What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-19 compared with 2020-02-20 · 442 added, 641 removed, 1166 unchanged (48% of the section changed)

13 unchanged sentences

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

Index to Financial Statements

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

7 unchanged sentences

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, 2019 and 2018, and the related consolidated statements of income, comprehensive income, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and our report dated February 20, 2020 expressed an unqualified opinion thereon.

as of December 31, 2020 and 2019, 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, 2020, and the related notes and our report dated February 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

12 unchanged sentences

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.

Index to Financial Statements

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

4 unchanged sentences

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

During the fourth quarter of 2020, 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.

Other Information

11 unchanged sentences

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 2021 Annual Meeting of Stockholders, which information is incorporated herein by reference.

Index to Financial Statements

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

19 unchanged sentences

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 for 2019 grants and 80% of target for 2018 and prior grants) to two times the units granted (for actual performance of 110% or more of target for 2019 grants and 120% or more of target for 2018 and prior grants).

the number of performance share units that vest can vary from zero (for actual performance less than 90% of target for 2020 and 2019 grants and 80% of target for 2018 and prior grants) to two times the units granted (for actual performance of 110% or more of target for 2020 and 2019 grants and 120% or more of target for 2018 and prior grants).

The weighted average exercise price does not take these restricted share units and performance share units into account.

Includes 20.328 million shares available for future grants under the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc.

and its Affiliates, as Amended and Restated, and 6.883 million shares of common stock reserved for future issuance under the HCA Holdings, Inc.

Includes 20.274 million shares available for future grants under the 2020 Stock Incentive Plan for Key Employees of HCA Healthcare, Inc.

and its Affiliates and 5.865 million shares of common stock reserved for future issuance under the HCA Holdings, Inc.

Employee Stock Purchase Plan.

4 unchanged sentences

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 2021 Annual Meeting of Stockholders, which information is incorporated herein by reference.

Index to Financial Statements

Exhibits and Financial Statement Schedules

27 unchanged sentences

001-11239), and incorporated herein by reference).

Index to Financial Statements

— Amendment No.

25 unchanged sentences

001-11239), and incorporated herein by reference).

Index to Financial Statements

— 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.

3 unchanged sentences

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 filed February 21, 2019 (File No.

001-11239), and incorporated herein by reference).

15 unchanged sentences

— 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 filed February 21, 2019 (File No.

001-11239), and incorporated herein by reference).

2 unchanged sentences

001-11239), and incorporated herein by reference).

Index to Financial Statements

— 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 filed February 21, 2019 (File No.

001-11239), and incorporated herein by reference).

7 unchanged sentences

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 (File No.

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 (File No.

001-11239), and incorporated herein by reference).

1 unchanged sentence

001-11239), and incorporated herein by reference).

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 filed February 21, 2019 (File No.

— 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 (File No.

001-11239), and incorporated herein by reference).

2 unchanged sentences

— 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 filed February 21, 2019 (File No.

001-11239), and incorporated herein by reference).

2 unchanged sentences

333-145054), and incorporated herein by reference).

Index to Financial Statements

— Receivables Intercreditor Agreement, dated as of November 17, 2006, 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.

2 unchanged sentences

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).

001-11239), and incorporated herein by reference).

— 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 (File No.

14 unchanged sentences

333-145054), and incorporated herein by reference).

Index to Financial Statements

— Assignment and Assumption Agreement, dated as of February 10, 1994, between HCA-Hospital Corporation of America and the Company 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.

31 unchanged sentences

333-226709), and incorporated herein by reference).

Supplemental Indenture No.

1, dated as of August 1, 2011, 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 August 1, 2011 (File No.

001-11239), and incorporated herein by reference).

Form of 7.50% Senior Notes due 2022 (included in Exhibit 4.25).

Index to Financial Statements

— Supplemental Indenture No.

4 unchanged sentences

001-11239), and incorporated herein by reference).

Supplemental Indenture dated as of January 3, 2018, among 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 4.26(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (File No.

— Supplemental Indenture dated as of March 31, 2020, among 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 4.13(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No.

001-11239), and incorporated herein by reference).

5 unchanged sentences

— Supplemental Indenture No.

1, dated as of December 6, 2012, 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 4.2 to the Company’s Current Report on Form 8-K filed December 6, 2012 (File No.

001-11239), and incorporated herein by reference).

Form of 6.25% Senior Notes due 2021 (included in Exhibit 4.32).

Supplemental Indenture No.

8, dated as of March 17, 2014, 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 (File No.

13 unchanged sentences

— Form of 5.375% Senior Notes due 2025 (included in Exhibit 4.36).

Index to Financial Statements

— Supplemental Indenture No.

24 unchanged sentences

— Supplemental Indenture No.

18, dated as of June 22, 2017, 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 on June 22, 2017 (File No.

001-11239), and incorporated herein by reference).

— Form of 5.500% Senior Secured Notes due 2047 (included in Exhibit 4.49).

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 on June 22, 2017 (File No.

— 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 (File No.

001-11239), and incorporated herein by reference).

Index to Financial Statements

— Supplemental Indenture No.

19, dated as of August 23, 2018, 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 August 23, 2018 (File No.

001-11239), and incorporated herein by reference).

1 unchanged sentence

— Supplemental Indenture No.

20, dated as of August 23, 2018, 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 August 23, 2018 (File No.

001-11239), and incorporated herein by reference).

1 unchanged sentence

— Supplemental Indenture No.

21, dated as of January 22, 2019, 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 January 22, 2019 (File No.

001-11239), and incorporated herein by reference).

— Supplemental Indenture No.

22, dated as of January 30, 2019, 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 January 30, 2019 (File No.

001-11239), and incorporated herein by reference).

1 unchanged sentence

— Supplemental Indenture No.

23, dated as of June 12, 2019, 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 on June 12, 2019 (File No.

001-11239), and incorporated herein by reference).

8 unchanged sentences

— Form of 5 1/4% Senior Secured Notes due 2049 (included in Exhibit 4.61).

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 on June 12, 2019 (File No.

— 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 (File No.

001-11239), and incorporated herein by reference).

— Supplemental Indenture No.

26, dated as of February 26, 2020, 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 (File No.

001-11239), and incorporated herein by reference).

Index to Financial Statements

— Form of 3.500% Senior Notes Due 2030 (included in Exhibit 4.66).

— Credit Agreement, dated as of March 19, 2020, by and among HCA Inc., as borrower, 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 March 20, 2020 (File No.

001-11239), and incorporated herein by reference).

— Guarantee, dated as of March 19, 2020, by and among the subsidiary guarantors party thereto and Bank of America, N.A., as administrative agent (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No.

001-11239), and incorporated herein by reference).

— Additional First Lien Secured Party Consent, dated as of March 19, 2020, by and among Bank of America, N.A., as administrative agent, Bank of America, N.A., as collateral agent, HCA Inc., as borrower, and the subsidiary guarantors party thereto (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No.

001-11239), and incorporated herein by reference).

— Additional Receivables Intercreditor Agreement, dated as of March 19, 2020, by and between Bank of America, N.A., as ABL Collateral Agent and Bank of America, N.A., as New First Lien Collateral Agent, and consented to by HCA Inc., as borrower, and the subsidiary grantors party thereto (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No.

001-11239), and incorporated herein by reference).

— Supplement No.

1, dated as of March 31, 2020, to the Guarantee, dated as of March 19, 2020, by and among each of the new guarantors party thereto and Bank of America, N.A., as administrative agent (filed as Exhibit 4.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No.

001-11239), and incorporated herein by reference).

— 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.

13 unchanged sentences

333-171369), and incorporated herein by reference).

Form of Stock Option Agreement (2011) (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (File No.

001-11239), and incorporated herein by reference).*

— Form of Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc.

1 unchanged sentence

001-11239), and incorporated herein by reference).*

Index to Financial Statements

— Form of 2014 Stock Appreciation Right Award Agreement Under the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc.

7 unchanged sentences

001-11239), and incorporated herein by reference).*

— Amendment, dated December 22, 2020, to Amended and Restated HCA Supplemental Executive Retirement Plan.*

— 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 (File No.

001-11239), and incorporated herein by reference).*

Amended and Restated Employment Agreement dated September 10, 2018 (R.

Milton Johnson) (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 12, 2018 (File No.

— 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 (File No.

001-11239), and incorporated herein by reference).*

26 unchanged sentences

001-11239), and incorporated herein by reference).

Index to Financial Statements

— Assignment and Assumption Agreement, dated November 22, 2010, by and among HCA Inc., HCA Holdings, Inc.

30 unchanged sentences

001-11239), 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 (File No.

001-11239), and incorporated herein by reference).*

Index to Financial Statements

— Form of 2018 Performance Share Unit Award Agreement Under the 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc.

