HCA Holdings 2011 Annual Report Download - page 64

HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS — (Continued)
2011 Operations Summary
Net income attributable to HCA Holdings, Inc. totaled $2.465 billion, or $4.97 per diluted share, for 2011,
compared to $1.207 billion, or $2.76 per diluted share, for 2010. The 2011 results include net gains on sales of
facilities of $142 million (pretax), or $0.16 per diluted share, a gain on the acquisition of controlling interest in an
equity investment of $1.522 billion (pretax), or $2.87 per diluted share, losses on retirement of debt of $481
million (pretax), or $0.61 per diluted share, and termination of management agreement fees of $181 million
(pretax), or $0.30 per diluted share. The 2010 results include net gains on sales of facilities of $4 million (pretax),
or $0.01 per diluted share, and impairments of long-lived assets of $123 million (pretax), or $0.18 per diluted
share. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used
for diluted earnings per share were 495.943 million shares and 437.347 million shares for the years ended
December 31, 2011 and 2010, respectively. During March 2011, we completed the initial public offering of
87.719 million shares of our common stock, and during September 2011, we repurchased 80.771 million shares
of our common stock from affiliates of Bank of America Corporation.
Revenues increased to $29.682 billion for 2011 from $28.035 billion for 2010. Revenues increased 5.9%
and 3.3%, respectively, on a consolidated basis and on a same facility basis for 2011, compared to 2010. The
consolidated revenues increase can be attributed to the combined impact of a 0.7% increase in revenue per
equivalent admission and a 5.2% increase in equivalent admissions. The same facility revenues increase resulted
from a 0.3% increase in same facility revenue per equivalent admission and a 3.0% increase in same facility
equivalent admissions. We experienced a shift in service mix from more complex surgical cases to less acute
medical cases, resulting in lower than anticipated revenue per equivalent admission growth for 2011.
During 2011, consolidated admissions increased 4.2% and same facility admissions increased 2.3%,
compared to 2010. Inpatient surgical volumes declined 0.5% on a consolidated basis and declined 1.7% on a
same facility basis during 2011, compared to 2010. Outpatient surgical volumes increased 2.0% on a
consolidated basis and declined 0.6% on a same facility basis during 2011, compared to 2010. Emergency room
visits increased 7.7% on a consolidated basis and increased 6.2% on a same facility basis during 2011, compared
to 2010.
For 2011, the provision for doubtful accounts increased $176 million, compared to 2010. The self-pay
revenue deductions for charity care and uninsured discounts increased $346 million and $1.066 billion,
respectively, for 2011, compared to 2010. The sum of the provision for doubtful accounts, uninsured discounts
and charity care, as a percentage of the sum of revenues, the provision for doubtful accounts, uninsured discounts
and charity care, was 27.4% for 2011, compared to 25.6% for 2010. Same facility uninsured admissions
increased 7.4% and same facility uninsured emergency room visits increased 5.8% for 2011, compared to 2010.
Interest expense totaled $2.037 billion for 2011, compared to $2.097 billion for 2010. The $60 million
decline in interest expense for 2011 was due primarily to a decline in the average interest rate.
Cash flows from operating activities increased $848 million, from $3.085 billion for 2010 to $3.933 billion
for 2011. The increase in cash flows from operating activities was primarily due to improved cash flows of $885
million related to income taxes.
Business Strategy
We are committed to providing the communities we serve with high quality, cost-effective health care while
growing our business, increasing our profitability and creating long-term value for our stockholders. To achieve
these objectives, we align our efforts around the following growth agenda:
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