Supplemental Condensed Consolidating Financial Information | NOTE 12 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION During November 2010, HCA Holdings, Inc. issued $1.525 billion aggregate principal amount of 7 3 / 4 % senior unsecured notes due 2021. During May 2015, we redeemed all $1.525 billion aggregate principal amount of 7 3 / 4 % unsecured senior notes due 2021. During December 2012, HCA Holdings, Inc. issued $1.000 billion aggregate principal amount of 6.25% senior unsecured notes due 2021. These notes are senior unsecured obligations and are not guaranteed by any of our subsidiaries. HCA Inc., a direct wholly-owned subsidiary of HCA Holdings, Inc., is the obligor under a significant portion of our other indebtedness, including our senior secured credit facilities, senior secured notes and senior unsecured notes (other than the senior unsecured notes issued by HCA Holdings, Inc.). The senior secured notes and senior unsecured notes issued by HCA Inc. are fully and unconditionally guaranteed by HCA Holdings, Inc. The senior secured credit facilities and senior secured notes are fully and unconditionally guaranteed by substantially all existing and future, direct and indirect, 100% owned material domestic subsidiaries that are “Unrestricted Subsidiaries” under our Indenture dated December 16, 1993 (except for certain special purpose subsidiaries that only guarantee and pledge their assets under our senior secured asset-based revolving credit facility). Our summarized condensed consolidating comprehensive income statements for the quarters and six months ended June 30, 2015 and 2014, condensed consolidating balance sheets at June 30, 2015 and December 31, 2014 and condensed consolidating statements of cash flows for the six months ended June 30, 2015 and 2014, segregating HCA Holdings, Inc. issuer, HCA Inc. issuer, the subsidiary guarantors, the subsidiary non-guarantors and eliminations, follow: HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED JUNE 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,597 $ 5,335 $ — $ 10,932 Provision for doubtful accounts — — 550 485 — 1,035 Revenues — — 5,047 4,850 — 9,897 Salaries and benefits — — 2,250 2,242 — 4,492 Supplies — — 869 801 — 1,670 Other operating expenses (4 ) — 838 921 — 1,755 Electronic health record incentive income — — (12 ) (6 ) — (18 ) Equity in earnings of affiliates (603 ) — (2 ) (8 ) 603 (10 ) Depreciation and amortization — — 223 246 — 469 Interest expense 38 604 (168 ) (49 ) — 425 Losses on sales of facilities — — 5 — — 5 Losses on retirement of debt 122 3 — — — 125 Management fees — — (178 ) 178 — — (447 ) 607 3,825 4,325 603 8,913 Income (loss) before income taxes 447 (607 ) 1,222 525 (603 ) 984 Provision (benefit) for income taxes (60 ) (234 ) 462 151 — 319 Net income (loss) 507 (373 ) 760 374 (603 ) 665 Net income attributable to noncontrolling interests — — 24 134 — 158 Net income (loss) attributable to HCA Holdings, Inc. $ 507 $ (373 ) $ 736 $ 240 $ (603 ) $ 507 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 561 $ (358 ) $ 740 $ 275 $ (657 ) $ 561 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED JUNE 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,079 $ 4,879 $ — $ 9,958 Provision for doubtful accounts — — 394 334 — 728 Revenues — — 4,685 4,545 — 9,230 Salaries and benefits — — 2,118 1,980 — 4,098 Supplies — — 805 727 — 1,532 Other operating expenses 5 — 789 850 — 1,644 Electronic health record incentive income — — (24 ) (11 ) — (35 ) Equity in earnings of affiliates (516 ) — (1 ) (8 ) 516 (9 ) Depreciation and amortization — — 224 230 — 454 Interest expense 46 536 (112 ) (43 ) — 427 Gains on sales of facilities — — (11 ) — — (11 ) Losses on retirement of debt — 226 — — — 226 Management fees — — (176 ) 176 — — (465 ) 762 3,612 3,901 516 8,326 Income (loss) before income taxes 465 (762 ) 1,073 644 (516 ) 904 Provision (benefit) for income taxes (18 ) (277 ) 381 186 — 272 Net income (loss) 483 (485 ) 692 458 (516 ) 632 Net income attributable to noncontrolling interests — — 18 131 — 149 Net income (loss) attributable to HCA Holdings, Inc. $ 483 $ (485 ) $ 674 $ 327 $ (516 ) $ 483 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 516 $ (477 ) $ 677 $ 349 $ (549 ) $ 516 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 10,798 $ 10,456 $ — $ 21,254 Provision