HCA Healthcare (HCA) 10-K risk factor changes: FY2019 vs FY2018

[removed: _Our] [added: Our] substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our [removed: obligations._][added: obligations.]

As of December 31, [removed: 2018,] [added: 2019,] our total indebtedness was [removed: $32.821] [added: $33.722] billion.

As of December 31, [removed: 2018,] [added: 2019,] we had availability of [removed: $1.983] [added: $1.967] billion under our senior secured revolving credit facility and [removed: $710] [added: $1.270] million under our asset-based revolving credit facility, after giving effect to letters of credit and borrowing base limitations.

| | • | [removed: |] increasing our vulnerability to downturns or adverse changes in general economic, industry or competitive conditions and adverse changes in government regulations; |

| | • | [removed: |] requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flows to fund our operations, capital expenditures and future business opportunities; |

| | • | [removed: |] exposing us to the risk of increased interest rates to the extent that our existing unhedged borrowings are at variable rates of interest or we seek to refinance our debt in a rising rate environment; |

| | • | [removed: |] limiting our ability to make strategic acquisitions or causing us to make nonstrategic divestitures; |

| | • | [removed: |] limiting our ability to obtain additional financing for working capital, capital expenditures, share repurchases, dividends, product or service line development, debt service requirements, acquisitions and general corporate or other purposes; and |

| | • | [removed: |] limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged. |

[removed: _We] [added: We] may not be able to generate sufficient cash to service all of our indebtedness and may not be able to refinance our indebtedness on favorable terms.

If we are unable to do so, we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be [removed: successful._][added: successful.]

[removed: _Our] [added: Our] debt agreements contain restrictions that limit our flexibility in operating our [removed: business._][added: business.]

| | • | [removed: |] incur additional indebtedness or issue certain preferred shares; |

| | • | [removed: |] pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; |

| | • | [removed: |] make certain investments; |

| | • | [removed: |] sell or transfer assets; |

| | • | [removed: |] create liens; |

| | • | [removed: |] consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and |

| | • | [removed: |] enter into certain transactions with our affiliates. |

Under our asset-based revolving credit facility, [added: borrowing] availability is subject to a borrowing base of 85% of eligible accounts receivable less customary reserves, with any reduction in the borrowing base commensurately reducing our ability to access this facility as a source of liquidity.

Our ability to meet those financial ratios [removed: can] [added: may] be affected by events beyond our control, and there can be no assurance we will continue to meet those ratios.

Upon the occurrence of an event of default under these senior secured credit facilities, 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 [added: portion of our other outstanding indebtedness.]

[removed: _Our] [added: Our] hospitals face competition for patients from other hospitals and health care [removed: providers._][added: providers.]

[removed: In addition,] CMS publicizes on its Hospital Compare website performance data related to quality measures and data on patient satisfaction surveys that hospitals submit in connection with their Medicare reimbursement.

If any of our hospitals achieve poor results (or results that are lower than our competitors) on [removed: these] quality measures or on patient satisfaction surveys or if our standard charges are [added: higher] or are perceived to be higher than our competitors, our [removed: patient volumes] [added: competitive position] could [removed: decline.][added: be negatively affected.]

Many individuals are seeking a broader range of services at outpatient facilities as a result of the growing availability of stand-alone outpatient [removed: healthcare] [added: 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.

Some of the facilities that compete with our hospitals are physician-owned or are owned by governmental agencies or [removed: not-for-profit corporations supported by endowments, charitable contributions and/or tax revenues and can finance capital expenditures and operations on a tax-exempt basis.]

[removed: 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 [removed: increasing efforts by payers to influence or direct the patient’s choice of provider by the use of narrow networks or other strategies.]

[removed: Further, if] [added: 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 favorable third-party payer contracts at their facilities than our hospitals and other providers, we may experience an overall decline in patient volume.

[removed: _A] [added: A] deterioration in the collectability of uninsured and patient due accounts could adversely affect our results of [removed: operations._][added: operations.]

At December 31, [removed: 2018,] [added: 2019,] estimated implicit price concessions of [removed: $6.280] [added: $6.953] billion had been recorded [removed: as reductions] to [removed: our accounts receivable to enable us to record] [added: adjust] our revenues and accounts receivable [removed: at] [added: to] the estimated amounts we expect to collect.

[removed: Total] [added: The estimated cost of total] uncompensated care increased from [removed: $20.455] [added: $3.021] billion for [removed: 2016] [added: 2017] to [removed: $23.420] [added: $3.318] billion for [removed: 2017] [added: 2018] and to [removed: $26.757] [added: $3.733] billion for [removed: 2018.][added: 2019.]

Effective January 2019, Congress eliminated the financial penalty associated with the [removed: Health Reform Law’s] [added: Affordable Care Act’s] individual mandate.

Further, final rules issued in 2018 expand the availability of association health plans and allow the sale of short-term, limited-duration health plans, neither of which are required to cover all of the essential health benefits mandated by the [removed: Health Reform Law.][added: Affordable Care Act.]

The presidential administration and a number of members of Congress continue to make other efforts to repeal or significantly change the [removed: Health Reform Law.][added: Affordable Care Act, and the law remains subject to court challenges.]

[removed: Even if the Health Reform Law remains in effect, we will continue to experience collectability issues and] [added: We] provide uninsured discounts and charity care for [removed: individuals] [added: individuals, including for those] residing in states that choose not to implement the Medicaid [removed: expansion,] [added: expansion or that modify the terms of the program,] for undocumented aliens who are not permitted to enroll in an Exchange or government health care programs and for certain others who may not have [removed: insurance coverage.][added: insurance.]

[removed: Further, some] [added: Some] patients may choose to enroll in lower cost Medicaid plans or other health insurance plans with lower reimbursement levels.

[removed: _Changes] [added: Changes] in government health care programs may adversely affect our [removed: revenues._][added: revenues.]

Specifically, we derived [removed: 40.9%] [added: 41.5%] of our revenues from the Medicare and Medicaid programs in [removed: 2018.][added: 2019.]

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The Affordable Care Act affects how health care services are covered, delivered and reimbursed through expanded health insurance coverage, reduced growth in Medicare program spending, reductions in Medicare and Medicaid DSH payments, and the establishment of programs that tie reimbursement to quality and integration.

However, there is uncertainty regarding the future of the Affordable Care Act.

The law has been subject to legislative and regulatory changes and court challenges.

The presidential administration and a number of members of Congress have stated their intent to repeal or make additional significant changes to the Affordable Care Act, its implementation or interpretation.

Further, the President of the United States signed an executive order that directs agencies to minimize “economic and regulatory burdens” of the Affordable Care Act, which may result in additional changes in how the law is implemented.

In December 2019, the Fifth Circuit Court of Appeals upheld this decision with respect to the individual mandate, but remanded for further consideration of how this affects the rest of the law.

Pending the appeals process, the law remains in place.

There is also uncertainty regarding whether, when, and what other health reform initiatives will be adopted and the impact of such efforts on providers and other health care industry participants.

Further, the outcome of the 2020 federal election and its potential impact on health reform efforts is unknown.

CMS administrators have also signaled interest in changing Medicaid payment models.

Other health reform initiatives and proposals, such as those addressing

out-of-network

charges, may impact prices, our relationships with patients and payers, and our competitive position.

MS-DRG

For example, under a site neutrality policy, clinic visit services provided by

off-campus

Although a federal judge invalidated the expansion of the policy for calendar year 2019, in a decision that CMS is appealing, CMS issued a final rule implementing year two of the policy

phase-in

for 2020.

