HCA Healthcare

2023

Annual Report 
to Shareholders

Above all else,  
we are committed 
to the care and 
improvement of 
human life.

To our valued shareholders,

2023 was another successful year for HCA Healthcare. We improved our quality 
outcomes and efficiency, accelerated our workforce capabilities to support growth, 
and continued to make a positive impact in the communities we serve. Our operational 
momentum continued from the previous year across most areas of our business. 
Additionally, we saw strong demand for our services, healthy operating margins,  
and continued progress with our technology agenda. Our HCA Healthcare colleagues 
demonstrated a remarkable ability to adapt and deliver value to our stakeholders. 

In 2023, we were responsible for more than 43 million patient encounters at our 186 
hospitals and approximately 2,400 ambulatory sites of care. We want to thank our 
colleagues for their dedication, their hard work, and their overall effectiveness in 
delivering our core mission.

We believe the power of our purpose as an organization, the power of our plan to 
achieve that purpose, and the power of our people in executing our plan separates 
HCA Healthcare from other healthcare delivery systems. 

Last November, we held 
an Investor Day, where we 
provided perspectives on 
our financial performance, 
operations, and strategies 
to drive growth and create 
value. If you’ve not already 
done so, we encourage you 
to visit the Investor Day 
page on our HCA Healthcare 
website to learn more.

Thomas F. Frist III 
Chairman of the Board

Samuel N. Hazen 
Chief Executive Officer

Visit  
the Investor 
Day page

Visit our Impact Report 
site to learn more 
about HCA Healthcare’s 
collective impact

 2

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the fiscal year ended December 31, 2023
Or

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number 1-11239

HCA Healthcare, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

One Park Plaza
Nashville, Tennessee
(Address of Principal Executive Offices)

27-3865930
(I.R.S. Employer
Identification No.)

37203
(Zip Code)

Registrant’s telephone number, including area code: (615) 344-9551
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading
Symbol(s)

Common Stock, $0.01 Par Value

HCA
Securities Registered Pursuant to Section 12(g) of the Act: None

Name of Each Exchange
on Which Registered

New York Stock Exchange

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒ 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 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 ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a 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 12b-2 of the Exchange Act.

Large accelerated filer ☒
Non-accelerated filer ☐

Accelerated filer
Smaller reporting company
Emerging growth company

☐
☐
☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included

in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Auditor PCAOB ID Number: 42 Auditor Name: Ernst & Young LLP Auditor Location: Nashville, Tennessee, United States of America

As of January 31, 2024, there were 264,498,700 outstanding shares of the Registrant’s common stock. As of June 30, 2023, the aggregate market
value of the common stock held by nonaffiliates was approximately $61.126 billion. For purposes of the foregoing calculation only, Hercules Holding
II and the Registrant’s directors and executive officers have been deemed to be affiliates.

Portions of the Registrant’s definitive proxy materials for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

DOCUMENTS INCORPORATED BY REFERENCE

INDEX

Page
Reference

Business .......................................................................................................................................
Risk Factors..................................................................................................................................
Unresolved Staff Comments ........................................................................................................
Cybersecurity ...............................................................................................................................
Properties .....................................................................................................................................
Legal Proceedings ........................................................................................................................
Mine Safety Disclosures ..............................................................................................................

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities .................................................................................................................
[Reserved] ....................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ......
Quantitative and Qualitative Disclosures about Market Risk ......................................................
Financial Statements and Supplementary Data............................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure......
Controls and Procedures ..............................................................................................................
Other Information ........................................................................................................................
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.........................................

Directors, Executive Officers and Corporate Governance ..........................................................
Executive Compensation..............................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.....................................................................................................................................
Certain Relationships and Related Transactions, and Director Independence ............................
Principal Accountant Fees and Services ......................................................................................

Exhibits and Financial Statement Schedules ...............................................................................
Form 10-K Summary ..................................................................................................................
Signatures.....................................................................................................................................

3
33
51
51
53
53
53

54
55
56
70
71
71
71
73
73

74
74

74
75
75

76
88
89

Part I
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.

Part II
Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.

Part III
Item 10.
Item 11.
Item 12.

Item 13.
Item 14.

Part IV
Item 15.
Item 16.

Item 1.

Business

General

PART I

HCA Healthcare, Inc. is one of the leading health care services companies in the United States. At December 31,
2023, we operated 186 hospitals, comprised of 178 general, acute care hospitals; six behavioral hospitals; and two
rehabilitation hospitals. In addition, we operated 124 freestanding surgery centers and 24 freestanding endoscopy centers.
Our facilities are located in 20 states and England.

The terms “Company,” “HCA,” “HCA Healthcare,” “we,” “our” or “us,” as used herein and unless otherwise stated
or indicated by context, refer to HCA Healthcare, Inc. and its affiliates. The term “affiliates” means direct and indirect
subsidiaries of HCA Healthcare, Inc. and partnerships and joint ventures in which such subsidiaries are partners. The
terms “facilities” or “hospitals” refer to entities owned and operated by affiliates of HCA, and the term “employees” refers
to employees of affiliates of HCA.

Our primary objective is to provide a comprehensive array of quality health care services in the most cost-effective
manner possible. Our general, acute care hospitals typically provide a full range of services to accommodate such medical
specialties as internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics and obstetrics, as well
as diagnostic and emergency services. Outpatient and ancillary health care services are provided by our general, acute
care hospitals, freestanding surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics,
diagnostic centers and rehabilitation facilities. Our behavioral hospitals provide a full range of mental health care services
through inpatient, partial hospitalization and outpatient settings.

Our common stock is traded on the New York Stock Exchange (symbol “HCA”). Through our predecessors, we
commenced operations in 1968. HCA Healthcare, Inc. was incorporated in Delaware in October 2010. Our principal
executive offices are located at One Park Plaza, Nashville, Tennessee 37203, and our telephone number is (615) 344-
9551.

Available Information

We file certain reports with the Securities and Exchange Commission (the “SEC”), including annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The SEC maintains an Internet site at
http://www.sec.gov that contains the reports, proxy and information statements and other information we file. Our website
address is www.hcahealthcare.com. Please note that our website address is provided throughout this report as an inactive
textual reference only. 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. The information provided on our website is not part of this report, and is therefore not
incorporated by reference unless such information is specifically referenced elsewhere in this report.

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

Business Strategy

We are committed to providing the communities we serve with high quality, convenient and cost-effective health
care while growing our business and creating long-term value for our stockholders. We strive to be the health care system
of choice in the communities we serve by developing comprehensive networks locally and supporting these networks
with enterprise expertise and economies of scale. Our strategy is organized around a framework that seeks to drive
sustained growth by delivering operational excellence, attracting exceptional physicians and other health care
professionals, developing comprehensive services; creating greater access, and coordinating higher quality care for
patients.

3

To achieve these objectives, we align our efforts around the following growth agenda:

•

•

•

•

•

grow our presence in existing markets;

achieve industry-leading performance in clinical, operational and satisfaction measures;

recruit and retain physicians and other health care professionals to meet the need for high quality health
services;

continue to utilize economies of scale to grow the Company; and

pursue a disciplined development strategy.

Our strategy also emphasizes investments that seek to advance our clinical systems and digital capabilities,
transform care models with innovative care solutions, expand our workforce development programs and enhance our
health care networks and partnerships.

Health Care Facilities

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, home health, hospice, outpatient physical
therapy home and community-based services providers, and various other facilities.

At December 31, 2023, we owned and operated 178 general, acute care hospitals with 48,755 licensed beds. Most
of our general, acute care hospitals provide medical and surgical services, including inpatient care, intensive care, cardiac
care, diagnostic services and emergency services. The general, acute care hospitals also provide outpatient services such
as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology and physical therapy. Each hospital has an
organized medical staff and a local board of trustees or governing board comprised of members of the local community.

At December 31, 2023, we operated six behavioral hospitals with 653 licensed beds. Our behavioral hospitals
provide therapeutic programs, including child, adolescent and adult psychiatric care and adolescent and adult alcohol and
drug abuse treatment and counseling.

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. These outpatient services are an integral component of our strategy to develop comprehensive
health care networks in select communities. Most of our ASCs are operated through partnerships or limited liability
companies, with majority ownership of each partnership or limited liability company typically held by a general partner
or member that is an affiliate of HCA.

Certain of our affiliates provide a variety of management services to our health care facilities, including patient
safety programs, ethics and compliance programs, national supply contracts, equipment purchasing and leasing contracts,
accounting,
reimbursement assistance, construction planning and
coordination, information technology systems and solutions, legal counsel, human resources services and internal audit
services.

financial and clinical systems, governmental

Summary Risk Factors

You should carefully read and consider the risk factors set forth under Item 1A, “Risk Factors,” as well as all other
information contained in this annual report on Form 10-K. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial position,
results of operations, cash flows or prospects could be materially, adversely affected. Our business is subject to the
following principal risks and uncertainties:

4

Risks related to our indebtedness:

• We have significant indebtedness and may incur further indebtedness in the future. Our indebtedness 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 obligations.

• 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 successful.

• Our debt agreements contain restrictions that limit our flexibility in operating our business.

Risks related to human capital:

• Our results of operations may be adversely affected by competition for staffing, the shortage of experienced

nurses and other health care professionals and labor union activity.

• Our performance depends on our ability to recruit and retain quality physicians.

• We may be unable to attract, hire and retain a highly qualified and diverse workforce, including key

management.

Risks related to technology, data privacy and cybersecurity:

•

Cybersecurity incidents or other forms of data breaches could result in the compromise of our facilities,
confidential data or critical data systems. A cybersecurity incident or other form of data breach could also
give rise to potential harm to patients; remediation and other expenses; and exposure to liability under Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”), consumer protection laws, common law
theories or other laws. Such incidents could subject us to litigation and foreign, federal and state
governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

• Our operations could be impaired by a failure of our information systems.

• Health care technology initiatives, particularly those related to sharing patient data and interoperability, may

adversely affect our operations.

• We may not be adequately reimbursed by third-party payers for services involving new technology.

Risks related to public health crises:

•

COVID-19 has affected, and may continue to affect, our operations. In addition, the emergence and effects
related to a potential future pandemic, epidemic or outbreak of an infectious disease could adversely affect
our business and operations.

Risks related to governmental regulation and other legal matters:

• Our business and results of operations may be adversely affected by health care reform efforts. We are
unable to predict whether, what, and when additional health reform measures will be adopted or
implemented, and the effects and ultimate impact of any such measures are uncertain and may adversely
affect our business and results of operations.

•

•

•

Changes in government health care programs may adversely affect our revenues.

If we fail to comply with extensive laws and government regulations, we could suffer penalties or be
required to make significant changes to our operations.

State efforts to regulate the construction or expansion of health care facilities could impair our ability to
operate and expand our operations.

• We may incur additional tax liabilities.

• We have been and could become the subject of government investigations, claims and litigation, as well as

governmental and commercial payer audits.

• We may be subject to liabilities from claims brought against our facilities, which are costly to defend and

may require us to pay significant damages if not covered by insurance.

5

Risks related to operations, strategy, demand and competition:

• Our hospitals and other facilities face competition for patients from other hospitals and health care providers.

• Any increase in the volume of uninsured patients or deterioration in the collectability of uninsured and

patient due accounts could adversely affect our results of operations.

•

•

•

If our volume of patients with private health insurance coverage declines or we are unable to retain and
negotiate favorable contracts with private third-party payers, including managed care plans, our revenues
may be adversely affected.

Changes to physician utilization practices and treatment methodologies and other factors outside our control
that impact demand for medical services may reduce our revenues.

Third-party payer controls designed to reduce costs and other payer practices intended to decrease inpatient
services, surgical procedure volumes or reimbursement for services rendered may reduce our revenues.

• We may encounter difficulty acquiring hospitals and other health care businesses, encounter challenges
integrating the operations of acquired hospitals and other health care businesses and/or become liable for
unknown or contingent liabilities as a result of acquisitions.

• Our facilities are heavily concentrated in Florida and Texas, which makes us sensitive to regulatory,

economic, public health, environmental and competitive conditions and changes in those states.

• Our business and operations are subject to risks related to climate change.

• We may be adversely affected if we are not able to achieve our environmental, social and governance
(“ESG”) objectives or otherwise meet the expectations of our stakeholders with respect to ESG matters.

•

The industry trend toward value-based purchasing may negatively impact our revenues.

Risks related to macroeconomic conditions:

• Our overall business results may suffer during periods of general economic weakness or recessions.

• We are exposed to market risk related to changes in the market values of securities and interest rates.

Risks related to ownership of our common stock:

•

•

There can be no assurance that we will continue to pay dividends.

Certain of our investors may continue to have influence over us.

Sources of Revenue

Hospital revenues depend upon inpatient occupancy levels, the medical and ancillary services ordered by physicians
and provided to patients, the volume of outpatient procedures and the charges or payment rates for such services.
Reimbursement rates for inpatient 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.
Inpatient occupancy levels fluctuate for various reasons, many of which are beyond our control.

6

We receive payments for patient services from the federal government under the Medicare program, state
governments under their respective Medicaid or similar programs, managed care plans (including plans offered through
federal and state-based health insurance marketplaces (“Exchanges”)), private insurers and directly from patients. Our
revenues by primary third-party payer classification and other (including uninsured patients) for the years ended
December 31, 2023, 2022 and 2021 are summarized in the following table (dollars in millions):

Medicare
Managed Medicare
Medicaid
Managed Medicaid
Managed care and other insurers
International (managed care and other insurers)
Other
Revenues

...............................................................
................................................
...............................................................
................................................
..........................
...
......................................................................
...............................................................

2023
$ 10,585
10,496
3,606
3,879
31,819
1,509
3,074
$ 64,968

Years Ended December 31,

Ratio

2022

Ratio

2021

Ratio

16.3% $ 10,447
9,201
16.2
2,636
5.6
3,998
6.0
29,120
49.0
1,317
2.3
3,514
4.6
100.0% $ 60,233

17.3% $ 10,447
8,424
15.3
2,290
4.4
3,124
6.6
30,295
48.3
1,336
2.2
2,836
5.9
100.0% $ 58,752

17.8%
14.3
3.9
5.3
51.6
2.3
4.8
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 end-stage renal disease and persons with Lou Gehrig’s Disease. Medicaid is a
federal-state program, administered by the states, that provides hospital and medical benefits to qualifying low-income
individuals. Payment under the Medicare and Medicaid programs is conditioned on satisfaction of extensive provider
enrollment requirements. All of our general, acute care hospitals located in the United States are eligible and enrolled to
participate in Medicare and Medicaid programs. Amounts received under Medicare and Medicaid programs are generally
significantly less than established hospital gross charges for the services provided.

Our hospitals generally offer discounts from established charges to certain group purchasers of health care services,
including private health insurers, employers, health maintenance organizations (“HMOs”), preferred provider
organizations (“PPOs”) and other managed care plans, including health plans offered through the Exchanges. These
discount programs generally limit our ability to increase revenues in response to increasing costs. See Item 1, “Business
— Competition.” For services under Medicare, Medicaid, HMOs, PPOs and other managed care plans, patients are
generally responsible for any exclusions, deductibles or coinsurance features of their coverage. The amounts of such
exclusions, deductibles and coinsurance continue to increase. Collection of amounts due from individuals is typically
more difficult than from government health care programs or other third-party payers. We provide discounts to uninsured
patients who do not qualify for Medicaid or for financial relief under our charity care policy. 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. If an uninsured patient does not qualify for these programs, the uninsured
discount is applied.

Medicare

In addition to the reimbursement reductions and adjustments discussed below, the Budget Control Act of 2011 (the
“BCA”) requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction
across all Medicare programs of 2% per fiscal year that extends through the first seven months of federal fiscal year 2032.
In addition, the American Rescue Plan Act of 2021 (“ARPA”) increased the federal budget deficit in a manner that triggers
an additional sequestration mandated under the Pay-As-You-Go Act of 2010. As a result, a further payment reduction of
up to 4% was required to take effect in January 2022. However, Congress has delayed implementation of this payment
reduction until 2025. We anticipate that the federal deficit will continue to place pressure on government health care
programs, and it is possible that future deficit reduction legislation will impose additional spending reductions.

Inpatient Acute Care

Under the Medicare program, we receive reimbursement under a prospective payment system (“PPS”) for general,
acute care hospital inpatient services. Under the hospital inpatient PPS, fixed payment amounts per inpatient discharge
are established based on the patient’s assigned Medicare severity diagnosis-related group (“MS-DRG”). MS-DRGs
classify treatments for illnesses according to the estimated intensity of hospital resources necessary to furnish care for
each principal diagnosis. MS-DRG weights represent the average resources for a given MS-DRG relative to the average
resources for all MS-DRGs. MS-DRG payments are adjusted for area wage differentials. Hospitals, other than those
defined as “new,” receive PPS reimbursement for inpatient capital costs based on MS-DRG weights multiplied by a
geographically adjusted federal rate. When the cost to treat certain patients falls well outside the normal distribution,
providers typically receive additional “outlier” payments. These payments are financed by offsetting reductions in the

7

inpatient PPS rates. A high-cost outlier threshold is set annually at a level that targets estimated outlier payments equaling
5.1% of total inpatient PPS payments for the federal fiscal year.

MS-DRG payment rates are updated, and MS-DRG weights are recalibrated, using cost-relative weights each
federal fiscal year (which begins October 1). The index used to update the MS-DRG payment rates (the “market basket”)
gives consideration to the inflation experienced by hospitals and entities outside the health care industry in purchasing
goods and services. Each federal fiscal year, the annual market basket update is reduced by a productivity adjustment
based on the Bureau of Labor Statistics (“BLS”) 10-year moving average of changes in specified economy-wide
productivity. A decrease in payment rates or an increase in rates that is below the increase in our costs may adversely
affect our results of operations.

For federal fiscal year 2023, the Centers for Medicare & Medicaid Services (“CMS”) increased the MS-DRG
payment rates by approximately 4.3%. This increase reflected a market basket update of 4.1%, reduced by a 0.3 percentage
point productivity adjustment and increased by 0.5 percentage points as required by the Medicare Access and CHIP
Reauthorization Act of 2015 (“MACRA”). For federal fiscal year 2024, CMS increased the MS-DRG payment rates by
approximately 3.1%. This increase reflects a market basket update of 3.3%, reduced by a 0.2 percentage point productivity
adjustment. Additional adjustments may apply, depending on patient-specific or hospital-specific factors. For example,
the two-midnight rule limits payments to hospitals when services to Medicare beneficiaries are payable as inpatient
services. In addition, under transfer policies, Medicare reimbursement rates may be reduced when an inpatient hospital
discharges a patient to another hospital or, for specified MS-DRGs, to certain post-acute care settings.

CMS has implemented and is implementing a number of programs and requirements intended to transform
Medicare from a passive payer to an active purchaser of quality goods and services. For example, hospitals that do not
successfully participate in the Hospital Inpatient Quality Reporting Program are subject to a 25% reduction of the market
basket update. Hospitals that do not demonstrate meaningful use of electronic health records (“EHRs”) are subject to a
75% reduction of the market basket update.

Further, Medicare does not allow an inpatient hospital discharge to be assigned to a higher paying MS-DRG if
certain designated hospital acquired conditions (“HACs”) were not present on admission and the identified HAC is the
only condition resulting in the assignment of the higher paying MS-DRG. In this situation, the case is paid as though the
secondary diagnosis was not present. There are currently 14 categories of conditions on the list of HACs. In addition, the
25% of hospitals with the worst risk-adjusted HAC scores in the designated performance period receive a 1.0% reduction
in their inpatient PPS Medicare payments in the applicable federal fiscal year. CMS has also established three National
Coverage Determinations that prohibit Medicare reimbursement for erroneous surgical procedures performed on an
inpatient or outpatient basis.

Under the Hospital Readmission Reduction Program, payments to hospitals may also be reduced based on
readmission rates. Each federal fiscal year, inpatient payments are reduced if a hospital experiences “excess” readmissions
within the 30-day time period from the date of discharge for conditions or procedures designated by CMS during the prior
performance review period. CMS has designated six conditions or procedures under the program, including heart attack,
pneumonia and total hip arthroplasty. Hospitals with what CMS defines as excess readmissions for these conditions or
procedures receive reduced payments for all inpatient discharges in the federal fiscal year, not just discharges relating to
the conditions or procedures subject to the excess readmission standard. The amount by which payments are reduced is
determined by assessing a hospital’s performance relative to hospitals with similar proportions of dual eligible patients,
subject to a cap established by CMS. The reduction in payments to hospitals with excess readmissions can be up to 3%
of a hospital’s base payments. Each hospital’s performance is publicly reported by CMS.

In addition, under the Hospital Value-Based Purchasing Program, CMS reduces the inpatient PPS payment amount
for all discharges by 2.0% in each federal fiscal year. The total amount collected from these reductions is pooled, and the
entire amount collected is redistributed as incentive payments to reward hospitals that meet certain quality performance
standards established by CMS. CMS scores each hospital based on achievement (relative to other hospitals) and
improvement ranges (relative to the hospital’s own past performance) for each applicable performance standard. Hospitals
that meet or exceed the quality performance standards receive greater reimbursement under the value-based purchasing
program than they would have otherwise. Hospitals that do not achieve the necessary level of quality performance receive
reduced Medicare inpatient hospital payments. Hospitals are scored on a number of individual measures that are
categorized into four domains: clinical outcomes; efficiency and cost reduction; safety; and person and community
engagement.

8

As a result of the national public health emergency declared in response to COVID-19, CMS paused or refined
several measures across various hospital quality measurement and value-based purchasing programs. However, as of
federal fiscal year 2024, these programs have resumed in their standard form.

Outpatient

CMS reimburses hospital outpatient services (and certain Medicare Part B services furnished to hospital inpatients
who have no Part A coverage) on a PPS basis. Hospital outpatient services paid under PPS are classified into groups
called ambulatory payment classifications (“APCs”). Services for each APC are similar clinically and in terms of the
resources they require. Depending on the services provided, a hospital may be paid for more than one APC for a patient
visit. A payment rate is established for each APC and updated for each calendar year. Each calendar year, the annual
market basket update is further reduced by a productivity adjustment based on the BLS 10-year moving average of
changes in specified economy-wide productivity. For calendar year 2023, CMS increased payment rates under the
outpatient PPS by an estimated 3.8%. This increase reflects a market basket increase of 4.1%, reduced by a 0.3 percentage
point productivity adjustment. For calendar year 2024, CMS increased payment rates by an estimated 3.1%. This increase
reflects a market basket increase of 3.3%, reduced by a 0.2 percentage point productivity adjustment. CMS requires
hospitals to submit quality data relating to outpatient care to avoid receiving a 2.0 percentage point reduction in the annual
payment update under the outpatient PPS.

Medicare reimbursement for outpatient services may also be affected by broad shifts in payment policy. For
example, the 340B Drug Pricing Program allows participating hospitals to purchase certain outpatient drugs from
manufacturers at discounted rates. These hospitals are reimbursed for the discounted drugs under the same Medicare
payment methodology and rates that apply to non-340B hospitals. In 2018, CMS implemented a payment policy that
reduced Medicare payments for 340B hospitals for most drugs obtained at 340B-discounted rates and that resulted in
increased payments for non-340B hospitals. Most of our facilities are non-340B hospitals. In June 2022, the U.S. Supreme
Court invalidated this 340B program payment policy. In light of this U.S. Supreme Court decision and to achieve budget
neutrality, CMS implemented a reduction of approximately 3.1% to payment rates for non-drug services under the
outpatient PPS for calendar year 2023. HHS also directed that $9 billion be paid to affected 340B hospitals in one-time
lump sum payments as the remedy for calendar years 2018 through 2022. In order to comply with budget neutrality
requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS
providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually. This adjustment
will start in calendar year 2026 and continue for approximately 16 years.

In addition, CMS has implemented an expanded site-neutral payment policy for clinic visit services provided at all
off-campus provider-based departments. Under the policy, clinic visit services provided at all off-campus provider-based
departments are generally not covered as outpatient department services under the outpatient PPS, but rather are
reimbursed at the Medicare Physician Fee Schedule (“Physician Fee Schedule”) rate, which is generally lower than the
outpatient PPS rate.

Rehabilitation

CMS reimburses inpatient rehabilitation facilities (“IRFs”) on a PPS basis. Under the IRF PPS, patients are
classified into case mix groups that reflect the relative resource intensity typically associated with the patient’s clinical
condition. The case mix groups are based upon impairment, age, functional motor and cognitive scores, and comorbidities
(additional diseases or disorders from which the patient suffers). IRFs are paid a predetermined amount per discharge that
reflects the patient’s case mix group and is adjusted for facility-specific factors, such as area wage levels, proportion of
low-income patients, and location in a rural area. Each federal fiscal year, the IRF rates are updated using a market basket
index, which is reduced by a productivity adjustment based on the BLS 10-year moving average of changes in specified
economy-wide productivity. For federal fiscal year 2023, CMS increased IRF payment rates by an estimated 3.9%,
reflecting an IRF market basket update of 4.2%, reduced by a 0.3 percentage point productivity adjustment. For federal
fiscal year 2024, CMS increased IRF payment rates by an estimated 3.4%, reflecting an IRF market basket update of
3.6%, reduced by a 0.2 percentage point productivity adjustment. In addition, CMS requires IRFs to report quality
measures to avoid receiving a reduction of 2.0 percentage points to the market basket update.

In order to qualify for classification as an IRF, at least 60% of a facility’s inpatients during the most recent 12-
month CMS-defined review period must have required intensive rehabilitation services for one or more of 13 specified
conditions. IRFs must also meet additional coverage criteria, including patient selection and care requirements relating to
pre-admission screenings, post-admission evaluations, ongoing coordination of care and involvement of rehabilitation
physicians. A facility that fails to meet the 60% threshold, or other criteria to be classified as an IRF, will be paid under
either the acute care hospital inpatient or outpatient PPS, which generally provide for lower payment amounts. As of
December 31, 2023, we had two rehabilitation hospitals and 73 hospital rehabilitation units.

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The Improving Medicare Post-Acute Care Transformation Act of 2014 (“IMPACT Act”) required the U.S.
Department of Health and Human Services (“HHS”), together with the Medicare Payment Advisory Commission
(“MedPAC)”, to consider and propose a unified payment system for post-acute care services provided by IRFs, home
health agencies, skilled nursing facilities, and long-term care hospitals. A unified post-acute care payment system would
pay post-acute care providers under a single framework according to a patient’s characteristics, rather than based on the
post-acute care setting where the patient receives treatment. As required under the statute, CMS issued a report in July
2022 presenting a prototype for a unified post-acute care payment model, and MedPAC issued a report in June 2023
evaluating a prototype design. Although both CMS and MedPAC determined that designing a post-acute care PPS is
feasible, MedPAC noted that implementation would require significant policy changes and considerable agency resources
and that CMS may consider smaller-scale site-neutral policies to address some of the overlap in patients treated in different
settings.

Psychiatric

Inpatient hospital services furnished in behavioral hospitals and behavioral units of general, acute care hospitals
and critical access hospitals are reimbursed on a PPS basis. The inpatient psychiatric facility (“IPF”) PPS is based upon
a per diem payment, with adjustments to account for certain patient and facility characteristics. The IPF PPS contains an
“outlier” policy for extraordinarily costly cases and an adjustment to a facility’s base payment if it maintains a full-service
emergency department. CMS has established the IPF PPS payment rate in a manner intended to be budget neutral. Each
federal fiscal year, IPF payment rates are updated using a market basket index, which is reduced by a productivity
adjustment based on the BLS 10-year moving average of changes in specified economy-wide productivity. For federal
fiscal year 2023, CMS increased IPF payment rates by an estimated 3.8%, reflecting a 4.1% IPF market basket update,
reduced by a 0.3 percentage point productivity adjustment. For federal fiscal year 2024, CMS increased IPF payment
rates by an estimated 3.3%, which reflects a 3.5% IPF market basket increase with a negative 0.2 percentage point
productivity adjustment. Together with other policy changes, total payments to IPFs are anticipated to increase by 2.3%
in federal fiscal year 2024. Inpatient psychiatric facilities are required to report quality measures to CMS to avoid
receiving a 2.0 percentage point reduction to the market basket update. As of December 31, 2023, we had six behavioral
hospitals and 44 hospital behavioral units.

Ambulatory Surgery Centers

CMS reimburses ASCs using a predetermined fee schedule. Reimbursements for ASC overhead costs are limited
to no more than the overhead costs paid to hospital outpatient departments under the Medicare hospital outpatient PPS
for the same procedure. If CMS determines that a procedure is commonly performed in a physician’s office, the ASC
reimbursement for that procedure is limited to the reimbursement allowable under the Physician Fee Schedule, with
limited exceptions. All surgical procedures, other than those that pose a significant safety risk or generally require an
overnight stay, are payable as ASC procedures. From time to time, CMS expands the services that may be performed in
ASCs, which may result in more Medicare procedures that historically have been performed in hospitals being moved to
ASCs, reducing surgical volume in our hospitals. Also, more Medicare procedures that historically have been performed
in ASCs may be moved to physicians’ offices. Some commercial third-party payers have adopted similar policies.

Historically, CMS updated reimbursement rates for ASCs based on changes to the consumer price index. However,
for calendar years through 2025, CMS updates to ASC reimbursement rates will be based on the hospital market basket
index, partly to promote site-neutrality between hospitals and ASCs. For each federal fiscal year, the ASC payment system
update is reduced by a productivity adjustment based on the BLS 10-year moving average of changes in specified
economy-wide productivity. For calendar year 2023, CMS increased ASC payment rates by 3.8%, which reflected a
market basket increase of 4.1%, reduced by a 0.3 percentage point productivity adjustment. For calendar year 2024, CMS
increased ASC payment rates by 3.1%, which reflects a market basket increase of 3.3%, reduced by a 0.2 percentage point
productivity adjustment. In addition, CMS has established a quality reporting program for ASCs under which ASCs that
fail to report on specified quality measures receive a 2.0 percentage point reduction to the market basket update.

Home Health

CMS reimburses home health agencies under the Home Health PPS. Home health agencies are paid a national,
standardized 30-day period payment rate if a period of care meets a certain threshold of home health visits (periods of
care that do not meet the visit threshold are paid a per-visit payment rate for the discipline providing care). The daily
home health payment rate is adjusted for case-mix and area wage levels. An outlier adjustment may be paid for periods
of care where costs exceed a specific threshold amount. Each calendar year, home health payment rates are updated using
a market basket index, which is reduced by a productivity adjustment based on the BLS 10-year moving average of
changes in specified economy-wide productivity. For calendar year 2023, CMS increased home health payment rates by
0.7%, based on a home health payment update percentage of 4.0%, which reflected a 4.1% market basket increase, reduced

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by a 0.1 percentage point productivity adjustment, among other changes. For calendar year 2024, CMS increased home
health payment rates by 0.8%, based on a home health payment update percentage of 3.0%, which reflects a 3.3% market
basket increase, reduced by a 0.3 percentage point productivity adjustment, among other changes. Home health agencies
that do not submit required quality data are subject to a 2.0 percentage point reduction to the market basket update. In
addition, home health agencies are required to submit a one-time Notice of Admission (“NOA”) for each patient that
establishes that the beneficiary is under a Medicare home health period of care. Failure to submit the NOA within five
calendar days from the start of care results in a reduction to the 30-day period payment amount for each day from the start
of care date until the date the NOA is submitted.

Under the nationwide Home Health Value-Based Purchasing (“HHVBP”) Model, home health agencies receive
increases or reductions to their Medicare fee-for-service payments of up to 5%, based on performance against specific
quality measures relative to the performance of other home health providers. Data collected in each performance year will
impact Medicare payments two years later.

Payment of claims for home health services may be impacted by the Review Choice Demonstration, a program
intended to identify and prevent home health services fraud, reduce the number of Medicare appeals, and improve provider
compliance with Medicare program requirements. The program currently applies only to home health agencies in certain
states, including North Carolina, Florida and Texas. Providers in these states may initially select from the following claims
review and approval processes: pre-claim review, post-payment review or a minimal post-payment review with a 25%
payment reduction. Home health agencies that maintain high levels of compliance are eligible for additional, less
burdensome options.

As noted above, the IMPACT Act required HHS and MedPAC to propose a unified post-acute care payment model
by 2023. After evaluating the proposed model, which included home health agencies, MedPAC recommended that CMS
instead focus on smaller-scale site-neutral policies to address some of the overlap in patients treated in different settings.

Hospice

Medicare beneficiaries who have a terminal illness and a life expectancy of six months or less may elect to receive
hospice benefits (palliative care) instead of standard coverage of treatment for the terminal illness and related conditions.
Hospice services are paid under the Hospice PPS, under which CMS sets a daily rate for each day a patient is enrolled in
the hospice benefit. The daily rate depends on the level of care provided to a patient (routine home care, continuous home
care, inpatient respite care, or general inpatient care). Daily rates are adjusted for factors such as area wage levels. Each
federal fiscal year, hospice payment rates are updated using a market basket index, which is reduced by a productivity
adjustment based on the BLS 10-year moving average of changes in specified economy-wide productivity. For federal
fiscal year 2023, CMS increased hospice payment rates by 3.8%, which reflected a 4.1% market basket update, reduced
by a 0.3 percentage point productivity adjustment. For federal fiscal year 2024, CMS increased hospice payment rates by
3.1%, which reflects a 3.3% market basket update, reduced by a 0.2 percentage point productivity adjustment. Hospices
that fail to satisfy quality reporting requirements receive a 4.0 percentage point reduction to the market basket update.

Overall payments made by Medicare to each hospice are subject to an inpatient cap and an aggregate cap. The
inpatient cap limits the number of days of inpatient care to no more than 20% of total patient care days. The aggregate
cap limits the amount of Medicare reimbursement a hospice may receive, based on the number of Medicare patients
served. The aggregate cap is updated annually. In federal fiscal year 2024, the aggregate cap is $33,494.01. If a hospice’s
Medicare payments exceed its inpatient or aggregate caps, it must repay Medicare for the excess amount.

Physician Services

Physician services are reimbursed under the Physician Fee Schedule system, under which CMS has assigned a
national relative value unit (“RVU”) to most medical procedures and services that reflects the various resources required
by a physician to provide the services, relative to all other services. Each RVU is calculated based on a combination of
work required in terms of time and intensity of effort for the service, practice expense (overhead) attributable to the service
and malpractice insurance expense attributable to the service. These three elements are each modified by a geographic
adjustment factor to account for local practice costs and are then aggregated. While RVUs for various services may change
in a given year, any alterations are required by statute to be virtually budget neutral, such that total payments made under
the Physician Fee Schedule may not differ by more than $20 million from what payments would have been if adjustments
were not made. CMS annually reviews resource inputs for select services as part of the potentially misvalued code
initiative. To determine the payment rate for a particular service, the sum of the geographically adjusted RVUs is
multiplied by a conversion factor. For calendar year 2024, CMS reduced the conversion factor by approximately 3.4%.

Medicare payments are adjusted based on participation in the Quality Payment Program (“QPP”), a payment
methodology intended to reward high-quality patient care. Physicians and certain other health care clinicians are required
to participate in one of two QPP tracks. Under both tracks, performance data collected in each performance year will

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affect Medicare payments two years later. CMS expects to transition increasing financial risk to providers as the QPP
evolves. The Advanced Alternative Payment Model (“Advanced APM”) track encourages participation in specific
innovative payment models approved by CMS through financial incentives, which are paid two years after the relevant
performance period, if a provider has sufficient participation (based on percentage of payments or patients) in an
Advanced APM. Providers were able to earn a 3.5% incentive payment for performance year 2023 (to be paid in 2025),
the final year for the incentive payments. Beginning in the 2024 performance year, qualifying providers will instead
receive a higher Medicare Physician Fee Schedule payment rate (payment year 2026 for performance year 2024). In
addition, providers are exempt from the reporting requirements and payment adjustments imposed under the Merit-Based
Incentive Payment System (“MIPS”). Alternatively, providers may participate in the MIPS track. Providers electing this
option may receive payment incentives or be subject to payment reductions based on their performance with respect to
clinical quality, resource use, clinical improvement activities, and meeting Promoting Interoperability standards related
to the meaningful use of EHRs. Performance data collected in 2024 will result in payment adjustments of up to 9% in
2026; positive adjustments are subject to a scaling factor to meet budget neutrality requirements.

Other

CMS uses fee schedules to pay for physical, occupational and speech therapies, durable medical equipment, clinical
diagnostic laboratory services, nonimplantable orthotics and prosthetics, services provided by independent diagnostic
testing facilities and ambulance services.

Under the various PPS structures, the payment rates are adjusted for area differences in wage levels by a factor
reflecting the relative wage level in the geographic area compared to the national average wage level and taking into
account occupational mix (“wage index”). The redistributive impact of wage index changes is not anticipated to have a
material financial impact for 2024. To smooth variations and decrease volatility, CMS has implemented permanent,
budget-neutral caps on year-to-year decreases in the wage indexes under certain PPS structures, including the hospital
inpatient PPS and home health PPS.

Medicare reimburses hospitals for a portion (65%) of deductible and coinsurance amounts that are uncollectable

from Medicare beneficiaries.

CMS competitively bids the Medicare fiscal

functions to Medicare
Administrative Contractors (“MACs”), which are geographically assigned across 12 jurisdictions to service both Part A
and Part B providers. Home health and hospice providers are serviced across four MAC jurisdictions. While providers
with operations across multiple geographies had the option of having all hospitals use one home office MAC, we chose,
in most cases, to use the MACs assigned to the geographic areas in which our hospitals are located. CMS periodically re-
solicits bids, and the MAC servicing a geographic area can change as a result of the bid competition. MAC transition
periods can impact claims processing functions and the resulting cash flows.

intermediary and Medicare carrier

CMS contracts with third parties to promote the integrity of the Medicare program through reviews of quality
concerns and detections, and corrections of improper payments. Quality Improvement Organizations, for example, are
groups of physicians and other health care quality experts that work on behalf of CMS to ensure that Medicare pays only
for goods and services that are reasonable and necessary, and that are provided in the most appropriate setting. Under the
Recovery Audit Contractor (“RAC”) program, CMS contracts with RACs on a contingency basis to conduct post-payment
reviews to detect and correct improper payments in the fee-for-service Medicare program. The compensation for RACs
is based on their review of claims submitted to Medicare for billing compliance, including correct coding and medical
necessity, and the amount of overpayments and underpayments they identify. CMS limits the number of claims that RACs
may audit by limiting the number of records that RACs may request from hospitals based on each provider’s claim denial
rate for the previous year. CMS has implemented the RAC program on a permanent, nationwide basis and expanded the
RAC program to the Managed Medicare program and Medicare Part D. CMS has transitioned some of its other integrity
programs to a consolidated model by engaging Unified Program Integrity Contractors (“UPICs”) to perform audits,
investigations and other integrity activities.

We have established policies and procedures to respond to requests from and payment denials by RACs and other
Medicare contractors. Payment recoveries resulting from reviews and denials are appealable through administrative and
judicial processes, and we pursue reversal of adverse determinations at appropriate appeal levels. We incur additional
costs related to responding to requests and denials, including costs associated with responding to requests for records and
pursuing the reversal of payment denials and losses associated with overpayments that are not reversed upon appeal. In
recent years, there have been significant delays in the Medicare appeals process. However, HHS has taken steps to
streamline the appeals process and has significantly reduced the appeals backlog. Depending upon changes to and the
growth of the RAC program and other Medicare integrity programs, our success in appealing claims in future periods,
and potential future delays in the appeals process, our cash flows and results of operations could be negatively impacted.

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Medicare reimburses teaching hospitals for portions of the direct and indirect costs of graduate medical education
(“GME”) through statutory formulas that are generally based on the number of medical residents and which take into
account patient volume or the number of hospital beds. Accrediting organizations review GME programs for compliance
with educational standards. Many of our hospitals operate GME or other residency programs to train physicians and other
allied health professionals.

Managed Medicare

Under the Managed Medicare program (also known as Medicare Part C, or Medicare Advantage), the federal
government contracts with private health insurers to provide members with Medicare Part A, Part B and Part D benefits.
Managed Medicare plans can be structured as HMOs, PPOs or private fee-for-service plans. In addition to covering Part
A and Part B benefits, the health insurers may choose to offer supplemental benefits and impose higher premiums and
plan costs on beneficiaries. CMS makes fee payment adjustments based on service benchmarks and quality ratings and
publishes star ratings to assist beneficiaries with plan selection. According to CMS data, approximately half of all
Medicare enrollees participate in managed Medicare plans.

Medicaid

Medicaid programs are funded jointly by the federal government and the states and are administered by states under
approved plans. Most state Medicaid program payments are made under a PPS or are based on negotiated payment levels
with individual hospitals. Medicaid reimbursement is often less than a hospital’s cost of services. The Patient Protection
and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the
“Affordable Care Act”) requires states to expand Medicaid coverage to all individuals under age 65 with incomes
effectively at or below 138% of the federal poverty level. However, states may opt out of the expansion without losing
existing federal Medicaid funding. A number of states, including Texas and Florida, have opted out of the Medicaid
expansion. Among these states, the maximum income level required for individuals and families to qualify for Medicaid
varies widely.

Medicaid enrollment increased as a result of COVID-19 relief legislation that authorized a temporary increase in
federal funds for certain Medicaid expenditures in states that maintained continuous Medicaid enrollment, among other
requirements. The end of the continuous enrollment requirement in 2023, including the resumption of redeterminations
for Medicaid enrollees, has resulted in significant coverage disruptions and dis-enrollments of enrollees. Medicaid
enrollment is generally expected to continue to decline through fiscal year 2024 (which ends June 30, 2024, in most
states). To increase state compliance with redetermination and reporting requirements and guidelines, CMS published an
interim final rule in December 2023 that provides an enforcement framework, including potential monetary penalties for
states.

Because most states must operate with balanced budgets and because the Medicaid program is often a state’s largest
program, many states have adopted or may consider adopting various strategies to reduce their Medicaid expenditures.
Outside of the government response to COVID-19, budgetary pressures have, in recent years, resulted and likely will
continue to result in decreased spending, or decreased spending growth, for Medicaid programs in many states. Most
states in which we operate have adopted broad-based provider taxes to fund the non-federal share of Medicaid programs
within the state. Many states have also adopted, or are considering, legislation designed to reduce coverage, enroll
Medicaid recipients in managed care programs and/or impose additional taxes on hospitals to help finance or expand the
states’ Medicaid systems. Some states use, or have applied to use, waivers granted by CMS to implement Medicaid
expansion, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal
standards. For example, the Texas Healthcare Transformation and Quality Improvement Program, which is operated under
a Medicaid waiver, enables the expansion of Medicaid managed care programs in the state, and provides funding for
uncompensated care. The funding amount to each hospital for uncompensated care is recalculated annually by the state
and subject to changes in state policies. The total uncompensated care funding for the state is also recalculated every five
years by CMS and subject to rebasing again effective federal fiscal year 2028. In recent years, aspects of existing or
proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty. Additionally, federal policies
that shape administration of the Medicaid programs at the state level are subject to change, including as a result of changes
in the presidential administration. Where states had previously been permitted to condition Medicaid enrollment on work
or other community engagement, the approvals of waivers permitting these conditions have been rescinded, and the
federal government is also reexamining block grant funding structures. However, a federal court is permitting Georgia to
impose work and community engagement requirements under a Medicaid demonstration program that launched in mid-
2023.