10 unchanged sentences

001-11239), and incorporated herein by reference).*

HCA Holdings, Inc.

— HCA Healthcare, Inc.

2019 Senior Officer Performance Excellence Program (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 2, 2019 (File No.

4 unchanged sentences

— 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 10.42 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (File No.

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 (File No 001-11239), 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 (File No.

333-237967), and incorporated herein by reference).*

Form of Restricted Share Unit Agreement (R.

Milton Johnson) (filed as Exhibit 10.43 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (File No.

— 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).*

— HCA Healthcare, Inc.

1 unchanged sentence

001-11239), and incorporated herein by reference).*

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.*

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.*

— 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 (File No.

001-11239), 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.*

Index to Financial Statements

— Form of 2021 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.

5 unchanged sentences

for the year ended December 31, 2020, filed with the SEC on February 19, 2021, formatted in Extensible Business Reporting Language (XBRL):

(i) the consolidated balance sheets at December 31, 2019 and 2018, (ii) the consolidated income statements for the years ended December 31, 2019, 2018 and 2017, (iii) the consolidated comprehensive income statements for the years ended December 31, 2019, 2018 and 2017, (iv) the consolidated statements of stockholders’ deficit for the years ended December 31, 2019, 2018 and 2017, (v) the consolidated statements of cash flows for the years ended December 31, 2019, 2018 and 2017, and (vi) the notes to consolidated financial statements.

(i) the consolidated balance sheets at December 31, 2020 and 2019, (ii) the consolidated income statements for the years ended December 31, 2020, 2019 and 2018, (iii) the consolidated comprehensive income statements for the years ended December 31, 2020, 2019 and 2018, (iv) the consolidated statements of stockholders’ equity (deficit) for the years ended December 31, 2020, 2019 and 2018, (v) the consolidated statements of cash flows for the years ended December 31, 2020, 2019 and 2018, and (vi) the notes to consolidated financial statements.

— The cover page from the Company’s Annual Report on Form 10-K

1 unchanged sentence

Management compensatory plan or arrangement.

Form 10-K Summary

Index to Financial Statements

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.

HCA HEALTHCARE, INC.

/s/ Samuel N.

/ S / S AMUEL N.

Chief Executive Officer

1 unchanged sentence

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.

/s/ Samuel N.

/ S / S AMUEL N.

Chief Executive Officer and Director

1 unchanged sentence

February 19, 2021

/s/ William B.

/ S / W ILLIAM B.

Executive Vice President and

3 unchanged sentences

February 19, 2021

/s/ Thomas F.

/ S / T HOMAS F.

Chairman and Director

February 19, 2021

/ S / M EG G.

February 19, 2021

/s/ Robert J.

/ S / R OBERT J.

February 19, 2021

/s/ Nancy-Ann DeParle

/s/ N ANCY -A NN D E P ARLE

February 19, 2021

/s/ William R.

/ S / W ILLIAM R.

February 19, 2021

/s/ Charles O.

Holliday, Jr.

/ S / C HARLES O.

H OLLIDAY , J R .

Holliday, Jr.

February 19, 2021

/s/ Geoffrey G.

February 20, 2020

/s/ Michael W.

February 20, 2020

/ S / M ICHAEL W.

February 19, 2021

/ S / W AYNE J.

February 19, 2021

Index to Financial Statements

HCA HEALTHCARE, INC.

5 unchanged sentences

Consolidated Balance Sheets, December 31, 2020 and 2019

Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2020, 2019 and 2018

Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018

Notes to Consolidated Financial Statements

Quarterly Consolidated Financial Information (Unaudited)

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of HCA Healthcare, Inc.

(the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2020 and 2019, 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, 2020, 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, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.

1 unchanged sentence

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, 2020, 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 19, 2021 expressed an unqualified opinion thereon.

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2019, the Company adopted ASU No.

Leases (Topic 842), on a modified retrospective basis.

Basis for Opinion

13 unchanged sentences

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.

Index to Financial Statements

Revenue Recognition

18 unchanged sentences

At December 31, 2020, the Company’s reserves for professional liability risks were $1.963 billion and the Company’s related provision for losses for the year ended December 31, 2020 was $435 million.

As discussed in Note 1 to the consolidated financial statements, reserves for professional liability risks represent the estimated ultimate cost of all reported and unreported losses incurred and unpaid as of the

consolidated balance sheet date.

Management determines 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.

Index to Financial Statements

Auditing management’s professional liability claims reserves was complex and judgmental due to the significant estimations required in determining the reserves, particularly the actuarial methodology and assumptions related to the severity and frequency of claims.

8 unchanged sentences

February 19, 2021

Index to Financial Statements

HCA HEALTHCARE, INC.

7 unchanged sentences

Interest expense

Gains on sales of facilities

Losses (gains) on sales of facilities

Losses on retirement of debt

8 unchanged sentences

The accompanying notes are an integral part of the consolidated financial statements.

Index to Financial Statements

HCA HEALTHCARE, INC.

5 unchanged sentences

Unrealized gains (losses) on available-for-sale

Realized gains included in other operating expenses

Defined benefit plans

1 unchanged sentence

Change in fair value of derivative financial instruments

Interest (benefits) costs included in interest expense

Other comprehensive (loss) income before taxes

Interest costs (benefits) included in interest expense

Other comprehensive loss before taxes

Income taxes (benefits) related to other comprehensive income items

Other comprehensive (loss) income

Other comprehensive loss

Comprehensive income

2 unchanged sentences

The accompanying notes are an integral part of the consolidated financial statements.

Index to Financial Statements

HCA HEALTHCARE, INC.

12 unchanged sentences

operating lease assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

3 unchanged sentences

Long-term debt due within one year

Long-term debt, less debt issuance costs and discounts of $ 239

Long-term debt, less debt issuance costs and discounts of $ 236 and $ 239

Professional liability risks

1 unchanged sentence

Income taxes and other liabilities

Stockholders’ deficit:

Common stock $ 0.01

authorized 1,800,000,000

outstanding 338,445,600

shares — 2019 and 342,895,200

shares — 2018

Stockholders’ equity (deficit):

Common stock $ 0.01 par;

authorized 1,800,000,000 shares;

outstanding 339,425,600 shares — 2020 and 338,445,600 shares — 2019

Capital in excess of par value

Accumulated other comprehensive loss

Retained deficit

Stockholders’ deficit attributable to HCA Healthcare, Inc.

Retained earnings (deficit)

Stockholders’ equity (deficit) attributable to HCA Healthcare, Inc.

Noncontrolling interests

The accompanying notes are an integral part of the consolidated financial statements.

Index to Financial Statements

HCA HEALTHCARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018

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Comprehensive

(in millions)

Balances, December 31, 2017

Comprehensive income

Comprehensive income (loss)

Repurchase of common stock

Share-based benefit plans

Cash dividends declared

($ 1.40 share)

Distributions

Reclassification of stranded tax

Balances, December 31, 2018

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Cash dividends declared

($ 1.60 share)

Distributions

Reclassification of stranded tax effects

Balances, December 31, 2019

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Cash dividends declared

($ 0.43 share)

Distributions

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The accompanying notes are an integral part of the consolidated financial statements.

Index to Financial Statements

HCA HEALTHCARE, INC.

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Depreciation and amortization

Gains on sales of facilities

Losses (gains) on sales of facilities

Losses on retirement of debt

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Issuances of long-term debt

Net change in revolving bank credit facilities

Net change in revolving credit facilities

Repayment of long-term debt

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Payment of dividends

Repurchases of common stock

Repurchase of common stock

Net cash used in financing activities

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The accompanying notes are an integral part of the consolidated financial statements.

Index to Financial Statements

HCA HEALTHCARE, INC.

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and partnerships and joint ventures in which such subsidiaries are partners.

At December 31, 2019, these affiliates owned and operated 184 hospitals, 123 freestanding surgery centers and provided extensive outpatient and ancillary services.

HCA Healthcare, Inc.’s facilities are located in 21 states and England.

At December 31, 2020 these affiliates owned and operated 185 hospitals, 121

freestanding surgery centers, 21 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.

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Costs that could be classified as general and administrative include our corporate office costs, which were $ 416 million, $ 370 million and $ 344 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Pandemic and CARES Act Funding

On March 11, 2020, the World Health Organization designated COVID-19

as a global pandemic.

Patient volumes and the related revenues for most of our services were significantly impacted during the latter portion of the first quarter and the first half of the second quarter of 2020 and have continued to be impacted as various policies that were implemented by federal, state and local governments in response to the COVID-19

pandemic, including policies that have caused many people to remain at home, forced the closure of or limitations on certain businesses, and suspended elective surgical procedures by health care facilities.

