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Published: 2023-07-27 00:00:00 ET

EX-99.1 2 d536904dex991.htm EX-99.1 EX-99.1

Exhibit 99.1


				FOR IMMEDIATE RELEASE

INVESTOR CONTACT:				MEDIA CONTACT:
Frank Morgan				Harlow Sumerford
615-344-2688				615-344-1851

HCA HEALTHCARE REPORTS SECOND QUARTER 2023 RESULTS

RAISES 2023 GUIDANCE

NASHVILLE, Tenn., July 27, 2023 – HCA Healthcare, Inc. (NYSE:HCA), today announced financial and operating results for the second quarter ended June 30, 2023.

Key second quarter metrics (all percentage changes compare 2Q 2023 to 2Q 2022 unless otherwise noted):

●

Revenues totaled $15.861 billion

●

Net income attributable to HCA Healthcare, Inc. totaled $1.193 billion, or $4.29 per diluted share

●

Adjusted EBITDA totaled $3.056 billion

●

Cash flows from operating activities totaled $2.475 billion

●

Same facility admissions increased 2.2 percent and same facility equivalent admissions increased 3.7 percent

“The company produced solid results in the second quarter driven by continued strong demand for our services and good execution by our teams. I want to thank our colleagues for their dedication and great work,” said Sam Hazen, Chief Executive Officer of HCA Healthcare.

Revenues in the second quarter of 2023 increased to $15.861 billion, compared to $14.820 billion in the second quarter of 2022. Net income attributable to HCA Healthcare, Inc. totaled $1.193 billion, or $4.29 per diluted share, compared to $1.155 billion, or $3.90 per diluted share, in the second quarter of 2022. The second quarter of 2022 results included losses on sales of facilities of $32 million, or $0.11 per diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share.

For the second quarter of 2023, Adjusted EBITDA totaled $3.056 billion, compared to $3.042 billion in the second quarter of 2022. Adjusted EBITDA is a non-GAAP financial measure. A table providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release.

Same facility admissions increased 2.2 percent and same facility equivalent admissions increased 3.7 percent in the second quarter of 2023, compared to the prior year period. Same facility emergency room visits increased 3.7 percent in the second quarter of 2023, compared to the prior year period. Same facility inpatient surgeries increased 1.8 percent while same facility outpatient surgeries increased 3.3 percent in the second quarter of 2023, compared to the same period of 2022. Same facility revenue per equivalent admission increased 2.4 percent in the second quarter of 2023, compared to the second quarter of 2022.

Six Months Ended June 30, 2023

Revenues for the six months ended June 30, 2023 totaled $31.452 billion, compared to $29.765 billion in the same period of 2022. Net income attributable to HCA Healthcare, Inc. was $2.556 billion, or $9.14 per diluted share, compared to $2.428 billion, or $8.05 per diluted share, for the first six months of 2022. Results for the six months ended June 30, 2023 include losses on sales of facilities of $14 million, or $0.08 per diluted share. Results for the six months ended June 30, 2022 included losses on sales of facilities of $22 million, or $0.08 per diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share.

Balance Sheet and Cash Flows from Operations

As of June 30, 2023, HCA Healthcare, Inc.’s balance sheet reflected cash and cash equivalents of $862 million, total debt of $38.932 billion, and total assets of $53.594 billion. During the second quarter of 2023, capital expenditures totaled $1.241 billion, excluding acquisitions. Cash flows provided by operating activities in the second quarter totaled $2.475 billion, compared to $1.630 billion in the second quarter of 2022.

During the second quarter of 2023, the Company repurchased 3.3 million shares of its common stock at a cost of $915 million. The Company had $2.825 billion remaining under its repurchase authorization as of June 30, 2023. As of June 30, 2023, the Company had $6.875 billion of availability under its credit facilities.

Dividend

HCA today announced that its Board of Directors declared a quarterly cash dividend of $0.60 per share on the Company’s common stock. The dividend will be paid on September 29, 2023 to stockholders of record at the close of business on September 15, 2023.

The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations and contractual restrictions. Future dividends are expected to be funded by cash balances and future cash flows from operations.