for doubtful accounts — — 846 835 — 1,681 Revenues — — 9,952 9,621 — 19,573 Salaries and benefits — — 4,467 4,423 — 8,890 Supplies — — 1,723 1,585 — 3,308 Other operating expenses 2 — 1,658 1,812 — 3,472 Electronic health record incentive income — — (25 ) (12 ) — (37 ) Equity in earnings of affiliates (1,226 ) — (3 ) (26 ) 1,226 (29 ) Depreciation and amortization — — 453 489 — 942 Interest expense 84 1,199 (342 ) (97 ) — 844 Gains on sales of facilities — — (4 ) — — (4 ) Losses on retirement of debt 122 3 — — — 125 Management fees — — (356 ) 356 — — (1,018 ) 1,202 7,571 8,530 1,226 17,511 Income (loss) before income taxes 1,018 (1,202 ) 2,381 1,091 (1,226 ) 2,062 Provision (benefit) for income taxes (80 ) (458 ) 890 325 — 677 Net income (loss) 1,098 (744 ) 1,491 766 (1,226 ) 1,385 Net income attributable to noncontrolling interests — — 47 240 — 287 Net income (loss) attributable to HCA Holdings, Inc. $ 1,098 $ (744 ) $ 1,444 $ 526 $ (1,226 ) $ 1,098 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 1,131 $ (724 ) $ 1,452 $ 531 $ (1,259 ) $ 1,131 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 10,109 $ 9,532 $ — $ 19,641 Provision for doubtful accounts — — 931 648 — 1,579 Revenues — — 9,178 8,884 — 18,062 Salaries and benefits — — 4,217 3,931 — 8,148 Supplies — — 1,619 1,445 — 3,064 Other operating expenses 10 — 1,562 1,717 — 3,289 Electronic health record incentive income — — (46 ) (19 ) — (65 ) Equity in earnings of affiliates (894 ) — (2 ) (16 ) 894 (18 ) Depreciation and amortization — — 442 459 — 901 Interest expense 92 1,093 (234 ) (64 ) — 887 Gains on sales of facilities — — (32 ) — — (32 ) Losses on retirement of debt — 226 — — — 226 Legal claim costs — 78 — — — 78 Management fees — — (350 ) 350 — — (792 ) 1,397 7,176 7,803 894 16,478 Income (loss) before income taxes 792 (1,397 ) 2,002 1,081 (894 ) 1,584 Provision (benefit) for income taxes (38 ) (524 ) 733 327 — 498 Net income (loss) 830 (873 ) 1,269 754 (894 ) 1,086 Net income attributable to noncontrolling interests — — 47 209 — 256 Net income (loss) attributable to HCA Holdings, Inc. $ 830 $ (873 ) $ 1,222 $ 545 $ (894 ) $ 830 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 888 $ (851 ) $ 1,227 $ 576 $ (952 ) $ 888 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING BALANCE SHEET JUNE 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 130 $ 543 $ — $ 673 Accounts receivable, net — — 2,907 2,897 — 5,804 Inventories — — 807 541 — 1,348 Deferred income taxes 376 — — — — 376 Other 57 — 421 614 — 1,092 433 — 4,265 4,595 — 9,293 Property and equipment, net — — 7,968 6,592 — 14,560 Investments of insurance subsidiaries — — — 404 — 404 Investments in and advances to affiliates 23,262 — 16 166 (23,262 ) 182 Goodwill and other intangible assets — — 1,704 4,780 — 6,484 Other 571 — 21 195 — 787 $ 24,266 $ — $ 13,974 $ 16,732 $ (23,262 ) $ 31,710 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ 7 $ — $ 1,149 $ 728 $ — $ 1,884 Accrued salaries — — 721 561 — 1,282 Other accrued expenses 29 359 507 875 — 1,770 Long-term debt due within one year — 1,264 59 51 — 1,374 36 1,623 2,436 2,215 — 6,310 Long-term debt, net 982 26,865 225 291 — 28,363 Intercompany balances 30,108 (11,233 ) (22,244 ) 3,369 — — Professional liability risks — — — 1,132 — 1,132 Income taxes and other liabilities 546 467 459 388 — 1,860 31,672 17,722 (19,124 ) 7,395 — 37,665 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (7,406 ) (17,722 ) 32,976 8,008 (23,262 ) (7,406 ) Noncontrolling interests — — 122 1,329 — 1,451 (7,406 ) (17,722 ) 33,098 9,337 (23,262 ) (5,955 ) $ 24,266 $ — $ 13,974 $ 16,732 $ (23,262 ) $ 31,710 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 87 $ 479 $ — $ 566 Accounts receivable, net — — 2,812 2,882 — 5,694 Inventories — — 756 523 — 1,279 Deferred income taxes 366 — — — — 366 Other 118 — 376 531 — 1,025 484 — 4,031 4,415 — 8,930 Property and equipment, net — — 7,871 6,484 — 14,355 Investments of insurance subsidiaries — — — 494 — 494 Investments in and advances to affiliates 21,970 — 16 149 (21,970 ) 165 Goodwill and other intangible assets — — 1,705 4,711 — 6,416 Other 435 — 27 158 — 620 $ 22,889 $ — $ 13,650 $ 16,411 $ (21,970 ) $ 30,980 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) Current liabilities: Accounts payable $ 1 $ — $ 1,272 $ 762 $ — $ 2,035 Accrued salaries — — 783 