HCA 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, our total indebtedness was $43.031$46.492 billion. As of December 31, 2024,2025, we had availability of $3.486$5.779 billion under our senior secured cash flowunsecured credit facility and $4.500 billion under our senior secured asset-based revolving credit facility, (after giving effect to all issued and outstanding letters of credit and our intention to maintain a minimum available borrowing basecapacity limitations.equal to the aggregate amount outstanding under the commercial paper program ($2.207 billion as of December 31, 2025)). Our indebtedness could have important consequences, including:

We and our subsidiaries have the ability to incur additional indebtedness in the future, subject to the restrictions contained in our senior securedunsecured credit facilitiesfacility and the indentures governing our outstanding notes. If new indebtedness is added to our current debt levels, interest rates and the related risks that we now face could intensify.

We may find it necessary or prudent to refinance our outstanding indebtedness, the terms of which refinancing may not be favorable to us. Our ability to refinance our indebtedness on favorable terms, or at all, is directly affected by the then current global economic and financial conditions which affect the availability of debt financing and the rates at which such financing is available. In addition, our ability to incur secured indebtedness depends in part on the value of our assets, which depends, in turn, on the strength of our cash flows and results of operations, and on economic and market conditions and other factors. Downgrades in our credit ratings may also negatively affect availability of debt financing and the rates at which such financing is available.

Our senior securedunsecured credit facilitiesfacility and, to a lesser extent,and the indentures governing our outstanding notes contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit our and/or certain of our subsidiaries’ ability to, among other things:

engage in certain sale and lease-back transactions; and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and enter into certain transactions with our affiliates.assets.

Under our senior securedunsecured credit facilities,facility, we are required to satisfy and maintain a specified financial ratios.ratio. Our ability to meetmaintain thosethis financial ratiosratio may be affected by global economic and financial conditions or other events beyond our control, and there can be no assurance we will continue to meetmaintain thosethis ratios.ratio. A breach of this or any other covenant could result in a default under bothour thesenior cash flowunsecured credit facilityfacility, andupon the asset-based revolving credit facility. Upon the occurrence of an event of default under these senior secured credit facilities,which the lenders thereunder could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable and terminate all commitments to extend further credit, which would also result in an event of default under a significant portion of our other outstanding indebtedness. If we were unable to repay those amounts, the lenders under the senior secured credit facilities could proceed against the collateral granted to them to secure such indebtedness. We have pledgedIn a significantscenario portion of our assets under our senior secured credit facilities. If any of the lenders under the senior secured credit facilities acceleratewhere the repayment of borrowings,borrowings is accelerated, there can be no assurance there will be sufficient assets to repay theour senior securedunsecured credit facilitiesfacility and our other indebtedness.

Economic conditions, including macroeconomic uncertainties and inflationary pressure, workforce burnout, and public health conditions and other factors, have exacerbated workforce competition, personnel shortages and capacity constraints. New limitations on federal loan eligibility, other student loan changes imposed pursuant to the FBA and changes to immigration policies may also impact health care personnel shortages. We may be required to increase wages and benefits to recruit and retain nurses and other medical support personnel and to hire more expensive temporary or contract personnel.

The success of our hospitals depends in part on the number and quality of the physicians on the medical staffs of our hospitals, the admission and utilization practices of those physicians, maintaining good relations with those physicians and controlling costs related to their employment or affiliation with our hospitals. Although we employ some physicians, physicians are often not employees of the hospitals at which they practice and instead affiliate with us and use our facilities as an extension of their practices. In many of the markets we serve, physicians may have admitting privileges at other hospitals in addition to our hospitals. We continue to face increasing competition to recruit and retain quality physicians, as well as increasing costs to contract with hospital-based physicians. Such physicians may terminate their affiliation with our hospitals at any time. IfSome states enacthave legalenacted restrictions on the provision of medicalcertain procedures or types of care, such restrictionswhich may impact providers'providers’ recruitment and retention efforts in certainthose states. We anticipate facing increased challenges inwith thisrecruitment areaand retention as a significant portion of the current physician population reaches retirement age, especially if there is a shortage of physicians willing and able to provide comparable services. Moreover, changes in immigration policies could reduce the availability of international physicians. If we are unable to recruit and retain quality physicians to affiliate with our hospitals, enter into contractual arrangements with hospital-based physicians, or provide adequate support personnel or technologically advanced equipment and hospital facilities that meet the needs of those physicians and their patients, our admissions may decrease, our operating performance may decline, and our capacity and growth prospects may be materially adversely affected.

The talents and efforts of our employees, particularly our key management, are vital to our success. The members of our management team have significant industry experience, and if any member of our management team leaves the Company,Company unexpectedly, such member would be difficult to replace. While we have adopted succession plans to prepare for such an event, our succession plans may not result in a successful transition. Further, institutional knowledge may be lost in any potential managerial transition. We may be unable to retain key management or attract other highly qualified employees, particularly if we do not offer employment terms that are competitive with the rest of the labor market. Failure to attract, hire, develop, motivate, and retain highly qualified employee talent or failure to develop and implement an adequate succession plan for the management team could disrupt our operations and adversely affect our business and our future success.

We, directly and through our vendors and other third parties, collect and store on our networks andnetworks, devices and third-party technology platforms sensitive information, including intellectual property, proprietary business information, protected health information of our patients and personally identifiable information of our employees, patients and consumers. Our facilities use EHRsEHR and other information systems and medical devices that store or transmit information that are integral to the provision of patient care, and these systems and devices are increasingly connected to the internet, hospital networks and other medical devices. The secure maintenance of this information and technology is critical to our business operations.

We have implemented multiple layers of security measures, including cybersecurity and information security systems, protocols and monitoring procedures, intended to protect the confidentiality, integrity and availability of our data and the systems and devices that store and transmit such data. In addition, we rely on various third parties to have appropriate controls to protect our information that is on their systems or otherwise in their control, and we seek to obtain assurances that such third parties will protect our information. However, despite our efforts to mitigate our exposure to cyberattack, even an advanced internal control environment is vulnerable to compromise. We have seen, and believe we will continue to see, widespread vulnerabilities that could affect our or other third parties’ data or systems. We rely on a substantial number of employees, contractors, personnel, hardware, software, applications, and third-party vendors, platforms and technologies, each of which may represent an attack surface for threat actors. Threats from malicious threat actors, including nation-state actors and ransomware groups, new vulnerabilities and advanced new attacks against our, or our vendors’, information systems and devices create risk of cybersecurity incidents, including ransomware, malware and phishing incidents, in which third parties attempt to fraudulently induce our employees or our vendors’ employees into disclosing usernames, passwords or other sensitive information, which can in turn be used for unauthorized access to our or our vendors’ systems. We, our vendors and other third parties have experienced cybersecurity incidents in the past and continue to be the target of attempted cybersecurity and other threats that could have a significant impact on our business, including threats by third parties seeking to access, misappropriate, corrupt, or manipulate our information or disrupt our operations. We expect that we, our vendors and other third parties will continue to experience an increase in cybersecurity threats in the future, both directly and indirectly through threats targeting third parties, as the volume and intensity of cyberattacks on hospitals, health systems and other health care entities continue to increase. Furthermore, because the tools and techniques used by attackers change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We, our vendors and other third parties may experience security incidents that may remain undetected for an extended period. Even if identified, we, our vendors and other third parties may be unable to adequately investigate or remediate incidents or breaches, including due to attackers increasingly using tools and techniques that are designed to circumvent controls, avoid detection and remove or obfuscate forensic evidence. State-sponsored threat actors are increasingly targeting critical infrastructure sectors, including health systems and other critical infrastructure on which we rely. Increasing use of AI technologies in our internal systems may create new attack surfaces or methods for threat actors, and threat actors may use AI technologies to make cyberattacks more difficult to detect, contain or mitigate. Internal access management failures could also result in the compromise or unauthorized exposure of confidential data. Moreover, hardware, software or applications we use may have inherent vulnerabilities or defects of design, manufacture, or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise cybersecurity or information security. There can be no assurance that we or our vendors and other third parties will not be subject to additional cybersecurity threats and incidents that bypass our or their security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our or their information systems, devices or business, including our ability to provide various health care services. In such an event, we may incur substantial costs, including but not limited to, costs associated with remediating the effects of the cybersecurity or information security incident, costs for security measures to guard against similar future incidents and costs to recover data. Further, consumer confidence in the integrity and security of personal information and critical operations data in the health care industry generally could be shaken to the extent there are successful cyberattacks at other health care services companies, which could have a material, adverse effect on our business, financial position or results of operations.

Cybersecurity, privacy, physical securitysecurity, operational resiliency and the continued development and enhancement of our controls, processes and practices designed to protect our facilities, information systems and data from attack, damage or unauthorized access remain a priority for us. AsHowever, as cyber threats continue to evolve, along with their increased volume and sophistication, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities or incidents, and such measures may decrease the efficiency of our operations. We may also be required to expend additional resources to comply with evolving federalfederal, state and stateindustry requirements related to cybersecurity and information security, including those focused on health care providers. Although, to date, no cyberattack or other information or security breach has resulted in material losses or other material consequences to us, there can be no assurance that our controls and procedures in place to monitor and mitigate the risks of cyber threats, including the remediation of critical cybersecurity, information security and software vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the future. Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover our losses in excess of what we self-insure, or all types of claims that may arise. The occurrence of any of these events could result in (i) harm to patients; (ii) business interruptions and delays; (iii) the loss, misappropriation, corruption or unauthorized access of data; (iv) litigation and potential liability under privacy, security, breach notification and consumer protection laws, common law theories or other applicable laws; (v) reputational damage; and (vi) foreign, federal and state governmental inquiries, any of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.

