Supplemental Condensed Consolidating Financial Information | NOTE 12 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION During December 2012, HCA Healthcare, 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 Healthcare, 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 Healthcare, Inc.). The senior secured notes and senior unsecured notes issued by HCA Inc. are fully and unconditionally guaranteed by HCA Healthcare, 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, 2017 and 2016, condensed consolidating balance sheets at September 30, 2017 and December 31, 2016 and condensed consolidating statements of cash flows for the nine months ended September 30, 2017 and 2016, segregating HCA Healthcare, Inc. issuer, HCA Inc. issuer, the subsidiary guarantors, the subsidiary non-guarantors HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,897 $ 6,070 $ — $ 11,967 Provision for doubtful accounts — — 636 635 — 1,271 Revenues — — 5,261 5,435 — 10,696 Salaries and benefits — — 2,427 2,654 — 5,081 Supplies — — 889 888 — 1,777 Other operating expenses — — 963 1,112 — 2,075 Equity in earnings of affiliates (436 ) — (1 ) (12 ) 436 (13 ) Depreciation and amortization — — 249 290 — 539 Interest expense 16 792 (318 ) (63 ) — 427 Gains on sales of facilities — — (4 ) (3 ) — (7 ) Losses on retirement of debt — 39 — — — 39 Management fees — — (215 ) 215 — — (420 ) 831 3,990 5,081 436 9,918 Income (loss) before income taxes 420 (831 ) 1,271 354 (436 ) 778 Provision (benefit) for income taxes (6 ) (307 ) 460 101 — 248 Net income (loss) 426 (524 ) 811 253 (436 ) 530 Net income attributable to noncontrolling interests — — 24 80 — 104 Net income (loss) attributable to HCA Healthcare, Inc. $ 426 $ (524 ) $ 787 $ 173 $ (436 ) $ 426 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 451 $ (522 ) $ 790 $ 193 $ (461 ) $ 451 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 5,591 $ 5,519 $ — $ 11,110 Provision for doubtful accounts — — 391 449 — 840 Revenues — — 5,200 5,070 — 10,270 Salaries and benefits — — 2,373 2,367 — 4,740 Supplies — — 888 811 — 1,699 Other operating expenses 1 — 904 991 — 1,896 Equity in earnings of affiliates (573 ) — (1 ) (21 ) 573 (22 ) Depreciation and amortization — — 242 253 — 495 Interest expense 16 711 (235 ) (60 ) — 432 Gains on sales of facilities — — — (3 ) — (3 ) Losses on retirement of debt — 4 — — — 4 Legal claim costs — 11 — — — 11 Management fees — — (206 ) 206 — — (556 ) 726 3,965 4,544 573 9,252 Income (loss) before income taxes 556 (726 ) 1,235 526 (573 ) 1,018 Provision (benefit) for income taxes (62 ) (268 ) 447 156 — 273 Net income (loss) 618 (458 ) 788 370 (573 ) 745 Net income attributable to noncontrolling interests — — 24 103 — 127 Net income (loss) attributable to HCA Healthcare, Inc. $ 618 $ (458 ) $ 764 $ 267 $ (573 ) $ 618 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 621 $ (432 ) $ 766 $ 242 $ (576 ) $ 621 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 17,799 17,357 $ — $ 35,156 Provision for doubtful accounts — — 1,648 1,456 — 3,104 Revenues — — 16,151 15,901 — 32,052 Salaries and benefits — — 7,330 7,548 — 14,878 Supplies — — 2,771 2,598 — 5,369 Other operating expenses 5 — 2,841 3,124 — 5,970 Equity in earnings of affiliates (1,702 ) — (3 ) (33 ) 1,702 (36 ) Depreciation and amortization — — 748 833 — 1,581 Interest expense 48 2,280 (878 ) (193 ) — 1,257 Gains on sales of facilities — — (5 ) (5 ) — (10 ) Losses on retirement of debt — 39 — — — 