HCA HCA Healthcare 10-Q 2026-09-30 section summaries

HCA Healthcare — Q3 and first nine months of 2026

HCA’s revenue grew in Q3 and year to date, while Q3 net income attributable to HCA declined and nine-month operating cash flow was lower. Reduced weighted-average diluted shares helped lift diluted EPS. Segment results were mixed: National Group adjusted EBITDA improved, while Atlantic and American Group EBITDA declined year over year.

Consolidated results

Q3 geographic segments

Q3 reconciliation items included depreciation and amortization of $2.828B versus $2.612B, interest expense of $1.790B versus $1.676B, and facility-sale gains of $13M versus $22M. Adjusted segment EBITDA is a non-GAAP measure HCA uses for resource allocation, performance assessment and evaluating leverage and debt-service capacity; the company cautions it may not be comparable across companies.

Revenue, cash flow and investment

Q3 payer revenue included Medicare of $2.925B versus $2.728B; managed Medicare of $3.530B versus $3.306B; Medicaid of $1.765B versus $1.783B; and managed care and insurers of $9.574B versus $9.267B. Management attributed pressure on managed-care and insurer revenue to the expiration of enhanced Exchange premium tax credits at year-end 2025 and related administrative reforms. Nine-month Medicaid revenue benefited from state-directed and supplemental payment programs, primarily in Florida.

Estimated uncompensated-care cost rose 24.3% to $1.477B in Q3 from $1.188B, and to $4.174B for 9M from $3.359B. Estimated charity-care cost was $562M versus $408M in Q3 and $1.580B versus $1.153B for 9M. These estimates include charity care, uninsured discounts and implicit price concessions.

HCA spent $942M acquiring nonhospital healthcare entities in 9M 2026, versus $361M on nonhospital entities and two hospitals in 9M 2025. Facility, real estate and other healthcare-entity sale proceeds were $107M, with $22M of pretax gains, versus $177M of proceeds and $4M of pretax losses in 9M 2025.

Balance sheet, debt and capital allocation

HCA repurchased 15.139M shares during 9M at an average $430.01 per share. The $10B January 2025 authorization was fully used in Q1 2026; $4.240B remained under the January 2026 authorization at quarter-end. Nine-month share repurchases were $6.605B versus $7.509B; dividends were $519M versus $517M, and distributions to noncontrolling interests were $574M versus $631M.

In April, HCA issued $3.000B principal of senior notes: $1.000B at 4.700% due 2031, $750M at 5.000% due 2033, and $1.250B at 5.300% due 2036. Proceeds were used to repay commercial paper and for general corporate purposes; HCA redeemed $2.500B principal of 2026 notes in May. In July, it doubled its commercial-paper program limit to $8.000B and intends to maintain revolver capacity equal to outstanding commercial paper. The revolving credit facility is $8.000B. Debt had an average life of 11.6 years and average rates of 5.1%. Estimated debt fair value was $47.311B against carrying amount of $50.932B, excluding issuance costs and discounts; at year-end 2025, fair value was $45.911B against carrying amount of $46.928B on that basis.

Other developments and risks

HCA operated 182 U.S. hospitals across its geographic groups and seven hospitals in England, along with 117 freestanding surgery centers and 30 freestanding endoscopy centers. The nine-month income-tax provision was $1.515B versus $1.541B, with effective tax rates of 21.2% versus 21.5%; tax benefits from employee equity-award settlements were $110M versus $45M. Gross unrecognized tax benefits were $557M, plus $106M of accrued interest and penalties; the IRS was examining an affiliate’s 2019 return.

HCA cited exposure to healthcare litigation, regulatory proceedings, government investigations, False Claims Act and state whistleblower matters, tax claims, and injury and physician-privilege claims. Punitive damages may not be insured, and systemic findings in government inquiries could materially adversely affect results, financial position or liquidity. Accumulated other comprehensive loss widened to $350M from $305M, mainly reflecting foreign-currency translation losses of $335M versus $299M and available-for-sale securities losses of $20M versus $11M.

HCA Healthcare — Q3 and 9M 2026

Consolidated results

Q3 revenue grew 3.6%, while attributable net income fell 3.9%; lower diluted share counts helped EPS rise despite the earnings decline. Q3 results included $13M of facility-sale gains ($0.05 per diluted share). For 9M, facility-sale gains were $22M versus losses of $4M in 2025, and employee equity-award tax benefits were $110M versus $45M.

Q3 operating costs

Salaries and benefits declined to 43.2% of revenue from 43.6%, and supplies declined to 14.2% from 14.5%. Salaries per equivalent admission fell 0.2%, while same-facility salaries per FTE rose 2.7%; supply cost per equivalent admission fell 1.4%. Other operating expenses increased to 23.0% of revenue from 21.8%, reflecting inflation and other cost pressures. Higher depreciation primarily reflected capital investment at existing facilities.