Many state Medicaid programs incorporate value-based purchasing models and related payment and delivery
system reform initiatives that incentivize improvements in quality of care and cost-effectiveness. For example, federal
funds under the Medicaid program may not be used to reimburse providers for treatment of certain provider-preventable

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conditions. Each state Medicaid program must deny payments to providers for the treatment of health care-acquired
conditions designated by CMS as well as other provider-preventable conditions that may be designated by the state.

Congress has expanded the federal government’s involvement in fighting fraud, waste and abuse in the Medicaid
program through the Medicaid Integrity Program. CMS employs UPICs to perform post-payment audits of Medicaid
claims, identify overpayments and perform other program integrity activities. The UPICs collaborate with states and
coordinate provider investigations across the Medicare and Medicaid programs. In addition, state Medicaid agencies are
required to establish Medicaid RAC programs. These programs vary by state in design and operation.

Managed Medicaid

Enrollment in managed Medicaid plans has increased in recent years, as state governments seek to control the cost
of Medicaid programs. Managed Medicaid programs enable states to contract with one or more entities for patient
enrollment, care management and claims adjudication. The states usually do not relinquish program responsibilities for
financing, eligibility criteria and core benefit plan design. We generally contract directly with one or more of the
designated entities, usually a managed care organization. The provisions of these programs are state-specific. Certain
states may direct managed care plans to pass through supplemental payments to designated providers, independent of
services rendered, to ensure consistent funding of providers that serve large numbers of low-income patients. In an effort
to more closely tie funds to delivery and outcomes, CMS is limiting these “pass-through payments” that are paid by states
under managed Medicaid plan contracts and will generally prohibit such payments by 2027. However, CMS permits new
pass-throughs of supplemental provider payments for up to a three-year period when states are transitioning Medicaid
populations or services from a fee-for-service system to a managed care system.

Disproportionate Share Hospital and Medicaid State Directed and Supplemental Payments

In addition to making payments for services provided directly to beneficiaries, Medicare makes additional payments
to hospitals that treat a disproportionately large number of low-income patients (Medicaid and Medicare patients eligible
to receive Supplemental Security Income). Disproportionate Share Hospital (“DSH”) payment adjustments are
determined annually based on certain statistical information required by HHS and are paid as a percentage addition to
MS-DRG payments. The methodology for calculating DSH payment adjustments is affected by shifts in payment policy.
For example, in August 2023, CMS finalized changes to the treatment of patient days paid under demonstrations
authorized under Section 1115 of the Social Security Act (“Section 1115”) (including through demonstration-authorized
uncompensated and undercompensated care pools) in the Medicaid fraction of the DSH payment formula in a manner that
will effectively lower DSH payments for many hospitals. These changes could adversely impact our results of operations.
CMS also distributes a payment to each DSH hospital that is allocated according to the hospital’s proportion of
uncompensated care costs relative to the uncompensated care amount of other DSH hospitals.

Some states make additional payments to providers through the Medicaid program that are separate from base
payments and not specifically tied to an individual’s care. These supplemental payments may be in the form of Medicaid
DSH payments, which are intended to offset hospital uncompensated care costs. The federal government distributes
federal Medicaid DSH funds to each state based on a statutory formula. The states then distribute the DSH funding among
qualifying hospitals. States have broad discretion to define which hospitals qualify for Medicaid DSH payments and the
amount of such payments. The Affordable Care Act and subsequent legislation provided for reductions to the Medicaid
DSH hospital program, but Congress has delayed the implementation of these reductions. Under current law, Medicaid
DSH payments will be reduced by $8 billion for the period from March 9, 2024, through September 30, 2024, and in each
of federal fiscal years 2025 through 2027.

Many states have implemented state directed payment (“SDP”) arrangements to direct certain Medicaid managed
care plan expenditures. These arrangements, which are subject to approval by CMS, allow states to implement delivery
system and provider payment initiatives by requiring Medicaid managed care organizations to pay providers according to
specific rates or methods. For example, SDP arrangements may require managed care plans to implement value-based
purchasing models or performance improvement initiatives, or may direct managed care plans to adopt specific payment
parameters, such as minimum or maximum fee schedules for specific types of providers. States are increasingly using
SDP arrangements, and some states have converted supplemental payment programs to SDP arrangements, diverting
previously-available funding. SDP arrangements can be limited to a specific subset of providers, and providers that do
not satisfy applicable criteria may be ineligible for payments. All state directed payment programs are subject to annual
approval by CMS. If a state is unable to obtain future CMS approvals of these programs, our revenues could be negatively
impacted.

Supplemental payments may also be in the form of payments, such as upper payment limit payments, which are
intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or

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payments under other programs that vary by state under Section 1115 waivers. These supplemental reimbursement
programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended.

Over the last three years, states in which the majority of our hospitals operate have implemented or enhanced their
Medicaid state directed and supplemental payment programs. Revenues from these programs totaled approximately $3.9
billion in 2023.

Accountable Care Organizations and Bundled Payment Initiatives

An Accountable Care Organization (“ACO”) is a network of providers and suppliers that work together to invest in
infrastructure and redesign delivery processes to attempt to achieve high quality and efficient delivery of services. ACOs
are intended to promote accountability, coordinate care and produce savings as a result of improved quality and
operational efficiency. ACOs that achieve quality performance standards established by HHS are eligible to share in a
portion of the amounts saved by the Medicare program. There are several types of ACO programs, including the Medicare
Shared Savings Program. CMS continues to explore strategies to accelerate the growth of and access to ACOs.

The CMS Innovation Center is responsible for establishing demonstration projects and other initiatives in order to
identify, develop, test and encourage the adoption of new methods of delivering and paying for health care that create
savings under the Medicare and Medicaid programs, while improving quality of care. For example, providers participating
in bundled payment initiatives agree to receive one payment for services provided to Medicare patients for certain medical
conditions or episodes of care, accepting accountability for costs and quality of care. By rewarding providers for
increasing quality and reducing costs and penalizing providers if costs exceed a set amount, these models are intended to
lead to higher quality, more coordinated care at a lower cost to the Medicare program. Hospitals may receive supplemental
Medicare payments or owe repayments to CMS depending on whether overall CMS spending per episode exceeds or falls
below a target specified by CMS and whether quality standards are met. The CMS Innovation Center has implemented
bundled payment models, including the Bundled Payment Care Improvement Advanced program, which is voluntary and
expected to run through December 2025. Participation in bundled payment programs is generally voluntary, but CMS
currently requires providers in selected geographic areas to participate in a mandatory bundled program for specified
orthopedic procedures and a model for end-stage renal disease treatment. In addition, a mandatory radiation oncology
model was expected to begin on January 1, 2023, but CMS has indefinitely delayed its implementation. CMS has indicated
that it will provide six months’ notice before starting the model.

In a strategic report issued in 2021 and updated in 2022, the CMS Innovation Center highlighted the need to
accelerate the movement to value-based care and drive broader system transformation. By 2030, the CMS Innovation
Center aims to have all fee-for-service Medicare beneficiaries and most Medicaid beneficiaries in a care relationship with
accountability for quality and total cost of care. CMS also indicated it will streamline its payment model portfolio and
consider how to ensure broad provider participation, including by implementing more mandatory models. In the 2022
updated report, the CMS Innovation Center indicated that it plans to focus on increased care coordination between primary
care physicians and specialists. Moreover, several private third-party payers are increasingly employing alternative
payment models, which may increasingly shift financial risk to providers.

TRICARE

TRICARE is the Department of Defense’s health care program for members of the armed forces. For inpatient
services, TRICARE reimburses hospitals based on a DRG system modeled on the Medicare inpatient PPS. For outpatient
services, TRICARE reimburses hospitals based on a PPS that is similar to that utilized for outpatient services furnished
to Medicare beneficiaries.

Annual Cost Reports

All hospitals, home health agencies, hospice providers and other institutional providers participating in the
Medicare, Medicaid and TRICARE programs, whether paid on a reasonable cost basis or under a PPS, are required to
meet certain financial reporting requirements. Federal and, where applicable, state regulations require the submission of
annual cost reports covering the revenues, costs and expenses associated with the services provided by each provider type
to Medicare beneficiaries and Medicaid recipients.

Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may
result in adjustments to the amounts ultimately determined to be due to us under these reimbursement programs. These
audits often require several years to reach the final determination of amounts due to or from us under these programs.
Providers also have rights of appeal, and it is common to contest issues raised in audits of cost reports.

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Managed Care and Other Discounted Plans

Most of our hospitals offer discounts from established charges to certain large group purchasers of health care
services, including managed care plans and private health insurers. Admissions reimbursed by commercial managed care
and other insurers were 30%, 30% and 31% of our total admissions for the years ended December 31, 2023, 2022 and
2021, respectively. Managed care contracts are typically negotiated for terms between one and three years. While we
generally have received contracted annual increases to payment rates from managed care payers, there can be no assurance
that we will continue to receive increases in the future. Price transparency initiatives may impact our relationships with
payers and ability to obtain or maintain favorable contract terms. For example, hospitals are required to publish a list of
their standard charges for all items and services, including gross charges, discounted cash prices and payer-specific and
de-identified negotiated charges, in a machine-readable, publicly accessible online file. Further, CMS requires most health
insurers to publish online charges negotiated with providers for health care services. In addition, the No Surprises Act
requires providers to send to a patient’s health plan a good faith estimate of the expected charges for furnishing scheduled
items or services, including billing and diagnostic codes, prior to the scheduled date of the items or services. The estimate
must cover any item or service that is reasonably expected to be provided in conjunction with the primary items or
services, including those that may be delivered by another provider. However, HHS is deferring enforcement of certain
requirements of the No Surprises Act related to the good faith estimates for insured patients until it issues additional
regulations. It is not clear what impact, if any, these or future health reform efforts at the federal and state levels,
consolidation within the third-party payer industry and vertical integration among third-party payers and health care
providers will have on our ability to negotiate reimbursement rates.

Uninsured and Self-Pay Patients

Self-pay revenues are derived from providing health care services to patients without health insurance coverage and
from the patient responsibility portion of payments for our health care services that are not covered by an individual’s
health plan. Collection of amounts due from individuals is typically more difficult than collection of amounts due from
government health care programs or private third-party payers. Any increases in uninsured individuals, changes to the
payer mix or greater adoption of health plan structures that result in higher patient responsibility amounts could increase
amounts due from individuals. The No Surprises Act requires providers to provide uninsured and self-pay patients, in
advance of the scheduled date for the item or service or upon request of the individual, a good faith estimate of the
expected charges for furnishing scheduled items or services, including billing and diagnostic codes. The estimate must
cover any item or service that is reasonably expected to be provided in conjunction with the scheduled item or service or
that is reasonably expected to be delivered by another provider. HHS is delaying enforcement with regard to good faith
estimates to uninsured individuals that do not include expected charges for co-providers or co-facilities until the agency
issues additional regulations. If the actual charges to the uninsured or self-pay patient exceed the good faith estimate by
an amount deemed to be substantial by regulation (which is currently $400) or the provider furnishes an item or service
that was not included in the estimate, the patient can invoke a patient-provider dispute resolution process to challenge the
higher amount.

A high percentage of our uninsured patients are initially admitted through our emergency rooms. For the year ended
December 31, 2023, approximately 85% of our admissions of uninsured patients occurred through our emergency rooms.
The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital that participates in the Medicare
program to conduct an appropriate medical screening examination of every person who presents to the hospital’s
emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize
that condition or make an appropriate transfer of the individual to a facility that can handle the condition. The obligation
to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. In
addition, various federal and state laws require health insurers to reimburse hospitals for emergency services provided to
enrollees without prior authorization and without regard to whether a participating provider contract is in place.

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Hospital Utilization

We believe the most important factors relating to the overall utilization of a hospital are the quality and market
position of the hospital and the number and quality of physicians and other health care professionals providing patient
care within the facility. Generally, we believe the ability of a hospital to be a market leader is determined by its breadth
of services, level of technology, quality and condition of the facilities, emphasis on quality of care and convenience for
patients and physicians. Other factors that impact utilization include the growth in local population, local economic
conditions and market penetration of managed care programs.

The following table sets forth certain operating statistics for our health care facilities. Health care facility operations
are subject to certain seasonal fluctuations, including decreases in patient utilization during holiday periods and increases
in the cold weather months.

Number of hospitals at end of period
...........................................
Number of freestanding outpatient surgerycenters at end of period(a)
.
Number of licensed beds at end of period(b)
...............................
Weighted average beds in service(c)
............................................
Admissions(d)
..............................................................................
Equivalent admissions(e)
.............................................................
Average length of stay (days)(f)
..................................................
...............................................................
Average daily census(g)
Occupancy rate(h)
........................................................................
.............................................................
Emergency room visits(i)
Outpatient surgeries(j)
..................................................................
Inpatient surgeries(k)
...................................................................
Days revenues in accounts receivable(l)
......................................
Outpatient revenues as a % of patient revenues(m)
.....................

2023

2022

2021

186
124
49,588
41,873
2,130,728
3,788,434
4.9
28,721

72%

9,342,783
1,044,415
528,845
53
38%

182
126
49,281
41,982
2,075,459
3,611,299
5.1
28,778

72%

8,971,951
1,023,239
522,151
53
38%

182
125
48,803
42,148
2,089,975
3,536,238
5.2
29,752

74%

8,475,345
1,008,236
522,069
49
37%

(a)
(b)

Excludes freestanding endoscopy centers (24 at December 31, 2023 and 21 at December 31, 2022 and 2021).
Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state
licensing agency.
Represents the average number of beds in service, weighted based on periods owned.

(c)
(d) Represents the total number of patients admitted to our hospitals and is used by management and certain investors

(e)

as a general measure of inpatient volume.
Equivalent admissions are used by management and certain investors as a general measure of combined inpatient
and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross
inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure
(admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient
volume.
(f)
Represents the average number of days admitted patients stay in our hospitals.
(g) Represents the average number of admitted patients in our hospital beds each day.
(h) Represents the percentage of hospital beds in service that are occupied by patients (admitted and observations).

(i)
(j)

Both average daily census and occupancy rate provide measures of the utilization of inpatient rooms.
Represents the number of patients treated in our emergency rooms.
Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management
and endoscopy procedures are not included in outpatient surgeries.

(k) Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain

(l)

management and endoscopy procedures are not included in inpatient surgeries.
Revenues per day is calculated by dividing the revenues for the fourth quarter of each year by the days in the quarter.
Days revenues in accounts receivable is then calculated as accounts receivable at the end of the period divided by
revenues per day.

(m) Represents the percentage of patient revenues related to patients who are not admitted to our hospitals.

17

Competition

Generally, other hospitals and facilities in the communities we serve provide services similar to those we offer.
Additionally, the number of freestanding specialty hospitals, surgery centers, emergency departments, urgent care centers,
diagnostic and imaging centers and other medical facilities in the geographic areas in which we operate continues to
increase. As a result, most of our hospitals and other facilities operate in a highly competitive environment. In some cases,
competing facilities are more established than we are. Some competing facilities are physician-owned or are owned by
tax-supported government agencies and many others are owned by not-for-profit entities that may be supported by
endowments, charitable contributions and/or tax revenues and are exempt from sales, property and income taxes. Such
exemptions and support are not available to our facilities and may provide the tax-supported or not-for-profit entities an
advantage in funding capital expenditures. In certain localities there are large teaching hospitals that provide highly
specialized facilities, equipment and services that may not be available at most of our hospitals. We also face competition
from specialty hospitals and from both our own and unaffiliated freestanding ASCs for market share in certain high margin
services. Psychiatric hospitals frequently attract patients from areas outside their immediate locale and, therefore, our
behavioral hospitals and units compete with both local and regional hospitals, including the behavioral units of general,
acute care hospitals.

Trends toward clinical and pricing transparency may impact our competitive position, ability to obtain or maintain
favorable contract terms and patient volumes in ways that may be difficult to predict. For example, hospitals are required
to publish a list of their standard charges for all items and services, including discounted cash prices and payer-specific
and de-identified negotiated charges, in a machine-readable, publicly accessible online file. Hospitals are also required to
publish a consumer-friendly list of standard charges for certain “shoppable” services (i.e., services that can be scheduled
by a patient in advance) and associated ancillary services or, alternatively, maintain an online price estimator tool. CMS
may impose civil monetary penalties for noncompliance with these price transparency requirements. Further, CMS
requires most health insurers to publish online charges negotiated with providers for health care services. Starting January
1, 2024, most health insurers must also provide online price comparison tools to help individuals get personalized cost
estimates for all covered items and services. In addition, the No Surprises Act requires providers to send uninsured and
self-pay patients (in advance of the scheduled date for the item or service or upon request) and health plans of
commercially insured patients a good faith estimate of the expected charges and diagnostic codes. Until HHS issues
additional regulations, the agency is deferring enforcement of certain requirements regarding providing good faith
estimates for insured patients and for good faith estimates sent to uninsured or self-pay patients that do not include
expected charges for co-providers or co-facilities.

Our strategies are designed to ensure our hospitals and other facilities are competitive. We believe our hospitals and
other facilities compete within local communities on the basis of many factors, including the quality of care, ability to
attract and retain quality physicians, skilled clinical personnel and other health care professionals, location, breadth of
services, technology offered and quality and condition of the facilities. We focus on operating outpatient services with
accessibility and convenient service for patients and predictability and efficiency for physicians.

Two of the most significant factors that impact the competitive position of a hospital are the number and quality of
physicians affiliated with or employed by the hospital. Although physicians may at any time terminate their relationship
with a hospital we operate, our hospitals seek to retain physicians with varied specialties on the hospitals’ medical staffs
and to attract other qualified physicians. We believe physicians refer patients to a hospital on the basis of the quality and
scope of services it renders to patients and physicians, the quality of physicians on the medical staff, the location of the
hospital and the quality of the hospital’s facilities, technology, equipment and employees. Accordingly, we strive to
maintain and provide quality facilities, technology, equipment, employees and services for physicians and patients. Our
hospitals face competitors that are implementing physician alignment strategies, such as employing physicians, acquiring
physician practice groups and participating in ACOs or other clinical integration models.

Another major factor in the competitive position of our hospitals and other facilities is our ability to negotiate
service contracts with group purchasers of health care services. Managed care plans attempt to direct and control
members’ use of health care services and obtain discounts from providers’ established gross charges. Similarly, employers
and traditional health insurers continue to attempt to contain costs through negotiations with providers for managed care
programs and discounts from established gross charges. Generally, hospitals compete for service contracts with group
purchasers of health care services on the basis of price, market reputation, geographic location, quality and range of
services, quality of the medical staff and convenience. Legislative and regulatory initiatives may impact our contract terms
or ability to contract with payers, such as laws that permit payers to guide patients to particular providers and eliminate
restrictions on placing providers into preferred tiers. Our future success will depend, in part, on our ability to retain and
renew our contracts with third-party payers and enter into new contracts on favorable terms. Other health care providers
may impact our ability to enter into contracts with third-party payers or negotiate increases in our reimbursement and
other favorable terms and conditions. For example, some of our competitors may negotiate exclusivity provisions with
managed care plans or otherwise restrict the ability of managed care companies to contract with us. Price transparency

18

initiatives and increasing vertical integration efforts involving third-party payers and health care providers, among other
factors, may increase these challenges. Moreover, the trend toward consolidation among private third-party payers tends
to increase payer bargaining power over fee structures, and private third-party payers may increasingly demand reduced
fees or be unwilling to negotiate reimbursement increases. Health plans increasingly utilize narrow networks that restrict
the number of participating providers or tiered networks that impose significantly higher cost sharing obligations on
patients who obtain services from providers in a disfavored tier. The importance of obtaining contracts with group
purchasers of health care services varies by purchaser and by community, depending on the market position of such
organizations.

State certificate of need (“CON”) laws, which place limitations on a health care facility’s ability to expand services
and facilities, make capital expenditures and otherwise make changes in operations, may also have the effect of restricting
competition. We currently operate health care facilities in a number of states with CON laws or that require other types
of approvals for the establishment or expansion of certain facility types or services. Before issuing a CON or other
approval, these states consider the need for additional, changes in, or expanded health care facilities or services. Removal
of these requirements could reduce barriers to entry and increase competition in our service areas. In those states that do
not require state approval or that set relatively high levels of expenditures before they become reviewable by state
authorities, competition in the form of new services, facilities and capital spending is more prevalent. Other federal and
state laws and regulations may also adversely impact our ability to expand, such as a regulation commonly known as the
“36 Month Rule,” which restricts the assumption of Medicare billing privileges for certain home health agencies and,
effective January 1, 2024, hospices. In addition, changes in licensure or other laws or regulations and recognition of new
provider types or payment models could impact our competitive position. See Item 1, “Business — Regulation and Other
Factors.”

We and the health care industry as a whole face the challenge of continuing to provide quality patient care while
dealing with rising costs and strong competition for patients. Changes in medical technology, existing and future
legislation, regulations and interpretations and contracting for provider services by third-party payers remain ongoing
challenges.

Admissions, average lengths of stay and reimbursement amounts continue to be negatively affected by third-party
payer pre-admission authorization requirements, utilization review and pressure to maximize outpatient and alternative
health care delivery services for less acutely ill patients. Increased competition, admission constraints and third-party
payer pressures are expected to continue. To meet these challenges, we intend to expand and update our facilities or
acquire or construct new facilities where appropriate, enhance the provision of a comprehensive array of outpatient
services, offer market competitive pricing to group purchasers of health care services, upgrade facilities and equipment
and offer new or expanded programs and services.

Regulation and Other Factors

Licensure, Certification and Accreditation

Health care facility construction and operation are subject to numerous federal, state and local regulations relating
to the adequacy of medical care, equipment, personnel, operating policies and procedures, maintenance of adequate
records, fire prevention, rate-setting, building codes and environmental protection. Facilities are subject to periodic
inspection by governmental and other authorities to assure continued compliance with the various standards necessary for
licensing, certification, and accreditation. We believe our health care facilities are properly licensed under applicable state
laws.

Each of our acute care hospitals located in the United States is eligible to participate in Medicare and Medicaid
programs. To receive reimbursement under the Medicare and Medicaid programs, organizational providers and suppliers
and individuals must satisfy extensive enrollment and revalidation requirements. CMS has the authority to deny or revoke
Medicare enrollment and deactivate billing privileges for a variety of reasons. An adverse action relating to Medicare
enrollment may impact a provider’s Medicaid eligibility, and adverse actions relating to Medicaid enrollment may impact
Medicare enrollment. If any facility were to lose its Medicare or Medicaid certification, the facility would be unable to
receive reimbursement from applicable federal health care programs. Each of our acute care hospitals located in the United
States is accredited by The Joint Commission. From time to time, we may acquire a facility that is not accredited but for
which we will seek accreditation. If any facility were to lose accreditation, the facility would be subject to state surveys,
potentially be subject to increased scrutiny by CMS and likely lose payment from private third-party payers.

The Controlled Substances Act and Drug Enforcement Administration (“DEA”) regulations require every person
who dispenses controlled substances to be registered with the DEA at each principal place of business or professional

19

practice where the person dispenses controlled substances, subject to limited exceptions. Each hospital or clinic must hold
a DEA registration at each location and may be subject to similar state registration requirements. In addition, we are
subject to a variety of federal and state statutes and regulations that govern operational issues related to pharmaceuticals
and controlled substances, such as those related to packaging, storing, and dispensing of pharmaceutical drugs, inventory
control and recordkeeping requirements for controlled substances, and other standards intended to prevent diversion of
controlled substances. The DEA, the Department of Justice (“DOJ”), HHS, and state boards of pharmacy have broad
enforcement powers, may conduct audits and investigations and can impose substantial fines and other penalties,
including revocation of registration.

Management believes our facilities are in substantial compliance with current applicable federal, state, local and
independent review body regulations and standards. The requirements for licensure, certification and accreditation are
subject to change, and, in order to remain qualified, it may become necessary for us to make changes in our facilities,
equipment, personnel and services. The requirements for licensure, certification and accreditation also include notification
or approval in the event of the transfer or change of ownership or certain other changes. Failure to provide required
notifications or obtain necessary approvals in these circumstances can result in the inability to complete an acquisition or
change of ownership, loss of licensure, lapses in reimbursement or other penalties.

Certificates of Need

In some states where we operate hospitals and other health care providers, the construction or expansion of health
care facilities, the acquisition of existing facilities, the transfer or change of ownership, capital expenditures and the
addition of new beds or services may be subject to review by and prior approval of, or notifications to, state regulatory
agencies under a CON program. Such laws generally require the reviewing state agency to determine the public need for
additional or expanded health care facilities and services or other change. Failure to provide required notifications or
obtain necessary state approvals can result in the inability to expand facilities, complete an acquisition or expenditure or
change ownership or other penalties.

Federal Health Care Program Regulations

Participation in any federal health care program, including the Medicare and Medicaid programs, is heavily
regulated by statute and regulation. If a hospital or other provider fails to substantially comply with the numerous
conditions of participation in the Medicare and Medicaid programs or performs certain prohibited acts, the provider’s
participation in the federal health care programs may be terminated, or civil and/or criminal penalties may be imposed.
Civil monetary penalties are adjusted annually based on updates to the consumer price index.

Anti-kickback Statute

A section of the Social Security Act known as the “Anti-kickback Statute” prohibits providers and others from
directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or
orders for services or items covered by a federal health care program. Courts have interpreted this statute broadly and
held that there is a violation of the Anti-kickback Statute if just one purpose of the remuneration is to generate referrals,
even if there are other lawful purposes. Furthermore, knowledge of the law or the intent to violate the law is not required.
Violations of the Anti-kickback Statute may be punished by criminal fines per violation, imprisonment, substantial civil
monetary penalties per violation that are subject to annual adjustment based on updates to the consumer price index and
damages of up to three times the total amount of the remuneration and/or exclusion from participation in federal health
care programs, including Medicare and Medicaid. In addition, submission of a claim for services or items generated in
violation of the Anti-kickback Statute may be subject to additional penalties under the federal False Claims Act (“FCA”)
as a false or fraudulent claim.

The HHS Office of Inspector General (the “OIG”), among other regulatory agencies, is responsible for identifying
and eliminating fraud, abuse and waste. The OIG carries out this mission through a nationwide program of audits,
investigations and inspections. The OIG provides guidance to the industry through various methods, including advisory
opinions and “Special Fraud Alerts.” These Special Fraud Alerts do not have the force of law, but identify features of
arrangements or transactions that the government believes may cause the arrangements or transactions to violate the Anti-
kickback Statute or other federal health care laws. The OIG has identified several incentive arrangements that constitute
suspect practices, including: (a) payment of any incentive by a hospital each time a physician refers a patient to the
hospital, (b) the use of free or significantly discounted office space or equipment in facilities usually located close to the
hospital, (c) provision of free or significantly discounted billing, nursing or other staff services, (d) free training for a
physician’s office staff in areas such as management techniques and laboratory techniques, (e) guarantees which provide,
if the physician’s income fails to reach a predetermined level, the hospital will pay any portion of the remainder, (f) low-
interest or interest-free loans, or loans which may be forgiven if a physician refers patients to the hospital, (g) payment of
the costs of a physician’s travel and expenses for conferences or payments to a physician for speaking engagements, (h)

20

coverage on the hospital’s group health insurance plans at an inappropriately low cost to the physician, (i) payment for
services (which may include consultations at the hospital) which require few, if any, substantive duties by the physician,
(j) purchasing goods or services from physicians at prices in excess of their fair market value, (k) rental of space in
physician offices, at other than fair market value terms, by persons or entities to which physicians refer, and (l) physician-
owned entities (frequently referred to as physician-owned distributorships or PODs) that derive revenue from selling, or
arranging for the sale of, implantable medical devices ordered by their physician-owners for use on procedures that
physician-owners perform on their own patients at hospitals or ASCs. The OIG has encouraged persons having
information about hospitals who offer the above types of incentives to physicians to report such information to the OIG.

The OIG also issues “Special Advisory Bulletins” as a means of providing guidance to health care providers. These
bulletins, along with the Special Fraud Alerts, have focused on certain arrangements that could be subject to heightened
scrutiny by government enforcement authorities, including: (a) contractual joint venture arrangements and other joint
venture arrangements between those in a position to refer business, such as physicians, and those providing items or
services for which Medicare or Medicaid pays, and (b) certain “gainsharing” arrangements, i.e., the practice of giving
physicians a share of any reduction in a hospital’s costs for patient care attributable in part to the physician’s efforts.

In addition to issuing Special Fraud Alerts and Special Advisory Bulletins, the OIG issues compliance program
guidance for certain types of health care providers. The OIG guidance identifies a number of risk areas under federal fraud
and abuse statutes and regulations. These areas of risk include compensation arrangements with physicians, recruitment
arrangements with physicians and joint venture relationships with physicians.

As authorized by Congress, the OIG has published safe harbor regulations that outline categories of activities
deemed protected from prosecution under the Anti-kickback Statute. Currently, there are statutory exceptions and safe
harbors for various activities, including the following: certain investment interests, space rental, equipment rental,
practitioner recruitment, personnel services and management contracts, sale of practice, referral services, warranties,
discounts, employees, group purchasing organizations, waiver of beneficiary coinsurance and deductible amounts,
managed care arrangements, obstetrical malpractice insurance subsidies, investments in group practices, freestanding
surgery centers, ambulance replenishing, referral agreements for specialty services, care coordination arrangements,
arrangements for patient engagement and support, CMS-sponsored model arrangements, cybersecurity technology and
related services, and value-based arrangements.

The fact that conduct or a business arrangement does not fall within a safe harbor or is identified in a Special Fraud
Alert, Special Advisory Bulletin or other guidance does not necessarily render the conduct or business arrangement illegal
under the Anti-kickback Statute. However, such conduct and business arrangements may lead to increased scrutiny by
government enforcement authorities.

We have a variety of financial relationships with physicians and others who either refer or influence the referral of
patients to our hospitals, other health care facilities and employed physicians, including employment contracts, leases,
medical director agreements and professional service agreements. We also have similar relationships with physicians and
facilities to which patients are referred from our facilities and other providers. In addition, we provide financial incentives,
including minimum revenue guarantees, to recruit physicians into the communities served by our hospitals. While we
endeavor to comply with the applicable safe harbors, certain of our current arrangements, including joint ventures and
financial relationships with physicians and other referral sources and persons and entities to which we refer patients, do
not qualify for safe harbor protection.

Although we believe our arrangements with physicians and other referral sources and referral recipients have been
structured to comply with current law and available interpretations, there can be no assurance regulatory authorities
enforcing these laws will determine these financial arrangements comply with the Anti-kickback Statute or other
applicable laws. An adverse determination could subject us to liabilities under the Social Security Act and other laws,
including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other
federal health care programs.

Stark Law

The Social Security Act also includes a provision commonly known as the “Stark Law.” The Stark Law prohibits
physicians from referring Medicare and Medicaid patients to entities with which they or any of their immediate family
members have a financial relationship, if these entities provide certain “designated health services” reimbursable by
Medicare or Medicaid unless an exception applies. The Stark Law also prohibits entities that provide designated health
services reimbursable by Medicare and Medicaid from billing the Medicare and Medicaid programs for any items or
services that result from a prohibited referral and requires the entities to refund amounts received for items or services
provided pursuant to the prohibited referral on a timely basis. “Designated health services” include inpatient and outpatient
hospital services, clinical laboratory services, radiology and certain other imaging services, radiation therapy services and
home health services. Sanctions for violating the Stark Law include denial of payment, substantial civil monetary penalties

21

per claim submitted and exclusion from the federal health care programs. Failure to refund amounts received as a result
of a prohibited referral on a timely basis may constitute a false or fraudulent claim and may result in civil penalties and
additional penalties under the FCA. The statute also provides for a penalty for a circumvention scheme. These penalties
are updated annually based on changes to the consumer price index.

including employment contracts,

There are exceptions to the self-referral prohibition for many of the customary financial arrangements between
physicians and providers,
leases, recruitment agreements and personal service
arrangements. Unlike safe harbors under the Anti-kickback Statute with which compliance is voluntary, a financial
relationship must comply with every requirement of a Stark Law exception or the arrangement is in violation of the Stark
Law. Although there is an exception for a physician’s ownership interest in an entire hospital, the Affordable Care Act
prohibits physician-owned hospitals established after December 31, 2010 from billing for Medicare or Medicaid patients
referred by their physician owners. As a result, the law effectively prevents the formation of new physician-owned
hospitals that participate in Medicare or Medicaid. While the Affordable Care Act grandfathers existing physician-owned
hospitals, it does not allow these hospitals to increase the percentage of physician ownership and significantly restricts
their ability to expand services.

Through a series of rulemakings, CMS has issued final regulations implementing the Stark Law. While these
regulations were intended to clarify the requirements of the exceptions to the Stark Law, it is unclear how the government
will interpret many of these exceptions for enforcement purposes. Further, we do not always have the benefit of significant
regulatory or judicial interpretation of the Stark Law and its implementing regulations. We attempt to structure our
relationships to meet an exception to the Stark Law, but the regulations implementing the exceptions are detailed and
complex, and are subject to continuing legal and regulatory change. We cannot assure that every relationship complies
fully with the Stark Law.

Other Fraud and Abuse Provisions

Certain federal fraud and abuse laws apply to all health benefit programs and provide for criminal penalties. The
Social Security Act also imposes criminal and civil penalties for making false claims and statements to Medicare and
Medicaid. False claims include, but are not limited to, billing for services not rendered or for misrepresenting actual
services rendered in order to obtain higher reimbursement, billing for unnecessary goods and services and cost report
fraud. Federal enforcement officials have the ability to exclude from Medicare and Medicaid any business entities and
any investors, officers and managing employees associated with business entities that have committed health care fraud,
even if the officer or managing employee had no knowledge of the fraud. Criminal and civil penalties may be imposed
for a number of other prohibited activities, including failure to return known overpayments, certain gainsharing
arrangements, billing Medicare amounts that are substantially in excess of a provider’s usual charges, offering
remuneration to influence a Medicare or Medicaid beneficiary’s selection of a health care provider, contracting with an
individual or entity known to be excluded from a federal health care program, making or accepting a payment to induce
a physician to reduce or limit services, and soliciting or receiving any remuneration in return for referring an individual
for an item or service payable by a federal health care program. Like the Anti-kickback Statute, these provisions are very
broad. Civil penalties may be imposed for the failure to report and return an overpayment within 60 days of identifying
the overpayment or by the date a corresponding cost report is due, whichever is later. To avoid liability, providers must,
among other things, carefully and accurately code claims for reimbursement, promptly return overpayments and
accurately prepare cost reports.

Some of these provisions, including the federal Civil Monetary Penalty Law, require a lower burden of proof than
other fraud and abuse laws, including the Anti-kickback Statute. Substantial civil monetary penalties may be imposed
under the federal Civil Monetary Penalty Law. These penalties will be updated annually based on changes to the consumer
price index. In some cases, violations of the Civil Monetary Penalty Law may result in penalties of up to three times the
remuneration offered, paid, solicited or received. In addition, a violator may be subject to exclusion from federal and state
health care programs. Federal and state governments increasingly use the federal Civil Monetary Penalty Law, especially
where they believe they cannot meet the higher burden of proof requirements under the Anti-kickback Statute. Further,
individuals can receive up to $1,000 for providing information on Medicare fraud and abuse that leads to the recovery of
at least $100 of Medicare funds under the Medicare Integrity Program.

In addition, the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”) establishes criminal penalties for
paying, receiving, soliciting or offering any remuneration in return for referring a patient to a laboratory, clinical treatment
facility or recovery home, or in exchange for an individual using the services of one of these entities. The EKRA
prohibitions apply to services covered by government health care programs and by private health plans. There is limited
guidance with respect to the application of EKRA.

22

State Fraud and Abuse Laws

Many states in which we operate also have laws intended to prevent fraud and abuse within the health care industry.
Some of these laws are similar to the Anti-kickback Statute, prohibiting payments to physicians for patient referrals, and
to the Stark Law, prohibiting certain self-referrals. These state laws often apply regardless of the source of payment for
care, and little precedent exists for their interpretation or enforcement. These statutes typically provide for criminal and
civil penalties, as well as loss of licensure.

The Federal False Claims Act and Similar State Laws

We are subject to state and federal laws that govern the submission of claims for reimbursement and prohibit the
making of false claims or statements. One of the most prominent of these laws is the FCA, which may be enforced by the
federal government directly or by a qui tam plaintiff, or whistleblower, on the government’s behalf. The government may
use the FCA to prosecute Medicare and other government program fraud in areas such as coding errors, billing for services
not provided and submitting false cost reports. In addition, the FCA covers payments made in connection with the
Exchanges if those payments include any federal funds. When a private party brings a qui tam action under the FCA, the
defendant is not made aware of the lawsuit until the government commences its own investigation or makes a
determination whether it will intervene. If a defendant is determined by a court of law to be liable under the FCA, the
defendant may be required to pay three times the actual damages sustained by the government, plus substantial mandatory
civil penalties for each separate false claim. These penalties are updated annually based on changes to the consumer price
index.

There are many potential bases for liability under the FCA. Liability often arises when an entity knowingly submits
a false claim for reimbursement to the federal government. The FCA defines the term “knowingly” broadly. Though
simple negligence will not give rise to liability under the FCA, submitting a claim with reckless disregard to its truth or
falsity constitutes a “knowing” submission under the FCA and, therefore, may create liability. Submission of claims for
services or items generated in violation of the Anti-kickback Statute constitutes a false or fraudulent claim under the FCA.
Whistleblowers and the federal government have taken the position, and some courts have held, that providers who
allegedly have violated other statutes, such as the Stark Law, have thereby submitted false claims under the FCA. False
claims under the FCA also include the knowing and improper failure to report and refund amounts owed to the government
in a timely manner following identification of an overpayment. An overpayment is deemed to be identified when a person
has, or should have through reasonable diligence, determined that an overpayment was received and quantified the
overpayment.

Every entity that receives at least $5 million annually in Medicaid payments must have written policies for all
employees, contractors or agents, providing detailed information about false claims, false statements and whistleblower
protections under certain federal laws, including the FCA, and similar state laws. In addition, federal law provides an
incentive to states to enact false claims laws comparable to the FCA. A number of states in which we operate have adopted
their own false claims provisions as well as their own whistleblower provisions under which a private party may file a
civil lawsuit in state court. We have adopted and distributed policies pertaining to the FCA and relevant state laws.

HIPAA Administrative Simplification and Privacy, Security and Interoperability Requirements

The Administrative Simplification Provisions of HIPAA and implementing regulations require the use of uniform
electronic data transaction standards and code sets for certain health care claims and payment transactions submitted or
received electronically. In addition, HIPAA requires each provider to use a National Provider Identifier. These provisions
are intended to encourage electronic commerce in the health care industry.

The privacy and security regulations promulgated pursuant to HIPAA extensively regulate the use and disclosure
of individually identifiable health information, known as “protected health information,” and require covered entities,
including health plans and most health care providers, to implement administrative, physical and technical safeguards to
protect the security of such information. Certain provisions of the security and privacy regulations apply to business
associates (entities that handle protected health information on behalf of covered entities), and business associates are
subject to direct liability for violation of these provisions. In addition, a covered entity may be subject to penalties as a
result of a business associate violating HIPAA, if the business associate is found to be an agent of the covered entity.

Covered entities must report breaches of unsecured protected health information to affected individuals without
unreasonable delay but not to exceed 60 days after discovery of the breach by a covered entity or its agents. Notification
must also be made to HHS and, in certain situations involving large breaches, to the media. HHS is required to publish
on its website a list of all covered entities that report a breach involving more than 500 individuals. All non-permitted
uses or disclosures of unsecured protected health information are presumed to be breaches unless the covered entity or

23

business associate establishes that there is a low probability the information has been compromised. Various state laws
and regulations may also require us to notify affected individuals in the event of a data breach involving individually
identifiable information.

Violations of the HIPAA privacy and security regulations may result in criminal penalties and in substantial civil
penalties per violation. These civil penalties are updated annually based on updates to the consumer price index. HHS
enforces the regulations and performs compliance audits. In addition to enforcement by HHS, state attorneys general are
authorized to bring civil actions seeking either injunction or damages in response to violations that threaten the privacy
of state residents. HHS may resolve HIPAA violations through informal means, such as allowing a covered entity to
implement a corrective action plan, but HHS has the discretion to move directly to impose monetary penalties and is
required to impose penalties for violations resulting from willful neglect. We enforce compliance in accordance with
HIPAA privacy and security regulations. The Information Protection and Security Department monitors our compliance
with the HIPAA privacy and security regulations. The HIPAA privacy regulations and security regulations have and will
continue to impose significant costs on our facilities in order to comply with these standards.

Health care providers and industry participants are also subject to a growing number of requirements intended to
promote the interoperability and exchange of patient health information. For example, health care providers and certain
other entities are subject to information blocking restrictions pursuant to the 21st Century Cures Act that prohibit practices
that are likely to interfere with the access, exchange or use of electronic health information, except as required by law or
specified by HHS as a reasonable and necessary activity. Violations may result in penalties or other significant
disincentives. In November 2023, HHS issued a proposed rule to establish disincentives for certain types of providers. If
finalized, hospitals found to have committed information blocking would not qualify as “meaningful electronic health
record users” under the Medicare Promoting Interoperability Program and as a result would lose 75% of the annual market
basket increase they would otherwise receive.

EMTALA

All of our hospitals in the United States are subject to EMTALA. This federal law requires any hospital participating
in the Medicare program to conduct an appropriate medical screening examination of every individual who presents to
the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to
either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition.
The obligation to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for
treatment. There are severe penalties under EMTALA if a hospital fails to screen or appropriately stabilize or transfer an
individual or if the hospital delays appropriate treatment in order to first inquire about the individual’s ability to pay.
Penalties for violations of EMTALA include exclusion from participation in the Medicare program and civil monetary
penalties. These civil monetary penalties are adjusted annually based on updates to the consumer price index. In addition,
an injured individual, the individual’s family or a medical facility that suffers a financial loss as a direct result of a
hospital’s violation of the law can bring a civil suit against the hospital.

The government broadly interprets EMTALA to cover situations in which individuals do not actually present to a
hospital’s emergency room, but present for emergency examination or treatment to the hospital’s campus, generally, or
to a hospital-based clinic that treats emergency medical conditions or are transported in a hospital-owned ambulance,
subject to certain exceptions. At least one court has interpreted the law also to apply to a hospital that has been notified
of a patient’s pending arrival in a non-hospital owned ambulance. In recent years, the government has undertaken
enforcement actions in which it has broadly interpreted a hospital’s obligations with respect to screening and stabilizing
patients who present with a psychiatric emergency. EMTALA does not generally apply to individuals admitted for
inpatient services. The government has expressed its intent to investigate and enforce EMTALA violations actively.
Hospitals may face conflicting interpretations of EMTALA’s requirements with respect to state laws that limit access to
abortion or other reproductive health services. For example, HHS has provided guidance regarding EMTALA obligations
specific to patients who are pregnant or are experiencing pregnancy loss and the preemption of state law. This guidance
is the subject of legal challenges, including pending cases in Texas and Idaho that currently have allowed state restrictions
to remain in effect or stayed or limited application of HHS guidance as the cases continue.