CMS is also considering proposals to reduce drug costs and has reduced Medicare payment rates under the outpatient PPS for

most drugs obtained at 340B discounted rates, although the final rules implementing the 340B reductions are the subject of ongoing court challenges.

dis-enroll

Medicaid recipients who fail to meet work requirements and/or impose additional taxes on hospitals to help finance or expand the states’ Medicaid systems.

CMS has announced its intent to introduce additional flexibilities for Medicaid program operation, including block grants and increased use of value-based care models.

The Hospital Compare website provides an overall rating that synthesizes various quality measures into a single star rating for each hospital.

Further, hospitals are currently required by law to publish online a list of their standard charges for items and services.

A CMS final rule implements expanded transparency requirements beginning in 2021, but these additional requirements are the subject of ongoing court challenges.

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##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

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##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

portion of our outstanding indebtedness.

Additional quality measures and trends toward clinical transparency may have an unanticipated impact on our competitive position and patient volumes.

Further, CMS requires every Medicare-participating hospital to establish and update annually a public listing online of the hospital’s standard charges for items and services.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

CMS is also considering proposals to reduce drug costs.

For example, in December 2017, CMS announced that it will phase out funding for Designated State Health Programs under certain types of Medicaid waivers.

The Health Reform Law is the most prominent of these efforts and represents a significant shift in the way health care services are delivered, covered, and reimbursed.

Although it has reduced our Medicare and Medicaid reimbursement, the Health Reform Law has also reduced the number of uninsured patients to whom we provide health care services, primarily through the Exchanges and Medicaid expansion.

If the District Court’s ruling is upheld on appeal, it could have an adverse effect on the Company’s results of operations.

In addition, the presidential administration and a number of

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

members of Congress continue to attempt to repeal, amend or replace the law, or make significant changes to its implementation, and the law remains subject to court challenges.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

those physicians and controlling costs related to the employment of physicians.

Recent changes in federal labor laws and the NLRB’s modification of its election procedures could increase the likelihood of employee unionization attempts.

Because a significant percentage of our revenues consists of fixed, prospective payments, our ability to pass along increased labor costs is constrained.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

[removed: Forward-Looking Statements][added: Forward-Looking Statements]

[removed: This annual report on Form 10-K includes certain disclosures which contain “forward-looking statements.”] Forward-looking statements include statements regarding expected share-based compensation expense, expected capital expenditures, expected dividends, expected net claim payments 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 [removed: to] [added: to,] (1) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, (2) the impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the [removed: “Health Reform Law”),] [added: “Affordable Care Act”),] including the effects of court challenges to, any repeal of, or changes to, the [removed: Health Reform Law] [added: Affordable Care Act] or [added: additional] changes to its implementation, the possible enactment of additional federal or state health care reforms and possible changes to other federal, state or local laws or regulations affecting the health care industry, [added: including single-payer proposals (often referred to as “Medicare for All”),] (3) the effects related to the continued implementation of the sequestration spending reductions required under the Budget Control Act of 2011, and related legislation extending these reductions, and the potential for future deficit reduction legislation that may alter these spending reductions, which include cuts to Medicare payments, or create additional spending reductions, (4) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (5) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services, (6) possible changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs or Medicaid waiver programs, that may impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (7) the highly competitive nature of the health care business, (8) changes in service mix, revenue mix and surgical 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, (9) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (10) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (11) increases in wages and the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical and technical support personnel, (12) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (13) changes in accounting practices, (14) changes in general economic conditions nationally and regionally in our markets, (15) the emergence [added: of] and effects related to [added: pandemics, epidemics and] infectious diseases, (16) future divestitures which may result in charges and possible impairments of long-lived assets, (17) changes in business strategy or development plans, (18) delays in receiving payments for services provided, (19) the outcome of pending and any future tax audits, disputes and litigation associated [removed: with our tax positions, (20) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (21) the impact of potential]

[removed: HCA] [added: HCA] HEALTHCARE, [removed: INC.][added: INC.]

[removed: MANAGEMENT’S] [added: MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL [removed: CONDITION][added: CONDITION]

[removed: AND] [added: AND] RESULTS OF OPERATIONS [removed: (Continued)][added: (Continued)]

[removed: Forward-Looking] [added: Forward-Looking] Statements [removed: (continued)][added: (continued)]

[added: with our tax positions, (20) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (21) the impact of potential] cybersecurity incidents or security breaches, (22) our ongoing ability to demonstrate meaningful use of certified electronic health record (“EHR”) [removed: technology,] [added: technology and the impact of interoperability requirements,] (23) the impact of natural disasters, such as hurricanes and floods, or similar events beyond our control, (24) [removed: the effects of the 2017 Tax Cuts and Jobs Act (the “Tax Act”), including potential legislation] [added: changes in U.S. federal, state,] or [added: foreign tax laws including] interpretive guidance that may be issued by [removed: federal and state] taxing authorities or other [removed: standard-setting] [added: standard setting] bodies, and (25) other risk factors described in this annual report on Form [removed: 10-K.]

[removed: 2018] [added: 2019] Operations [removed: Summary][added: Summary]

Net income attributable to HCA Healthcare, Inc. totaled [removed: $3.787] [added: $3.505] billion, or [removed: $10.66] [added: $10.07] per diluted share, for [removed: 2018,] [added: 2019,] compared to [removed: $2.216] [added: $3.787] billion, or [removed: $5.95] [added: $10.66] per diluted share, for [removed: 2017.][added: 2018.]

The 2018 results include [removed: net] gains on sales of facilities of $428 million, or $0.91 per diluted share, and losses on retirement of debt of $9 million, or $0.02 per diluted share.

The [removed: 2017] [added: 2018] results include [removed: net] gains on sales of facilities of [removed: $8] [added: $428] million, or [removed: $0.01] [added: $0.91] per diluted share, and losses on retirement of debt of [removed: $39] [added: $9] million, or [removed: $0.06] [added: $0.02] per diluted share.

The 2018 results include a reduction in our provision for income taxes of [removed: $551] [added: $67] million, or [removed: $1.55] [added: $0.19] per diluted share, [removed: on net income attributable to HCA Healthcare, Inc., excluding gains on sales of facilities and losses on retirement of debt, related to the impact of the Tax Act, $484 million due to a reduction in the effective tax rate and $67 million] for the remeasurement of certain of our deferred tax assets and liabilities for which we were unable to record reasonable estimates in 2017.

[removed: The 2017 results include an increase in the] [added: Our] provision for income taxes [added: for 2018 included $28 million] of [removed: $301 million, or $0.81 per diluted share,] [added: benefits for tax credits] related to [added: certain 2017 hurricane-related expenses and $67 million of benefits related to] the remeasurement of our deferred tax assets and liabilities due to the enactment of the Tax Act.

During [added: 2019 and] 2018, we recorded [removed: a reduction] [added: reductions] to the provision for professional liability risks of [added: $50 million, or $0.11 per diluted share, and] $70 million, or $0.15 per diluted [removed: share.][added: share, respectively.]

[removed: Both of these amounts are] [added: This amount is] prior to any insurance recoveries.

Our provisions for income taxes for [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] included tax benefits of [removed: $124] [added: $65] million, or [removed: $0.35] [added: $0.19] per diluted share, and [removed: $82] [added: $124] million, or [removed: $0.22] [added: $0.35] per diluted share, respectively, related to employee equity award settlements.

Shares used for diluted earnings per share were [removed: 355.303] [added: 348.226] million shares and [removed: 372.221] [added: 355.303] million shares for the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

During [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] we repurchased [removed: 14.070] [added: 7.949] million and [removed: 25.092] [added: 14.070] million shares, respectively, of our common stock.