Our operations could be impaired by a failure in or breach of our information systems.systems or those of third parties on whose systems our business relies.

We have taken precautionary measures designed to prevent problems that could affect our information systems. Nevertheless, wethere can be no assurance that our business continuity, technology change and information security response plans will effectively mitigate our operational risks. We or our vendors and other third parties thatupon whom we rely upon may experience system failures and disruptions. The occurrence of any system failure could result in interruptions,business interruptions or delays, the loss or corruption of data and cessations or interruptions in the availability of systems, any of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.

The federal government is working to promotepromoting the adoption of health information technology and the promotion of nationwide health information exchange to improve health care. For example, HHS incentivizes the adoption and meaningful use of certified EHR technology through its Medicare Promoting Interoperability Program and Quality Payment Program. Eligible hospitals that fail to demonstrate meaningful use of certified EHR technology and have not applied and qualified for a hardship exception are subject to reduced reimbursement from Medicare. Eligible health care professionals are also subject to positive or negative payment adjustments based, in part, on their use of EHR technology. Therefore, if our hospitals and employed professionals are unable to properly adopt, maintain and utilize certified EHR systems, weany couldresulting bepayment subject to penalties thatadjustments may have an adverse effect on our financial condition and results of operations.

Current and future initiatives related to health care technology, data sharing and interoperability may require changes to our operations, impose new and complex compliance obligations and require investments in infrastructure. In particular, AI is driving innovation and, in some cases, augmenting risks related to health care technology. For example, our physicians are adopting the use of generative AI to assist with the taking of patient medical notes, among other tasks. We may also use AI in health care-related administrative tasks, including in the collection of patient accounts receivable. Rapid changes in technology driven by AI may require us to expend significant resources to acquire, develop, implement and maintain that technology. Failure to integrate these technologies in a timely, cost-efficient and resource-efficient manner may impede our ability to deliver health care services in a competitive manner. There is also a risk that our confidential information becomes part of a model that is accessible by other third-party AI applications or users as a result of a cybersecurity incident or a third-party AI developer’s violation of our vendor engagement terms.

The development of AI technologies is complex, and there are technical challenges associated with achieving the desired level of accuracy, efficiency and reliability. For instance, AI models used by us or third-party vendors may be based on biasedbiased, inaccurate or deficient datasets, which could result in inaccurate or misleading outputs. Ineffective or inadequate AI development or deployment practices by us or third-party developers or vendors, including any disruptionsdisruptions, errors or failures of AI systems once implemented, could result in unintended consequences. Should the use of AI technologies fail to operate as anticipated or not perform as specified, including any biases or errors in the outputs of AI, patient care may be affected, legal claims may be asserted against us and our reputation may be harmed. Further, federal and state requirements regarding the use of AI by health care providers continue to evolve.evolve and could conflict as administrations take differing approaches to evolving AI. For example, HHS finalized a rule in December 2023 imposingimposes transparency requirements for AI and other predictive algorithms that are part of certified health information technology. Some states have adopted or are considering additional measures regarding the use of AI within the health care industry. For example, California’s AB 3030 requires that certain disclaimers and instructions be provided to patients if generative AI is used to create patient communications pertaining to patient clinical information. In addition, theUtah’s AIPA requires that physicians, nurses and other regulated health care providers disclose when an individual is interacting with generative AI whilein receivinga “high-risk” manner, including the regulatedcollection service.of health data or the provision of medical advice or services. Further, in Colorado, the CAIA will impose significant requirements on companies that use AI systems to recommend certain health decisions. If we or our third-party providers are restricted from using AI as a result of any laws or regulations, it could impact our operations and cause us to incur costs to replace or modify our use of AI. We may be subject to financial penalties or other disincentives or experience reputational damage for failure to comply with applicable laws and regulations. In addition, any failure or perceived failure by us or our third-party providers to comply with applicable AI laws and regulations could result in investigations or legal proceedings, which could result in significant legal costs and potential liability.

As a front-line provider of health care services, we are subject to the health and economic effects of public health conditions. If a pandemic, epidemic, outbreak of an infectious disease or other public health crisis were to occur in an area in which we operate, our operations could be adversely affected. Such a crisis could diminish the public trust in health care facilities, especially hospitals that fail to accurately or timely diagnose, or are treating (or have treated) patients affected by infectious diseases. If any of our facilities are involved, or perceived as being involved, in treating patients from such an infectious disease, other patients might cancel elective procedures or fail to seek needed care at our facilities, and our reputation may be negatively affected. Patient volumes may decline or volumes of uninsured and underinsured patients may increase, depending on the economic circumstances surrounding the pandemic, epidemic or outbreak. Further, a pandemic, epidemic or outbreak might adversely affect our operations by causing a temporary shutdown or diversion of patients, causing disruption or delays in supply chains for materials and products or causing staffing shortages in our facilities. Although we have contingency plans in place, including infection control and disaster plans, the potential impact of, as well as the public’s and the government’s response to, a future pandemic, epidemic or outbreak is difficult to predict and could adversely affect our business, results of operations, financial condition and cash flows.

The health care industry has been and continues to be impacted by health care reform efforts.efforts and is subject to changing political, regulatory and other influences. For example, the Affordable Care Act affects how health care services are covered, delivered and reimbursed, and expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms. Changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected and may continue to affect the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased,obtained, and may impact our payer mix. Reductions in the number of insured individuals or the scope of insurance coverage, or an increase in patients covered under governmental health programs or other health plans with lower reimbursement levels, may have an adverse effect on our business. For example, theCOVID-19 ARPArelief legislation temporarily enhanced the premium tax credits available for purchasing coverage through the Exchanges by lowering premiums and raising income eligibility thresholds.thresholds, Subsequent legislation extendedbut these enhanced premium tax credits throughexpired at the end of 2025. However, further extension is uncertain, and weWe believe the expiration of thesethe enhanced premium tax credits wouldwill adversely impact Exchange enrollment and significantly increase the uninsured rate. In addition, the FBA includes several health care policy changes that are expected to impact insurance coverage obtained through the Exchanges, and a final rule issued by CMS in June 2025 makes other changes intended to address affordability, consumer protections and integrity of the Exchanges. The June 2025 rule is the subject of legal challenges and, in August 2025, a federal district court issued a nationwide stay of several provisions. Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could increase rates of uninsured and underinsured individuals and destabilize insurance markets. Reductions in the number of insured individuals or the scope of insurance coverage, a decline in patients with private insurance coverage, or an increase in patients covered under governmental health programs or other health plans with lower reimbursement levels may have an adverse effect on our business and results of operations.

In addition, the Medicare and Medicaid programs are subject to change, includingchange as a result of changeslegislation fromand theadministrative 2024 federal election.actions. For example, some members of Congress have proposed changes intended to accelerate the shift from traditional Medicare to Medicare Advantage, repealing the Affordable Care Act or eliminating some of its consumer protections. The outcome of the 2024 federal election increases regulatory uncertainty. Changes in governmental administration, including changes in agency structures and staffing, such as reduction or elimination of personnel and agencies, may result in changes to established rulemaking conventions and timelines, including for regularly issued reimbursement rules, among other effects.Advantage. Legislation and administrative actions at the federal level may also impact funding for, or the structure of, the Medicaid program and may shape administration of the Medicaid program at the state level. ChangesFor example, the FBA includes significant health care policy reforms that are expected to result in Medicaid spending reductions and changes in administration of state Medicaid programs. Among other changes, the law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under age 65 in Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions. The law also makes significant changes to Medicaid financing mechanisms, including restrictions intended to reduce the federal fundingmatching formulafunds forreceived by state Medicaid couldprograms, significantlywith impactgreater restrictions in states that have expanded Medicaid. It is difficult to predict the ultimate effects of the FBA, as it is a complex law that mandates various changes over time and we expect additional rulemaking and guidance from federal agencies regarding implementation. However, reductions in federal matching funds and increased state obligations and administrative burden could result in state limitations on Medicaid undereligibility theor Affordablecoverage, Careamong Act,other especiallyeffects, particularly if federal contributions for Medicaid expansion populations decrease and states are unable to offset thereductions reductions.in Further,federal somefunding. Some states have trigger laws that would end their Medicaid expansion or require other changes if the federal funding match rate is reduced.reduced or similar funding restrictions are imposed for Medicaid expansion. Although most of these trigger laws are not directly implicated by the FBA, some states may nonetheless consider or make changes to Medicaid expansion programs due to related budgetary pressures. In addition to implementing changes mandated through legislation, CMS may make changes to Medicaid payment models and may impose new restrictions or grant states additional flexibility in the administration of state Medicaid programs, including by allowing additional states to condition Medicaid enrollment on work or other community engagement or permitting other eligibility restrictions.programs. Other health reform initiatives and proposals at the federal and state levels include those focused on price transparency and out-of-network charges, which may impact prices, our relationships with patients, payers or ancillary providers (such as anesthesiologists, radiologists and pathologists) and our competitive position, and site-neutral payment policies, which may reduce the reimbursement we receive. Some states are considering or have imposed rate-setting measures, including limits on hospital rates. Other industry participants, such as private payers and large employer groups and their affiliates, may also introduce financial or delivery system reforms.

In recent years, legislative and regulatory changes have resulted in limitations on and, in some cases, reductions in levels of payments to health care providers for certain services under the Medicare program. For example, Congress established automatic spending reductions, referred to as sequestration, under the BCA, resulting in a 2% reduction in Medicare payments that extends through the first eightfive months of federal fiscal year 2032.2033. These reductions are in addition to reductions mandated by other laws. It is difficult to predict whether, when or what other deficit or other spending reduction initiatives may be proposed by Congress, but we anticipate that efforts to address the federal budget deficit will continue to place pressures on government health care programs and that future legislation may include additional Medicare spending reductions.