39 Management fees — — (637 ) 637 — — (1,649 ) 2,319 12,167 14,509 1,702 29,048 Income (loss) before income taxes 1,649 (2,319 ) 3,984 1,392 (1,702 ) 3,004 Provision (benefit) for income taxes (93 ) (856 ) 1,443 408 — 902 Net income (loss) 1,742 (1,463 ) 2,541 984 (1,702 ) 2,102 Net income attributable to noncontrolling interests — — 74 286 — 360 Net income (loss) attributable to HCA Healthcare, Inc. $ 1,742 $ (1,463 ) $ 2,467 $ 698 $ (1,702 ) $ 1,742 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 1,812 $ (1,458 ) $ 2,476 $ 754 $ (1,772 ) $ 1,812 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues before provision for doubtful accounts $ — $ — $ 16,957 $ 16,284 $ — $ 33,241 Provision for doubtful accounts — — 1,383 1,009 — 2,392 Revenues — — 15,574 15,275 — 30,849 Salaries and benefits — — 7,074 7,059 — 14,133 Supplies — — 2,672 2,459 — 5,131 Other operating expenses 5 — 2,654 2,958 — 5,617 Equity in earnings of affiliates (1,843 ) — (4 ) (40 ) 1,843 (44 ) Depreciation and amortization — — 707 756 — 1,463 Interest expense 48 2,031 (646 ) (158 ) — 1,275 Gains on sales of facilities — — — (8 ) — (8 ) Losses on retirement of debt — 4 — — — 4 Legal claim costs — 33 — — — 33 Management fees — — (601 ) 601 — — (1,790 ) 2,068 11,856 13,627 1,843 27,604 Income (loss) before income taxes 1,790 (2,068 ) 3,718 1,648 (1,843 ) 3,245 Provision (benefit) for income taxes (180 ) (763 ) 1,347 494 — 898 Net income (loss) 1,970 (1,305 ) 2,371 1,154 (1,843 ) 2,347 Net income attributable to noncontrolling interests — — 67 310 — 377 Net income (loss) attributable to HCA Healthcare, Inc. $ 1,970 $ (1,305 ) $ 2,304 $ 844 $ (1,843 ) $ 1,970 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 1,894 $ (1,288 ) $ 2,312 $ 743 $ (1,767 ) $ 1,894 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ 1 $ — $ 117 $ 600 $ — $ 718 Accounts receivable, net — — 3,003 2,977 — 5,980 Inventories — — 899 647 — 1,546 Other 33 — 438 733 — 1,204 34 — 4,457 4,957 — 9,448 Property and equipment, net — — 8,670 8,659 — 17,329 Investments of insurance subsidiaries — — — 368 — 368 Investments in and advances to affiliates 28,817 — 15 186 (28,817 ) 201 Goodwill and other intangible assets — — 1,728 5,629 — 7,357 Other 783 29 35 181 — 1,028 $ 29,634 $ 29 $ 14,905 $ 19,980 $ (28,817 ) $ 35,731 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ — $ — $ 1,288 $ 1,026 $ — $ 2,314 Accrued salaries — — 704 608 — 1,312 Other accrued expenses 8 279 475 1,021 — 1,783 Long-term debt due within one year — 97 54 51 — 202 8 376 2,521 2,706 — 5,611 Long-term debt, net 994 31,275 192 290 — 32,751 Intercompany balances 34,983 (10,069 ) (28,514 ) 3,600 — — Professional liability risks — — — 1,179 — 1,179 Income taxes and other liabilities 429 2 353 472 — 1,256 36,414 21,584 (25,448) 8,247 — 40,797 Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. (6,780 ) (21,555 ) 40,228 10,144 (28,817 ) (6,780 ) Noncontrolling interests — — 125 1,589 — 1,714 (6,780 ) (21,555 ) 40,353 11,733 (28,817 ) (5,066 ) $ 29,634 $ 29 $ 14,905 $ 19,980 $ (28,817 ) $ 35,731 HCA HEALTHCARE, 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) EQUITY 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 Healthcare, 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 HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,742 $ (1,463 ) $ 2,541 $ 984 $ (1,702 ) $ 2,102 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (15 ) (293 ) (1,785 ) (1,300 ) — (3,393 ) Provision for doubtful