Revenues increased [added: 10.0%] to [added: $51.336 billion for 2019 from] $46.677 billion for 2018 [added: and increased 7.0% for 2018] from $43.614 billion for 2017.

Revenues increased [removed: 7.0%] [added: 10.0%] and [removed: 6.5%,] [added: 5.9%,] respectively, on a consolidated basis and on a same facility basis for [removed: 2018,] [added: 2019,] compared to [removed: 2017.][added: 2018.]

The consolidated revenues increase can be primarily attributed to the combined impact of a [removed: 2.8%] [added: 3.2%] increase in revenue per equivalent admission and a [removed: 4.1%] [added: 6.6%] increase in equivalent admissions.

The same facility revenues increase resulted primarily from a [removed: 3.9%] [added: 2.3%] increase in same facility revenue per equivalent admission and a [removed: 2.5%] [added: 3.5%] increase in same facility equivalent admissions.

[removed: HCA] [added: HCA] HEALTHCARE, [removed: INC.][added: INC.]

[removed: MANAGEMENT’S] [added: MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL [removed: CONDITION][added: CONDITION]

[removed: AND] [added: AND] RESULTS OF OPERATIONS [removed: (Continued)][added: (Continued)]

[removed: 2018] [added: 2019] Operations Summary [removed: (continued)][added: (continued)]

[removed: During 2018, consolidated] [added: Same facility] admissions increased [removed: 3.5%] [added: 2.8% during 2019 compared to 2018] and [removed: same facility admissions] increased [removed: 2.5%,] [added: 2.5% during 2018] compared to 2017.

Inpatient surgical volumes increased [removed: 1.5%] [added: 3.4%] on a consolidated basis and increased [removed: 0.8%] [added: 1.1%] on a same facility basis during [removed: 2018,] [added: 2019,] compared to [removed: 2017.][added: 2018.]

[removed: Outpatient surgical volumes increased 3.2% on a] consolidated basis and increased [removed: 1.8%] [added: 1.6%] on a same facility basis during [removed: 2018,] [added: 2019,] compared to [removed: 2017.][added: 2018.]

[removed: Emergency] [added: Same facility emergency] room visits increased [removed: 1.6% on a consolidated basis] [added: 2.8% during 2019 compared to 2018] and increased 0.1% [removed: on a same facility basis] during [removed: 2018,] [added: 2018] compared to 2017.

[removed: Same] [added: Consolidated and same] facility uninsured admissions increased [removed: 8.5%] [added: 5.8%] and [added: 3.7%, respectively, and consolidated and] same facility uninsured emergency room visits increased [removed: 3.8%] [added: 5.8% and 3.9%, respectively,] for [removed: 2018,] [added: 2019,] compared to [removed: 2017.][added: 2018.]

Same facility uninsured [removed: admissions] [added: emergency room visits] increased [removed: 5.9%] [added: 3.9%] and same facility uninsured [removed: emergency room visits] [added: admissions] increased [removed: 2.4% for 2017,] [added: 3.7% during 2019] compared to [removed: 2016.][added: 2018.]

Interest expense totaled [removed: $1.755] [added: $1.824] billion for [removed: 2018,] [added: 2019,] compared to [removed: $1.690] [added: $1.755] billion for [removed: 2017.][added: 2018.]

The [removed: $65] [added: $69] million increase in interest expense for [removed: 2018] [added: 2019] was due to the increase in the average debt balance.

Cash flows from operating activities increased [removed: $1.335 billion,] [added: $841 million,] from [removed: $5.426] [added: $6.761] billion for [removed: 2017] [added: 2018] to [removed: $6.761] [added: $7.602] billion for [removed: 2018.][added: 2019.]

The [added: $1.335 billion] increase in cash [removed: flows from] [added: provided by] operating activities [added: for 2018, compared to 2017,] was primarily related to the increase in net income, excluding gains on sales of facilities, of [removed: $1.226] [added: $1.309] billion.

[removed: Business Strategy][added: Business Strategy]

[removed: _Grow Our Presence in Existing Markets._] We believe we are well positioned in a number of large and growing markets that will allow us the opportunity to generate long-term, attractive growth through the expansion of our presence in these markets.

[removed: _Achieve Industry-Leading Performance in Clinical and Satisfaction Measures._] Achieving high levels of patient safety, patient satisfaction and clinical quality are central goals of our [removed: business model.][added: business.]

This annual report on Form

10-K

includes certain disclosures which contain “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties.

10-K.

The 2019 results also include revenues of $86 million, or $0.19 per diluted share, related to the resolution of transaction price differences regarding certain

out-of-network

services performed in prior periods.

Outpatient surgical volumes increased 4.0% on a

The estimated cost of total uncompensated care increased $415 million for 2019, compared to 2018.

Grow Our Presence in Existing Markets.

Achieve Industry-Leading Performance in Clinical and Satisfaction Measures.

Recruit and Employ Physicians to Meet the Needs for High Quality Health Services.

Continue to Leverage Our Scale and Market Positions to Grow the Company.

Pursue a Disciplined Development Strategy.

in-market

opportunities.

To complement our

in-market

to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition.

Prior to November 2017, patients treated at hospitals for

non-elective

We believe our quarterly updates to the estimated implicit price

period-to-period

comparisons of our results of operations.

The estimated ultimate cost includes

20-year

period is used in our reserve estimation process.

occurrence-to-resolution

timeframe that varies from this average.

The current portion of these reserves, $457 million and $466 million at December 31, 2019

low-taxed

income as a period expense.

indicated that it will phase out some of the federal funding.

The 2019 results include revenues of $86 million, or $0.19 per diluted share, related to the resolution of transaction price differences regarding certain

out-of-network

services performed in prior periods.

Revenues increased 10.0% to $51.336 billion for 2019 from $46.677 billion for 2018.

Same facility supply costs per equivalent admission increased 1.6% for medical devices and 2.2% for general medical and surgical items and declined 2.1% for pharmacy supplies in 2019 compared to 2018.

Depreciation expense was $2.579 billion for 2019 and $2.262 billion for 2018, and the $317 million increase was due to both acquisitions and increased capital expenditures in 2019 (same facility depreciation amortization increased $154 million).

During July 2019, we redeemed all $600 million outstanding aggregate principal amount of 4.25% senior secured notes due 2019, all $3.000 billion outstanding aggregate principal amount of 6.50% senior secured notes due 2020 and all $1.350 billion outstanding aggregate principal amount of 5.875% senior secured notes due 2022.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

During 2017, we recorded additional expenses and losses of revenues estimated at approximately $140 million, or $0.24 per diluted share, associated with the impact of hurricanes Harvey and Irma on our Texas, Florida, Georgia and South Carolina facilities.

All “per diluted share” disclosures are based upon amounts net of the applicable income taxes.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

Total uncompensated care increased $3.337 billion for 2018, compared to 2017.

Total uncompensated care as a percentage of the sum of revenues and total uncompensated care was 36.4% for 2018, compared to 34.9% for 2017.

We attract and retain physicians

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##### [Index to Financial Statements](#INDEX)

We have

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

Total uncompensated care as a percentage of the sum of revenues and total uncompensated care was 36.4% for 2018, 34.9% for 2017 and 33.0% for 2016.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

$25 million per occurrence.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

claims is approximately four years, although the facts and circumstances of each individual claim can result in an occurrence-to-resolution timeframe that varies from this average.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

Revenues increased 7.0% to $46.677 billion for 2018 from $43.614 billion for 2017 and increased 5.1% for 2017 from $41.490 billion for 2016.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

| Legal claim benefits | | | — | | | | — | | | | — | | | | — | | | | (246 | ) | | | (0.6 | ) |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

The 2017 results include an increase in provision for income taxes of $301 million, or $0.81 per diluted share, related to the remeasurement of our deferred tax assets and liabilities due to the enactment of the Tax Act.

