HCA_HEALTHCARE Earningcall Transcript Of Q2 of 2024

Mike Marks -- Chief Financial Officer

Thank you, Sam, and good morning, everyone. The second quarter showed continued solid
performance with strong demand, improved margins, and a balanced allocation of capital. Sam
reviewed our top-line results, so I will cover operating costs in the quarter. Operating costs were
well managed, resulting in a margin improvement of 100 basis points to prior year and
sequentially through the first quarter.

Labor cost has improved 200 basis points from the prior year, and we continue to see good
results in contract labor, which declined 25.7% from the prior year and represented 4.8% of total
labor costs. Supply costs as a percent of revenues improved 50 basis points from the prior year.
On other operating costs as a percent of revenue, they did grow compared to the prior year, but it
remained relatively consistent for the past four quarters. We were encouraged that
year-over-year same-facility professional fee costs growth moderated to approximately 13% in
the second quarter, which compares favorably to the 20% increase we experienced in the first
quarter.

Adjusted EBITDA was $3.55 billion in the quarter, which represents a 16% increase over the prior
year and included a modest benefit from Medicaid supplemental payments. As a management
team, we are very pleased with the operational performance of the company. Now moving to

capital allocation. We continue to deploy a balanced strategy of allocating capital for long-term
value creation.

Cash flow from operations was just under $2 billion in the quarter, which is a decline of $500
million in the prior year, driven by income tax payments and timing of Medicaid supplemental
program accruals and cash receipts. Capital expenditures totaled $1.28 billion, and we
repurchased $1.37 billion of our outstanding shares during the quarter. We also paid about $170
million in dividends. Our debt-to-adjusted EBITDA leverage remains near the low end of our
stated guidance range, and we believe we are well-positioned from a balance sheet perspective.

Finally, in our release this morning, we are updating estimated guidance for 2024. For revenues,
our new guidance range is $69.75 billion to $71.75 billion; net income attributable to HCA
Healthcare, $5.675 billion to $5.975 billion; adjusted EBITDA, $13.75 billion to $14.25 billion; and
diluted earnings per share, $21.60 to $22.80 per share. Based on the strength of our year-to-date
results and our revised outlook, we estimate that share repurchases will be around $6 billion in
2024, subject to market conditions. With that, I'll turn the call over to you, Frank, for questions
and answers.

Frank Morgan -- Vice President, Investor Relations

Thank you, Mike. [Operator instructions] Ellie, you may now give instructions to those who would
like to ask a question.

Questions & Answers: