HCA Holdings 2011 Annual Report Download - page 122

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTE 1 — ACCOUNTING POLICIES (Continued)
Noncontrolling Interests in Consolidated Entities
The consolidated financial statements include all assets, liabilities, revenues and expenses of less than 100%
owned entities that we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity
of such entities.
Related Party Transactions — Management Agreement
The Investors have provided management and advisory services to the Company pursuant to a management
agreement among HCA Inc. and the Investors executed in connection with the Investors’ acquisition of HCA Inc.
in November 2006. The management agreement was terminated pursuant to its terms upon completion of the
initial public offering of our common stock during March 2011, and the Company paid the Investors a final fee
of $181 million. The management agreement also provided that the Company pay a 1% fee in connection with
certain financing, acquisition, divestiture and change of control transactions. The Company paid the Investors a
fee of $26 million related to the initial public offering of our common stock, and this fee was recorded as a cost
of the stock offering. The annual management fee was $18 million for 2010 and $15 million for 2009.
Reclassifications
Certain prior year amounts have been reclassified to conform to the 2011 presentation.
NOTE 2 — SHARE-BASED COMPENSATION
Stock Incentive Plan
The 2006 Stock Incentive Plan for Key Employees of HCA Holdings Inc. and its Affiliates, as Amended
and Restated (the “Stock Incentive Plan”) is designed to promote the long term financial interests and growth of
the Company and its subsidiaries by attracting and retaining management and other personnel and key service
providers and to motivate management personnel by means of incentives to achieve long range goals and further
the alignment of interests of participants with those of our stockholders through opportunities for increased stock,
or stock-based, ownership in the Company. During 2011, our Board of Directors approved certain amendments
to the Stock Incentive Plan that became effective upon the initial public offering of our common stock. The
amendments included an increase to the number of shares available for issuance under the plan by 40,000,000
shares. A portion of the options under the Stock Incentive Plan vests solely based upon continued employment
over a specific period of time, and a portion of the options vests based both upon continued employment over a
specific period of time and upon the achievement of predetermined financial and Investor return targets over
time. We granted 1,288,000 and 964,000 options under the Stock Incentive Plan during 2011 and 2010,
respectively. As of December 31, 2011, 35,090,800 options granted under the Stock Incentive Plan have vested,
of which 30,723,400 are outstanding and exercisable, and there were 42,099,900 shares available for future
grants under the Stock Incentive Plan.
Rollover Options
Certain management holders of outstanding prerecapitalization HCA stock options retained certain of their
stock options (the “Rollover Options”). The Rollover Options remain outstanding in accordance with the terms of
the governing stock incentive plans and grant agreements pursuant to which the holder originally received the
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