During 2017, we recorded additional expenses and losses of revenues estimated at approximately $140 million, or $0.24 per diluted share, associated with the impact of hurricanes Harvey and Irma on our Texas, Florida, Georgia and South Carolina facilities.

Emergency room visits increased 1.6% on a consolidated basis and increased 0.1% on a same facility basis during 2018 compared to 2017.

Supply costs per equivalent admission increased 3.6% for

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

medical devices and 1.2% for general medical and surgical items, and declined 1.5% for pharmacy supplies in 2018 compared to 2017.

[removed: General][added: General]

At December 31, [removed: 2018,] [added: 2019,] we operated [removed: 179] [added: 184] hospitals, comprised of [removed: 175] [added: 179] general, acute care hospitals; three psychiatric hospitals; and [removed: one] [added: two] rehabilitation [removed: hospital.][added: hospitals.]

Our facilities are located in [removed: 20] [added: 21] states and England.

Outpatient and ancillary health care services are provided by our general, acute care hospitals, freestanding surgery centers, freestanding emergency care facilities, urgent care facilities, [removed: walk-in clinics, diagnostic centers and rehabilitation facilities.]

Our principal executive offices are located at One Park Plaza, Nashville, Tennessee 37203, and our telephone number is (615) [removed: 344-9551.]

[removed: Available Information][added: Available Information]

We file certain reports with the Securities and Exchange Commission (the “SEC”), including annual reports on Form [removed: 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.]

[removed: We make available free of charge, through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K] and all amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

Our Code of Conduct is available free of charge upon request to our Corporate Secretary, HCA Healthcare, Inc., One Park Plaza, Nashville, Tennessee [removed: 37203] [added: 37203,] and is also available on the Ethics and Compliance and Corporate Governance portion of our website at www.hcahealthcare.com.

[removed: Business Strategy][added: Business Strategy]

| | • | [removed: |] grow our presence in existing markets; |

| | • | [removed: |] achieve industry-leading performance in clinical and satisfaction measures; |

| | • | [removed: |] recruit and employ physicians to meet the need for high quality health services; |

| | • | [removed: |] continue to leverage our scale and market positions to grow the Company; and |

| | • | [removed: |] pursue a disciplined development strategy. |

[removed: Health] [added: Health] Care [removed: Facilities][added: Facilities]

[removed: We currently own, manage or operate hospitals, freestanding surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in] clinics, diagnostic and imaging centers, radiation and oncology therapy centers, comprehensive rehabilitation and physical therapy centers, physician practices and various other facilities.

At December 31, [removed: 2018,] [added: 2019,] we owned and operated [removed: 175] [added: 179] general, acute care hospitals with [removed: 46,687] [added: 48,443] licensed beds.

At December 31, [removed: 2018,] [added: 2019,] we operated three psychiatric hospitals with 412 licensed beds.

Our psychiatric hospitals provide therapeutic programs, including child, adolescent and adult psychiatric [removed: care,] [added: care and] adolescent and adult alcohol and drug abuse treatment and counseling.

[removed: We also operate outpatient health care facilities, which include freestanding ambulatory surgery centers (“ASCs”), freestanding emergency care facilities, urgent care facilities, walk-in] clinics, diagnostic and imaging centers, comprehensive rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices and various other facilities.

[removed: Sources] [added: Sources] of [removed: Revenue][added: Revenue]

[removed: Charges and reimbursement] [added: Reimbursement] rates for inpatient [added: and outpatient] services vary significantly depending on the type of third-party payer, the type of service (e.g., medical/surgical, intensive care or psychiatric) and the geographic location of the hospital.

Our revenues [removed: from] [added: by primary] third-party [removed: payers] [added: payer classification] and other (including uninsured patients) for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] are summarized in the following table (dollars in millions):

| | | [removed: Years] [added: Years] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | | | | | |

| | | [removed: 2018] [added: 2019] | | | | [removed: Ratio] [added: Ratio] | | | | [removed: 2017] [added: 2018] | | | | [removed: Ratio] [added: Ratio] | | | | [removed: 2016] [added: 2017] | | | | [removed: Ratio] [added: Ratio] | | |

| Medicare | | [removed: $] [added: $] | [removed: 9,831] [added: 10,798] | | | | [removed: 21.1] [added: 21.0] | [removed: %] [added: %] | | $ | [removed: 9,285] [added: 9,831] | | | | [removed: 21.3] [added: 21.1] | % | | $ | [removed: 8,719] [added: 9,285] | | | | [removed: 21.0] [added: 21.3] | % |

| Managed Medicare | | | [removed: 5,497] [added: 6,452] | | | | [removed: 11.8] [added: 12.6] | | | | [removed: 4,680] [added: 5,497] | | | | [removed: 10.7] [added: 11.8] | | | | [removed: 4,278] [added: 4,680] | | | | [removed: 10.3] [added: 10.7] | |

| Medicaid | | | [removed: 1,358] [added: 1,572] | | | | [removed: 2.9] [added: 3.1] | | | | [removed: 1,316] [added: 1,358] | | | | [removed: 3.0] [added: 2.9] | | | | [removed: 1,278] [added: 1,316] | | | | [removed: 3.1] [added: 3.0] | |

| Managed Medicaid | | | [removed: 2,403] [added: 2,450] | | | | [removed: 5.1] [added: 4.8] | | | | [removed: 2,165] [added: 2,403] | | | | [removed: 5.0] [added: 5.1] | | | | [removed: 2,317] [added: 2,165] | | | | [removed: 5.6] [added: 5.0] | |

| Managed care and other insurers | | | [removed: 24,467] [added: 26,544] | | | | [removed: 52.4] [added: 51.6] | | | | [removed: 23,342] [added: 24,467] | | | | [removed: 53.5] [added: 52.4] | | | | [removed: 22,287] [added: 23,342] | | | | [removed: 53.7] [added: 53.5] | |

| International (managed care and [added: other] insurers) | | | [removed: 1,156] [added: 1,162] | | | | [removed: 2.5] [added: 2.3] | | | | [removed: 1,097] [added: 1,156] | | | | 2.5 | | | | [removed: 1,195] [added: 1,097] | | | | [removed: 2.9] [added: 2.5] | |

| Other | | | [removed: 1,965] [added: 2,358] | | | | [removed: 4.2] [added: 4.6] | | | | [removed: 1,729] [added: 1,965] | | | | [removed: 4.0] [added: 4.2] | | | | [removed: 1,416] [added: 1,729] | | | | [removed: 3.4] [added: 4.0] | |

| Revenues | | [removed: $] [added: $] | [removed: 46,677] [added: 51,336] | | | | [removed: 100.0] [added: 100.0] | [removed: %] [added: %] | | $ | [removed: 43,614] [added: 46,677] | | | | 100.0 | % | | $ | [removed: 41,490] [added: 43,614] | | | | 100.0 | % |

Medicare is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over, some disabled persons, persons with [removed: end-stage renal disease and persons with Lou Gehrig’s Disease.]

See Item 1, “Business — Competition.” [removed: Patients are generally not responsible for the total difference between established hospital gross charges and amounts reimbursed for such] [added: For] services under Medicare, Medicaid, HMOs, PPOs and other managed care plans, [removed: but] [added: patients] are [added: generally] responsible [removed: to the extent of] [added: for] any exclusions, deductibles or coinsurance features of their coverage.

