HCA Healthcare, Inc.

Ladies and gentlemen, welcome to the HCA HealthShare Second Quarter 2026 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Frank Morgan. Please go ahead, sir.

Good morning and welcome to everyone on today's call. With me this morning is our CEO, Sam Hazen, and CFO, Mike Marks. Sam and Mike will provide some prepared remarks and then we'll take questions. Before I turn the call over to Sam, let me remind everyone that should today's call contain any forward-looking statements, they're based on management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from those that might be expressed today. More information on forward-looking statements and these factors are listed in today's press release and in our various SDC filings. On this morning's call, we may refer Good morning. Good morning.

We believe that access to healthcare and affordability for Americans begins and ends with health insurance coverage. Most people need support to secure it, whether that is through an employer, the federal government, or some other means. Throughout 2025, our teams advocated for extending, in some form, the enhanced premium tax credits for those individuals who needed it. Unfortunately, the enhanced premium tax credits expired at the end of the year, and the effects, as expected, were that many people became uninsured and still needed emergency care from hospitals. As we look at the first half of the year, our expectations proved accurate, although the impact was greater than our estimates. Our colleagues, however, have continued to deliver high-quality, compassionate care to an increased number of patients during the first half of the year, while managing well through the various headwinds we faced. On behalf of our board and our senior team, I want to thank our colleagues for their great work. When I look at the company's mid-year results, I focus on three factors. But before I get to those, I do want to indicate that the company had solid success diluted earnings per share growth of 11% in the quarter and 11% year-to-date. First, we experienced an unfavorable payer mix shift, which created most of the financial pressure for the company. Overall, adjusted admissions for patients who were formerly covered by the health insurance exchanges declined by 15%. We expected some of these patients to shift to other forms of coverage, but this did not happen. Instead, these patients migrated almost one for one to uninsured. We had three of our 15 domestic divisions that had outsized effects from this payer mix shift, and they accounted for around 50% of the company's overall impact. In the quarter, we had an incremental net benefit from Medicaid supplemental payment programs, primarily related to Florida. These programs, which are fundamental to our providing services to Medicaid patients, play an important role in supporting access to care. This support has been especially important for hospitals as they are now providing more uncompensated care to uninsured patients. Our updated guidance for the year incorporates what we have learned through the first six months with respect to patients who have lost their coverage on the exchanges. We believe most of the attrition this year is attributable to the expiration of the enhanced premium tax credits. The second factor was the strength in demand. Despite the payer mix shift, we were pleased with our volume growth. Insured volumes excluding exchanges across many of our services were solid with improving trends over the course of the first six months. Emergency room visits, cardiac procedures, and rehab volumes helped drive these improvements. With respect to surgery volumes, the primary explanation for the decline was from reduced demand in elective surgeries across both inpatient and outpatient settings We believe there are several factors contributing to this dynamic, including declines from patients who were previously covered through the exchanges. Emergency inpatient surgery volumes, which account for approximately two-thirds of our total inpatient cases, were up as compared to last year. As stated, we continue to be encouraged by the overall backdrop in demand. We believe our longer-term assumptions for demand growth of 2% to 3% are supported by market factors and population growth rates that we see in the communities we serve. To meet this expected demand, we have continued to add capacity and facilities to our networks this year. Additionally, we have approved more than $7 billion in capital expenditures that should come online in the next three years. We believe these investments will increase offerings and quality for our patients, improve our competitive positioning, and help us grow. HCA Healthcare has produced strong returns on invested capital over the years, and we believe there will be opportunities to do more in the future. We expect to use our cash flow and balance sheet strength to invest further in our business while also returning capital to our shareholders through our capital allocation plans. The last factor I want to focus on is the advancement of our financial resiliency program. We continue to see improvement in cost metrics as we move through the first two quarters. For years, HCA Healthcare has found ways to create economies of scale increased operational efficiency and enhanced margins. We believe the resiliency program we are advancing now has more capacity through digital transformation, global capabilities, and enhanced workforce development programs. We believe our program will continue to add value this year and on into subsequent years. I close with this. HCA Healthcare has a strong track record of effectively responding to challenges regardless of the event. From these experiences, we have built a culture of discipline. This culture has helped us stay true to our core mission to care and improve human life Next, it has allowed us to allocate resources productively to generate solid returns for our shareholders. And lastly, it keeps us focused on execution to deliver the outcomes necessary to make the company stronger. With that, I will turn the call over to Mike for more details on the quarter.