2023 Revised Guidance

The 2023 guidance ranges for the year have been revised from our first quarter release as follows:


	Previous 2023 Guidance Range as of April 21, 2023	2023 Guidance Range as of July 27, 2023
Revenues	$62.5 to $64.5 billion	$63.25 to $64.75 billion
Net Income Attributable to HCA Healthcare, Inc.	$4.750 to $5.160 billion	$4.900 to $5.255 billion
Adjusted EBITDA	$12.1 to $12.7 billion	$12.3 to $12.8 billion
EPS (diluted)	$17.25 to $18.55 per diluted share	$17.70 to $18.90 per diluted share

Capital expenditures for 2023, excluding acquisitions, are estimated to be approximately $4.7 billion compared to $4.6 billion previously.

The Company’s 2023 guidance contains a number of assumptions, including, among others, the Company’s current expectations regarding the impact of the COVID-19 pandemic, patient volumes and payor mix as well as general economic conditions, including inflation, and excludes the impact of items such as, but not limited to, gains or losses on sales of facilities, losses on retirement of debt, legal claims costs and impairment of long-lived assets.

Adjusted EBITDA is a non-GAAP financial measure. A table reconciling forecasted net income attributable to HCA Healthcare, Inc. to forecasted Adjusted EBITDA is included in this release.

The Company’s guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below in the Company’s “Forward-Looking Statements.”

Earnings Conference Call

HCA Healthcare will host a conference call for investors at 9:00 a.m. Central Daylight Time today. All interested investors are invited to access a live audio broadcast of the call via webcast. The broadcast also will be available on a replay basis beginning this afternoon. The webcast can be accessed through the Company’s Investor Relations web page at https://investor.hcahealthcare.com/events-and-presentations/default.aspx.

About the Company

As of June 30, 2023, HCA operated 182 hospitals and approximately 2,300 ambulatory sites of care, including surgery centers, freestanding emergency rooms, urgent care centers and physician clinics, in 20 states and the United Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements that do not relate solely to historical or current facts. Forward-looking statements 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 conditions nationally and regionally in our markets, including inflation and economic and business conditions (and the impact thereof on the economy, financial markets and banking industry); changes in revenues due to declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, supply chain or other expenditures; workforce disruptions; and supply shortages and disruptions, (2) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, (3) the impact of current and future federal and state health reform initiatives and possible changes to other federal, state or local laws and regulations affecting the health care industry, including, but not limited to, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”), additional changes to the Affordable Care Act,

its implementation, or interpretation (including through executive orders and court challenges), and proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or establish a single-payer system (such reforms often referred to as “Medicare for All”), (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 those required under the Pay-As-You-Go Act of 2010 as a result of the federal budget deficit impact of the American Rescue Plan Act of 2021, 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, (5) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (6) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services, (7) 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, (8) 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, (9) the highly competitive nature of the health care business, (10) 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, (11) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (12) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (13) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (14) changes in accounting practices, (15) developments related to COVID-19, including, without limitation, the length and severity of COVID-19-related impacts and the spread of virus strains with new epidemiological characteristics; the volume of canceled or rescheduled procedures and the volume and acuity of COVID-19 patients cared for across our health systems; and measures we are taking to respond to COVID-19, (16) the emergence of and effects related to pandemics, epidemics and infectious diseases, (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 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, including the data security incident disclosed in July 2023, (23) our ongoing ability to demonstrate meaningful use of certified electronic health record (“EHR”) technology and the impact of interoperability requirements, (24) the impact of natural disasters, such as hurricanes and floods, physical risks from climate change or similar events beyond our control, (25) changes in U.S. federal, state, or foreign tax laws including interpretive guidance that may be issued by taxing authorities or other standard setting bodies, and (26) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange Commission. Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All references to “Company,” “HCA” and “HCA Healthcare” as used throughout this release refer to HCA Healthcare, Inc. and its affiliates.

HCA Healthcare, Inc.

Condensed Consolidated Comprehensive Income Statements

Second Quarter

Unaudited

(Dollars in millions, except per share amounts)


	2023						2022
	Amount			Ratio			Amount			Ratio

Revenues		$15,861			100.0	%		$14,820			100.0		%

Salaries and benefits		7,277			45.9			6,792			45.8
Supplies		2,478			15.6			2,301			15.5
Other operating expenses		3,043			19.2			2,693			18.3
Equity in losses (earnings) of affiliates		7			-			(8	)		(0.1	)
Depreciation and amortization		763			4.8			738			5.0
Interest expense		485			3.1			434			2.9
Losses (gains) on sales of facilities		(1	)		-			32			0.2
Losses on retirement of debt		-			-			78			0.5


		14,052			88.6			13,060			88.1


Income before income taxes		1,809			11.4			1,760			11.9

Provision for income taxes		397			2.5			381			2.6


Net income		1,412			8.9			1,379			9.3

Net income attributable to noncontrolling interests		219			1.4			224			1.5


Net income attributable to HCA Healthcare, Inc.		$1,193			7.5			$1,155			7.8


Diluted earnings per share		$4.29						$3.90

Shares used in computing diluted earnings per share (millions)		278.198						296.061

Comprehensive income attributable to HCA Healthcare, Inc.		$1,207						$1,087

HCA Healthcare, Inc.

Condensed Consolidated Comprehensive Income Statements

For the Six Months Ended June 30, 2023 and 2022

Unaudited

(Dollars in millions, except per share amounts)


	2023					2022
	Amount		Ratio			Amount			Ratio

Revenues		$31,452		100.0	%		$29,765			100.0		%

Salaries and benefits		14,361		45.7			13,731			46.1
Supplies		4,901		15.6			4,622			15.5
Other operating expenses		5,937		18.8			5,445			18.4
Equity in losses (earnings) of affiliates		25		0.1			(19	)		(0.1	)
Depreciation and amortization		1,519		4.8			1,470			4.9
Interest expense		964		3.1			842			2.8
Losses on sales of facilities		14		-			22			0.1
Losses on retirement of debt		-		-			78			0.3


		27,721		88.1			26,191			88.0


Income before income taxes		3,731		11.9			3,574			12.0

Provision for income taxes		776		2.5			730			2.4


Net income		2,955		9.4			2,844			9.6

Net income attributable to noncontrolling interests		399		1.3			416			1.4


Net income attributable to HCA Healthcare, Inc.		$2,556		8.1			$2,428			8.2


Diluted earnings per share		$9.14					$8.05

Shares used in computing diluted earnings per share (millions)		279.573					301.690

Comprehensive income attributable to HCA Healthcare, Inc.		$2,590					$2,317

HCA Healthcare, Inc.

Condensed Consolidated Balance Sheets

Unaudited

(Dollars in millions)


	June 30,			March 31,			December 31,
	2023			2023			2022

ASSETS
Current assets:
Cash and cash equivalents		$862			$842			$908
Accounts receivable		8,713			8,657			8,891
Inventories		2,050			2,085			2,068
Other		2,263			1,957			1,776

		13,888			13,541			13,643

Property and equipment, at cost		56,667			55,463			54,757
Accumulated depreciation		(30,023	)		(29,410	)		(29,182	)

		26,644			26,053			25,575

Investments of insurance subsidiaries		384			390			381
Investments in and advances to affiliates		731			786			823
Goodwill and other intangible assets		9,641			9,590			9,653
Right-of-use operating lease assets		2,110			2,032			2,065
Other		196			319			298


		$53,594			$52,711			$52,438


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$3,823			$3,769			$4,239
Accrued salaries		1,776			1,565			1,712
Other accrued expenses		3,551			3,316			3,581
Long-term debt due within one year		2,395			2,378			370

		11,545			11,028			9,902

Long-term debt, less debt issuance costs and discounts of $349, $295 and $301		36,537			36,478			37,714
Professional liability risks		1,554			1,565			1,528
Right-of-use operating lease obligations		1,806			1,716			1,752
Income taxes and other liabilities		1,691			1,692			1,615

Stockholders’ equity (deficit):
Stockholders’ deficit attributable to HCA Healthcare, Inc.		(2,303	)		(2,495	)		(2,767	)
Noncontrolling interests		2,764			2,727			2,694

		461			232			(73	)

		$53,594			$52,711			$52,438

HCA Healthcare, Inc.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2023 and 2022

Unaudited

(Dollars in millions)


	2023			2022

Cash flows from operating activities:
Net income		$2,955			$2,844
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in cash from operating assets and liabilities:
Accounts receivable		306			(547	)
Inventories and other assets		(301	)		(462	)
Accounts payable and accrued expenses		(505	)		(818	)
Depreciation and amortization		1,519			1,470
Income taxes		3			121
Losses on sales of facilities		14			22
Losses on retirement of debt		-			78
Amortization of debt issuance costs and discounts		17			15
Share-based compensation		133			171
Other		137			81


Net cash provided by operating activities		4,278			2,975


Cash flows from investing activities:
Purchase of property and equipment		(2,438	)		(1,941	)
Acquisition of hospitals and health care entities		(124	)		(116	)
Sales of hospitals and health care entities		172			20
Change in investments		(16	)		(2	)
Other		(2	)		(11	)


Net cash used in investing activities		(2,408	)		(2,050	)


Cash flows from financing activities:
Issuances of long-term debt		3,218			5,966
Net change in revolving credit facilities		(1,840	)		930
Repayment of long-term debt		(608	)		(2,690	)
Distributions to noncontrolling interests		(342	)		(333	)
Payment of debt issuance costs		(30	)		(53	)
Payment of dividends		(339	)		(337	)
Repurchase of common stock		(1,761	)		(4,783	)
Other		(221	)		(201	)


Net cash used in financing activities		(1,923	)		(1,501	)


Effect of exchange rate changes on cash and cash equivalents		7			(17	)


Change in cash and cash equivalents		(46	)		(593	)
Cash and cash equivalents at beginning of period		908			1,451


Cash and cash equivalents at end of period		$862			$858


Interest payments		$925			$777
Income tax payments, net		$773			$609

HCA Healthcare, Inc.

Operating Statistics

Second Quarter

For the Six Months
Ended June 30,

2023

2022

2023

2022

Operations:

Number of Hospitals

182

182

182

182

Number of Freestanding Outpatient Surgery Centers*

126

126

126

126

Licensed Beds at End of Period

49,063

48,979

49,063

48,979

Weighted Average Beds in Service

41,802

41,930

41,743

41,875

Reported:

Admissions

522,996

515,113

1,048,231

1,022,069

% Change

1.5%

2.6%

Equivalent Admissions

938,834

902,757

1,855,369

1,762,047

% Change

4.0%

5.3%

Revenue per Equivalent Admission

16,894

16,417

16,952

16,892

% Change

2.9%

0.4%

Inpatient Revenue per Admission

17,689

16,727

17,759

17,207

% Change

5.8%

3.2%

Patient Days

2,558,563

2,571,328

5,196,466

5,253,046

% Change

-0.5%

-1.1%

Equivalent Patient Days

4,594,604

4,510,739

9,197,745

9,056,251

% Change

1.9%

1.6%

Inpatient Surgery Cases

132,447

130,961

262,907

257,841

% Change

1.1%

2.0%

Outpatient Surgery Cases

263,601

258,182

519,572

505,603

% Change

2.1%

2.8%

Emergency Room Visits

2,294,205

2,223,999

4,546,874

4,280,388

% Change

3.2%

6.2%

Outpatient Revenues as a
Percentage of Patient Revenues

39.8%

38.9%

38.7%

38.1%

Average Length of Stay (days)

4.892

4.992

4.957

5.140

Occupancy**

71.1%

71.0%

72.6%

72.8%

Same Facility:

Admissions

522,363

511,188

1,047,610

1,014,289

% Change

2.2%

3.3%

Equivalent Admissions

928,239

895,090

1,843,794

1,745,591

% Change

3.7%

5.6%

Revenue per Equivalent Admission

16,780

16,385

16,884

16,881

% Change

2.4%

0.0%

Inpatient Revenue per Admission

17,746

16,702

17,784

17,179

% Change

6.3%

3.5%

Inpatient Surgery Cases

132,286

129,922

262,757

255,816

% Change

1.8%

2.7%

Outpatient Surgery Cases

260,478

252,170

514,641

494,076

% Change

3.3%

4.2%

Emergency Room Visits

2,290,580

2,208,160

4,543,249

4,250,515

% Change

3.7%

6.9%

*	Excludes freestanding endoscopy centers (22 centers at June 30, 2023 and 21 centers at June 30, 2022).