[removed: In implementing our uninsured discount policy, we] [added: We] may attempt to provide assistance to uninsured patients to help determine whether they may qualify for Medicaid, other federal or state assistance or charity care under our charity care policy.

[removed: _Medicare_][added: Medicare]

In 2013, the Centers for Medicare & Medicaid Services (“CMS”) began imposing a [removed: 2%] [added: 2.0%] reduction on Medicare [removed: payments.][added: payments, and these reductions have been extended through 2029.]

[removed: _Inpatient] [added: Inpatient] Acute [removed: Care_][added: Care]

walk-in

clinics, diagnostic centers and rehabilitation facilities.

344-9551.

10-K,

quarterly reports on Form

10-Q

and current reports on Form

8-K.

We make available free of charge, through our website, our annual report on Form

10-K,

quarterly reports on Form

10-Q,

current reports on Form

8-K

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

We currently own, manage or operate hospitals, freestanding surgery centers, freestanding emergency care facilities, urgent care facilities,

walk-in

We also operate outpatient health care facilities, which include freestanding ambulatory surgery centers (“ASCs”), freestanding emergency care facilities, urgent care facilities,

walk-in

end-stage

renal disease and persons with Lou Gehrig’s Disease.

(“MS-DRG”).

MS-DRGs

MS-DRG

MS-DRG

relative to the average resources for all

MS-DRGs.

MS-DRG

MS-DRG

weights multiplied by a geographically adjusted federal rate.

MS-DRG

rates are updated, and

MS-DRG

The index used to update the

MS-DRG

10-year

| --- | --- |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

These reductions have been extended through 2027.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

inpatient discharge are established based on the patient’s assigned Medicare severity diagnosis-related group (“MS-DRG”).

This increase reflected a 2.7% market basket increase adjusted by the following percentage points: a 0.75 reduction required by the Health Reform Law, a negative 0.6 productivity adjustment, a further reduction of 0.6 to remove the effects of prior adjustments related to the “two midnight rule,” and a positive 0.46 adjustment in accordance with the 21st Century Cures Act.

Under the two midnight rule, services provided to Medicare beneficiaries are payable as inpatient hospital services only when there is a reasonable expectation that the hospital care is medically necessary and will be required across two midnights, absent unusual circumstances.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

CMS will phase in the expansion of this site-neutral policy over two calendar years, beginning in 2019.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

CMS also made corresponding increases to the Medicare reimbursement rates to all hospitals for other drugs and services paid under the outpatient PPS.

The holding and the court’s remedy could potentially be appealed.

This reflected an increase factor of 1.0%, the figure required by MACRA, with adjustments related to outlier threshold results.

Each payment year, the Health Reform Law provides for the annual market basket update to be further reduced by a productivity adjustment based on the BLS 10-year moving average of changes in specified economy-wide productivity.

Inpatient psychiatric facilities are required to report quality

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

For calendar year 2018, CMS increased ASC payments by 1.2%, which reflected a consumer price index update of 1.7% and a negative 0.5 percentage point productivity adjustment.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

The adjustment percentage will increase incrementally to 9% by 2022.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

However, the Health Reform Law requires states to at least maintain Medicaid eligibility standards for children established prior to the enactment of the law until October 1, 2019.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

are state-specific.

The Health Reform Law reduced Medicare DSH payments to 25% of the amount they otherwise would have been absent the law.

The remaining 75% of the amount that would otherwise be paid under Medicare DSH is effectively pooled, and this pool is adjusted each year by a formula that reflects changes in the national level of uninsured who are under 65 years of age.

[added: We are also subject] to claims and suits arising in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians’ staff privileges.

[removed: _Government] [added: Government] Investigations, Claims and [removed: Litigation_][added: Litigation]

[removed: Under the federal False Claims Act (“FCA”), private parties have the right to bring _qui tam_,] [added: ,] or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government.

[removed: The] [added: In 2018, the] Civil Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of Texas [removed: have] requested information about whether the [removed: Program] [added: Program,] as operated in Harris [removed: County complies] [added: County, complied] with the laws and regulations applicable to provider related [removed: donations.][added: donations, and the Company cooperated with that request.]

[removed: We believe] [added: The Company believes] that our participation is and has been consistent with the requirements of the [removed: Program.][added: Program and is vigorously defending against the lawsuit being pursued by the relator.]

Under the federal False Claims Act (“FCA”), private parties have the right to bring

qui tam

On May 21, 2019, a

qui tam

lawsuit asserting violations of the FCA and the Texas Medicaid Fraud Prevention Act related to the Program, as operated in Harris County, was unsealed by the U.S. District Court for the Southern District of Texas.

Both the federal and state governments declined to intervene in the

qui tam

lawsuit.

We cannot predict what effect, if any, the

qui tam

lawsuit could have on the Company.

We are also subject

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

The Company is cooperating with this request.

However, at this time, we cannot predict what effect, if any, the request or resulting claims under the federal FCA, other statutes, regulations or laws, could have on the Company.

[removed: 10-K 1 d676301d10k.htm FORM 10-K][added: Form]

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: (Mark One)][added: (Mark One)]

| ☒ | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year ended [removed: December 31, 2018]

| ☐ | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from [removed: to]

[removed: Commission] [added: Commission] File Number [removed: 1-11239]

[removed: HCA] [added: HCA] Healthcare, [removed: Inc.][added: Inc.]

[removed: (Exact] [added: (Exact] Name of Registrant as Specified in its [removed: Charter)][added: Charter)]

| [removed: Delaware] [added: Delaware] | | [removed: 27-3865930] [added: 27-3865930] |

| [removed: (State] [added: (State] or Other Jurisdiction [removed: of Incorporation] [added: of Incorporation] or [removed: Organization)] [added: Organization)] | | [removed: (I.R.S. Employer Identification No.)] [added: (I.R.S. Employer Identification No.)] |

| [removed: One] [added: One] Park [removed: Plaza Nashville, Tennessee (Address of Principal Executive Offices)] [added: Plaza Nashville , Tennessee] | | [removed: 37203 (Zip Code)] [added: 37203] |

[removed: Registrant’s] [added: Registrant’s] telephone number, including area code: [removed: (615) 344-9551][added: (]

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Trading Symbol(s) | | Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| [removed: Common Stock,] [added: Common Stock ,] $0.01 Par [removed: Value] [added: Value] | | [removed: New] [added: HCA | | New] York Stock [removed: Exchange] [added: Exchange] |

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(g) of the Act: [removed: None][added: None]

Yes [removed: ☒ No ☐]

Yes [removed: ☐ No ☒]

Yes [removed: ☒ No ☐]

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation [removed: S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).]

Yes [removed: ☒ No ☐]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a [removed: non-accelerated filer, a smaller reporting company, or an emerging growth company.]

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule [removed: 12b-2 of the Exchange Act.]

| [removed: Emerging growth company] | | [removed: ☐] | | [added: Emerging growth company] | | [added: ☐] |

Indicate by check mark whether the Registrant is a shell company (as defined in Rule [removed: 12b-2 of the Act).]

Yes [removed: ☐ No ☒]

[removed: As of January 31, 2019, there were 342,376,700] outstanding shares of the Registrant’s common stock.