Corporate Practice of Medicine/Fee Splitting

Some of the states in which we operate have laws prohibiting corporations and other entities not owned by
physicians or other permitted health professionals from employing physicians or certain other health professionals,
practicing medicine for a profit and making certain direct and indirect payments to, or entering into fee-splitting
arrangements with, health care providers designed to induce or encourage the referral of patients to, or the
recommendation of, particular providers for medical products and services. Possible sanctions for violation of these
restrictions include loss of license and civil and criminal penalties. In addition, agreements between the corporation and

24

the physician or other health professional may be considered void and unenforceable. These statutes vary from state to
state, are often vague and have seldom been interpreted by the courts or regulatory agencies.

Health Care Industry Investigations

Significant media and public attention has focused in recent years on the hospital industry. This media and public
attention, changes in government personnel and other factors have led to increased scrutiny of the health care industry.
Except as may be disclosed in our SEC filings, we are not aware of any material investigations of the Company under
federal or state health care laws or regulations. It is possible that governmental entities could initiate investigations or
litigation in the future at facilities we operate and that such matters could result in significant penalties, as well as adverse
publicity. It is also possible that our executives and managers could be included in governmental investigations or
litigation or named as defendants in private litigation.

Our substantial Medicare, Medicaid and other governmental billings result in heightened scrutiny of our operations.
We continue to monitor all aspects of our business and have developed a comprehensive ethics and compliance program
that is designed to meet or exceed applicable federal guidelines and industry standards.

However, because the law in this area is complex and constantly evolving, governmental investigations or litigation

may result in interpretations that are inconsistent with our practices or industry practices.

In public statements surrounding current investigations, governmental authorities have taken positions on a number
of issues, including some for which little official interpretation previously has been available, that appear to be inconsistent
with practices that have been common within the industry and that previously have not been challenged in this manner.
In some instances, government investigations that have in the past been conducted under the civil provisions of federal
law may now be conducted as criminal investigations.

Both federal and state government agencies have increased their focus on and coordination of civil and criminal
enforcement efforts in the health care area. Through the national Health Care Fraud and Abuse Control Program, the OIG
and the DOJ coordinate federal, state and local law enforcement activities with respect to health care fraud against both
public and private health plans. The OIG and DOJ have, from time to time, established national enforcement initiatives
that target all hospital providers, focusing on specific billing practices or other suspected areas of abuse. In addition,
governmental agencies and their agents, such as MACs, fiscal intermediaries and carriers, may conduct audits of our
health care operations. Private third-party payers may conduct similar post-payment audits, and we also perform internal
audits and monitoring.

In addition to national enforcement initiatives, federal and state investigations have addressed a wide variety of
routine health care operations such as: cost reporting and billing practices, including for Medicare outliers; financial
arrangements with referral sources; physician recruitment activities; physician joint ventures; and hospital charges and
collection practices for self-pay patients. We engage in many of these routine health care operations and other activities
that could be the subject of governmental investigations or inquiries. For example, we have significant Medicare and
Medicaid billings, numerous financial arrangements with physicians who are referral sources to our hospitals, and joint
venture arrangements involving physician investors. Certain of our individual facilities have received, and other facilities
may receive, government inquiries from, and may be subject to investigation by, federal and state agencies. Any additional
investigations of the Company, our executives or managers could result in significant liabilities or penalties to us, as well
as adverse publicity.

Health Care Reform

The health care industry is subject to changing political, regulatory and other influences, along with various
scientific and technological initiatives and innovations. In recent years, the U.S. health care industry has undergone
significant changes at the federal and state levels, many of which have been aimed at reducing costs and government
spending and increasing access to health insurance. The most prominent of these efforts, the Affordable Care Act, affects
how health care services are covered, delivered and reimbursed. The Affordable Care Act increased health insurance
coverage through a combination of private sector health insurance requirements, public program expansion and other
reforms.

There is uncertainty regarding the ongoing net effect of the Affordable Care Act, particularly as it has been, and
continues to be, subject to legislative and regulatory changes and court challenges. For example, effective January 1,
2019, the penalty associated with the individual mandate to maintain health insurance was effectively eliminated.
However, some states have imposed individual health insurance mandates, and other states have explored or offer public
health insurance options. To increase access to health insurance during the COVID-19 pandemic, the ARPA enhanced
subsidies for individuals eligible to purchase coverage through the Exchanges. Subsequent legislation extended these
enhanced subsidies through 2025. These and other changes and initiatives have impacted the number of individuals that

25

elect to obtain public or private health insurance or the scope of such coverage, if purchased, in the states that we operate.
For example, the ARPA enhanced subsidies, among other factors, have resulted in increased Exchange enrollment in the
states in which we operate. If these subsidies are not extended beyond 2025, Exchange enrollment may be adversely
impacted.

Health care providers may be significantly impacted by changes specific to the Medicaid program, including
changes resulting from the Affordable Care Act and subsequent legislation or agency initiatives. The Affordable Care Act
expanded the categories of individuals eligible for Medicaid coverage and permits individuals with relatively higher
incomes to qualify. However, a number of states, including Texas and Florida, have opted out of the Medicaid expansion
provisions. Some states use, or have applied to use, waivers granted by CMS to implement expansion, impose different
eligibility or enrollment conditions, or otherwise implement programs that vary from federal standards. The Medicaid
landscape is constantly evolving as the federal and state governments consider and test various models of delivery and
payment system reform.

In addition, there is uncertainty regarding the potential impact of other reform efforts at the federal and state levels.
For example, some members of Congress have proposed measures that would expand government-sponsored coverage,
including 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”). Other recent initiatives and
proposals include those aimed at price transparency and out-of-network charges, which may impact prices and the
relationships between health care providers, insurers and patients. For example, the No Surprises Act imposes various
requirements on providers and health plans intended to prevent “surprise” medical bills, and several states have
implemented similar laws intended to protect consumers. The No Surprises Act prohibits providers from charging patients
an amount beyond the in-network cost sharing amount for items and services rendered by out-of-network providers (i.e.,
prohibits balance billing), subject to limited exceptions. The No Surprises Act also impacts the payment received by an
out-of-network provider from a health plan for items and services to which the prohibitions on balance billing apply. For
items and services for which balance billing is prohibited (even when no balance billing occurs), the No Surprises Act
establishes an independent dispute resolution (“IDR”) process for providers and payers to handle payment disputes that
cannot be resolved through direct negotiations. The final rule establishing the IDR process is currently the subject of legal
challenges, and government agencies have proposed various changes, creating uncertainty and resulting in delays in
claims resolution. The No Surprises Act also requires providers to provide a good faith estimate of expected charges to
uninsured or self-pay individuals in connection with scheduled items or services, in advance of the date of the scheduled
item or service, or upon request of the individual. HHS is delaying enforcement with regard to good faith estimates to
uninsured individuals that do not include expected charges for co-providers or co-facilities until the agency issues
additional regulations. If the actual charges to an uninsured or self-pay patient exceed the good faith estimate by an amount
deemed to be substantial by regulation (which is currently $400) or the provider furnishes an item or service that was not
included in the good faith estimate, the patient may invoke a patient-provider dispute resolution process established by
regulation to challenge the higher amount.

Other trends toward transparency and value-based purchasing may impact the competitive position and patient
volumes of providers. For example, the CMS Care Compare website makes available to the public certain data that
hospitals, home health agencies, hospices, and other Medicare-certified providers submit in connection with Medicare
reimbursement claims, including performance data on quality measures and patient satisfaction. Medicare reimbursement
may be adjusted based on quality and efficiency measures and/or compliance with quality reporting requirements. In
addition, hospitals are required by federal regulation to publish online payer-specific negotiated charges and de-identified
minimum and maximum charges. Some price transparency obligations apply only to payers. For example, CMS requires
health insurers to publish online charges negotiated with providers for health care services, and health insurers must
provide online price comparison tools to help individuals get personalized cost estimates for covered items and services.
Other industry participants, such as private payers and large employer groups and their affiliates, may also introduce
financial or delivery system reforms. For example, in recent years, there have been trends influenced by private and/or
public payers toward enrollment in managed care programs, favoring outpatient care over inpatient care, and provider
consolidation. These issues are further discussed in Item 1A, “Risk Factors.”

General Economic and Demographic Factors

The health care industry is impacted by the overall U.S. economy. Budget deficits at the federal level and within
some state and local government entities have had a negative impact on spending for many health and human service
programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our hospitals
and other providers. We anticipate that the federal deficit, the growing magnitude of Medicare and Medicaid expenditures
and the aging of the U.S. population, among other factors, will continue to place pressure on government health care
programs. Other risks we face during periods of economic weakness and high unemployment include potential declines
in the population covered under managed care agreements, increased patient decisions to postpone or cancel elective and

26

nonemergency health care procedures (including delaying surgical procedures), potential increases in the uninsured and
underinsured populations, increased adoption of health plan structures that shift financial responsibility to patients and
increased difficulties in collecting patient receivables for copayment and deductible amounts.

Compliance Program

We maintain a comprehensive ethics and compliance program that is designed to meet or exceed applicable federal
guidelines and industry standards. The program is intended to monitor and raise awareness of various regulatory issues
among employees and to emphasize the importance of complying with governmental laws and regulations. As part of the
ethics and compliance program, we provide annual ethics and compliance training to our employees and encourage all
employees to report any violations to their supervisor, an ethics and compliance officer or to the Company’s ethics line
available 24 hours a day by phone and internet portal.

Antitrust Laws

The federal government and most states have enacted antitrust laws that prohibit certain types of conduct deemed
to be anti-competitive. These laws prohibit price fixing, market allocation, bid-rigging, concerted refusal to deal, market
monopolization, price discrimination, tying arrangements, acquisitions of competitors and other practices that have, or
may have, an adverse effect on competition. Violations of federal or state antitrust laws can result in various sanctions,
including criminal and civil penalties. Antitrust enforcement in the health care industry is currently a priority of the Federal
Trade Commission and the DOJ, including with respect to hospital and physician practice acquisitions. We believe we
are in compliance with such federal and state laws, but courts or regulatory authorities may reach a determination in the
future that could adversely affect our operations and growth strategy.

Environmental Matters

We are subject to various federal, state and local statutes and ordinances regulating the discharge of materials into
the environment. We do not believe that we will be required to expend any material amounts in order to comply with
these laws and regulations as presently in effect. Regulations limiting greenhouse gas emissions and energy inputs may
increase in coming years, which may increase our costs associated with compliance, disrupt and adversely affect our
operations and could materially, adversely affect our financial performance.

Our environmental strategy is designed to complement our mission of the care and improvement of human life,
which extends to the environment. This strategy is centered on incorporating the following four pillars into our operations:

• Managing energy and water responsibly,

•

•

Enhancing our climate resilience,

Sourcing and consuming efficiently, and

• Managing the environmental impact of our capital programs.

We are pursuing a plan to reduce our scope 1 and scope 2 greenhouse gas emissions by 2030 in line with the Paris
Agreement 1.5℃ emissions reduction goal. Our initiatives contemplate operational changes intended to reduce energy
consumption, including by accelerating related capital investments, new technology pilots, renewable energy contracting
and investments, and medical gas initiatives. In 2021, we baselined our scope 1 and scope 2 greenhouse gas emissions for
2020, and we are updating those calculations annually to measure trends in our greenhouse gas emissions. In 2023, we
measured our 2021 scope 3 greenhouse gas emissions for the first time for the purchased goods and services category and
the capital goods category. These two categories comprise the majority of our scope 3 emissions.

27

In 2022, we released our inaugural Task Force on Climate-related Financial Disclosures (“TCFD”) report to provide
additional insight into our commitment to improving our environmental impact and strengthening our climate resilience
to support the communities we serve. The report follows TCFD guidance and outlines the ways we are integrating climate-
related risks and opportunities into our governance structure, our risk management and strategy development processes,
and how we establish and track climate-related metrics and objectives. We plan to continue following established
guidelines to assess and better understand the physical and transition risks from climate change that we believe most
significantly impact our operations. We have also integrated climate-related risk assessment into our established enterprise
risk management function.

While we currently believe that compliance with existing environmental laws and regulations does not have a
material impact on our operations, changes in consumer preferences and additional legislation or regulatory requirements,
including those associated with efforts to transition to a low-carbon economy, may increase costs associated with
compliance, the operation of our facilities and supplies.

Insurance

As is typical in the health care industry, we are subject to claims and legal actions by patients in the ordinary course
of business. Subject, in most cases, to a $15 million per occurrence self-insured retention, our facilities are insured by our
insurance subsidiary for losses up to $80 million per occurrence. The insurance subsidiary has obtained reinsurance for
professional liability risks generally above a retention level of either $25 million or $35 million per occurrence, depending
on the jurisdiction for the related claim. We also maintain professional liability insurance with unrelated commercial
carriers for losses in excess of amounts insured by our insurance subsidiary.

We purchase, from unrelated insurance companies, coverage for cybersecurity incidents, directors and officers
liability and property loss in amounts we believe are reasonable and subject to terms of coverage we believe to be
reasonable.

Human Capital Resources

Our workforce is comprised of approximately 310,000 employees (as of December 31, 2023),

including
approximately 90,000 part-time and PRN employees (references herein to “employees” refer to employees of our
affiliates). Our Board of Directors and its committees oversee human capital matters through regular reporting from
management and advisors.

Diversity, Equity and Inclusion

We are committed to fostering a culture of inclusion that embraces and supports our patients, colleagues, partners,
physicians and communities. Our domestic workforce is comprised of approximately 78% women and 45% people of
color. Our policies prohibit discrimination on the basis of age, gender, disability, race, color, ancestry, citizenship,
religion, pregnancy, sexual orientation, gender identity or expression, national origin, medical condition, marital status,
veteran status, payment source or ability, or any other basis prohibited by federal, state or local law.

We are dedicated to being an employer of choice. We seek to recruit diverse candidates at all stages of their careers
and through a variety of venues and programs. Our Chief Diversity Officer leads a team that is responsible for advancing
diversity, equity and inclusion (“DEI”) initiatives across the Company. Our Executive DEI Council, sponsored by our
Chief Executive Officer and comprised of executive leaders from the Company, champions DEI across the Company and
informs strategic decisions towards DEI objectives. In addition to the Executive DEI Council, we have implemented
division DEI Councils comprised of diversity leaders and facility representatives and added division-based DEI leaders
to support local deployment of DEI strategies and programs across the enterprise.

We have established nine employee resource groups to provide colleagues opportunities to convene around shared
experiences, including groups for Black colleagues, women, young professionals, LGBTQ+, Hispanic and Asian
colleagues, veterans, colleagues with disabilities and a group focused on mental health and wellness – each with a senior
leader serving as executive sponsor. The Company remains focused on supporting leadership development and
advancement opportunities for all of its employees, and as part of that overarching commitment, has established programs
which develop leadership skills and provide mentorship opportunities for Black, Asian, and Hispanic leaders at the
manager level and above.

The Company’s Corporate Governance Guidelines reinforce its commitment to diversity by requiring the initial
pool of candidates from which the Nominating and Corporate Governance Committee may recommend director nominees
to include qualified female and racially/ethnically diverse candidates and the Nominating and Corporate Governance

28

Committee to request that any third-party search firm that it engages to identify such candidates to include qualified
female and racially/ethnically diverse candidates in such initial pool.

We encourage you to review the “Diversity, Equity and Inclusion” section of our website, which includes our
EEO-1 data, as well as our 2023 Impact Report (available at www.hcahealthcareimpact.com) for more detailed
information regarding our DEI and pay equity programs and initiatives. Nothing on our website, including our 2023
Impact Report or sections thereof, shall be deemed incorporated by reference into this annual report on Form 10-K.

Compensation and Benefits

To recruit and retain a highly qualified and diverse workforce, we design competitive compensation and benefits
programs to attract, retain, recognize and reward the performance of our employees. These programs (which vary by
location) include an Employee Stock Purchase Plan, a 401(k) Plan, health care and insurance benefits, flexible spending
accounts, paid time off, family leave, family care resources, flexible work schedules, employee assistance and wellbeing
programs, tuition and student loan payment assistance and on-site services, such as cafeterias and fitness centers, among
many others.

Recruitment and Workforce Development

We continue to invest in numerous initiatives to attract and acquire the talent needed to deliver on our mission and
business objectives. We are working within our communities to expand access to health care programs and careers,
including our expansion of Galen College of Nursing, to specifically address the growing nursing shortage. We are
broadening our access to talent through early outreach programs, internships, career paths, and college and diversity
recruitment efforts.

Serving the Community

We strive to provide not only the quality health care that our patients deserve, but also to address needs in the
communities we serve. We provide opportunities for our colleagues to get involved and be a part of something bigger
than our organization. By joining forces with other leading organizations, we believe our collective talents and work has
an impact that is only possible when we work together. Through research, partnerships, leadership and investments, we
are tackling problems in our communities and throughout the health care industry, from disaster relief to environmental
sustainability to new innovations. We also support the HCA Healthcare Foundation, whose mission is to promote health
and wellbeing and strive to make a positive impact in all the communities HCA Healthcare serves by providing leadership,
service and financial support to effective non-profit organizations.

Culture and Talent Development

HCA Healthcare’s culture is critical to our success. We seek to instill a culture across our system that includes
making a positive impact on our patients, communities and each other, and nurture that culture through inclusion,
compassion and respect. To assess and improve employee retention and engagement, we connect with our colleagues in
several ways to listen to and respond to their concerns, including employee rounding, employee advisory groups and
governance councils, and colleague surveys throughout the year. We have expanded our efforts to improve our colleagues’
engagement by focusing on the vital behavior of personal connection through care, support and growth to better respond
to the needs of our colleagues. By providing education, training and opportunities to grow as clinicians and leaders, we
seek to support our colleagues throughout their career journey. We also support our colleagues’ development through
programs such as tuition assistance, student loan payment assistance, clinical training and certification.

We are highly committed to developing leaders who support our culture, grow our business and lead the industry.
We invest in award winning programs offered through the HCA Healthcare Leadership Institute where we develop the
capabilities of our current leaders and build our pipeline for the future. These programs are designed to assess, develop
and advance leaders at all levels from supervisory to executive. Our commitment to leadership development and
succession planning creates the platform for which we continue to deliver on our mission and grow our business.

29

Health, Safety and Wellness

We focus on supporting employees in ways that have a positive impact on their physical, mental and financial health
so they can take care of themselves, their families, their patients and each other. We provide our employees and their
families with access to a variety of health and wellness programs that can help with burnout, stress, depression, anxiety,
and other health concerns as well as relationship issues, career development, work challenges, retirement planning and
financial support. For 2023, this included the following touchpoints:

•

•

•

Approximately 55,800 visits to the online Wellbeing Hub website;

More than 7,000 calls to the Nurse Care help line; and

Approximately 17,100 interactions with Optum Wellbeing Services.

Labor Matters

We are subject to various state and federal laws that regulate wages, hours, benefits and other terms and conditions
relating to employment. At December 31, 2023, certain employees at 37 of our domestic hospitals are represented by
various labor unions. No union elections occurred at any of our domestic facilities in 2023. One election was held in
January 2024 that resulted in the addition of a number of employees to an existing bargaining unit at one of our facilities
in Nevada. There are no other elections scheduled to be held in 2024. It is possible that employees at additional hospitals
may unionize in the future, or employees currently represented by labor unions may choose to reject that representation.
We have not experienced work stoppages that have materially, adversely affected our business or results of operations.
However, it is possible that a material work stoppage at one or more of our hospitals may occur in the future.

Physicians are an integral part of the success of our hospitals in delivering quality care to our patients. Our hospitals
are staffed by licensed physicians, including both employed physicians and physicians who are not employees of our
hospitals. Some physicians provide services in our hospitals under contracts, which generally describe a term of service,
provide and establish the duties and obligations of such physicians, require the maintenance of certain performance criteria
and set compensation for such services. Any licensed physician may apply to be accepted to the medical staff of any of
our hospitals, but the hospital’s medical staff and the appropriate governing board of the hospital, in accordance with
established credentialing criteria, must approve acceptance to the staff. Members of the medical staffs of our hospitals
often also serve on the medical staffs of other hospitals and may terminate their affiliation with one of our hospitals at
any time. We continue to experience increasing competition to recruit and retain quality physicians, as well as increasing
costs to contract with hospital-based physicians.

Our facilities, like most health care facilities, have experienced challenges related to labor costs and turnover. Nurse
and medical support personnel availability and retention can present significant operating issues for health care providers
such as the Company, including capacity and growth constraints, reduced patient satisfaction, reduced physician
satisfaction, impact on services offered and increased costs, among others. To address these challenges, we implemented
several initiatives to improve retention, recruiting, compensation programs and productivity. While these efforts
moderated the impact of these challenges to the Company in 2023, there can be no assurance we will not experience
operating issues due to the costs and availability of nurse and medical support personnel in the future.

We may be required to enhance wages and benefits to recruit and retain nurses and other medical support personnel
and to utilize more expensive temporary or contract personnel. As a result, our labor costs could increase at rates in excess
of historical levels. We also depend on the available labor pool of employees in each of the markets in which we operate
to fill other necessary positions. If there is additional union organizing activity or a significant portion of our employee
base unionizes, our costs could increase. In addition, we operate in states that have adopted mandatory nurse-staffing
ratios or mandate staffing committees to develop staffing plans. If these states reduce mandatory nurse to patient ratios or
additional states in which we operate adopt mandatory nurse to patient ratios or other measures to regulate staffing, such
changes could significantly affect labor costs and have an adverse impact on revenues if we are required to limit patient
admissions in order to comply.

The inability to attract, retain and utilize sufficient, quality clinical and non-clinical personnel could impair our

capacity, ability to grow and results of operations.

30

Information about our Executive Officers

As of February 1, 2024, our executive officers were as follows:

Name
Samuel N. Hazen...............................................
Erol R. Akdamar ...............................................
Jennifer L. Berres ..............................................
Phillip G. Billington ..........................................
Jeff E. Cohen .....................................................
Michael S. Cuffe, M.D. .....................................
Jon M. Foster.....................................................
Richard A. Hammett .........................................
Michael A. Marks..............................................
Michael R. McAlevey .......................................
Timothy M. McManus. .....................................
Sammie S. Mosier .............................................
Deborah M. Reiner............................................
William B. Rutherford.......................................
Joseph A. Sowell, III .........................................
Kathryn A. Torres .............................................
Chad J. Wasserman ...........................................
Kathleen M. Whalen .........................................
Christopher F. Wyatt .........................................

Position(s)

Age
63 Chief Executive Officer and Director
56
President — American Group
53
Senior Vice President and Chief Human Resources Officer
56
Senior Vice President — Internal Audit Services
52
Senior Vice President — Government Relations
58 Executive Vice President and Chief Clinical Officer
62 Executive Vice President and Chief Operating Officer
54
54
60
52
49
62
60 Executive Vice President and Chief Financial Officer
67
Senior Vice President and Chief Development Officer
60
Senior Vice President — Payer Contracting and Alignment
51
Senior Vice President and Chief Information Officer
Senior Vice President and Chief Ethics and Compliance Officer
60
46
Senior Vice President and Controller

President — Atlantic Group
Senior Vice President — Finance
Senior Vice President and Chief Legal Officer
President — National Group
Senior Vice President and Chief Nurse Executive
Senior Vice President — Marketing and Communications

Samuel N. Hazen has served as Chief Executive Officer since January 2019 and was appointed as a director in
September 2018. From November 2016 through December 2018, Mr. Hazen served as the Company’s President and Chief
Operating Officer. Prior to that, he served as Chief Operating Officer of the Company from January 2015 to November
2016 and as President — Operations of the Company from 2011 to 2015. He also served as President — Western Group
from 2001 to 2011 and as Chief Financial Officer — Western Group of the Company from 1995 to 2001. Prior to that
time, Mr. Hazen served in various hospital, regional and division Chief Financial Officer positions with the Company,
Humana Inc. and Galen Health Care, Inc.

Erol R. Akdamar was appointed President – American Group effective January 1, 2023. Mr. Akdamar previously
served as President of the North Texas Division from October 2013 to December 2022. Prior to that, he served as CEO
of Medical City Dallas Hospital in Dallas, Texas from 2010 to 2013 and CEO of St. David’s South Austin Medical Center
in Austin, Texas from 2004 to 2010. Mr. Akdamar began his career with HCA in 1993 with Rapides Regional Medical
Center.

Jennifer L. Berres was appointed Senior Vice President and Chief Human Resources Officer effective November
1, 2019. Ms. Berres joined HCA in 1993 and served in various capacities, including as Vice President — Human
Resources from April 2013 through October 2019.

Phillip G. Billington was appointed Senior Vice President — Internal Audit Services effective January 1, 2019. Mr.
Billington previously served as Vice President — Corporate Internal Audit from June 2005 to December 2018. Prior to
joining HCA, Mr. Billington worked as a managing director for FTI Consulting, Inc., a director for KPMG LLP and was
a senior manager at Arthur Andersen LLP.

Jeff E. Cohen was appointed Senior Vice President — Government Relations effective October 1, 2019. Prior to
joining HCA, Mr. Cohen spent 20 years with the Federation of American Hospitals, most recently as Executive Vice
President of Public Affairs, where he managed all advocacy, public affairs and communications for the association.

Michael S. Cuffe, M.D. was appointed Executive Vice President and Chief Clinical Officer effective January 1,
2022. He previously served as President — Physician Services Group from October 2011 through December 2021. From
October 2011 to January 2015, Dr. Cuffe also served as a Vice President of the Company. Prior to that time, Dr. Cuffe
served Duke University Health System as Vice President for Ambulatory Services and Chief Medical Officer from March
2011 to October 2011 and Vice President Medical Affairs from June 2005 to March 2011. He also served Duke University
School of Medicine as Vice Dean for Medical Affairs from June 2008 to March 2011, Deputy Chair of the Department
of Medicine from August 2009 to August 2010 and Associate Professor of Medicine from March 2005 to October 2011.

31

Prior that time, Dr. Cuffe served in various leadership roles with the Duke Clinical Research Institute, Duke University
Medical Center and Duke University School of Medicine.

Jon M. Foster was appointed Executive Vice President and Chief Operating Officer effective January 1, 2023. Prior
to that time, he served as President — American Group from January 2013 to December 2022, President — Southwest
Group from February 2011 to January 2013 and Division President for the Central and West Texas Division from January
2006 to February 2011. Mr. Foster joined HCA in March 2001 as President and CEO of St. David’s HealthCare in Austin,
Texas and served in that position until February 2011. Prior to joining the Company, Mr. Foster served in various
executive capacities within the Baptist Health System in Knoxville, Tennessee and The Methodist Hospital System in
Houston, Texas.

Richard A. Hammett was appointed President — Atlantic Group effective January 1, 2023. Mr. Hammett previously
served as President of the North Florida Division from June 2020 to December 2022. Prior to that, he served as President
and CEO of Swedish Medical Center in Englewood, Colorado from 2015 to 2020. Prior to that time, Mr. Hammett held
numerous leadership positions within HCA Healthcare, including serving as president and chief executive officer of The
Medical Center of Aurora in Aurora, Colorado and chief operating officer and interim CEO of St. David’s Medical Center
in Austin, Texas.

Michael A. Marks was appointed Senior Vice President — Finance effective January 1, 2023. Mr. Marks previously
served as Vice President — Financial Operations Support from March 2021 to December 2022. Prior to that time, he
served as CFO of the National Group from December 2008 to February 2021 and CFO of the West Florida Division from
January 2006 to November 2008. Mr. Marks joined HCA Healthcare in 1996.

Michael R. McAlevey was appointed Senior Vice President and Chief Legal Officer in January 2022. Prior to joining
HCA, Mr. McAlevey served in senior legal and executive roles at General Electric, most recently as Vice President,
General Counsel and Business Development Leader for GE Healthcare since 2018. Prior to that, he served as General
Counsel and Business Development Leader for GE Aviation from 2011 to 2018 and Chief Corporate, Securities and
Finance Counsel for GE from 2003 to 2011. Before joining GE, Mr. McAlevey served as Deputy Director of the United
States Securities and Exchange Commission’s Division of Corporation Finance from 1998 to 2002.

Timothy M. McManus was appointed President — National Group effective January 1, 2023. Mr. McManus
previously served as President of the Capital Division from August 2016 to December 2022. Mr. McManus joined HCA
Healthcare in 2007 and served as CEO of Chippenham and Johnston-Willis Medical Center in Richmond, Virginia from
June 2012 to July 2016, CEO of Reston Medical Center in Reston, Virginia from June 2010 to June 2012 and CEO of
Garden Park Medical Center in Gulfport, Mississippi from September 2007 to May 2010.

Sammie S. Mosier was appointed Senior Vice President and Chief Nurse Executive effective December 1, 2021.
Dr. Mosier joined HCA in 1996 as a medical-surgical bedside nurse at Frankfort Regional Medical Center and has held
progressive leadership roles, including as Vice President and Assistant Chief Nursing Executive — Clinical Services
Group from 2019 to 2021.

Deborah M. Reiner was appointed Senior Vice President — Marketing and Communications in October 2017. Prior
to that time, she served as Vice President of Marketing and Customer Relationship Management from August 2017 to
October 2017 and Vice President of Customer Relationship Management from January 2012 to August 2017. Ms. Reiner
joined the Company in 2000 and served in various roles with the Company’s Mountain Division from 2000 to 2012.

William B. Rutherford has served as Executive Vice President and Chief Financial Officer since January 2014. Mr.
Rutherford previously served as Chief Operating Officer of the Company’s Clinical and Physician Services Group from
January 2011 to January 2014 and Chief Financial Officer of the Company’s Outpatient Services Group from November
2008 to January 2011. Prior to that time, Mr. Rutherford was employed by Summit Consulting Group of Tennessee from
July 2007 to November 2008 and was Chief Operating Officer of Psychiatric Solutions, Inc. from March 2006 to June
2007. Mr. Rutherford also previously served in various positions with the Company from 1986 to 2005, including Chief
Financial Officer of what was then the Company’s Eastern Group, Director of Internal Audit and Director of Operations
Support.

Joseph A. Sowell, III was appointed as Senior Vice President and Chief Development Officer in December 2009.
From 1987 to 1996 and again from 1999 to 2009, Mr. Sowell was a partner at the law firm of Waller Lansden Dortch &
Davis where he specialized in the areas of health care law, mergers and acquisitions, joint ventures, private equity
financing, tax law and general corporate law. He also co-managed the firm’s corporate and commercial transactions
practice. From 1996 to 1999, Mr. Sowell served as the head of development, and later as the Chief Operating Officer of
Arcon Healthcare.

32

Kathryn A. Torres was appointed Senior Vice President — Payer Contracting and Alignment (formerly Senior Vice
President — Employer and Payer Engagement) in July 2016. Ms. Torres joined HCA in 1993 and served in various
capacities, including as Vice President of Employer and Payer Engagement and Vice President — Strategy.

Chad J. Wasserman was appointed Senior Vice President and Chief Information Officer effective February 1, 2024.
Prior to that time, he served as Senior Vice President and Chief Operating Officer – Information Technology Group since
July 2023. Mr. Wasserman joined HCA Healthcare in 1996 and has served in a variety of other leadership positions,
including Vice President – IT&S Service Lines & Corporate Solutions from 2022 to 2023, Vice President of Digital
Patient Experience from 2020 to 2022, Vice President – IT&S Infrastructure Services & Operations from 2017 to 2020
and Chief Information Officer of Parallon Business Performance Group from 2013 to 2017.

Kathleen M. Whalen was appointed Senior Vice President and Chief Ethics and Compliance Officer effective
January 1, 2019. Prior to that time, Ms. Whalen served as Vice President — Ethics and Compliance from August 2013
through December 2018 and Assistant Vice President — Ethics and Compliance Program Development from March 2000
through July 2013. Prior to joining HCA in January 1998, Ms. Whalen served as Associate Counsel to President Clinton
with responsibility for the White House’s ethics program. She began her government service in the ethics division of the
General Counsel’s Office at the U.S. Commerce Department. Prior to that, she practiced labor and employment law in
Dayton, Ohio.

Christopher F. Wyatt was appointed Senior Vice President and Controller in April 2016. Prior to that time, Mr.
Wyatt served the Company as Vice President and Chief Financial Officer — IT&S from January 2013 to April 2016 and
Chief Financial Officer — Clinical Services Group from October 2010 until January 2013. From 2000 to 2010, Mr. Wyatt
served in various capacities with Ernst & Young LLP.

Item 1A. Risk Factors

If any of the events discussed in the following risk factors were to occur, our business, financial position, results of
operations, cash flows or prospects could be materially, adversely affected. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also affect us. Our business is subject to the following
material risks and uncertainties.

Risks related to our indebtedness:

We have significant indebtedness and may incur further indebtedness in the future. Our indebtedness 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
obligations.

As of December 31, 2023, our total indebtedness was $39.593 billion. As of December 31, 2023, we had availability
of $3.487 billion under our senior secured cash flow credit facility and $2.620 billion under our senior secured asset-based
revolving credit facility, after giving effect to letters of credit and borrowing base limitations. Our indebtedness could
have important consequences, including:

•

•

•

•

•

•

increasing our vulnerability to downturns or adverse changes in general economic, industry or competitive
conditions and adverse changes in government regulations;

requiring a 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;

exposing us to the risk of increased interest rates on our existing borrowings that are at variable rates of
interest or refinancing our debt in a rising or high rate environment;

limiting our ability to make strategic acquisitions or causing us to make nonstrategic divestitures;

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

limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage
compared to our competitors who have less debt.

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

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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 successful.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition
and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial,
business and other factors beyond our control. We cannot guarantee we will maintain a level of cash flows from operating
activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

In addition, we conduct our operations through our subsidiaries. Accordingly, repayment of our indebtedness is
dependent on the generation of cash flows by our subsidiaries and their ability to make such cash available to us by
dividend, debt repayment or otherwise. Our subsidiaries may not be able to, or may not be permitted to, make distributions
to enable us to make payments in respect of our indebtedness. Each subsidiary is a distinct legal entity, and, under certain
circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

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

If our cash flows and capital resources are insufficient to fund our debt service obligations or we are unable to
refinance our indebtedness, we may be forced to reduce or delay investments and capital expenditures, or to sell assets,
seek additional capital or restructure our indebtedness. These alternative measures may not be successful and may not
permit us to meet our scheduled debt service obligations. If our operating results and available cash are insufficient to
meet our debt service obligations, we could face substantial liquidity problems and might be required to dispose of
material assets or operations to meet our debt service and other obligations. We may not be able to consummate those
dispositions, or the proceeds from the dispositions may not be adequate to meet any debt service obligations then due.

Our debt agreements contain restrictions that limit our flexibility in operating our business.

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

•

•

incur additional indebtedness or issue certain preferred shares;

pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted
payments;

• make certain investments;

•

•

•

•

sell or transfer assets;

create liens;

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and

enter into certain transactions with our affiliates.

Under our asset-based revolving credit facility, borrowing availability is subject to a borrowing base of 85% of
eligible accounts receivable less customary reserves, with any reduction in the borrowing base that results in the borrowing
base falling below the amount committed by the lenders thereunder commensurately reducing our ability to access this
facility as a source of liquidity. In addition, under the asset-based revolving credit facility, when (and for as long as) the
combined availability under our asset-based revolving credit facility and the revolving facility under our senior secured
cash flow credit facility is less than a specified amount for a certain period of time or, if a payment or bankruptcy event
of default has occurred and is continuing, funds deposited into any of our depository accounts will be transferred on a
daily basis into a blocked account with the administrative agent and applied to prepay loans under the asset-based
revolving credit facility and to collateralize letters of credit issued thereunder.

Under our senior secured credit facilities, we are required to satisfy and maintain specified financial ratios. Our
ability to meet those financial ratios may be affected by global economic and financial conditions or other events beyond
our control, and there can be no assurance we will continue to meet those ratios. A breach of this or any other covenant
could result in a default under both the cash flow credit facility and the asset-based revolving credit facility. Upon the
occurrence of an event of default under these senior secured credit facilities, the lenders thereunder could elect to declare

34

all amounts outstanding under the senior secured credit facilities to be immediately due and payable and terminate all
commitments to extend further credit, which would also result in an event of default under a significant portion of our
other outstanding indebtedness. If we were unable to repay those amounts, the lenders under the senior secured credit
facilities could proceed against the collateral granted to them to secure such indebtedness. We have pledged a significant
portion of our assets under our senior secured credit facilities. If any of the lenders under the senior secured credit facilities
accelerate the repayment of borrowings, there can be no assurance there will be sufficient assets to repay the senior secured
credit facilities and our other indebtedness.

Risks related to human capital:

Our results of operations may be adversely affected by competition for staffing, the shortage of experienced nurses
and other health care professionals and labor union activity.

Our operations are dependent on the efforts, abilities and experience of our management and medical personnel,
such as physicians, nurses, pharmacists and lab technicians. We compete with other health care providers in recruiting
and retaining qualified management and personnel responsible for the daily operations of each of our hospitals and other
facilities, including nurses and other nonphysician health care professionals. In some markets, the availability of nurses
and other medical support personnel has been a significant operating issue to health care providers, including at certain
of our facilities. The impact of labor shortages across the health care industry may result in other health care facilities,
such as nursing homes, limiting admissions, which may constrain our ability to discharge patients to such facilities and
further exacerbate the demand on our resources, supplies and staffing.

Economic conditions, increased inflationary pressure and COVID-19 have exacerbated workforce competition,
shortages and capacity constraints. We may be required to increase wages and benefits to recruit and retain nurses and
other medical support personnel and to hire more expensive temporary or contract personnel. As a result of labor
shortages, competition and inflationary pressures, our labor costs could increase and our capacity could be negatively
impacted. We also depend on the available labor pool of employees in each of the markets in which we operate to fill
other necessary positions. If there is continued competition for these employees or additional union organizing activity or
a significant portion of our employee base unionizes, it is possible our labor costs could increase.

When negotiating collective bargaining agreements with unions, whether such agreements are renewals or first
contracts, we have experienced, and could experience in the future, labor strikes. Our continued operation during any
strikes could result in an increase to our labor costs. In addition, upon the expiration of existing collective bargaining
agreements, we may not reach new agreements without union action, and any such new agreements may not be on terms
satisfactory to us. The unavailability of staff, or the inability of the Company to control labor costs, could have a material,
adverse effect on our capacity, growth prospects and results of operations.

In addition, federal and state laws and regulations may increase our costs of maintaining qualified nurses and other
medical support personnel. We operate in states that have adopted mandatory nurse-staffing ratios or mandate staffing
committees to develop staffing plans. If these states reduce, or if additional states in which we operate adopt, mandatory
nurse-staffing ratios or related measures, such changes could significantly affect labor costs and have an adverse impact
on revenues if we are required to limit admissions or incur other costs in order to comply. If our labor costs continue to
increase, we may not be able to offset these increased costs as a significant percentage of our revenues consists of fixed,
prospective payments.

Our performance depends on our ability to recruit and retain quality physicians.

The success of our hospitals depends in part on the number and quality of the physicians on the medical staffs of
our hospitals, the admission and utilization practices of those physicians, maintaining good relations with those physicians
and controlling costs related to their employment or affiliation with our hospitals. Although we employ some physicians,
physicians are often not employees of the hospitals at which they practice and instead affiliate with us and use our facilities
as an extension of their practices. In many of the markets we serve, physicians may have admitting privileges at other
hospitals in addition to our hospitals. We continue to face increasing competition to recruit and retain quality physicians,
as well as increasing cost to contract with hospital-based physicians. Such physicians may terminate their affiliation with
our hospitals at any time. We anticipate facing increased challenges in this area as the physician population reaches
retirement age, especially if there is a shortage of physicians willing and able to provide comparable services. If we are
unable to recruit and retain quality physicians to affiliate with our hospitals, enter into contractual arrangements with
hospital-based physicians, or provide adequate support personnel or technologically advanced equipment and hospital
facilities that meet the needs of those physicians and their patients, our admissions may decrease, our operating
performance may decline, and our capacity and growth prospects may be materially adversely affected.

35

We may be unable to attract, hire and retain a highly qualified and diverse workforce, including key management.

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

Risks related to technology, data privacy and cybersecurity:

Cybersecurity incidents or other forms of data breaches could result in the compromise of our facilities, confidential
data or critical data systems. A cybersecurity incident or other form of data breach could also give rise to potential
harm to patients; remediation and other expenses; and exposure to liability under HIPAA, consumer protection laws,
common law theories or other laws. Such incidents could subject us to litigation and foreign, federal and state
governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

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

Despite our efforts to mitigate our exposure to cyberattack, even an advanced internal control environment is
vulnerable to compromise. In July 2023, we disclosed a security incident in which an unauthorized party accessed
information at an external storage location exclusively used to automate the formatting of email messages. Approximately
11 million patients were affected by the security incident. In response to this security incident, we reinforced our
cybersecurity systems, protocols and monitoring procedures, particularly focusing on data interfaces with third party
storage locations. We continue to be the target of attempted cybersecurity and other threats that could have a security
impact, including those by third parties to access, misappropriate, corrupt or manipulate our information or disrupt our
operations. We expect to continue to experience an increase in cybersecurity threats in the future, as the volume and
intensity of cyberattacks on hospitals, health systems and other health care entities continue to increase. Threats from
malicious persons and groups, new vulnerabilities and advanced new attacks against our, or our vendors’, information
systems and devices create risk of cybersecurity incidents, including ransomware, malware and phishing incidents, in
which third parties attempt to fraudulently induce our employees or our vendors’ employees into disclosing usernames,
passwords or other sensitive information, which can in turn be used for unauthorized access to our or our vendors’ systems.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks by
making cyberattacks more difficult to detect, contain or mitigate. We have seen, and believe we will continue to see,
widespread vulnerabilities that could affect our or other third parties’ data or systems. Mitigation and remediation
recommendations continue to evolve, and addressing this and other critical vulnerabilities pertaining to widely used
systems, platforms and infrastructure is a priority for us. Internal access management failures could result in the
compromise or unauthorized exposure of confidential data. Moreover, hardware, software or applications we use may
have inherent vulnerabilities or defects of design, manufacture or operations or could be inadvertently or intentionally
implemented or used in a manner that could compromise information security. There can be no assurance that we or our
vendors and other third parties will not be subject to additional cybersecurity threats and incidents that bypass our or their
security measures, impact the integrity, availability or privacy of personal health information or other data subject to
privacy laws or disrupt our or their information systems, devices or business, including our ability to provide various
health care services. In such an event, we may incur substantial costs, including but not limited to, costs associated with
remediating the effects of the cybersecurity incident, costs for security measures to guard against similar future incidents
and costs to recover data. Further, consumer confidence in the integrity and security of personal information and critical
operations data in the health care industry generally could be shaken to the extent there are successful cyberattacks at
other health care services companies, which could have a material, adverse effect on our business, financial position or
results of operations.

Cybersecurity, privacy, physical security and the continued development and enhancement of our controls,
processes and practices designed to protect our facilities, information systems and data from attack, damage or
unauthorized access remain a priority for us. As cyber threats continue to evolve, along with their increased volume and
sophistication, we may be required to expend significant additional resources to continue to modify or enhance our

36

protective measures or to investigate and remediate any cybersecurity vulnerabilities or incidents. Although to date no
cyberattack or other information or security breach, including those experienced by us in 2023, has resulted in material
losses or other material consequences to us, there can be no assurance that our controls and procedures in place to monitor
and mitigate the risks of cyber threats, including the remediation of critical information security and software
vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the future.
Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such insurance
coverage may be insufficient to cover our losses in excess of what we self-insure, or all types of claims that may arise.
The occurrence of any of these events could result in (i) harm to patients; (ii) business interruptions and delays; (iii) the
loss, misappropriation, corruption or unauthorized access of data; (iv) litigation and potential liability under privacy,
security, breach notification and consumer protection laws, common law theories or other applicable laws; (v) reputational
damage; and (vi) foreign, federal and state governmental inquiries, any of which could have a material, adverse effect on
our financial position and results of operations and harm our business reputation.