From time to time, CMS revises the reimbursement systems used to reimburse health care providers, including changes to the inpatient hospital MS-DRG system and other payment systems, which may result in reduced Medicare payments. For example, under a site neutrality policy, clinic visit services provided by off-campus provider-based departments are generally not covered as outpatient department services under the outpatient PPS, but instead are paid at the Physician Fee Schedule rate, which is generally substantially lower than the outpatient PPS rate. Further, to address past changes to the 340B Drug Pricing Program that were invalidated by the U.S. Supreme Court, CMS finalized payment reductions under the outpatient PPS. Payment rates were reduced for non-drug services in calendar year 2023, and additional reductions to payments for non-drug item and services will taketook effect in calendar year 2026 and will continue for approximatelyseveral 16years, years. As another example, CMS recently finalized changes tountil the Medicaidpast fraction of the Medicare DSH payment formula that will result in lower DSHinvalidated payments forare many hospitals.offset. These payment policies and future changes to payment policies may adversely impact our results of operations, and any potential legal challenges to changes may take years to resolve. Payment policies for different types of providers and for various items and services continue to evolve. Congress and/or CMS may implement further changes to reimbursement for items or services that result in payment reductions for other items or services or that otherwise affect our business and operations. In some cases, private third-party payers rely on all or portions of Medicare payment systems to determine payment rates. Changes to government health care programs that reduce payments under these programs may negatively impact payments from private third-party payers.

A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal information. Various states in which we operate have passed privacy laws and regulations that impose restrictive requirements on the useuse, disclosure, transfer and disclosurestorage of personal information, including restrictions on the offshoring of data, and many other state and federal privacy laws have been proposed. In many cases, these laws are more restrictive or impose more obligations than, and may not be preempted by, the HIPAA privacy and security regulations, may apply to employees and business contacts in addition to patients, and may be subject to new and varying interpretations by courts and government agencies. The potential effects of these laws are far-reaching and may require us to incur substantial expenses, including costs associated with modifying our data processing practices and policies. Failure to comply with these and any other comprehensive privacy laws passed at the state or federal level may result in regulatory enforcement actions, penalties and damage to our reputation. As a result of our operations in the United Kingdom, we are subject to the UK Data Protection Act, which contains stricter privacy restrictions than laws and regulations in the United States and provides for significant fines in the event of violations. These administrative fines are based on a multi-factored approach. Moreover, rules for data transfers outside of the United Kingdom and European Economic Area are subject to increased regulation, and such regulations are frequently subject to further revision and updated regulator guidance, making necessary compliance measures challenging to ascertain and implement with respect to our United Kingdom operations. We expect that there will continue to be new or modified laws, regulations, regulatory guidance and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions, which could impact our operations and cause us to incur substantial costs.

We send short message service,service or SMS,(“SMS”) text messages to patients. While we obtain consent from these individuals to send text messages, federal or state regulatory authorities or private litigants may claim that the notices and disclosures we provide, form of consents we obtain or our SMS texting practices are not adequate or violate applicable law. In addition, weWe must ensure that our SMS texting practices comply with regulations and agency guidance under the Telephone Consumer Protection Act (the “TCPA”), a federal statute that protects consumers from unwanted telephone calls, faxes and text messages.messages as well as similar state laws and regulations. While we strive to adhere to strict policies and procedures that comply with the TCPA,TCPA and similar state laws, the Federal Communications Commission, as the agency that implements and enforces the TCPA, or other federal or state regulatory authorities or private litigants may disagree with our interpretation of such laws, and may claim that the TCPAnotices and disclosures we provide, form of consents we obtain or our SMS texting practices are not adequate or violate applicable law, all which may subject us to penalties and other consequences for noncompliance. Determination by a court or regulatory agency that our SMS texting practices violate the TCPA or similar state laws could subject us to civil penalties and could require us to change some portions of our business. Even an unsuccessful challenge by patients or regulatory authorities of our activities could result in adverse publicity and could require a costly response from and defense by us. Moreover, if wireless carriers or their trade associations, which issue guidelines for texting programs, determine that we have violated their guidelines, our ability to engage in texting programs may be curtailed or revoked, which could impact our operations and cause us to incur costs related to implementing aalternative workaround solution.solutions.

Some states, particularly in the eastern part of the country, require health care providers to provide notice or obtain prior approval,approval often known asunder a CON,CON program for the purchase, construction or expansion of health care facilities, to make certain capital expenditures or to make changes in services or bed capacity. In giving approval, these states consider the need for additional or expanded health care facilities or services. We currently operate health care facilities in a number of states with CON laws or that require other types of approvals for the establishment or expansion of certain facility types or services. The failure to obtain any required CON or other required approval or provide a required notice could impair our ability to operate or expand operations. Any such failure could, in turn, adversely affect our ability to attract patients and physicians to our facilities and grow our revenues, which would have an adverse effect on our results of operations.

We are also subject to examination by federal, state and foreign taxing authorities. Management believes HCA Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the Internal Revenue Service (“IRS”), state and foreign taxing authorities and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position. However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.

Government agencies and their agents, such as the MACs, fiscal intermediaries and carriers, as well as the OIG, CMS and state Medicaid programs, conduct audits of our health care operations. CMS and state Medicaid agencies contract with RACs and other contractors on a contingency fee basis to conduct post-paymentreviews reviewsof claims, generally post-payment, and other program integrity activities to detect and correct improper payments in the Medicare program, including managed Medicare plans, and the Medicaid programs. RAC denials are appealable. However, the RAC audit and appeals processes can impose a significant administrative burden on providers, and we may experience delays in appealing RAC payment denials. Private third-party payers may conduct similar post-paymentpayment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material, adverse effect on our financial position, results of operations and liquidity.

We are subject to litigation relating to our business practices, including claims and legal actions by patients and others in the ordinary course of business alleging malpractice, product liability or other legal theories. Many of these actions seek large sums of money as damages and involve significant defense costs. We insure a portion of our professional liability risks through one of our insurance subsidiary.subsidiaries. Management believes our reserves for self-insured retentions and insurance coverage are sufficient to cover insured claims arising out of the operation of our facilities, although some claims may exceed the scope or amount of the coverage limits of our insurance policies. Our insurance subsidiary has entered into certain reinsurance contracts; however, the subsidiary remains liable to the extent that the reinsurers do not meet their obligations under the reinsurance contracts. If payments for claims exceed actuarially determined estimates, are not covered by insurance, or reinsurers, if any, fail to meet their obligations, our results of operations and financial position could be adversely affected.

The number of freestanding specialty hospitals, surgery centers, emergency departments, urgent care centers and diagnostic and imaging centers in the geographic areas in which we operate has increased. Many individuals are seeking a broader range of services at outpatient facilities as a result of the growing availability of stand-alone outpatient health care facilities, the increase in payer reimbursement policies that restrict inpatient coverage and the increase in the services that can be provided on an outpatient basis, including high margin services. Consequently, most of our hospitals operate in a highly competitive environment, which may put pressure on our pricing, ability to contract with third-party payers and strategy for volume growth. Some of the facilities that compete with our hospitals are physician-owned or are owned by governmental agencies or not-for-profit corporations supported by endowments, charitable contributions or tax revenues and can finance capital expenditures and operations on a tax-exempt basis. Recent consolidations of not-for-profit hospital entities may intensify this competitive pressure. There is also increasing consolidation in the third-party payer industry, including vertical integration efforts among third-party payers and health care providers, and increasing efforts by payers to influence or direct the patient’s choice of provider by the use of narrow or tiered networks or other strategies. Health care industry participants are increasingly implementing physician alignment strategies, such as employing physicians, acquiring physician practice groups and participating in ACOs or other clinical integration models.models, which may negatively affect our competitive position, including through effects on our recruiting and retention efforts. Other industry participants, such as large employer groups and their affiliates and large retail chains, may intensify competitive pressure and affect the industry in ways that are difficult to predict.

Our hospitals compete with specialty hospitals and with freestanding ASCs and other outpatient providers forwith marketregard share into certain high margin services and for quality physicians and personnel. If ASCs and other outpatient providers are better able to compete in this environment than our hospitals, our hospitals may experience a decline in patient volume, and we may experience a decrease in operating margin. In states that do not require a CON or other type of approval for the purchase, construction or expansion of health care facilities or services, competition in the form of new services, facilities and capital spending is more prevalent. Some states that have historically imposed CON or similar prior approval requirements have removed or are considering removing these requirements, which may reduce barriers to entry and increase competition in our service areas. Changes in licensure or other regulations and recognition of new provider types or payment models could also impact our competitive position. If our competitors are better able to attract patients, make capital expenditures and maintain modern and technologically upgraded facilities and equipment, recruit physicians, expand services or obtain more favorable third-party payer contracts at their facilities than our hospitals and other providers, we may experience an overall decline in patient volume. See Item 1, “Business — Competition.”

