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 nine months ended September 30, 2015 and 2014, condensed consolidating balance sheets at September 30, 2015 and December 31, 2014 and condensed consolidating statements of cash flows for the nine months ended September 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 SEPTEMBER 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,721 $ 5,293 $ — $ 11,014 Provision for doubtful accounts — — 689 469 — 1,158 Revenues — — 5,032 4,824 — 9,856 Salaries and benefits — — 2,357 2,262 — 4,619 Supplies — — 853 791 — 1,644 Other operating expenses 7 — 865 924 — 1,796 Electronic health record incentive income — — (6 ) (3 ) — (9 ) Equity in earnings of affiliates (464 ) — (1 ) (8 ) 464 (9 ) Depreciation and amortization — — 230 252 — 482 Interest expense 16 608 (156 ) (57 ) — 411 Losses (gains) on sales of facilities — — (1 ) 3 — 2 Legal claim costs — 77 — — — 77 Management fees — — (178 ) 178 — — (441 ) 685 3,963 4,342 464 9,013 Income (loss) before income taxes 441 (685 ) 1,069 482 (464 ) 843 Provision (benefit) for income taxes (8 ) (258 ) 394 142 — 270 Net income (loss) 449 (427 ) 675 340 (464 ) 573 Net income attributable to noncontrolling interests — — 21 103 — 124 Net income (loss) attributable to HCA Holdings, Inc. $ 449 $ (427 ) $ 654 $ 237 $ (464 ) $ 449 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 430 $ (418 ) $ 657 $ 206 $ (445 ) $ 430 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,133 $ 4,845 $ — $ 9,978 Provision for doubtful accounts — — 457 301 — 758 Revenues — — 4,676 4,544 — 9,220 Salaries and benefits — — 2,176 2,035 — 4,211 Supplies — — 797 742 — 1,539 Other operating expenses 4 — 804 880 — 1,688 Electronic health record incentive income — — (22 ) (10 ) — (32 ) Equity in earnings of affiliates (549 ) — (3 ) (11 ) 549 (14 ) Depreciation and amortization — — 225 235 — 460 Interest expense 46 536 (115 ) (40 ) — 427 Losses (gains) on sales of facilities — — 16 (4 ) — 12 Management fees — — (178 ) 178 — — (499 ) 536 3,700 4,005 549 8,291 Income (loss) before income taxes 499 (536 ) 976 539 (549 ) 929 Provision (benefit) for income taxes (19 ) (205 ) 365 177 — 318 Net income (loss) 518 (331 ) 611 362 (549 ) 611 Net income attributable to noncontrolling interests — — 18 75 — 93 Net income (loss) attributable to HCA Holdings, Inc. $ 518 $ (331 ) $ 593 $ 287 $ (549 ) $ 518 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 511 $ (303 ) $ 595 $ 250 $ (542 ) $ 511 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 16,519 $ 15,749 $ — $ 32,268 Provision for doubtful accounts — — 1,535 1,304 — 2,839 Revenues — — 14,984 14,445 — 29,429 Salaries and benefits — — 6,824 6,685 — 13,509 Supplies — — 2,576 2,376 — 4,952 Other operating expenses 9 — 2,523 2,736 — 5,268 Electronic health record incentive income — — (31 ) (15 ) — (46 ) Equity in earnings of affiliates (1,690 ) — (4 ) (34 ) 1,690 (38 ) Depreciation and amortization — — 683 741 — 1,424 Interest expense 100 1,807 (498 ) (154 ) — 1,255 Losses (gains) on sales of facilities — — (5 ) 3 — (2 ) Losses on retirement of debt 122 3 — — — 125 Legal claim costs — 77 — — — 77 Management fees — — (534 ) 534 — — (1,459 ) 1,887 11,534 12,872 1,690 26,524 Income (loss) before income taxes 1,459 (1,887 ) 3,450 1,573 (1,690 ) 2,905 Provision (benefit) for income taxes (88 ) (716 ) 1,284 467 — 947 Net income (loss) 1,547 (1,171 ) 2,166 