Our operations could be impaired by a failure of our information systems.

The performance of our information systems is critical to our business operations. In addition to our shared services

initiatives, our information systems are essential to a number of critical areas of our operations, including:

•

•

•

•

•

accounting and financial reporting;

billing and collecting accounts;

coding and compliance;

admissions, provision of care and care coordination;

clinical systems and medical devices;

• medical records and document storage;

•

•

inventory management;

negotiating, pricing and administering managed care contracts and supply contracts; and

• monitoring quality of care and collecting data on quality measures necessary for full Medicare payment

updates.

Information systems may be vulnerable to damage from a variety of sources, including telecommunications or
network failures, human acts such as inadvertent or intentional misuse by employees, natural disasters and cyberattacks,
including ransomware and data theft, such as the data security incident we disclosed in July 2023. Moreover, we rely on
various third-party technology platforms, which are increasingly important to our business and continue to grow in
complexity and scope. Failure to adequately manage implementations of new technology, updates or enhancements of
such platforms or interfaces between platforms could place us at a competitive disadvantage, disrupt our operations, and
have a material, adverse impact on our business and results of operations.

We have taken precautionary measures to prevent unanticipated problems that could affect our information systems.
Nevertheless, we or our vendors and other third parties that we rely upon may experience system failures and disruptions.
The occurrence of any system failure could result in interruptions, delays, the loss or corruption of data and cessations or
interruptions in the availability of systems, any of which could have a material, adverse effect on our financial position
and results of operations and harm our business reputation.

Health care technology initiatives, particularly those related to sharing patient data and interoperability, may
adversely affect our operations.

The federal government is working to promote the adoption of health information technology and the promotion of
nationwide health information exchange to improve health care. For example, HHS incentivizes the adoption and
meaningful use of certified EHR technology through its Promoting Interoperability Programs. Eligible hospitals and
eligible professionals, including our hospitals and employed professionals, are subject to reduced payments from
Medicare if they fail to demonstrate meaningful use of certified EHR technology. As these technologies have become
widespread, the focus has shifted to increasing patient access to health care data and interoperability. The 21st Century
Cures Act and its implementing regulations promote information sharing by prohibiting information blocking by health
care providers and certain other entities. Information blocking is defined as engaging in activities likely to interfere with
the access, exchange or use of electronic health information, except as required by law or specified by HHS as a reasonable
and necessary activity. Under a rule proposed by HHS in November 2023, a hospital found to have engaged in information
blocking would not qualify as a “meaningful electronic health record user” under the Medicare Promoting Interoperability
Program and as a result would lose 75% of the annual market basket increase it would otherwise receive.

37

Current and future initiatives related to health care technology (including artificial intelligence and other predictive
algorithms), data sharing and interoperability may require changes to our operations, impose new and complex
compliance obligations and require investments in infrastructure. For example, HHS finalized a rule in December 2023
imposing transparency requirements for artificial intelligence and other predictive algorithms that are part of certified
health information technology. We may be subject to financial penalties or other disincentives or experience reputational
damage for failure to comply with applicable laws and regulations. It is difficult to predict how these initiatives will affect
our relationships with providers and vendors, participation in health care information exchanges or networks, the
exchange of patient data and patient engagement.

Machine learning and artificial intelligence are driving innovations in technology in the health care industry, which
presents certain risks. As currently employed, our physicians use generative AI to assist with the taking of medical notes
regarding our patients. Should the use of generative AI fail to operate as anticipated or not perform as specified, patient
care may be affected, legal claims may be asserted against us and our reputation may be harmed.

We may not be adequately reimbursed by third-party payers for services involving new technology.

As health care technology continues to advance, the price of purchasing new technology has significantly increased
for providers. Some payers have not adapted their payment systems to adequately cover the cost of new technology used
to treat patients. If reimbursement from third-party payers for services involving new technology does not sufficiently
cover our purchasing costs, we may be unable to acquire new technology. Even without sufficient third-party
reimbursement, we may acquire or utilize new technology in order to treat our patients. In either case, our results of
operations and financial position could be adversely affected.

Risks related to public health crises:

COVID-19 has affected, and may continue to affect, our operations. In addition, the emergence and effects related to
a potential future pandemic, epidemic or outbreak of an infectious disease could adversely affect our business and
operations.

As a front-line provider of health care services, we have been and continue to be affected by the health and economic
effects of COVID-19. COVID-19 continues to evolve, and we may not be able to predict or effectively respond to future
developments.

If public health conditions related to COVID-19 significantly worsen, any such developments could materially and
adversely affect our business, results of operations, financial position and cash flows. The ongoing impact of COVID-19
on our business will depend on, among other factors, the duration and severity of any severe or widespread outbreaks of
COVID-19; the impact of COVID-19 on economic conditions; the volume of canceled or rescheduled procedures at our
facilities; the volume of COVID-19 patients cared for across our health systems; the availability, acceptance of, and need
for effective vaccines and medical treatments; the spread of potentially more contagious and/or virulent forms of the virus;
and the impact of government actions on the health care industry and broader economy.

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

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Risks related to governmental regulation and other legal matters:

Our business and results of operations may be adversely affected by health care reform efforts. We are unable to
predict whether, what, and when additional health reform measures will be adopted or implemented, and the effects
and ultimate impact of any such measures are uncertain and may adversely affect our business and results of
operations.

In recent years, the U.S. health care industry has undergone significant changes at the federal and state levels, many
of which have been aimed at reducing costs and government spending and increasing access to health insurance. The most
prominent of these legislative reform efforts is the Affordable Care Act, which affects how health care services are
covered, delivered and reimbursed, and expanded health insurance coverage through a combination of public program
expansion and private sector health insurance reforms. The Affordable Care Act has been, and continues to be, subject to
legislative and regulatory changes and court challenges. For example, effective January 1, 2019, the penalty associated
with the individual mandate to maintain health insurance was effectively eliminated. However, some states have imposed
individual health insurance mandates, and other states have explored or offer public health insurance options. To increase
access to health insurance during the COVID-19 pandemic, the ARPA enhanced subsidies for individuals eligible to
purchase coverage through the Exchanges. Subsequent legislation extended these enhanced subsidies through 2025. These
and other changes and initiatives may impact the number of individuals that elect to obtain public or private health
insurance or the scope of such coverage, if purchased.

There is uncertainty regarding whether, when and how the Affordable Care Act may be further changed, and how
the law will be interpreted. Changes by Congress or government agencies could eliminate or alter provisions beneficial
to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business.

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. Some members of Congress have proposed
measures that would expand government-sponsored coverage, including 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”). CMS administrators may grant states additional flexibility in the administration of state
Medicaid programs and make changes to Medicaid payment models. Other recent health reform initiatives and proposals
at the federal and state levels include those focused on price transparency and out-of-network charges, which may impact
prices, our relationships with patients, payers or ancillary providers (such as anesthesiologists, radiologists and
pathologists) and our competitive position. For example, among other consumer protections, the No Surprises Act imposes
various requirements on providers and health plans intended to prevent “surprise” medical bills. Some states are
considering or have imposed rate-setting measures, including limits on hospital rates, or site-neutral pricing requirements.
Trends toward transparency and value-based pricing may impact our competitive position and patient volumes. For
example, the CMS Care Compare website makes publicly available certain data on performance of hospitals and other
Medicare-certified providers on quality measures and patient satisfaction, and our patient volumes could decline if any of
our facilities achieve poor results. Further, Medicare reimbursement for hospitals is adjusted based on quality and
efficiency measures. Other industry participants, such as private payers and large employer groups and their affiliates,
may also introduce financial or delivery system reforms. We are unable to predict the nature and success of such
initiatives. Health care reform initiatives may have an adverse effect on our business, results of operations, cash flow,
capital resources and liquidity.

Changes in government health care programs may adversely affect our revenues.

A significant portion of our patient volume is derived from government health care programs, principally Medicare
and Medicaid. Specifically, we derived 44.1% of our revenues from the Medicare and Medicaid programs in 2023.
Changes in government health care programs, including as a result of health reform efforts, may reduce the reimbursement
we receive and could adversely affect our business and results of operations. In addition, in some cases, private third-
party payers rely on all or portions of Medicare payment systems to determine payment rates. Changes to government
health care programs that reduce payments under these programs may negatively impact payments from private third-
party payers.

In recent years, legislative and regulatory changes have resulted in limitations on and, in some cases, reductions in
levels of payments to health care providers for certain services under the Medicare program. For example, Congress
established automatic spending reductions, referred to as sequestration, under the BCA, resulting in a 2% reduction in
Medicare payments that extends through the first seven months of federal fiscal year 2032. In addition, as a result of the
ARPA, an additional Medicare payment reduction of up to 4% was required to take effect in January 2022; however,
Congress has delayed implementation of this reduction until 2025. These reductions are in addition to reductions mandated
by other laws. It is difficult to predict whether, when or what other deficit reduction initiatives may be proposed by
Congress, but future legislation may include additional Medicare spending reductions.

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From time to time, CMS revises the reimbursement systems used to reimburse health care providers, including
changes to the inpatient hospital MS-DRG system and other payment systems, which may result in reduced Medicare
payments. For example, under a site neutrality policy, clinic visit services provided by off-campus provider-based
departments that were formerly paid under the outpatient PPS are now paid under the Physician Fee Schedule. Further,
to address past changes to the 340B Drug Pricing Program that were invalidated by the U.S. Supreme Court, CMS
finalized payment reductions under the outpatient PPS. Payment rates were reduced for non-drug services in calendar
year 2023, and additional reductions to payments for non-drug item and services will take effect in calendar year 2026
and continue for approximately 16 years. As another example, CMS recently finalized changes to the Medicaid fraction
of the Medicare DSH payment formula that will result in lower DSH payments for many hospitals. These payment policies
and future changes to payment policies may adversely impact our results of operations, and any potential legal challenges
to changes may take years to resolve. Payment policies for different types of providers and for various items and services
continue to evolve. Congress and/or CMS may implement further changes to reimbursement for items or services that
result in payment reductions for other items or services or that otherwise affect our business and operations.

Because most states must operate with balanced budgets and the Medicaid program is often a state’s largest
program, some states have enacted or may consider enacting legislation designed to reduce their Medicaid expenditures.
Further, many states have also adopted, or are considering, legislation designed to reduce coverage, enroll Medicaid
recipients in managed care programs, and/or impose additional taxes on hospitals to help finance or expand the states’
Medicaid systems. Periods of economic weakness may increase the budgetary pressures on many states, and these
budgetary pressures may result in decreased spending, or decreased spending growth, for Medicaid programs and the
Children’s Health Insurance Program in many states. Some states that provide Medicaid supplemental payments are
reviewing these programs or have filed requests with CMS to replace these programs, and CMS has performed and
continues to perform compliance reviews of some states’ programs and is considering changes to the requirements for
such programs, which could result in Medicaid supplemental payments being reduced or eliminated. We may also be
impacted by SDP arrangements, which allow states to direct certain Medicaid managed plan expenditures, particularly as
funding may be diverted from other payment programs, and we may not satisfy applicable criteria when payments are
directed to a specific subset of providers. Further, legislation and administrative actions at the federal level may impact
the funding for, or structure of, the Medicaid program, and may shape the administration of the Medicaid program at the
state level. Federal Medicaid policies are subject to change, including as a result of changes in the presidential
administration. For example, where states had previously been permitted to condition Medicaid enrollment on work or
other community engagement, the approvals of waivers permitting these conditions have been rescinded. However, a
federal court is permitting Georgia to impose work and community engagement requirements under a Medicaid
demonstration program that launched in mid-2023. Some members of Congress are also reexamining block grant funding
structures.

Current or future health care reform and deficit reduction efforts, changes in laws or regulations regarding
government health care programs, other changes in the administration of government health care programs and changes
by private third-party payers in response to health care reform and other changes to government health care programs
could have a material, adverse effect on our financial position and results of operations.

If we fail to comply with extensive laws and government regulations, we could suffer penalties or be required to make
significant changes to our operations.

As a participant in the health care industry, we are required to comply with extensive and complex laws and

regulations at the federal, state and local government levels relating to, among other things:

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billing and coding for services and properly handling overpayments;

appropriateness and classification of level and setting of care provided, including proper classification of
admissions, observation services and outpatient care;

certifications of patient eligibility for home health and hospice services;

relationships with physicians and other referral sources and referral recipients;

necessity and adequacy of medical care;

quality of medical equipment and services;

qualifications of medical and support personnel;

the confidentiality, maintenance, interoperability, exchange, data breach, identity theft and security of
health-related and personal information and medical records;

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the development and use of artificial intelligence and other predictive algorithms, including those used in
clinical decision support tools;

screening, stabilization and transfer of individuals who have emergency medical conditions;

restrictions on the provision of medical care, including with respect to reproductive care;

licensure, certification and enrollment with government programs;

the distribution, maintenance and dispensing of pharmaceuticals and controlled substances;

debt collection, limits or prohibitions on balance billing and billing for out of network services;

communications with patients and consumers;

preparing and filing of cost reports;

operating policies and procedures;

activities regarding competitors;

the addition of facilities and services; and

environmental protection.

Among these laws are the federal Anti-kickback Statute, EKRA, the federal Stark Law, the FCA, the No Surprises
Act and similar state laws. We have a variety of financial relationships with physicians and others who either refer or
influence the referral of patients to our hospitals, other health care facilities, laboratories and employed physicians or who
are the recipients of referrals, and these laws govern those relationships. The OIG has enacted safe harbor regulations that
outline practices deemed protected from prosecution under the Anti-kickback Statute. While we endeavor to comply with
the applicable safe harbors, certain of our current arrangements, including joint ventures and financial relationships with
physicians and other referral sources and persons and entities to which we refer patients, do not qualify for safe harbor
protection. Failure to qualify for a safe harbor does not mean the arrangement necessarily violates the Anti-kickback
Statute but may subject the arrangement to greater scrutiny. However, we cannot offer assurance that practices outside of
a safe harbor will not be found to violate the Anti-kickback Statute. Allegations of violations of the Anti-kickback Statute
may be brought under the federal Civil Monetary Penalty Law, which requires a lower burden of proof than other fraud
and abuse laws, including the Anti-kickback Statute.

Our financial relationships with referring physicians and their immediate family members must comply with the
Stark Law by meeting an exception. We attempt to structure our relationships to meet an exception to the Stark Law, but
the regulations implementing the exceptions are detailed and complex and are subject to continuing legal and regulatory
change. Thus, we cannot provide assurance that every relationship complies fully with the Stark Law. Unlike the Anti-
kickback Statute, failure to meet an exception under the Stark Law results in a violation of the Stark Law, even if such
violation is technical in nature.

Additionally, if we violate the Anti-kickback Statute or Stark Law, or if we improperly bill for our services, we
may be found to violate the FCA, either under a suit brought by the government or by a private person under a qui tam,
or “whistleblower,” suit. See Item 1, “Business — Regulation and Other Factors.”

We develop software programs utilizing machine learning/artificial intelligence for use within our network to
improve care and may also use similar technologies in other capacities. Jurisdictions worldwide are proposing laws and
regulations on the use of artificial intelligence and machine learning applications and tools, particularly on the use of
artificial intelligence to facilitate health care, employment, or hiring decisions. For example, in 2023, HHS finalized
transparency requirements for artificial intelligence and other predictive algorithms used in certified health information
technology, such as decision support interventions. In some cases, software can be considered a medical device under the
federal Food, Drug, and Cosmetic Act (“FDCA”). Medical devices are subject to extensive regulation by the Food and
Drug Administration (“FDA”) under the FDCA. In September 2022, FDA issued non-binding final guidance that
describes the types of clinical decision support software that FDA will regulate as a medical device, potentially including
software programs that were not previously treated as medical devices. Application of the new guidance may result in our
current and/or future software programs providing clinical decision support being subject to FDA regulation. If FDA
determines that any of our software programs are medical devices under the FDCA, the distribution and/or use of those
software programs may require premarket approval or clearance, and we may be required to cease distribution and/or use
of such programs until we obtain any required premarket approval or clearance, which could adversely affect our

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operations. Failure to seek FDA approval or clearance or noncompliance with other applicable FDA requirements could
adversely affect our business, financial condition or results of operations.

We also operate health care facilities in the United Kingdom and have operations and commercial relationships
with companies in other foreign jurisdictions and, as a result, are subject to certain U.S. and foreign laws applicable to
businesses generally, including anti-corruption and anti-bribery laws. The Foreign Corrupt Practices Act regulates U.S.
companies in their dealings with foreign officials, prohibiting bribes and similar practices, and requires that they maintain
records that fairly and accurately reflect transactions and appropriate internal accounting controls. In addition, the United
Kingdom Bribery Act has wide jurisdiction over certain activities occurring within the United Kingdom.

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

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

We engage in consumer debt collection for HCA-affiliated hospitals and certain non-affiliated hospitals. We also
engage in credit reporting for certain non-affiliated hospitals. The federal Fair Debt Collection Practices Act, the Fair
Credit Reporting Act and the TCPA restrict the methods that companies may use to contact and seek payment from
consumer debtors regarding past due accounts and to report to consumer reporting agencies on the status of those accounts.
Many states impose additional limitations or requirements on debt collection and credit reporting practices, and some of
those requirements are more stringent than the federal requirements.

Finally, we are subject to various federal, state and local statutes and ordinances regulating the discharge of
materials into the environment. For example, our health care operations generate medical waste, such as pharmaceuticals,
biological materials and disposable medical instruments that must be handled, stored, transported, treated and disposed
of in compliance with federal, state and local environmental laws and regulations. Environmental regulations also may
apply when we build new facilities or renovate existing facilities. If we are found not to be in compliance with such laws
and regulations, we may be liable for significant investigation and clean-up costs or be subject to enforcement actions by
governmental authorities or lawsuits by private plaintiffs. Moreover, any changes in the environmental regulatory
framework (including legislative or regulatory efforts designed to address climate change) could have a material, adverse
effect on our business.

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If we fail to comply with these or other applicable laws and regulations, which are subject to change, we could be
subject to liabilities, including civil penalties, money damages, lapses in reimbursement, the loss of our licenses to operate
one or more facilities, exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal
and state health care programs, civil lawsuits and criminal penalties. In addition, different interpretations or enforcement
of, or amendments to, these and other laws and regulations in the future could subject our current or past practices to
allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel,
services, capital expenditure programs and operating expenses. The costs of compliance with, and the other burdens
imposed by, these and other laws or regulatory actions may increase our operational costs, result in interruptions or delays
in the availability of systems and/or result in a patient volume decline. We may also face audits or investigations by one
or more domestic or foreign government agencies relating to our compliance with these regulations. An adverse outcome
under any such investigation or audit, a determination that we have violated these or other laws or a public announcement
that we are being investigated for possible violations could result in liability, could result in negative publicity and could
adversely affect our business, financial condition, results of operations or prospects.

State efforts to regulate the construction or expansion of health care facilities could impair our ability to operate and
expand our operations.

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

We may incur additional tax liabilities.

We are subject to tax in the United States as well as those states and foreign jurisdictions in which we do business.
Changes in tax laws, including increases in tax rates, or interpretations of tax laws by taxing authorities or other standard
setting bodies could increase our tax obligations and have a material, adverse impact on our results of operations.

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

We have been and could become the subject of government investigations, claims and litigation, as well as
governmental and commercial payer audits.

Health care companies are subject to numerous investigations by various government agencies. Further, under the
FCA, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims
for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state
whistleblower and false claims provisions. Certain of our individual facilities and/or affiliates have received, and other
facilities and/or affiliates may receive, government inquiries from, and may be subject to investigation by, federal and
state agencies. Depending on whether the underlying conduct in these or future inquiries or investigations could be
considered systemic, their resolution could have a material, adverse effect on our financial position, results of operations
and liquidity.

Government agencies and their agents, such as the MACs, fiscal intermediaries and carriers, as well as the OIG,
CMS and state Medicaid programs, conduct audits of our health care operations. CMS and state Medicaid agencies
contract with RACs and other contractors on a contingency fee basis to conduct post-payment reviews to detect and
correct improper payments in the Medicare program, including managed Medicare plans, and the Medicaid programs.
RAC denials are appealable; however, in recent years, there have been significant delays in the Medicare appeals process.
Although HHS has improved efficiency and effectively eliminated a years-long backlog, we may nevertheless experience
delays in appealing RAC payment denials. Private third-party payers may conduct similar post-payment audits, and we
also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the
underlying conduct could be considered systemic, the resolution of these audits could have a material, adverse effect on
our financial position, results of operations and liquidity.

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Should we be found out of compliance with applicable laws, regulations or programs, depending on the nature of

the findings, our business, our financial position and our results of operations could be negatively impacted.

We may be subject to liabilities from claims brought against our facilities, which are costly to defend and may require
us to pay significant damages if not covered by insurance.

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

Risks related to operations, strategy, demand and competition:

Our hospitals and other facilities face competition for patients from other hospitals and health care providers.

The health care business is highly competitive, and competition among hospitals and other health care providers
for patients has intensified in recent years. Generally, other hospitals and health care facilities in the communities we
serve provide services similar to those we offer. Trends toward transparency and value-based purchasing may have an
impact on our competitive position, ability to obtain and maintain favorable contract terms and patient volumes in ways
that are difficult to predict. CMS publicizes on its Care Compare website performance data related to quality measures
and data on patient satisfaction surveys that hospitals, home health agencies, hospices and various other types of Medicare-
certified facilities submit in connection with their Medicare reimbursement. The Care Compare website provides an
overall rating that synthesizes various quality measures into a star rating for each hospital, home health agency and
hospice. If any of our hospitals or other provider types achieve poor results (or results that are lower than our competitors)
on quality measures or on patient satisfaction surveys, our competitive position could be negatively affected. Further,
hospitals are required to publish online a list of their standard charges for all items and services, including discounted
cash prices and payer-specific and de-identified negotiated charges, and must also publish a consumer-friendly list of
standard charges for certain “shoppable” services or, alternatively, maintain an online price estimator tool for the
shoppable services. HHS also requires health insurers to publish online charges negotiated with providers for health care
services, and health insurers must provide online price comparison tools to help individuals get personalized cost estimates
for covered items and services. The No Surprises Act imposes additional price transparency requirements, including
requiring providers to send uninsured or self-pay patients (in advance of the date of the scheduled item or service or upon
request) and health plans (prior to the scheduled date of the item or service) of insured patients a good faith estimate of
the expected charges and diagnostic codes. HHS is deferring enforcement of certain requirements of the No Surprises Act
applicable to providing estimates for insured individuals and providing estimates to uninsured or self-pay patients that do
not include expected charges for co-providers or co-facilities. It is not entirely clear how price transparency requirements
will affect consumer behavior, our relationships with payers or our ability to set and negotiate prices, but our competitive
position could be negatively affected if our standard charges are higher or are perceived to be higher than the charges of
our competitors.

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

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

Any increase in the volume of uninsured patients or deterioration in the collectability of uninsured and patient due
accounts could adversely affect our results of operations.

The primary collection risks for our accounts receivable relate to the uninsured patient accounts and patient accounts
for which the primary third-party payer has paid the amounts covered by the applicable agreement, but patient
responsibility amounts (exclusions, deductibles and copayments) remain outstanding. At December 31, 2023, estimated
implicit price concessions of $7.283 billion had been recorded to adjust our revenues and accounts receivable to the
estimated amounts we expect to collect. The estimated cost of total uncompensated care was $3.720 billion for 2023,
$3.491 billion for 2022 and $3.350 billion for 2021.

Any increase in the volume of uninsured patients or deterioration in the collectability of uninsured and self-pay
accounts receivable could adversely affect our cash flows and results of operations. Our facilities may experience growth
in total uncompensated care as a result of a number of factors, including conditions impacting the overall economy and
unemployment levels. In addition, federal and state legislatures have in recent years considered or passed various
proposals impacting the size of the uninsured or underinsured population. For example, under early COVID-19-related
legislation, states that maintained continuous Medicaid enrollment were eligible for a temporary increase in federal funds
for state Medicaid expenditures. The resumption of redeterminations for Medicaid enrollees in 2023 resulted in significant
coverage disruptions and dis-enrollments of Medicaid enrollees, and Medicaid enrollment is generally expected to
continue to decline through mid-year 2024. It is difficult to predict what, if any, and when legislative and regulatory
changes may be made in the future.

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

If our volume of patients with private health insurance coverage declines or we are unable to retain and negotiate
favorable contracts with private third-party payers, including managed care plans, our revenues may be adversely
affected.

Broad economic factors, including inflationary pressures, supply chain disruptions, labor shortages, recessions,
increased unemployment and underemployment rates and reduced consumer spending and confidence, the continued shift
of care to an outpatient setting and the aging population may impact our revenue mix. Private third-party payers, including
HMOs, PPOs and other managed care plans, typically reimburse health care providers at a higher rate than Medicare,
Medicaid or other government health care programs. Reimbursement rates are set forth by contract when our facilities are
in-network, and payers utilize plan structures to encourage or require the use of in-network providers. Revenues derived

45

from private third-party payers (domestic only) accounted for 49.0%, 48.3% and 51.6% of our revenues for 2023, 2022
and 2021, respectively. Our ability to maintain or increase patient volumes covered by private third-party payers and to
maintain and obtain favorable contracts with private third-party payers significantly affects the revenues and operating
results of our facilities.

Private third-party payers, including managed care plans and payers participating in the Exchanges, continue to
demand discounted fee structures, and the ongoing trend toward consolidation among payers tends to increase their
bargaining power over fee structures. Payers may utilize plan structures such as narrow networks and tiered networks that
limit beneficiary provider choices, impose significantly higher cost sharing obligations when care is obtained from
providers in a disfavored tier or otherwise shift greater financial responsibility for care to individuals. Legislative and
regulatory initiatives may accelerate or otherwise impact these trends.

Other health care providers may impact our ability to enter into managed care contracts or negotiate increases in
our reimbursement and other favorable terms and conditions. For example, some of our competitors may negotiate
exclusivity provisions with managed care plans or otherwise restrict the ability of managed care plans to contract with us.
In addition to increasing negotiating leverage of private third-party payers, alignment efforts between third-party payers
and health care providers may result in other competitive advantages, such as greater access to performance and pricing
data. Our future success will depend, in part, on our ability to retain and renew our third-party payer contracts and enter
into new contracts on terms favorable to us, which may be impacted by price transparency initiatives. For example, the
No Surprises Act requires providers to send health plans of insured patients a good faith estimate of the expected charges
and diagnostic codes prior to the scheduled date of the service or item. Further, hospitals are required to publish online
payer-specific negotiated charges and de-identified minimum and maximum charges. In addition, health insurers are
required to provide online price comparison tools to help individuals get personalized cost estimates for covered items
and services. Cost-reduction strategies by large employer groups and their affiliates, such as directly contracting with a
limited number of providers, may also limit our ability to negotiate favorable terms in our contracts and otherwise intensify
competitive pressure. It is not clear what impact, if any, these and future health reform efforts will have on our ability to
negotiate reimbursement increases and participate in third-party payer networks on favorable terms. If we are unable to
retain and negotiate favorable contracts with third-party payers or experience reductions in payment increases or amounts
received from third-party payers, our revenues may be reduced.

Our revenues may be reduced if we experience growth in self-pay volume. In recent years, federal and state
legislatures have considered or passed various proposals potentially impacting the size of the uninsured population. The
number and identity of states that choose to expand or otherwise modify Medicaid programs and the terms of expansion
and other program modifications continue to evolve. Some states have imposed individual health insurance mandates with
financial penalties for noncompliance. Other states have explored or offer public health insurance options. These
variables, among others, make it difficult to predict the number of uninsured individuals.

Changes to physician utilization practices and treatment methodologies and other factors outside our control that
impact demand for medical services may reduce our revenues.

Volume, admission and case-mix trends may be impacted by factors beyond our control, such as changes in volume
of certain high acuity services, variations in the prevalence and severity of outbreaks of influenza and other illnesses, such
as COVID-19, and medical conditions, seasonal and severe weather conditions, changes in treatment regimens and
medical technology and other advances. Further, trends in physician treatment protocols and health plan design, such as
health plans that shift increased costs and accountability for care to patients, could reduce our surgical volumes and
admissions in favor of lower intensity and lower cost treatment methodologies or result in patients seeking care from
other providers. Additionally, our operations may be impacted by expansion of in-home acute care models, and our
inpatient volumes may decline if various inpatient hospital procedures become eligible for reimbursement by Medicare
when performed in outpatient settings. These and other factors beyond our control may reduce the demand for services
we offer and decrease the reimbursement that we receive, which could have a material, adverse effect on our business,
financial position and results of operations.

Third-party payer controls designed to reduce costs and other payer practices intended to decrease inpatient services,
surgical procedure volumes or reimbursement for services rendered may reduce our revenues.

Controls imposed by Medicare, managed Medicare, Medicaid, managed Medicaid and private third-party payers
designed to reduce admissions, intensity of services, surgical volumes and lengths of stay, in some instances referred to
as “utilization review,” have affected and are expected to increasingly affect our facilities. Utilization review entails the
review of the admission and course of treatment of a patient by third-party payers, and may involve prior authorization
requirements. The Medicare program also issues national or local coverage determinations that restrict the circumstances

46

under which Medicare pays for certain services. Inpatient utilization, average lengths of stay and occupancy rates continue
to be negatively affected by third-party payers’ preadmission authorization requirements, coverage restrictions, utilization
review and by pressure to maximize outpatient and alternative health care delivery services for less acutely ill patients.
Cost control efforts have resulted in an increase in reimbursement denials and delays by governmental and commercial
payers, which may increase costs and administrative burden for providers and decrease the reimbursement we receive.
Efforts to impose more stringent cost controls are expected to continue and may have a material, adverse effect on our
business, financial condition and results of operations.

We may encounter difficulty acquiring hospitals and other health care businesses, encounter challenges integrating
the operations of acquired hospitals and other health care businesses and/or become liable for unknown or contingent
liabilities as a result of acquisitions.

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

We may be unable to timely and effectively integrate hospitals and other businesses that we acquire with our
ongoing operations, or we may experience delays implementing operating procedures and systems. Hospitals and other
health care businesses that we acquire may have unknown or contingent liabilities, including liabilities for failure to
comply with health care and other laws and regulations, medical and general professional
liabilities, workers’
compensation liabilities and tax liabilities. Although we typically exclude significant liabilities from our acquisition
transactions and seek indemnification from the sellers for these matters, we could experience difficulty enforcing those
obligations, experience liability in excess of any indemnification obtained or otherwise incur material liabilities for the
pre-acquisition conduct of acquired businesses. Such liabilities and related legal or other costs could harm our business
and results of operations.

Our facilities are heavily concentrated in Florida and Texas, which makes us sensitive to regulatory, economic, public
health, environmental and competitive conditions and changes in those states.

We operated 186 hospitals at December 31, 2023, and 96 of those hospitals are located in Florida and Texas. Our
Florida and Texas facilities’ combined revenues represented 51% of our consolidated revenues for the year ended
December 31, 2023. This geographic concentration makes us particularly sensitive to regulatory, economic, public health,
environmental and competitive conditions in those states. Any material change in the current payment programs or
regulatory, economic, public health, environmental or competitive conditions in those states could have a disproportionate
effect on our overall business results.

47

Our business and operations are subject to risks related to climate change.

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

In addition, changes in consumer preferences and additional legislation and regulatory requirements, including
those associated with the transition to a low-carbon economy, may increase costs associated with compliance, the
operation of our facilities and supplies. Regulations limiting greenhouse gas emissions and energy inputs may also
increase in coming years, which may adversely impact us through increased compliance costs for us and our suppliers
and vendors. Our response to climate change, our climate change strategies, policies, objectives, commitments and
disclosure, our ability to achieve our climate-related objectives and commitments (which are subject to risks and
uncertainties, many of which are outside of our control) and/or any perception that our response is ineffective or
inefficient, or conversely, not in the best interests of the Company could result in reputational harm as a result of negative
public sentiment, regulatory scrutiny, litigation and reduced investor and stakeholder confidence.

We may be adversely affected if we are not able to achieve our environmental, social and governance (“ESG”)
objectives or otherwise meet the expectations of our stakeholders with respect to ESG matters.

We strive to deliver shared value through our business, and our diverse stakeholders expect us to make significant
progress with respect to certain ESG-related matters. From time to time, we announce certain aspirations and objectives
relevant to our priority ESG matters. We periodically publish information about our ESG priorities, strategies, objectives
and progress on our corporate website and update our ESG reporting. For example, we publish our Annual Sustainability
Report, which has information about our climate-related objectives and initiatives and progress made during the prior
year. Achievement of these aspirations, plans and objectives is subject to risks and uncertainties, many of which are
outside of our control, and it is possible that we may not achieve, or be perceived to have not achieved, our ESG objectives
or that certain of our stakeholders might not be satisfied or agree with our efforts, which could result in reputational harm
as a result of negative public sentiment, regulatory scrutiny, litigation and reduced investor and stakeholder confidence.

Standards for tracking and reporting ESG matters continue to evolve. Our selection of voluntary disclosure
frameworks and standards, and the interpretation or application of those frameworks and standards, may change from
time to time or differ from those of others. This may result in a lack of consistent or meaningful comparative data from
period to period or between us and other companies in the same industry. In addition, our processes and controls may not
always comply with evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related
disclosures that may be required of public companies by the SEC, and such standards may change over time, which could
result in significant revisions to our current objectives, reported progress in achieving such objectives, or ability to achieve
such objectives in the future. A delay or inability to meet our objectives and aspirations, comply with international, federal

48

or state ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could adversely
affect public perception of our business, employee morale or patient or shareholder support; necessitate the expenditure
of additional corporate resources; result in substantial costs and expenses; give rise to legal or regulatory proceedings
against the Company and negatively impact our financial condition and results of operations. Certain challenges we face
in the achievement of our ESG objectives are also captured within our ESG reporting, including the Annual Sustainability
Report, which is not incorporated by reference into and does not form any part of this Annual Report on Form 10-K or
our other filings with the SEC.

The industry trend toward value-based purchasing may negatively impact our revenues.

There is a trend in the health care industry toward value-based purchasing of health care services. These value-
based purchasing programs include both public reporting of quality data and preventable adverse events tied to the quality
and efficiency of care provided by facilities. For example, Medicare requires hospitals, ASCs, home health agencies,
hospices and other providers to report certain quality data to receive full reimbursement updates. In addition, Medicare
does not reimburse for care related to certain preventable adverse events (also called “never events”), and federal law
prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance provided to
treat HACs. The 25% of hospitals with the worst risk-adjusted HAC scores in the designated performance period receive
a 1% reduction in their inpatient PPS Medicare payments in the applicable federal fiscal year.

Hospitals with excess readmission rates for conditions designated by CMS receive a reduction in their inpatient
PPS operating Medicare payments for all Medicare inpatient discharges in the federal fiscal year, not just discharges
relating to the conditions subject to the excess readmission standard. The reduction in payments to hospitals with excess
readmissions can be up to 3% of a hospital’s base payments.

CMS has implemented a value-based purchasing program for inpatient hospital services that reduces inpatient
hospital payments for all discharges by 2% in each federal fiscal year. CMS pools the amount collected from these
reductions to fund payments to reward hospitals that meet or exceed certain quality performance standards established by
CMS. CMS scores each hospital based on achievement (relative to other hospitals) and improvement (relative to the
hospital’s own past performance). Hospitals that meet or exceed the quality performance standards will receive greater
reimbursement under the value-based purchasing program than they would have otherwise.

In the post-acute care space, home health agencies participate in the nationwide HHVBP Model. Under the model,
home health agencies receive increases or reductions to their Medicare fee-for-service payments of up to 5%, based on
performance against specific quality measures relative to the performance of other home health providers. Data collected
in each performance year affects Medicare payments two years later.

CMS has developed several alternative payment models that are intended to reduce costs and improve quality of
care for Medicare beneficiaries and has signaled its intent to have states apply similar strategies in the Medicaid context.
Examples of alternative payment models include bundled payment models in which, depending on whether overall CMS
spending per episode exceeds or falls below a target specified by CMS and whether quality standards are met, hospitals
may receive supplemental Medicare payments or owe repayments to CMS. Generally, participation in bundled payment
programs is voluntary, but CMS currently requires hospitals in selected markets to participate in a bundled payment
initiative for specified orthopedic procedures and in a model for end-stage renal disease treatment. In addition, a
mandatory radiation oncology model was expected to begin January 1, 2023, but CMS has indefinitely delayed its
implementation. CMS has indicated that it is developing more voluntary and mandatory bundled payment models.
Participation in mandatory or voluntary demonstration projects, particularly demonstrations with the potential to affect
payment, may negatively impact our results of operations.

In a strategic report issued in 2021 and updated in 2022, the CMS Innovation Center highlighted the need to
accelerate the movement to value-based care and drive broader system transformation. By 2030, the CMS Innovation
Center aims to have all fee-for-service Medicare beneficiaries and the vast majority of Medicaid beneficiaries in an
accountable care relationship with providers who are responsible for quality and total medical costs. The CMS Innovation
Center signaled its intent to streamline its payment models and to increase provider participation through implementation
of more mandatory models.

There are also several state-driven value-based care initiatives. For example, some states have aligned quality
metrics across payers through legislation or regulation. Some private third-party payers are also transitioning toward
alternative payment models or implementing other value-based care strategies. For example, many large private third-
party payers currently require hospitals to report quality data, and several private third-party payers do not reimburse

49

hospitals for certain preventable adverse events. Further, we have implemented a policy pursuant to which we do not bill
patients or third-party payers for fees or expenses incurred due to certain preventable adverse events.

We expect value-based purchasing programs, including programs that condition reimbursement on patient outcome
measures, to become more common and to involve a higher percentage of reimbursement amounts. It is unclear whether
these and other alternative payment models will successfully coordinate care and reduce costs or whether they will
decrease aggregate reimbursement. We are unable to predict our future payments or whether we will be subject to payment
reductions under these programs or how this trend will affect our results of operations. If we are unable to meet or exceed
the quality performance standards under any applicable value-based purchasing program, perform at a level below the
outcomes demonstrated by our competitors, or otherwise fail to effectively provide or coordinate the efficient delivery of
quality health care services, our reputation in the industry may be negatively impacted, we may receive reduced
reimbursement amounts and we may owe repayments to payers, causing our revenues to decline.

Risks related to macroeconomic conditions:

Our overall business results may suffer during periods of general economic weakness or recessions.

Our business is impacted by economic conditions in the United States, including periods of significant inflation,
higher interest rates or economic weakness or recessions. Also, budget deficits at the federal level and within some state
and local government entities have had a negative impact on spending and may continue to negatively impact spending
for health and human service programs, including Medicare, Medicaid and similar programs, which represent significant
third-party payer sources for our hospitals. We anticipate that the federal deficit, the growing magnitude of Medicare and
Medicaid expenditures and the aging of the U.S. population will continue to place pressure on government health care
programs, and it is possible that future deficit reduction legislation will mandate additional Medicare spending reductions.
Other risks we face during periods of economic weakness and high unemployment include potential declines in the
population covered under managed care agreements, increased patient decisions to postpone or cancel elective and
nonemergency health care procedures (including delaying surgical procedures), which may lead to poorer health and
higher acuity interventions, potential increases in the uninsured and underinsured populations, increased adoption of
health plan structures that shift financial responsibility to patients and further difficulties in collecting patient receivables
for copayment and deductible receivables. Further, inflationary pressures may increase operating expenses faster than
reflected in updates to the reimbursement systems of governmental and private payers. General economic conditions,
including inflation, when worsening or remaining volatile for an extended period of time, have and could continue to
have, a negative impact on our results of operations, liquidity, ability to repay our outstanding debt and trading price of
our common stock. These factors may affect the availability, terms or timing on which we may obtain any additional
funding and our ability to access our cash. There can be no assurance that we will be able to raise additional funds on
terms acceptable to us, if at all.

We are exposed to market risk related to changes in the market values of securities and interest rates.

We are exposed to market risk related to changes in market values of securities. The investment securities held by
our insurance subsidiaries were $564 million at December 31, 2023. These investments are carried at fair value, with
changes in unrealized gains and losses related to factors other than credit loss allowances being recorded as adjustments
to other comprehensive income. At December 31, 2023, we had net unrealized losses of $28 million on the insurance
subsidiaries’ investment securities.

We are exposed to market risk related to market illiquidity. Investment securities of our insurance subsidiaries could
be impaired by the inability to access the capital markets. Should the insurance subsidiaries require significant amounts
of cash in excess of normal cash requirements to pay claims and other expenses on short notice, we may have difficulty
selling these investments in a timely manner or be forced to sell them at a price less than what we might otherwise have
been able to in a normal market environment. We may be required to recognize credit-related impairments on long-term
investments in future periods should issuers default on interest payments or should the fair market valuations of the
securities deteriorate due to ratings downgrades or other issue specific factors.

We are also exposed to market risk related to changes in interest rates that impact the amount of the interest expense
we incur with respect to our floating rate obligations as well as the value of certain investments. We periodically enter
into interest rate swap agreements to manage our exposure to these fluctuations. These interest rate swap agreements
involve the exchange of fixed and variable rate interest payments between two parties, based on common notional
principal amounts and maturity dates.

50

Risks related to ownership of our common stock:

There can be no assurance that we will continue to pay dividends.

The Company declares a regular quarterly cash dividend under our cash dividend program. During 2023, the Board
of Directors declared four quarterly dividends of $0.60 per share, or $2.40 per share in the aggregate, on our common
stock. On January 29, 2024, our Board of Directors declared a quarterly dividend of $0.66 per share on our common stock
payable on March 29, 2024 to stockholders of record at the close of business on March 15, 2024.

The declaration, amount and timing of such dividends are subject to capital availability and determinations by our
Board of Directors that cash dividends are in the best interest of our stockholders and are in compliance with all respective
laws and our agreements applicable to the declaration and payment of cash dividends. Our ability to pay dividends will
depend upon, among other factors, our cash flows from operations, our available capital and potential future capital
requirements for strategic transactions, including acquisitions, debt service requirements, share repurchases and investing
in our existing markets as well as our results of operations, financial condition and other factors beyond our control that
our Board of Directors may deem relevant. A reduction in or suspension or elimination of our dividend payments could
have a negative effect on our stock price.

Certain of our investors may continue to have influence over us.

On November 17, 2006, HCA Inc. was acquired by a private investor group, including affiliates of HCA founder,
Dr. Thomas F. Frist, Jr. and certain other investors. Through their investment in Hercules Holding II and other holdings,
certain of the Frist-affiliated investors continue to hold a significant interest in our outstanding common stock
(approximately 26% as of January 31, 2024). In addition, pursuant to a shareholders agreement we entered into with
Hercules Holding II and the Frist-affiliated investors, certain representatives of these investors have the continued right
to nominate certain of the members of our Board of Directors. As a result, certain of these investors potentially have the
ability to influence our decisions to enter into corporate transactions (and the terms thereof) and prevent changes in the
composition of our Board of Directors or any transaction that requires stockholder approval.

Item 1B.

Unresolved Staff Comments

None.

Item 1C.

