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, which were redeemed in full during May 2015. During December 2012, HCA Holdings, Inc. issued $1.000 billion aggregate principal amount of 6.250% 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, 2016 and 2015, condensed consolidating balance sheets at June 30, 2016 and December 31, 2015 and condensed consolidating statements of cash flows for the six months ended June 30, 2016 and 2015, 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, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,693 $ 5,388 $ — $ 11,081 Provision for doubtful accounts — — 498 264 — 762 Revenues — — 5,195 5,124 — 10,319 Salaries and benefits — — 2,347 2,344 — 4,691 Supplies — — 886 832 — 1,718 Other operating expenses 2 — 895 976 — 1,873 Electronic health record incentive income — — (2 ) (3 ) — (5 ) Equity in earnings of affiliates (563 ) — (1 ) (9 ) 563 (10 ) Depreciation and amortization — — 238 251 — 489 Interest expense 16 670 (204 ) (55 ) — 427 Gains on sales of facilities — — (2 ) (4 ) — (6 ) Legal claim costs — 10 — — — 10 Management fees — — (235 ) 235 — — (545 ) 680 3,922 4,567 563 9,187 Income (loss) before income taxes 545 (680 ) 1,273 557 (563 ) 1,132 Provision (benefit) for income taxes (113 ) (303 ) 555 202 — 341 Net income (loss) 658 (377 ) 718 355 (563 ) 791 Net income attributable to noncontrolling interests — — 21 112 — 133 Net income (loss) attributable to HCA Holdings, Inc. $ 658 $ (377 ) $ 697 $ 243 $ (563 ) $ 658 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 608 $ (379 ) $ 701 $ 191 $ (513 ) $ 608 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 SIX MONTHS ENDED JUNE 30, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 11,366 $ 10,765 $ — $ 22,131 Provision for doubtful accounts — — 992 560 — 1,552 Revenues — — 10,374 10,205 — 20,579 Salaries and benefits — — 4,701 4,692 — 9,393 Supplies — — 1,784 1,648 — 3,432 Other operating expenses 4 — 1,755 1,971 — 3,730 Electronic health record incentive income — — (5 ) (4 ) — (9 ) Equity in earnings of affiliates (1,270 ) — (3 ) (19 ) 1,270 (22 ) Depreciation and amortization — — 465 503 — 968 Interest expense 32 1,320 (411 ) (98 ) — 843 Gains on sales of facilities — — — (5 ) — (5 ) Legal claim costs — 22 — — — 22 Management fees — — (395 ) 395 — — (1,234 ) 1,342 7,891 9,083 1,270 18,352 Income (loss) before income taxes 1,234 (1,342 ) 2,483 1,122 (1,270 ) 2,227 Provision (benefit) for income taxes (118 ) (495 ) 900 338 — 625 Net income (loss) 1,352 (847 ) 1,583 784 (1,270 ) 1,602 Net income attributable to noncontrolling interests — — 43 207 — 250 Net income (loss) attributable to HCA Holdings, Inc. $ 1,352 $ (847 ) $ 1,540 $ 577 $ (1,270 ) $ 1,352 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 1,273 $ (856 ) $ 1,546 $ 501 $ (1,191 ) $ 1,273 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 — — (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 BALANCE SHEET JUNE 30, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 82 $ 609 $ — $ 691 Accounts receivable, net — — 2,917 2,752 — 5,669 Inventories — — 885 596 — 1,481 Other — — 530 724 — 1,254 — — 4,414 4,681 — 9,095 Property and equipment, net — — 8,491 7,133 — 15,624 Investments of insurance subsidiaries — — — 341 — 341 Investments in and advances to affiliates 25,571 — 16 185 (25,571 ) 201 Goodwill and other intangible assets — — 1,705 4,989 — 6,694 Other 1,041 — 16 193 — 1,250 $ 26,612 $ — $ 14,642 $ 17,522 $ (25,571 ) $ 33,205 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ — $ — $ 1,210 $ 724 $ — $ 1,934 Accrued salaries — — 775 630 — 1,405 Other accrued expenses 46 406 486 895 — 1,833 Long-term debt due within one year — 109 60 55 — 224 46 515 2,531 2,304 — 5,396 Long-term debt, net 992 29,742 201 293 — 31,228 Intercompany balances 