basic)$4.21
EPS (Diluted)$4.14
Shares Outstanding (Basic)302.45M
Shares Outstanding (Diluted)307.37M

Key Highlights

  • 1Revenue increased by 6.9% year-over-year to $14.945 billion, driven by higher revenue per equivalent admission and increased admissions.
  • 2Net income attributable to HCA Healthcare, Inc. decreased by 10.6% to $1.273 billion, or $4.14 per diluted share, compared to the prior year.
  • 3Operating expenses rose, with salaries and benefits increasing as a percentage of revenue and other operating expenses impacted by inflation.
  • 4Cash flow from operations declined by $643 million due to negative working capital changes, including a $344 million payment for deferred payroll taxes.
  • 5The company actively managed its capital structure, repurchasing $2.101 billion of common stock and issuing $6 billion in senior secured notes during the quarter.
  • 6Same facility revenues increased by 7.8%, indicating continued growth in core operations.
  • 7Emergency department visits and outpatient surgeries saw significant increases, up 11.7% and 7.0% respectively on a consolidated basis.

Frequently Asked Questions

The revenue increase of 6.9% to $14.945 billion in Q1 2022 was primarily driven by a combination of a 3.6% increase in revenue per equivalent admission and a 3.2% increase in equivalent admissions on a consolidated basis. Same facility revenues also grew by 7.8%.

Net income attributable to HCA Healthcare, Inc. decreased by 10.6% to $1.273 billion in Q1 2022. This was influenced by increased operating expenses, particularly higher salaries and benefits as a percentage of revenue (46.4% vs. 45.1% in Q1 2021) and other operating expenses impacted by inflation. Additionally, there was a $121 million decline in net income, excluding gains on sales of facilities, contributing to the decrease.

HCA Healthcare is actively managing its capital structure. During Q1 2022, the company issued $6.000 billion in senior secured notes and repurchased $2.101 billion of its common stock. The company also redeemed $1.250 billion of its 4.75% senior secured notes due 2023 in April 2022. Despite a substantial debt load of $37.696 billion at March 31, 2022, management believes its liquidity and access to capital markets are sufficient to meet its obligations.

The company acknowledges that COVID-19 continues to impact its operations, though the extent is uncertain and largely beyond its control. While revenue per equivalent admission was negatively impacted by a decline in the acuity of COVID-19 patients, the company also benefited from government programs for uninsured COVID-19 patients, though the program for accepting new claims stopped in March 2022. The pandemic also contributes to increased labor and supply chain costs.