Supplemental Condensed Consolidating Financial Information and Other Collateral-Related Information | NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION HCA Inc. is a 100% owned direct subsidiary of HCA Holdings, Inc. On November 23, 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. On December 6, 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. The senior secured credit facilities and senior secured notes described in Note 9 are jointly and severally, and 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 ABL credit facility). Our condensed consolidating balance sheets at December 31, 2016 and 2015 and condensed consolidating statements of comprehensive income and cash flows for each of the three years in the period ended December 31, 2016, segregating HCA Holdings, Inc. issuer, HCA Inc. issuer, the subsidiary guarantors, the subsidiary non-guarantors HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 22,906 $ 21,841 $ — $ 44,747 Provision for doubtful accounts — — 1,885 1,372 — 3,257 Revenues — — 21,021 20,469 — 41,490 Salaries and benefits — — 9,435 9,462 — 18,897 Supplies — — 3,607 3,326 — 6,933 Other operating expenses 6 — 3,474 4,028 — 7,508 Electronic health record incentive income — — (6 ) (6 ) — (12 ) Equity in earnings of affiliates (2,738 ) — (6 ) (48 ) 2,738 (54 ) Depreciation and amortization — — 950 1,016 — 1,966 Interest expense 64 2,756 (891 ) (222 ) — 1,707 Losses (gains) on sales of facilities — — 3 (26 ) — (23 ) Losses on retirement of debt — 4 — — — 4 Legal claim benefits — (246 ) — — — (246 ) Management fees — — (763 ) 763 — — (2,668 ) 2,514 15,803 18,293 2,738 36,680 Income (loss) before income taxes 2,668 (2,514 ) 5,218 2,176 (2,738 ) 4,810 Provision (benefit) for income taxes (222 ) (928 ) 1,891 637 — 1,378 Net income (loss) 2,890 (1,586 ) 3,327 1,539 (2,738 ) 3,432 Net income attributable to noncontrolling interests — — 92 450 — 542 Net income (loss) attributable to HCA Holdings, Inc. $ 2,890 $ (1,586 ) $ 3,235 $ 1,089 $ (2,738 ) $ 2,890 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 2,817 $ (1,505 ) $ 3,224 $ 946 $ (2,665 ) $ 2,817 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 22,272 $ 21,319 $ — $ 43,591 Provision for doubtful accounts — — 2,099 1,814 — 3,913 Revenues — — 20,173 19,505 — 39,678 Salaries and benefits — — 9,131 8,984 — 18,115 Supplies — — 3,464 3,174 — 6,638 Other operating expenses (2 ) — 3,324 3,781 — 7,103 Electronic health record incentive income — — (31 ) (16 ) — (47 ) Equity in earnings of affiliates (2,352 ) — (6 ) (40 ) 2,352 (46 ) Depreciation and amortization — — 915 989 — 1,904 Interest expense 115 2,445 (766 ) (129 ) — 1,665 Losses (gains) on sales of facilities — — (2 ) 7 — 5 Losses on retirement of debt 122 13 — — — 135 Legal claim costs 120 129 — — — 249 Management fees — — (676 ) 676 — — (1,997 ) 2,587 15,353 17,426 2,352 35,721 Income (loss) before income taxes 1,997 (2,587 ) 4,820 2,079 (2,352 ) 3,957 Provision (benefit) for income taxes (132 ) (962 ) 1,758 597 — 1,261 Net income (loss) 2,129 (1,625 ) 3,062 1,482 (2,352 ) 2,696 Net income attributable to noncontrolling interests — — 92 475 — 567 Net income (loss) attributable to HCA Holdings, Inc. $ 2,129 $ (1,625 ) $ 2,970 $ 1,007 $ (2,352 ) $ 2,129 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 2,187 $ (1,568 ) $ 3,009 $ 969 $ (2,410 ) $ 2,187 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 20,533 $ 19,554 $ — $ 40,087 Provision for doubtful accounts — — 1,777 1,392 — 3,169 Revenues — — 18,756 18,162 — 36,918 Salaries and benefits — — 8,574 8,067 — 16,641 Supplies — — 3,280 2,982 — 6,262 Other operating expenses 20 — 3,138 3,597 — 6,755 Electronic health record incentive income — — (85 ) (40 ) — (125 ) Equity in earnings of affiliates (2,003 ) — (7 ) (36 ) 2,003 (43 ) Depreciation and amortization — — 888 932 — 1,820 Interest expense 184 2,175 (559 ) (57 ) — 1,743 Gains on sales of facilities — — (25 ) (4 ) — (29 ) Losses on retirement of debt — 335 — — — 335 Legal claim costs — 78 — — — 78 Management fees — — (662 ) 662 — — (1,799 ) 2,588 14,542 16,103 2,003 33,437 Income (loss) before income taxes 1,799 (2,588 ) 4,214 2,059 (2,003 ) 3,481 Provision (benefit) for income taxes (76 ) (961 ) 1,533 612 — 1,108 Net income (loss) 1,875 (1,627 ) 2,681 1,447 (2,003 ) 2,373 Net income attributable