HCA Holdings 2012 Annual Report Download - page 133

Download and view the complete annual report

Please find page 133 of the 2012 HCA Holdings annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 161

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 8 — FINANCIAL INSTRUMENTS (continued)
Interest Rate Swap Agreements (continued)
The following table sets forth our interest rate swap agreements, which have been designated as cash flow
hedges, at December 31, 2012 (dollars in millions):
Notional
Amount Maturity Date
Fair
Value
Pay-fixed interest rate swaps ................... $ 500 December 2014 $ (10)
Pay-fixed interest rate swaps ................... 3,000 December 2016 (346)
Pay-fixed interest rate swaps ................... 1,000 December 2017 (73)
During the next 12 months, we estimate $126 million will be reclassified from other comprehensive income
(“OCI”) to interest expense.
Cross Currency Swaps
The Company and certain subsidiaries have incurred obligations and entered into various intercompany
transactions where such obligations are denominated in currencies, other than the functional currencies of the
parties executing the trade. In order to mitigate the currency exposure risks and better match the cash flows of
our obligations and intercompany transactions with cash flows from operations, we enter into various cross
currency swaps. Our credit risk related to these agreements is considered low because the swap agreements are
with creditworthy financial institutions.
Our cross currency swap is not designated as a hedge, and changes in fair value are recognized in results of
operations. The following table sets forth our cross currency swap agreement at December 31, 2012 (amounts in
millions):
Notional
Amount Maturity Date
Fair
Value
Euro — United States Dollar Currency Swap ..... 241Euro November 2013 $(13)
Derivatives — Results of Operations
The following tables present the effect of our interest rate and cross currency swaps on our results of
operations for the year ended December 31, 2012 (dollars in millions):
Derivatives in Cash Flow Hedging Relationships
Amount of Loss
Recognized in OCI on
Derivatives, Net of Tax
Location of Loss
Reclassified from
Accumulated OCI
into Operations
Amount of Loss
Reclassified from
Accumulated OCI
into Operations
Interest rate swaps ................. $96 Interest expense $122
Derivatives Not Designated as Hedging Instruments
Location of Gain
Recognized in
Operations on
Derivatives
Amount of Gain
Recognized in
Operations on
Derivatives
Cross currency swap ............................. Other operating expenses $3
Credit-risk-related Contingent Features
We have agreements with each of our derivative counterparties that contain a provision where we could be
declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the
lender due to our default on the indebtedness. As of December 31, 2012, we have not been required to post any
F-25