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BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2012
Uncompensated Care

The following table shows the amounts recorded at our acute care hospitals for charity care and uninsured discounts, based on charges at established rates, for the years ended December 31, 2012, 2011 and 2010:

 

     (dollar amounts in thousands)  
     2012     2011     2010  
     Amount      %     Amount      %     Amount      %  

Charity care

    $ 778,268         74 %    $ 804,301         84 %    $ 664,212         82 % 

Uninsured discounts

      267,304         26 %      151,447         16 %      142,467         18 % 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  

Total uncompensated care

    $ 1,045,572         100 %    $ 955,748         100 %    $ 806,679         100 % 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  
Estimated Cost of Providing Uncompensated Care

The estimated cost of providing uncompensated care, as reflected below, were based on a calculation which multiplied the percentage of operating expenses for our acute care hospitals to gross charges for those hospitals by the above-mentioned total uncompensated care amounts. The percentage of cost to gross charges is calculated based on the total operating expenses for our acute care facilities divided by gross patient service revenue for those facilities. An increase in the level of uninsured patients to our facilities and the resulting adverse trends in the provision for doubtful accounts and uncompensated care provided could have a material unfavorable impact on our future operating results.

 

     (amounts in thousands)  
     2012      2011      2010  

Estimated cost of providing charity care

    $ 131,890       $ 145,350       $ 129,820   

Estimated cost of providing uninsured discounts related care

      45,299         27,363         27,845   
  

 

 

     

 

 

     

 

 

  

Estimated cost of providing uncompensated care

    $ 177,189       $ 172,713       $ 157,665   
  

 

 

     

 

 

     

 

 

  
Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the two years ended December 31, 2012 were as follows (in thousands):

 

     Acute Care
Services		     Behavioral
Health
Services		     Total
Consolidated		  

Balance, January 1, 2011

    $ 389,484      $ 2,200,430      $ 2,589,914   

Adjustments to goodwill (a)

      —         37,688        37,688   
  

 

 

    

 

 

    

 

 

  

Balance, January 1, 2012

      389,484        2,238,118        2,627,602   

Goodwill acquired during the period

      11,110        434,551        445,661   

Goodwill divested during the period

      (17,450 )      (1,902 )      (19,352 ) 

Adjustments to goodwill (b)

      (448 )      (16,698 )      (17,146 ) 
  

 

 

    

 

 

    

 

 

  

Balance, December 31, 2012

    $ 382,696      $ 2,654,069      $ 3,036,765   
  

 

 

    

 

 

    

 

 

  

 

(a) Consists of adjustments to prior year purchase price allocations.
(b) The reduction to the Behavioral Health Services’ goodwill consists primarily of a reclassification to “assets of facilities held for sale” and represents the goodwill attributable to Peak Behavioral Health Services which we agreed to divest pursuant to our agreement with the Federal Trade Commission in connection with our acquisition of Ascend Health Corporation in October, 2012. Adjustments to prior year purchase price allocations for Acute Care and Behavioral Health Services are also included.
Amounts Recognized in AOCI

The amounts recognized in AOCI for the two years ended December 31, 2012 were as follows (in thousands):

 

     Net Unrealized
Gains (Losses) on
Effective Cash
Flow  Hedges		     Minimum
Pension
Liability		     Total
AOCI		  

Balance, January 1, 2011, net of income tax

    $ (5,130 )    $ (15,009 )    $ (20,139 ) 

2011 activity:

       

Pre-tax amount

      (37,813 )      (12,397 )      (50,210 ) 

Income tax effect

      14,483        4,691        19,174   
  

 

 

    

 

 

    

 

 

  

Change, net of income tax

      (23,330 )      (7,706 )      (31,036 ) 
  

 

 

    

 

 

    

 

 

  

Balance, January 1, 2012, net of income tax

      (28,460 )      (22,715 )      (51,175 ) 

2012 activity:

       

Pre-tax amount

      6,341        4,986        11,327   

Income tax effect

      (2,408 )      (1,898 )      (4,306 ) 
  

 

 

    

 

 

    

 

 

  

Change, net of income tax

      3,933        3,088        7,021   
  

 

 

    

 

 

    

 

 

  

Balance, December 31, 2012, net of income tax

    $ (24,527 )    $ (19,627 )    $ (44,154 ) 
  

 

 

    

 

 

    

 

 

  
Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share, for the periods indicated:

 

     Twelve Months Ended December 31,  
     2012     2011     2010  

Basic and diluted:

       

Net Income

    $ 489,047      $ 448,870      $ 275,795   

Less: Net income attributable to noncontrolling interest

      (45,601 )      (50,703 )      (45,612 ) 

Less: Net income attributable to unvested restricted share grants

      (497 )      (521 )      (918 ) 
  

 

 

    

 

 

    

 

 

  

Net income attributable to UHS—basic and diluted

    $ 442,949      $ 397,646      $ 229,265   
  

 

 

    

 

 

    

 

 

  

Basic earnings per share attributable to UHS:

       

Weighted average number of common shares—basic

      96,821        97,199        96,786   
  

 

 

    

 

 

    

 

 

  

Total basic earnings per share

    $ 4.57      $ 4.09      $ 2.37   
  

 

 

    

 

 

    

 

 

  

Diluted earnings per share attributable to UHS:

       

Weighted average number of common shares

      96,821        97,199        96,786   

Net effect of dilutive stock options and grants based on the treasury stock method

      890        1,338        1,187   
  

 

 

    

 

 

    

 

 

  

Weighted average number of common shares and equivalents—diluted

      97,711        98,537        97,973   
  

 

 

    

 

 

    

 

 

  

Total diluted earnings per share

    $ 4.53      $ 4.04      $ 2.34