HCA Holdings 2012 Annual Report Download - page 116

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ACCOUNTING POLICIES
Reporting Entity and Corporate Reorganization
On November 17, 2006, HCA Inc. was acquired by a private investor group, including affiliates of or funds
sponsored by Bain Capital Partners, LLC, Kohlberg Kravis Roberts & Co., BAML Capital Partners and HCA
founder, Dr. Thomas F. Frist Jr. (collectively, the “Investors”) and by members of management and certain other
investors. The transaction was accounted for as a recapitalization in our financial statements, with no adjustments
to the historical basis of our assets and liabilities.
On November 22, 2010, HCA Inc. reorganized by creating a new holding company structure (the
“Corporate Reorganization”). HCA Holdings, Inc. became the new parent company, and HCA Inc. became HCA
Holdings, Inc.’s wholly-owned direct subsidiary. As part of the Corporate Reorganization, HCA Inc.’s
outstanding shares of common stock were automatically converted, on a share for share basis, into identical
shares of HCA Holdings, Inc.’s common stock. As a result of the Corporate Reorganization, HCA Holdings, Inc.
was deemed the successor registrant to HCA Inc. under the Securities Exchange Act of 1934.
During March 2011, we completed the initial public offering of 87,719,300 shares of our common stock at a
price of $30.00 per share (before deducting underwriter discounts, commissions and other related offering
expenses). Our common stock is traded on the New York Stock Exchange (symbol “HCA”).
HCA Holdings, Inc. is a holding company whose affiliates own and operate hospitals and related health care
entities. The term “affiliates” includes direct and indirect subsidiaries of HCA Holdings, Inc. and partnerships
and joint ventures in which such subsidiaries are partners. At December 31, 2012, these affiliates owned and
operated 162 hospitals, 112 freestanding surgery centers and provided extensive outpatient and ancillary services.
HCA Holdings, Inc.’s facilities are located in 20 states and England. The terms “Company,” “HCA,” “we,” “our”
or “us,” as used herein and unless otherwise stated or indicated by context, refer to HCA Inc. and its affiliates
prior to the Corporate Reorganization and to HCA Holdings, Inc. and its affiliates after the Corporate
Reorganization. The term “facilities” or “hospitals” refer to entities owned and operated by affiliates of HCA and
the term “employees” refers to employees of affiliates of HCA.
Basis of Presentation
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.
The consolidated financial statements include all subsidiaries and entities controlled by HCA. We generally
define “control” as ownership of a majority of the voting interest of an entity. The consolidated financial
statements include entities in which we absorb a majority of the entity’s expected losses, receive a majority of the
entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the
entity. Significant intercompany transactions have been eliminated. Investments in entities we do not control, but
in which we have a substantial ownership interest and can exercise significant influence, are accounted for using
the equity method.
We have completed various acquisitions and joint venture transactions. The accounts of these entities have
been included in our consolidated financial statements for periods subsequent to our acquisition of controlling
interests. The majority of our expenses are “cost of revenue” items. Costs that could be classified as general and
administrative include our corporate office costs, which were $248 million, $228 million and $182 million for the
years ended December 31, 2012, 2011 and 2010, respectively.
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