33,138 (11,391 ) (24,731 ) 2,984 — — Professional liability risks — — — 1,126 — 1,126 Income taxes and other liabilities 543 582 425 403 — 1,953 34,719 19,448 (21,574 ) 7,110 — 39,703 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (8,107 ) (19,448 ) 36,074 8,945 (25,571 ) (8,107 ) Noncontrolling interests — — 142 1,467 — 1,609 (8,107 ) (19,448 ) 36,216 10,412 (25,571 ) (6,498 ) $ 26,612 $ — $ 14,642 $ 17,522 $ (25,571 ) $ 33,205 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 155 $ 586 $ — $ 741 Accounts receivable, net — — 2,982 2,907 — 5,889 Inventories — — 852 587 — 1,439 Other 223 — 403 537 — 1,163 223 — 4,392 4,617 — 9,232 Property and equipment, net — — 8,328 6,686 — 15,014 Investments of insurance subsidiaries — — — 432 — 432 Investments in and advances to affiliates 24,380 — 14 164 (24,380 ) 178 Goodwill and other intangible assets — — 1,703 5,028 — 6,731 Other 943 — 19 195 — 1,157 $ 25,546 $ — $ 14,456 $ 17,122 $ (24,380 ) $ 32,744 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ 2 $ — $ 1,375 $ 793 $ — $ 2,170 Accrued salaries — — 712 521 — 1,233 Other accrued expenses 172 340 458 910 — 1,880 Long-term debt due within one year — 114 65 54 — 233 174 454 2,610 2,278 — 5,516 Long-term debt, net 984 28,756 226 289 — 30,255 Intercompany balances 31,432 (11,171 ) (23,435 ) 3,174 — — Professional liability risks — — — 1,115 — 1,115 Income taxes and other liabilities 555 548 417 384 — 1,904 33,145 18,587 (20,182 ) 7,240 — 38,790 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (7,599 ) (18,587 ) 34,510 8,457 (24,380 ) (7,599 ) Noncontrolling interests — — 128 1,425 — 1,553 (7,599 ) (18,587 ) 34,638 9,882 (24,380 ) (6,046 ) $ 25,546 $ — $ 14,456 $ 17,122 $ (24,380 ) $ 32,744 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2016 (Dollars in millions) HCA Holdings, Inc. Issuer HCA Inc. Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Condensed Consolidated Cash flows from operating activities: Net income (loss) $ 1,352 $ (847 ) $ 1,583 $ 784 $ (1,270 ) $ 1,602 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (23 ) 66 (1,140 ) (545 ) — (1,642 ) Provision for doubtful accounts — — 992 560 — 1,552 Depreciation and amortization — — 465 503 — 968 Income taxes 67 — — — — 67 Gains on sales of facilities — — — (5 ) — (5 ) Legal claim costs — 22 — — — 22 Amortization of debt issuance costs — 18 — — — 18 Share-based compensation — — 129 — — 129 Equity in earnings of affiliates (1,270 ) — — — 1,270 — Other 37 — (2 ) 2 — 37 Net cash provided by (used in) operating activities 163 (741 ) 2,027 1,299 — 2,748 Cash flows from investing activities: Purchase of property and equipment — — (482 ) (690 ) — (1,172 ) Acquisition of hospitals and health care entities — — (148 ) (282 ) — (430 ) Disposition of hospitals and health care entities — — 9 5 — 14 Change in investments — — 3 15 — 18 Other — — (1 ) 16 — 15 Net cash used in investing activities — — (619 ) (936 ) — (1,555 ) Cash flows from financing activities: Issuance of long-term debt — 3,000 — — — 3,000 Repayment of long-term debt — (2,005 ) (38 ) (22 ) — (2,065 ) Distributions to noncontrolling interests — — (29 ) (176 ) — (205 ) Payment of debt issuance costs — (24 ) — — — (24 ) Repurchases of common stock (1,858 ) — — — — (1,858 ) Changes in intercompany balances with affiliates, net 1,799 (230) (1,414 ) (155 ) — — Other (104 ) — — 13 — (91 ) Net cash (used in) provided by financing activities (163 ) 741 (1,481 ) (340 ) — (1,243 ) Change in cash and cash equivalents — — (73 ) 23 — (50 ) Cash and cash equivalents at beginning of period — — 155 586 — 741 Cash and cash equivalents at end of period $ — $ — $ 82 $ 609 $ — $ 691 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 ) — — Other 165 — — (18 ) — 147 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 |