HCA Holdings 2011 Annual Report Download - page 128

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HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTE 5 — INCOME TAXES (Continued)
liability for unrecognized tax benefits does not reflect deferred tax assets of $45 million ($63 million as of
December 31, 2010) related to deductible interest and state income taxes or a refundable deposit of $19 million
($82 million as of December 31, 2010), which is recorded in noncurrent assets.
Depending on the resolution of the IRS disputes, the completion of examinations by federal, state or
international taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we
believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or
decrease within the next 12 months. However, we are currently unable to estimate the range of any possible
change.
NOTE 6 — EARNINGS PER SHARE
We compute basic earnings per share using the weighted average number of common shares outstanding.
We compute diluted earnings per share using the weighted average number of common shares outstanding plus
the dilutive effect of outstanding stock options, computed using the treasury stock method. The following table
sets forth the computations of basic and diluted earnings per share for the years ended December 31, 2011, 2010
and 2009 (dollars in millions, except per share amounts, and shares in thousands):
2011 2010 2009
Net income attributable to HCA Holdings, Inc ................................... $ 2,465 $ 1,207 $ 1,054
Weighted average common shares outstanding .................................. 476,609 426,424 425,567
Effect of dilutive stock options ............................................... 19,334 10,923 6,660
Shares used for diluted earnings per share ...................................... 495,943 437,347 432,227
Earnings per share: ........................................................
Basic earnings per share ................................................ $ 5.17 $ 2.83 $ 2.48
Diluted earnings per share ............................................... $ 4.97 $ 2.76 $ 2.44
NOTE 7 — INVESTMENTS OF INSURANCE SUBSIDIARIES
A summary of the insurance subsidiaries’ investments at December 31 follows (dollars in millions):
2011
Amortized
Cost
Unrealized
Amounts Fair
ValueGains Losses
Debt securities:
States and municipalities ................................... $398 $19 $— $417
Auction rate securities ..................................... 139 — (8) 131
Asset-backed securities .................................... 20 — — 20
Money market funds ...................................... 53 — — 53
610 19 (8) 621
Equity securities ........................................... 7 1 (1) 7
$617 $20 $ (9) 628
Amounts classified as current assets ............................ (80)
Investment carrying value .................................... $548
F-23