HCA Holdings 2012 Annual Report Download - page 129

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 5 — INCOME TAXES (continued)
The provision for income taxes reflects $53 million, $100 million and $69 million ($33 million, $63 million
and $44 million net of tax, respectively) reductions in interest related to taxing authority examinations for the
years ended December 31, 2012, 2011 and 2010, respectively.
A reconciliation of the federal statutory rate to the effective income tax rate follows:
2012 2011 2010
Federal statutory rate ........................................................ 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit ...................................... 2.2 2.0 2.7
Change in liability for uncertain tax positions ..................................... —1.0 0.3
Nontaxable gain on acquisition of controlling interest in equity investment .............. —(13.8) —
Tax exempt interest income ................................................... (0.2) (0.2) (0.4)
Other items, net ............................................................. (1.4) (1.4) (2.3)
Effective income tax rate on income applicable to HCA Holdings, Inc. ................. 35.6 22.6 35.3
Income attributable to noncontrolling interests from consolidated partnerships ........... (4.9) (2.4) (5.8)
Effective income tax rate on income before income taxes ............................ 30.7% 20.2% 29.5%
A summary of the items comprising the deferred tax assets and liabilities at December 31 follows (dollars in
millions):
2012 2011
Assets Liabilities Assets Liabilities
Depreciation and fixed asset basis differences ........ $ — $292 $ — $402
Allowances for professional liability and other risks . . . 355 — 337 —
Accounts receivable ............................. 405 — 706 —
Compensation ................................. 237 — 216 —
Other ......................................... 744 595 698 511
$1,741 $887 $1,957 $913
At December 31, 2012, state net operating loss carryforwards (expiring in years 2013 through
2032) available to offset future taxable income approximated $45 million. Utilization of net operating loss
carryforwards in any one year may be limited and, in certain cases, result in an adjustment to intangible assets.
Net deferred tax assets related to such carryforwards are not significant.
At December 31, 2012, the IRS Examination Division was conducting an audit of HCA Inc.’s 2007, 2008
and 2009 federal income tax returns. We expect the IRS Examination Division will begin an audit of HCA
Holdings, Inc.’s 2010 and 2011 federal income tax returns in 2013.
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