While many of these restrictions have been eased across the U.S.

and most states have lifted moratoriums on non-emergent

procedures, restrictions remain in place or may be adopted or re-imposed,

and the possibility exists that the public, particularly segments with a high mortality risk, could remain wary of real or perceived opportunities for exposure to the virus.

We are unable to predict the future impact of the pandemic on our operations.

During 2020, we received approximately $ 4.4 billion of accelerated Medicare payments and approximately $ 1.8 billion in general and targeted distributions from the Provider Relief Fund, both as provided for and established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

During October 2020,

we announced our decision to return, or repay early, all of our share of the Provider Relief Fund distributions and all of the Medicare accelerated payments.

During the fourth quarter of 2020, we returned, or repaid early, approximately $ 6.1 billion of these funds.

The unreturned Provider Relief Funds of $ 83 million, related to amounts received by certain of our partnership entities, are recorded under the caption “other accrued

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — ACCOUNTING POLICIES (continued)

Pandemic and CARES Act Funding (continued)

expenses” in our consolidated balance sheet at December 31, 2020.

Our share of these funds will be returned in 2021 after final determination of amounts earned and distributable to the members of each respective partnership.

The CARES Act also provides for a deferral of payments of the employer portion of Social Security tax incurred during the pandemic, allowing half of such payroll taxes to be deferred until December 2021 and the remaining half until December 2022.

At December 31, 2020, the Company had deferred $ 688 million of Social Security taxes.

Additionally, the CARES Act created a payroll tax credit designed to encourage companies to retain employees during the pandemic.

During the year ended December 31, 2020, the Company evaluated its eligibility for this credit and recorded $ 60 million of employee retention payroll tax credits pursuant to the CARES Act.

These tax credits were recorded as a reduction of salaries and benefits in our consolidated income statement.

We believe the extent of the COVID-19 pandemic’s impact on our operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond our control and ability to forecast.

Such factors include, but are not limited to :

the severity or duration of the pandemic, including whether there will be additional periods of increases in the number of COVID-19 cases in the areas in which we operate, the rollout and availability of effective medical treatments and vaccines, the efficacy of public health controls, including vaccines, and the impact of any mutations of the virus;

the scope and duration of stay-at-home practices and business closures and restrictions;

recommended or required suspensions of elective procedures;

continued declines in patient volumes for an indeterminable length of time;

increases in the number of uninsured and underinsured patients as a result of higher sustained rates of unemployment;

incremental expenses required for supplies and personal protective equipment;

and changes in professional and general liability exposure.

Because of these and other uncertainties, we cannot estimate how long or how severely the pandemic will impact our business.

If we experience declines in cash flows and results of operations, such declines could have an impact on the inputs and assumptions used in significant accounting estimates, including estimated implicit price concessions related to uninsured patient accounts, professional and general liability reserves, and potential impairments of goodwill and long-lived assets.

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 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 .

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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

Services provided to patients having Medicaid coverage are generally paid at prospectively

Index to Financial Statements

HCA HEALTHCARE, INC.

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Revenues (continued)

upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service

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

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.

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers.

Estimates of contractual a djustments

under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements.

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 discounts and contractual discounts).

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Managed care and other insurers

International (managed care and other

International (managed care and other insurers)

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation.

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The adjustments to estimated Medicare and Medicaid reimbursement amounts and disproportionate-share funds related primarily to cost reports filed during the respective year resulted in net increases to revenues of $ 70 million, $ 51 million and $ 29 million in 2020, 2019 and 2018, respectively.

The adjustments to estimated reimbursement amounts related primarily to cost reports filed during previous years resulted in net increases to revenues of $ 13 million, $ 51 million and $ 56 million in 2019, 2018 and 2017, respectively.

The adjustments to estimated reimbursement amounts related primarily to cost reports filed during previous years resulted in a net reduction

to revenues of $ 5 million in 2020 and net increases to revenues of $ 13 million and $ 51 million in 2019 and 2018, respectively.

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.

The obligation to screen and stabilize emergency medical conditions exists regardless of an

Index to Financial Statements

HCA HEALTHCARE, INC.

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Revenues (continued)

P rior to November 2017, patients treated at hospitals for non-e lective care,

who have income at or below 200 % of the federal poverty level, were eligible for charity care.

During November 2017, we expanded our charity policy to include patients who have income above 200 %, but at or below 400 %,

of the federal poverty level 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.

individual’s ability to pay for treatment.

Patients treated at hospitals for non-elective

care, who have income at or below 400 % of the federal poverty level, were 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, were 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.

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Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the age of those accounts.

Accounts are written off when all reasonable internal and external collection efforts have been performed.

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.

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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 results of operations.

comparisons of our revenues

At December 31, 2020 and 2019, estimated implicit price concessions of $ 6.108 billion and $ 6.953 billion, respectively, had been recorded to adjust our revenues and accounts receivable to the estimated amounts we expect to collect.

Index to Financial Statements

HCA HEALTHCARE, INC.

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Estimated cost of total uncompensated care

The total uncompensated care amounts include charity care of $ 13.260 billion, $ 8.611 billion and $ 4.861 billion.

The estimated costs of charity care were $ 1.591 billion, $ 1.068 billion and $ 627 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The total uncompensated care amounts include charity care of $ 13.763 billion, $ 13.260 billion and $ 8.611 billion for the years ended December 31, 2020, 2019 and 2018, respectively.

The estimated costs of charity care were $ 1.652 billion, $ 1.591 billion and $ 1.068 billion for the years ended December 31, 2020, 2019 and 2018, respectively.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with a maturity of three months or less when purchased.

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.

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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 50 days, 51 days and 52 days at December 31, 2019, 2018 and 2017, respectively.

Changes in general economic conditions, patient accounting service center operations, payer mix, or federal or state governmental health care coverage could affect our collection of accounts receivable, cash flows and results of operations.

Days revenues in accounts receivable were 45 days, 50 days and 51 days at December 31, 2020, 2019 and 2018,

respectively.

The five-day decline from December 31, 2019 to December 31, 2020 was primarily due to the combined impact of a $ 329 million decline in accounts receivable at December 31, 2020, compared to December 31, 2019, and a 5.7 % increase in fourth

Index to Financial Statements

HCA HEALTHCARE, INC.

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NOTE 1 — ACCOUNTING POLICIES (continued)

Accounts Receivable (continued)

quarter 2020 revenues per day compared to fourth quarter 2019 revenues per day.

Inventories are stated at the lower of cost (first-in,

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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 cre d

it-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.

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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

Index to Financial Statements

HCA HEALTHCARE, INC.

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Goodwill and Intangible Assets (continued)

quantitative analyses of market multiples, revenues and cash flows and reviews of recent sales of similar facilities.

goodwill impairments were recognized during 2019, 2018 or 2017.

During 2019, goodwill increased by $ 332 million related to acquisitions and declined by $ 4 million related to foreign currency translation and other adjustments.

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 2020, 2019 or 2018.

During 2020, goodwill increased by $ 279

million related to acquisitions, including the finalization of the accounting for certain prior year acquisitions, and declined

by $ 9 million related to foreign currency translation and other adjustments.

During 2019, goodwill increased by $ 332 million related to acquisitions and declined by $ 4 million related to foreign currency translation and other adjustments.

During 2019, identifiable intangible assets declined by $ 12 million due to amortization, foreign currency translation and other adjustments.

During 2020, identifiable intangible assets increased by $65 million related to acquisitions, including the finalization of the accounting for certain prior year acquisitions, and declined by

$ 26 million due to amortization and other adjustments.

During 2019, identifiable intangible assets declined by $ 12 million due to amortization, foreign currency translation and other adjustments.

Identifiable intangible assets are amortized over estimated lives ranging generally from three to 10 years.

The gross carrying amount of identifiable intangible assets at both December 31, 2019 and 2018 was $ 184 million and accumulated amortization was $ 123 million and $ 111 million, respectively.

The gross carrying amounts of identifiable intangible assets at December 31, 2020 and 2019 were

$ 249 million and $ 184 million, respectively, and accumulated amortization was $ 149 million and $ 123 million, respectively.

The gross carrying amount of indefinite-lived identifiable intangible assets at both December 31, 2020 and 2019 was $ 269 million.

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Debt Issuance Costs and Discounts

Debt issuance costs and discounts

are amortized based upon the terms of the respective debt obligations.

The gross carrying amount of debt issuance costs and discounts

at December 31, 2019 and 2018 was $ 413 million and $ 360 million, respectively, and accumulated amortization was $ 174 million and $ 203 million, respectively.

Amortization of debt issuance costs and discounts

is included in interest expense and was $ 30 million, $ 31 million and $ 31 million for 2019, 2018 and 2017, respectively.