Any increase in the volume of uninsured patients or deterioration in the collectability of uninsureduninsured, self-pay and self-payother patient-responsibility accounts receivable could adversely affect our cash flows and results of operations. Our facilities may experience growth in total uncompensated care as a result of a number of factors, including conditions impacting the overall economy and unemployment levels. In addition, federal and state legislatures have in recent years considered or passed various proposals impacting the size of the uninsured or underinsured population. For example, the ARPA temporarily enhanced premium tax credits available for purchasing coverage through the Exchanges by lowering premiums and raising income eligibility thresholds. These premium tax creditsthat were extendedestablished throughby COVID-19 relief legislation expired at the end of 2025. However,We further extension is uncertain, and we believeexpect their expiration wouldwill adversely impact Exchange enrollment and significantly increase the uninsured rate. In addition, underthe earlyend COVID-19-relatedof the continuous enrollment requirement, also part of COVID-19 relief legislation, statesand that maintained continuous Medicaid enrollment were eligible for a temporary increase in federal funds for state Medicaid expenditures. Thethe resumption of redeterminations for Medicaid enrollees in 2023 resulted in significant coverage disruptions and dis-enrollments of Medicaid enrollees, and the number of individuals enrolled in Medicaid declined in 20242025 in comparison to 2023.2024. The FBA is expected to further adversely affect the uninsured rate, including by requiring pre-enrollment verification of eligibility in a plan with premium tax credits and restricting subsidized marketplace coverage, effectively ending automatic renewals of coverage, and by limiting Medicare and Medicaid enrollmenteligibility maybased beon furtherimmigration affectedstatus by potential changes to the federal funding formula for Medicaid. For example, some states have trigger laws that would end their Medicaid expansion or requireand other changesfactors, ifamong federalother funding for expansion populations is reduced. Further, if federal contributions for Medicaid expansion populations decrease, states that expanded Medicaid might not be able to offset such funding reductions.measures. Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could also increase rates of uninsured and underinsured individuals. It is difficult to predict what, whether, and when legislative and regulatory changes may be made in the future.

We provide uninsured discounts and charity care for individuals, including for those residing in states that choose not to implement the Medicaid expansion or that modify the terms of the program, for undocumented aliensimmigrants who are not permitted to enroll in an Exchange plan or government health care programs and for certain others who may not have insurance. Some patients may choose to enroll in lower cost Medicaid plans or other health insurance plans with lower reimbursement levels. We may also be adversely affected by the growth in patient responsibility accounts as a result of increases in the adoption of health plan structures that shift greater payment responsibility for care to individuals through greater exclusions and copayment and deductible amounts. For example, to address anticipated increases in health insurance premiums for consumers, CMS announced in September 2025 that it would expand eligibility for high-deductible catastrophic health insurance plans. Further, our ability to collect patient responsibility accounts may be limited by statutory, regulatory and investigatory initiatives, including private lawsuits directed at hospital charges and collection practices for uninsured and underinsured patients. For example, the No Surprises Act requires providers to send uninsured and self-pay patients a good faith estimate of expected charges for items and services. The estimate must cover items and services that are reasonably expected to be provided together with the primary item or services, including those that may be provided by other providers. If the uninsured or self-pay patient receives a bill that exceeds the good faith estimate by an amount deemed to be substantial by regulation (which is currently $400) or the provider furnishes an item or service that was not included in the good faith estimate,, they may initiate a patient-provider dispute resolution process established by regulation.

Private third-party payers, including HMOs, PPOs and other managed care plans, typically reimburse health care providers at a higher rate than Medicare, Medicaid, other government health care programs or uninsured, self-pay patients. If we experience reductions in the volume of patients with private health insurance coverage, our revenues may be reduced. Factors that may cause enrollment in private health insurance to decrease include economic factors, such as increased unemployment and underemployment rates and inflationary pressures, and legislative or regulatory changes that increase barriers to and costs associated with obtaining or maintaining comprehensive coverage, including changes affecting insurance brokers and Exchange navigators, limiting automatic re-enrollment in plans purchased through the Exchanges, or expanding short-term insurance options. We anticipate that several recent developments may adversely affect our revenues by contributing to potential future declines in our volume of patients with private health insurance coverage, including the expiration of enhanced premium tax credits, provisions of the FBA that are expected to impact coverage obtained through the Exchanges, and a final rule issued by CMS in June 2025 focused on affordability, consumer protections and integrity of the Exchanges.

Reimbursement rates are set forth by contract when our facilities are in-network, and payers utilize plan structures to encourage or require the use of in-network providers. Private third-party payers, including managed care plans and payers participating in the Exchanges, continue to demand discounted fee structures, and the ongoing trend toward consolidation among payers tends to increase their bargaining power over fee structures. Payers may utilize plan structures such as narrow networks and tiered networks that limit beneficiary provider choices, impose significantly higher cost sharingcost-sharing obligations when care is obtained from providers in a disfavored tier or otherwise shift greater financial responsibility for care to individuals. Legislative and regulatory initiatives may accelerate or otherwise impact these trends. Cost-reduction strategies by large employer groups and their affiliates, such as directly contracting with a limited number of providers, may also limit our ability to negotiate favorable terms in our contracts and otherwise intensify competitive pressure.

Volume, admission and case-mix trends may be impacted by factors beyond our control, such as changes in volume of certain high acuity services, variations in the prevalence and severity of outbreaks of influenza and other illnesses and medical conditions, seasonal and severe weather conditions, changes in treatment regimens and medical technology and other advances. Further, trends in physician treatment protocols and health plan design, such as health plans that shift increased costs and accountability for care to patients, could reduce our surgical volumes and admissions in favor of lower intensity and lower cost treatment methodologies or result in patients seeking care from other providers. Additionally,Efforts ourto operationsshift treatment to lower-acuity settings, such as the elimination of Medicare’s inpatient-only list over a three year period beginning in 2026, may be impacted by expansion of in-home acute care models, andreduce our inpatient volumes may decline ifas various inpatient hospital procedures become eligible for reimbursement by Medicare when performed in outpatient settings.settings and may result in patients seeking care from other providers. Additionally, our operations may be impacted by expansion of in-home acute care models. These and other factors beyond our control may reduce the demand for services we offer and decrease the reimbursement that we receive, which could have a material, adverse effect on our business, financial position and results of operations.

Controls imposed by Medicare, managed Medicare, Medicaid, managed Medicaid and private third-party payers designed to reduce admissions, intensity of services, surgical procedure volumes and lengths of stay, in some instances referred to as “utilization review,” have affected and are expected to increasingly affect our facilities. Utilization review entails the review of the admission and course of treatment of a patient by third-party payers and may involve prior authorization requirements. TheFor example, in 2026, CMS is implementing a new payment and service delivery model, the WISeR model, under which technology vendors will use enhanced technologies, including AI, to address compliance with Medicare coverage criteria for selected items and services under fee-for-service Medicare. Providers will be required to submit prior authorization requests or be subject to post-service, pre-payment medical review. In addition, the Medicare program also issues national or local coverage determinations that restrict the circumstances under which Medicare pays for certain services. Inpatient and outpatient service utilization and inpatient occupancy rates and average lengths of stay continue to be negatively affected by third-party payers’ prior authorization requirements, coverage restrictions, utilization review and by pressure to maximize outpatient and alternative health care delivery services for less acutely ill patients. In addition, some private third-party payers have implemented downcoding policies to automatically adjust medical claims to reflect lower-cost services. Cost control efforts have resulted in an increase in reimbursement denialsdenials, negative adjustments and delays by both governmental and commercial payers, which may decrease the reimbursement we receive and may increase our costs and administrative burden, as additional resources are devoted to collection and documentation efforts. Additionally, the reimbursement we receive may decline as a result of site-neutrality initiatives, which aim to align payment for services across care settings. For example, CMS is phasing out the Medicare inpatient-only list over a three year period beginning in 2026, allowing more procedures to be performed on an outpatient basis, including in the ASC setting. Efforts to impose more stringent cost controls are expected to continue and may have a material, adverse effect on our business, financial condition and results of operations.

A component of our business strategy is acquiring hospitals and other health care businesses. We may encounter difficulty acquiring new facilities or other businesses due to a lack of attractive opportunities or as a result of competition from other purchasers that may be willing to pay purchase prices that are higher than we believe are reasonable. Antitrust enforcement in the health care industry is currently a priority of the Federal Trade Commission and the DOJ, including with respect to hospital and physician practice acquisitions. States also are increasingly enacting laws modeled after the federal Hart-Scott-Rodino Act, requiring pre-notification of covered transactions. These laws may specifically target health care transactions and may have broad impacts on closing timetables and approvals. Some states require CONs in order to acquire a hospitalexpand or othermodify facility, or to expandexisting facilities or services.services, and notice or approval related to a CON may be required for the transfer or change of ownership of existing facilities. In addition, the acquisition of health care facilities often involves licensure approvals or reviews and complex change of ownership processes for Medicare and other payers. Further, many states have laws that restrict the conversion or sale of not-for-profit hospitals to for-profit entities. These laws may require prior approval fromfrom, the state attorney general,or advance notification ofto, the attorneyapplicable states’ attorneys general or other regulators and community involvement. Attorneys general in states without specific requirements may exercise broad discretionary authority over transactions involving the sale of not-for-profits under their general obligations to protect the use of charitable assets. These legislative and administrative efforts often focus on the appropriate valuation of the assets divested and the use of the proceeds of the sale by the non-profit seller and may include consideration of commitments for capital improvements and charity care by the purchaser. Similarly, some states require disclosures regarding structure, financing, markets, anticipated impacts and other information by certain health care entities, including hospitals and physician practices, to state attorneys general or other designated entities in advance of sales or other transactions. Also, the increasingly challenging regulatory and enforcement environment may negatively impact our ability to acquire health care businesses if they are found to have material unresolved compliance issues, such as repayment obligations. Resolving compliance issues as well as completion of oversight, review or approval processes could seriously delay or even prevent our ability to acquire hospitals or other businesses and increase our acquisition costs.

Our business and operations are subject to risks related to changinghurricanes, globalextreme weather patterns.events or other natural disasters.

ChangingOur globalhospitals and other facilities, including those in Florida, Texas and other coastal states, are located in regions that have been, and may in the future be, impacted by hurricanes, extreme weather patternsevents presentor bothother immediatenatural and long-term physical risks (such as potential increases indisasters, the intensity or frequency of hurricanes,which extremecould be affected by changing global weather conditions or other natural disasters) and risks associated with the transition to a low-carbon economy (such as regulatory or technology changes).patterns. These changesevents could result in, for example, temporary declines in the number of patients seeking our services, closures of our hospitals and related facilities, supply chain disruptions, increased costs of products, commodities and energy (including utilities) and disruptions in our information systems, which in turn could negatively impact our business and results of operations. In addition, our hospitals and other facilities in Florida, Texas and other coastal states are located in regions that may be impacted by hurricanes. In the past, hurricanes have had a disruptive effect on the operations of our hospitals and other facilities in Florida, Texas and other coastal states and the patient populations in those states, including Hurricanes Helene and Milton, which made landfall in September and October 2024, respectively. Changing global weather patterns could also increase the intensity or frequency of hurricanes, extreme weather conditions or other natural disasters. Our business assets and activities and the communities we serve have been and could in the future be harmed by a particularly active hurricane season or even a single storm. We face the risk of losses incurred as a result of physical damage to our hospitals and related facilities and business interruptions caused by such events. We maintain property insurance coverage for claims in excess of deductibles and self-insured retention levels generally at $110 million per occurrence ($120 million effective January 1, 2026) to address the impact of physical damage to our facilities and for business interruption losses. However, such insurance coverage may be insufficient to cover our losses in excess of what we self-insure, and we may experience a material, adverse effect on our results of operations that is not recoverable through our insurance policies. Additionally, if we experience a significant increase in climate-relatedhurricanes, extreme weather events or other natural disasters that result in material losses we may be unable to obtain similar levels of property insurance coverage in the future.

This annual report on Form 10-K includes certain disclosures that contain “forward-looking statements,” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements regarding expected capital expenditures, expected dividends, expected share repurchases, expected net claim payments, expected inflationary pressures and all other statements that do not relate solely to historical or current facts, and can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) changes in or related to general economic or business conditions nationally and regionally in our markets, including inflation and economic and business conditions (and the impact thereofof ontrade policies, including changes in, or the economy,imposition financialof, marketstariffs and/or bankingtrade industry)barriers; changes in revenues dueresulting tofrom declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, pharmaceuticals, supply chain or other expenditures; workforce disruptions; supply and pharmaceutical shortages and disruptions (including as a result of tariffs or geopolitical disruptions); and the impact of potential federal government shutdownsshutdowns, holds on or cancellations of congressionally authorized spending and interruptions in appropriation orthe distribution of governmental funds, (2) the impact of current and future health care public policy developments and the implementation of new, and possible changes to otherexisting, federal, state or local laws and regulations affecting the health care industry, including, but not limited to,including the expiration at the end of 2025 of enhanced premium tax credits (“EPTCs”) for eligible individuals eligible to purchasepurchasing insurance coverage through federal and state-based health insurance marketplaces, changes in the structure and administration of, and funding for, federal and state agencies and programs, and effects of the 2025 Federal Budget Act (the “FBA”), (3) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (4) the effects related to the implementation of sequestration spending reductions required under the Budget Control Act of 2011, related legislation extending these reductions, and the potential for future deficit or other spending reduction legislation that may alter thesecurrent spending reductions, which include cuts to Medicare payments, or createimpose additional spending reductions, (5) the ability to achieve operating and financial targets, develop and execute resiliency plans to offset to the extent possible impacts from the FBA, the expiration of EPTCs and tariffs, attain expected levels of patient volumes and revenues, and control the costs of providing services, (6) possible reductions or other changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs orand state directed payments,payment thatarrangements, any of which may negatively impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (7) the results of our efforts to use technology and resilience initiatives, including artificial intelligence and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience, (8) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (89) personnel-related capacity constraints, increases in wages and the ability to attract, utilize and retain qualified management and other personnel, including affiliated physicians, nurses and medical and technical support personnel, (910) the highly competitive nature of the health care business, (1011) changes in service mix, revenue mix and surgicalservice volumes, including potential declines in the population covered under third-party payer agreements, the ability to enter into and renew third-party payer provider agreements on acceptable terms and the impact of consumer-driven health plans and physician utilization trends and practices, (1112) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (1213) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (1314) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (1415) changes in accounting practices, (1516) the emergence of and effects related to pandemics, epidemics and outbreaks of infectious diseases or other public health crises, (1617) future divestitures which may result in charges and possible impairments of long-lived assets, (1718) changes in business strategy or development plans, (1819) delays in receiving payments for services provided, (1920) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (2021) the impact of known and unknown government investigations, litigation and other claims that may be made against us, (2122) the impact of actual and potential cybersecurity incidents or security breaches involving us or our vendors and other third parties, (2223) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and the impact of interoperability requirements, (2324) the impact of natural disasters, such as hurricanes and floods, including Hurricanes Milton and Helene, physical risks from changing global weather patterns or similar events beyond our control on our assets and activities and the communities we serve, (2425) changes in U.S. federal, state, or foreign tax laws, interpretations of tax laws including interpretive guidance that may be issued by taxing authorities, other standard setting bodies or judicial decisions, (2526) changes to, and the resultstiming and amount of ourfuture effortsapprovals to(if useany) technologyof, state Medicaid directed and resiliencesupplemental initiatives, including AI and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience,payments and (2627) other risk factors described in this annual report on Form 10-K. As a consequence, current plans, anticipated actions and future financial position and results of operations may differ from those expressed in any forward-looking statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report, which forward-looking statements reflect management’s views only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Net income attributable to HCA Healthcare, Inc. totaled $6.784 billion, or $28.33 per diluted share, for 2025, compared to $5.760 billion, or $22.00 per diluted share, for 2024, compared to $5.242 billion, or $18.97 per diluted share, for 2023.2024. The 2025 and 2024 results include gains on sales of facilities of $37 million, or $0.12 per diluted share, and $14 million, or $0.04 per diluted share.share, respectively. The 2024 results also include additional expenses and losses of revenues estimated at approximately $250 million, or $0.73 per diluted share, related to Hurricanes Helene and Milton, which impacted our facilities in North Carolina and certain facilities in Florida. The 2023 results include losses on sales of facilities of $5 million, or $0.04 per diluted share. Our provisions for income taxes for 20242025 and 20232024 include tax benefits of $102$61 million, or $0.39$0.25 per diluted share, and $93$102 million, or $0.34$0.39 per diluted share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 261.806239.495 million shares and 276.412261.806 million shares for the years ended December 31, 20242025 and 2023,2024, respectively. During 20242025 and 2023,2024, we repurchased 17.79826.739 million and 14.46517.798 million shares, respectively, of our common stock.

During 2024,2025, consolidated admissions increased 5.0%2.7% and same facility admissions increased 4.9%,2.3%, compared to 2023.2024. Inpatient surgical volumes increased 2.2% on both a consolidated basis and a same facility basis during 2024, compared to 2023. Outpatient surgical volumes declined 1.9%0.9% on a consolidated basis and declined 1.6%0.4% on a same facility basis during 2024,2025, compared to 2023.2024. EmergencyOutpatient roomsurgical visitsvolumes increaseddeclined 4.8%0.2% on a consolidated basis and increased 4.9%0.5% on a same facility basis during 2024,2025, compared to 2023.2024. Emergency room visits increased 1.6% on a consolidated basis and 1.8% on a same facility basis during 2025, compared to 2024.

The estimated cost of total uncompensated care increased $646$239 million for 2024,2025, compared to 2023.2024. Consolidated and same facility uninsured admissions increased 1.3%1.9% and 1.0%,1.2%, respectively, and consolidated and same facility uninsured emergency room visits increasedeach 13.8%declined and 13.5%, respectively,0.6% for 2024,2025, compared to 2023.2024.

Cash flows from operating activities increased $1.083$2.122 billion, from $9.431 billion for 2023 to $10.514 billion for 2024.2024 to $12.636 billion for 2025. The increase in cash flows from operating activities was related primarily to anthe combined impact of a $1.319 billion increase in net income of $542 million,income, excluding losses and gains on sales of facilities,facilities and adepreciation and amortization, positive changechanges in working capital items of $351$524 million,million mainly fromand a decline in inventoriesincome andtaxes otherpaid assets.of $104 million.

Revenues are recorded during the period the health care services are provided, based upon the estimated amounts due from payers. Estimates of contractual allowancesadjustments under managed care health plans are based upon the payment terms specified in the related contractual agreements. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. The estimated reimbursement amounts are made on a payer-specific basis and are recorded based on the best information available regarding management’s interpretation of the applicable laws, regulations and contract terms. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. We have invested significant resources to refine and improve our billing systems and the information system data used to make contractual allowanceadjustment estimates. We have developed standardized calculation processes and related employee training programs to improve the utility of our patient accounting systems.

Professional Liability ClaimsReserves

We, along with virtually all health care providers, operate in an environment with professional liability risks. Our facilities are insured by one of our insurance subsidiarysubsidiaries for losses up to $80$110 million per occurrence ($110$120 million effective January 1, 20252026), subject, in most cases, to a $15 million per occurrence self-insured retention. The insurance subsidiary has obtained reinsurance for professional liability risks generally above a retention level of either $25 million or $35 million per occurrence, depending on the jurisdiction for the related claim. We purchase excess insurance on an occurrence reported basis for losses in excess of amounts insured by our insurance subsidiary. Provisions for losses related to professional liability risks were $627$651 million, $619$627 million and $517$619 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. We recorded an increase to the provision for professional liability risks of $40 million during 2023 and a reduction to the provision for professional liability risks of $55 million for 2022, due to the receipt of updated actuarial information.