1,106 (1,690 ) 1,958 Net income attributable to noncontrolling interests — — 68 343 — 411 Net income (loss) attributable to HCA Holdings, Inc. $ 1,547 $ (1,171 ) $ 2,098 $ 763 $ (1,690 ) $ 1,547 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 1,561 $ (1,142 ) $ 2,109 $ 737 $ (1,704 ) $ 1,561 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 15,242 $ 14,377 $ — $ 29,619 Provision for doubtful accounts — — 1,388 949 — 2,337 Revenues — — 13,854 13,428 — 27,282 Salaries and benefits — — 6,393 5,966 — 12,359 Supplies — — 2,416 2,187 — 4,603 Other operating expenses 14 — 2,366 2,597 — 4,977 Electronic health record incentive income — — (68 ) (29 ) — (97 ) Equity in earnings of affiliates (1,443 ) — (5 ) (27 ) 1,443 (32 ) Depreciation and amortization — — 667 694 — 1,361 Interest expense 138 1,629 (349 ) (104 ) — 1,314 Gains on sales of facilities — — (16 ) (4 ) — (20 ) Losses on retirement of debt — 226 — — — 226 Legal claim costs — 78 — — — 78 Management fees — — (528 ) 528 — — (1,291 ) 1,933 10,876 11,808 1,443 24,769 Income (loss) before income taxes 1,291 (1,933 ) 2,978 1,620 (1,443 ) 2,513 Provision (benefit) for income taxes (57 ) (729 ) 1,098 504 — 816 Net income (loss) 1,348 (1,204 ) 1,880 1,116 (1,443 ) 1,697 Net income attributable to noncontrolling interests — — 65 284 — 349 Net income (loss) attributable to HCA Holdings, Inc. $ 1,348 $ (1,204 ) $ 1,815 $ 832 $ (1,443 ) $ 1,348 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 1,399 $ (1,154 ) $ 1,822 $ 826 $ (1,494 ) $ 1,399 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 109 $ 479 $ — $ 588 Accounts receivable, net — — 2,874 2,953 — 5,827 Inventories — — 821 558 — 1,379 Deferred income taxes 412 — — — — 412 Other 13 — 428 574 — 1,015 425 — 4,232 4,564 — 9,221 Property and equipment, net — — 8,078 6,626 — 14,704 Investments of insurance subsidiaries — — — 409 — 409 Investments in and advances to affiliates 23,674 — 17 169 (23,674 ) 186 Goodwill and other intangible assets — — 1,703 4,837 — 6,540 Other 625 — 24 187 — 836 $ 24,724 $ — $ 14,054 $ 16,792 $ (23,674 ) $ 31,896 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ 9 $ — $ 1,165 $ 703 $ — $ 1,877 Accrued salaries — — 770 588 — 1,358 Other accrued expenses 14 245 540 902 — 1,701 Long-term debt due within one year — 1,264 61 52 — 1,377 23 1,509 2,536 2,245 — 6,313 Long-term debt, net 982 26,874 222 297 — 28,375 Intercompany balances 30,472 (10,757 ) (22,877 ) 3,162 — — Professional liability risks — — — 1,117 — 1,117 Income taxes and other liabilities 541 534 428 400 — 1,903 32,018 18,160 (19,691 ) 7,221 — 37,708 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (7,294 ) (18,160 ) 33,626 8,208 (23,674 ) (7,294 ) Noncontrolling interests — — 119 1,363 — 1,482 (7,294 ) (18,160 ) 33,745 9,571 (23,674 ) (5,812 ) $ 24,724 $ — $ 14,054 $ 16,792 $ (23,674 ) $ 31,896 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) EQUITY 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 NINE MONTHS ENDED SEPTEMBER 30, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,547 $ (1,171 ) $ 2,166 $ 1,106 $ (1,690 ) $ 1,958 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (22 ) (56 ) (1,959 ) (1,296 ) — (3,333 ) Provision for doubtful accounts — — 1,535 1,304 — 2,839 Depreciation and amortization — — 683 741 — 1,424 Income taxes (148 ) — — — — (148 ) Losses (gains) on sales of facilities — — (5 ) 3 — (2 ) Losses on