Cybersecurity

Management is responsible for the day-to-day handling of risks facing our Company, while the Board of Directors,
as a whole and through its committees, oversees risk management, including cybersecurity risks. The Board has delegated
certain risk management responsibilities with respect to cybersecurity to our Audit and Compliance Committee.

The Audit and Compliance Committee periodically reviews our data security programs, including cybersecurity,
and reviews our programs and plans that management has established to monitor compliance with data security
compliance programs and test preparedness. The Audit and Compliance Committee also receives reports regarding risks
associated with our data security programs and management’s plans for monitoring and testing compliance with data
security regulations.

The Audit and Compliance Committee meetings take place on a quarterly basis and include a report from our Chief
Security Officer ("CSO") regarding our security programs, including (i) the status on activities under way to support our
security strategy, (ii) an overview of the current threat landscape, including emerging threats and trends that may affect
us, (iii) key performance measures of security operations, and (iv) general security program needs. The security program
includes cybersecurity, privacy, physical security and information security risk management. Our senior security
leadership team has an average of 20 years of data security experience, and each member has served in multiple roles
within our security programs.

We seek to leverage a comprehensive risk management program that encompasses a structured approach to assess,
identify, and manage cyber and information security risks. The internal processes for these activities are evaluated for
alignment with our objectives and overall risk tolerance. This approach is consistent with our overall risk management
efforts. The CSO participates with other senior officers, including the Chief Executive Officer, Chief Information Officer,
Chief Financial Officer, Chief Legal Officer, Chief Ethics and Compliance Officer and others on our risk management
committee, which develops and coordinates enterprise cybersecurity policy and strategy, and provides guidance to senior
management.

We utilize cross-functional teams and risk assessment tools and technologies to identify potential cyber and
information security threats and risks. These teams include representatives from various departments within our Company

51

to promote a holistic view of the organization’s cyber and information security risk landscape and to facilitate
communication. We have implemented multiple layers of security measures designed to protect the confidentiality,
integrity and availability of our data and the systems and devices that store and transmit such data. We also seek to embed
security measures into software and system development processes and to use current security technologies. In addition,
we engage third parties to actively monitor potential threats as well as our security defenses. The risk landscape is assessed
to determine the likelihood and potential impact of identified risks. This assessment involves a combination of qualitative
and quantitative analyses to help prioritize identified risks and determine the appropriate risk treatment. The effectiveness
of the cyber and information security program is tested through a combination of internal and external assessments.
Updates are provided to senior management and the Audit and Compliance Committee for informed decision-making and
are integrated into our broader enterprise risk management processes.

We also seek to oversee and identify potential cyber and information security threats and risks relating to suppliers
and third-party service providers. These efforts may include due diligence to assess the party’s cybersecurity practices,
controls, and compliance with relevant statutes and regulations; the use of contractual agreements that outline certain
cybersecurity requirements; and using outside services to perform ongoing monitoring of select suppliers and third-party
service providers. We may also collaborate with third-party suppliers to develop and align incident response plans.

No risks from cybersecurity threats or previous cybersecurity incidents have materially affected our business
strategy, results of operations, or financial condition. However, there can be no assurance that our controls and procedures
in place to monitor and mitigate the risks of cyber threats, including the remediation of critical information security and
software vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the
future. Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such
insurance coverage may be insufficient to cover all insured losses or all types of claims that may arise.

52

Item 2.

Properties

The following table lists, by state, the number of hospitals (general, acute care, behavioral and rehabilitation)

directly or indirectly owned and operated by us as of December 31, 2023:

State
Alaska
California
Colorado
Florida
Georgia
Idaho
Indiana
Kansas
Kentucky
Louisiana
Missouri
Nevada
New Hampshire
North Carolina
South Carolina
Tennessee
Texas
Utah
Virginia

.............................
........................
.........................
............................
...........................
...............................
............................
.............................
.........................
........................
..........................
............................
..............
................
................
........................
...............................
................................
...........................

International
England

...........................

Hospitals

Beds

1
5
7
46
5
2
1
4
2
1
5
3
3
7
4
14
50
8
11

7
186

250
1,895
2,494
13,142
1,543
454
278
1,432
384
380
1,080
1,524
432
1,219
1,024
2,752
14,025
1,057
3,335

888
49,588

In addition to the hospitals listed in the above table, we directly or indirectly operate 124 freestanding surgery
centers and 24 freestanding endoscopy centers. We also operate medical office buildings in conjunction with some of our
hospitals. These office buildings are primarily occupied by physicians who practice at our hospitals. Twelve of our
general, acute care hospitals and five of our other properties have been mortgaged to support our obligations under our
senior secured cash flow credit facility.

We maintain our headquarters in approximately 2,031,000 square feet of space in the Nashville, Tennessee area. In
addition to the headquarters in Nashville, we maintain regional service centers related to our shared services initiatives.
These service centers are located in markets in which we operate hospitals.

We believe our headquarters, hospitals and other facilities are suitable for their respective uses and are, in general,
adequate for our present needs. Our properties are subject to various federal, state and local statutes and ordinances
regulating their operation. Management does not believe that compliance with such statutes and ordinances will materially
affect our financial position or results of operations.

Item 3.

Legal Proceedings

The information set forth in Note 10 – Contingencies in the notes to the consolidated financial statements is

incorporated herein by reference.

In addition, the following matter is being disclosed pursuant to Item 103 of Regulation S-K because it relates to

environmental regulations and the Company believes monetary sanctions could exceed $300,000.

In December 2023, an affiliate of the Company was notified of an investigation conducted by District Attorneys in
four counties in California regarding the waste disposal practices of the Company’s California facilities and alleging
violations of certain state environmental and other laws. The Company is responding to requests for information from the
District Attorneys and is assessing the allegations and underlying facts. Based on the information known at this time, the
Company does not believe this matter will materially impact the Company.

Item 4.

Mine Safety Disclosures

None.

53

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

During January 2022, January 2023 and January 2024, our Board of Directors authorized share repurchase programs
for up to $8 billion, $3 billion and $6 billion, respectively, of the Company’s outstanding common stock. The January
2022 authorization was completed during 2023, and at December 31, 2023, there was $775 million of share repurchase
authorization that remained available under the January 2023 authorization. All repurchases made during the fourth
quarter of 2023, as detailed below, were made pursuant to the January 2023 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,

2023 through December 31, 2023 (dollars in millions, except per share amounts).

Period
October 2023
November 2023
December 2023
Total for Fourth Quarter 2023

........................................................
....................................................
....................................................
...............................

Total
Number
of Shares
Purchased
1,474,715
904,304
1,268,054
3,647,073

Average
Price
Paid per
Share
$ 244.12
$ 243.29
$ 260.25
$ 249.52

Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs

Approximate
Dollar Value of
Shares That
May Yet Be
Purchased
Under Publicly
Announced
Plans or
Programs

1,474,715
904,304
1,268,054
3,647,073

$
$
$

1,325
1,105
775

Our common stock is traded on the New York Stock Exchange (“NYSE”) (symbol “HCA”). During 2023, our
Board of Directors declared four quarterly dividends of $0.60 per share, or $2.40 per share in the aggregate, on our
common stock. On January 29, 2024, our Board of Directors declared a quarterly dividend of $0.66 per share on our
common stock payable on March 29, 2024 to stockholders of record at the close of business on March 15, 2024. Future
declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final
determination of our Board of Directors. Our ability to declare future dividends may also from time to time be limited by
the terms of our debt agreements. At the close of business on February 1, 2024, there were approximately 420 holders of
record of our common stock.

54

STOCK PERFORMANCE GRAPH
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among HCA Healthcare, Inc., the S&P 500 Index and the S&P Health Care Index

HCA Healthcare, Inc.
S&P 500
S&P Health Care

.............
....................................
.....................

12/31/2018
100.00
$
100.00
100.00

12/31/2019
120.25
$
131.49
120.82

12/31/2020
134.25
$
155.68
137.07

12/31/2021
211.56
$
200.37
172.89

12/31/2022
199.61
$
164.08
169.51

12/31/2023
227.19
$
207.21
172.99

The graph shows the cumulative total return to our stockholders for the five-year period ended December 31, 2023,
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, 2018 in our common stock and in each index with the subsequent reinvestment of dividends.
The stock performance shown on the graph represents historical stock performance and is not necessarily indicative of
future stock price performance.

Item 6.

[Reserved]

55

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The accompanying consolidated financial statements present certain information with respect to the financial
position, results of operations and cash flows of HCA Healthcare, Inc. which should be read in conjunction with the
following discussion and analysis. The terms “HCA,” “Company,” “we,” “our,” or “us,” as used herein, refer to HCA
Healthcare, Inc. and its affiliates. The term “affiliates” means direct and indirect subsidiaries of HCA Healthcare, Inc. and
partnerships and joint ventures in which such subsidiaries are partners.

Forward-Looking Statements

This annual report on Form 10-K includes certain disclosures that contain “forward-looking statements,” within the
meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include
statements regarding expected capital expenditures, expected dividends, expected share repurchases, expected net claim
payments, expected inflationary pressures and all other statements that do not relate solely to historical or current facts,
and can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,”
“plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and
are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which
could significantly affect current plans and expectations and our future financial position and results of operations. These
factors include, but are not limited to, (1) changes in or related to general economic 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; supply shortages and disruptions (including as a result of geopolitical
disruptions); and the impact of potential federal government shutdowns, (2) the impact of our significant 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, 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, attain expected
levels of patient volumes and revenues, and control the costs of providing services, (7) possible changes in Medicare,
Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or
SDPs 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) the
emergence of and effects related to pandemics, epidemics and outbreaks of infectious diseases or other public health
crises, including but not limited to developments related to COVID-19, (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 with our tax positions, (20) the impact of known and unknown government investigations, litigation and other
claims that may be made against us, (21) the impact of actual and potential cybersecurity incidents or security breaches,
including the data security incident disclosed in July 2023, (22) our ongoing ability to demonstrate meaningful use of
certified electronic health record technology and the impact of interoperability requirements, (23) the impact of natural

56

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Forward-Looking Statements (continued)

disasters, such as hurricanes and floods, physical risks from climate change or similar events beyond our control, (24)
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, (25) the results of our efforts to use technology and resilience initiatives, including
artificial intelligence and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience,
and (26) other risk factors described in this annual report on Form 10-K. As a consequence, current plans, anticipated
actions and future financial position and results of operations may differ from those expressed in any forward-looking
statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when
evaluating the information presented in this report, which forward-looking statements reflect management’s views only
as of the date of this report. We undertake no obligation to revise or update any forward-looking statements, whether as
a result of new information, future events or otherwise.

2023 Operations Summary

Net income attributable to HCA Healthcare, Inc. totaled $5.242 billion, or $18.97 per diluted share, for 2023,
compared to $5.643 billion, or $19.15 per diluted share, for 2022. The 2023 results include losses on sales of facilities of
$5 million, or $0.04 per diluted share. The 2022 results include gains on sales of facilities of $1.301 billion, or $2.46 per
diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share. Our provisions for income taxes
for 2023 and 2022 include tax benefits of $93 million, or $0.34 per diluted share, and $77 million, or $0.26 per diluted
share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon
amounts net of the applicable income taxes. Shares used for diluted earnings per share were 276.412 million shares and
294.666 million shares for the years ended December 31, 2023 and 2022, respectively. During 2023 and 2022, we
repurchased 14.465 million and 30.747 million shares, respectively, of our common stock.

Revenues increased to $64.968 billion for 2023 from $60.233 billion for 2022. Revenues increased 7.9% and 7.6%,
respectively, on a consolidated basis and on a same facility basis for 2023, compared to 2022. The consolidated revenues
increase can be primarily attributed to the combined impact of a 4.9% increase in equivalent admissions and a 2.8%
increase in revenue per equivalent admission. The same facility revenues increase resulted primarily from the combined
impact of a 4.8% increase in equivalent admissions and a 2.7% increase in revenue per equivalent admission.

During 2023, consolidated admissions increased 2.7% and same facility admissions increased 3.3%, compared to
2022. Inpatient surgical volumes increased 1.3% on a consolidated basis and increased 2.0% on a same facility basis
during 2023, compared to 2022. Outpatient surgical volumes increased 2.1% on a consolidated basis and increased 2.5%
on a same facility basis during 2023, compared to 2022. Emergency room visits increased 4.1% on a consolidated basis
and increased 4.7% on a same facility basis during 2023, compared to 2022.

The estimated cost of total uncompensated care increased $229 million for 2023, compared to 2022. Consolidated
and same facility uninsured admissions each declined 0.4%, and consolidated and same facility uninsured emergency
room visits increased 4.0% and 4.4%, respectively, for 2023, compared to 2022.

Interest expense totaled $1.938 billion for 2023, compared to $1.741 billion for 2022. The $197 million increase in

interest expense for 2023 was primarily due to an increase in the average effective interest rate.

Cash flows from operating activities increased $909 million, from $8.522 billion for 2022 to $9.431 billion for
2023. The increase in cash flows from operating activities was related primarily to a positive change in working capital
items of $695 million, mainly from an increase in accounts payable and accrued expenses, and an increase in net income
of $275 million, excluding losses and gains on sales of facilities and losses on retirement of debt.

Business Strategy

We are committed to providing the communities we serve with high quality, convenient and cost-effective health
care while growing our business and creating long-term value for our stockholders. We strive to be the health care system
of choice in the communities we serve by developing comprehensive networks locally and supporting these networks
with enterprise expertise and economies of scale. Our strategy is organized around a framework that seeks to drive
sustained growth by delivering operational excellence, attracting exceptional physicians and other health care
professionals, developing comprehensive services, creating greater access, and coordinating higher quality care for
patients. To achieve these objectives, we align our efforts around the following growth agenda:

57

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Business Strategy (continued)

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. We plan to continue recruiting and strategically collaborating with the physician community and
developing comprehensive service lines such as cardiology, neurology, oncology, orthopedics and women’s services.
Additional components of our growth strategy include providing access and convenience through developing various
outpatient facilities, including, but not limited to surgery centers, urgent care clinics, freestanding emergency care
facilities, imaging centers and home health and hospice services, as well as seeking to improve coordination of care and
patient retention across our markets.

Achieve Industry-Leading Performance in Clinical, Operational and Satisfaction Measures. Achieving high levels
of patient safety, patient satisfaction and clinical quality are central goals of our business. To achieve these goals, we have
implemented a number of initiatives including infection reduction initiatives, hospitalist programs, advanced health
information technology and evidence-based medicine programs. We routinely analyze operational practices from our
best-performing hospitals to identify ways to implement organization-wide performance improvements and reduce
clinical variation. We believe these initiatives will continue to improve patient care, help us achieve cost efficiencies and
favorably position us in an environment where our constituents are increasingly focused on quality, efficacy and
efficiency.

Recruit and Retain Physicians and Other Health Care Professionals to Meet the Need for High Quality Health
Services. We depend on the quality and dedication of the health care providers and other team members who serve at our
facilities. We believe a critical component of our growth strategy is our ability to successfully recruit and strategically
collaborate with physicians and other health care professionals to provide high quality care. We attract and retain
physicians and other health care professionals by providing high quality, convenient facilities with advanced technology,
by expanding our specialty services and by building our outpatient operations. We believe our continued investment in
the employment, recruitment and retention of physicians and other health care professionals will improve the quality of
care at our facilities.

Continue to Utilize Economies of Scale to Grow the Company. We believe there is significant opportunity to
continue to grow our company by fully utilizing the scale and scope of our organization. We continue to invest in
initiatives such as care navigators, clinical data exchange and centralized patient transfer operations, which will enable us
to improve coordination of care and patient retention across our markets. We believe our centrally managed business
processes and ability to leverage cost-saving practices across our extensive network will enable us to continue to manage
costs effectively. We continue to invest in our shared service platforms to deploy key components of our support
infrastructure, including revenue cycle management, health care group purchasing, supply chain management and staffing
functions.

Pursue a Disciplined Development Strategy. We continue to believe there are significant growth opportunities in
our markets. We will continue to provide financial and operational resources to analyze and develop our in-market
opportunities. To complement our in-market growth agenda and achieve cost savings and other benefits for the patients
and communities we serve, we intend to focus on selectively developing and acquiring new hospitals, outpatient facilities
and other health care service providers.

Our strategy also emphasizes investments that seek to advance our clinical systems and digital capabilities,
transform care models with innovative care solutions, expand our workforce development programs and enhance our
health care networks and partnerships.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts
of revenues and expenses. Our estimates are based on historical experience and various other assumptions we believe are
reasonable under the circumstances. We evaluate our estimates on an ongoing basis and make changes to the estimates
and related disclosures as experience develops or new information becomes known. Actual results may differ from these
estimates.

58

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Critical Accounting Policies and Estimates (continued)

We believe the following critical accounting policies affect our more significant judgments and estimates used in

the preparation of our consolidated financial statements.

Revenues

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

Patients treated at hospitals for non-elective care who have income at or below 400% of the federal poverty level
are eligible for charity care, and we limit the patient responsibility amounts for these patients to a percentage of their
annual household income, computed on a sliding scale based upon their annual income and the applicable percentage of
the federal poverty level. Patients treated at hospitals for non-elective care who have income above 400% of the federal
poverty level are eligible for certain other discounts which limit the patient responsibility amounts for these patients to a
percentage of their annual household income, computed on a sliding scale based upon their annual income and the
applicable percentage of the federal poverty level. We apply additional discounts to limit patient responsibility for certain
emergency services. The federal poverty level is established by the federal government and is based on income and family
size. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in
revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. 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. If an uninsured patient does not qualify for these programs, the uninsured discount is applied.

Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price
concessions are recorded for all uninsured accounts, regardless of the age of those accounts. Accounts are written off
when all reasonable collection efforts have been performed. The estimates for implicit price concessions are based upon
management’s assessment of historical writeoffs and expected net collections, business and economic conditions, trends
in federal, state and private employer health care coverage and other collection indicators. Management relies on the
results of detailed reviews of historical writeoffs and collections at facilities that represent a majority of our revenues and
accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our
accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable
collection and writeoff data. We believe our quarterly updates to the estimated implicit price concession amounts at each
of our hospital facilities provide reasonable estimates of our revenues and valuations of our accounts receivable. These
routine, quarterly changes in estimates have not resulted in material adjustments to the valuations of our accounts
receivable or period-to-period comparisons of our revenues.

59

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Critical Accounting Policies and Estimates (Continued)

Revenues (continued)

To quantify the total impact of and trends related to uninsured patient accounts, we believe it is beneficial to view
total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. A
summary of the estimated cost of total uncompensated care for the years ended December 31, follows (dollars in millions):

2023

2022

2021

Patient care costs (salaries and benefits, supplies, other operating

expenses and depreciation and amortization)

...................................

$

55,341

Cost-to-charges ratio (patient care costs as percentage of gross

patient charges)

Total uncompensated care
Multiply by the cost-to-charges ratio
Estimated cost of total uncompensated care

.................................................................................
...................................................................
...................................................
........................................

10.5%

35,426

10.5%

3,720

$

$

$

$

$

51,180

11.0%

31,734

11.0%

3,491

$

$

$

49,074

11.3%

29,642

11.3%

3,350

Management expects a continuation of the challenges related to collection of patient due accounts. Adverse changes
in the percentage of our patients having adequate health care coverage, increases in patient responsibility amounts under
certain health care coverages, general economic conditions, patient accounting service center operations, payer mix, or
trends in federal, state, and private employer health care coverage could affect the collection of accounts receivable, cash
flows and results of operations.

Professional Liability Claims

We, along with virtually all health care providers, operate in an environment with professional liability risks. Our
facilities are insured by our insurance subsidiary for losses up to $80 million per occurrence, subject, in most cases, to a
$15 million per occurrence self-insured retention. The insurance subsidiary has obtained reinsurance for professional
liability risks generally above a retention level of either $25 million or $35 million per occurrence, depending on the
jurisdiction for the related claim. We purchase excess insurance on an occurrence reported basis for losses in excess of
amounts insured by our insurance subsidiary. Provisions for losses related to professional liability risks were $619 million,
$517 million and $453 million for the years ended December 31, 2023, 2022 and 2021, respectively. We recorded an
increase to the provision for professional liability risks of $40 million during 2023 and reductions to the provision for
professional liability risks of $55 million and $87 million for 2022 and 2021, respectively, due to the receipt of updated
actuarial information.

Reserves for professional liability risks represent the estimated ultimate cost of all reported and unreported losses
incurred through the respective consolidated balance sheet dates. The estimated ultimate cost includes estimates of direct
expenses and fees paid to outside counsel and experts, but does not include the general overhead costs of our insurance
subsidiary or corporate office. Individual case reserves are established based upon the particular circumstances of each
reported claim and represent our estimates of the future costs that will be paid on reported claims. Case reserves are
reduced as claim payments are made and are adjusted upward or downward as our estimates regarding the amounts of
future losses are revised. Once the case reserves for known claims are determined, information is stratified by loss layers
and retentions, accident years, reported years, and geographic location of our hospitals. Several actuarial methods are
employed to utilize this data to produce estimates of ultimate losses and reserves for incurred but not reported claims,
including: paid and incurred extrapolation methods utilizing paid and incurred loss development to estimate ultimate
losses; frequency and severity methods utilizing paid and incurred claims development to estimate ultimate average
frequency (number of claims) and ultimate average severity (cost per claim); and Bornhuetter-Ferguson methods which
add expected development to actual paid or incurred experience to estimate ultimate losses. These methods use our
company-specific historical claims data and other information. Company-specific claim reporting and payment data
collected over an approximate 20-year period is used in our reserve estimation process. This company-specific data
includes information regarding our business, including historical paid losses and loss adjustment expenses, historical and
current case loss reserves, actual and projected hospital statistical data, professional liability retentions for each policy
year, geographic information and other data.

60

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Critical Accounting Policies and Estimates (Continued)

Professional Liability Claims (continued)

Reserves and provisions for professional liability risks are based upon actuarially determined estimates. The
estimated reserve ranges, net of amounts receivable under reinsurance contracts, were $1.863 billion to $2.230 billion at
December 31, 2023 and $1.802 billion to $2.159 billion at December 31, 2022. Our estimated reserves for professional
liability claims may change significantly if future claims differ from expected trends. We perform sensitivity analyses
which model the volatility of key actuarial assumptions and monitor our reserves for adequacy relative to all our
assumptions in the aggregate. Based on our analysis, we believe the estimated professional liability reserve ranges
represent the reasonably likely outcomes for ultimate losses. We consider the number and severity of claims to be the
most significant assumptions in estimating reserves for professional liabilities. A 2.5% change in the expected frequency
trend could be reasonably likely and would increase the reserve estimate by $31 million or reduce the reserve estimate by
$30 million. A 2.5% change in the expected claim severity trend could be reasonably likely and would increase the reserve
estimate by $137 million or reduce the reserve estimate by $126 million. We believe adequate reserves have been recorded
for our professional liability claims; however, due to the complexity of the claims, the extended period of time to resolve
the claims and the wide range of potential outcomes, our ultimate liability for professional liability claims could change
by more than the estimated sensitivity amounts and could change materially from our current estimates.

The reserves for professional liability risks cover approximately 2,100 and 2,000 individual claims at December
31, 2023 and 2022, respectively, and estimates for unreported potential claims. The time period required to resolve these
claims can vary depending upon the jurisdiction and whether the claim is settled or litigated. The average time period
between the occurrence and final resolution for our professional liability claims is approximately five years, although the
facts and circumstances of each individual claim can result in an occurrence-to-resolution timeframe that varies from this
average. The estimation of the timing of payments beyond a year can vary significantly.

Reserves for professional liability risks were $2.089 billion and $2.043 billion at December 31, 2023 and 2022,
respectively. The current portion of these reserves, $532 million and $515 million at December 31, 2023 and 2022,
respectively, is included in “other accrued expenses.” Obligations covered by reinsurance and excess insurance contracts
are included in the reserves for professional liability risks, as we remain liable to the extent reinsurers and excess insurance
carriers do not meet their obligations. Reserves for professional liability risks (net of $42 million and $60 million
receivable under reinsurance and excess insurance contracts at December 31, 2023 and 2022, respectively) were $2.047
billion and $1.983 billion at December 31, 2023 and 2022, respectively. The estimated total net reserves for professional
liability risks at December 31, 2023 and 2022 are comprised of $947 million and $793 million, respectively, of case
reserves for known claims and $1.100 billion and $1.190 billion, respectively, of reserves for incurred but not reported
claims.

Changes in our professional liability reserves, net of reinsurance recoverable, for the years ended December 31, are

summarized in the following table (dollars in millions):

Net reserves for professional liability claims, January 1

.............................

Provision for current year claims
Unfavorable (favorable) development related to prior years’ claims

.............................................................
......
.....................................................................................

Total provision

Payments for current year claims
Payments for prior years’ claims

............................................................
.............................................................
...........................................................................

Total claim payments

Effect of new retroactive reinsurance contracts

Net reserves for professional liability claims, December 31

......................................
.......................

2023
2021
2022
$ 1,983 $ 1,967 $1,924

573
46
619

13
537
550

538
(21)
517

4
493
497

530
(77)
453

5
379
384

(5)

(26)
$ 2,047 $ 1,983 $1,967

(4)

61

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Critical Accounting Policies and Estimates (Continued)

Income Taxes

We calculate our provision for income taxes using the asset and liability method, under which deferred tax assets
and liabilities are recognized by identifying the temporary differences that arise from the recognition of items in different
periods for tax and accounting purposes. Deferred tax assets generally represent the tax effects of amounts expensed in
our income statement for which tax deductions will be claimed in future periods. Interest and penalties payable to taxing
authorities are included as a component of our provision for income taxes. We have elected to treat taxes incurred on
global intangible low-taxed income as a period expense.

Although we believe we have properly reported taxable income and paid taxes in accordance with applicable laws,
federal, state or foreign taxing authorities may challenge our tax positions upon audit. Significant judgment is required in
determining and assessing the impact of uncertain tax positions. We report a liability for unrecognized tax benefits from
uncertain tax positions taken or expected to be taken in our income tax returns. During each reporting period, we assess
the facts and circumstances related to uncertain tax positions. If the realization of unrecognized tax benefits is deemed
probable based upon new facts and circumstances, the estimated liability and the provision for income taxes are reduced
in the current period. Final audit results may vary from our estimates.

Results of Operations

Revenue/Volume Trends

Our revenues depend upon inpatient occupancy levels, the ancillary services and therapy programs ordered by
physicians and provided to patients, the volume of outpatient procedures and the charge and negotiated payment rates for
such services. Gross charges typically do not reflect what our facilities are actually paid. Our facilities have entered into
agreements with third-party payers, including government programs and managed care health plans, under which the
facilities are paid based upon the cost of providing services, predetermined rates per diagnosis, fixed per diem rates or
discounts from gross charges. We do not pursue collection of amounts related to patients who meet our guidelines to
qualify for charity care; therefore, they are not reported in revenues. We provide discounts to uninsured patients who do
not qualify for Medicaid or charity care.

Revenues increased 7.9% to $64.968 billion for 2023 from $60.233 billion for 2022 and increased 2.5% for 2022
from $58.752 billion for 2021. The increase in revenues in 2023 can be primarily attributed to the combined impact of a
4.9% increase in equivalent admissions and a 2.8% increase in revenue per equivalent admission compared to the prior
year. The increase in revenues in 2022 can be primarily attributed to the combined impact of a 2.1% increase in equivalent
admissions and a 0.4% increase in revenue per equivalent admission compared to the prior year.

Same facility revenues increased 7.6% for the year ended December 31, 2023 compared to the year ended December
31, 2022 and increased 3.2% for the year ended December 31, 2022 compared to the year ended December 31, 2021. The
7.6% increase for 2023 can be primarily attributed to the combined impact of a 4.8% increase in equivalent admissions
and a 2.7% increase in revenue per equivalent admission. The 3.2% increase for 2022 can be primarily attributed to the
net impact of a 3.3% increase in equivalent admissions and a 0.1% decline in revenue per equivalent admission.

Consolidated admissions increased 2.7% during 2023 compared to 2022 and declined 0.7% during 2022 compared
to 2021. Consolidated surgeries increased 1.8% during 2023 compared to 2022 and increased 1.0% during 2022 compared
to 2021. Consolidated emergency room visits increased 4.1% during 2023 compared to 2022 and increased 5.9% during
2022 compared to 2021.

Same facility admissions increased 3.3% during 2023 compared to 2022 and increased 0.5% during 2022 compared
to 2021. Same facility surgeries increased 2.3% during 2023 compared to 2022 and increased 1.5% during 2022 compared
to 2021. Same facility emergency room visits increased 4.7% during 2023 compared to 2022 and increased 7.6% during
2022 compared to 2021.

62

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

Same facility uninsured emergency room visits increased 4.4% and same facility uninsured admissions declined
0.4% during 2023 compared to 2022. Same facility uninsured emergency room visits increased 6.6% and same facility
uninsured admissions declined 4.6% during 2022 compared to 2021.

The approximate percentages of our admissions related to Medicare, managed Medicare, Medicaid, managed
Medicaid, managed care and insurers and the uninsured for the years ended December 31, 2023, 2022 and 2021 are set
forth below.

Medicare
Managed Medicare
Medicaid
Managed Medicaid
Managed care and insurers
Uninsured

.................................
.................
.................................
.................
.....
................................

Years Ended December 31,
2022

2021

2023

21%
25
4
13
30
7
100%

22%
23
4
14
30
7
100%

23%
21
5
13
31
7
100%

The approximate percentages of our inpatient revenues related to Medicare, managed Medicare, Medicaid, managed

Medicaid, and managed care and insurers for the years ended December 31, 2023, 2022 and 2021 are set forth below.

Medicare
Managed Medicare
Medicaid
Managed Medicaid
Managed care and insurers

..................................
..................
..................................
..................
......

Years Ended December 31,
2022

2021

2023

22%
18
9
6
45
100%

23%
17
7
8
45
100%

23%
16
6
6
49
100%

At December 31, 2023, we owned and operated 46 hospitals and 29 surgery centers in the state of Florida. Our
Florida facilities’ revenues totaled $15.004 billion, $13.763 billion and $13.593 billion for the years ended December 31,
2023, 2022 and 2021, respectively. At December 31, 2023, we owned and operated 50 hospitals and 39 surgery centers
in the state of Texas. Our Texas facilities’ revenues totaled $17.871 billion, $16.472 billion and $15.356 billion for the
years ended December 31, 2023, 2022 and 2021, respectively. During 2023, 2022 and 2021, 58%, 58% and 56%,
respectively, of our admissions and 51%, 50% and 49%, respectively, of our revenues were generated by our Florida and
Texas facilities. Uninsured admissions in Florida and Texas represented 73%, 74% and 72%, respectively, of our
uninsured admissions during 2023, 2022 and 2021.

We receive a significant portion of our revenues from government health programs, principally Medicare and
Medicaid, which are highly regulated and subject to frequent and substantial changes. Some state Medicaid programs use,
or have applied to use, waivers granted by CMS to implement Medicaid expansion, impose different eligibility or
enrollment restrictions, or otherwise implement programs that vary from federal standards. We receive supplemental
payments in several states. We are aware these supplemental payment programs are currently being reviewed by certain
state agencies and some states have made requests to CMS to replace their existing supplemental payment programs. It is
possible these reviews and requests will result in the restructuring of such supplemental payment programs and could
result in the payment programs being reduced or eliminated. Because deliberations about these programs are ongoing, we
are unable to estimate the financial impact the program structure modifications, if any, may have on our results of
operations.

63

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Key Performance Indicators

We present certain metrics and statistical information that management uses when assessing our results of
operations. We believe this information is useful to investors as it provides insight to how management evaluates
operational performance and trends between reporting periods. Information on how these metrics and statistical
information are defined is provided in the following tables summarizing operating results and operating data.

Operating Results Summary

The following are comparative summaries of operating results and certain operating data for the years ended

December 31, 2023, 2022 and 2021 (dollars in millions):

Revenues

...................................................................

Salaries and benefits
Supplies
Other operating expenses
Equity in earnings of affiliates
Depreciation and amortization
Interest expense
Losses (gains) on sales of facilities
Losses on retirement of debt

...................................................
.....................................................................
............................................
....................................
....................................
.........................................................
.............................
.......................................

Income before income taxes
Provision for income taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to HCA Healthcare, Inc. 

.......................................
.........................................
.................................................................
.....
........ 

2023

2022

2021

Amount
$ 64,968

Ratio
100.0

Amount
$ 60,233

Ratio
100.0

Amount
$ 58,752

Ratio
100.0

29,487
9,902
12,875
(22)
3,077
1,938
5
—
57,262
7,706
1,615
6,091
849
$ 5,242

45.4
15.2
19.8
—
4.7
3.0
—
—
88.1
11.9
2.5
9.4
1.3
8.1

27,685
9,371
11,155
(45)
2,969
1,741
(1,301)
78
51,653
8,580
1,746
6,834
1,191
5,643

$

46.0
15.6
18.5
(0.1)
5.0
2.9
(2.2)
0.1
85.8
14.2
2.9
11.3
1.9
9.4

$

26,779
9,481
9,961
(113)
2,853
1,566
(1,620)
12
48,919
9,833
2,112
7,721
765
6,956

45.6
16.1
17.0
(0.2)
4.9
2.7
(2.8)
—
83.3
16.7
3.6
13.1
1.3
11.8

% changes from prior year:

Revenues
Income before income taxes
Net income attributable to HCA Healthcare, Inc. 
Admissions(a)
Equivalent admissions(b)
Revenue per equivalent admission

...............................................................
...................................
....
........................................................
.......................................
..........................

Same facility % changes from prior year(c):

Revenues
Admissions(a)
Equivalent admissions(b)
Revenue per equivalent admission

...............................................................
........................................................
........................................
..........................

7.9%

(10.2)
(7.1)
2.7
4.9
2.8

7.6
3.3
4.8
2.7

2.5%

(12.7)
(18.9)
(0.7)
2.1
0.4

3.2
0.5
3.3
(0.1)

14.0%
81.1
85.3
4.0
6.8
6.8

14.4
4.8
7.6
6.3

(a)

(b)

(c)

Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general
measure of inpatient volume.
Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient
volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient
revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume,
resulting in a general measure of combined inpatient and outpatient volume.
Same facility information excludes the operations of hospitals and their related facilities that were either acquired, divested or
removed from service during the current and prior year.

64

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Operating Results Summary (continued)

Operating Data:

Number of hospitals at end of period
Number of freestanding outpatient surgical centers at end of period(a)
Number of licensed beds at end of period(b)
Weighted average beds in service(c)
Admissions(d)
Equivalent admissions(e)
Average length of stay (days)(f)
Average daily census(g)
Occupancy(h)
Emergency room visits(i)
Outpatient surgeries(j)
Inpatient surgeries(k)
Days revenues in accounts receivable(l)
Outpatient revenues as a % of patient revenues(m)

........................................................
...
.............................................
.........................................................
...........................................................................................
..........................................................................
................................................................
............................................................................
............................................................................................
..........................................................................
...............................................................................
.................................................................................
...................................................
..................................

2023

186
124
49,588
41,873
2,130,728
3,788,434
4.9
28,721

72%

9,342,783
1,044,415
528,845
53
38%

2022

182
126
49,281
41,982
2,075,459
3,611,299
5.1
28,778

72%

8,971,951
1,023,239
522,151
53
38%

2021

182
125
48,803
42,148
2,089,975
3,536,238
5.2
29,752

74%

8,475,345
1,008,236
522,069
49
37%

(a)
(b)

Excludes freestanding endoscopy centers (24 at December 31, 2023 and 21 at December 31, 2022 and 2021).
Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state
licensing agency.
Represents the average number of beds in service, weighted based on periods owned.

(c)
(d) Represents the total number of patients admitted to our hospitals and is used by management and certain investors

(e)

as a general measure of inpatient volume.
Equivalent admissions are used by management and certain investors as a general measure of combined inpatient
and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross
inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure
(admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient
volume.
(f)
Represents the average number of days admitted patients stay in our hospitals.
(g) Represents the average number of admitted patients in our hospital beds each day.
(h) Represents the percentage of hospital beds in service that are occupied by patients (admitted and observations).

(i)
(j)

Both average daily census and occupancy rate provide measures of the utilization of inpatient rooms.
Represents the number of patients treated in our emergency rooms.
Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management
and endoscopy procedures are not included in outpatient surgeries.

(k) Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain

(l)

management and endoscopy procedures are not included in inpatient surgeries.
Revenues per day is calculated by dividing the revenues for the fourth quarter of each year by the days in the quarter.
Days revenues in accounts receivable is then calculated as accounts receivable at the end of the period divided by
revenues per day.

(m) Represents the percentage of patient revenues related to patients who are not admitted to our hospitals.

65

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Years Ended December 31, 2023 and 2022

Net income attributable to HCA Healthcare, Inc. totaled $5.242 billion, or $18.97 per diluted share, for 2023,
compared to $5.643 billion, or $19.15 per diluted share, for 2022. The 2023 results include losses on sales of facilities of
$5 million, or $0.04 per diluted share. The 2022 results include gains on sales of facilities of $1.301 billion, or $2.46 per
diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share. Our provisions for income taxes
for 2023 and 2022 include tax benefits of $93 million, or $0.34 per diluted share, and $77 million, or $0.26 per diluted
share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon
amounts net of the applicable income taxes. Shares used for diluted earnings per share were 276.412 million shares and
294.666 million shares for the years ended December 31, 2023 and 2022, respectively. During 2023 and 2022, we
repurchased 14.465 million and 30.747 million shares, respectively, of our common stock.

During 2023, consolidated admissions increased 2.7% and same facility admissions increased 3.3% compared to
2022. Consolidated inpatient surgeries increased 1.3% and same facility inpatient surgeries increased 2.0% during 2023
compared to 2022. Emergency room visits increased 4.1% on a consolidated basis and increased 4.7% on a same facility
basis during 2023 compared to 2022.

Revenues increased 7.9% to $64.968 billion for 2023 from $60.233 billion for 2022. The increase in revenues was
due primarily to the combined impact of a 4.9% increase in equivalent admissions and a 2.8% increase in revenue per
equivalent admission compared to 2022. Same facility revenues increased 7.6% due primarily to the combined impact of
a 4.8% increase in equivalent admissions and a 2.7% increase in revenue per equivalent admission compared to 2022.

Salaries and benefits, as a percentage of revenues, were 45.4% in 2023 and 46.0% in 2022. Salaries and benefits
per equivalent admission increased 1.5% in 2023 compared to 2022. Same facility salaries and benefits per full time
equivalent increased 1.7% for 2023 compared to 2022. We continue to utilize certain contract, overtime and other
premium rate labor costs to support our clinical staff and patients. While these costs have declined compared to the prior
year period, future costs may be affected by labor market conditions and other factors. Share-based compensation expense
was $262 million in 2023 and $341 million in 2022.

Supplies, as a percentage of revenues, were 15.2% in 2023 and 15.6% in 2022. Supply costs per equivalent
admission increased 0.7% in 2023 compared to 2022. Supply costs per equivalent admission increased 3.1% for medical
devices and 0.6% for general medical and surgical items, but declined 6.4% for pharmacy supplies in 2023 compared to
2022. The decline in pharmacy supplies is primarily related to lower application of certain COVID-19 therapies, combined
with increased utilization of generic drugs during 2023 compared to 2022.

Other operating expenses, as a percentage of revenues, were 19.8% in 2023 and 18.5% in 2022. Other operating
expenses are primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases,
utilities, insurance (including professional liability insurance) and nonincome taxes. The 1.3% increase in other operating
expenses, as a percentage of revenues for 2023 compared to 2022, was primarily related to increased costs for state
provider fees in certain states, professional fees and insurance. We have seen inflation have a negative impact on certain
of these expenses and expect inflationary pressures will continue to impact operating expenses in 2024. Provisions for
losses related to professional liability risks were $619 million and $517 million for 2023 and 2022, respectively. We
recorded an increase of $40 million, or $0.11 per diluted share, during 2023 and a reduction of $55 million, or $0.14 per
diluted share, during 2022 to our provision for professional liability risks related to the receipt of updated actuarial
information.

Equity in earnings of affiliates was $22 million for 2023 and $45 million for 2022. The decline of $23 million is

primarily related to the operations of a hospital-based physician staffing joint venture.

Depreciation and amortization, as a percentage of revenues, were 4.7% in 2023 and 5.0% in 2022. Depreciation
expense was $3.052 billion for 2023 and $2.941 billion for 2022. The increase of $111 million in depreciation expense
relates primarily to capital expenditures at our existing facilities.

Interest expense increased to $1.938 billion for 2023 from $1.741 billion for 2022. The $197 million increase in
interest expense was primarily due to an increase in the average effective interest rate. The average effective interest rate
for our long-term debt was 5.0% for 2023 and 4.7% for 2022. Our average debt balance was $38.790 billion for 2023
compared to $37.363 billion for 2022.

66

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Years Ended December 31, 2023 and 2022 (continued)

Losses on sales of facilities were $5 million for 2023 and gains on sales of facilities were $1.301 billion for 2022.
The gains on sales of facilities for 2022 were primarily related to the sales of controlling interests in a subsidiary of our
group purchasing organization and subsidiaries of our research entities.

During 2022, we issued $6.000 billion aggregate principal amount of senior notes and used a portion of the net
proceeds to pay down our revolving credit facilities, and we redeemed all $1.250 billion outstanding aggregate principal
amount of our 4.75% senior notes due 2023 and all $1.250 billion outstanding aggregate principal amount of our 5.875%
senior notes due 2023. The aggregate pretax loss on retirement of debt for these two redemptions was $78 million.

The effective income tax rate was 23.6% for both 2023 and 2022. The effective tax rate computations exclude net

income attributable to noncontrolling interests as it relates to consolidated partnerships.

Net income attributable to noncontrolling interests declined from $1.191 billion for 2022 to $849 million for 2023.
The decline in net income attributable to noncontrolling interests related primarily to the gain on the sale of a controlling
interest in a subsidiary of our group purchasing organization in 2022.

For results of operations comparisons relating to years ending December 31, 2022 and 2021, refer to our annual
report on Form 10-K, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on February 17,
2023.

Liquidity and Capital Resources

Our primary cash requirements are paying our operating expenses, servicing our debt, capital expenditures on our
existing properties, acquisitions of hospitals and health care entities, repurchases of our common stock, dividends to
stockholders and distributions to noncontrolling interests. Our primary cash sources are from operating activities,
issuances of debt securities and sales of hospitals and health care entities.

Cash provided by operating activities totaled $9.431 billion in 2023 compared to $8.522 billion in 2022 and $8.959
billion in 2021. The $909 million increase in cash provided by operating activities for 2023, compared to 2022, was related
primarily to a positive change in working capital items of $695 million, mainly from an increase in accounts payable and
accrued expenses, and an increase in net income of $275 million, excluding losses and gains on sales of facilities and
losses on retirement of debt. The $437 million decline in cash provided by operating activities for 2022, compared to
2021, was related primarily to a negative change in working capital items of $649 million, mainly from a decline in
accounts payable and accrued expenses, and a decline in net income of $687 million, excluding gains on sales of facilities
and losses on retirement of debt, offset by a decline in cash payments for interest and income taxes of $847 million for
2022 compared to 2021. Cash payments for interest and income taxes increased $441 million for 2023 compared to 2022.
Working capital totaled $2.272 billion at December 31, 2023 and $3.741 billion at December 31, 2022. The decline in
working capital in the current period is primarily due to the $2.054 billion increase in long-term debt due within one year
in the current period.