**	Reflects the rate of occupancy (patient days and observations) based on weighted average beds in service.

HCA Healthcare, Inc.

Supplemental Non-GAAP Disclosures

Operating Results Summary

(Dollars in millions, except per share amounts)


					For the Six Months
	Second Quarter				Ended June 30,
	2023		2022		2023		2022

Revenues		$15,861		$14,820		$31,452		$29,765

Net income attributable to HCA Healthcare, Inc.		$1,193		$1,155		$2,556		$2,428
Losses (gains) on sales of facilities (net of tax)		-		32		22		24
Losses on retirement of debt (net of tax)		-		60		-		60

Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt (a)		1,193		1,247		2,578		2,512
Depreciation and amortization		763		738		1,519		1,470
Interest expense		485		434		964		842
Provision for income taxes		396		399		768		746
Net income attributable to noncontrolling interests		219		224		399		416


Adjusted EBITDA (a)		$3,056		$3,042		$6,228		$5,986


Adjusted EBITDA margin (a)		19.3%		20.5%		19.8%		20.1%

Diluted earnings per share:
Net income attributable to HCA Healthcare, Inc.		$4.29		$3.90		$9.14		$8.05
Losses (gains) on sales of facilities		-		0.11		0.08		0.08
Losses on retirement of debt		-		0.20		-		0.20

Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt (a)		$4.29		$4.21		$9.22		$8.33


Shares used in computing diluted earnings per share (millions)		278.198		296.061		279.573		301.690

(a)

Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA should not be considered as measures of financial performance under generally accepted accounting principles (“GAAP”). We believe net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are important measures that supplement discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our results of operations on the same basis used by management. Management relies upon net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA as the primary measures to review and assess operating performance of its health care facilities and their management teams.

Management and investors review both the overall performance (including net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and GAAP net income attributable to HCA Healthcare, Inc.) and operating performance (Adjusted EBITDA) of our health care facilities. Adjusted EBITDA and the Adjusted EBITDA margin (Adjusted EBITDA divided by revenues) are utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry. It is reasonable to expect that losses (gains) on sales of facilities and losses on retirement of debt will occur in future periods, but the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our health care facilities and complicate period comparisons of our results of operations and operations comparisons with other health care companies.

Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are not measures of financial performance under GAAP, and should not be considered as alternatives to net income attributable to HCA Healthcare, Inc. as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are not measurements determined in accordance with GAAP and are susceptible to varying calculations, net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.

HCA Healthcare, Inc.

Supplemental Non-GAAP Disclosures

2023 Operating Results Forecast

(Dollars in millions, except per share amounts)


	For the Year Ending
	December 31, 2023
	Low		High

Revenues		$63,250		$64,750

Net income attributable to HCA Healthcare, Inc. (a)		$4,900		$5,255
Depreciation and amortization		3,070		3,100
Interest expense		1,950		1,970
Provision for income taxes		1,535		1,610
Net income attributable to noncontrolling interests		845		865


Adjusted EBITDA (a) (b)		$12,300		$12,800


Diluted earnings per share:
Net income attributable to HCA Healthcare, Inc.		$17.70		$18.90

Shares used in computing diluted earnings per share (millions)		278.000		278.000

The Company’s forecasted guidance range is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks.

(a)

The Company does not forecast the impact of items such as, but not limited to, losses (gains) on sales of facilities, losses on retirement of debt, legal claim costs (benefits) and impairments of long-lived assets because the Company does not believe that it can forecast these items with sufficient accuracy.

(b)

Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles (“GAAP”). We believe Adjusted EBITDA is an important measure that supplements discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our results of operations on the same basis used by management. Management relies upon Adjusted EBITDA as a primary measure to review and assess operating performance of its health care facilities and their management teams.

Management and investors review both the overall performance (including net income attributable to HCA Healthcare, Inc.) and operating performance (Adjusted EBITDA) of our health care facilities. Adjusted EBITDA is utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry.

Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income attributable to HCA Healthcare, Inc. as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.