Operating metrics

Equivalent admissions increased 2.8%, and revenue per equivalent admission rose 0.7%; on a same-facility basis, they increased 3.0% and 0.6%, respectively. Admissions grew 2.5% and emergency visits 5.3%, while inpatient and outpatient surgeries declined 1.3% and 4.2%. For 9M, equivalent admissions increased 2.2% and revenue per equivalent admission 3.3%.

Payer mix and uncompensated care

Managed care and insurers accounted for 48.3% of Q3 revenue versus 48.4%; Medicare and managed Medicare shares were 14.7% and 17.8%, compared with 14.2% and 17.3%. Uninsured admissions rose 27.2% consolidated and 27.4% same-facility in Q3. HCA cited the expiration of enhanced exchange premium tax credits, administrative reforms, and fewer Medicaid conversions as contributing pressures. Estimated uncompensated-care cost increased to $1.477B from $1.188B in Q3 and to $4.174B from $3.359B in 9M.

For 9M, Medicaid revenue was $5.998B versus $4.413B, favorably affected by state-directed and supplemental payment programs, primarily in Florida, for the October 2024–September 2025 program year. Managed-care and insurer revenue was adversely affected by exchange-related changes.

Cash flow, investment and financing

The 9M operating cash flow decline primarily reflected $472M of unfavorable working-capital changes and $1.190B more income taxes paid, largely because of the prior-year IRS payment deferral; partly offset was a $213M increase in net income excluding facility-sale gains/losses and depreciation and amortization. Interest and net income-tax payments totaled $3.142B versus $1.923B. Planned 2026 capital expenditures are $5.0B–$5.5B, excluding acquisitions; projects under construction are expected to require another $8.6B over five years.

9M financing included a $3.788B net increase in indebtedness, $519M of dividends, $6.605B of share repurchases, and $574M of distributions to noncontrolling interests. HCA repurchased 15.139M shares in 9M 2026, following 26.739M in 2025.

Debt was $50.493B at September 30, 2026. HCA issued $3.000B of senior notes in April at 4.700%–5.300% due 2031–2036 and redeemed $2.500B of notes due 2026 in May. In July, it increased commercial-paper capacity from $4.000B to $8.000B, supported by an $8.000B credit facility. After reserving for commercial paper, facility availability was $2.226B at September 30 and $1.709B on October 26. Negative working capital widened to $3.560B from $567M at year-end 2025, primarily due to short-term borrowings and current maturities; excluding commercial paper, working capital would have been $2.167B.

At September 30, variable-rate debt was $6.027B and fixed-rate debt $44.466B; estimated debt fair value was $47.311B. The average effective rate for 9M fell to 4.9% from 5.1%. A hypothetical 1% rate increase would reduce annualized future pretax earnings by approximately $60M. Management expects operating cash flow, credit-facility availability, and debt-market access to cover foreseeable liquidity needs.

Risks and outlook

HCA’s 103 hospitals in Texas and Florida generated 58% of Q3 admissions and 51% of revenue; those states accounted for 73% of uninsured admissions. This concentration increases exposure to state Medicaid policy and uninsured-care trends. Federal Budget Act and CMS restrictions on provider taxes and Medicaid supplemental or state-directed payments could reduce federal matching funds, pressure state budgets, and affect reimbursement or coverage; the timing and impact remain uncertain. HCA is pursuing resiliency initiatives to improve efficiency and control costs amid policy changes, inflation, labor constraints, and other operating pressures.

Professional-liability self-insured reserves were $1.965B, versus $1.906B at year-end; expected net claim payments over the next 12 months were $576M, including $537M subject to self-insured retention. Insurance-subsidiary investments were $574M, with $25M of net unrealized losses. HCA also cited risks from refinancing and indebtedness, payer-mix deterioration, collection risk, cybersecurity, litigation, and regulation.

Item 3 provides no separate market-risk metrics or disclosures. It directs readers to the “Market Risk” discussion in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Disclosure Controls and Procedures

As of September 30, 2026, HCA management, including its CEO and CFO, concluded that the company’s disclosure controls and procedures were effective. During the reporting period, no changes in internal control over financial reporting materially affected, or were reasonably likely to materially affect, those controls.

HCA reported no material changes to the risk factors previously disclosed in its FY2025 Form 10-K. The FY2025 Form 10-K risk disclosures and the factors described in this 10-Q’s forward-looking statements are incorporated by reference. This section identifies no new risks, financial metrics, or strategic developments.

During Q3 2026, no HCA director or officer adopted or terminated a trading arrangement other than COO Jon M. Foster. On August 11, 2026, Foster adopted a Rule 10b5-1 trading plan permitting the sale of up to 10,000 HCA common shares, subject to minimum market prices. The plan’s sale period runs from December 11, 2026, through June 9, 2028. This section reports no financial results or broader business developments.