HCA Healthcare, Inc. Fair Value Disclosure
NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820”) emphasizes fair value is a market-based measurement, and fair value measurements should be determined based on the assumptions market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment.
The investments of our insurance subsidiaries are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
The following tables summarize the investments of our insurance subsidiaries measured at fair value on a recurring basis as of December 31, 2025 and 2024, aggregated by the level in the fair value hierarchy within which those measurements fall (dollars in millions):
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2025 |
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Fair Value Measurements Using |
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Fair Value |
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Quoted Prices in |
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Significant Other |
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Significant |
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||||
Debt securities |
|
$ |
328 |
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|
$ |
1 |
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$ |
327 |
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|
$ |
— |
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Money market funds and other |
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|
260 |
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|
260 |
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|
|
— |
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|
|
— |
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Investments of insurance subsidiaries |
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|
588 |
|
|
|
261 |
|
|
|
327 |
|
|
|
— |
|
Less amounts classified as current assets |
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|
(103 |
) |
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|
(103 |
) |
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|
— |
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|
|
— |
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|
|
$ |
485 |
|
|
$ |
158 |
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|
$ |
327 |
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|
$ |
— |
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2024 |
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Fair Value Measurements Using |
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Fair Value |
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Quoted Prices in |
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Significant Other |
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Significant |
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Debt securities |
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$ |
361 |
|
|
$ |
— |
|
|
$ |
361 |
|
|
$ |
— |
|
Money market funds and other |
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|
296 |
|
|
|
296 |
|
|
|
— |
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|
|
— |
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Investments of insurance subsidiaries |
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657 |
|
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296 |
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|
|
361 |
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|
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— |
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Less amounts classified as current assets |
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(88 |
) |
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(88 |
) |
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— |
|
|
|
— |
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|
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$ |
569 |
|
|
$ |
208 |
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$ |
361 |
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|
$ |
— |
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NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)
The estimated fair value of our long-term debt was $45.911 billion and $40.845 billion at December 31, 2025 and 2024, respectively, compared to carrying amounts, gross of debt issuance costs, premiums and discounts, aggregating $46.928 billion and $43.400 billion, respectively. The estimates of fair value are generally based on Level 2 inputs, including quoted market prices or quoted market prices for similar issues of long-term debt with the same maturities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 22, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.