HCA Healthcare Inc. (NYSE:HCA)

The analysis of annual current and deferred income tax expenses over the period from 2017 to 2021 reveals several distinct patterns and fluctuations.

Current Income Tax Expense

The current income tax expense exhibits a downward trend from 2017 through 2019, decreasing from 1,206 million USD in 2017 to 821 million USD in 2019. However, this trend reverses starting 2020, with a notable increase to 1,152 million USD and then a substantial rise in 2021, reaching 2,095 million USD. This sharp increase in 2021 suggests a significant rise in taxable income or changes in tax regulations impacting current tax liabilities.

Deferred Income Tax Expense

Deferred income tax expenses display more variability and do not follow a consistent trend. Initially, there is a significant decrease from 432 million USD in 2017 to 15 million USD in 2018, followed by an increase to 278 million USD in 2019. In 2020, the deferred tax expense turns negative at -109 million USD, indicating a deferred tax benefit or reversal, before marginally increasing to 17 million USD in 2021. This volatility may reflect timing differences in recognizing income or expenses for tax purposes and possible adjustments in deferred tax assets or liabilities.

Provision for Income Taxes (Total)

The total provision for income taxes, which aggregates current and deferred taxes, follows a downward trend from 1,638 million USD in 2017 to 946 million USD in 2018. It then increases moderately to 1,099 million USD in 2019 but slightly decreases to 1,043 million USD in 2020. A significant escalation occurs in 2021, with the provision rising sharply to 2,112 million USD. This pattern corresponds closely with the movements in the current tax expense, underscoring the dominant influence of current taxes on the total provision.

In summary, the data highlights a general decline in current tax expense and total provision until 2019, followed by a reversal with sharp increases in 2020 and especially 2021. Deferred tax expenses, meanwhile, show irregular fluctuations, including a reversal in 2020, indicating some complexities related to timing differences and tax asset/liability adjustments during the period.

The analysis of the provided financial data reveals several key trends related to the income tax components over the five-year period ending December 31, 2021.

Federal statutory tax rate

This rate experienced a significant decrease from 35% in 2017 to 21% in 2018, remaining constant at 21% through to 2021. This suggests a substantial tax reform or adjustment occurring between 2017 and 2018, with subsequent stability in the statutory rate.

State income taxes, net of federal tax benefit

The state tax component started at 2.2% in 2017 and showed slight fluctuations over the years, peaking at 2.9% in 2018, then declining to 1.9% in 2020 before a marginal rise to 2.0% in 2021. Overall, state income taxes contributed a small but variable additional effective tax burden.

Change in liability for uncertain tax positions

Values were missing for 2017, but from 2018 onward the values fluctuated between -0.2% and 0.7%. Positive values in 2019 and 2021 indicate increases in tax liabilities due to uncertain positions, whereas negative values in 2018 and 2020 indicate reductions.

Tax benefit from settlements of employee equity awards

This item consistently reduced the tax rate, with percentages ranging from -2.4% in 2018 to -1.2% in 2021. The trend suggests a gradually decreasing tax benefit from such settlements over time, signaling possible changes in the volume or valuation of equity awards settled.

Income attributable to noncontrolling interests from consolidated partnerships

The negative impact of this item on the tax rate decreased steadily from -5.1% in 2017 to -1.8% in 2021. This decline denotes a reduction in the proportion or effect of income attributable to noncontrolling interests, which lessened its offsetting impact on the overall tax rate.

Other items, net

Beginning at -0.5% in 2017, this category shifted positively to small gains between 0.2% and 1.1% during 2018 through 2021, indicating other miscellaneous factors contributing modestly to higher tax rates or lower benefits in recent years.

Effective income tax rate, before impact of Tax Act on deferred tax balances

Excluding the Tax Act’s deferred tax impact, the effective tax rate showed a notable decrease from 29.6% in 2017 down to a low of 19.2% in 2020, with a slight rise to 21.5% in 2021, reflecting a general trend towards lower effective taxation consistent with statutory rate changes.

Impact of Tax Act on deferred tax balances

This factor had a significant positive impact on the effective tax rate in 2017 with 7.8%, then a negative impact of -1.6% in 2018. Data were not provided for subsequent years, suggesting the Tax Act effects were mostly relevant in the earlier periods.