Debt issuance costs and discounts are amortized based upon the terms of the respective debt obligations.

The gross carrying amount of debt issuance costs and discounts at December 31, 2020 and 2019 was $ 411 million and $ 413 million, respectively, and accumulated amortization was $ 175 million and $ 174 million, respectively.

Amortization of debt issuance costs and discounts is included in interest expense and was $ 30 million, $ 30 million and $ 31 million for 2020, 2019 and 2018, respectively.

Professional Liability Claims

Reserves for professional liability risks were $ 1.963 billion and $ 1.827 billion at December 31, 2020 and 2019, respectively.

The current portion of the reserves, $ 457 million and $ 466 million at December 31, 2019 and 2018, respectively, is included in “other accrued expenses” in the consolidated balance sheets.

Provisions for losses related to professional liability risks were $ 497 million, $ 447 million and $ 466 million for 2019, 2018 and 2017, respectively, and are included in “other operating expenses” in our consolidated income statements.

The current portion of the reserves, $ 477 million and $ 457

million at December 31, 2020 and 2019, respectively, is included in “other accrued expenses” in the consolidated balance sheets.

Provisions for losses related to professional liability risks were

$ 435 million, $ 497 million and $ 447

million for 2020, 2019 and 2018, 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.

During 2019 and 2018, we recorded reduction s

to the provision for professional liability risks of $ 50 million and $ 70 million, respectively, due to the receipt of updated actuarial information.

During 2020, 2019 and 2018, we recorded reductions to the provision for professional liability risks of

$ 112 million ,

million and $ 70 million,

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 2,300 and 2,200 individual claims at December 31, 2019 and 2018, 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 2019 and 2018, $ 408 million and $ 358 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

Those estimates are subject to the effects of trends in loss severity and

Index to Financial Statements

HCA HEALTHCARE, INC.

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Professional Liability Claims (continued)

significantly.

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 2,300 individual claims at both December 31, 2020 and 2019 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 2020 and 2019, $ 292 million and $ 408 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;

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A portion of our professional liability risks is insured through a 100% owned insurance subsidiary.

Subject, in most cases, to a $ 15

million per occurrence self-insured retention, our facilities are insured by our 100% owned insurance subsidiary for losses up to $ 50

Subject, in most cases, to a $ 15 million per occurrence self-insured retention, our facilities are insured by our 100% owned insurance subsidiary for losses up to $ 50

million per occurrence.

The insurance subsidiary has obtained reinsurance for professional liability risks generally above a retention level of $ 25 million per occurrence.

The insurance subsidiary has obtained reinsurance for professional liability risks generally above a retention level of either

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.

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Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2019 presentation.

Index to Financial Statements

HCA HEALTHCARE, INC.

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NOTE 2 — SHARE-BASED COMPENSATION

Stock Incentive Plan

Our stock incentive plan is 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 through opportunities for stock-based compensation and stock ownership in the Company.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2020 presentation.

Stock Incentive Plans

In May 2020, the 2020 Stock Incentive Plan for Key Employees of HCA Healthcare, Inc.

and its Affiliates

(the “2020 Plan”) was established to replace the 2006 Stock Incentive Plan for Key Employees of HCA Holdings

and its Affiliates (the “2006 Plan”).

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 through opportunities for stock-based compensation and stock ownership in the Company.

Stock option, stock appreciation right (“SARs”) and restricted share unit (“RSUs”) grants vest solely based upon continued employment over a specific period of time, and performance share unit (“PSUs”) grants vest based upon both continued employment over a specific period of time and the achievement of predetermined financial targets over time.

At December 31, 2019, there were 20.328 million shares available for future grants under the stock incentive plan.

No further grants will be made under the 2006 Plan, and no shares under the 2006 Plan are available for grant under the 2020 Plan.

At December 31, 2020 there were 20.274 million shares available for future grants under the 2020 Plan.

Employee Stock Purchase Plan

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During 2020, 2019 and 2018, the Company recognized $ 13 million, $ 12 million and $ 10 million, respectively, of compensation expense related to the ESPP.

Stock Option, SAR, RSU and PSU Activity

Stock Option, SAR, RSU and PSU Activity – All Plans

The fair value of each stock option and 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 plan generally vest based on continued employment (“Time Stock Options and SARs” and “Time RSUs”) and based upon continued employment and the achievement of certain financial targets (“Performance Stock Options and SARs”, “Performance RSUs” 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 9

0% of target for 2019 grants and 80% of target for 2018 and prior grants) to two times the original PSU grant (for actual performance of 110% or more of target for 2019 grants and 120% or more of target for 2018 and prior grants).

Awards under our stock incentive plans generally vest based on continued employment (“Time Stock Options and SARs” and “Time RSUs”) and based upon continued employment and the achievement of certain financial targets (“Performance Stock Options and SARs”, “Performance RSUs” 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 for 2020 and 2019 grants and less than 80% of target for 2018 and prior grants) to two times the original PSU grant (for actual performance of 110% or more of target for 2020 and 2019 grants and 120% or more of target for 2018 and prior grants).

Each grant is valued as a single award with an expected term equal to the average expected term of the component vesting tranches.

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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.

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 — SHARE-BASED COMPENSATION (continued)

Stock Option, SAR, RSU and PSU Activity – All Plans (continued)

Risk-free interest rate

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Expected dividend yield

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 — SHARE-BASED COMPENSATION (continued)

Stock Option, SAR, RSU and PSU Activity (continued)

Information regarding Time Stock Options and SARs and Performance Stock Options and SARs activity during 2020, 2019 and 2018 is summarized below (share amounts in thousands):

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The total intrinsic value of stock options and SARs exercised during 2020, 2019 and 2018 was $ 328 million, $ 153 million and $ 456 million, respectively.

The total fair value of RSUs and PSUs that vested during 2019, 2018 and 2017 was $ 346 million, $ 413 million and $ 188 million, respectively.

As of December 31, 2020, the unrecognized compensation cost related to nonvested stock options and SARs was $ 53 million.

Index to Financial Statements

HCA HEALTHCARE, INC.

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NOTE 2 — SHARE-BASED COMPENSATION (continued)

Stock Option, SAR, RSU and PSU Activity (continued)

Stock Option, SAR, RSU and PSU Activity – All Plans (continued)

Information regarding Time RSUs, Performance RSUs and PSUs activity during 2020, 2019 and 2018 is summarized below (share amounts in thousands):

RSUs and PSUs outstanding, December 31, 2017

Performance adjustment

RSUs and PSUs outstanding, December 31, 2018

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RSUs and PSUs outstanding, December 31, 2020

The total fair value of RSUs and PSUs that vested during 2020, 2019 and 2018 was $ 349 million, $ 346 million and $ 413 million, respectively.

As of December 31, 2020, the unrecognized compensation cost related to RSUs and PSUs was $ 330 million.

NOTE 3 — ACQUISITIONS AND DISPOSITIONS

During 2020, we paid $ 568 million to acquire a hospital in New Hampshire and other nonhospital health care entities.

During 2019, we paid $ 1.384 billion to acquire a seven -hospital health system in North Carolina and $ 298 million to acquire nonhospital health care entities.

During 2018, we paid $ 792 million to acquire two hospital facilities and $ 461 million to acquire nonhospital health care entities.

During 2017, we paid $ 1.000 billion to acquire eight hospital facilities and $ 212 million to acquire nonhospital health care entities.

Purchase price amounts have been allocated to the related assets acquired and liabilities assumed based upon their respective fair values.

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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 2019, we received proceeds of $ 25 million and recognized a pretax loss of $ 1 million ($ 1 million after tax) related to the sale of a hospital facility from our American Group (a Louisiana market).

During 2019, we also received proceeds of $ 36 million and recognized

pretax gain s

of $ 19 million ($ 14 million after tax) related to sales of real estate and other investments.

During 2018, we received proceeds of $ 758 million and recognized a pretax gain of $ 353 million ($ 265 million after tax) related to the sale of two hospital facilities from our American Group (Oklahoma market).

During 2018, we also received proceeds of $ 50 million and recognized

During 2020, we received proceeds of $ 68 million and recognized a pretax loss of $ 7 million ($ 9 million after tax) related to the sale of a hospital facility from our American Group (Mississippi market) and sales of real estate and other investments.

During 2019, we received proceeds of $ 61 million and recognized a pretax gain of $ 18 million ($ 13 million after tax) related to the sale of a hospital facility from our American Group (a Louisiana

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3 — ACQUISITIONS

AND DISPOSITIONS ( continued

pretax gains of $ 75 million ($ 59 million after tax) related to sales of real estate and other investments.

During 2017, we received proceeds of $ 25 million and recognized pretax gains of $ 8 million ($ 5 million after tax) related to sales of real estate and other investments.

NOTE 3 — ACQUISITIONS AND DISPOSITIONS (continued)

market) and sales of real estate and other investments.

During 2018, we received proceeds of $

758 million and recognized a pretax gain of $ 353 million ($ 265 million after tax) related to the sale of two hospital facilities from our American Group (Oklahoma market).

During 2018, we also received proceeds of $ 50 million and recognized pretax gains of $ 75 million ($ 59 million after tax) related to sales of real estate and other investments.

NOTE 4 — INCOME TAXES

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The 2017 Tax Cuts and Jobs Act (“Tax Act”) significantly revised U.S.

corporate income taxes, including lowering the statutory corporate tax rate from 35 % to 21 % beginning in 2018, imposing a mandatory one-time

transition tax on undistributed foreign earnings and creating a new U.S.

minimum tax on earnings of foreign subsidiaries.

Our provision for income taxes for the year ended December

31, 2018 included tax benefits of $ 613 million (including $ 67 million related to the remeasurement of certain deferred tax assets and liabilities) related to the reduction in our effective tax rate under the Tax Act.

We completed our analysis of the impact of the Tax Act during the fourth quarter of 2018, reducing our provision for income taxes for the year ended December 31, 2018 by $ 67 million related to a remeasurement of certain deferred tax assets and liabilities for which we were unable to make reasonable estimates in 2017.

For the year ended, December 31, 2017, a provisional amount of $ 301 million related to the remeasurement of our deferred tax assets and liabilities for which we were then able to make reasonable estimates was recorded as a component of our provision for income taxes.

During 2017 we also reclassified a provisional amount of $ 127 million from our deferred tax liabilities for the one-time

transition tax, based on our estimated undistributed post-1986 foreign earnings and profits.

Because we had previously recorded U.S.

taxes on these earnings, the transition tax liability, which is payable over an 8-year

period, did not affect our 2017 provision for income taxes.

Adjustments during 2018 to the provisional amounts recorded in 2017 were not significant.

During 2018, we recorded a reduction to our provision for income taxes of $ 28 million for tax credits related to certain 2017 hurricane-related expenses.

corporate income taxes, including lowering the statutory corporate tax rate from 35 % to 21 % beginning in 2018.

We completed our analysis of the impact of the Tax Act during 2018, reducing our provision for income taxes for the year ended December 31, 2018 by $ 67 million related to a remeasurement of certain deferred tax assets and liabilities for which we were unable to make reasonable estimates in 2017.

Our provision for income taxes for the years ended December 31, 2020, 2019 and 2018 included tax benefits of $ 92 million, $ 65 million and $ 124 million, respectively, related to the settlement of employee equity awards.

During 2018, we recorded a reduction to our provision for income taxes of $ 28 million for tax credits related to certain 2017 hurricane-related expenses.

Our foreign pretax income was $ 9 million, $ 50 million and $ 86 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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:

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Effective income tax rate on income before income taxes

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4 — INCOME TAXES (continued)

A summary of the items comprising the deferred tax assets and liabilities at December 31 follows (dollars in millions):

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Accounts receivable

Right-of-use lease assets and obligations

At December 31, 2019, federal and state net operating loss carryforwards (expiring in years 2022

) available to offset future taxable income approximated $ 60

million and $ 128

million, respectively.

lease assets and obligations

At December 31, 2020, federal and state net operating loss carryforwards (expiring in years 2023 through 2039 ) available to offset future taxable income approximated $ 56 million and $ 127 million, respectively.

Utilization of net operating loss carryforwards in any one year may be limited.

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Balance at January 1

Additions based on tax positions related to the current year

Additions (reductions) based on tax positions related to the current year

Additions for tax positions of prior years

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Our liability for unrecognized tax benefits was $ 508 million, including accrued interest of $ 73 million and excluding $ 34 million that was recorded as reductions of the related deferred tax assets, as of December 31, 2020 ($ 550 million, $ 62 million and $ 34 million, respectively, as of December 31, 2019).

Unrecognized tax benefits of $ 160 million ($ 137 million as of December 31, 2018) would affect the effective rate, if recognized.

The increase in our liability for unrecognized tax benefits relates primarily to the effect of certain federal and state legislative and regulatory developments during 2019.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4 — INCOME TAXES (continued)

The Internal Revenue Service began an examination of the Company’s 2016 and 2017 federal income tax returns during 2019.

Unrecognized tax benefits of $ 157 million as of December 31, 2020 ($ 160 million as of December 31, 2019) would affect the effective rate, if recognized.

The Internal Revenue Service (“IRS”) was conducting an examination of the Company’s 2016, 2017 and 2018 federal income tax returns at December 31, 2020.

We are also subject to examination by state and foreign taxing authorities.

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However, we are currently unable to estimate the range of any possible change.

Index to Financial Statements

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 stock options, SARs, RSUs and PSUs, computed using the treasury stock method. During 2019, 2018 and 2017, we repurchased 7.949 million shares, 14.070 million shares and 25.092 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, 2019, 2018 and 2017 (dollars and shares in millions, except

per share amounts):

During 2020, 2019 and 2018, we repurchased 3.287 million shares, 7.949 million shares and 14.070 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, 2020, 2019 and 2018 (dollars and shares in millions, except per share amounts):

Net income attributable to HCA Healthcare, Inc.

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Investment carrying value

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 — INVESTMENTS OF INSURANCE SUBSIDIARIES (continued)

Debt securities

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Investment carrying value

At December 31, 2019 and 2018, the investments in debt securities of our insurance subsidiaries were classified as “available-for-sale.” Changes in unrealized gains and losses are recorded as adjustments to other comprehensive income (loss).

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 — INVESTMENTS OF INSURANCE SUBSIDIARIES (continued)

At December 31, 2020 and 2019, the investments in debt securities of our insurance subsidiaries were classified as “available-for-sale.”

Changes in unrealized gains and losses are recorded as adjustments to other comprehensive income (loss).

Scheduled maturities of investments in debt securities at December 31, 2020 were as follows (dollars in millions):

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Our credit risk related to these agreements is considered low because the swap agreements are with creditworthy financial institutions.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 — FINANCIAL INSTRUMENTS (continued)

Interest Rate Swap Agreements (continued)

The following table sets forth our interest rate swap agreements, which have been designated as cash flow hedges, at December 31, 2020 (dollars in millions):

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December 2022

During the next 12 months, we estimate $ 1 million will be reclassified from accumulated

other comprehensive income (“OCI”) and will be included i n

interest expense.

During the next 12 months, we estimate $ 37 million will be reclassified from accumulated other comprehensive income (“OCI”) and will be included in interest expense.

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 — FINANCIAL INSTRUMENTS (continued)

Derivatives — Results of Operations

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Derivatives, Net of Tax

Location of Gain

Location of Loss

Reclassified from

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into Operations

Amount of Gain

Amount of Loss

Reclassified from

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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,

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

related market activity.

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.

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Our cash traded investments 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.

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

Derivative Financial Instruments

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Less amounts classified as current assets

Interest rate swaps (Other)

Interest rate swaps (Income taxes and other liabilities)

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

Derivative Financial Instruments (continued)

December 31, 2019

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Interest rate swaps (Other)

The estimated fair value of our long-term debt was $ 37.026 billion and $ 32.887 billion at December 31, 2019 and 2018, respectively, compared to carrying amounts, excluding debt issuance costs and di scounts

, aggregating $ 33.961 billion and $ 32.978 billion, respectively.

Interest rate swaps (Income taxes and other liabilities)

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

The estimated fair value of our long-term debt was $ 35.814 billion and $ 37.026 billion at December 31, 2020 and 2019, respectively, compared to carrying amounts, excluding debt issuance costs and discounts, aggregating $ 31.240 billion and $ 33.961 billion, respectively.

The estimates of fair value are generally based upon the quoted market prices or quoted market prices for similar issues of long-term debt with the same maturities.

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A summary of long-term debt at December 31, including related interest rates at December 31, 2020, follows (dollars in millions):

Senior secured asset-based revolving credit facility (effective interest rate of 3.0 %)

Senior secured asset-based revolving credit facility

Senior secured revolving credit facility

Senior secured 364-day

term loan facility

Senior secured term loan facilities (effective interest rate of 2.8 %)

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Net debt issuance costs

Total debt (average life of 8.6

years, rates averaging 5.2

Total debt (average life of 8.9 years, rates averaging 5.0 %)

Less amounts due within one year

During January 2019, we issued $

1.500 billion aggregate principal amount of senior unsecured notes comprised of $

1.000 billion aggregate principal amount of

5.875 % notes due 2029 and $

500 million aggregate principal amount of

5.625 % notes due 2028.