As of June 30, [removed: 2018,] [added: 2019,] the aggregate market value of the common stock held by nonaffiliates was approximately [removed: $28.045] [added: $36.403] billion.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the Registrant’s definitive proxy materials for its [removed: 2019] [added: 2020] Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

[removed: INDEX][added: INDEX]

| | | | | [removed: Page Reference] [added: Page Reference] | | |

| [removed: Part I] [added: Part I] | | | | | | |

| Item 1. | | [removed: [Business](#tx676301_1)] [added: [Business](#tx864235_1)] | | | 3 | |

| Item 1A. | | [Risk [removed: Factors](#tx676301_2)] [added: Factors](#tx864235_2)] | | | [removed: 31] [added: 30] | |

| Item 1B. | | [Unresolved Staff [removed: Comments](#tx676301_3)] [added: Comments](#tx864235_3)] | | | 47 | |

10-K

December 31, 2019

Or

to

1-11239

| (Address of Principal Executive Offices) | | (Zip Code) |

344-9551

| | | | | |

| --- | --- | --- | --- | --- |

No

No

No

S-T

(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such

files).

No

non-accelerated

filer, a smaller reporting company, or an emerging growth company.

12b-2

of the Exchange Act.

12b-2

of the Act).

No

As of January 31, 2020, there were

338,427,300

| | | [Signatures](#tx864235_22) | | | 9 1 | |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

Form 10-K

Or

| | | |

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

| | | [Signatures](#tx676301_22) | | | 93 | |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

The following table lists, by state, the number of hospitals (general, acute care, psychiatric and rehabilitation) directly or indirectly owned and operated by us as of December 31, [removed: 2018:][added: 2019:]

| [removed: State] [added: State] | | [removed: Hospitals] [added: Hospitals] | | | | [removed: Beds] [added: Beds] | | |

| New Hampshire | | | 2 | | | | [removed: 295] [added: 306] | |

| South Carolina | | | 3 | | | | [removed: 941] [added: 949] | |

| [removed: International] [added: International] | | | | | | | | |

We maintain our headquarters in approximately [removed: 2,129,000] [added: 2,127,000] square feet of space in the Nashville, Tennessee area.

| Colorado | | | 7 | | | | 2,411 | |

| Florida | | | 45 | | | | 12,410 | |

| Georgia | | | 9 | | | | 2,469 | |

| Louisiana | | | 3 | | | | 914 | |

| Missouri | | | 5 | | | | 1,058 | |

| Nevada | | | 3 | | | | 1,421 | |

| North Carolina | | | 7 | | | | 1,181 | |

| Tennessee | | | 13 | | | | 2,576 | |

| Texas | | | 46 | | | | 13,395 | |

| Virginia | | | 11 | | | | 3,300 | |

| England | | | 6 | | | | 892 | |

| | | | 184 | | | | 49,035 | |

| Colorado | | | 7 | | | | 2,415 | |

| Florida | | | 45 | | | | 12,057 | |

| Georgia | | | 9 | | | | 2,459 | |

| Louisiana | | | 4 | | | | 1,049 | |

| Missouri | | | 5 | | | | 1,030 | |

| Nevada | | | 3 | | | | 1,283 | |

| Tennessee | | | 13 | | | | 2,544 | |

| Texas | | | 47 | | | | 13,252 | |

| Virginia | | | 11 | | | | 3,284 | |

| England | | | 6 | | | | 837 | |

| | | | 179 | | | | 47,199 | |

[removed: PART II][added: PART II]

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

During January [added: 2020 and] 2019, our Board of Directors authorized [removed: a] share repurchase [removed: program] [added: programs] for up to [removed: $2] [added: $4] billion [added: ($2 billion for each authorization)] of our outstanding common stock.

Repurchases made during the fourth quarter of [removed: 2018,] [added: 2019,] as detailed below, were made pursuant to the [removed: $2 billion October 2017] [added: January 2019] share repurchase authorization and were made in the open market.

The following table provides certain information with respect to our repurchases of common stock from October 1, [removed: 2018] [added: 2019] through December 31, [removed: 2018] [added: 2019] (dollars in millions, except per share amounts).

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number of Shares [removed: Purchased] [added: Purchased] | | | | [removed: Average] [added: Average] Price Paid per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs] [added: Programs] | | | | [removed: Approximate] [added: Approximate] Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or [removed: Programs] [added: Programs] | | |

On January [removed: 29, 2019,] [added: 27, 2020,] our Board of Directors declared a quarterly dividend of [removed: $0.40] [added: $0.43] per share on our common stock payable on March [removed: 29, 2019] [added: 31, 2020] to stockholders of record [added: at the close of business] on March [removed: 1, 2019.][added: 2, 2020.]

During [removed: 2018,] [added: 2019,] our Board of Directors declared four quarterly dividends of [removed: $0.35] [added: $0.40] per share, or [removed: $1.40] [added: $1.60] per share in the aggregate, on our common stock.

At the close of business on February [removed: 8, 2019,] [added: 7, 2020,] there were approximately [removed: 380] [added: 390] holders of record of our common stock.

[removed: STOCK] [added: STOCK] PERFORMANCE [removed: GRAPH][added: GRAPH]

[removed: COMPARISON] [added: COMPARISON] OF 5 YEAR CUMULATIVE TOTAL [removed: RETURN][added: RETURN]

[removed: ][added: ]

| | | [removed: 12/31/2013] [added: 12/31/2014] | | | | [removed: 12/31/2014] [added: 12/31/2015] | | | | [removed: 12/31/2015] [added: 12/31/2016] | | | | [removed: 12/31/2016] [added: 12/31/2017] | | | | [removed: 12/31/2017] [added: 12/31/2018] | | | | [removed: 12/31/2018] [added: 12/31/2019] | | |

The graph shows the cumulative total return to our stockholders beginning as of December 31, [removed: 2013] [added: 2014] through December 31, [removed: 2018,] [added: 2019,] in comparison to the cumulative returns of the S&P 500 Index and the S&P Health Care Index.

The graph assumes $100 invested on December 31, [removed: 2013] [added: 2014] in our common stock and in each index with the subsequent reinvestment of dividends.

| October 1, 2019 through October 31, 2019 | | | 898,323 | | | $ | 120.23 | | | | 898,323 | | | $ | 1,405 | |

| November 1, 2019 through November 30, 2019 | | | 585,739 | | | $ | 136.44 | | | | 585,739 | | | $ | 1,325 | |

| December 1, 2019 through December 31, 2019 | | | 585,429 | | | $ | 143.49 | | | | 585,429 | | | $ | 1,241 | |

| Total for Fourth Quarter 2019 | | | 2,069,491 | | | $ | 131.40 | | | | 2,069,491 | | | $ | 1,241 | |

| HCA Healthcare, Inc. | | $ | 100.00 | | | $ | 92.15 | | | $ | 100.86 | | | $ | 119.69 | | | $ | 171.61 | | | $ | 206.36 | |

| S&P 500 | | | 100.00 | | | | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | |

| S&P Health Care | | | 100.00 | | | | 106.89 | | | | 104.01 | | | | 126.98 | | | | 135.19 | | | | 163.34 | |

During October 2017, our Board of Directors authorized a share repurchase program for up to $2 billion of our outstanding common stock.

| October 1, 2018 through October 31, 2018 | | | 952,686 | | | $ | 134.40 | | | | 952,686 | | | $ | 479 | |

| November 1, 2018 through November 30, 2018 | | | 613,685 | | | $ | 138.43 | | | | 613,685 | | | $ | 394 | |

| December 1, 2018 through December 31, 2018 | | | 946,231 | | | $ | 128.59 | | | | 946,231 | | | $ | 272 | |

| Total for Fourth Quarter 2018 | | | 2,512,602 | | | $ | 133.20 | | | | 2,512,602 | | | $ | 272 | |

There were no dividends or distributions declared during 2017.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

| HCA Healthcare, Inc. | | $ | 100.00 | | | $ | 153.83 | | | $ | 141.75 | | | $ | 155.15 | | | $ | 184.11 | | | $ | 263.98 | |

| S&P 500 | | | 100.00 | | | | 113.69 | | | | 115.26 | | | | 129.05 | | | | 157.22 | | | | 150.33 | |

| S&P Health Care | | | 100.00 | | | | 125.34 | | | | 133.97 | | | | 130.37 | | | | 159.15 | | | | 169.44 | |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

[removed: HCA] [added: HCA] HEALTHCARE, [removed: INC.][added: INC.]