Professional Liability ClaimsReserves (continued)

The reserves for professional liability risks cover approximately 2,1002,360 and 2,120 individual claims at both December 31, 20242025 and 20232024, respectively, and estimates for unreported potential claims. The time period required to resolve these claims can vary depending upon the jurisdiction and whether the claim is settled or litigated. The average time period between the occurrence and final resolution for our professional liability claims is approximately five years, although the facts and circumstances of each individual claim can result in an occurrence-to-resolution timeframe that varies from this average. The estimation of the timing of payments beyond a year can vary significantly.

Reserves for professional liability risks were $2.131$2.044 billion and $2.089$2.131 billion at December 31, 20242025 and 2023,2024, respectively. The current portion of these reserves, $587$578 million and $532$587 million at December 31, 20242025 and 2023,2024, respectively, is included in “other accrued expenses.” Obligations covered by reinsurance and excess insurance contracts are included in the reserves for professional liability risks, as we remain liable to the extent reinsurers and excess insurance carriers do not meet their obligations. Reserves for professional liability risks (net of $80$47 million and $42$80 million receivable under reinsurance and excess insurance contracts at December 31, 20242025 and 2023,2024, respectively) were $2.051$1.997 billion and $2.047$2.051 billion at December 31, 20242025 and 2023,2024, respectively. The estimated total net reserves for professional liability risks at December 31, 20242025 and 20232024 are comprised of $1.059$1.124 billion and $947$1.059 million,billion, respectively, of case reserves for known claims and $992$873 million and $1.100$992 billion,million, respectively, of reserves for incurred but not reported claims. The 20242025 increase in case reserves for known claims and the corresponding decrease in reserves for incurred but not reported claims is the result of changes in case management processes at our insurance subsidiary that include establishing case reserve estimates earlier and resolving claims quicker.

Same facility revenues increased 6.6% for the year ended December 31, 2025 compared to the year ended December 31, 2024 and increased 7.9% for the year ended December 31, 2024 compared to the year ended December 31, 20232023. andThe increased6.6% 7.6%increase for the2025 yearcan endedbe Decemberprimarily 31, 2023 comparedattributed to the yearcombined endedimpact Decemberof 31,a 2022.2.4% increase in equivalent admissions and a 4.1% increase in revenue per equivalent admission. The 7.9% increase for 2024 can be primarily attributed to the combined impact of a 4.5% increase in equivalent admissions and a 3.2% increase in revenue per equivalent admission. The 7.6% increase for 2023 can be primarily attributed to the net impact of a 4.8% increase in equivalent admissions and a 2.7% decline in revenue per equivalent admission.

Consolidated admissions increased 2.7% during 2025 compared to 2024 and increased 5.0% during 2024 compared to 2023 and increased 2.7% during 2023 compared to 2022.2023. Consolidated inpatient surgical volumes increased 0.9% during 2025 compared to 2024 and increased 2.2% during 2024 compared to 2023 and increased 1.3% during 2023 compared to 2022.2023. Consolidated outpatient surgical volumes declined 0.2% during 2025 compared to 2024 and declined 1.9% during 2024 compared to 2023 and increased 2.1% during 2023 compared to 2022.2023. Consolidated emergency room visits increased 1.6% during 2025 compared to 2024 and increased 4.8% during 2024 compared to 2023 and increased 4.1% during 2023 compared to 2022.2023.

Same facility admissions increased 2.3% during 2025 compared to 2024 and increased 4.9% during 2024 compared to 2023 and increased 3.3% during 2023 compared to 2022.2023. Same facility inpatient surgical volumes increased 0.4% during 2025 compared to 2024 and increased 2.2% during 2024 compared to 2023 and increased 2.0% during 2023 compared to 2022.2023. Same facility outpatient surgical volumes declined 0.5% during 2025 compared to 2024 and declined 1.6% during 2024 compared to 2023 and increased 2.5% during 2023 compared to 2022.2023. Same facility emergency room visits increased 1.8% during 2025 compared to 2024 and increased 4.9% during 2024 compared to 2023 and increased 4.7% during 2023 compared to 2022.2023.

The approximate percentages of our inpatient revenuesadmissions related to Medicare, managed Medicare, Medicaid, managed Medicaid, and managed care and insurers and the uninsured for the years ended December 31, 2024,2025, 20232024 and 20222023 are set forth below.

Net income attributable to HCA Healthcare, Inc. totaled $6.784 billion, or $28.33 per diluted share, for 2025, compared to $5.760 billion, or $22.00 per diluted share, for 2024, compared to $5.242 billion, or $18.97 per diluted share, for 2023.2024. The 2025 and 2024 results include gains on sales of facilities of $37 million, or $0.12 per diluted share, and $14 million, or $0.04 per diluted share.share, respectively. The 2024 results also include additional expenses and losses of revenues estimated at approximately $250 million, or $0.73 per diluted share, related to Hurricanes Helene and Milton, which impacted our facilities in North Carolina and certain facilities in Florida. The 2023 results include losses on sales of facilities of $5 million, or $0.04 per diluted share. Our provisions for income taxes for 20242025 and 20232024 include tax benefits of $102$61 million, or $0.39$0.25 per diluted share, and $93$102 million, or $0.34$0.39 per diluted share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 261.806239.495 million shares and 276.412261.806 million shares for the years ended December 31, 20242025 and 2023,2024, respectively. During 20242025 and 2023,2024, we repurchased 17.79826.739 million and 14.46517.798 million shares, respectively, of our common stock.

During 2024,2025, consolidated admissions increased 5.0%2.7% and same facility admissions increased 4.9%2.3% compared to 2023.2024. Consolidated inpatient surgeries increased 0.9% and same facility inpatient surgeries each increased 2.2%0.4% during 20242025 compared to 2023.2024. Emergency room visits increased 4.8%1.6% on a consolidated basis and increased 4.9%1.8% on a same facility basis during 20242025 compared to 2023.2024.

Salaries and benefits, as a percentage of revenues, were 43.5% in 2025 and 44.1% in 2024 and 45.4% in 2023.2024. Salaries and benefits per equivalent admission increased 0.4%2.4% in 20242025 compared to 2023.2024. Same facility salaries and benefits per full time equivalent increased 1.8%3.3% for 20242025 compared to 2023.2024. We continue to utilize certain contract, overtime and other premium rate labor costs to support our clinical staff and patients. While these labor costs have declined compared to the prior year period, future costs may be affected by labor market conditions and other factors. Share-based compensation expense was $401 million in 2025 and $360 million in 2024 and $262 million in 2023.2024.

Supplies, as a percentage of revenues, were 15.0% in 2025 and 15.2% in both 2024 and 2023.2024. Supply costs per equivalent admission increased 3.1%2.7% in 20242025 compared to 2023.2024. Supply costs per equivalent admission increased 5.6%7.0% for medical devices and 3.2%0.3% for general medical and surgical items, but declined 2.4%4.0% for pharmacy supplies in 20242025 compared to 2023.2024. The increase in supply costs per equivalent admission for medical devices is primarily related to cardiovascular technologies. The decline in supply costs per equivalent admission for pharmacy supplies is primarily related to a decrease in the costs of certain drugs.

Other operating expenses, as a percentage of revenues, were 21.0% in 2024both 2025 and 19.8% in 2023.2024. Other operating expenses are primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance (including professional liability insurance) and nonincome taxes. The 1.2% increase in other operating expenses, as a percentage of revenues for 2024 compared to 2023, was primarily related to increased costs for state provider fees in certain states, professional fees and repairs and maintenance, primarily related to remediation activities in certain hospitals in the state of Florida in response to Hurricane Milton. We have seen inflation have a negative impact on certain of these expenses and expect inflationary pressures will continue to impact operating expenses in 2025. Provisions for losses related to professional liability risks were $627 million and $619 million for 2024 and 2023, respectively. We recorded an increase of $40 million, or $0.11 per diluted share, during 2023 to our provision for professional liability risks related to the receipt of updated actuarial information.2026.

Depreciation and amortization, as a percentage of revenues, were 4.6% in 2025 and 4.7% in both 2024 and 2023.2024. Depreciation expense was $3.508 billion for 2025 and $3.294 billion for 2024 and $3.052 billion for 2023.2024. The increase of $242$214 million in depreciation expense relates primarily to capital expenditures at our existing facilities.

Gains on sales of facilities were $37 million for 2025 and $14 million for 2024 and losses on sales of facilities were $5 million for 2023.2024.

Net income attributable to noncontrolling interests increased from $849 million for 2023 to $897 million for 2024.2024 to $998 million for 2025. The increase in net income attributable to noncontrolling interests related primarily to the operations of onetwo of our Texas markets and our surgery center partnerships.markets.

Cash used in investing activities was $4.988 billion, $4.933 billion,billion and $5.317 billion and $3.389 billion in 2024,2025, 20232024 and 2022,2023, respectively. Excluding acquisitions, capital expenditures were $4.944 billion in 2025, $4.875 billion in 2024,2024 and $4.744 billion in 2023 and $4.395 billion in 2022.2023. Planned capital expenditures are expected to approximate between $5.0 billion and $5.2$5.5 billion in 2025.2026. At December 31, 2024,2025, there were projects under construction which had an estimated additional cost to complete and equip over the next five years of approximately $4.7$7.1 billion. We expect to fund capital expenditures with internally generated and borrowed funds. We expended $266$397 million, $635$266 million and $224$635 million for acquisitions of hospitals and health care entities during 2024,2025, 20232024 and 2022,2023, respectively. Cash flows from sales of hospitals and health care entities increasedwere to$269 million of net proceeds for 2025, $328 million of net proceeds for 2024 fromand $193 million of net proceeds for 2023, and was $1.237 billion in 2022 primarily related to proceeds from our sales of other health care entities.2023.