Cash used in investing activities was $5.317 billion, $3.389 billion and $2.643 billion in 2023, 2022 and 2021,
respectively. Excluding acquisitions, capital expenditures were $4.744 billion in 2023, $4.395 billion in 2022 and $3.577
billion in 2021. Planned capital expenditures are expected to approximate between $5.1 billion and $5.3 billion in 2024.
At December 31, 2023, there were projects under construction which had an estimated additional cost to complete and
equip over the next five years of approximately $4.1 billion. We expect to fund capital expenditures with internally
generated and borrowed funds. We expended $635 million, $224 million and $1.105 billion for acquisitions of hospitals
and health care entities during 2023, 2022 and 2021, respectively. Cash flows from sales of hospitals and health care
entities declined from $2.160 billion for 2021 (primarily related to the proceeds from our sales of five hospitals in Georgia
and other health care entity investments) to $1.237 billion of net proceeds for 2022 (primarily related to proceeds from
our sales of other health care entities) and were $193 million for 2023.

67

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Cash used in financing activities totaled $4.094 billion in 2023, $5.656 billion in 2022 and $6.655 billion in 2021.
During 2023, we had a net increase of $1.295 billion in our indebtedness, paid dividends of $661 million and paid $3.811
billion for repurchases of common stock. During 2022, we had a net increase of $3.287 billion in our indebtedness, paid
dividends of $653 million and paid $7.000 billion for repurchases of common stock. During 2021, we had a net increase
of $3.255 billion in our indebtedness, paid dividends of $624 million and paid $8.215 billion for repurchases of common
stock. During 2023, 2022 and 2021, we made distributions to noncontrolling interests of $640 million, $1.025 billion and
$749 million, respectively. The increase in distributions in 2022 was related to the sale of a controlling interest in a
subsidiary of our group purchasing organization.

We, or our affiliates, may in the future repurchase portions of our debt or equity securities, subject to certain
limitations, from time to time in either the open market or through privately negotiated transactions, in accordance with
applicable SEC and other legal requirements. The timing, prices, and sizes of purchases depend upon prevailing trading
prices, general economic and market conditions, and other factors, including applicable securities laws.

During January 2022, January 2023 and January 2024, our Board of Directors authorized $8 billion, $3 billion and
$6 billion, respectively, for share repurchases of the Company’s outstanding common stock. The January 2022
authorization was completed during 2023, and at December 31, 2023, there was $775 million of share repurchase
authorization that remained available under the January 2023 authorization. Funds for the repurchase of debt or equity
securities have, and are expected to, come primarily from cash generated from operations and borrowed funds.

During 2023, our Board of Directors declared four quarterly dividends of $0.60 per share, or $2.40 per share in the
aggregate, on our common stock. On January 29, 2024, our Board of Directors declared a quarterly dividend of $0.66 per
share on our common stock payable on March 29, 2024 to stockholders of record at the close of business on March 15,
2024. The timing and amount of future cash dividends will vary based on a number of factors, including future capital
requirements for strategic transactions, share repurchases and investing in our existing markets, the availability of
financing on acceptable terms, debt service requirements, changes to applicable tax laws or corporate laws, changes to
our business model and periodic determinations by our Board of Directors that cash dividends are in the best interest of
stockholders and are in compliance with all applicable laws and agreements of the Company.

In addition to cash flows from operations, available sources of capital include amounts available under our senior
secured credit facilities ($6.107 billion as of December 31, 2023 and $6.228 billion as of January 31, 2024) and anticipated
access to public and private debt and equity markets.

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay
claims, totaled $564 million and $473 million at December 31, 2023 and 2022, respectively. The insurance subsidiary
maintained net reserves for professional liability risks of $121 million and $147 million at December 31, 2023 and 2022,
respectively. Our facilities are insured by our insurance subsidiary for losses up to $80 million per occurrence; however,
this coverage is subject, in most cases, to a $15 million per occurrence self-insured retention. Net reserves for the self-
insured professional liability risks retained were $1.926 billion and $1.836 billion at December 31, 2023 and 2022,
respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate
$524 million. We estimate that approximately $489 million of the expected net claim payments during the next 12 months
will relate to claims subject to the self-insured retention.

Financing Activities

We have significant debt service requirements. Our debt totaled $39.593 billion and $38.084 billion at December

31, 2023 and 2022, respectively. Our interest expense was $1.938 billion for 2023 and $1.741 billion for 2022.

During 2023, we issued $3.250 billion aggregate principal amount of senior notes comprised of (i) $1.000 billion
aggregate principal amount of 5.200% senior notes due 2028, (ii) $1.250 billion aggregate principal amount of 5.500%
senior notes due 2033 and (iii) $1.000 billion aggregate principal amount of 5.900% senior notes due 2053. We used the
net proceeds to repay borrowings under our asset-based revolving credit facility.

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

68

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Financing Activities (continued)

HCA Inc., a direct wholly-owned subsidiary of HCA Healthcare, Inc., is the primary obligor under a substantial
portion of our indebtedness, including our senior secured credit facilities and senior notes. The senior secured credit
facilities are fully and unconditionally guaranteed on a senior secured basis by substantially all existing and future, direct
and indirect, 100% owned material domestic subsidiaries that are “Unrestricted Subsidiaries” under our Indenture dated
December 16, 1993 (except for certain special purpose subsidiaries that only guarantee and pledge their assets under our
senior secured asset-based revolving credit facility). During 2022, the conditions in the senior secured indentures to permit
the permanent release of the subsidiary guarantees and all collateral securing the senior secured notes were met. The
subsidiary guarantees and collateral securing our senior secured credit facilities were not affected. Following this release
of the subsidiary guarantees and collateral securing the senior secured notes, summarized financial information for HCA
Healthcare, Inc., HCA Inc. and the subsidiary guarantors, and information about the subsidiary guarantees and affiliates
whose securities were pledged as collateral are no longer required to be presented.

All of the senior notes issued by HCA Inc. in 2014 or later are fully and unconditionally guaranteed on an unsecured
basis by HCA Healthcare, Inc. The combined assets, liabilities, and results of operations of HCA Healthcare, Inc. and
HCA Inc. are not materially different than the corresponding amounts presented in the consolidated financial statements
of HCA Healthcare, Inc. As a result, summarized financial information of HCA Healthcare, Inc. and HCA Inc. is not
required to be presented under Rule 13-01 of Regulation S-X.

Market Risk

We are exposed to market risk related to changes in market values of securities. Our insurance subsidiaries held
$564 million of investment securities at December 31, 2023. These investments are carried at fair value, with changes in
unrealized gains and losses that are not credit-related being recorded as adjustments to other comprehensive income. At
December 31, 2023, we had net unrealized losses of $28 million on the insurance subsidiaries’ investment securities.

We are exposed to market risk related to market illiquidity. Investments in debt and equity securities of our
insurance subsidiaries could be impaired by the inability to access the capital markets. Should the insurance subsidiaries
require significant amounts of cash in excess of normal cash requirements to pay claims and other expenses on short
notice, we may have difficulty selling these investments in a timely manner or be forced to sell them at a price less than
what we might otherwise have been able to in a normal market environment. We may be required to recognize credit-
related impairments on our investment securities in future periods should issuers default on interest payments or should
the fair market valuations of the securities deteriorate due to ratings downgrades or other issue-specific factors.

We are also exposed to market risk related to changes in interest rates. Debt of $3.193 billion at December 31, 2023
was subject to variable rates of interest, while the remaining debt balance of $36.400 billion at December 31, 2023 was
subject to fixed rates of interest. Both the general level of interest rates and, for the senior secured credit facilities, our
leverage affect our variable interest rates. Our variable debt is comprised primarily of amounts outstanding under the
senior secured credit facilities. The average effective interest rate for our long-term debt was 5.0% for 2023 and 4.7% for
2022.

The estimated fair value of our total long-term debt was $38.253 billion at December 31, 2023. The estimates of
fair value are based upon the quoted market prices for the same or similar issues of long-term debt with the same
maturities. Based on a hypothetical 1% increase in interest rates, the potential annualized reduction to future pretax
earnings would be approximately $32 million. To mitigate the impact of fluctuations in interest rates, we generally target
a majority of our debt portfolio to be maintained at fixed rates.

We are exposed to currency translation risk related to our foreign operations. We currently do not consider the
market risk related to foreign currency translation to be material to our consolidated financial statements or our liquidity.

69

HCA HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)

Tax Examinations

At December 31, 2023, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016,
2017 and 2018 federal income tax returns and the 2019 returns of certain affiliates. We are also subject to examination
by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Management believes HCA
Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance
with applicable laws and agreements established with the IRS, state and foreign taxing authorities, and final resolution of
any disputes will not have a material, adverse effect on our results of operations or financial position. However, if
payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material,
adverse effect on our results of operations or financial position.

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Information with respect to this Item is provided under the caption “Market Risk” under Item 7, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations.”

70

Item 8.

Financial Statements and Supplementary Data

Information with respect to this Item is contained in our consolidated financial statements indicated in the Index to

Consolidated Financial Statements on Page F-1 of this annual report on Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

1. Conclusion Regarding the Effectiveness of Disclosure Controls and 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 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based
on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls
and procedures were effective as of the end of the period covered by this annual report.

2. Internal Control Over Financial Reporting

(a) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting,
as such term is defined in Exchange Act Rule 13a-15(f). Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective, can provide
only reasonable assurance with respect to financial statement preparation and presentation.

Under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting
based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework). 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, 2023.

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

71

(b) Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
of HCA Healthcare, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited HCA Healthcare, Inc.’s internal control over financial reporting as of December 31, 2023, based on
criteria established in Internal 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, 2023,
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, 2023 and 2022, and the
related consolidated statements of income, comprehensive income, stockholders’ equity (deficit), and cash flows for each
of the three years in the period ended December 31, 2023, and the related notes and our report dated February 16, 2024
expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ Ernst & Young LLP

Nashville, Tennessee
February 16, 2024

72

(c) Changes in Internal Control Over Financial Reporting

During the fourth quarter of 2023, there were no changes in our internal control over financial reporting that

materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B.

Other Information

(b) During the three months ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) of the
Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading
arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

73

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

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 2024 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 10-K with respect to our executive officers. The information
required by this Item contained in such definitive proxy materials is incorporated herein by reference.

Information on the beneficial ownership reporting for our directors and executive officers required by this Item is
contained under the caption “Delinquent Section 16(a) Reports” in the definitive proxy materials to be filed in connection
with our 2024 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 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

We have a Code of Conduct which is applicable to all our directors, officers and employees (the “Code of
Conduct”). The Code of Conduct is available on the Ethics and Compliance and Corporate Governance pages of our
website at www.hcahealthcare.com. 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 8-K. Our Code of Conduct is available free of charge upon request to our Investor Relations Department, HCA
Healthcare, Inc., One Park Plaza, Nashville, TN 37203.

Item 11.

Executive Compensation

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 2024 Annual Meeting of Stockholders, which information is incorporated herein by reference, except as to
information required pursuant to Item 402(v) of SEC Regulation S-K, relating to pay versus performance.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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 2024 Annual Meeting of Stockholders, which information is
incorporated herein by reference.

74

Total

(1)

(2)

This table provides certain information as of December 31, 2023 with respect to our equity compensation plans:

EQUITY COMPENSATION PLAN INFORMATION
(Share and share unit amounts in millions)

(a)

(b)

Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding
options,
warrants and rights

(c)
Number of securities
remaining
available for future
issuance
under equity
compensation
plans (excluding securities
reflected in column(a))

Equity compensation plans approved by

security holders

................................................

Equity compensation plans not approved by

security holders

................................................
..................................................................

8.330(1)

$146.46(1)

24.840(2)

—
8.330

—
$146.46

—
24.840

Includes 1.551 million restricted share units which vest solely based upon continued employment over a specific
period of time and 1.410 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
90% of target) to two times the units granted (for actual performance of 110% or more of target). The weighted
average exercise price does not take these restricted share units and performance share units into account.
Includes 11.056 million shares available for future grants under the 2020 Stock Incentive Plan for Key Employees
of HCA Healthcare, Inc. and its Affiliates, 3.784 million shares of common stock reserved for future issuance under
the HCA Holdings, Inc. Employee Stock Purchase Plan and 10.000 million shares of common stock reserved for
future issuance under the HCA Healthcare, Inc. 2023 Employee Stock Purchase Plan.

* For additional information concerning our equity compensation plans, see the discussion in Note 2 — Share-Based
Compensation in the notes to the consolidated financial statements.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is set forth under the headings “Certain Relationships and Related Party
Transactions” and “Corporate Governance” in the definitive proxy materials to be filed in connection with our 2024
Annual Meeting of Stockholders, which information is incorporated herein by reference.

Item 14.

Principal Accountant Fees and Services

The information required by this Item is set forth under the heading “Ratification of Appointment of Independent
Registered Public Accounting Firm” in the definitive proxy materials to be filed in connection with our 2024 Annual
Meeting of Stockholders, which information is incorporated herein by reference.

75

Item 15.

Exhibits and Financial Statement Schedules

(a) Documents filed as part of the report:

PART IV

1. Financial Statements. The accompanying Index to Consolidated Financial Statements on page F-1 of this annual

report on Form 10-K is provided in response to this item.

2. List of Financial Statement Schedules. All schedules are omitted because the required information is either not

present, not present in material amounts or presented within the consolidated financial statements.

3. List of Exhibits

2.1

2.2

3.1

3.2

4.1

4.2

4.3

4.4

— Agreement and Plan of Merger, dated July 24, 2006, by and among HCA Inc., Hercules Holding II,
LLC and Hercules Acquisition Corporation (filed as Exhibit 2.1 to the Company’s Current Report on
Form 8-K filed July 25, 2006, and incorporated herein by reference).

— Merger Agreement, dated November 22, 2010, by and among HCA Inc., HCA Holdings, Inc., and HCA
Merger Sub LLC (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed November
24, 2010, and incorporated herein by reference).

— Amended and Restated Certificate of Incorporation of the Company (restated for SEC filing purposes
only) (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2020, and incorporated herein by reference).

— Third Amended and Restated Bylaws of the Company (filed as Exhibit 3.1 to the Company’s Current

Report on Form 8-K filed December 19, 2022, and incorporated herein by reference).

— Description of Registered Securities (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-

K for the fiscal year ended December 31, 2022, and incorporated herein by reference).

— Specimen Certificate for shares of Common Stock, par value $0.01 per share, of the Company (filed as
Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017,
and incorporated herein by reference).

— Security Agreement, dated as of November 17, 2006, by and among HCA Inc., the subsidiary grantors
party thereto and The Bank of New York, as collateral agent (filed as Exhibit 4.2 to the Company’s
Current Report on Form 8-K filed November 24, 2006, and incorporated herein by reference).

— Pledge Agreement, dated as of November 17, 2006, by and among HCA Inc., the subsidiary pledgors
party thereto and The Bank of New York, as collateral agent (filed as Exhibit 4.3 to the Company’s
Current Report on Form 8-K filed November 24, 2006, and incorporated herein by reference).

4.5(a) — $13,550,000,000 — €1,000,000,000 Credit Agreement, dated as of November 17, 2006, by and among
HCA Inc., HCA UK Capital Limited, the lending institutions from time to time parties thereto, Banc of
America Securities LLC, J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as joint lead arrangers and joint bookrunners, Bank of America,
N.A., as administrative agent, JPMorgan Chase Bank, N.A. and Citicorp North America, Inc., as co-
syndication agents and Merrill Lynch Capital Corporation, as documentation agent (filed as Exhibit 4.8
to the Company’s Current Report on Form 8-K filed November 24, 2006, and incorporated herein by
reference).

4.5(b) — Amendment No. 1 to the Credit Agreement, dated as of February 16, 2007, by and among HCA Inc.,
HCA UK Capital Limited, the lending institutions from time to time parties thereto, Bank of America,
N.A., as administrative agent, JPMorgan Chase Bank, N.A., and Citicorp North America, Inc., as Co-
Syndication Agents, Banc of America Securities, LLC, J.P. Morgan Securities Inc., Citigroup Global
Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and
bookrunners, Deutsche Bank Securities and Wachovia Capital Markets LLC, as joint bookrunners and
Merrill Lynch Capital Corporation, as documentation agent (filed as Exhibit 4.7(b) to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and incorporated herein by
reference).

4.5(c) — Amendment No. 2 to the Credit Agreement, dated as of March 2, 2009, by and among HCA Inc., HCA
UK Capital Limited, the lending institutions from time to time parties thereto, Bank of America, N.A.,
as administrative agent, JPMorgan Chase Bank, N.A., and Citicorp North America, Inc., as Co-

76

Syndication Agents, Banc of America Securities, LLC, J.P. Morgan Securities Inc., Citigroup Global
Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and
bookrunners, Deutsche Bank Securities and Wachovia Capital Markets LLC, as joint bookrunners and
Merrill Lynch Capital Corporation, as documentation agent (filed as Exhibit 4.8(c) to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and incorporated herein by
reference).

4.5(d) — Amendment No. 3 to the Credit Agreement, dated as of June 18, 2009, by and among HCA Inc., HCA
UK Capital Limited, the lending institutions from time to time parties thereto, Bank of America, N.A.,
as administrative agent, JPMorgan Chase Bank, N.A., and Citicorp North America, Inc., as Co-
Syndication Agents, Banc of America Securities, LLC, J.P. Morgan Securities Inc., Citigroup Global
Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and
bookrunners, Deutsche Bank Securities and Wachovia Capital Markets LLC, as joint bookrunners and
Merrill Lynch Capital Corporation, as documentation agent (filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed June 22, 2009, and incorporated herein by reference).

4.5(e) — Extension Amendment No. 1 to the Credit Agreement, dated as of April 6, 2010, by and among HCA
Inc., HCA UK Capital Limited, the lending institutions from time to time parties thereto, Bank of
America, N.A., as administrative agent and collateral agent (filed as Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed April 8, 2010, and incorporated herein by reference).

4.5(f)

— Amended and Restated Joinder Agreement No. 1, dated as of November 8, 2010, by and among each
of the financial institutions listed as a “Replacement-1 Revolving Credit Lender” on Schedule A thereto,
HCA Inc., Bank of America, N.A., as Administrative Agent and as Collateral Agent, and the other
parties listed on the signature pages thereto (filed as Exhibit 4.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2010, and incorporated herein by reference).

4.5(g) — Restatement Agreement, dated as of May 4, 2011, by and among HCA Inc., HCA UK Capital Limited,
the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent to the
Credit Agreement, dated as of November 17, 2006, as amended on February 16, 2007, March 2, 2009,
June 18, 2009, April 6, 2010 and November 8, 2010 (filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed May 9, 2011, and incorporated herein by reference).

4.5(h) — Extension Amendment No. 1, dated as of April 25, 2012, by and among HCA Inc., HCA UK Capital
Limited, each of the U.S. Guarantors, each of the European Guarantors, the lenders party thereto and
Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer (filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 26, 2012, and incorporated
herein by reference).

4.5(i)

4.5(j)

4.5(k)

4.5(l)

— Restatement Agreement, dated as of February 26, 2014, to (i) the Credit Agreement, dated as of
November 17, 2006 and as amended and restated as of May 4, 2011, by and among the HCA Inc., HCA
UK Capital Limited, the lenders party thereto and Bank of America, N.A., as administrative agent and
collateral agent and (ii) the U.S. Guarantee, dated as of November 17, 2006, by and among the
guarantors party thereto and Bank of America, N.A., as administrative agent (filed as Exhibit 4.1 to the
Company’s Current Report on Form 8-K filed February 28, 2014, and incorporated herein by reference).

— Supplement No. 14, dated as of November 9, 2015, to the U.S. Guarantee, dated as of November 17,
2006 and amended and restated on February 26, 2014, by and among the guarantors party thereto and
Bank of America, N.A., as administrative agent (filed as Exhibit 4.4(j) to the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2018, and incorporated herein by reference).

—

Schedule of Omitted Supplements to the U.S. Guarantee, dated as of November 17, 2006 and amended 
and restated on February 26, 2014, filed pursuant to Instruction 2 to Item 601 of Regulation S-K.
— Restatement Agreement, dated as of June 28, 2017, to the Credit Agreement, dated as of November 17,
2006, by and among HCA Inc., as borrower, the guarantors party thereto, Bank of America, N.A., as
administrative agent and collateral agent, and the lenders party thereto (filed as Exhibit 4.1 to the
Company’s Current Report on Form 8-K filed June 30, 2017, and incorporated herein by reference).

4.5(m) — Joinder Agreement No. 8, dated as of July 16, 2019, by and among HCA Inc., as borrower, the
guarantors party thereto, Bank of America, N.A., as administrative agent and collateral agent, and the
lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 22,
2019, and incorporated herein by reference).

77

4.5(n) — Joinder Agreement No. 9, dated as of October 8, 2019, by and among HCA Inc., as borrower, the
guarantors party thereto, Bank of America, N.A., as administrative agent and collateral agent, and the
lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed October
10, 2019, and incorporated herein by reference).

4.5(o) — Joinder Agreement No. 10, dated as of November 20, 2019, by and among HCA Inc., as borrower, the
guarantors party thereto, Bank of America, N.A., as administrative agent and collateral agent, and the
lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed
November 21, 2019, and incorporated herein by reference).

4.5(p) — Restatement Agreement, dated as of June 30, 2021, to the Credit Agreement, dated as of November 17,
2006, by and among HCA Inc., as borrower, the guarantors party thereto, Bank of America, N.A., as
administrative agent and collateral agent, and the lenders party thereto (filed as Exhibit 4.10 to the
Company’s Current Report on Form 8-K filed July 1, 2021, and incorporated herein by reference).

4.5(q) — Restatement Agreement dated as of January 4, 2023, by and among HCA Inc., as borrower, the
guarantors party thereto, Bank of America, N.A., as administrative agent and collateral agent, and the
lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January
4, 2023, and incorporated herein by reference).

4.6(a) — Security Agreement, dated as November 17, 2006, and amended and restated as of March 2, 2009, by
and among the Company, the Subsidiary Grantors named therein and Bank of America, N.A., as
Collateral Agent (filed as Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2008, and incorporated herein by reference).

4.6(b) — Supplement No. 2, dated as of October 27, 2011, to the Amended and Restated Security Agreement,
dated as of March 2, 2009, as supplemented, by and among the subsidiary grantor named therein and
Bank of America, N.A., as collateral agent (filed as Exhibit 4.5(b) to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2018, and incorporated herein by reference).

4.6(c) —

Schedule  of  Omitted  Supplements  to  the  Security  Agreement,  dated  as  of  November  17,  2006  and 
amended and restated as of March 2, 2009, filed pursuant to Instruction 2 to Item 601 of Regulation S-K.
4.7(a) — Pledge Agreement, dated as of November 17, 2006, and amended and restated as of March 2, 2009, by
and among the Company, the Subsidiary Pledgors named therein and Bank of America, N.A., as
Collateral Agent (filed as Exhibit 4.11 to the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2008, and incorporated herein by reference).

4.7(b) — Supplement No. 1 dated as of October 27, 2011 to the Amended and Restated Pledge Agreement, dated
as of March 2, 2009, by and among the subsidiary pledgors named therein and Bank of America, N.A.,
as collateral agent (filed as Exhibit 4.6(b) to the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2018, and incorporated herein by reference).

4.7(c) —

Schedule of Omitted Supplements to the Pledge Agreement, dated as of November 6, 2006 and amended 
and restated as of March 2, 2009, filed pursuant to Instruction 2 to Item 601 of Regulation S-K..

4.8(a) — $2,500,000,000 Credit Agreement, dated as of September 30, 2011, by and among HCA Inc., the
subsidiary borrowers party thereto, the lenders from time to time party thereto and Bank of America,
N.A., as administrative agent (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed
October 3, 2011, and incorporated herein by reference).

4.8(b) — Restatement Agreement, dated as of March 7, 2014, to the Credit Agreement, dated as of September
30, 2011, by and among HCA Inc., the subsidiary borrowers party thereto, the lenders party thereto and
Bank of America, N.A. as administrative agent and collateral agent (filed as Exhibit 4.1 to the
Company’s Current Report on Form 8-K filed March 11, 2014, and incorporated herein by reference).

4.8(c) — Joinder Agreement and Amendment No. 1, dated as of October 30, 2014, to the Credit Agreement,
dated as of September 30, 2011 and amended and restated as of March 7, 2014, by and among HCA
Inc., the subsidiary borrowers party thereto, the lenders party thereto and Bank of America, N.A. as
administrative agent and collateral agent (filed as Exhibit 4.1 to the Company’s Current Report on Form
8-K filed October 31, 2014, and incorporated herein by reference).

4.8(d) — Restatement Agreement, dated as of June 28, 2017, to the Credit Agreement, dated as of September 30,
2011, by and among HCA Inc., as borrower, the subsidiary borrowers party thereto, Bank of America,
N.A., as administrative agent and collateral agent, and the lenders party thereto (filed as Exhibit 4.2 to
the Company’s Current Report on Form 8-K filed June 30, 2017, and incorporated herein by reference).

78

4.8(e) — Joinder Agreement, dated as of January 3, 2018, to the Credit Agreement, dated as of September 30,
2011 (as amended and restated on March 7, 2014, as further amended on October 30, 2014, and as
further amended and restated on June 28, 2017), by and among the subsidiary borrowers party thereto
and Bank of America, N.A., as administrative agent (filed as Exhibit 4.7(e) to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018, and incorporated herein by
reference).

4.8(f)

— Restatement Agreement, dated as of June 30, 2021, to the Credit Agreement, dated as of September 30,
2011, by and among HCA Inc., as parent borrower, the subsidiary borrowers party thereto, Bank of
America, N.A., as administrative agent and collateral agent, and the lenders party thereto (filed as
Exhibit 4.11 to the Company’s Current Report on Form 8-K filed July 1, 2021, and incorporated herein
by reference).

4.8(g) — Amendment No. 1 to Credit Agreement dated as of January 4, 2023, by and among HCA Inc., as parent
borrower, the subsidiary borrowers party thereto, Bank of America, N.A., as administrative agent and
collateral agent, and the lenders party thereto (filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K filed January 4, 2023, and incorporated herein by reference).

4.9(a) — Security Agreement, dated as of September 30, 2011, by and among HCA Inc., the subsidiary borrowers
party thereto and Bank of America, N.A., as collateral agent (filed as Exhibit 4.5 to the Company’s
Current Report on Form 8-K filed October 3, 2011, and incorporated herein by reference).

4.9(b) — Supplement No. 1, dated as of October 27, 2011, to the Security Agreement dated as of September 30,
2011, by and among the subsidiary borrower party thereto and Bank of America, N.A., as collateral
agent (filed as Exhibit 4.8(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2018, and incorporated herein by reference).

4.9(c) —

Schedule  of  Omitted  Supplements  to  the  Security Agreement  dated  as  of  September  30,  2011,  filed 
pursuant to Instruction 2 to Item 601 of Regulation S-K.

4.10(a) — General Intercreditor Agreement, dated as of November 17, 2006, by and between Bank of America,
N.A., as First Lien Collateral Agent, and The Bank of New York, as Junior Lien Collateral Agent (filed
as Exhibit 4.13(a) to the Company’s Registration Statement on Form S-4 (File No. 333-145054), and
incorporated herein by reference).

4.10(b) — Receivables Intercreditor Agreement, dated as of November 17, 2006, by and among Bank of America,
N.A., as ABL Collateral Agent, Bank of America, N.A., as CF Collateral Agent and The Bank of New
York, as Bonds Collateral Agent (filed as Exhibit 4.13(b) to the Company’s Registration Statement on
Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.10(c) — First Lien Intercreditor Agreement, dated as of April 22, 2009, by and among Bank of America, N.A.
as Collateral Agent, Bank of America, N.A. as Authorized Representative under the Credit Agreement
and Law Debenture Trust Company of New York as the Initial Additional Authorized Representative
(filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K filed April 28, 2009, and
incorporated herein by reference).

4.10(d) — Additional General Intercreditor Agreement, dated as of August 1, 2011, by and among Bank of
America, N.A., in its capacity as First Lien Collateral Agent, The Bank of New York Mellon, in its
capacity as Junior Lien Collateral Agent and in its capacity as trustee for the Second Lien Notes issued
on November 17, 2006, and The Bank of New York Mellon Trust Company, N.A., in its capacity as
trustee for the Second Lien Notes issued on February 19, 2009 (filed as Exhibit 4.9 to the Company’s
Current Report on Form 8-K filed August 1, 2011, and incorporated herein by reference).

4.10(e) — Additional Receivables Intercreditor Agreement, dated as of August 1, 2011, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as New First Lien Collateral
Agent (filed as Exhibit 4.10 to the Company’s Current Report on Form 8-K filed August 1, 2011, and
incorporated herein by reference).

4.10(f) — Additional General Intercreditor Agreement, dated as of February 16, 2012, by and among Bank of
America, N.A., in its capacity as First Lien Collateral Agent, The Bank of New York Mellon, in its
capacity as Junior Lien Collateral Agent and in its capacity as trustee for the Second Lien Notes issued
on November 17, 2006, and The Bank of New York Mellon Trust Company, N.A., in its capacity as
trustee for the Second Lien Notes issued on February 19, 2009 (filed as Exhibit 4.9 to the Company’s
Current Report on Form 8-K filed February 16, 2012, and incorporated herein by reference).

79

4.10(g) — Additional Receivables Intercreditor Agreement, dated as of February 16, 2012, by and between Bank
of America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as New First Lien Collateral
Agent (filed as Exhibit 4.10 to the Company’s Current Report on Form 8-K filed February 16, 2012,
and incorporated herein by reference).

4.10(h) — Additional General Intercreditor Agreement, dated as of October 23, 2012, by and among Bank of
America, N.A., in its capacity as First Lien Collateral Agent, The Bank of New York Mellon, in its
capacity as Junior Lien Collateral Agent and in its capacity as trustee for the Second Lien Notes issued
on November 17, 2006, and The Bank of New York Mellon Trust Company, N.A., in its capacity as
trustee for the Second Lien Notes issued on February 19, 2009 (filed as Exhibit 4.10 to the Company’s
Current Report on Form 8-K filed October 23, 2012, and incorporated herein by reference).

4.10(i) — Additional Receivables Intercreditor Agreement, dated as of October 23, 2012, by and between Bank
of America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as New First Lien Collateral
Agent (filed as Exhibit 4.11 to the Company’s Current Report on Form 8-K filed October 23, 2012, and
incorporated herein by reference).

4.11

4.12

4.13

— Registration Rights Agreement, dated as of November 22, 2010, by and among HCA Holdings, Inc.,
Hercules Holding II, LLC and certain other parties thereto (filed as Exhibit 4.4 to the Company’s
Current Report on Form 8-K filed November 24, 2010, and incorporated herein by reference).

— Registration Rights Agreement, dated as of March 16, 1989, by and among HCA-Hospital Corporation
of America and the persons listed on the signature pages thereto (filed as Exhibit 4.14 to the Company’s
Registration Statement on Form S-4 (File No. 333-145054), and incorporated herein by reference).

— Assignment and Assumption Agreement, dated as of February 10, 1994, by and between HCA-Hospital
Corporation of America and Columbia Healthcare Corporation relating to the Registration Rights
Agreement, as amended (filed as Exhibit 4.15 to the Company’s Registration Statement on Form S-4
(File No. 333-145054), and incorporated herein by reference).

4.14(a) — Indenture, dated as of December 16, 1993, by and between the Company and The First National Bank
of Chicago, as Trustee (filed as Exhibit 4.16(a) to the Company’s Registration Statement on Form S-4
(File No. 333-145054), and incorporated herein by reference).

4.14(b) — First Supplemental Indenture, dated as of May 25, 2000, by and between the Company and Bank One
Trust Company, N.A., as Trustee (filed as Exhibit 4.16(b) to the Company’s Registration Statement on
Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.14(c) — Second Supplemental Indenture, dated as of July 1, 2001, by and between the Company and Bank One
Trust Company, N.A., as Trustee (filed as Exhibit 4.16(c) to the Company’s Registration Statement on
Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.14(d) — Third Supplemental Indenture, dated as of December 5, 2001, by and between the Company and The
Bank of New York, as Trustee (filed as Exhibit 4.16(d) to the Company’s Registration Statement on
Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.14(e) — Fourth Supplemental Indenture, dated as of November 14, 2006, by and between the Company and The
Bank of New York, as Trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed
November 16, 2006, and incorporated herein by reference).

4.15

— Form of 7.5% Debenture due 2023 (filed as Exhibit 4.17 to the Company’s Registration Statement on

Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.16

— Form of 8.36% Debenture due 2024 (filed as Exhibit 4.18 to the Company’s Registration Statement on

Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.17

4.18

— Form of Fixed Rate Global Medium-Term Note (filed as Exhibit 4.19 to the Company’s Registration

Statement on Form S-4 (File No. 333-145054), and incorporated herein by reference).

— Form of Floating Rate Global Medium-Term Note (filed as Exhibit 4.20 to the Company’s Registration

Statement on Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.19

— Form of 7.69% Note due 2025 (filed as Exhibit 4.10 to the Company’s Annual Report on Form 10-K

for the fiscal year ended December 31, 2004, and incorporated herein by reference).

4.20

— Form of 7.50% Debenture due 2095 (filed as Exhibit 4.23 to the Company’s Registration Statement on

Form S-4 (File No. 333-145054), and incorporated herein by reference).

80

4.21

— Form of 7.05% Debenture due 2027 (filed as Exhibit 4.24 to the Company’s Registration Statement on

Form S-4 (File No. 333-145054), and incorporated herein by reference).

4.22

— 7.50% Note due 2033 in the principal amount of $250,000,000 (filed as Exhibit 4.2 to the Company’s

Current Report on Form 8-K filed November 6, 2003, and incorporated herein by reference).

4.23

— Form of Indenture of HCA Inc. (filed as Exhibit 4.2 to the Registrant’s Registration Statement on Form

S-3 (File No. 333-175791), and incorporated herein by reference).

4.24

4.25

4.26

4.27

4.28

4.29

4.30

4.31

4.32

4.33

4.34

4.35

4.36

4.37

— Indenture dated as of August 1, 2011, by and among HCA Inc., the guarantors named on Schedule I
thereto, Delaware Trust Company (as successor to Law Debenture Trust Company of New York), as
trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent
(filed as Exhibit 4.5 to the Company’s Registration Statement on Form S-3 (File No. 333-226709), and
incorporated herein by reference).

— Indenture, dated as of December 6, 2012, by and among HCA Holdings, Inc., Law Debenture Trust
Company of New York, as trustee, and Deutsche Bank Trust Company Americas, as registrar, paying
agent and transfer agent (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed
December 6, 2012, and incorporated herein by reference).

— Supplemental Indenture No. 8, dated as of March 17, 2014, by and among HCA Inc., HCA Holdings,
Inc., the subsidiary guarantors named therein, Law Debenture Trust Company of New York, as trustee,
and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as
Exhibit 4.3 to the Company’s Current Report on Form 8-K filed March 21, 2014, and incorporated
herein by reference).

— Form of 5.00% Senior Secured Notes due 2024 (included in Exhibit 4.26).

— Additional Receivables Intercreditor Agreement, dated as of March 17, 2014, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as New First Lien Collateral
Agent (filed as Exhibit 4.9 to the Company’s Current Report on Form 8-K filed March 21, 2014, and
incorporated herein by reference).

— Supplemental Indenture No. 10, dated as of October 17, 2014, by and among HCA Inc., HCA Holdings,
Inc., the subsidiary guarantors named therein, Law Debenture Trust Company of New York, as trustee,
and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as
Exhibit 4.3 to the Company’s Current Report on Form 8-K filed October 17, 2014, and incorporated
herein by reference).

— Form of 5.25% Senior Secured Notes due 2025 (included in Exhibit 4.29).

— Additional Receivables Intercreditor Agreement, dated as of October 17, 2014, by and between Bank
of America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as New First Lien Collateral
Agent (filed as Exhibit 4.9 to the Company’s Current Report on Form 8-K filed October 17, 2014, and
incorporated herein by reference).

— Supplemental Indenture No. 11, dated as of January 16, 2015, by and among HCA Inc., HCA Holdings,
Inc., Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust Company
Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current
Report on Form 8-K filed January 16, 2015, and incorporated herein by reference).

— Form of 5.375% Senior Notes due 2025 (included in Exhibit 4.32).

— Supplemental Indenture No. 12, dated as of May 20, 2015, by and among HCA Inc., HCA Holdings,
Inc., Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust Company
Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the Company’s Current
Report on Form 8-K filed May 20, 2015, and incorporated herein by reference).

— Supplemental Indenture No. 13, dated as of November 13, 2015, by and among HCA Inc., HCA
Holdings, Inc., Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust
Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s
Current Report on Form 8-K filed November 13, 2015, and incorporated herein by reference).

— Form of 5.875% Senior Notes due 2026 (included in Exhibit 4.35).

— Supplemental Indenture No. 14, dated as of December 8, 2015, by and among HCA Inc., HCA
Holdings, Inc., Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust

81

4.38

4.39

4.40

4.41

4.42

4.43

4.44

4.45

4.46

4.47

4.48

4.49

4.50

4.51

4.52

4.53

Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the Company’s
Current Report on Form 8-K filed December 8, 2015, and incorporated herein by reference).

— Supplemental Indenture No. 15, dated as of March 15, 2016, by and among HCA Inc., HCA Holdings,
Inc., the subsidiary guarantors named therein, Law Debenture Trust Company of New York, as trustee,
and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as
Exhibit 4.2 to the Company’s Current Report on Form 8-K filed March 15, 2016, and incorporated
herein by reference).

— Form of 5.250% Senior Secured Notes due 2026 (included in Exhibit 4.38).

— Additional Receivables Intercreditor Agreement, dated as of March 15, 2016, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as First Lien Collateral Agent
(filed as Exhibit 4.7 to the Company’s Current Report on Form 8-K filed March 15, 2016, and
incorporated herein by reference).

— Supplemental Indenture No. 16, dated as of August 15, 2016, by and among HCA Inc., HCA Holdings,
Inc., the subsidiary guarantors named therein, Law Debenture Trust Company of New York, as trustee,
and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as
Exhibit 4.3 to the Company’s Current Report on Form 8-K filed August 15, 2016, and incorporated
herein by reference).

— Form of 4.500% Senior Secured Notes due 2027 (included in Exhibit 4.41).

— Additional Receivables Intercreditor Agreement, dated as of August 15, 2016, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as First Lien Collateral Agent
(filed as Exhibit 4.8 to the Company’s Current Report on Form 8-K filed August 15, 2016, and
incorporated herein by reference).

— Supplemental Indenture No. 17, dated as of December 9, 2016, by and among HCA Inc., HCA
Holdings, Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and
Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit
4.1 to the Company’s Current Report on Form 8-K filed December 9, 2016, and incorporated herein by
reference).

— Supplemental Indenture No. 18, dated as of June 22, 2017, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed June 22, 2017, and incorporated herein by reference).

— Form of 5.500% Senior Secured Notes due 2047 (included in Exhibit 4.45).

— Additional Receivables Intercreditor Agreement, dated as of June 22, 2017, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as First Lien Collateral Agent
(filed as Exhibit 4.7 to the Company’s Current Report on Form 8-K filed June 22, 2017, and
incorporated herein by reference).

— Supplemental Indenture No. 19, dated as of August 23, 2018, by and among HCA Inc., HCA
Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas,
as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K filed August 23, 2018, and incorporated herein by reference).

— Form of 5.375% Senior Notes Due 2026 (included in Exhibit 4.48).

— Supplemental Indenture No. 20, dated as of August 23, 2018, by and among HCA Inc., HCA
Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas,
as paying agent, registrar and transfer agent (filed as Exhibit 4.3 to the Company’s Current Report on
Form 8-K filed August 23, 2018, and incorporated herein by reference).

— Form of 5.625% Senior Notes Due 2028 (included in Exhibit 4.50).

— Supplemental Indenture No. 21, dated as of January 22, 2019, by and among HCA Inc., HCA
Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas,
as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the Company’s Current Report on
Form 8-K filed January 22, 2019, and incorporated herein by reference).

— Supplemental Indenture No. 22, dated as of January 30, 2019, by and among HCA Inc., HCA
Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas,

82

4.54

4.55

4.56

4.57

4.58

4.59

4.60

4.61

4.62

4.63

4.64

4.65

4.66

4.67
4.68

as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K filed January 30, 2019, and incorporated herein by reference).

— Form of 5.875% Senior Notes Due 2029 (included in Exhibit 4.53).

— Supplemental Indenture No. 23, dated as of June 12, 2019, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed June 12, 2019, and incorporated herein by reference).

— Supplemental Indenture No. 24, dated as of June 12, 2019, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.3 to the
Company’s Current Report on Form 8-K filed June 12, 2019, and incorporated herein by reference).

— Supplemental Indenture No. 25, dated as of June 12, 2019, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the
Company’s Current Report on Form 8-K filed June 12, 2019, and incorporated herein by reference).

— Form of 4 1/8% Senior Secured Notes due 2029 (included in Exhibit 4.55).

— Form of 5 1/8% Senior Secured Notes due 2039 (included in Exhibit 4.56).

— Form of 5 1/4% Senior Secured Notes due 2049 (included in Exhibit 4.57).

— Additional Receivables Intercreditor Agreement, dated as of June 12, 2019, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as First Lien Collateral Agent
(filed as Exhibit 4.11 to the Company’s Current Report on Form 8-K filed June 12, 2019, and
incorporated herein by reference).

— Supplemental Indenture No. 26, dated as of February 26, 2020, by and among HCA Inc., HCA
Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas,
as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K filed February 26, 2020, and incorporated herein by reference).

— Form of 3.500% Senior Notes Due 2030 (included in Exhibit 4.62).

— Supplemental Indenture No. 27, dated as of June 30, 2021, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed July 1, 2021, and incorporated herein by reference).

— Supplemental Indenture No. 28, dated as of June 30, 2021, by and among HCA Inc., HCA Healthcare,
Inc., the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.3 to the
Company’s Current Report on Form 8-K filed July 1, 2021, and incorporated herein by reference).

— Form of 2 3/8% Senior Secured Notes Due 2031 (included in Exhibit 4.64).

— Form of 3 1/2% Senior Secured Notes Due 2051 (included in Exhibit 4.65).
— Additional Receivables Intercreditor Agreement, dated as of June 30, 2021, by and between Bank of
America, N.A., as ABL Collateral Agent, and Bank of America, N.A., as First Lien Collateral Agent
(filed as Exhibit 4.9 to the Company’s Current Report on Form 8-K filed July 1, 2021, and incorporated
herein by reference).

4.69

—

4.70

—

4.71

—

Supplemental Indenture No. 29, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust 
Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s 
Current Report on Form 8-K filed March 10, 2022, and incorporated herein by reference).
Supplemental Indenture No. 30, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust 
Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.3 to the Company’s 
Current Report on Form 8-K filed March 10, 2022, and incorporated herein by reference).
Supplemental Indenture No. 31, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust 

83

4.72

—

4.73

—

Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.4 to the Company’s 
Current Report on Form 8-K filed March 10, 2022, and incorporated herein by reference).
Supplemental Indenture No. 32, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust 
Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.5 to the Company’s 
Current Report on Form 8-K filed March 10, 2022, and incorporated herein by reference).
Supplemental Indenture No. 33, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust 
Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.6 to the Company’s 
Current Report on Form 8-K filed March 10, 2022, and incorporated herein by reference).