accounts — — 1,648 1,456 — 3,104 Depreciation and amortization — — 748 833 — 1,581 Income taxes (9 ) — — — — (9 ) Gains on sales of facilities — — (5 ) (5 ) — (10 ) Losses on retirement of debt — 39 — — — 39 Amortization of debt issuance costs — 23 — — — 23 Share-based compensation — — 195 — — 195 Equity in earnings of affiliates (1,702 ) — — — 1,702 — Other 58 — — 2 — 60 Net cash provided by (used in) operating activities 74 (1,694 ) 3,342 1,970 — 3,692 Cash flows from investing activities: Purchase of property and equipment — — (912 ) (1,121 ) — (2,033 ) Acquisition of hospitals and health care entities — — (9 ) (1,133 ) — (1,142 ) Disposition of hospitals and health care entities — — 12 12 — 24 Change in investments — — — (15 ) — (15 ) Other — — (2 ) (4 ) — (6 ) Net cash used in investing activities — — (911 ) (2,261 ) — (3,172 ) Cash flows from financing activities: Issuance of long-term debt — 1,500 — 2 — 1,502 Net change in revolving credit facilities — 650 — — — 650 Repayment of long-term debt — (604 ) (52 ) (44 ) — (700 ) Distributions to noncontrolling interests — — (105 ) (258 ) — (363 ) Payment of debt issuance costs — (25 ) — — — (25 ) Repurchases of common stock (1,475 ) — — — — (1,475 ) Changes in intercompany balances with affiliates, net 1,468 173 (2,267 ) 626 — — Other (66 ) — — 29 — (37 ) Net cash (used in) provided by financing activities (73 ) 1,694 (2,424 ) 355 — (448 ) Change in cash and cash equivalents 1 — 7 64 — 72 Cash and cash equivalents at beginning of period — — 110 536 — 646 Cash and cash equivalents at end of period $ 1 $ — $ 117 $ 600 $ — $ 718 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,970 $ (1,305 ) $ 2,371 $ 1,154 $ (1,843 ) $ 2,347 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (40 ) (49 ) (1,628 ) (829 ) — (2,546 ) Provision for doubtful accounts — — 1,383 1,009 — 2,392 Depreciation and amortization — — 707 756 — 1,463 Income taxes 8 — — — — 8 Gains on sales of facilities — — — (8 ) — (8 ) Losses on retirement of debt — 4 — — — 4 Legal claim costs — 33 — — — 33 Amortization of debt issuance costs — 26 — — — 26 Share-based compensation — — 196 — — 196 Equity in earnings of affiliates (1,843 ) — — — 1,843 — Other 53 — (3 ) (11 ) — 39 Net cash provided by (used in) operating activities 148 (1,291 ) 3,026 2,071 — 3,954 Cash flows from investing activities: Purchase of property and equipment — — (892 ) (992 ) — (1,884 ) Acquisition of hospitals and health care entities — — (164 ) (304 ) — (468 ) Disposition of hospitals and health care entities — — 10 13 — 23 Change in investments — — (2 ) 80 — 78 Other — — — 17 — 17 Net cash used in investing activities — — (1,048 ) (1,186 ) — (2,234 ) Cash flows from financing activities: Issuance of long-term debt — 5,400 — — — 5,400 Net change in revolving credit facilities — (70 ) — — — (70 ) Repayment of long-term debt — (4,334 ) (54 ) (36 ) — (4,424 ) Distributions to noncontrolling interests — — (46 ) (296 ) — (342 ) Payment of debt issuance costs — (40 ) — — — (40 ) Repurchases of common stock (2,213 ) — — — — (2,213 ) Changes in intercompany balances with affiliates, net 2,171 335 (1,895 ) (611 ) — — Other (105 ) — — 10 — (95 ) Net cash (used in) provided by financing activities (147 ) 1,291 (1,995 ) (933 ) — (1,784 ) Change in cash and cash equivalents 1 — (17 ) (48 ) — (64 ) Cash and cash equivalents at beginning of period — — 155 586 — 741 Cash and cash equivalents at end of period $ 1 $ — $ 138 $ 538 $ — $ 677 |