[removed: SELECTED] [added: SELECTED] FINANCIAL [removed: DATA][added: DATA]

[removed: AS] [added: AS] OF AND FOR THE YEARS ENDED DECEMBER [removed: 31][added: 31]

[removed: (Dollars] [added: (Dollars] in millions, except per share [removed: amounts)][added: amounts)]

| | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Summary] [added: Summary] of [removed: Operations:] [added: Operations:] | | | | | | | | | | | | | | | | | | | | |

| Revenues | | [removed: $] [added: $] | [removed: 46,677] [added: 51,336] | | | $ | [removed: 43,614] [added: 46,677] | | | $ | [removed: 41,490] [added: 43,614] | | | $ | [removed: 39,678] [added: 41,490] | | | $ | [removed: 36,918] [added: 39,678] | |

| Salaries and benefits | | | [removed: 21,425] [added: 23,560] | | | | [removed: 20,059] [added: 21,425] | | | | [removed: 18,897] [added: 20,059] | | | | [removed: 18,115] [added: 18,897] | | | | [removed: 16,641] [added: 18,115] | |

| Supplies | | | [removed: 7,724] [added: 8,481] | | | | [removed: 7,316] [added: 7,724] | | | | [removed: 6,933] [added: 7,316] | | | | [removed: 6,638] [added: 6,933] | | | | [removed: 6,262] [added: 6,638] | |

| Other operating expenses | | | [removed: 8,608] [added: 9,481] | | | | [removed: 8,051] [added: 8,608] | | | | [removed: 7,496] [added: 8,051] | | | | [removed: 7,056] [added: 7,496] | | | | [removed: 6,630] [added: 7,056] | |

| Equity in earnings of affiliates | | | [removed: (29] [added: (43] | [removed: )] [added: )] | | | [removed: (45] [added: (29] | ) | | | [removed: (54] [added: (45] | ) | | | [removed: (46] [added: (54] | ) | | | [removed: (43] [added: (46] | ) |

| Depreciation and amortization | | | [removed: 2,278] [added: 2,596] | | | | [removed: 2,131] [added: 2,278] | | | | [removed: 1,966] [added: 2,131] | | | | [removed: 1,904] [added: 1,966] | | | | [removed: 1,820] [added: 1,904] | |

| Interest expense | | | [removed: 1,755] [added: 1,824] | | | | [removed: 1,690] [added: 1,755] | | | | [removed: 1,707] [added: 1,690] | | | | [removed: 1,665] [added: 1,707] | | | | [removed: 1,743] [added: 1,665] | |

| Losses (gains) on sales of facilities | | | [removed: (428] [added: (18] | [removed: )] [added: )] | | | [removed: (8] [added: (428] | ) | | | [removed: (23] [added: (8] | ) | | | [removed: 5] [added: (23] | [added: )] | | | [removed: (29] [added: 5] | [removed: )] |

| Losses on retirement of debt | | | [removed: 9] [added: 211] | | | | [removed: 39] [added: 9] | | | | [removed: 4] [added: 39] | | | | [removed: 135] [added: 4] | | | | [removed: 335] [added: 135] | |

| Legal claim (benefits) costs | | | [removed: —] [added: —] | | | | — | | | | [removed: (246] [added: —] | [removed: )] | | | [removed: 249] [added: (246] | [added: )] | | | [removed: 78] [added: 249] | |

| | | | [removed: 41,342] [added: 46,092] | | | | [removed: 39,233] [added: 41,342] | | | | [removed: 36,680] [added: 39,233] | | | | [removed: 35,721] [added: 36,680] | | | | [removed: 33,437] [added: 35,721] | |

| Income before income taxes | | | [removed: 5,335] [added: 5,244] | | | | [removed: 4,381] [added: 5,335] | | | | [removed: 4,810] [added: 4,381] | | | | [removed: 3,957] [added: 4,810] | | | | [removed: 3,481] [added: 3,957] | |

| Provision for income taxes | | | [removed: 946] [added: 1,099] | | | | [removed: 1,638] [added: 946] | | | | [removed: 1,378] [added: 1,638] | | | | [removed: 1,261] [added: 1,378] | | | | [removed: 1,108] [added: 1,261] | |

| Net income | | | [removed: 4,389] [added: 4,145] | | | | [removed: 2,743] [added: 4,389] | | | | [removed: 3,432] [added: 2,743] | | | | [removed: 2,696] [added: 3,432] | | | | [removed: 2,373] [added: 2,696] | |

| Net income attributable to noncontrolling interests | | | [removed: 602] [added: 640] | | | | [removed: 527] [added: 602] | | | | [removed: 542] [added: 527] | | | | [removed: 567] [added: 542] | | | | [removed: 498] [added: 567] | |

| Net income attributable to HCA Healthcare, Inc. | | [removed: $] [added: $] | [removed: 3,787] [added: 3,505] | | | $ | [removed: 2,216] [added: 3,787] | | | $ | [removed: 2,890] [added: 2,216] | | | $ | [removed: 2,129] [added: 2,890] | | | $ | [removed: 1,875] [added: 2,129] | |

| [removed: Per] [added: Per] common share [removed: data:] [added: data:] | | | | | | | | | | | | | | | | | | | | |

| Basic earnings per share | | [removed: $] [added: $] | [removed: 10.90] [added: 10.27] | | | $ | [removed: 6.12] [added: 10.90] | | | $ | [removed: 7.53] [added: 6.12] | | | $ | [removed: 5.14] [added: 7.53] | | | $ | [removed: 4.30] [added: 5.14] | |

| Diluted earnings per share | | [removed: $] [added: $] | [removed: 10.66] [added: 10.07] | | | $ | [removed: 5.95] [added: 10.66] | | | $ | [removed: 7.30] [added: 5.95] | | | $ | [removed: 4.99] [added: 7.30] | | | $ | [removed: 4.16] [added: 4.99] | |

| Cash dividends declared per share | | [removed: $] [added: $] | [removed: 1.40] [added: 1.60] | | | [added: $] | [removed: —] [added: 1.40] | | | | — | | | | — | | | | — | |

| [removed: Financial Position:] [added: Financial Position:] | | | | | | | | | | | | | | | | | | | | |

| Assets | | [removed: $] [added: $] | [removed: 39,207] [added: 45,058] | | | $ | [removed: 36,593] [added: 39,207] | | | $ | [removed: 33,758] [added: 36,593] | | | $ | [removed: 32,744] [added: 33,758] | | | $ | [removed: 30,980] [added: 32,744] | |

| Working capital | | | [removed: 2,644] [added: 3,439] | | | | [removed: 3,819] [added: 2,644] | | | | [removed: 3,252] [added: 3,819] | | | | [removed: 3,716] [added: 3,252] | | | | [removed: 3,450] [added: 3,716] | |

| Long-term debt, net, including amounts due within one year | | | [removed: 32,821] [added: 33,722] | | | | [removed: 33,058] [added: 32,821] | | | | [removed: 31,376] [added: 33,058] | | | | [removed: 30,488] [added: 31,376] | | | | [removed: 29,426] [added: 30,488] | |

| Noncontrolling interests | | | [removed: 2,032] [added: 2,243] | | | | [removed: 1,811] [added: 2,032] | | | | [removed: 1,669] [added: 1,811] | | | | [removed: 1,553] [added: 1,669] | | | | [removed: 1,396] [added: 1,553] | |