We used the net proceeds to fund the purchase of a seven-hospital health system located in western North Carolina.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LONG-TERM DEBT (continued)

During June 2019, we issued $ 5.000 billion aggregate principal amount of senior secured notes comprised of $ 2.000 billion aggregate principal amount of 4 1/8 % notes due 2029, $ 1.000 billion aggregate principal amount of 5 1/8 % notes due 2039 and $ 2.000 billion aggregate principal amount of 5 1/4 % notes due 2049.

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

The pretax loss on retirement of debt for these redemptions was $ 211 million.

During February 2020, we issued $ 2.700 billion aggregate principal amount of 3.50 % senior notes due 2030.

During March 2020, we used the net proceeds for the redemption of all $ 1.000 billion outstanding aggregate principal amount of HCA Healthcare, Inc.’s 6.25 % senior notes due 2021 and, together with available funds, for the redemption of all $ 2.000 billion outstanding aggregate principal amount of HCA Inc.’s 7.50 % senior notes due 2022.

The pretax loss on retirement of debt was $ 295 million.

During March 2020 in response to the risks the COVID-19 pandemic presents to our business, we entered into a credit agreement that provides for a 364-day secured term loan facility for an aggregate principal amount of up to $ 2.000 billion.

As of December 31, 2020 there was no amount outstanding or draw notices pending under the facility.

We terminated this credit agreement during January 2021.

Senior Secured Credit Facilities And Other Senior Secured Debt

We have entered into the following senior secured credit facilities:

(i) a $ 3.750 billion asset-based revolving credit facility maturing on June 28, 2022

with a borrowing base of 85

% of eligible accounts receivable, subject to customary reserves and eligibility criteria ($ 2.480 billion outstanding at December 31, 2019) (the “ABL credit facility”);

(ii) a $ 2.000 billion senior secured revolving credit facility maturing on June 28, 2022

(i) a $ 3.750 billion asset-based revolving credit facility maturing on

June 28, 2022 with a borrowing base of

85 % of eligible accounts receivable, subject to customary reserves and eligibility criteria

( none outstanding at December 31, 2020) (the “ABL credit facility”);

(ii) a $ 2.000 billion senior secured revolving credit facility maturing on June 28, 2022 ( none

outstanding at December 31, 2020 without giving effect to certain outstanding letters of credit);

(iii) a $ 1.106 billion senior secured term loan A-6

facility maturing on July 16, 2024

(iv) a $ 1.474 billion senior secured term loan B-12

facility maturing on March 13, 2025

and (v) a $ 1.145 billion senior secured term loan B-13

facility maturing on March 18, 2026

We refer to the facilities described under (ii) through (v) above, collectively, as the “cash flow credit facility” and, together with the ABL credit facility, the “senior secured credit facilities.”

$ 2.000 billion senior secured 364-day term loan facility maturing on March 18, 2021 ( none

outstanding at December 31, 2020 and the

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LONG-TERM DEBT (continued)

Senior Secured Credit Facilities And Other Senior Secured Debt (continued)

terminated during January 2021);

$ 1.078 billion senior secured term loan A-6 facility maturing on

July 16, 2024 ;

(v) a $ 1.459 billion senior secured term loan B-12 facility maturing on

March 13, 2025 ;

and (vi) a $ 1.134 billion senior secured term loan B-13 facility maturing on

March 18, 2026 .

We refer to the facilities described under (ii) through (vi) above, collectively, as the “cash flow credit facility” and, together with the ABL credit facility, the “senior secured credit facilities.”

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 LIBOR rate for the currency of such borrowing for the relevant interest period, plus, in each case, an applicable margin.

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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 secured notes consists of (i) $ 1.250

billion aggregate principal amount of 4.75 % first lien notes due 2023;

Senior secured notes consists of (i) $ 1.250 billion aggregate principal amount of 4.75 % first lien notes due 2023;

(ii) $ 2.000 billion aggregate principal amount of 5.00 % first lien notes due 2024;

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(v) $ 1.200 billion aggregate principal amount of 4.50 % first lien notes due 2027;

billion aggregate principal amount of 4 1/8% first lien notes due 2029;

(vii) $ 1.000

billion aggregate principal amount of 5 1/8% first lien notes due 2039;

(vi) $ 2.000 billion aggregate principal amount of 4 1/8 % first lien notes due 2029;

(vii) $ 1.000 billion aggregate principal amount of 5 1/8% first lien notes due 2039;

(viii) $ 1.500 billion aggregate principal amount of 5.50 % first lien notes due 2047;

and (ix) $ 2.000

billion aggregate principal amount of 5 1/4% first lien notes due 2049.

and (ix) $ 2.000 billion aggregate principal amount of 5 1/4 % first lien notes due 2049.

Finance leases and other secured debt totaled $ 767 million at December 31, 2020.

We use interest rate swap agreements to manage the variable rate exposure of our debt portfolio.

At December 31, 2019, we had entered into effective interest rate swap agreements, in a total notional amount of $ 2.500 billion, in order to hedge a portion of our exposure to variable rate interest payments associated with the

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LONG-TERM DEBT (continued)

Senior Secured Credit Facilities And Other Senior Secured Debt (continued)

senior secured credit facilities.

At December 31, 2020, we had entered into effective interest rate swap agreements, in a total notional amount of $ 2.500 billion, in order to hedge a portion of our exposure to variable rate interest payments associated with the senior secured credit facilities.

The effect of the interest rate swaps is reflected in the effective interest rates for the senior secured credit facilities.

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and (iii) an aggregate principal amount of $ 736 million debentures with maturities ranging from 2023 to 2095 .

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 — LONG-TERM DEBT (continued)

General Debt Information

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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 U.S.

guarantor, in each of their respective first-tier subsidiaries;

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 U.S.

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 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;

a second-priority lien on certain of the Receivables Collateral.

senior secured notes and the related guarantees are secured by first-priority liens, subject to permitted liens, on our and our subsidiary guarantors’ assets, subject to certain exceptions, that secure our cash flow credit facility on a first-priority basis and are secured by second-priority liens, subject to permitted liens, on our and our subsidiary guarantors’ assets that secure our ABL credit facility on a first-priority basis and our other cash flow credit facility on a second-priority basis.

Maturities of long-term debt in years 2021 through 2024 , excluding amounts under the ABL credit facility, are $ 1.156 billion, $ 2.177 billion, $ 2.770 billion and $ 3.137 billion, respectively.

Our senior secured notes and the related guarantees are secured by first-priority liens, subject to permitted liens, on our and our subsidiary guarantors’ assets, subject to certain exceptions, that secure our cash flow credit facility on a first-priority basis and are secured by second-priority liens, subject to permitted liens, on our and our subsidiary guarantors’ assets that secure our ABL credit facility on a first-priority basis and our other cash flow credit facility on a second-priority basis.

Maturities of long-term debt in years 2022 through 2025 are $ 233 million, $ 2.799 billion, $ 3.163 billion and $ 5.872 billion, respectively.

NOTE 10 — LEASES

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, which requires leases with durations greater than 12 months to be recognized on the balance sheet, effective January 1, 2019, using the modified retrospective approach.

Prior period financial statement amounts and disclosures have not been adjusted to reflect the

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — LEASES (continued)

provisions of the new standard.

We elected the package of transition provisions available which allowed us to carry forward our historical assessments of whether contracts are or contain leases, the lease classification and the treatment of initial direct costs.

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.

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.

The following table presents our lease-related assets and liabilities at December 31, 2019 (dollars in millions):

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — LEASES (continued)

The following table presents our lease-related assets and liabilities at December 31, 2020 and 2019 (dollars in millions):

Balance Sheet Classification

Operating leases

operating lease assets

Right-of-use operating lease assets

Finance leases

6 unchanged sentences

Operating leases

operating lease obligations

Right-of-use operating lease obligations

Finance leases

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Finance leases

Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — LEASES (continued)

The following table presents certain information related to lease expense for finance and operating leases for the year ended December 31, 2019 (dollars in millions):

December 31, 2019

The following table presents certain information related to lease expense for finance and operating leases for the years ended December 31, 2020 and 2019 (dollars in millions):

Finance lease expense:

Amortization of leased assets

Interest on lease liabilities

Depreciation and amortization

Operating leases( 1

2 unchanged sentences

Expenses are included in “other operating expenses” in our consolidated income statements.

The following table presents supplemental cash flow information for the year ended December 31, 2019 (dollars in millions):

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — LEASES (continued)

The following table presents supplemental cash flow information for the years ended December 31, 2020 and 2019 (dollars in millions):

Cash paid for amounts included in the measurement of lease liabilities:

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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, 2019 (dollars in millions):

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, 2020 and 2019 (dollars in millions):

Total minimum lease payments

3 unchanged sentences

Long-term lease obligations

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 — CONTINGENCIES

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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.

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.

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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.

, or “whistleblower,” suits

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 — CONTINGENCIES (continued)

Government Investigations, Claims and Litigation (continued)

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.

1 unchanged sentence

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 CMS under Section 1115 of the Social Security Act (“Program”).

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;

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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.

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 2020, January 2019, October 2017 and November 2016, our Board of Directors authorized share repurchase programs for up to $ 8 billion ($ 2 billion for each authorization) of our outstanding common stock.

During 2019, we repurchased 7.949 million shares of our common stock at an average price of $ 129.71 per

During January 2020, January 2019 and October 2017, our Board of Directors authorized share repurchase programs for up to $ 6 billion ($ 2 billion for each authorization) of our outstanding common stock.

During March 2020

in response to the risks the COVID-19

pandemic presents to our business, we announced the suspension of our share repurchase programs.

During February 2021, our

Board of Directors authorized the resumption of the share repurchase program, pursuant to which $ 2.8 billion of pre-suspension authorization remained available, and an additional $ 6 billion was authorized for repurchases of the Company’s outstanding common stock ($ 8.8 billion of total repurchase authorization).

During 2020, we repurchased 3.287 million shares of our common stock at an average price of $ 134.18 per share through market purchases pursuant to the $ 2.0

billion share repurchase program authorized during January 2019.

At December 31, 2020, we had $ 2.800 billion of repurchase authorization available under the January 2019 and 2020 authorizations.

During 2019, we repurchased 7.949 million shares of our common stock at an average price of $ 129.71 per share through market purchases pursuant to the October 2017 authorization (which was completed during the first quarter of 2019) and the January 2019 authorization.

During 2018, we repurchased 14.070 million shares of our common stock at an average price of $ 108.74 per share through market purchases pursuant to the October 2017 authorization.

Index to Financial Statements

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12 — CAPITAL STOCK (continued)

Share Repurchase Transactions (continued)

share through market purchases pursuant to the October 2017 authorization (which was completed during the first quarter of 2019) and the January 2019 authorization.

At December 31, 2019, we had $ 1.241 billion of repurchase authorization available under the January 2019 authorization.

During 2018, we repurchased 14.070 million shares of our common stock at an average price of $ 108.74 per share through market purchases pursuant to the October 2017 authorization.

During 2017, we repurchased 25.092 million shares of our common stock at an average price of $ 81.73 per share through market purchases pursuant to the November 2016 authorization (which was completed during the fourth quarter of 2017) and the October 2017 authorization.

NOTE 13 — EMPLOYEE BENEFIT PLANS

We maintain defined contribution benefit plans that are available to employees who meet certain minimum requirements.

Certain of the plans require that we match specified percentages of 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).

The cost of these plans totaled $ 532 million for 2019, $ 499 million for 2018 and $ 471 million for 2017.

Our contributions are funded during the applicable or following year.

Certain of the plans require that we match specified percentages of 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).

The cost of these plans totaled

$ 552 million for 2020,

$ 532 million for 20 19 and

$ 499 million for 2018.

Our matching contributions are funded during the year following the participant contributions.

We maintain the noncontributory, nonqualified Restoration Plan to provide certain retirement benefits for eligible employees.

Eligibility for the Restoration Plan is based upon earning eligible compensation in excess of the Social Security Wage Base and attaining 1,000 or more hours

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’ account balances (the Restoration Plan is not funded) depend upon participants’ compensation, years of vesting service and certain IRS limitations.

Benefits expense under this plan was $ 44 million for 2019, $ 22 million for 2018 and $ 40 million for 2017.

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.

Benefits expense under this plan was

$ 35 million for 2020, $ 44 million for 2019 and $ 22 million for 2018.

Accrued benefits liabilities under this plan totaled $ 242 million at December 31, 2020 and $ 227 million at December 31, 2019.

1 unchanged sentence

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 $ 19 million for 2019, $ 26 million for 2018 and $ 28 million for 2017.

Benefits expense under the plan was

$ 24 million for 2020, $ 19 million for 2019 and $ 26 million for 2018.

Accrued benefits liabilities under this plan totaled $ 204 million at December 31, 2020 and $ 192 million at December 31, 2019.

We maintain defined benefit pension plans which resulted from certain hospital acquisitions in prior years.

Benefits expense under these plans was $ 11 million for 2019, $ 9 million for 2018, and $ 14 million for 2017.

Accrued benefits liabilities under these plans totaled $ 63 million at December 31, 2019 and $ 68 million at December 31, 2018.

Benefits expense under these plans was

$ 8 million for 2020,

$ 11 million for 2019, and

$ 9 million for 2018.

Accrued benefits liabilities under these plans totaled

$ 96 million at December 31, 2020 and

$ 63 million at December 31, 2019.

NOTE 14 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities.

We operate in two

geographically organized groups:

We operate in two geographically organized groups:

the National and American Groups.

At December 31, 2019, the National Group included 95 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, North Carolina, South Carolina, Utah and Virginia, and the American Group included 83 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana,

Mississippi, Missouri, Tennessee and Texas.

We also operate six hospitals in England, and these facilities are included in the Corporate and other group.

At December 31, 2020, the National Group included 96 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, North Carolina, South Carolina, Utah and Virginia, and the American Group included 82 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Missouri, Tennessee and Texas.

We also operate seven hospitals in England, and these facilities are included in the Corporate and other group.

Index to Financial Statements

HCA HEALTHCARE, INC.

1 unchanged sentence

NOTE 14 — SEGMENT AND GEOGRAPHIC INFORMATION (continued)

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, gains on sales of facilities, losses on retirement of debt, income taxes and net income attributable to noncontrolling interests.

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.

19 unchanged sentences

Corporate and other

Index to Financial Statements

HCA HEALTHCARE, INC.

5 unchanged sentences

Interest expense

Gains on sales of facilities

Losses (gains) on sales of facilities

Losses on retirement of debt

9 unchanged sentences

Balance at December 31, 2019

oreign currency translation, amortization and other

Foreign currency translation, amortization and other

Balance at December 31, 2020

Index to Financial Statements

HCA HEALTHCARE, INC.

3 unchanged sentences

Balances at December 31, 2017

Unrealized gains on available-for-sale

Foreign currency translation adjustments, net of $ 35 of income taxes

Defined benefit plans, net of $ 10 income tax benefit

Change in fair value of derivative instruments, net of $ 4 of income taxes

Expense (income) reclassified into operations from other comprehensive income, net of $ 1 of income taxes and $ 7 and $ 7 income tax benefits, respectively

Balances at December 31, 2017

Unrealized losses on available-for-sale

securities, net of $ 2 income tax benefit

securities, net of $ 2

income tax benefit

Foreign currency translation adjustments, net of $ 8 income tax benefit

Defined benefit plans, net of $ 10 of income taxes

Change in fair value of derivative instruments, net of $ 5 of income taxes

Change in fair value of derivative instruments, net of $ 5 of

Expense (income) reclassified into operations from other comprehensive income, net of $ 5 income tax benefit and $ 2 of income taxes, respectively

1 unchanged sentence

Balances at December 31, 2018

Unrealized gains

on available-for-sale

securities, net of $ 4 of income taxes

Foreign currency translation adjustments, net of $ 5 of income taxes

Unrealized gains on available-for-sale

securities, net of $ 4 of

Foreign currency translation adjustments, net of $ 5 of income

Defined benefit plans, net of $ 14 income tax benefit

Change in fair value of derivative instruments, net of $ 13 income tax benefit

Change in fair value of derivative instruments, net of $ 13 income

Expense (income) reclassified into operations from other comprehensive income, net of $ 3 income tax benefit and $ 3 of income taxes, respectively

Balances at December 31, 2019

Unrealized gains on available-for-sale

securities, net of $ 3 of

Foreign currency translation adjustments, net of $ 6 of income

Defined benefit plans, net of $ 16 income tax benefit

Change in fair value of derivative instruments, net of $ 15 income

Expense reclassified into operations from other comprehensive income, net of $ 6 and $ 5 income tax benefits, respectively

Balances at December 31, 2020

Index to Financial Statements

HCA HEALTHCARE, INC.

4 unchanged sentences

Defined contribution benefit plan

operating lease

Right-of-use operating lease

Taxes other than income

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION

is a 100% owned direct subsidiary of HCA Healthcare, Inc.

HCA Healthcare, Inc.

has $ 1 .000 billion aggregate principal amount of 6.25 % senior unsecured notes due 2021 outstanding.

These notes are senior unsecured obligations and are not guaranteed by any of our subsidiaries.