to noncontrolling interests — — 87 411 — 498 Net income (loss) attributable to HCA Holdings, Inc. $ 1,875 $ (1,627 ) $ 2,594 $ 1,036 $ (2,003 ) $ 1,875 Comprehensive income (loss) attributable to HCA Holdings, Inc. $ 1,809 $ (1,566 ) $ 2,508 $ 995 $ (1,937 ) $ 1,809 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 110 $ 536 $ — $ 646 Accounts receivable, net — — 3,028 2,798 — 5,826 Inventories — — 890 613 — 1,503 Other — — 445 666 — 1,111 — — 4,473 4,613 — 9,086 Property and equipment, net — — 8,463 7,889 — 16,352 Investments of insurance subsidiaries — — — 336 — 336 Investments in and advances to affiliates 27,045 — 16 190 (27,045 ) 206 Goodwill and other intangible assets — — 1,728 4,976 — 6,704 Other 877 — 34 163 — 1,074 $ 27,922 $ — $ 14,714 $ 18,167 $ (27,045 ) $ 33,758 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) Current liabilities: Accounts payable $ — $ — $ 1,439 $ 879 $ — $ 2,318 Accrued salaries — — 704 561 — 1,265 Other accrued expenses 29 572 464 970 — 2,035 Long-term debt due within one year — 97 60 59 — 216 29 669 2,667 2,469 — 5,834 Long-term debt, net 993 29,693 199 275 — 31,160 Intercompany balances 33,784 (10,277 ) (26,447 ) 2,940 — — Professional liability risks — — — 1,148 — 1,148 Income taxes and other liabilities 418 12 387 432 — 1,249 35,224 20,097 (23,194 ) 7,264 — 39,391 Stockholders’ (deficit) equity attributable to HCA Holdings, Inc. (7,302 ) (20,097 ) 37,752 9,390 (27,045 ) (7,302 ) Noncontrolling interests — — 156 1,513 — 1,669 (7,302 ) (20,097 ) 37,908 10,903 (27,045 ) (5,633 ) $ 27,922 $ — $ 14,714 $ 18,167 $ (27,045 ) $ 33,758 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) 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 YEAR ENDED DECEMBER 31, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 2,890 $ (1,586 ) $ 3,327 $ 1,539 $ (2,738 ) $ 3,432 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Change in operating assets and liabilities (25 ) 39 (1,991 ) (1,238 ) — (3,215 ) Provision for doubtful accounts — — 1,885 1,372 — 3,257 Depreciation and amortization — — 950 1,016 — 1,966 Income taxes 123 — — — — 123 Losses (gains) on sales of facilities — — 3 (26 ) — (23 ) Losses on retirement of debt — 4 — — — 4 Legal claim benefits — (246 ) — — — (246 ) Amortization of debt issuance costs 1 33 — — — 34 Share-based compensation — — 251 — — 251 Equity in earnings of affiliates (2,738 ) — — — 2,738 — Other 71 — — (1 ) — 70 Net cash provided by (used in) operating activities 322 (1,756 ) 4,425 2,662 — 5,653 Cash flows from investing activities: Purchase of property and equipment — — (1,120 ) (1,640 ) — (2,760 ) Acquisition of hospitals and health care entities — — (195 ) (381 ) — (576 ) Disposal of hospitals and health care entities — — 10 16 — 26 Change in investments — — (15 ) 79 — 64 Other — — — 6 — 6 Net cash used in investing activities — — (1,320 ) (1,920 ) — (3,240 ) Cash flows from financing activities: Issuance of long-term debt — 5,400 — — — 5,400 Net change in revolving bank credit facilities — (110 ) — — — (110 ) Repayment of long-term debt — (4,358 ) (72 ) (45 ) — (4,475 ) Distributions to noncontrolling interests — — (64 ) (370 ) — (434 ) Payment of debt issuance costs — (40 ) — — — (40 ) Repurchases of common stock (2,751 ) — — — — (2,751 ) Changes in intercompany balances with affiliates, net 2,532 864 (3,014 ) (382 ) — — Other (103 ) — — 5 — (98 ) Net cash (used in) provided by financing activities (322 ) 1,756 (3,150 ) (792 ) — (2,508 ) Change in cash and cash equivalents — — (45 ) (50 ) — (95 ) Cash and cash equivalents at beginning of period — — 155 586 — 741 Cash and cash equivalents at end of period $ — $ — $ 110 $ 536 $ — $ 646 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 2,129 $ (1,625 ) $ 3,062 $ 1,482 $ (2,352 ) $ 2,696 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Change in operating assets and liabilities (12 ) 44 (2,537 ) (1,731 ) — (4,236 ) Provision for doubtful accounts — — 2,099 1,814 — 3,913 Depreciation and amortization — — 915 989 — 1,904 Income taxes (160 ) — — — — (160 ) Losses (gains) on sales of facilities — — (2 ) 7 — 5 Losses on retirement of debt 122 13 — — — 135 Legal claim costs 20 129 — — — 149 Amortization of debt issuance costs 3 32 — — — 35 Share-based compensation — — 239 — — 239 Equity in earnings of affiliates (2,352 ) — — — 2,352 — Other 66 3 (4 ) (11 ) — 54 Net cash provided by (used in) operating activities (184 ) (1,404 ) 3,772 2,550 — 4,734 Cash flows from investing activities: Purchase of property and equipment — — (1,248 ) (1,127 ) — (2,375 ) Acquisition of hospitals and health care entities — — (51 ) (300 ) — (351 ) Disposal of hospitals and health care entities — — 48 25 — 73 Change in investments — — 9 54 — 63 Other — — (6 ) 13 — 7 Net cash used in investing activities — — (1,248 ) (1,335 ) — (2,583 ) Cash flows from financing activities: Issuance of long-term debt — 5,548 — — — 5,548 Net change in revolving bank credit facilities — 150 — — — 150 Repayment of long-term debt (1,632 ) (3,189 ) (59 ) (40 ) — (4,920 ) Distributions to noncontrolling interests — — (85 ) (410 ) — (495 ) Payment of debt issuance costs — (50 ) — — — (50 ) Repurchases of common stock (2,397 ) — — — — (2,397 ) Changes in intercompany balances with affiliates, net 4,006 (1,055 ) (2,312 ) (639 ) — — Other 207 — — (19 ) — 188 Net cash (used in) provided by financing activities 184 1,404 (2,456 ) (1,108 ) — (1,976 ) Change in cash and cash equivalents — — 68 107 — 175 Cash and cash equivalents at beginning of period — — 87 479 — 566 Cash and cash equivalents at end of period $ — $ — $ 155 $ 586 $ — $ 741 HCA HOLDINGS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,875 $ (1,627 ) $ 2,681 $ 1,447 $ (2,003 ) $ 2,373 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Change in operating assets and liabilities (11 ) (12 ) (1,972 ) (1,438 ) — (3,433 ) Provision for doubtful accounts — — 1,777 1,392 — 3,169 Depreciation and amortization — — 888 932 — 1,820 Income taxes (83 ) — — — — (83 ) Gains on sales of facilities — — (25 ) (4 ) — (29 ) Losses on retirement of debt — 335 — — — 335 Legal claim costs — 78 — — — 78 Amortization of debt issuance costs 3 39 — — — 42 Share-based compensation — — 163 — — 163 Equity in earnings of affiliates (2,003 ) — — — 2,003 — Other — 18 — (5 ) — 13 Net cash (used in) provided by operating activities (219 ) (1,169 ) 3,512 2,324 — 4,448 Cash flows from investing activities: Purchase of property and equipment — — (1,189 ) (987 ) — (2,176 ) Acquisition of hospitals and health care entities — — (34 ) (732 ) — (766 ) Disposal of hospitals and health care entities — — 41 10 — 51 Change in investments — — 32 (69 ) — (37 ) Other — — — 10 — 10 Net cash used in investing activities — — (1,150 ) (1,768 ) — (2,918 ) Cash flows from financing activities: Issuance of long-term debt — 5,500 — 2 — 5,502 Net change in revolving bank credit — 440 — — — 440 Repayment of long-term debt — (5,086 ) (50 ) (28 ) — (5,164 ) Distributions to noncontrolling interests — — (65 ) (377 ) — (442 ) Payment of debt issuance costs — (73 ) — — — (73 ) Repurchases of common stock (1,750 ) — — — — (1,750 ) Changes in intercompany balances with affiliates, net 1,841 388 (2,272 ) 43 — — Other 128 — — (19 ) — 109 Net cash provided by (used in) financing activities 219 1,169 (2,387 ) (379 ) — (1,378 ) Change in cash and cash equivalents — — (25 ) 177 — 152 Cash and cash equivalents at beginning of period — — 112 302 — 414 Cash and cash equivalents at end of period $ — $ — $ 87 $ 479 $ — $ 566 Healthtrust, Inc. — The Hospital Company (“Healthtrust”) is the first-tier subsidiary of HCA Inc. The common stock of Healthtrust has been pledged as collateral for the senior secured credit facilities and senior secured notes described in Note 9. Rule 3-16 S-X Reconciliations of the HCA Holdings, Inc. Consolidated Statements of Stockholders’ Deficit presentation to the Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit presentation for the years ended December 31, 2016, 2015 and 2014 are as follows (dollars in millions): 2016 2015 2014 Presentation in HCA Holdings, Inc. Consolidated Statements of Stockholders’ Deficit: Share-based benefit plans $ 233 $ 523 $ 321 Other (2 ) (18 ) (6 ) Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit: Distributions from HCA Holdings, Inc., net of contributions to HCA Holdings, Inc. $ 231 $ 505 $ 315 Due to the consolidated financial statements of Healthtrust being substantially identical to the consolidated financial statements of HCA, except for the items presented in the table above, the separate consolidated financial statements of Healthtrust are not presented. |