| Stockholders’ deficit | | | [removed: (2,918] [added: (565] | [removed: )] [added: )] | | | [removed: (4,995] [added: (2,918] | ) | | | [removed: (5,633] [added: (4,995] | ) | | | [removed: (6,046] [added: (5,633] | ) | | | [removed: (6,498] [added: (6,046] | ) |

| [removed: Cash] [added: Cash] Flow [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | |

| Cash provided by operating activities | | [removed: $] [added: $] | [removed: 6,761] [added: 7,602] | | | $ | [removed: 5,426] [added: 6,761] | | | $ | [removed: 5,653] [added: 5,426] | | | $ | [removed: 4,734] [added: 5,653] | | | $ | [removed: 4,448] [added: 4,734] | |

| Cash used in investing activities | | | [removed: (3,901] [added: (5,720] | [removed: )] [added: )] | | | [removed: (4,279] [added: (3,901] | ) | | | [removed: (3,240] [added: (4,279] | ) | | | [removed: (2,583] [added: (3,240] | ) | | | [removed: (2,918] [added: (2,583] | ) |

| Purchase of property and equipment | | | [removed: (3,573] [added: (4,158] | [removed: )] [added: )] | | | [removed: (3,015] [added: (3,573] | ) | | | [removed: (2,760] [added: (3,015] | ) | | | [removed: (2,375] [added: (2,760] | ) | | | [removed: (2,176] [added: (2,375] | ) |

| Cash used in financing activities | | | [removed: (3,075] [added: (1,771] | [removed: )] [added: )] | | | [removed: (1,061] [added: (3,075] | ) | | | [removed: (2,508] [added: (1,061] | ) | | | [removed: (1,976] [added: (2,508] | ) | | | [removed: (1,378] [added: (1,976] | ) |

| | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Operating Data:] [added: Operating Data:] | | | | | | | | | | | | | | | | | | | | |

| Number of hospitals at end of period | | | [removed: 179] [added: 184] | | | | 179 | | | | [removed: 170] [added: 179] | | | | [removed: 168] [added: 170] | | | | [removed: 166] [added: 168] | |

| --- | --- |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

| * | Reclassifications between inpatient surgery cases and outpatient surgery cases for 2017 have been made to conform to the 2018 presentation. |

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

Information with respect to this Item is contained in our consolidated financial statements indicated in the Index to Consolidated Financial Statements on Page [removed: F-1 of this annual report on Form 10-K.]

F-1

of this annual report on Form

10-K.

Conclusion Regarding the Effectiveness of Disclosure Controls and [removed: Procedures][added: Procedures]

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule [removed: 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).]

Internal Control Over Financial [removed: Reporting][added: Reporting]

Our management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange Act Rule [removed: 13a-15(f).]

Based on our assessment under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]

Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Form [removed: 10-K, has issued a report on our internal control over financial reporting, which is included herein.]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited HCA Healthcare, Inc.’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in Internal [removed: Control—Integrated] [added: Control — Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, HCA Healthcare, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of HCA Healthcare, Inc. as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the related consolidated statements of income, comprehensive income, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] and the related notes and our report dated February [removed: 21, 2019] [added: 20, 2020] expressed an unqualified opinion thereon.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Definition] [added: Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting]

During the fourth quarter of [removed: 2018,] [added: 2019,] there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

1.

13a-15(e)

promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

2.

13a-15(f).

10-K,

has issued a report on our internal control over financial reporting, which is included herein.

February 20, 2020

1.

2.

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

February 21, 2019

##### [Table of Contents](#toc)

##### [Index to Financial Statements](#INDEX)

[removed: PART III][added: PART III]

The information required by this Item regarding the identity and business experience of our directors and executive officers is set forth under the heading “Nominees for Election” and “Election of Directors” in the definitive proxy materials of HCA to be filed in connection with our [removed: 2019] [added: 2020] Annual Meeting of Stockholders with respect to our directors and is set forth in Item 1 of Part I of this annual report on Form [removed: 10-K with respect to our executive officers.]

Information on the beneficial ownership reporting for our directors and executive officers required by this Item is contained under the caption [removed: “Section] [added: “Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance”] [added: Reports”] in the definitive proxy materials to be filed in connection with our [removed: 2019] [added: 2020] Annual Meeting of Stockholders and is incorporated herein by reference.

Information on our Audit and Compliance Committee and Audit Committee Financial Experts required by this Item is contained under the caption “Corporate Governance” in the definitive proxy materials to be filed in connection with our [removed: 2019] [added: 2020] Annual Meeting of Stockholders and is incorporated herein by reference.

To the extent required pursuant to applicable SEC regulations, we intend to post amendments to or waivers from our Code of Conduct (to the extent applicable to our chief executive officer, principal financial officer or principal accounting officer) at this location on our website or report the same on a Current Report on Form [removed: 8-K.]

10-K

with respect to our executive officers.

8-K.

The information required by this Item is set forth under the headings “Executive Compensation” and “Compensation Committee Interlocks and Insider Participation” in the definitive proxy materials to be filed in connection with our [removed: 2019] [added: 2020] Annual Meeting of Stockholders, which information is incorporated herein by reference.

Information about security ownership of certain beneficial owners required by this Item is set forth under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in the definitive proxy materials to be filed in connection with our [removed: 2019] [added: 2020] Annual Meeting of Stockholders, which information is incorporated herein by reference.

This table provides certain information as of December 31, [removed: 2018] [added: 2019] with respect to our equity compensation plans:

[removed: EQUITY] [added: EQUITY] COMPENSATION PLAN [removed: INFORMATION][added: INFORMATION]

[removed: (Share] [added: (Share] and share unit amounts in [removed: thousands)][added: millions)]

| | | [removed: Number] [added: Number] of securities to be issued upon exercise of outstanding options, warrants and [removed: rights] [added: rights] | | | | [removed: Weighted-average] [added: Weighted-average] exercise price of outstanding options, warrants and [removed: rights] [added: rights] | | | | [removed: Number] [added: Number] of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in [removed: column(a))] [added: column(a))] | | |

| Equity compensation plans approved by security holders | | | [removed: 18,572] [added: 16.849] | (1) | | $ | [removed: 61.49] [added: 71.79] | (1) | | | [removed: 28,989] [added: 27.211] | (2) |

| (1) | Includes [removed: 3,123 thousand] [added: 2.620 million] restricted share units which vest solely based upon continued employment over a specific period of time and [removed: 3,422 thousand] [added: 3.035 million] performance share units which vest based upon continued employment over a specific period of time and the achievement of predetermined financial targets over time. The performance share units reported reflect the number of performance share units that would vest upon achievement of target performance; the number of performance share units that vest can vary from zero (for actual performance less than [added: 90% of target for 2019 grants and] 80% of [removed: target)] [added: target for 2018 and prior grants)] to two times the units granted (for actual performance of [added: 110% or more of target for 2019 grants and] 120% or more of [removed: target).] [added: target for 2018 and prior grants).] The weighted average exercise price does not take these restricted share units and performance share units into account. |

| (2) | Includes [removed: 21,162 thousand] [added: 20.328 million] shares available for future grants under the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated, and [removed: 7,827 thousand] [added: 6.883 million] shares of common stock reserved for future issuance under the HCA Holdings, Inc. Employee Stock Purchase Plan. |

| | | (a) | | | | (b) | | | | (c) | | |

| Total | | | 16.849 | | | $ | 71.79 | | | | 27.211 | |

##### [Table of Contents](#toc)