10-QPeriod: Q2 FY2022

HCA Healthcare, Inc. Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 1, 2022For Securities:HCA

Summary

HCA Healthcare, Inc.'s (HCA) Q2 2022 filing shows a modest revenue increase of 2.7% to $14.82 billion, driven by a 4.2% rise in revenue per equivalent admission, despite a 1.5% decline in equivalent admissions. Net income attributable to HCA Healthcare, Inc. decreased by 20.3% to $1.155 billion, or $3.90 per diluted share, compared to $1.450 billion, or $4.36 per diluted share, in Q2 2021. This decline was impacted by losses on debt retirement and facility sales, as well as increased salaries and benefits, which rose as a percentage of revenue. The company continues to manage its significant debt load, which stood at $38.9 billion at the end of June 2022. Despite increased interest expenses, HCA maintains ample liquidity, with $2.725 billion available under its senior secured credit facilities. Management expressed confidence in their ability to meet liquidity needs through operating cash flows, credit facilities, and access to debt markets. The company also continued its share repurchase program, buying back $4.783 billion worth of stock in the first six months of 2022.

Financial Highlights

46 data points
Beta

Revenue

$14.82B

Net Income

$1.16B

7.8% Net Margin

EPS (Diluted)

$3.90

Total Assets

$51.58B

Cash & Equivalents

$858.00M

Free Cash Flow

$550.00M

Financial Statements
Beta
Revenue$14.82B
Operating Expenses$13.06B
Interest Expense$434.00M
Net Income$1.16B
EPS (Basic)$3.95
EPS (Diluted)$3.90
Shares Outstanding (Basic)292.53M
Shares Outstanding (Diluted)296.06M

Key Highlights

  • 1Revenue increased by 2.7% year-over-year to $14.82 billion in Q2 2022, primarily due to higher revenue per equivalent admission (+4.2%).
  • 2Net income attributable to HCA Healthcare, Inc. decreased by 20.3% to $1.155 billion ($3.90 per diluted share) compared to $1.450 billion ($4.36 per diluted share) in Q2 2021.
  • 3Operating expenses, particularly salaries and benefits, rose as a percentage of revenue (45.8% vs. 44.2%), driven by labor costs and inflation.
  • 4Cash flow from operations declined significantly, down $621 million in Q2 2022 compared to Q2 2021, largely due to changes in working capital.
  • 5Total debt remained substantial at $38.9 billion as of June 30, 2022, with interest expense increasing in Q2 2022.
  • 6HCA repurchased $4.783 billion of its common stock in the first six months of 2022, demonstrating a commitment to returning capital to shareholders.
  • 7Despite a drop in net income, the company highlighted strong revenue growth on a same-facility basis (+4.0%) and continued investment in capital expenditures ($1.941 billion in H1 2022).

Frequently Asked Questions

HCA Healthcare's revenue grew by 2.7% to $14.82 billion in Q2 2022, primarily driven by an increase in revenue per equivalent admission, which rose by 4.2%. This indicates that the company was able to generate more revenue from each patient interaction, even though overall patient volume (equivalent admissions) saw a slight decline.

Net income attributable to HCA Healthcare, Inc. decreased by 20.3% to $1.155 billion in Q2 2022. This decline was influenced by several factors, including losses on the retirement of debt ($78 million) and sales of facilities ($32 million). Additionally, operating expenses, particularly salaries and benefits, increased as a percentage of revenue, impacting profitability.

HCA Healthcare carries a significant debt load, totaling $38.9 billion as of June 30, 2022. While interest expenses have increased, the company reported ample liquidity with $2.725 billion available under its senior secured credit facilities. Management believes that current operating cash flows, credit facilities, and access to debt markets are sufficient to meet its liquidity needs for the next 12 months.

Inflation is having a negative impact on HCA Healthcare's operating expenses, particularly salaries and benefits, which increased as a percentage of revenue. The company cited increased utilization of contract, overtime, and premium rate labor as drivers for these higher costs, which it aims to reduce but notes that labor market conditions may affect this pace.