Cash used in financing activities totaled $8.550 billion in 2025, $4.582 billion in 2024,2024 and $4.094 billion in 20232023. andDuring $5.6562025, we had a net increase of $3.287 billion in 2022.our indebtedness, paid dividends of $679 million and paid $10.067 billion for repurchases of common stock. During 2024, we had a net increase of $3.205 billion in our indebtedness, paid dividends of $690 million and paid $6.042 billion for repurchases of common stock. During 2023, we had a net increase of $1.295 billion in our indebtedness, paid dividends of $661 million and paid $3.811 billion for repurchases of common stock. During 2022,2025, we had a net increase of $3.287 billion in our indebtedness, paid dividends of $653 million2024 and paid $7.000 billion for repurchases of common stock. During 2024, 2023 and 2022,2023, we made distributions to noncontrolling interests of $711$827 million, $640$711 million and $1.025$640 billion,million, respectively. The increase in distributions in 2022 was related to the sale of a controlling interest in a subsidiary of our group purchasing organization.

In addition to cash flows from operations, available sources of capital include amounts available under our senior securedunsecured credit facilitiesfacility ($7.986$5.779 billion and $5.664 billion available as of December 31, 2025 and January 31, 2026, respectively, after giving effect to all issued and outstanding letters of credit and our intention to maintain a minimum available borrowing capacity equal to the aggregate amount outstanding under the commercial paper program ($2.207 billion and $2.322 billion as of both December 31, 20242025 and January 31, 20252026, respectively) and anticipated access to public and private debt and equity markets.

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay claims, totaled $657$588 million and $564$657 million at December 31, 20242025 and 2023,2024, respectively. TheAn insurance subsidiary maintained net reserves for professional liability risks of $127$91 million and $121$127 million at December 31, 20242025 and 2023,2024, respectively. Our facilities are insured by one of our insurance subsidiarysubsidiaries for losses up to $80$110 million per occurrence ($110$120 million effective January 1, 20252026); however, this coverage is subject, in most cases, to a $15 million per occurrence self-insured retention. Net reserves for the self-insured professional liability risks retained were $1.924$1.906 billion and $1.926$1.924 billion at December 31, 20242025 and 2023,2024, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $543$568 million. We estimate that approximately $507$524 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

During 2024,2025, we also issued $3.000$5.250 billion aggregate principal amount of senior notes comprised of (i) $700 million aggregate principal amount of 5.000% senior notes due 2028, (ii) $300 million aggregate principal amount of floating rate senior notes due 2028, (iii) $750 million aggregate principal amount of 5.450%5.250% senior notes due 20312030, (theiv) “New$750 2031million Notes”),aggregate principal amount of 5.500% senior notes due 2032, (iiv) $1.500 billion aggregate principal amount of 5.750% senior notes due 2035 and (vi) $1.250 billion aggregate principal amount of 5.450%6.200% senior notes due 2034 and (iii) $1.000 billion aggregate principal amount of 5.950% senior notes due 2054. The New 2031 Notes represent a further issuance of our Existing 2031 Notes, issued during February 2024, and together with the New 2031 Notes, the aggregate principal amount of these notes is $1.750 billion.2055. We used the net proceeds to repay borrowings under ourthe asset-basedsenior revolvingunsecured credit facility and for general corporate purposes.

Management believes that cash flows from operations, amounts available under our senior securedunsecured credit facilitiesfacility and our anticipated access to public and private debt markets will be sufficient to meet expected liquidity needs for the foreseeable future.

We are also exposed to market risk related to changes in interest rates. Debt of $1.238$2.507 billion at December 31, 20242025 was subject to variable rates of interest, while the remaining debt balance of $41.793$43.985 billion at December 31, 20242025 was subject to fixed rates of interest. Both the general level of interest rates and, for the senior securedunsecured credit facilities,facility, our leverage affect our variable interest rates. Our variable debt is comprised primarily of amounts outstanding undercommercial paper notes and the floating rate senior securednotes creditdue facilities.2028. The average effective interest rate for our long-term debt was 5.0% for both 20242025 and 2023.2024.

During 2024,2025, the Internal Revenue Service (“IRS”) completedconcluded its examination of ourthe 2016,Company’s 20172022 and 20182023 income tax returns,returns resolving all federal income tax matters for those years,years. andCompletion of the 2020examination federalhad statuteno material impact on our results of limitationsoperations expired.or financial position. At December 31, 2024,2025, the IRS was examining the Company’s 2022 and 2023 income tax returns and the 2019 income tax returns of certain affiliates.affiliates of the Company. We are subject to examination by the IRS for tax years after 2020,2023, as well as by state and foreign taxing authorities. Management believes HCA Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the IRS, state and foreign taxing authorities, and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position. However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.

This quarterly report on Form 10-Q includes certain disclosures that contain “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements regarding expected capital expenditures, expected dividends, expected share repurchases, expected net claim payments, expected inflationary pressures, expected labor costs and all other statements that do not relate solely to historical or current facts, and can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) changes in or related to general economic or business conditions nationally and regionally in our markets, including inflationinflation, and the impact of trade policies, including changes in, or the imposition of, tariffs and/or trade barriers; changes in revenues resulting from declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, pharmaceuticals, supply chain or other expenditures; workforce disruptions; supply and pharmaceutical shortages and disruptions (including as a result of tariffs or geopolitical disruptions); and the impact of federal government shutdowns, holds on or cancellations of congressionally authorized spending and interruptions in the distribution of governmental funds, (2) the impact of current and future health care public policy developments and the implementation of new, and possible changes to existing, federal, state or local laws and regulations affecting health care spending or the health care industry, including the expiration at the end of 2025 of enhanced premium tax credits (“EPTCs”) for eligible individuals purchasing insurance coverage through federal and state-based health insurance marketplaces,exchanges (the “Exchanges”), changes in the structure and administration of, and funding for, federal and state agencies and programs, effects of the 2025 Federal Budget Act (the “FBA”) and efforts to address health care affordability, (3) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (4) the effects related to the implementation of sequestration spending reductions required under the Budget Control Act of 2011, related legislation extending these reductions, and the potential for future deficit or other spending reduction legislation that may alter current spending reductions, which include cuts to Medicare payments, or impose additional spending reductions, (5) the ability to achieve operating and financial targets, develop and execute resiliency plans to offset to the extent possible impacts from the FBA, the expiration of EPTCs and tariffs, attain expected levels of patient volumes and revenues,revenues and service mix, and control the costs of providing services, (6) possiblethe impact of reductions or other changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs and state directed payment (“SDP”) arrangements, any of which may negatively impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (7) the results of our efforts to use technology and resilience initiatives, including artificial intelligence and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience, (8) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (9) personnel-related capacity constraints, increases in wages and the ability to attract, utilize and retain qualified management and other personnel, including affiliated physicians, nurses and medical and technical support personnel, (10) the highly competitive nature of the health care business, (11) changes in service mix, revenue mix and service volumes, including potential declines in the population covered under third-party payer agreements, the ability to enter into and renew third-party payer provider agreements on acceptable terms and the impact of consumer-driven health plans and physician utilization trends and practices, (12) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (13) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (14) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (15) changes in accounting practices, (16) the emergence of and effects related to pandemics, epidemics and outbreaks of infectious diseases or other public health crises, (17) future divestitures which may result in charges and possible impairments of long-lived assets, (18) changes in business strategy or development plans, (19) delays in receiving or failure to receive payments for services provided, (20) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (21) the impact of known and unknown government investigations, litigation and other claims that may be made against us, (22) the impact of actual and potential cybersecurity incidents or security breaches involving us or our vendors and other third parties, (23) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and the impact of interoperability requirements, (24) the impact of natural disasters, such as hurricanes and floods, including Hurricanes Milton and Helene, physical risks from changing global weather patterns or similar events beyond our control on our assets and activities and the communities we serve, (25) changes in U.S. federal, state, or foreign tax laws, interpretations of tax laws by taxing authorities, other standard setting bodies or judicial decisions, (26) changes to, and the timing and amount of future approvals (if any) of, state Medicaid directed and supplemental payments and (27) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2025 and our other filings with the Securities and Exchange Commission. As a consequence, current plans, anticipated actions and future financial position and results of operations may differ from those expressed in any forward-looking statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report, which forward-looking statements reflect management’s views only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

FirstSecond Quarter 2026 Operations Summary

Revenues increased to $19.109$20.230 billion in the firstsecond quarter of 2026 from $18.321$18.605 billion in the firstsecond quarter of 2025. Net income attributable to HCA Healthcare, Inc. totaled $1.620$1.699 billion, or $7.15$7.62 per diluted share, for the quarter ended MarchJune 31,30, 2026, compared to $1.610$1.653 billion, or $6.45$6.83 per diluted share, for the quarter ended MarchJune 31,30, 2025. Second quarter results for 2026 and 2025 include gains on sales of facilities of $10 million, or $0.03 per diluted share, and losses on sales of facilities of $3 million, or $0.01 per diluted share, respectively. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 226.652222.828 million shares for the quarter ended MarchJune 31,30, 2026 and 249.440241.911 million shares for the quarter ended MarchJune 31,30, 2025. During 2025 and the first quartersix months of 2026, we repurchased 26.739 million shares and 3.1577.909 million shares, respectively, of our common stock.