4.74
4.75
4.76
4.77
4.78
4.79

— Form of 3 1/8% Senior Secured Notes due 2027 (included in Exhibit 4.69).
— Form of 3 3/8% Senior Secured Notes due 2029 (included in Exhibit 4.70).
— Form of 3 5/8% Senior Secured Notes due 2032 (included in Exhibit 4.71).
— Form of 4 3/8% Senior Secured Notes due 2042 (included in Exhibit 4.72).
— Form of 4 5/8% Senior Secured Notes due 2052 (included in Exhibit 4.73).
—

4.80

—

4.81

—

4.82

—

4.83

—

Additional  Receivables  Intercreditor Agreement,  dated  as  of  March  9,  2022,  by  and  between  Bank 
of  America,  N.A.,  as  ABL  Collateral  Agent,  and  Bank  of  America,  N.A.,  as  First  Lien  Collateral 
Agent (filed as Exhibit 4.15 to the Company’s Current Report on Form 8-K filed March 10, 2022, and 
incorporated herein by reference).
Registration Rights Agreement, dated as of March 9, 2022, among HCA Inc., HCA Healthcare, Inc., 
the subsidiary guarantors named therein and Citigroup Global Markets Inc., BofA Securities, Inc., J.P. 
Morgan Securities LLC and Morgan Stanley & Co. LLC as representatives of the other several initial 
purchasers named therein (filed as Exhibit 4.16 to the Company’s Current Report on Form 8-K filed 
March 10, 2022, and incorporated herein by reference).
Supplemental Indenture No.  34,  dated as  of  May  4,  2023,  among  HCA  Inc.,  HCA  Healthcare, Inc., 
Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, 
registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on 
May 4, 2023, and incorporated herein by reference).
Supplemental Indenture No.  35,  dated as  of  May  4,  2023,  among  HCA  Inc.,  HCA  Healthcare, Inc., 
Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, 
registrar and transfer agent (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on 
May 4, 2023, and incorporated herein by reference).
Supplemental Indenture No.  36,  dated as  of  May  4,  2023,  among  HCA  Inc.,  HCA  Healthcare, Inc., 
Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, 
registrar and transfer agent (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on 
May 4, 2023, and incorporated herein by reference).

4.84
4.85
4.86
10.1

— Form of 5.200% Senior Notes due 2028 (included in Exhibit 4.81).
— Form of 5.500% Senior Notes due 2033 (included in Exhibit 4.82).
— Form of 5.900% Senior Notes due 2053 (included in Exhibit 4.83).
— Form of Indemnity Agreement with certain officers and directors (filed as Exhibit 10.3 to the
Company’s Registration Statement on Form S-4 (File No. 333-145054) and incorporated herein by
reference).

10.2(a) — 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc. and its Affiliates as Amended
and Restated (filed as Exhibit 10.11(b) to the Company’s Registration Statement on Form S-1 (File No.
333-171369), and incorporated herein by reference).*

10.2(b) — First Amendment to 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc. and its
Affiliates, as Amended and Restated (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2011, and incorporated herein by reference).*

10.2(c) — Second Amendment to the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc. and
its Affiliates, as Amended and Restated (filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2013, and incorporated herein by reference).*

10.3(a) — Management Stockholder’s Agreement, dated November 17, 2006 (filed as Exhibit 10.12 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and
incorporated herein by reference).

84

10.3(b) — Form of Omnibus Amendment to HCA Holdings, Inc.’s Management Stockholder’s Agreements (filed
as Exhibit 10.39 to the Company’s Registration Statement on Form S-1 (File No. 333-171369), and
incorporated herein by reference).

10.4

10.5

10.6

— Form of Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for Key
Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed February 14, 2012, and incorporated herein by
reference).*

— Form of 2014 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.17(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013,
and incorporated herein by reference).*

— Retirement Agreement, dated as of January 1, 2002, by and between the Company and Thomas F. Frist,
Jr., M.D. (filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2001, and incorporated herein by reference).*

10.7(a) — Amended and Restated HCA Supplemental Executive Retirement Plan, effective December 22, 2010,
except as provided therein (filed as Exhibit 10.26 to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2010, and incorporated herein by reference).*

10.7(b) — Amendment, dated December 22, 2020, to Amended and Restated HCA Supplemental Executive
Retirement Plan (filed as Exhibit 10.7(b) to the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2020, and incorporated herein by reference).*

10.8(a) — Amended and Restated HCA Restoration Plan, effective December 22, 2010 (filed as Exhibit 10.27 to
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and
incorporated herein by reference).*

10.8(b) — Amendment to the Amended and Restated HCA Restoration Plan, effective June 5, 2020 (filed as
Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020,
and incorporated herein by reference).*

10.9(a) — Employment Agreement dated November 16, 2006 (Samuel N. Hazen) (filed as Exhibit 10.27(d) to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and
incorporated herein by reference).*

10.9(b) — Amendment to Employment Agreement effective February 9, 2011 (Samuel N. Hazen) (filed as Exhibit
10.29(j) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010,
and incorporated herein by reference).*

10.9(c) — Second Amendment to Employment Agreement effective January 29, 2015 (Samuel N. Hazen) (filed
as Exhibit 10.23(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2014 (File No. 001-11239), and incorporated herein by reference).*

10.9(d) — Third Amendment to Employment Agreement effective January 27, 2016 (Samuel N. Hazen) (filed as
Exhibit 10.23(j) to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2015, and incorporated herein by reference).*

10.9(e) — Fourth Amendment to Employment Agreement effective November 14, 2016 (Samuel N. Hazen) (filed
as Exhibit 10.16(l) to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2016, and incorporated herein by reference).*

10.9(f) — Fifth Amendment to Employment Agreement effective January 1, 2019 (Samuel N. Hazen) (filed as
Exhibit 10.14(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2018, and incorporated herein by reference).*

10.9(g) —

10.10

Signing Bonus Agreement, dated as of January 24, 2022, by and between HCA Healthcare, Inc. and 
Michael R. McAlevey (filed as Exhibit 10.9(i) to the Company’s Annual Report on Form 10-K for the 
fiscal year ended December 31, 2022, and incorporated herein by reference) *

— Indemnification Priority and Information Sharing Agreement, dated as of November 1, 2009, by and
between HCA Inc. and certain other parties thereto (filed as Exhibit 10.35 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by
reference).

85

10.11

10.12

10.13

10.14

10.15

10.16

— Assignment and Assumption Agreement, dated November 22, 2010, by and among HCA Inc., HCA
Holdings, Inc. and HCA Merger Sub LLC (filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed November 24, 2010, and incorporated herein by reference).

— Omnibus Amendment

to Various Stock and Option Plans and the Management Stockholders’
Agreement, dated November 22, 2010 (filed as Exhibit 10.2 to the Company’s Current Report on Form
8-K filed November 24, 2010, and incorporated herein by reference).*

— Omnibus Amendment to Stock Option Agreements Issued Under the 2006 Stock Incentive Plan for Key
Employees of HCA Holdings, Inc. and its Affiliates, as amended, effective February 16, 2011 (filed as
Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2010, and incorporated herein by reference).*

— Stockholders’ Agreement, dated as of March 9, 2011, by and among the Company, Hercules Holding
II, LLC and the other signatories thereto (filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed March 16, 2011, and incorporated herein by reference).

— Amendment, dated as of September 21, 2011, to the Stockholders’ Agreement, dated as of March 9,
2011 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 21, 2011,
and incorporated herein by reference).

— Form of Director Restricted Share Unit Agreement Under the 2006 Stock Incentive Plan for Key
Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit 10.5 to
the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated
herein by reference).*

10.17

— Executive Severance Policy (filed as Exhibit 10.46 to the Company’s Annual Report on Form 10-K for

the fiscal year ended December 31, 2013, and incorporated herein by reference).*

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

— HCA Holdings, Inc. Employee Stock Purchase Plan (filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed April 25, 2014 (File No. 001-11239), and incorporated herein by reference).*

— Form of 2015 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed February 4, 2015, and incorporated herein by
reference).*

— Form of 2016 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.50 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015,
and incorporated herein by reference).*

— Form of Director Restricted Share Unit Agreement (Annual Award) Under the 2006 Stock Incentive
Plan for Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016,
and incorporated herein by reference).*

— Form of 2017 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.42 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016,
and incorporated herein by reference).*

— Form of 2018 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.40 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,
and incorporated herein by reference).*

— Form of 2019 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit
10.41 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018,
and incorporated herein by reference).*

— Form of 2019 Performance Share Unit Award Agreement Under the 2006 Stock Incentive Plan for Key
Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit 10.42
to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and
incorporated herein by reference).*

86

10.26

—

Form of 2020 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for 
Key Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit 
10.32 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and 
incorporated herein by reference).*

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

— Form of 2020 Performance Share Unit Award Agreement Under the 2006 Stock Incentive Plan for Key
Employees of HCA Holdings, Inc. and its Affiliates, as Amended and Restated (filed as Exhibit 10.33
to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and
incorporated herein by reference).*

— 2020 Stock Incentive Plan for Key Employees of HCA Healthcare, Inc., and its Affiliates (filed as
Exhibit 4.4 to the Company’s Registration Statement on Form S-8, and incorporated herein by
reference).*

— Form of Stock Appreciation Right Award Agreement Under the 2020 Stock Incentive Plan for Key
Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 4.5 to the Company’s
Registration Statement on Form S-8 (File No. 333-237967), and incorporated herein by reference).*

— Form of Employee Restricted Share Unit Award Agreement Under the 2020 Stock Incentive Plan for
Key Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 4.6 to the Company’s
Registration Statement on Form S-8 (File No. 333-237967), and incorporated herein by reference).*

— Form of Performance Share Unit Award Agreement Under the 2020 Stock Incentive Plan for Key
Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 4.7 to the Company’s
Registration Statement on Form S-8 (File No. 333-237967), and incorporated herein by reference).*

— Form of Director Restricted Share Unit Agreement Under the 2020 Stock Incentive Plan for Key
Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.2 to the Company Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020, and incorporated herein by reference).*

— Form of 2021 Stock Appreciation Right Award Agreement Under the 2020 Stock Incentive Plan for
Key Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.37 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by
reference).*

— Form of 2021 Performance Share Unit Award Agreement Under the 2020 Stock Incentive Plan for Key
Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.38 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2020, and incorporated herein by
reference).*

— HCA Healthcare, Inc. 2021 Senior Officer Performance Excellence Program (filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed April 9, 2021, and incorporated herein by reference).*

— Form of 2022 Stock Appreciation Right Award Agreement Under the 2020 Stock Incentive Plan for
Key Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.38 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and incorporated herein by
reference).*

— Form of 2022 Performance Share Unit Award Agreement Under the 2020 Stock Incentive Plan for Key
Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.39 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2021, and incorporated herein by
reference).*

— HCA Healthcare, Inc. 2022 Senior Officer Performance Excellence Program (filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed on April 11, 2022, and incorporated herein by
reference).*

— Form of 2023 Stock Appreciation Right Award Agreement Under the 2020 Stock Incentive Plan for
Key Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.40 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and incorporated herein by
reference).*

10.40

—

10.41

—

Form  of  2023  Performance  Share  Unit Award Agreement  Under  the  2020  Stock  Incentive  Plan  for 
Key Employees of HCA Healthcare, Inc. and its Affiliates (filed as Exhibit 10.41 to the Company’s 
Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and incorporated herein 
by reference).*
HCA Healthcare, Inc. 2023 Senior Officer Performance Excellence Program (filed as Exhibit 10.1 to the 
Company’s Current Report on Form 8-K filed on April 6, 2023, and incorporated herein by reference).*

87

10.42

10.43

10.44

21

22

23

31.1

31.2

32

97
101

—

—

—

HCA Healthcare, Inc. 2023 Employee Stock Purchase Plan (filed as Exhibit 10.1 to the Company’s 
Current Report on Form 8-K filed on April 21, 2023, and incorporated herein by reference).*
Form of 2024 Stock Appreciation Right Award Agreement under the 2020 Stock Incentive Plan for Key 
Employees of HCA Healthcare, Inc. and its Affiliates.*
Form of 2024 Performance Share Unit Award Agreement Under the 2020 Stock Incentive Plan for Key 
Employees of HCA Healthcare, Inc. and its Affiliates.*

— List of Subsidiaries.

— List of Subsidiary Guarantors and Pledged Securities.

— Consent of Ernst & Young LLP.

— Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

— Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

— Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002.

— HCA Healthcare, Inc. Compensation Recoupment Policy.
— The following financial information from our annual report on Form 10-K for the year ended December
31, 2023, filed with the SEC on February 16, 2024, formatted in Extensible Business Reporting
Language (XBRL): (i) the consolidated balance sheets at December 31, 2023 and 2022, (ii) the
consolidated income statements for the years ended December 31, 2023, 2022 and 2020, (iii) the
consolidated comprehensive income statements for the years ended December 31, 2023, 2022 and 2021,
(iv) the consolidated statements of stockholders’ equity (deficit) for the years ended December 31, 2023,
2022 and 2021, (v) the consolidated statements of cash flows for the years ended December 31, 2023,
2022 and 2021, and (vi) the notes to consolidated financial statements.

104

— The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31,

2023, formatted in Inline XBRL (included in Exhibit 101).

__________
* Management compensatory plan or arrangement.

Item 16.

Form 10-K Summary

None.

88

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

HCA HEALTHCARE, INC.

By:

/S/ SAMUEL N. HAZEN
Samuel N. Hazen
Chief Executive Officer

Dated: February 16, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature
/S/ SAMUEL N. HAZEN
Samuel N. Hazen

/S/ WILLIAM B. RUTHERFORD
William B. Rutherford

/S/ THOMAS F. FRIST III
Thomas F. Frist III

/S/ MEG G. CROFTON
Meg G. Crofton

/S/ ROBERT J. DENNIS
Robert J. Dennis

/S/ NANCY-ANN DEPARLE
Nancy-Ann DeParle

/S/ WILLIAM R. FRIST
William R. Frist

/S/ HUGH F. JOHNSTON
Hugh F. Johnston

/S/ MICHAEL W. MICHELSON
Michael W. Michelson

/S/ WAYNE J. RILEY
Wayne J. Riley

/S/ ANDREA B. SMITH
Andrea B. Smith

Title
Chief Executive Officer and Director
(Principal Executive Officer)

Date
February 16, 2024

Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

February 16, 2024

Chairman and Director

February 16, 2024

Director

Director

Director

Director

Director

Director

Director

Director

February 16, 2024

February 16, 2024

February 16, 2024

February 16, 2024

February 16, 2024

February 16, 2024

February 16, 2024

February 16, 2024

89

[THIS PAGE INTENTIONALLY LEFT BLANK] 

HCA HEALTHCARE, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm ....................................................................................
Consolidated Financial Statements:

.

Consolidated Income Statements for the years ended December 31, 2023, 2022 and 2021...........................
.
..
Consolidated Comprehensive Income Statements for the years ended December 31, 2023, 2022 and 2021
Consolidated Balance Sheets, December 31, 2023 and 2022 .........................................................................
.
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2023, 2022
and 2021 .....................................................................................................................................................
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 ...............
Notes to Consolidated Financial Statements ...................................................................................................

.
.
.

Page
F-2

F-5
F-6
F-7

F-8
F-9
F-10

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
of HCA Healthcare, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of HCA Healthcare, Inc. (the Company) as of December
31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity (deficit)
and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 16, 2024 expressed an unqualified opinion
thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-2

Description of the Matter

Revenue Recognition

of

care

contractual

adjustments

under managed

payers. Estimates

For the year ended December 31, 2023, the Company’s revenues were $64.968 billion. As
discussed in Note 1 to the consolidated financial statements, revenues are based upon the
estimated amounts the Company expects to be entitled to receive from patients and third-
party
and
commercial insurance plans are based upon the payment terms specified in the related
contractual agreements. Management continually reviews the contractual adjustments
estimation process to consider and incorporate the frequent changes in managed care
contractual terms resulting from contract renegotiations and renewals. Revenues related to
uninsured patients and uninsured copayment and deductible amounts for patients who have
health care coverage may have discounts applied (uninsured and other discounts). The
Company also records estimated implicit price concessions (based primarily on historical
collection experience) related to uninsured accounts to record these revenues and accounts
receivable at the estimated amounts the Company expects to collect. The primary collection
risks relate to uninsured patient accounts, including amounts owed from patients after
insurance has paid the amounts covered by the applicable agreement. Implicit price
concessions relate primarily to amounts due directly from patients and are based upon
management’s assessment of historical write-offs and expected net collections, business and
economic conditions, trends in federal, state and private employer health care coverage and
other collection indicators.

How We Addressed the
Matter in Our Audit

Auditing management’s estimates of contractual adjustments and implicit price concessions
was complex and judgmental due to the significant data inputs and subjective assumptions
utilized in determining related amounts.

We tested internal controls that address the risks of material misstatement related to the
measurement and valuation of revenues, including estimation of contractual adjustments and
implicit price concessions. For example, we tested management’s internal controls over the
key data inputs to the contractual adjustments and implicit price concession models,
significant assumptions underlying management’s models, and management’s internal
controls over retrospective reviews of historical reserve accuracy.

To test the estimated contractual adjustments and implicit price concessions, we performed
audit procedures that included, among others, assessing methodologies and evaluating the
significant assumptions discussed above and testing the completeness and accuracy of the
underlying data used by the Company in its estimates. We compared the significant
assumptions used by management to historical assumptions and to current industry and
economic trends and considered changes, if any, to the Company’s business and other
relevant factors. We also assessed the historical accuracy of management’s estimates as a
source of potential corroborative or contrary evidence.

Professional Liability Claims

Description of the Matter At December 31, 2023, the Company’s reserves for professional liability risks were $2.089
billion and the Company’s related provision for losses for the year ended December 31, 2023
was $619 million. As discussed in Note 1 to the consolidated financial statements, reserves
for professional liability risks represent the estimated ultimate net cost of all reported and
unreported losses incurred and unpaid through the consolidated balance sheet date.
Management estimates professional
liability reserves and provisions for losses using
individual case-basis valuations and actuarial analyses. Trends in the average frequency
(number of claims) and ultimate average severity (cost per claim) of claims are significant
assumptions in estimating the reserves.

Auditing management’s professional liability claims reserves was complex and judgmental
due to the significant estimations required in determining the reserves, particularly the
actuarial analyses and assumptions related to the effects of trends in average severity and
frequency of claims.

F-3

How We Addressed the
Matter in Our Audit

We tested management’s internal controls that address the risks of material misstatement over
the Company’s professional liability claims reserves estimation process. For example, we
tested internal controls over management’s review of the actuarial analyses, the significant
assumptions, and the completeness and accuracy of claims data used in the reserve estimation
process.

included, among others,

To test the Company’s determination of the estimated professional liability expense and
reserves, we performed audit procedures that
testing the
completeness and accuracy of underlying claims data used by the Company and its actuaries
in its determination of reserves and reviewing the Company’s insurance contracts by policy
year to validate self-insured limits, deductibles and coverage limits. Additionally, with the
involvement of our actuarial specialists, we performed audit procedures that included, among
others, assessing the actuarial analyses performed by management and its actuaries, testing
the significant assumptions including consideration of Company-specific claim reporting and
payment data, assessing the accuracy of management’s historical reserve estimates, and
developing an independent range of reserves for comparison to the Company’s recorded
amounts.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1994.

Nashville, Tennessee
February 16, 2024

F-4

HCA HEALTHCARE, INC.
CONSOLIDATED INCOME STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Dollars in millions, except per share amounts)

Revenues  ...................................................................................  $

64,968

$

60,233

$

58,752

2023

2022

2021

Salaries and benefits  ..................................................................
 .....................................................................................
Supplies  
Other operating expenses  ..........................................................
Equity in earnings of affiliates  ..................................................
Depreciation and amortization  ..................................................
Interest expense  .........................................................................
Losses (gains) on sales of facilities  ...........................................
Losses on retirement of debt  .....................................................

taxes

Income before income
Provision for income
Net 
Net income attributable to noncontrolling

......................................................
........................................................
................................................................................
..................

interests

income

taxes

Net income attributable to HCA Healthcare, Inc.  ................ $

29,487
9,902
12,875
(22)
3,077
1,938
5
—
57,262
7,706
1,615
6,091
849
5,242

Per share data:

Basic earnings per share  ....................................................... $
Diluted earnings per share  .................................................... $

19.25
18.97

Shares used in earnings per share calculations (in millions):

27,685
9,371
11,155
(45)
2,969
1,741
(1,301)
78
51,653
8,580
1,746
6,834
1,191
5,643

19.43
19.15

$

$
$

26,779
9,481
9,961
(113)
2,853
1,566
(1,620)
12
48,919
9,833
2,112
7,721
765
6,956

21.52
21.16

$

$
$

Basic .....................................................................................
Diluted ..................................................................................

272.404
276.412

290.348
294.666

323.315
328.752

The accompanying notes are an integral part of the consolidated financial statements.

F-5

 
 
 
 
HCA HEALTHCARE, INC.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Dollars in millions)

Net income ........................................................................................................... $ 6,091
Other comprehensive income (loss) before taxes:

$ 6,834 $ 7,721

2023

2022

2021

Foreign currency translation ...........................................................................

Unrealized gains (losses) on available-for-sale securities ..............................
Losses (gains) included in other operating expenses .................................

Defined benefit plans ......................................................................................
Pension costs included in salaries and benefits .........................................

41

11
(1)
10

27
3
30

(111)

(55)
1
(54)

49
9
58

(9)

(16)
—
(16)

87
28
115

Change in fair value of derivative financial instruments ................................
Interest costs included in interest expense .................................................

—
—
—
81
Other comprehensive income (loss) before taxes ................................................
16
Income taxes (benefits) related to other comprehensive income items ...............
65
Other comprehensive income (loss) .....................................................................
6,156
Comprehensive income ........................................................................................
849
Comprehensive income attributable to noncontrolling interests .........................
Comprehensive income attributable to HCA Healthcare, Inc.   ............................ $ 5,307

6
2
8
(99)
(13)
(86)
6,748
1,191

1
37
38
128
30
98
7,819
765
$ 5,557 $ 7,054

The accompanying notes are an integral part of the consolidated financial statements.

F-6

HCA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2023 AND 2022
(Dollars in millions)

2023

2022

Current assets:

ASSETS

Cash and cash equivalents
Accounts receivable
Inventories
Other

..................................................................................
............................................................................................
..........................................................................................................
...................................................................................................................

$

Property and equipment, at cost:

Land
Buildings
Equipment
Construction in progress

....................................................................................................................
.............................................................................................................
...........................................................................................................
.....................................................................................

Accumulated depreciation

..................................................................................

Investments of insurance subsidiaries
Investments in and advances to affiliates
Goodwill and other intangible assets
Right-of-use operating lease assets
Other

.....................................................................
...............................................................
......................................................................
.........................................................................
.......................................................................................................................

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable
Accrued salaries
Other accrued expenses
Long-term debt due within one year

.......................
.........................................................................
..................................................................................................
......................................................................................
...................................................................

Long-term debt, less debt issuance costs and discounts of $333 and $301
Professional liability risks
Right-of-use operating lease obligations
Income taxes and other liabilities

............
..........................
................................................................
..........................

.............................................................

.................................................

Stockholders’ equity (deficit):

Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding

265,537,300 shares — 2023 and 277,378,300 shares — 2022

Accumulated other comprehensive loss
Retained deficit
Stockholders’ deficit attributable to HCA Healthcare, Inc.
Noncontrolling interests

........................
.............................................................
...................................................................................................
................................
......................................................................................

$

$

$

$

935
9,958
2,021
2,013
14,927

3,120
21,560
31,998
1,870
58,548
(30,833)
27,715

477
756
9,945
2,207
184
56,211

4,233
2,127
3,871
2,424
12,655

37,169
1,557
1,903
1,867

3
(425)
(1,352)
(1,774)
2,834
1,060
56,211

$

$

$

908
8,891
2,068
1,776
13,643

2,799
20,221
29,981
1,756
54,757
(29,182)
25,575

381
823
9,653
2,065
298
52,438

4,239
1,712
3,581
370
9,902

37,714
1,528
1,752
1,615

3
(490)
(2,280)
(2,767)
2,694
(73)
52,438

The accompanying notes are an integral part of the consolidated financial statements.

F-7

HCA HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Dollars in millions, except per share amounts)

Equity (Deficit) Attributable to HCA Healthcare, Inc.

Balances, December 31, 2020 ...

...
.
.
.
  ...........
Comprehensive income
...
Repurchase of common stock
Share-based benefit plans  ......
...
Cash dividends declared  ........
...
($1.92 per share)  .................
...
Distributions  .......................... 
...
Other......................................
...
.
Balances, December 31, 2021 ...
...
...
Comprehensive income (loss)
...
Repurchase of common stock
Share-based benefit plans .........
Cash dividends declared

.

($2.24 per share)

  ....................
Distributions .............................
Other .........................................
Balances, December 31, 2022 ......
.
............
Comprehensive income
Repurchase of common stock  ...
Share-based benefit plans .........
Cash dividends declared

.

($2.40 per share) ...................
Distributions .............................
Other .........................................
Balances, December 31, 2023 ......

Common Stock
Shares
(in millions)

339.426 $

Par
Value
3

(37.812)
3.863

305.477

3

(30.747)
2.648

277.378

3

(14.465)
2.624

Capital
in
Excess
of Par
Value
$ 294

(578)
280

4
—

(264)
282

(18)
—

(186)
172

Accumulated

Other
Comprehensive
Loss

$

(502) $
98

Retained
Earnings
(Deficit)
777
6,956
(7,637)

Equity

Attributable to
Noncontrolling
Interests

Total

$

765

2,320 $ 2,892
7,819
(8,215)
280

(628)

(404)
(86)

(532)
5,643
(6,736)

(655)

(490)
65

(2,280)
5,242
(3,656)

(658)

(749)
86
2,422
1,191

(1,025)
106
2,694
849

(628)
(749)
90
1,489
6,748
(7,000)
282

(655)
(1,025)
88
(73)
6,156
(3,842)
172

(658)
(640)
(55)
2,834 $ 1,060

(640)
(69)

265.537 $

3

14
$ — $

(425) $ (1,352) $

The accompanying notes are an integral part of the consolidated financial statements.

F-8

HCA HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Dollars in millions)

Cash flows from operating activities:

Net income
Adjustments to reconcile net income to net cash provided by

..................................................................................................

$ 6,091

$

6,834

$ 7,721

2023

2022

2021

operating activities:

Accounts receivable
Inventories and other assets
Accounts payable and accrued expenses

Increase (decrease) in cash from operating assets and liabilities:
.....
......................................................................
...........................................................
.....................................
............................................................
..........................................................................................
....................................................
...............................................................
..................................................
..................................................................
.......................................................................................................
...................................

Depreciation and amortization
Income taxes
Losses (gains) on sales of facilities
Losses on retirement of debt
Amortization of debt issuance costs and discounts
Share-based compensation
Other

Net cash provided by operating activities

Cash flows from investing activities:
Purchase of property and equipment
Acquisition of hospitals and health care entities
Sales of hospitals and health care entities
Change in investments
Other

.......................................................
...................................
..............................................
...............................................................................
.............................................................................................................
Net cash used in investing activities
............................................

Cash flows from financing activities:

Issuances of long-term debt
Net change in revolving credit facilities
Repayment of long-term debt
Distributions to noncontrolling interests
Payment of debt issuance costs
.............
Payment of dividends
Repurchase of common stock
Other

......................................................................
.................................................
...................................................................
................................................
...................................................
................................................................................
...................................................................
.............................................................................................................
Net cash used in financing activities
............................................
................
............................................................
......................................
.................................................
.............................................................................................
.........................................................................

Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Interest payments
Income tax payments, net

......

(935)
(126)
604
3,077
229
5
—
35
262
189
9,431

(4,744)
(635)
193
(112)
(19)
(5,317)

3,224
(1,020)
(909)
(640)
(31)
(661)
(3,811)
(246)
(4,094)
7
27
908
935
$
$ 1,892
$ 1,386

$
$
$

(797)
(59)
(296)
2,969
571
(1,301)
78
29
341
153
8,522

(4,395)
(224)
1,237
14
(21)
(3,389)

5,997
120
(2,830)
(1,025)
(53)
(653)
(7,000)
(212)
(5,656)
(20)
(543)
1,451
908
1,662
1,175

(962)
(540)
999
2,853
(70)
(1,620)
12
27
440
99
8,959

(3,577)
(1,105)
2,160
(117)
(4)
(2,643)

4,344
2,780
(3,869)
(749)
(38)
(624)
(8,215)
(284)
(6,655)
(3)
(342)
1,793
$ 1,451
$ 1,502
$ 2,182

The accompanying notes are an integral part of the consolidated financial statements.

F-9

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ACCOUNTING POLICIES

Reporting Entity

HCA Healthcare, Inc. is a holding company whose affiliates own and operate hospitals and related health care
entities. The term “affiliates” includes direct and indirect subsidiaries of HCA Healthcare, Inc. and partnerships and joint
ventures in which such subsidiaries are partners. At December 31, 2023 these affiliates owned and operated 186 hospitals,
124 freestanding surgery centers, 24 freestanding endoscopy centers and provided extensive outpatient and ancillary
services. HCA Healthcare, Inc.’s facilities are located in 20 states and England. The terms “Company,” “HCA,” “we,”
“our” or “us,” as used herein and unless otherwise stated or indicated by context, refer to HCA Healthcare, Inc. and its
affiliates. The terms “facilities” or “hospitals” refer to entities owned and operated by affiliates of HCA and the term
“employees” refers to employees of affiliates of HCA.

Basis of Presentation

The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements
and accompanying notes. Actual results could differ from those estimates.

The consolidated financial statements include all subsidiaries and entities controlled by HCA. We generally define
“control” as ownership of a majority of the voting interest of an entity. The consolidated financial statements include
entities in which we absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual
returns, or both, as a result of ownership, contractual or other financial interests in the entity. The accounts of acquired
entities are included in our consolidated financial statements for periods subsequent to our acquisition of controlling
interests. Significant intercompany transactions have been eliminated. Investments in entities we do not control, but in
which we have a substantial ownership interest and can exercise significant influence, are accounted for using the equity
method.

The majority of our expenses are “costs of revenues” items. Costs that could be classified as general and
administrative include our corporate office costs, which were $315 million, $307 million and $337 million for the years
ended December 31, 2023, 2022 and 2021, respectively.

Revenues

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

F-10

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Revenues (continued)

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-
party payers. Estimates of contractual adjustments under managed care and commercial insurance plans are based upon
the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured
copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured
and other discounts). We also record estimated implicit price concessions (based primarily on historical collection
experience) related to uninsured accounts to record these revenues at the estimated amounts we expect to collect. Our
revenues by primary third-party payer classification and other (including uninsured patients) for the years ended
December 31, are summarized in the following table (dollars in millions):

Years Ended December 31,

2023

Ratio

2022

Ratio

2021

Ratio

Medicare  
Managed Medicare   ..............................................
Medicaid  ..............................................................
Managed Medicaid   ..............................................
Managed care and other insurers   .........................
International (managed care and other insurers)  ..
Other  .....................................................................
Revenues  .............................................................. 

 ............................................................... $ 10,585
10,496
3,606
3,879
31,819
1,509
3,074
  $ 64,968

.

16.3% $ 10,447
9,201
16.2
2,636
5.6
3,998
6.0
29,120
49.0
1,317
2.3
3,514
4.6
100.0% $ 60,233

17.3% $ 10,447
8,424
15.3
2,290
4.4
3,124
6.6
30,295
48.3
1,336
2.2
2,836
5.9
100.0% $ 58,752

17.8%
14.3
3.9
5.3
51.6
2.3
4.8
100.0%

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation.
Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final
settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to
as the “cost report” filing and settlement process). The adjustments to estimated Medicare and Medicaid reimbursement
and disproportionate-share amounts, related primarily to cost reports filed during the respective year, resulted in net
increases to revenues of $84 million, $56 million and $53 million in 2023, 2022 and 2021, respectively. The adjustments
to estimated reimbursement amounts related primarily to cost reports filed during previous years resulted in net increases
to revenues of $58 million in 2023, $42 million in 2022 and $19 million in 2021.

The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the Medicare
program to conduct an appropriate medical screening examination of every person who presents to the hospital’s
emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize
the condition or make an appropriate transfer of the individual to a facility able to handle the condition. The obligation to
screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. Federal
and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide
services to patients who are financially unable to pay for the health care services they receive.

Patients treated at hospitals for non-elective care, who have income at or below 400% of the federal poverty level,
are eligible for charity care, and we limit the patient responsibility amounts for these patients to a percentage of their
annual household income, computed on a sliding scale based upon their annual income and the applicable percentage of
the federal poverty level. Patients treated at hospitals for non-elective care, who have income above 400% of the federal
poverty level, are eligible for certain other discounts which limit the patient responsibility amounts for these patients to a
percentage of their annual household income, computed on a sliding scale based upon their annual income and the
applicable percentage of the federal poverty level. We apply additional discounts to limit patient responsibility for certain
emergency services. The federal poverty level is established by the federal government and is based on income and family
size. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in
revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. 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. If an uninsured patient does not qualify for these programs, the uninsured discount is applied.

F-11

 
HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Revenues (continued)

The collection of outstanding receivables from Medicare, Medicaid, managed care payers, other third-party payers
and patients is our primary source of cash and is critical to our operating performance. The primary collection risks relate
to uninsured patient accounts, including patient accounts for which the primary insurance carrier has paid the amounts
covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain
outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price
concessions are recorded for all uninsured accounts, regardless of the age of those accounts. Accounts are written off
when all reasonable collection efforts have been performed.

The estimates for implicit price concessions are based upon management’s assessment of historical writeoffs and
expected net collections, business and economic conditions, trends in federal, state and private employer health care
coverage and other collection indicators. Management relies on the results of detailed reviews of historical writeoffs and
collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a
primary source of information in estimating the collectability of our accounts receivable. We perform the hindsight
analysis quarterly, utilizing rolling twelve-months accounts receivable collection and writeoff data. We believe our
quarterly updates to the estimated implicit price concession amounts at each of our hospital facilities provide reasonable
estimates of our revenues and valuations of our accounts receivable. These routine, quarterly changes in estimates have
not resulted in material adjustments to the valuations of our accounts receivable or period-to-period comparisons of our
revenues. At December 31, 2023 and 2022, estimated implicit price concessions of $7.283 billion and $6.780 billion,
respectively, had been recorded to adjust our revenues and accounts receivable to the estimated amounts we expect to
collect.

To quantify the total impact of the trends related to uninsured patient accounts, we believe it is beneficial to view
total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. A
summary of the estimated cost of total uncompensated care for the years ended December 31, follows (dollars in millions):

Patient care costs (salaries and benefits, supplies, other operating

expenses and depreciation and amortization)  ............................... $ 55,341

$ 51,180

$ 49,074

Cost-to-charges ratio (patient care costs as percentage of gross

patient charges) 

.............................................................................

10.5%

11.0%

11.3%

2023

2022

2021

Total uncompensated care  ............................................................... $ 35,426
Multiply by the cost-to-charges ratio 
Estimated cost of total uncompensated care 

...............................................

.................................... $

3,720

10.5%

$ 31,734

$ 29,642

11.0%

11.3%

$

3,491

$

3,350

The total uncompensated care amounts include charity care of $14.425 billion, $13.615 billion and $13.644 billion
for the years ended December 31, 2023, 2022 and 2021, respectively. The estimated cost of charity care was $1.515
billion, $1.498 billion and $1.542 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

Recent Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280):
Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires enhanced disclosures for significant
segment expenses. ASU 2023-07 is effective for public business entities for annual periods beginning on January 1, 2024
and interim periods beginning on January 1, 2025. We plan to adopt ASU 2023-07 on the respective annual and interim
effective dates applying a retrospective approach to all prior periods presented in the financial statements. We do not
believe the adoption of this new standard will have a material effect on our disclosures.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax
Disclosures (“ASU 2023-09”), which requires enhanced annual disclosures for specific categories in the rate
reconciliation and income taxes paid disaggregated by federal, state and foreign taxes. ASU 2023-09 is effective for public
business entities for annual periods beginning on January 1, 2025. We plan to adopt ASU 2023-09 effective January 1,
2025 applying a retrospective approach to all prior periods presented in the financial statements. We do not believe the
adoption of this new standard will have a material effect on our disclosures.

F-12

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with a maturity of three months or less when purchased.
Our insurance subsidiaries’ cash equivalent investments in excess of the amounts required to pay estimated professional
liability claims during the next twelve months are not included in cash and cash equivalents as these funds are not available
for general corporate purposes. Carrying values of cash and cash equivalents approximate fair value due to the short-term
nature of these instruments.

Our cash management system provides for daily investment of available balances and the funding of outstanding
checks when presented for payment. Outstanding, but unpresented, checks totaling $600 million and $656 million at
December 31, 2023 and 2022, respectively, have been included in “accounts payable” in the consolidated balance sheets.
Upon presentation for payment, these checks are funded through available cash balances or our credit facility.

Accounts Receivable

We receive payments for services rendered from federal and state agencies (under the Medicare and Medicaid
programs), managed care health plans, commercial insurance companies, employers and patients. We recognize that
revenues and receivables from government agencies are significant to our operations, but do not believe there are
significant credit risks associated with these government agencies. We do not believe there are any other significant
concentrations of revenues from any particular payer that would subject us to any significant credit risks in the collection
of our accounts receivable. Days revenues in accounts receivable were 53 days, 53 days and 49 days at December 31,
2023, 2022 and 2021, respectively. Changes in general economic conditions, patient accounting service center operations,
payer mix, payer claim processing, or federal or state governmental health care coverage could affect our collection of
accounts receivable, cash flows and results of operations.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market.

Property and Equipment

Depreciation expense, computed using the straight-line method, was $3.052 billion in 2023, $2.941 billion in 2022
and $2.826 billion in 2021. Buildings and improvements are depreciated over estimated useful lives ranging generally
from 10 to 40 years. Estimated useful lives of equipment vary generally from four to 10 years.

When events, circumstances or operating results indicate the carrying values of certain property and equipment
expected to be held and used might be impaired, we prepare projections of the undiscounted future cash flows expected
to result from the use of the assets and their eventual disposition. If the projections indicate the recorded amounts are not
expected to be recoverable, such amounts are reduced to estimated fair value. Fair value may be estimated based upon
internal evaluations that include quantitative analyses of revenues and cash flows, reviews of recent sales of similar assets
and independent appraisals.

Property and equipment to be disposed of are reported at the lower of their carrying amounts or fair value less costs
to sell or close. The estimates of fair value are usually based upon recent sales of similar assets and market responses
based upon discussions with and offers received from potential buyers.

F-13

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Investments of Insurance Subsidiaries

At December 31, 2023 and 2022, the investment securities held by our insurance subsidiaries were classified as
“available-for-sale” as defined in Accounting Standards Codification (“ASC”) No. 320, Investments — Debt Securities
and are recorded at fair value. The investment securities are held for the purpose of providing a funding source to pay
liability claims covered by the insurance subsidiaries. We perform quarterly assessments of individual investment
securities to determine whether declines in fair value are due to credit-related or noncredit-related factors. Our investment
securities evaluation process involves subjective judgments, often involves estimating the outcome of future events, and
requires a significant level of professional judgment in determining whether a credit-related impairment has occurred. We
evaluate, among other things, the financial position and near term prospects of the issuer, conditions in the issuer’s
industry, liquidity of the investment, changes in the amount or timing of expected future cash flows from the investment,
and recent downgrades of the issuer by a rating agency, to determine if, and when, a decline in the fair value of an
investment below amortized cost is considered to be a credit-related impairment. The extent to which the fair value of the
investment is less than amortized cost and our ability and intent to retain the investment, to allow for any anticipated
recovery of the investment’s fair value, are important components of our investment securities evaluation process.

Goodwill and Intangible Assets

Goodwill is not amortized but is subject to annual impairment tests. In addition to the annual impairment review,
impairment reviews are performed whenever circumstances indicate a possible impairment may exist. Impairment testing
for goodwill is done at the reporting unit level. Reporting units are one level below the business segment level, and our
impairment testing is performed at the operating division level. We compare the fair value of the reporting unit assets to
the carrying amount, on at least an annual basis, to determine if there is potential impairment. If the fair value of the
reporting unit assets is less than their carrying value, an impairment loss is recognized. Fair value is estimated based upon
internal evaluations of each reporting unit that include quantitative analyses of market multiples, revenues and cash flows
and reviews of recent sales of similar facilities. No goodwill impairments were recognized during 2023, 2022 or 2021.

During 2023, goodwill increased by $362 million related to acquisitions and declined by $50 million related to
foreign currency translation and other adjustments. During 2022, goodwill increased by $262 million related to
acquisitions and declined by $105 million related to foreign currency translation and other adjustments.

During 2023 and 2022, identifiable intangible assets declined by $20 million and $44 million, respectively, due to
amortization and other adjustments. Identifiable intangible assets with finite lives are amortized over estimated lives
ranging generally from three to 10 years. The gross carrying amount of amortizable identifiable intangible assets at both
December 31, 2023 and 2022 was $274 million and accumulated amortization was $228 million and $208 million,
respectively. The gross carrying amount of indefinite-lived identifiable intangible assets at both December 31, 2023 and
2022 was $293 million. Indefinite-lived identifiable intangible assets are not amortized but are subject to annual
impairment tests, and impairment reviews are performed whenever circumstances indicate a possible impairment may
exist.

Debt Issuance Costs and Discounts

Debt issuance costs and discounts are amortized based upon the terms of the respective debt obligations. The gross
carrying amounts of debt issuance costs and discounts at December 31, 2023 and 2022 were $559 million and $496
million, respectively, and accumulated amortization was $226 million and $195 million, respectively. Amortization of
debt issuance costs and discounts is included in interest expense and was $35 million, $29 million and $27 million for
2023, 2022 and 2021, respectively.

F-14

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Professional Liability Claims

Reserves for professional liability risks were $2.089 billion and $2.043 billion at December 31, 2023 and 2022,
respectively. The current portion of the reserves, $532 million and $515 million at December 31, 2023 and 2022,
respectively, is included in “other accrued expenses” in the consolidated balance sheets. Provisions for losses related to
professional liability risks were $619 million, $517 million and $453 million for 2023, 2022 and 2021, respectively, and
are included in “other operating expenses” in our consolidated income statements. Provisions for losses related to
professional liability risks are based upon actuarially determined estimates. We recorded an increase to the provision for
professional liability risks of $40 million during 2023 and reductions to the provision for professional liability risks of
$55 million and $87 million for 2022 and 2021, respectively, due to the receipt of updated actuarial information. Loss and
loss expense reserves represent the estimated ultimate net cost of all reported and unreported losses incurred through the
respective consolidated balance sheet dates. The reserves for unpaid losses and loss expenses are estimated using
individual case-basis valuations and actuarial analyses. Those estimates are subject to the effects of trends in loss severity
and frequency. The estimates are continually reviewed and adjustments are recorded as experience develops or new
information becomes known. Adjustments to the estimated reserve amounts are included in current operating results. The
reserves for professional liability risks cover approximately 2,100 and 2,000 individual claims at December 31, 2023 and
2022, respectively, and estimates for unreported potential claims. The time period required to resolve these claims can
vary depending upon the jurisdiction and whether the claim is settled or litigated. During 2023 and 2022, $550 million
and $497 million, respectively, of net payments were made for professional and general liability claims. The estimation
of the timing of payments beyond a year can vary significantly. Although considerable variability is inherent in
professional liability reserve estimates, we believe the reserves for losses and loss expenses are adequate; however, there
can be no assurance the ultimate liability will not exceed our estimates.

