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Income Taxes
6 Months Ended
Jun. 30, 2015
Income Taxes [Abstract]  
Income Taxes Disclosure

 

6.  INCOME TAXES 

The total amount of unrecognized benefit that would affect the effective tax rate, if recognized, was approximately $5 million as of June 30, 2015. A total of approximately $2 million of interest and penalties is included in the amount of the liability for uncertain tax positions at June 30, 2015. It is the Company’s policy to recognize interest and penalties related to unrecognized benefits in its condensed consolidated statements of income as income tax expense.

It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities; however, the Company does not anticipate the change will have a material impact on the Company’s consolidated results of operations or consolidated financial position.

The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction and various state jurisdictions. The Company has extended the federal statute of limitations through December 31, 2015 for Triad Hospitals, Inc. for the tax periods ended December 31, 1999, December 31, 2000, April 30, 2001, June 30, 2001, December 31, 2001, December 31, 2002, December 31, 2003, December 31, 2004, December 31, 2005, December 31, 2006 and July 25, 2007. With few exceptions, the Company is no longer subject to state income tax examinations for years prior to 2011. The Company’s federal income tax returns for the 2009 and 2010 tax years are currently under examination by the Internal Revenue Service. The Company believes the results of these examinations will not be material to its consolidated results of operations or consolidated financial position. The Company has extended the federal statute of limitations through June 30, 2016 for Community Health Systems, Inc. for the tax periods ended December 31, 2007, 2008, 2009 and 2010, and through September 6, 2016 for the tax period ended December 31, 2011.

The Company’s effective tax rates were 34.6% and 30.1% for the three months ended June 30, 2015 and 2014, respectively, and 34.0% and 103.6% for the six months ended June 30, 2015 and 2014, respectively. The increase in the Company’s effective tax rate for the three months ended June 30, 2015, when compared to the three months ended June 30, 2014, is primarily related to a disproportionate increase in income from continuing operations before income taxes, when compared to the decrease in net income attributable to noncontrolling interests for those same periods, which is not tax affected in the Company’s consolidated financial statements. The decrease in the Company’s effective tax rate for the six months ended June 30, 2015, when compared to the six months ended June 30, 2014, is primarily related to a disproportionate substantial increase in income from continuing operations before income taxes, when compared to a nominal change in net income attributable to noncontrolling interests for those same periods, which is not tax affected in the Company’s consolidated financial statements. Including the expense related to income attributable to noncontrolling interests, the effective tax rate for the six months ended June 30, 2015 and 2014 would have been 38.3% and 35.6%, respectively.

Cash paid for income taxes, net of refunds received, resulted in net cash paid of $8 million and $6 million during the three months ended June 30, 2015 and 2014, respectively, and net cash paid of $9 million and a net cash refund of $73 million during the six months ended June 30, 2015 and 2014, respectively.