The senior secured credit facilities and senior secured notes described in Note 9 are jointly and severally, and 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 dated December 16, 1993 (except for certain special purpose subsidiaries that only guarantee and pledge their assets under our ABL credit facility).

Our condensed consolidating balance sheets at December 31, 2019 and 2018 and condensed consolidating statements of comprehensive income and cash flows for each of the three years in the period ended December 31, 2019, segregating HCA Healthcare, Inc.

issuer, HCA Inc.

issuer, the subsidiary guarantors, the subsidiary non-guarantors

and eliminations, follow.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2019

(Dollars in millions)

Healthcare, Inc.

Salaries and benefits

Other operating expenses

Equity in earnings of affiliates

Depreciation and amortization

Interest expense (income)

Gains on sales of facilities

Losses on retirement of debt

Management fees

Income (loss) before income taxes

Provision (benefit) for income taxes

Net income (loss)

Net income attributable to noncontrolling interests

Net income (loss) attributable to HCA Healthcare, Inc.

Comprehensive income (loss) attributable to HCA Healthcare, Inc.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2018

(Dollars in millions)

Healthcare, Inc.

Salaries and benefits

Other operating expenses

Equity in earnings of affiliates

Depreciation and amortization

Interest expense (income)

Gains on sales of facilities

Losses on retirement of debt

Management fees

Income (loss) before income taxes

Provision (benefit) for income taxes

Net income (loss)

Net income attributable to noncontrolling interests

Net income (loss) attributable to HCA Healthcare, Inc.

Comprehensive income (loss) attributable to HCA Healthcare, Inc.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2017

(Dollars in millions)

Healthcare, Inc.

Salaries and benefits

Other operating expenses

Equity in earnings of affiliates

Depreciation and amortization

Interest expense (income)

Gains on sales of facilities

Losses on retirement of debt

Management fees

Income (loss) before income taxes

Provision (benefit) for income taxes

Net income (loss)

Net income attributable to noncontrolling interests

Net income (loss) attributable to HCA Healthcare, Inc.

Comprehensive income (loss) attributable to HCA Healthcare, Inc.

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2019

(Dollars in millions)

Healthcare, Inc.

Current assets:

Cash and cash equivalents

Accounts receivable, net

Property and equipment, net

Investments of insurance subsidiaries

Investments in and advances to affiliates

Goodwill and other intangible assets

operating lease assets

LIABILITIES AND STOCKHOLDERS’

(DEFICIT) EQUITY

Current liabilities:

Accounts payable

Accrued salaries

Other accrued expenses

Long-term debt due within one year

Long-term debt, net

Intercompany balances

Professional liability risks

operating lease obligations

Income taxes and other liabilities

Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc.

Noncontrolling interests

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

— SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-

INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2018

(Dollars in millions)

Healthcare, Inc.

Current assets:

Cash and cash equivalents

Accounts receivable, net

Property and equipment, net

Investments of insurance subsidiaries

Investments in and advances to affiliates

Goodwill and other intangible assets

LIABILITIES AND STOCKHOLDERS’

(DEFICIT) EQUITY

Current liabilities:

Accounts payable

Accrued salaries

Other accrued expenses

Long-term debt due within one year

Long-term debt, net

Intercompany balances

Professional liability risks

Income taxes and other liabilities

Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc.

Noncontrolling interests

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2019

(Dollars in millions)

Healthcare, Inc.

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Change in operating assets and liabilities

Depreciation and amortization

Gains on sales of facilities

Losses on retirement of debt

Amortization of debt issuance costs

Share-based compensation

Equity in earnings of affiliates

Net cash provided by (used in) 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

Net cash used in investing activities

Cash flows from financing activities:

Issuance of long-term debt

Net change in revolving bank credit facilities

Repayment of long-term debt

Distributions to noncontrolling interests

Payment of debt issuance costs

Payment of dividends

Repurchases of common stock

Changes in intercompany balances with affiliates, net

Net cash (used in) provided by 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

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2018

(Dollars in millions)

Healthcare, Inc.

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Change in operating assets and liabilities

Depreciation and amortization

Gains on sales of facilities

Losses on retirement of debt

Amortization of debt issuance costs

Share-based compensation

Equity in earnings of affiliates

Net cash provided by (used in) 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

Net cash used in investing activities

Cash flows from financing activities:

Issuance of long-term debt

Net change in revolving bank credit facilities

Repayment of long-term debt

Distributions to noncontrolling interests

Payment of debt issuance costs

Payment of dividends

Repurchases of common stock

Changes in intercompany balances with affiliates, net

Net cash (used in) provided by 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

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2017

(Dollars in millions)

Healthcare, Inc.

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Change in operating assets and liabilities

Depreciation and amortization

Gains on sales of facilities

Losses on retirement of debt

Amortization of debt issuance costs

Share-based compensation

Equity in earnings of affiliates

Net cash provided by (used in) 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

Net cash used in investing activities

Cash flows from financing activities:

Issuance of long-term debt

Net change in revolving bank credit facilities

Repayment of long-term debt

Distributions to noncontrolling interests

Payment of debt issuance costs

Repurchases of common stock

Changes in intercompany balances with affiliates, net

Net cash (used in) provided by financing activities

Change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

HCA HEALTHCARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)

Healthtrust, Inc.

— The Hospital Company (“Healthtrust”) is the first-tier subsidiary of HCA Inc.

The common stock of Healthtrust has been pledged as collateral for the senior secured credit facilities and senior secured notes described in Note 9.

of Regulation S-X

under the Securities Act requires the filing of separate financial statements for any affiliate of the registrant whose securities constitute a substantial portion of the collateral for any class of securities registered or being registered.

We believe the separate financial statements requirement applies to Healthtrust due to the pledge of its common stock as collateral for the senior secured notes.

Due to the corporate structure relationship of HCA and Healthtrust, HCA’s operating subsidiaries are also the operating subsidiaries of Healthtrust.

The corporate structure relationship, combined with the application of push-down accounting in Healthtrust’s consolidated financial statements related to HCA’s debt and financial instruments, results in the consolidated financial statements of Healthtrust being substantially identical to the consolidated financial statements of HCA.

The consolidated financial statements of HCA and Healthtrust present the identical amounts for revenues, expenses, net income, assets, liabilities, total stockholders’ deficit, net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities.

Certain individual line items in the HCA consolidated statements of stockholders’ deficit and cash flows are combined into one line item in the Healthtrust consolidated statements of stockholder’s deficit and cash flows.

Reconciliations of the HCA Healthcare, Inc.

Consolidated Statements of Stockholders’ Deficit and Consolidated Statements of Cash Flows presentations to the Healthtrust, Inc.

— The Hospital Company Consolidated Statements of Stockholder’s Deficit and Consolidated Statements of Cash Flows

presentations for the years ended December 31, are as follows (dollars in millions):

Presentation in HCA Healthcare, Inc.

Consolidated Statements of Stockholders’ Deficit:

Repurchases of common stock

Share-based benefit plans

Cash dividends declared ($ 1.60 per share — 2019 and $ 1.40 per share — 2018)

Presentation in Healthtrust, Inc.

— The Hospital Company Consolidated Statements of Stockholder’s Deficit:

Distributions to HCA Healthcare, Inc., net of contributions from HCA Healthcare, Inc.

Presentation in HCA Healthcare, Inc.

Consolidated Statements of Cash Flows (cash flows from financing activities):

Repurchases of common stock

Payment of dividends

Presentation in Healthtrust, Inc.

— The Hospital Company Consolidated Statements of Cash Flows (cash flows from financing activities):

Cash distributions to HCA Healthcare, Inc.

Due to the consolidated financial statements of Healthtrust being substantially identical to the consolidated financial statements of HCA, except for the items presented in the table above, the separate consolidated financial statements of Healthtrust are not presented.

HCA HEALTHCARE, INC.

QUARTERLY CONSOLIDATED FINANCIAL INFORMATION

(Dollars in millions, except per share amounts)

Net income attributable to HCA Healthcare, Inc.

Basic earnings per share

Diluted earnings per share

Net income attributable to HCA Healthcare, Inc.

Basic earnings per share

Diluted earnings per share

First quarter results include $ 1 million of losses on sales of facilities (See Note 3 of the notes to consolidated financial statements).

Second quarter results include $ 14 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements).

Third quarter results include $ 162

million of losses on retirement of debt (See Note 9 of the notes to consolidated financial statements).

quarter results include $ 305 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements).

Second quarter results include $ 8 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements).

Third quarter results include $ 5

million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements) and $ 7 million of losses on retirement of debt (See Note 9 of the notes to consolidated financial statements).

Fourth quarter results include $ 6 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements).

Government stimulus refund liability

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures