HCA Holdings 2012 Annual Report Download - page 89

HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Contractual Obligations and Off-Balance Sheet Arrangements
As of December 31, 2012, maturities of contractual obligations and other commercial commitments are
presented in the table below (dollars in millions):
Payments Due by Period
Contractual Obligations(a) Total Current 2-3 Years 4-5 Years After 5 Years
Long-term debt including interest, excluding the senior
secured credit facilities(b) ....................... $34,042 $2,570 $4,467 $3,858 $23,147
Loans outstanding under the senior secured credit
facilities, including interest(b) .................... 9,011 739 893 5,078 2,301
Operating leases(c) ............................... 2,002 301 508 323 870
Purchase and other obligations(c) ................... 26 19 7 — —
Total contractual obligations ....................... $45,081 $3,629 $5,875 $9,259 $26,318
Commitment Expiration by Period
Other Commercial Commitments Not Recorded on the
Consolidated Balance Sheet Total Current 2-3 Years 4-5 Years After 5 Years
Surety bonds(d) .................................... $ 48 $41 $ 7 $— $—
Letters of credit(e) .................................. 66 22 44 — —
Physician commitments(f) ............................ 22 19 3 — —
Guarantees(g) ..................................... 2 — — — 2
Total commercial commitments ....................... $138 $82 $54 $— $ 2
(a) We have not included obligations to pay net estimated professional liability claims ($1.248 billion at
December 31, 2012, including net reserves of $352 million relating to the wholly-owned insurance
subsidiary) in this table. The estimated professional liability claims, which occurred prior to 2007, are
expected to be funded by the designated investment securities that are restricted for this purpose
($570 million at December 31, 2012). We also have not included obligations related to unrecognized tax
benefits of $426 million at December 31, 2012, as we cannot reasonably estimate the timing or amounts of
cash payments, if any, at this time.
(b) Estimates of interest payments assume that interest rates, borrowing spreads and foreign currency exchange
rates at December 31, 2012, remain constant during the period presented.
(c) Amounts relate to future operating lease obligations, purchase obligations and other obligations and are not
recorded in our consolidated balance sheet. Amounts also include physician commitments that are recorded
in our consolidated balance sheet.
(d) Amounts relate primarily to instances in which we have agreed to indemnify various commercial insurers
who have provided surety bonds to cover self-insured workers’ compensation claims, utility deposits and
damages for malpractice cases which were awarded to plaintiffs by the courts. These cases are currently
under appeal and the bonds will not be released by the courts until the cases are closed.
(e) Amounts relate primarily to various insurance programs and employee benefit plan obligations for which we
have letters of credit outstanding.
(f) In consideration for physicians relocating to the communities in which our hospitals are located and
agreeing to engage in private practice for the benefit of the respective communities, we make advances to
physicians, normally over a period of one year, to assist in establishing the physicians’ practices. The actual
amount of these commitments to be advanced often depends upon the financial results of the physicians’
private practice during the recruitment agreement payment period. The physician commitments reflected
were based on our maximum exposure on effective agreements at December 31, 2012.
(g) We have entered into guarantee agreements related to certain leases.
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