HCA Holdings 2011 Annual Report Download - page 77

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HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS — (Continued)
Results of Operations (Continued)
Years Ended December 31, 2011 and 2010
Net income attributable to HCA Holdings, Inc. totaled $2.465 billion, or $4.97 per diluted share, for the year
ended December 31, 2011 compared to $1.207 billion, or $2.76 per diluted share, for the year ended
December 31, 2010. Financial results for 2011 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.
Financial results for 2010 include net gains on sales of facilities of $4 million (pretax), or $0.01 per diluted share,
and asset impairment charges 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.
During 2011, consolidated admissions increased 4.2% and same facility admissions increased 2.3% for
2011, compared to 2010. Consolidated inpatient surgical volumes declined 0.5%, and same facility inpatient
surgeries declined 1.7% during 2011 compared to 2010. Consolidated outpatient surgical volumes increased
2.0%, and same facility outpatient surgeries declined 0.6% 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.
Revenues before provision for doubtful accounts increased 5.9% to $32.506 billion for 2011 from $30.683
billion for 2010. Provision for doubtful accounts increased $176 million from $2.648 billion in 2010 to $2.824
billion in 2011. With our adoption of ASU 2011-07, the provision for doubtful accounts has been reclassified
from an operating expense to a deduction from patient service revenues. The provision for doubtful accounts and
the allowance for doubtful accounts relate primarily to uninsured amounts due directly from patients, including
copayment and deductible amounts for patients who have health care coverage. The self-pay revenue deductions
for charity care and uninsured discounts increased $346 million and $1.066 billion, respectively, during 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. At December 31, 2011, our allowance for doubtful accounts
represented approximately 92% of the $4.478 billion total patient due accounts receivable balance, including
accounts, net of estimated contractual discounts, related to patients for which eligibility for Medicaid coverage or
uninsured discounts was being evaluated.
Revenues increased 5.9% to $29.682 billion for 2011 from $28.035 billion for 2010. The increase in
revenues was due primarily to the combined impact of a 0.7% increase in revenue per equivalent admission and a
5.2% increase in equivalent admissions compared to 2010. Same facility revenues increased 3.3% due primarily
to the combined impact of a 0.3% increase in same facility revenue per equivalent admission and a 3.0% increase
in same facility equivalent admissions compared to 2010.
Salaries and benefits, as a percentage of revenues, were 45.3% in 2011 and 44.5% in 2010. Salaries and
benefits per equivalent admission increased 2.4% in 2011 compared to 2010. Same facility labor rate increases
averaged 2.3% for 2011 compared to 2010.
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