retirement of debt 122 3 — — — 125 Legal claim costs — 77 — — — 77 Amortization of debt issuance costs 3 24 — — — 27 Share-based compensation 171 — — — — 171 Equity in earnings of affiliates (1,690 ) — — — 1,690 — Other 49 3 — (14 ) — 38 Net cash provided by (used in) operating activities 32 (1,120 ) 2,420 1,844 — 3,176 Cash flows from investing activities: Purchase of property and equipment — — (764 ) (807 ) — (1,571 ) Acquisition of hospitals and health care entities — — (51 ) (133 ) — (184 ) Disposition of hospitals and health care entities — — 19 8 — 27 Change in investments — — 2 92 — 94 Other — — (6 ) 9 — 3 Net cash used in investing activities — — (800 ) (831 ) — (1,631 ) Cash flows from financing activities: Issuance of long-term debt — 4,048 — — — 4,048 Net change in revolving credit facilities — (270 ) — — — (270 ) Repayment of long-term debt (1,632 ) (2,001 ) (45 ) (24 ) — (3,702 ) Distributions to noncontrolling interests — — (70 ) (297 ) — (367 ) Payment of debt issuance costs — (34 ) — — — (34 ) Repurchases of common stock (1,386 ) — — — — (1,386 ) Changes in intercompany balances with affiliates, net 2,784 (623) (1,483 ) (678 ) — — Income tax benefits 231 — — — — 231 Other (29 ) — — (14 ) — (43 ) Net cash (used in) provided by financing activities (32 ) 1,120 (1,598 ) (1,013 ) — (1,523 ) Change in cash and cash equivalents — — 22 — — 22 Cash and cash equivalents at beginning of period — — 87 479 — 566 Cash and cash equivalents at end of period $ — $ — $ 109 $ 479 $ — $ 588 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,348 $ (1,204 ) $ 1,880 $ 1,116 $ (1,443 ) $ 1,697 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities 18 (151 ) (1,660 ) (1,152 ) — (2,945 ) Provision for doubtful accounts — — 1,388 949 — 2,337 Depreciation and amortization — — 667 694 — 1,361 Income taxes (61 ) — — — — (61 ) Gains on sales of facilities — — (16 ) (4 ) — (20 ) Losses on retirement of debt — 226 — — — 226 Legal claim costs — 78 — — — 78 Amortization of deferred loan costs 2 31 — — — 33 Share-based compensation 118 — — — — 118 Equity in earnings of affiliates (1,443 ) — — — 1,443 — Other — 3 — (6 ) — (3 ) Net cash (used in) provided by operating activities (18 ) (1,017 ) 2,259 1,597 — 2,821 Cash flows from investing activities: Purchase of property and equipment — — (893 ) (589 ) — (1,482 ) Acquisition of hospitals and health care entities — — (7 ) (90 ) — (97 ) Disposition of hospitals and health care entities — — 31 7 — 38 Change in investments — — 22 — — 22 Other — — — 7 — 7 Net cash used in investing activities — — (847 ) (665 ) — (1,512 ) Cash flows from financing activities: Issuance of long-term debt — 3,502 — — — 3,502 Net change in revolving credit facilities — (160 ) — — — (160 ) Repayment of long-term debt — (3,462 ) (35 ) (28 ) — (3,525 ) Distributions to noncontrolling interests — — (45 ) (280 ) — (325 ) Payment of debt issuance costs — (49 ) — — — (49 ) Repurchase of common stock (750 ) — — — — (750 ) Changes in intercompany balances with affiliates, net 654 1,186 (1,331 ) (509 ) — — Income tax benefits 119 — — — — 119 Other (5 ) — — (15 ) — (20 ) Net cash provided by (used in) financing activities 18 1,017 (1,411 ) (832 ) — (1,208 ) Change in cash and cash equivalents — — 1 100 — 101 Cash and cash equivalents at beginning of period — — 112 302 — 414 Cash and cash equivalents at end of period $ — $ — $ 113 $ 402 $ — $ 515 |