A portion of our professional liability risks is insured through our insurance subsidiary. Subject, in most cases, to a
$15 million per occurrence self-insured retention, our facilities are insured by our insurance subsidiary for losses up to
$80 million per occurrence. The insurance subsidiary has obtained reinsurance for professional liability risks generally
above a retention level of either $25 million or $35 million per occurrence, depending on the jurisdiction for the related
claim. We also maintain professional liability insurance with unrelated commercial carriers for losses in excess of amounts
insured by our insurance subsidiary.

The obligations covered by reinsurance and excess insurance contracts are included in the reserves for professional
liability risks, as we remain liable to the extent the reinsurers and excess insurance carriers do not meet their obligations
under the reinsurance and excess insurance contracts. The amounts receivable under the reinsurance contracts were $34
million and $48 million at December 31, 2023 and 2022, respectively, recorded in “other assets,” and $8 million and $12
million at December 31, 2023 and 2022, respectively, recorded in “other current assets.”

Financial Instruments

Derivative financial instruments have been employed to manage risks, including interest rate exposures, and have
not been used for trading or speculative purposes. Changes in the fair value of derivatives are recognized periodically
either in earnings or in stockholders’ equity, as a component of other comprehensive income, depending on whether the
derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or a
cash flow hedge. Gains and losses on derivatives designated as cash flow hedges, to the extent they are effective, are
recorded in other comprehensive income, and subsequently reclassified to earnings to offset the impact of the hedged
items when they occur. The net interest paid or received on interest rate swaps is recognized as interest expense.

Noncontrolling Interests in Consolidated Entities

The consolidated financial statements include all assets, liabilities, revenues and expenses of less than 100% owned
entities that we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities.

F-15

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 — SHARE-BASED COMPENSATION

Stock Incentive Plans

Our stock incentive plans are designed to promote the long-term financial interests and growth of the Company by
attracting and retaining management and other personnel, motivating them to achieve long range goals and aligning their
interests with those of our stockholders. Stock appreciation right (“SAR”) and restricted share unit (“RSU”) grants vest
solely based upon continued employment over a specific period of time, and performance share unit (“PSU”) grants vest
based upon both continued employment over a specific period of time and the achievement of predetermined financial
targets over a specific period of time. At December 31, 2023 there were 11.056 million shares available for future grants.

Employee Stock Purchase Plan

Our employee stock purchase plan (“ESPP”) provides our participating employees an opportunity to obtain shares
of our common stock at a discount (through payroll deductions over three-month periods). At December 31, 2023, 13.784
million shares of common stock were reserved for ESPP issuances. During 2023, 2022 and 2021, the Company recognized
$17 million, $16 million and $15 million, respectively, of compensation expense related to the ESPP.

SAR, RSU and PSU Activity

The fair value of each SAR award is estimated on the grant date, using valuation models and the weighted average
assumptions indicated in the following table. Awards under our stock incentive plans generally vest based on continued
employment (“Time SARs” and “RSUs”) or based upon continued employment and the achievement of certain financial
targets (“Performance SARs” and “PSUs”). PSUs have a three-year cumulative earnings per share target, and the number
of PSUs earned can vary from zero (for actual performance of less than 90% of target) to two times the original PSU grant
(for actual performance of 110% or more of target). Each grant is valued as a single award with an expected term equal
to the average expected term of the component vesting tranches. The expected term of the share-based award is limited
by the contractual term. We use historical exercise behavior data and other factors to estimate the expected term of the
SARs.

Compensation cost is recognized on the straight-line attribution method. The straight-line attribution method
requires that total compensation expense recognized must at least equal the vested portion of the grant-date fair value.
The expected volatility is derived using historical stock price information for our common stock and the volatility implied
by the trading of options to purchase our stock on open-market exchanges. The risk-free interest rate is the approximate
yield on United States Treasury Strips having a life equal to the expected share-based award life on the date of grant. The
expected life is an estimate of the number of years a share-based award will be held before it is exercised. The expected
dividend yield is estimated based on the assumption that the dividend yield at date of grant will be maintained over the
expected life of the grant.

2023

2022

2021

Risk-free interest rate  .................
Expected volatility  .....................
Expected life, in years  ................
Expected dividend yield  .............

.

3.69%
36%

5.14
0.95%

1.64%
34%

5.11
0.95%

0.68%
36%

6.17
1.10%

F-16

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 — SHARE-BASED COMPENSATION (continued)

SAR, RSU and PSU Activity (continued)

Information regarding Time SAR and Performance SAR activity during 2023, 2022 and 2021 is summarized below

(share amounts in thousands):

Time
SARs

Performance
SARs

SARs outstanding, December 31, 2020  ..
.
 ................................................
Granted  
Exercised  
 .............................................
Cancelled  .............................................
.
SARs outstanding, December 31, 2021 ..
Granted  ................................................
Exercised  .............................................
Cancelled  .............................................
.
SARs outstanding, December 31, 2022  ..
 ................................................
Granted  
Exercised  .............................................
Cancelled  .............................................
SARs outstanding, December 31, 2023  ..
.
SARs exercisable, December 31, 2023   ..
.

7,836
877
(2,443)
(108)
6,162
570
(660)
(112)
5,960
580
(1,156)
(59)
5,325
3,748

819
—
(533)
—
286
—
(159)
—
127
—
(83)
—
44
44

Total
SARs
8,655 $
877
(2,976)
(108)
6,448
570
(819)
(112)
6,087
580
(1,239)
(59)
5,369 $
3,792 $

Weighted
Average
Exercise
Price

91.53
174.98
67.57
138.32
113.15
236.00
90.84
182.87
126.38
253.49
95.29
202.05
146.46
118.67

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value
(dollars in
millions)

5.5 years $
4.5 years $

667
576

The weighted average fair values of SARs granted during 2023, 2022 and 2021 were $87.47, $69.55 and $54.57
per share, respectively. The intrinsic values of SARs exercised during 2023, 2022 and 2021 were $207 million, $115
million and $404 million, respectively. As of December 31, 2023, the unrecognized compensation cost related to
nonvested SARs was $46 million.

Information regarding RSU and PSU activity during 2023, 2022 and 2021 is summarized below (share amounts in

thousands):

RSUs

PSUs

2,476
899
—
(992)
(192)
2,191
611
—
(878)
(140)
1,784
609
—
(717)
(125)
1,551

2,592
689
684
(1,772)
(110)
2,083
455
699
(1,399)
(123)
1,715
479
697
(1,393)
(88)
1,410

Total RSUs
and PSUs
5,068
1,588
684
(2,764)
(302)
4,274
1,066
699
(2,277)
(263)
3,499
1,088
697
(2,110)
(213)
2,961

Weighted
Average
Grant
Date Fair
Value
$ 125.40
174.34
102.02
106.62
149.07
150.32
235.71
138.45
138.41
183.86
179.18
253.85
144.42
152.50
217.78
$ 214.71

RSUs and PSUs outstanding, December 31, 2021

RSUs and PSUs outstanding, December 31, 2020  ..............
Granted  ............................................................................
Performance adjustment  ..................................................
Vested  ..............................................................................
Cancelled  .........................................................................
  ..............
 . ............................................................................
  ..................................................
 ..............................................................................
 .........................................................................
  ..............
 . ............................................................................
  ..................................................
 ..............................................................................
 .........................................................................
  ..............

Granted
Performance adjustment
Vested
Cancelled

Granted
Performance adjustment
Vested
Cancelled

RSUs and PSUs outstanding, December 31, 2022

RSUs and PSUs outstanding, December 31, 2023

F-17

 
HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 — SHARE-BASED COMPENSATION (continued)

SAR, RSU and PSU Activity (continued)

The fair values of RSUs and PSUs that vested during 2023, 2022 and 2021 were $550 million, $550 million and
$475 million, respectively. As of December 31, 2023, the unrecognized compensation cost related to RSUs and PSUs was
$274 million.

NOTE 3 — ACQUISITIONS AND DISPOSITIONS

During 2023, we paid $229 million to acquire four hospital facilities in Texas and $406 million to acquire
nonhospital health care entities. During 2022, we paid $224 million to acquire nonhospital health care entities
(noncontrolling interests of $72 million were recorded). During 2021, we paid $67 million to acquire two hospital
facilities, one in southern Georgia and one in Tennessee, $594 million to acquire a network of urgent care centers in
Florida and $114 million to acquire other nonhospital health care entities (noncontrolling interests of $117 million were
recorded). We also paid $330 million and assumed certain liabilities to acquire an 80% interest (noncontrolling interests
of $100 million were recorded) in a venture providing post-acute care services (home health and hospice). Purchase price
amounts have been allocated to the related assets acquired and liabilities assumed based upon their respective fair values.
The purchase price paid in excess of the fair value of identifiable net assets of these acquired entities aggregated $362
million, $262 million and $1.002 billion in 2023, 2022 and 2021, respectively. The consolidated financial statements
include the accounts and operations of the acquired entities subsequent to the respective acquisition dates. The pro forma
effects of these acquired entities on our results of operations for periods prior to the respective acquisition dates were not
significant.

During 2023, we received proceeds of $162 million for the sale of two hospital facilities in Louisiana. We also
received proceeds of $31 million related to sales of real estate and other health care entity investments. We recognized a
pretax loss of $5 million for these transactions. During 2022, we received proceeds of $326 million and recognized a
pretax gain of $274 million ($200 million after tax) related to sales of real estate and other health care entity investments.
We also received proceeds of $911 million and recognized a pretax gain of $1.027 billion ($527 million after tax and
amounts attributable to noncontrolling interests) related to the sale of a controlling interest in a subsidiary of our group
purchasing organization. During 2021, we received proceeds of $1.502 billion and recognized a pretax gain of $1.226
billion ($920 million after tax) related to the sales of five hospital facilities in Georgia, comprised of three facilities from
our northern Georgia market and two facilities from our southern Georgia market. We also received proceeds of $658
million and recognized a pretax gain of $394 million ($294 million after tax) related to sales of other health care entity
investments and real estate.

NOTE 4 — INCOME TAXES

The provision for income taxes consists of the following (dollars in millions):

Current:

.
Federal .  ........... $
State  .................
Foreign ............

Deferred:

Federal  .............
State  .................
Foreign
............

$

2023

2022

2021

1,118 $
213
3

241
21
19
1,615 $

1,222 $
206
18

261
27
12
1,746 $

1,769
311
15

24
(18)
11
2,112

Our provision for income taxes for the years ended December 31, 2023, 2022 and 2021 included tax benefits of $93
million, $77 million and $119 million, respectively, related to the settlement of employee equity awards. Our foreign
pretax income was $85 million, $66 million and $64 million for the years ended December 31, 2023, 2022 and 2021,
respectively.

F-18

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4 — INCOME TAXES (continued)

A reconciliation of the federal statutory rate to the effective income tax rate follows:

Federal statutory rate   .......................................................................................................
State income taxes, net of federal tax benefit   ..................................................................
Change in liability for uncertain tax positions  .................................................................
Tax benefit from settlements of employee equity awards   ...............................................
Other items, net   ...............................................................................................................
Effective income tax rate on income attributable to HCA Healthcare, Inc.   ....................
Income attributable to noncontrolling interests from consolidated partnerships  .............
Effective income tax rate on income before income taxes   ..............................................

2023

2022

2021

21.0% 21.0%
2.3
2.6
0.7
0.4
(0.9)
(1.2)
0.5
0.8
23.6
23.6
(2.6)
(3.3)
21.0% 20.3%

21.0%
2.0
0.7
(1.2)
0.8
23.3
(1.8)
21.5%

A summary of the items comprising our deferred tax assets and liabilities at December 31 follows (dollars in

millions):

2023

2022

Assets

Liabilities

Assets

Depreciation and fixed asset basis differences  ................. $
Allowances for professional liability and other risks  .......
Accounts receivable  ..........................................................
Compensation  ..................................................................
Right-of-use lease assets and obligations  .........................
Other  .................................................................................

$

— $
452
363
308
506
592
2,221 $

1,048 $
—
—
—
492
860
2,400 $

— $
430
368
402
451
536
2,187

$

Liabilities
938
—
—
—
438
698
2,074

At December 31, 2023, federal and state net operating loss carryforwards (expiring in years 2024 through 2042)
available to offset future taxable income approximated $28 million and $189 million, respectively. Utilization of net
operating loss carryforwards in any one year may be limited.

The following table summarizes the activity related to our gross unrecognized tax benefits, excluding accrued

interest of $177 million and $129 million as of December 31, 2023 and 2022, respectively (dollars in millions):

2023

Balance at January 1  ..................................................................... $
Additions based on tax positions related to the current year  .......
Additions for tax positions of prior years  ....................................
Reductions for tax positions of prior years  ..................................
Settlements  ...................................................................................
Lapse of applicable statutes of limitations  ...................................
Balance at December 31  ............................................................... $

639
30
4
(10)
—
(24)
639

2022
$ 576
25
50
(4)
(1)
(7)
$ 639

Unrecognized tax benefits of $320 million as of December 31, 2023 ($278 million as of December 31, 2022) would

affect the effective rate, if recognized.

At December 31, 2023, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016,
2017 and 2018 federal income tax returns and the 2019 returns of certain affiliates. We are also subject to examination
by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Depending on the resolution of any
federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or
the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability
for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently
unable to estimate the range of any possible change.

F-19

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5 — EARNINGS PER SHARE

We compute basic earnings per share using the weighted average number of common shares outstanding. We
compute diluted earnings per share using the weighted average number of common shares outstanding plus the dilutive
effect of outstanding SARs, RSUs and PSUs, computed using the treasury stock method. During 2023, 2022 and 2021,
we repurchased 14.465 million shares, 30.747 million shares and 37.812 million shares, respectively, of our common
stock.

The following table sets forth the computations of basic and diluted earnings per share for the years ended December

31, 2023, 2022 and 2021 (dollars and shares in millions, except per share amounts):

Net income attributable to HCA Healthcare, Inc.

...

$

5,242

$

5,643 $

6,956

2023

2022

2021

Weighted average common shares outstanding
Effect of dilutive incremental shares
Shares used for diluted earnings per share
Earnings per share:

......
.......................
..............

272.404
4.008
276.412

290.348
4.318
294.666

323.315
5.437
328.752

Basic earnings per share
Diluted earnings per share

......................................
...................................

$
$

19.25
18.97

$
$

19.43 $
19.15 $

21.52
21.16

NOTE 6 — INVESTMENTS OF INSURANCE SUBSIDIARIES

A summary of the insurance subsidiaries’ investments at December 31 follows (dollars in millions):

2023

Unrealized
Amounts

Debt securities
Money market funds and other

..........................................................
.
................................

Amounts classified as current assets
Investment carrying value

........................
........................................

Amortized
Cost

$

$

404
188
592

$

$

Gains

Losses

Fair
Value

1
—
1

$

$

(29) $
—
(29)

$

376
188
564
(87)
477

2022
Unrealized
Amounts

Debt securities
Money market funds and other

............................................................
...................................

Amounts classified as current assets
Investment carrying value

..........................
..........................................

Amortized
Cost

$

$

415 $
96
511 $

Gains

Losses

Fair
Value

— $
—
— $

(38) $
—
(38)

$

377
96
473
(92)
381

At December 31, 2023 and 2022, the investments in debt securities of our insurance subsidiaries were classified as
“available-for-sale.” Changes in unrealized gains and losses that are not credit-related are recorded as adjustments to other
comprehensive income (loss).

F-20

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 — INVESTMENTS OF INSURANCE SUBSIDIARIES (continued)

Scheduled maturities of investments in debt securities at December 31, 2023 were as follows (dollars in millions):

Amortized
Cost

Fair
Value

Due in one year or less  ........................................... $
Due after one year through five years  ....................
Due after five years through ten years  ...................
Due after ten years  ..................................................

$

12
150
165
77
404

$

$

12
144
148
72
376

The average expected maturity of the investments in debt securities at December 31, 2023 was 5.1 years, compared
to the average scheduled maturity of 8.8 years. Expected and scheduled maturities may differ because the issuers of certain
securities have the right to call, prepay or otherwise redeem such obligations prior to their scheduled maturity date.

NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820”) emphasizes fair
value is a market-based measurement, and fair value measurements should be determined based on the assumptions
market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes
between market participant assumptions based on market data obtained from sources independent of the reporting entity
(observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about
market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs
are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs
observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield
curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which
are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the
determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level
in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input significant
to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value
measurement in its entirety requires judgment.

The investments of our insurance subsidiaries are generally classified within Level 1 or Level 2 of the fair value
hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources
with reasonable levels of price transparency.

The following tables summarize the investments of our insurance subsidiaries measured at fair value on a recurring
basis as of December 31, 2023 and 2022, aggregated by the level in the fair value hierarchy within which those
measurements fall (dollars in millions):

2023

Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)

Fair Value Measurements Using
Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Fair Value

Debt securities  ............................................... $
Money market funds and other  ......................
Investments of insurance subsidiaries  ...........
Less amounts classified as current assets  ......

$

376 $
188
564
(87)
477 $

F-21

— $

188
188
(87)
101

$

376
—
376
—
376

$

$

—
—
—
—
—

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

2022

Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)

Fair Value Measurements Using
Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Fair Value

Debt securities
Money market funds and other
Investments of insurance subsidiaries
Less amounts classified as current assets

.............................................
....................
.........
....

$

$

377 $
96
473
(92)
381 $

— $
96
96
(92)

4 $

377 $
—
377
—
377 $

—
—
—
—
—

The estimated fair value of our long-term debt was $38.253 billion and $35.555 billion at December 31, 2023 and
2022, respectively, compared to carrying amounts, gross of debt issuance costs and discounts, aggregating $39.926 billion
and $38.385 billion, respectively. The estimates of fair value are generally based on Level 2 inputs, including quoted
market prices or quoted market prices for similar issues of long-term debt with the same maturities.

NOTE 8 — LONG-TERM DEBT

A summary of long-term debt at December 31, including related interest rates at December 31, 2023, follows

(dollars in millions):

2023

2022

Senior secured asset-based revolving credit facility (effective interest rate of 6.7%)  ..... $
Senior secured revolving credit facility  ............................................................................
Senior secured term loan facilities (effective interest rate of 6.8%)  ................................
..............................................
Other senior secured debt (effective interest rate of 4.1%) 
Senior secured debt  ..........................................................................................................
  ..................................................
Senior unsecured notes (effective interest rate of 5.0%)
Debt issuance costs and discounts   ...................................................................................
Total debt (average life of 9.4 years, rates averaging 5.1%)  ............................................
Less amounts due within one year  ...................................................................................

1,880 $
—
1,313
967
4,160
35,766
(333)
39,593
2,424
$ 37,169 $

2,900
—
1,880
953
5,733
32,652
(301)
38,084
370
37,714

During 2023, the availability under our senior secured revolving credit facility was increased by $1.500 billion to
total $3.500 billion, the senior secured term loan B facility was fully retired and certain administrative updates were made
to our credit agreements. We also issued $3.250 billion aggregate principal amount of senior notes comprised of (i) $1.000
billion aggregate principal amount of 5.200% senior notes due 2028, (ii) $1.250 billion aggregate principal amount of
5.500% senior notes due 2033 and (iii) $1.000 billion aggregate principal amount of 5.900% senior notes due 2053. We
used the net proceeds to repay borrowings under our asset-based revolving credit facility.

Senior Secured Credit Facilities And Other Senior Secured Debt

We have entered into the following senior secured credit facilities: (i) a $4.500 billion asset-based revolving credit
facility maturing on June 30, 2026 with a borrowing base of 85% of eligible accounts receivable, subject to customary
reserves and eligibility criteria ($1.880 billion outstanding at December 31, 2023) (the “ABL credit facility”); (ii) a $3.500
billion senior secured revolving credit facility maturing on June 30, 2026 (none outstanding at December 31, 2023 without
giving effect to certain outstanding letters of credit); and (iii) a $1.313 billion senior secured term loan facility maturing
on June 30, 2026. We refer to the facilities described under (ii) and (iii) above, collectively, as the “cash flow credit
facility” and, together with the ABL credit facility, the “senior secured credit facilities.” Finance leases and other secured
debt totaled $967 million at December 31, 2023.

F-22

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — LONG-TERM DEBT (continued)

Borrowings under the senior secured credit facilities bear interest at a rate equal to, at our option, either (a) a base
rate determined by reference to the higher of (1) the federal funds rate plus 0.50% or (2) the prime rate of Bank of America
or (b) a reference rate (the Secured Overnight Financing Rate (SOFR)) for the relevant interest period, plus, in each case,
an applicable margin. The applicable margin for borrowings under the senior secured credit facilities may be reduced
subject to attaining certain leverage ratios.

The senior secured credit facilities contain a number of covenants that restrict, subject to certain exceptions, our
(and some or all of our subsidiaries’) ability to incur additional indebtedness, repay subordinated indebtedness, create
liens on assets, sell assets, make investments, loans or advances, engage in certain transactions with affiliates, pay
dividends and distributions, and enter into sale and leaseback transactions. In addition, we are required to satisfy and
maintain a maximum total leverage ratio covenant under the cash flow credit facility and, in certain situations under the
ABL credit facility, a minimum interest coverage ratio covenant.

Senior Unsecured Notes

Senior unsecured notes consist of (i) $35.041 billion aggregate principal amount of senior notes with maturities
ranging from 2024 to 2053; (ii) an aggregate principal amount of $125 million medium-term notes maturing 2025; and
(iii) an aggregate principal amount of $600 million debentures with maturities ranging from 2024 to 2095.

General Debt Information

The senior secured credit facilities are fully and unconditionally guaranteed by substantially all existing and future,
direct and indirect, 100% owned material domestic subsidiaries that are “Unrestricted Subsidiaries” under our Indenture
(the “1993 Indenture”) dated December 16, 1993 (except for certain special purpose subsidiaries that only guarantee and
pledge their assets under our ABL credit facility).

All obligations under the ABL credit facility, and the guarantees of those obligations, are secured, subject to
permitted liens and other exceptions, by a first-priority lien on substantially all of the receivables of the borrowers and
each guarantor under such ABL credit facility (the “Receivables Collateral”).

All obligations under the cash flow credit facility and the guarantees of such obligations are secured, subject to

permitted liens and other exceptions, by:

•

•

a first-priority lien on the capital stock owned by HCA Inc., or by any guarantor, in each of their respective
first-tier subsidiaries;

a first-priority lien on substantially all present and future assets of HCA Inc. and of each guarantor other
than (i) “Principal Properties” (as defined in the 1993 Indenture), (ii) certain other real properties and (iii)
deposit accounts, other bank or securities accounts, cash, leaseholds, motor-vehicles and certain other
exceptions; and

•

a second-priority lien on certain of the Receivables Collateral.

Maturities of long-term debt in years 2025 through 2028 are $4.672 billion, $5.350 billion, $2.408 billion and

$2.545 billion, respectively.

NOTE 9 — LEASES

We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months,
we record the related assets and obligations at the present value of lease payments over the term. Many of our leases
include rental escalation clauses and renewal options that are factored into our determination of lease payments, when
appropriate. We do not separate lease and nonlease components of contracts. Generally, we use our estimated incremental
borrowing rate to discount the lease payments, as most of our leases do not provide a readily determinable implicit interest
rate.

F-23

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LEASES (continued)

The following table presents our lease-related assets and liabilities at December 31, 2023 and 2022 (dollars in

millions):

Assets:

Balance Sheet Classification

2023

2022

Operating leases  ................................. Right-of-use operating lease assets
Finance leases  .................................... Property and equipment

Total lease assets   ...........................

Liabilities:
Current:

Operating leases  ................................. Other accrued expenses
Finance leases  .................................... Long-term debt due within one year

Noncurrent:

Operating leases  ................................. Right-of-use operating lease obligations
Finance leases  .................................... Long-term debt

Total lease liabilities  ......................

Weighted-average remaining term:

Operating leases  .................................
Finance leases  ....................................

Weighted-average discount rate:

Operating leases  .................................
Finance leases  ....................................

$

$

$

$

2,207
556
2,763

363
166

1,903
541
2,973

$

$

$

$

2,065
587
2,652

364
131

1,752
579
2,826

11.8 years
9.0 years

10.1 years
9.5 years

4.9%
4.9%

4.4%
4.5%

The following table presents certain information related to expenses for finance and operating leases for the years

ended December 31, 2023, 2022 and 2021 (dollars in millions):

2023

2022

2021

Finance lease expense:

Depreciation and amortization  ................................ $
Interest  ..................................................................... 
Operating leases(1)   .....................................................
Short-term lease expense(1)   .......................................
Variable lease expense(1)  ...........................................

164
31
495
337
162
$ 1,189

$

163
29
484
329
163
$ 1,168

$ 135
29
478
354
157
$1,153

(1)

Expenses are included in “other operating expenses” in our consolidated income statements.

The following table presents supplemental cash flow information for the years ended December 31, 2023, 2022 and

2021 (dollars in millions):

2023

2022

2021

Cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows for operating leases  ....................................
Operating cash flows for finance leases  .......................................
Financing cash flows for finance leases  .......................................

F-24

$ 479 $ 473 $ 474
29
123

29
124

31
140

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LEASES (continued)

Maturities of Lease Liabilities

The following table reconciles the undiscounted minimum lease payment amounts to the operating and finance

lease liabilities recorded on the balance sheet at December 31, 2023 and 2022 (dollars in millions):

2023

2022

Operating
Leases

Finance
Leases

Operating
Leases

Year 1   .................................................................................. $
  ..................................................................................
Year 2
  ..................................................................................
Year 3
  ..................................................................................
Year 4
  ..................................................................................
Year 5
.............................................................................
Thereafter
Total minimum lease payments  ...........................................
Less: amount of lease payments representing interest  .........
Present value of future minimum lease payments   ...............
Less: current lease obligations  .............................................
Long-term lease obligations  ................................................. $

452
394
340
288
228
1,540
3,242
(976)
2,266
(363)
1,903

$

$

193
155
115
60
45
356
924
(217)
707
(166)
541

$

$

436
380
320
269
222
1,122
2,749
(633)
2,116
(364)
1,752

Finance
Leases
156
$
164
125
89
39
359
932
(222)
710
(131)
579

$

NOTE 10 — CONTINGENCIES

We operate in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory
proceedings have been and can be expected to be instituted or asserted against us. 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. In certain of these actions the claimants may seek punitive damages against us, which
may not be covered by insurance. We are also subject to claims by various taxing authorities for additional taxes and
related interest and penalties. The resolution of any such lawsuits, claims or legal and regulatory proceedings could have
a material, adverse effect on our results of operations, financial position or liquidity.

Government Investigations, Claims and Litigation

Health care companies are subject to numerous investigations by various governmental agencies. Under the federal
False Claims Act (“FCA”), private parties have the right to bring qui tam, or “whistleblower,” suits against companies
that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have
adopted similar state whistleblower and false claims provisions. Certain of our individual facilities have received, and
from time to time, other facilities may receive, government inquiries from, and may be subject to investigation by, federal
and state agencies. Depending on whether the underlying conduct in these or future inquiries or investigations could be
considered systemic, their resolution could have a material, adverse effect on our results of operations, financial position
or liquidity.

Texas operates a state Medicaid program pursuant to a waiver from the Centers for Medicare & Medicaid Services
under Section 1115 of the Social Security Act (“Program”). The Program includes uncompensated-care pools; payments
from these pools are intended to defray the uncompensated costs of services provided by our and other hospitals to
Medicaid eligible or uninsured individuals. Separately, we and other hospitals provide charity care services in several
communities in the state. 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 requested information about whether the Program, as operated in Harris County, complied
with the laws and regulations applicable to provider related donations, and the Company cooperated with that request. 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. The Company believes that our
participation is and has been consistent with the requirements of the Program and is vigorously defending against the
lawsuit being pursued by the relator. We cannot predict what effect, if any, the qui tam lawsuit could have on the
Company.

F-25

 
HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 — CAPITAL STOCK

The amended and restated certificate of incorporation authorizes the Company to issue up to 1,800,000,000 shares
of common stock, and our amended and restated by-laws set the number of directors constituting the board of directors
of the Company at not less than three members, the exact number to be determined from time to time by resolution adopted
by the affirmative vote of a majority of the total number of directors then in office.

Share Repurchase Transactions

During January 2024, January 2023, January 2022, February 2021, January 2020 and January 2019, our Board of
Directors authorized share repurchase programs for up to $6 billion, $3 billion, $8 billion, $6 billion, $2 billion and $2
billion, respectively, of the Company’s outstanding common stock.

During 2023, we repurchased 14.465 million shares of our common stock at an average price of $263.47 per share
through market purchases pursuant to the January 2022 authorization (which was completed during 2023) and the January
2023 authorization. At December 31, 2023, we had $775 million of repurchase authorization available under the January
2023 authorization. During 2022, we repurchased 30.747 million shares of our common stock at an average price of
$227.67 per share through market purchases pursuant to the February 2021 authorization (which was completed during
2022) and the January 2022 authorization. During 2021, we repurchased 37.812 million shares of our common stock at
an average price of $217.25 per share through market purchases pursuant to the January 2019 and January 2020
authorizations (which were completed during 2021) and the February 2021 authorization.

NOTE 12 — EMPLOYEE BENEFIT PLANS

We maintain defined contribution benefit plans that are available to employees who meet certain minimum
requirements. The plans require that we match participant contributions up to certain maximum levels (generally, 100%
of the first 3% to 9%, depending upon years of vesting service, of compensation deferred by participants). Benefits
expense under these plans totaled $659 million for 2023, $606 million for 2022 and $560 million for 2021. Our matching
contributions are funded during the year following the participant contributions.

We maintain the noncontributory, nonqualified Restoration Plan to provide retirement benefits for eligible
employees. Eligibility for the Restoration Plan is based upon earning eligible compensation in excess of a base amount
and attaining 1,000 or more hours of service during the plan year. Company credits to participants’ hypothetical account
balances (the Restoration Plan is not funded) depend upon participants’ compensation, years of vesting service,
hypothetical investment returns (gains or losses) and certain IRS limitations. Amounts recognized under this plan was
$40 million expense for 2023, a $27 million credit for 2022 and $38 million expense for 2021. Accrued benefits liabilities
under this plan totaled $227 million at December 31, 2023 and $210 million at December 31, 2022.

We maintain a Supplemental Executive Retirement Plan (“SERP”) for certain executives (the SERP is not funded).
The plan is designed to ensure that upon retirement the participant receives the value of a prescribed life annuity from the
combination of the SERP and our other benefit plans. Benefits expense under the plan was $10 million for 2023, $22
million for 2022 and $22 million for 2021. Accrued benefits liabilities under this plan totaled $106 million at December
31, 2023 and $137 million at December 31, 2022.

We maintain defined benefit pension plans which resulted from certain hospital acquisitions in prior years. Amounts
recognized under these plans was $2 million expense for 2023, $11 million credit for 2022, and $4 million expense for
2021. Accrued benefits under these plans totaled $43 million of assets at December 31, 2023 and $9 million of assets at
December 31, 2022.

F-26

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. Effective January
1, 2023, we reorganized our operations into three geographically organized groups: the National, American and Atlantic
Groups with retrospective presentation for all periods presented. At December 31, 2023, the National Group included 57
hospitals located in Alaska, California, Idaho, Indiana, Kentucky, Nevada, New Hampshire, North Carolina, Tennessee,
Utah and Virginia, the American Group included 60 hospitals located in Colorado, Central Kansas, Louisiana and Texas,
and the Atlantic Group included 62 hospitals located in Florida, Georgia, Northern Kansas, Missouri and South Carolina.
The seven hospitals we operate in England are included in the Corporate and other group.

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, losses and
gains on sales of facilities, losses on retirement of debt, income taxes and net income attributable to noncontrolling
interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic
areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the
health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA
should not be considered as a measure of financial performance under generally accepted accounting principles, and the
items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial
performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted
accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not
be comparable to other similarly titled measures of other companies. The geographic distributions of our revenues, equity
in earnings of affiliates, adjusted segment EBITDA, depreciation and amortization, assets and goodwill and other
intangible assets are summarized in the following table (dollars in millions) and represent the operating segments under
the January 1, 2023 reorganized segment structure:

For the Year Ended December 31,
2022

2021

2023

Revenues:

National Group  ............................................... $ 18,105
21,167
Atlantic Group  ................................................
22,318
American Group  .............................................
3,378
Corporate and other  ........................................
$ 64,968

$ 16,767
19,324
20,858
3,284
$ 60,233

$ 16,329
19,098
19,636
3,689
$ 58,752

Equity in losses (earnings) of affiliates:

National Group  ............................................... $
Atlantic Group  ................................................
American Group  .............................................
Corporate and other  ........................................

$

Adjusted segment EBITDA:

(2)
(3)
(59)
42
(22)

$

$

(1)
(3)
(43)
2
(45)

$

$

(33)
(2)
(50)
(28)
(113)

National Group  ............................................... $
Atlantic Group  ................................................
.............................................
American Group 
........................................
Corporate and other 

4,000
4,492
5,208
(974)
$ 12,726

$

3,616
3,881
5,102
(532)
$ 12,067

$

4,202
4,218
4,836
(612)
$ 12,644

Depreciation and amortization:

National Group  ............................................... $
Atlantic Group  ................................................
.............................................
American Group 
........................................
Corporate and other 

$

834
989
971
283
3,077

$

$

801
921
937
310
2,969

$

$

754
848
897
354
2,853

F-27

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13 — SEGMENT AND GEOGRAPHIC INFORMATION (continued)

For the Year Ended December 31,
2021

2023

Adjusted segment EBITDA  .......................... $
Depreciation and amortization  ..................
 .........................................
Interest expense
Losses (gains) on sales of facilities   ..........
Losses on retirement of debt  .....................
Income before income taxes  ......................... $

12,726
3,077
1,938
5
—
7,706

$

$

2022
12,067 $
2,969
1,741
(1,301)
78
8,580 $

12,644
2,853
1,566
(1,620)
12
9,833

Assets:

National Group  ...........
Atlantic Group  ............
American Group  .........
Corporate and other  ....

2023

December 31,
2022

2021

$

$

12,487 $
16,098
19,786
7,840
56,211 $

11,793 $
15,092
17,934
7,619
52,438 $

11,236
13,944
17,224
8,338
50,742

 ........................................................... 

Goodwill and other intangible assets:
.
Balance at December 31, 2020 .......................................
 ....
Acquisitions  
Foreign currency translation, amortization and other
..
Balance at December 31, 2021........................................
Acquisitions  .............................................................
...
..
Foreign currency translation, amortization and other
Balance at December 31, 2022  ......................................
.
 .................................................................
Acquisitions 
Foreign currency translation, amortization and other
..
Balance at December 31, 2023   ......................................

.

.

National
Group

Atlantic
Group

American
Group

Corporate
and Other Total

$

$

1,089
126
(3)
1,212
75
(43)
1,244
—
(3)
1,241

$

$

1,375
610
(15)
1,970
90
(3)
2,057
8
(1)
2,064

$

$

4,996 $
66
—
5,062
90
—
5,152
326
—
5,478 $

260
(82)
1,296
7
(103)
1,200
28
(66)

1,118 $ 8,578
1,062
(100)
9,540
262
(149)
9,653
362
(70)
1,162 $ 9,945

F-28

 
 
 
 
HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14 — OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows (dollars in millions):

Balances at December 31, 2020  ............................................. $

Unrealized
Gains
(Losses) on
Available-
for-Sale
Securities
25

Unrealized losses on available-for-sale securities, net

of $3 income tax benefit  .................................................

(13)

Foreign
Currency
Translation
Adjustments
$

(271) $

Defined
Benefit
Plans

Foreign currency translation adjustments, net of $2

income tax benefit   ..........................................................
Defined benefit plans, net of $20 of income taxes  ............
Change in fair value of derivative instruments   .................
Expense reclassified into operations from other

comprehensive income, net of $7 and $8 income
tax benefits, respectively   ................................................
Balances at December 31, 2021   ............................................
Unrealized losses on available-for-sale securities, net

of $12 income tax benefit  ...............................................

Foreign currency translation adjustments, net of $16

income tax benefit   ..........................................................
Defined benefit plans, net of $11 of income taxes  ............
Change in fair value of derivative instruments, net of $1

of income taxes  ...............................................................

Expense reclassified into operations from other

comprehensive income, net of none, $2 and $1
income tax benefits, respectively   ...................................
Balances at December 31, 2022   ............................................
Unrealized gains on available-for-sale securities, net

of $2 of income taxes   .....................................................

Foreign currency translation adjustments, net of $7

of income taxes   ..............................................................
Defined benefit plans, net of $6 of income taxes  ..............
Expense (benefit) reclassified into operations from other
comprehensive income, net of none of income taxes
and $1 income tax benefit, respectively

  ........................

Balances at December 31, 2023   ............................................ $

(7)

(278)

(95)

(373)

34

12

(43)

1
(30)

9

Change
in Fair
Value of
Derivative
Instruments
$

(36)

Total
$ (502)

1

29
(6)

5

1
—

(13)

(7)
67
1

50
(404)

(43)

(95)
38

5

9
(490)

9

34
21

(220)

67

21
(132)

38

7
(87)

21

(1)
(22) $

(339) $

2
(64)

$

1
— $ (425)

NOTE 15 — ACCRUED EXPENSES

A summary of other accrued expenses at December 31 follows (dollars in millions):

Professional liability risks  .............................. $
Defined contribution benefit plans  .................
Right-of-use operating leases  .........................
Taxes other than income  ................................
...........................................................
Interest 
Employee medical benefits 
............................
 ...............................................................
Other  

$

2023

2022

532 $
668
363
382
414
199
1,313
3,871 $

515
612
364
371
402
182
1,135
3,581

F-29

 
 
EXHIBIT 31.1

I, Samuel N. Hazen, certify that:

1. I have reviewed this annual report on Form 10-K of HCA Healthcare, Inc.;

CERTIFICATIONS

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and
for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that
occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal
control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the Registrant’s auditors and the audit and compliance committee of the Registrant’s
board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process,
summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant

role in the Registrant’s internal control over financial reporting.

Date: February 16, 2024

By: /S/ SAMUEL N. HAZEN
Samuel N. Hazen
Chief Executive Officer

EXHIBIT 31.2

I, William B. Rutherford, certify that:

1. I have reviewed this annual report on Form 10-K of HCA Healthcare, Inc.;

CERTIFICATIONS

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and
for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that
occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal
control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the Registrant’s auditors and the audit and compliance committee of the Registrant’s
board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process,
summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant

role in the Registrant’s internal control over financial reporting.

Date: February 16, 2024

By: /S/ WILLIAM B. RUTHERFORD
William B. Rutherford
Executive Vice President and Chief Financial
Officer

EXHIBIT 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of HCA Healthcare, Inc. (the “Company”) on Form 10-K for the year ended
December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the
undersigned certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of

1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

February 16, 2024

February 16, 2024

By: /S/ SAMUEL N. HAZEN
Samuel N. Hazen
Chief Executive Officer

By: /S/ WILLIAM B. RUTHERFORD
William B. Rutherford
Executive Vice President and Chief Financial
Officer

Directors

Thomas F. Frist Ill
Chairman 
HCA Healthcare

Founder and 
Managing Principal 
Frist Capital

Samuel N. Hazen 
Chief Executive Officer 
HCA Healthcare 

Meg G. Crofton 
Retired President 
Parks and Resorts Operations
The Walt Disney Company

Robert J. Dennis
Retired Chairman and  
Chief Executive Officer 
Genesco Inc.

Nancy-Ann DeParle 
Co-founder and Managing 
Partner Consonance 
Capital Partners

William R. Frist 
Principal 
Champion & Co. Inc.

Hugh F. Johnston
Senior Executive  
Vice President and  
Chief Financial Officer 
The Walt Disney Company

Executive Officers
(as of March 15, 2024)

Samuel N. Hazen 
Chief Executive Officer 
and Director

Erol R. Akdamar 
President - American Group

Jennifer L. Berres 
Senior Vice President and 
Chief Human Resources 
Officer 

Phillip G. Billington 
Senior Vice President – 
Internal Audit Services 

Jeff E. Cohen 
Senior Vice President – 
Government Relations 

Michael S. Cuffe, M.D.
Executive Vice President and 
Chief Clinical Officer 

Jon M. Foster 
Executive Vice President and 
Chief Operating Officer 

Richard A. Hammett 
President – Atlantic Group

Michael A. Marks 
Senior Vice President - 
Finance

Michael R. McAlevey
Senior Vice President and 
Chief Legal Officer

Timothy M. McManus 
President – National Group 

Sammie S. Mosier
Senior Vice President and 
Chief Nurse Executive

Deborah M. Reiner 
Senior Vice President 
– Marketing and 
Communications

William B. Rutherford
Executive Vice President 
and Chief Financial Officer

Michael W. Michelson
Retired Member 
KKR Management LLC 

Wayne J. Riley, M.D., M.B.A.
President of SUNY  
Downstate Health 
Sciences University

Andrea B. Smith
Retired Chief  
Administrative Officer 
Bank of America Corporation

Joseph A. Sowell, III
Senior Vice President and 
Chief Development Officer 

Kathryn A. Torres 
Senior Vice President – 
Payer Contracting 
and Alignment

Chad J. Wasserman
Senior Vice President and 
Chief Information Officer

Kathleen M. Whalen
Senior Vice President 
and Chief Ethics and 
Compliance Officer 

Christopher F. Wyatt
Senior Vice President 
and Controller

Corporate Information

Transfer Agent and Registrar
EQ Shareowner Services
P.O. Box 64874
St. Paul, Minnesota 55164-0874
Toll free: 800-468-9716

Certified/Overnight Mail
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, Minnesota 55120

Independent Registered
Public Accounting Firm
Ernst & Young LLP
Nashville, Tennessee

Corporate Headquarters
One Park Plaza
Nashville, Tennessee 37203
615-344-9551

Form 10-K
The Company has filed an annual report on Form 10-K for the year ended
December 31, 2023 with the United States Securities and Exchange 
Commission (SEC). Shareholders may obtain a copy of this report,  
without charge, by writing:

Investor Relations, HCA Healthcare, Inc., One Park Plaza, Nashville, TN 37203
or by visiting the Company’s website at www.HCAhealthcare.com.

Common Stock and Dividend Information
The Common Stock of HCA Healthcare, Inc. is listed on the New York Stock
Exchange (NYSE) under the symbol “HCA”. On February 26, 2024, the 
Company had approximately 460 shareholders of record. On January 29, 2024, 
the Company’s Board of Directors declared a quarterly dividend of $0.66 per 
share on our common stock payable on March 29, 2024 to shareholders of 
record on March 15, 2024. Future declarations of quarterly dividends and the 
establishment of future record and payment dates are subject to the final 
determination of the Company’s Board of Directors.

Annual Meeting of Shareholders
The annual meeting of shareholders will be held on April 25, 2024,
at 2:00 pm local time in a virtual meeting format only, via live webcast at
www.virtualshareholdermeeting.com/HCA2024. Shareholders of record 
as of February 26, 2024 are invited to attend the virtual meeting.

HCA Healthcare
One Park Plaza
Nashville, Tennessee 37203
www.HCAhealthcare.com