HCA Holdings 2012 Annual Report Download - page 80

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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, 2012 and 2011
Net income attributable to HCA Holdings, Inc. totaled $1.605 billion, or $3.49 per diluted share, for the year
ended December 31, 2012 compared to $2.465 billion, or $4.97 per diluted share, for the year ended
December 31, 2011. Financial results for 2012 include legal claim costs of $175 million (pretax), or $0.24 per
diluted share, and net gains on sales of facilities of $15 million (pretax), or $0.02 per diluted share. 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. All “per diluted share”
disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share
were 459.403 million shares and 495.943 million shares for the years ended December 31, 2012 and 2011,
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.
During 2012, consolidated admissions increased 7.4% and same facility admissions increased 3.0% for
2012, compared to 2011. Consolidated inpatient surgical volumes increased 4.5%, and same facility inpatient
surgeries declined 0.1% during 2012 compared to 2011. Consolidated outpatient surgical volumes increased
9.3%, and same facility outpatient surgeries increased 0.9% during 2012 compared to 2011. Emergency room
visits increased 12.5% on a consolidated basis and increased 8.6% on a same facility basis during 2012 compared
to 2011.
Revenues before provision for doubtful accounts increased 13.2% to $36.783 billion for 2012 from
$32.506 billion for 2011. Provision for doubtful accounts increased $946 million from $2.824 billion in 2011 to
$3.770 billion in 2012. 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 $410 million and $1.271 billion, respectively, during 2012 compared to 2011. 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 29.5% for 2012 compared to 27.4% for 2011. At
December 31, 2012, our allowance for doubtful accounts represented approximately 93% of the $5.228 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 11.2% to $33.013 billion for 2012 from $29.682 billion for 2011. The increase in
revenues was due primarily to the combined impact of a 2.0% increase in revenue per equivalent admission and a
9.1% increase in equivalent admissions compared to 2011. Same facility revenues increased 4.5% due primarily
to the combined impact of a 0.3% increase in same facility revenue per equivalent admission and a 4.1% increase
in same facility equivalent admissions compared to 2011. The increase in revenues (and volume metrics) for
2012 compared to 2011 related primarily to the impact of the financial consolidation in the HCA-HealthONE
LLC venture for periods subsequent to our acquisition of controlling interests during October 2011 (HealthONE
revenues and volume metrics are not included in our same facility amounts). HealthONE revenues included in
our consolidated revenues increased from $347 million in 2011 to $2.203 billion in 2012. Two adjustments
(Rural Floor Provision Settlement and SSI ratios) related to Medicare revenues for prior period cost reports and
the current period resulted in a net increase of $188 million to 2012 revenues.
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