587 — 1,370 Other accrued expenses 45 317 517 858 — 1,737 Long-term debt due within one year — 231 56 51 — 338 46 548 2,628 2,258 — 5,480 Long-term debt, net 2,499 26,124 185 280 — 29,088 Intercompany balances 27,685 (10,141 ) (21,405 ) 3,861 — — Professional liability risks — — — 1,078 — 1,078 Income taxes and other liabilities 553 487 605 187 — 1,832 30,783 17,018 (17,987 ) 7,664 — 37,478 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (7,894 ) (17,018 ) 31,516 7,472 (21,970 ) (7,894 ) Noncontrolling interests — — 121 1,275 — 1,396 (7,894 ) (17,018 ) 31,637 8,747 (21,970 ) (6,498 ) $ 22,889 $ — $ 13,650 $ 16,411 $ (21,970 ) $ 30,980 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,098 $ (744 ) $ 1,491 $ 766 $ (1,226 ) $ 1,385 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities 21 22 (1,360 ) (779 ) — (2,096 ) Provision for doubtful accounts — — 846 835 — 1,681 Depreciation and amortization — — 453 489 — 942 Income taxes (101 ) — — — — (101 ) Gains on sales of facilities — — (4 ) — — (4 ) Losses on retirement of debt 122 3 — — — 125 Amortization of debt issuance costs 2 17 — — — 19 Share-based compensation 103 — — — — 103 Equity in earnings of affiliates (1,226 ) — — — 1,226 — Other 34 — (2 ) (11 ) — 21 Net cash provided by (used in) operating activities 53 (702 ) 1,424 1,300 — 2,075 Cash flows from investing activities: Purchase of property and equipment — — (470 ) (534 ) — (1,004 ) Acquisition of hospitals and health care entities — — (16 ) (79 ) — (95 ) Disposition of hospitals and health care entities — — 14 8 — 22 Change in investments — — 6 61 — 67 Other — — (6 ) 7 — 1 Net cash used in investing activities — — (472 ) (537 ) — (1,009 ) Cash flows from financing activities: Issuance of long-term debt — 4,048 — — — 4,048 Net change in revolving credit facilities — (300 ) — — — (300 ) Repayment of long-term debt (1,632 ) (1,971 ) (24 ) (17 ) — (3,644 ) Distributions to noncontrolling interests — — (46 ) (191 ) — (237 ) Payment of debt issuance costs — (33 ) — — — (33 ) Repurchases of common stock (940 ) — — — — (940 ) Changes in intercompany balances with affiliates, net 2,354 (1,042 ) (839 ) (473 ) — — Income tax benefits 197 — — — — 197 Other (32 ) — — (18 ) — (50 ) Net cash (used in) provided by financing activities (53 ) 702 (909 ) (699 ) — (959 ) Change in cash and cash equivalents — — 43 64 — 107 Cash and cash equivalents at beginning of period — — 87 479 — 566 Cash and cash equivalents at end of period $ — $ — $ 130 $ 543 $ — $ 673 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 830 $ (873 ) $ 1,269 $ 754 $ (894 ) $ 1,086 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities 13 (32 ) (1,258 ) (874 ) — (2,151 ) Provision for doubtful accounts — — 931 648 — 1,579 Depreciation and amortization — — 442 459 — 901 Income taxes (94 ) — — — — (94 ) Gains on sales of facilities — — (32 ) — — (32 ) Losses on retirement of debt — 226 — — — 226 Legal claim costs — 78 — — — 78 Amortization of deferred loan costs 2 21 — — — 23 Share-based compensation 77 — — — — 77 Equity in earnings of affiliates (894 ) — — — 894 — Other — 1 — (1 ) — — Net cash (used in) provided by operating activities (66 ) (579 ) 1,352 986 — 1,693 Cash flows from investing activities: Purchase of property and equipment — — (583 ) (330 ) — (913 ) Acquisition of hospitals and health care entities — — (2 ) (25 ) — (27 ) Disposition of hospitals and health care entities — — 25 7 — 32 Change in investments — — 26 17 — 43 Other — — — 1 — 1 Net cash used in investing activities — — (534 ) (330 ) — (864 ) Cash flows from financing activities: Issuance of long-term debt — 3,502 — — — 3,502 Net change in revolving credit facilities — 340 — — — 340 Repayment of long-term debt — (3,441 ) (25 ) (16 ) — (3,482 ) Distributions to noncontrolling interests — — (27 ) (170 ) — (197 ) Payment of debt issuance costs — (49 ) — — — (49 ) Repurchase of common stock (750 ) — — — — (750 ) Changes in intercompany balances with affiliates, net 756 227 (663 ) (320 ) — — Income tax benefits 75 — — — — 75 Other (15 ) — — (9 ) — (24 ) Net cash provided by (used in) financing activities 66 579 (715 ) (515 ) — (585 ) Change in cash and cash equivalents — — 103 141 — 244 Cash and cash equivalents at beginning of period — — 112 302 — 414 Cash and cash equivalents at end of period $ — $ — $ 215 $ 443 $ — $ 658 |