Effective income tax rate

Overall, the effective income tax rate decreased sharply from 37.4% in 2017 to 17.7% in 2018, aligning with the reduced statutory tax rate and Tax Act effects. Thereafter, the rate stabilized around the low twenties, reflecting a consistent tax burden in the later years of the period.

In summary, the data shows that the tax burden underwent a marked reduction starting in 2018, primarily driven by a lower federal statutory rate and the one-time effects associated with tax legislation changes. Subsequent years exhibited more stable and slightly fluctuating effective tax rates. Variations in state taxes, uncertain tax positions, and other adjusting items contributed minor fluctuations. The diminishing negative impact from noncontrolling interests also helped normalize the effective tax rate across the period.

The data reveals several noteworthy trends across the financial items over the five-year period ending December 31, 2021.

Allowances for professional liability and other risks

There is a consistent increase in the allowances, rising from $345 million in 2017 to $426 million in 2021. This suggests a growing reservation for potential liabilities or risks associated with professional activities over the period.

Accounts receivable

The balance shows an upward trend with minor fluctuations, increasing from $243 million in 2017 to $348 million in 2021. The rise indicates either higher sales or services provided on credit, or a lengthening of collection periods.

Compensation

Compensation expenses remain relatively stable from 2017 to 2019 but exhibit a significant jump starting in 2020, increasing from $292 million to $502 million by 2021. This sharp increase may reflect expanded workforce costs, wage increases, or changes in compensation structures.

Right-of-use lease assets and obligations

This item appears only from 2019 onwards with values increasing steadily from $369 million in 2019 to $428 million in 2021. The presence and growth of this balance align with the adoption of lease accounting standards and possibly an increase in leased assets or lease obligations.

Other (Assets)

The 'Other' asset category increases gradually over the years, from $420 million in 2017 to $499 million in 2021. This steady growth reflects added miscellaneous assets not separately classified.

Deferred tax assets

Deferred tax assets show a marked increase over the period, rising from $1,271 million in 2017 to $2,203 million in 2021. This suggests growing temporary differences that will yield future tax benefits or growing carryforwards.

Depreciation and fixed asset basis differences

A steadily increasing negative balance is observed, dropping from -$260 million in 2017 to -$737 million in 2021. This intensifying negative figure signifies growing accumulated depreciation or increasing fixed asset basis adjustments over time.

Right-of-use lease liabilities

The lease liabilities counterpart to lease assets reflect an increase in obligations from 2019 (-$366 million) through 2021 (-$419 million). This trend corroborates the increased recognition of lease liabilities under new accounting standards.

Other (Liabilities)

The 'Other' liabilities category becomes more negative across the years, from -$501 million in 2017 to -$652 million in 2021, indicating rising miscellaneous liabilities or obligations.

Deferred tax liabilities

Deferred tax liabilities show a significant increase in magnitude, moving from -$761 million in 2017 to -$1,808 million in 2021. This likely reflects growing taxable temporary differences or increased deferred tax obligations.

Deferred tax assets (liabilities), net

The net deferred tax position declines overall from $510 million in 2017 to $300 million in 2019, then recovers slightly to $395 million in 2021. This fluctuation indicates changes in the balance between deferred tax assets and liabilities, with the net asset position weakening initially before improving marginally.

Total Assets

The reported total assets show a consistent upward trajectory from 36,593 million US dollars at the end of 2017 to 50,742 million US dollars by the end of 2021. Similarly, the adjusted total assets follow the same positive trend, increasing from 36,083 million to 50,347 million US dollars over the same period. This signifies a steady growth in the company’s asset base over the five-year span.

Stockholders’ Equity (Deficit) Attributable to HCA Healthcare, Inc.

Reported stockholders’ equity starts with a significant deficit of -6,806 million US dollars in 2017, which improves progressively to a positive value of 572 million in 2020. However, it falls back into a deficit of -933 million by 2021. Adjusted stockholders’ equity exhibits a similar pattern, beginning at a deficit of -7,316 million US dollars in 2017, improving through 2019, briefly reaching a positive 187 million in 2020, then declining again to -1,328 million in 2021. These fluctuations suggest volatility in equity, with a transient recovery in 2020 followed by a reversal.

Net Income Attributable to HCA Healthcare, Inc.

The reported net income reveals growth from 2,216 million US dollars in 2017 to 3,787 million in 2018, followed by a slight decline to 3,505 million in 2019. It then improves to 3,754 million in 2020 and shows a marked increase to 6,956 million in 2021. Adjusted net income mirrors this general upward trend, starting from 2,648 million in 2017, peaking at 3,802 million in 2018, then showing minor fluctuation before surging to 6,973 million in 2021. The data indicate a significant increase in profitability in the most recent year, after moderate variation during the prior years.

The analysis of the financial ratios over the period from 2017 to 2021 reveals several notable trends and variations in profitability, efficiency, and return metrics.

Net Profit Margin

The reported net profit margin exhibited an overall increasing trend, starting at 5.08% in 2017 and rising to 11.84% by 2021. A moderate improvement was observed year-to-year, with a slight dip in 2019 from 2018 levels before resuming growth. The adjusted net profit margin closely followed a similar trajectory but remained marginally higher in all years, suggesting that adjustments for deferred income taxes had a small positive effect on profitability margins.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios demonstrated a slight downward trend from 2017 to 2020, decreasing from around 1.19 to about 1.09, indicating a reduction in the efficiency with which total assets generated revenue. However, there was a modest recovery in 2021, bringing the ratio up to approximately 1.16–1.17. The difference between reported and adjusted ratios was minimal, suggesting limited impact from tax adjustments on asset turnover.

Financial Leverage

Financial leverage data is only available for 2020, where notably high figures are observed: a reported leverage ratio of 83.02 and an adjusted ratio of 251.9. The substantially higher adjusted financial leverage indicates that deferred tax adjustments significantly increased the measure of leverage, implying a much larger equity base or debt influence when adjustments are considered. The absence of data for other years makes trend analysis infeasible.

Return on Equity (ROE)

Data for ROE is limited to 2020, with exceptionally elevated values—656.29% reported and 1949.2% adjusted. The extraordinarily high adjusted ROE suggests that tax adjustments dramatically impact equity returns, possibly due to changes in equity valuation or income recognition. Without data from other years, it is difficult to interpret a trend, but the disparity highlights the significant influence of deferred income tax adjustments.

Return on Assets (ROA)

The reported ROA showed an upward progression from 6.06% in 2017 to 13.71% in 2021, with a slight decline noted in 2019 followed by steady recovery and growth. Adjusted ROA followed a similar pattern, starting at a higher base of 7.34% in 2017 and reaching 13.85% in 2021. The consistent premium of the adjusted ROA over the reported ROA indicates that the tax effects boosted the overall asset returns throughout the period.

In summary, profitability margins and returns on assets have generally improved over the examined period, with adjustments for deferred income taxes systematically enhancing reported results. Asset turnover experienced a mild decline before recovering in the final year. The limited data on financial leverage and return on equity for 2020 reveal significant discrepancies between reported and adjusted figures, emphasizing the substantial impact of deferred tax adjustments on leverage and equity returns during that year.

The financial data indicate an overall upward trend in both reported and adjusted net income attributable to the company over the five-year period. Reported net income increased from $2,216 million in 2017 to $6,956 million in 2021, showing significant growth particularly between 2020 and 2021. Adjusted net income followed a similar pattern, rising from $2,648 million in 2017 to $6,973 million in 2021, with a slight dip in 2020 compared to 2019.

Gross profitability, as measured by net profit margins, also demonstrated improvement over the period. The reported net profit margin increased from 5.08% in 2017 to 11.84% in 2021. Adjusted net profit margin mirrored this trend, moving from 6.07% to 11.87% over the same period. Both margins display a steady increase with a noticeable acceleration in margin growth in the final year.

Reported net income attributable to HCA Healthcare, Inc.

Steadily increased from $2,216 million in 2017 to $3,787 million in 2018, followed by a slight decline to $3,505 million in 2019. It then rose again to $3,754 million in 2020 and saw a substantial jump to $6,956 million in 2021.

Adjusted net income attributable to HCA Healthcare, Inc.

Rose consistently from $2,648 million in 2017 to $3,802 million in 2018 and then to $3,783 million in 2019, slightly declining to $3,645 million in 2020. A significant increase occurred in 2021, reaching $6,973 million.

Reported net profit margin

Increased from 5.08% in 2017 to 8.11% in 2018, then decreased to 6.83% in 2019. It recovered to 7.28% in 2020 and nearly doubled by 2021 to 11.84%.

Adjusted net profit margin

Showed a progressive increase from 6.07% in 2017 to 8.15% in 2018, dipped slightly to 7.37% in 2019, decreased marginally to 7.07% in 2020, before rising sharply to 11.87% in 2021.

The data suggest robust growth in profitability, with both reported and adjusted net incomes nearly tripling over five years. Notably, 2021 stands out as a year of exceptional improvement in profitability ratios, implying enhanced operational efficiency or favorable financial adjustments. Minor fluctuations in 2019 and 2020 indicate some volatility, but the overall trend remains positive.

The financial data over the five-year period presents several notable trends. The total assets, both reported and adjusted for deferred income tax, showed a consistent upward trajectory from 2017 through 2021. Reported total assets increased steadily from $36,593 million in 2017 to $50,742 million in 2021, reflecting a cumulative growth that suggests ongoing asset accumulation or valuation improvements. Adjusted total assets followed a similar pattern, increasing from $36,083 million to $50,347 million over the same period, indicating that the adjustment for income tax had a relatively consistent impact on asset values each year.

In terms of asset utilization, the total asset turnover ratios (both reported and adjusted) demonstrate a gradual decline from 2017 to 2020, followed by a recovery in 2021. Specifically, the reported total asset turnover began at 1.19 in 2017 and maintained this level in 2018, but then declined to 1.14 in 2019 and further to 1.09 in 2020. This decrease suggests that asset efficiency in generating revenue weakened during this period. However, by 2021, the ratio rebounded to 1.16, indicating a partial recovery in asset productivity.

The adjusted total asset turnover shows a very similar trend, starting at 1.21 in 2017 and 2018, decreasing to 1.15 in 2019 and 1.09 in 2020, then recovering to 1.17 in 2021. The adjustment for deferred income taxes does not materially alter the overall trend but slightly raises the turnover ratio across all years, implying that the tax adjustment marginally improves the perception of asset efficiency.

Overall, the data suggest that while the company increased its asset base consistently, its efficiency in utilizing these assets to generate revenues experienced some decline amid the period, likely influenced by external factors or internal operational changes, before showing signs of improvement in the most recent year. The close alignment between reported and adjusted figures indicates that deferred income tax adjustments have not substantially distorted the underlying trends in asset size and turnover efficiency.

The analysis of the provided financial data over the five-year period reveals several notable trends in the company's financial position and leverage.

Assets Trends

The reported total assets demonstrate a consistent increase each year, rising from approximately $36.6 billion in 2017 to about $50.7 billion by the end of 2021. The adjusted total assets follow a nearly identical upward trajectory, starting slightly lower than the reported figures but converging closely by 2021. This steady growth suggests ongoing asset accumulation or revaluation adjustments that marginally reduce asset values when considering deferred tax effects.

Stockholders’ Equity Trends

The reported stockholders' equity attributable to the company shows a significant improvement between 2017 and 2020, moving from a substantial negative position of around -$6.8 billion to a positive $572 million. However, in 2021, equity reverts to a negative figure near -$933 million. The adjusted equity values mirror this pattern but remain consistently more negative each year, indicating that tax adjustments or other deferred items have a downward pressure on the equity figure. Overall, despite improvements by 2020, the equity position remains fragile with fluctuations between deficits and a brief positive point.

Financial Leverage

Financial leverage ratios are incomplete for most years, but the available data for the reported leverage and adjusted leverage in 2020 show a remarkable disparity. The reported leverage ratio is about 83.02, whereas the adjusted figure is significantly higher at 251.9. This discrepancy highlights that when adjusting for deferred income taxes, the company’s leverage appears much more pronounced, potentially reflecting the impact of deferred tax liabilities on the balance sheet structure. The absence of data in other years limits a full trend analysis, but the stark difference in 2020 is a critical insight.

In summary, the company exhibits steady growth in both reported and adjusted asset bases, while the equity position remains volatile and predominantly negative with a singular positive outlier year. The leverage data suggest considerable impact from tax adjustments, resulting in notably higher adjusted leverage, which could imply elevated financial risk when considering deferred tax items. This pattern indicates the importance of evaluating both reported and adjusted figures for a complete understanding of the company's financial health.

The financial data reveals several notable trends and variations over the five-year period analyzed.

Reported Net Income Attributable to HCA Healthcare, Inc.

The reported net income exhibits an overall increasing trend from 2017 to 2021. Starting at 2,216 million USD in 2017, it rose significantly to 3,787 million USD in 2018. There was a slight decline in 2019 to 3,505 million USD, followed by a recovery to 3,754 million USD in 2020. A sharp increase is observed in 2021, where the net income nearly doubled to 6,956 million USD.

Adjusted Net Income Attributable to HCA Healthcare, Inc.

Adjusted net income follows a somewhat similar pattern to reported net income but shows less volatility in some years. It increased from 2,648 million USD in 2017 to 3,802 million USD in 2018. The value peaked at 3,783 million USD in 2019, slightly decreased to 3,645 million USD in 2020, and then rose substantially to 6,973 million USD in 2021. The adjustment appears to smooth some fluctuations seen in reported figures.

Reported Stockholders’ Equity (Deficit) Attributable to HCA Healthcare, Inc.

Reported stockholders' equity shows a consistent trajectory of improvement but remains negative across most periods. Initially, it was at a deficit of 6,806 million USD in 2017, improving to -4,950 million USD in 2018, and further to -2,808 million USD in 2019. In 2020, it notably shifted to a positive equity of 572 million USD. However, this was followed by a reversed decline to a negative 933 million USD in 2021. This suggests fluctuations in retained earnings, capital structure, or valuation adjustments affecting equity.

Adjusted Stockholders’ Equity (Deficit) Attributable to HCA Healthcare, Inc.

The adjusted stockholders’ equity mirrors the reported figures in general trajectory but also remains negative throughout the periods except for 2020. It moved from a deficit of 7,316 million USD in 2017, improving each year to -5,428 million USD in 2018, -3,108 million USD in 2019, and approaching positive territory with 187 million USD in 2020. However, this too declined again to a deficit of 1,328 million USD in 2021. The adjusted equity consistently shows a larger deficit than the reported equity, which may reflect conservative adjustments or recognition of deferred tax impacts.

Return on Equity (ROE)

ROE data is only available for 2020, where reported ROE spikes dramatically to 656.29%, and adjusted ROE to 1,949.2%. Such elevated ROE figures indicate an extreme profitability relative to equity, likely influenced by the low or near-zero equity base in that year. The extremely high adjusted ROE suggests that earnings adjustments had a large impact on returns relative to the equity base.

In summary, income figures indicate strong profitability growth in 2021 after some fluctuations in prior years. Stockholders’ equity shows improvement through 2020 with temporary positive equity, yet it deteriorates again in 2021, reflecting potential challenges or adjustments impacting capital structure. The extraordinary ROE values in 2020 underscore the influence of low equity values on profitability ratios, stressing the importance of considering equity fluctuations when interpreting returns.

Net Income Trends

The reported net income attributable to the entity shows a general upward trajectory over the five-year period. Beginning at 2,216 million US dollars in 2017, it increased significantly to 3,787 million in 2018, then saw a minor decline to 3,505 million in 2019. It rose again to 3,754 million in 2020 before a substantial surge to 6,956 million in 2021. The adjusted net income figures follow a similar pattern, starting at 2,648 million in 2017 and increasing steadily to 6,973 million in 2021 with less volatility between 2018 and 2020 compared to reported net income, indicating some smoothing adjustments made for comparability or normalization purposes.

Asset Base Evolution

Total assets, both reported and adjusted, exhibit consistent growth from 2017 through 2021. Reported total assets increased from 36,593 million to 50,742 million, while adjusted total assets rose in close alignment from 36,083 million to 50,347 million over the same timeframe. The adjusted figures remain slightly lower than reported assets each year, likely reflecting adjustments made for deferred taxes or other timing differences, but the overall asset growth trend remains consistent and steady.

Return on Assets Analysis

Reported return on assets (ROA) demonstrates an upward trend with some fluctuations. It starts at 6.06% in 2017, peaks at 9.66% in 2018, decreases to 7.78% in 2019, holds steady near 7.9% in 2020, and then rises sharply to 13.71% in 2021. The adjusted ROA aligns closely but is slightly higher in most years, beginning at 7.34% in 2017, peaking modestly at 9.82% in 2018, and showing a similar dip and plateau before a strong increase to 13.85% in 2021. This indicates improving efficiency and profitability relative to asset base, especially notable in the most recent year.

Overall Observations

The data suggests an overall strengthening financial position through rising net income and expanding assets throughout the period examined. The notable jump in income and ROA in 2021 points to either enhanced operational performance or other favorable factors impacting profitability. Adjusted figures generally reflect a smoothing effect, providing a slightly more conservative but consistent outlook on profitability and asset efficiency. The consistency of asset growth supports the scalability of the company’s operations in conjunction with improving returns.