HCA Healthcare, Inc. Income Taxes Disclosure

NOTE 4 — INCOME TAXES

Effective January 1, 2025, we adopted Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), with a retrospective approach to all prior periods presented. Pretax income including income attributable to noncontrolling interests consists of the following (dollars in millions):

Our provision for income taxes for the years ended December 31, 2025, 2024 and 2023 included tax benefits of $61 million, $102 million and $93 million, respectively, related to the settlement of employee equity awards. The provision for income taxes reflects a $27 million and $61 million reduction in interest (net of tax) and penalty expense and $36 million of interest expense (net of tax) for the years ended December 31, 2025, 2024 and 2023, respectively. During 2024, we derecognized deferred tax assets and increased our tax provision by $276 million due to an internal restructuring of certain affiliates.

NOTE 4 — INCOME TAXES (continued)

The 2025 Federal Budget Act (the "FBA"), which was enacted on July 4, 2025, makes numerous tax changes, including reinstatement of 100% bonus depreciation for qualifying property placed in service after January 19, 2025, changing the timing of cash tax payments in 2025 and expected timing of cash tax payments for future years. We do not expect the tax provisions of the FBA will have a material impact on our effective tax rate.

At December 31, 2025, state net operating loss carryforwards (expiring in years 2026 through 2044) available to offset future taxable income approximated $24 million. Utilization of net operating loss carryforwards in any one year may be limited.

NOTE 4 — INCOME TAXES (continued)

Unrecognized tax benefits of $274 million as of December 31, 2025 ($295 million as of December 31, 2024) would affect the effective rate, if recognized.

During 2025, the Internal Revenue Service (“IRS”) concluded its examination of the Company’s 2022 and 2023 income tax returns resolving all federal income tax matters for those years. Completion of the examination had no material impact on our results of operations or financial position. During 2024, the IRS completed its examination of our 2016, 2017 and 2018 income tax returns, resolving all federal income tax matters for those years. In 2024, we reduced our tax provision by $254 million, including interest of $118 million (net of tax). Of this amount, $181 million, including $47 million of interest (net of tax) related to the tax rate changes under the 2017 Tax Cuts and Jobs Act. At December 31, 2025, the IRS was examining the 2019 tax returns of certain affiliates of the Company. We are subject to examination by the IRS for years after 2023, as well as by state and foreign taxing authorities.