During the quarter ended MarchJune 31,30, 2026, consolidated admissions increased 0.7%2.4% and same facility admissions increased 0.9%2.5% compared to the quarter ended MarchJune 31,30, 2025. Inpatient surgical volumes declined 0.4%2.3% on both a consolidated basis and a same facility basis during the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025. Outpatient surgical volumes declined 4.4% on a consolidated basis and 0.3%3.4% on a same facility basis during the quarter ended MarchJune 31,30, 2026, compared to the quarter ended MarchJune 31,30, 2025. OutpatientEmergency surgicaldepartment volumesvisits declinedincreased 2.7%3.5% on a consolidated basis and 1.7%3.6% on a same facility basis during the quarter ended MarchJune 31,30, 20262026, compared to the quarter ended MarchJune 31,30, 2025. Emergency department visits declined 0.4% on a consolidated basis and increased 0.3% on a same facility basis during the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. Volumes for the quarter ended March 31, 2026 were impacted by a decrease in seasonal respiratory-related activity and the impact of a winter storm in certain of our markets. Consolidated and same facility uninsured admissions increased 15.6%23.3% and 15.5%,23.4%, respectively, for the quarter ended MarchJune 31,30, 20262026, compared to the quarter ended MarchJune 31,30, 2025. Uninsured admissions increased for the second quarter and first quartersix months of 2026 reflecting impacts from the expiration of the EPTCs at the end of 2025 and administrative reforms, as well as a decline in Medicaid conversions. The second quarter increase in uninsured admissions includes the impact of attrition related to Exchange volumes from the first quarter that occurred during the second quarter.

Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchangesExchanges), and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

As expected, during the quarter and six months ended MarchJune 31,30, 2026, our revenues from managed care and insurers were unfavorably impacted by the expiration of the EPTCs at the end of 2025 and administrative reforms, both related to insurance purchased through the federalExchanges. In addition, we recognized revenues for the quarter and state-basedsix healthmonths insuranceended marketplacesJune (“Exchanges”).30, 2026 related to Medicaid state directed and supplemental payment programs, primarily from the Florida directed payment program.

To quantify the total impact of the trends related to uninsured patient accounts, we believe it is beneficial to viewconsider total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. ATotal summaryuncompensated ofcare was $15.076 billion and $11.625 billion, respectively, for the quarters ended June 30, 2026 and 2025, and the estimated cost of total uncompensated care was $1.445 billion and $1.116 billion, respectively, for the quarters ended MarchJune 31,30, 2026 and 20252025. followsTotal uncompensated care was $28.688 billion and $22.618 billion, respectively, for the six months ended June 30, 2026 and 2025, and the estimated cost of total uncompensated care was $2.697 billion and $2.171 billion, respectively, for the six months ended June 30, 2026 and 2025. The estimated cost of uncompensated care was based on a ratio of patient care costs (dollarssalaries inand millionsbenefits, supplies, other operating expense and depreciation and amortization): to gross charges.

The approximate percentages of our inpatient revenues related to Medicare, managed Medicare, Medicaid, managed Medicaid, managed care and insurers for the quarters and six months ended MarchJune 31,30, 2026 and 2025 are set forth in the following table.

At MarchJune 31,30, 2026, we had 102103 hospitals in the states of Texas and Florida. During the quarter ended MarchJune 31,30, 2026, 59%58% of our admissions and 51%55% of our revenues were generated by these hospitals. Uninsured admissions in Texas and Florida represented 73% of our uninsured admissions during the quarter ended MarchJune 31,30, 2026.

We receive a significant portion of our revenues from government health programs, principally Medicare and Medicaid, which are highly regulated and subject to frequent and substantial changes. Some states make additional payments to providers through the Medicaid program that are separate from base payments. These payments may be in the form of payments, such as upper payment limit payments, that are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other programs that vary by state under waivers authorized by Section 1115 of the Social Security Act. In addition, many states have implemented SDP arrangements to direct certain Medicaid managed care plan expenditures. These payments are generally authorized by the Centers for Medicare & Medicaid Services (“CMS”) and subject to periodic extension or reapproval. Most states in which we receive payment have adopted statewide or local provider taxes to fund the non-federal share of Medicaid programs.

Operating Results Summary (continued)

___________ (a)

Quarters Ended MarchJune 31,30, 2026 and 2025

Revenues increased to $19.109$20.230 billion in the firstsecond quarter of 2026 from $18.321$18.605 billion in the firstsecond quarter of 2025. Net income attributable to HCA Healthcare, Inc. totaled $1.620$1.699 billion, or $7.15$7.62 per diluted share, for the quarter ended MarchJune 31,30, 2026, compared to $1.610$1.653 billion, or $6.45$6.83 per diluted share, for the quarter ended MarchJune 31,30, 2025. Second quarter results for 2026 and 2025 include gains on sales of facilities of $10 million, or $0.03 per diluted share, and losses on sales of facilities of $3 million, or $0.01 per diluted share, respectively. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 226.652222.828 million shares for the quarter ended MarchJune 31,30, 2026 and 249.440241.911 million shares for the quarter ended MarchJune 31,30, 2025. During 2025 and the first quartersix months of 2026, we repurchased 26.739 million shares and 3.1577.909 million shares, respectively, of our common stock.

Revenues increased 4.3% and 4.5%8.7% on a consolidated basis and 9.3% on a same facility basis, respectively,basis for the quarter ended MarchJune 31,30, 2026, compared to the quarter ended MarchJune 31,30, 2025. The increase in consolidated revenues can be primarily attributed to the combined impact of a 1.1% increase in equivalent admissions and a 3.1%6.0% increase in revenue per equivalent admission.admission and a 2.6% increase in equivalent admissions. The same facility revenues increase primarily resulted from the combined impact of a 1.3% increase in same facility equivalent admissions and a 3.1%6.4% increase in same facility revenue per equivalent admission.admission and a 2.7% increase in same facility equivalent admissions.

Salaries and benefits, as a percentage of revenues, were 43.3%41.0% in the firstsecond quarter of 2026 and 43.6%43.7% in the firstsecond quarter of 2025. Salaries and benefits per equivalent admission increaseddeclined 2.4%0.7% in the firstsecond quarter of 20262026, compared to the firstsecond quarter of 2025. Same facility salaries and benefits per full timefull-time equivalent increased 3.6%2.5% for the firstsecond quarter of 20262026, compared to the firstsecond quarter of 2025.

Supplies, as a percentage of revenues, were 14.9%14.3% in the firstsecond quarter of 2026 and 15.1%15.3% in the firstsecond quarter of 2025. Supply costs per equivalent admission declined 1.0% in the second quarter of 2026, compared to the second quarter of 2025. Supply costs per equivalent admission increased 2.1% in the first quarter of 2026 compared to the first quarter of 2025. Supply costs per equivalent admission increased 4.8%0.1% for medical devices and 0.7%declined 5.0% for pharmacy supplies and 1.1% for general medical and surgical items and declined 4.6% for pharmacy supplies in the firstsecond quarter of 20262026, compared to the firstsecond quarter of 2025. The increase in supply costs per equivalent admission for medical devices is primarily related to cardiovascular technologies. The decline in supply costs per equivalent admission for pharmacy supplies is primarily related to a decrease in the utilization of certain drugs.

Other operating expenses, as a percentage of revenues, were 21.9%24.9% in the firstsecond quarter of 2026 and 21.0%20.4% in the firstsecond quarter of 2025. Other operating expenses isare primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance (including professional liability insurance) and nonincomenon-income taxes. The 4.5% increase in other operating expenses, as a percentage of revenues, isfor the second quarter of 2026 compared to the second quarter of 2025 was primarily related to growth in Medicaid state directed and supplemental Medicaidpayment program expenses,expenses higherand professional fees and an increase in technology investments.fees. We have seen inflation have a negative impact on certain of these expenses and expect inflationary pressures will continue to impact operating expenses in the future.

Equity in earnings of affiliates was $9$16 million and $18$19 million in the firstsecond quarters of 2026 and 2025, respectively.

Depreciation and amortization increased $70$81 million, from $860$863 million in the firstsecond quarter of 2025 to $930$944 million in the firstsecond quarter of 2026. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Interest expense was $584$599 million in the firstsecond quarter of 2026 and $547$568 million in the firstsecond quarter of 2025. Our average debt balance was $47.225$49.228 billion for the firstsecond quarter of 20262026, compared to $43.746$44.506 billion for the firstsecond quarter of 2025. The average effective interest ratesrate for our long-term debt werewas 5.0%4.9% and 5.1% for the quarters ended MarchJune 31,30, 2026 and 2025, respectively.

During the firstsecond quarters of 2026 and 2025, we recorded gains on sales of facilities of $10 million and losses on sales of facilities of $1 million and gains of $1$3 million, respectively.

The effective tax raterates waswere 21.0%24.9% and 23.8%24.1% for the firstsecond quarters of 2026 and 2025, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships. The declineincrease in the effective tax rate for the quarter ended MarchJune 31,30, 2026 is related primarily to an increasedecreases in the amountamounts of deductible share-based compensation for vested employee equity awards. Our provisions for income taxes for the first quarters of 2026awards and 2025other includednontaxable tax benefits of $103 million and $24 million, respectively, related to employee equity award settlements.items.

Quarters Ended MarchJune 31,30, 2026 and 2025 (continued)

Net income attributable to noncontrolling interests increaseddeclined from $215$238 million for the firstsecond quarter of 2025 to $237$231 million for the firstsecond quarter of 2026. The increasedecline in net income attributable to noncontrolling interests related primarily to the operations of onetwo of our Texas markets.