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 ended March 31, 2018 and 2017, condensed consolidating balance sheets at March 31, 2018 and December 31, 2017 and condensed consolidating statements of cash flows for the quarters ended March 31, 2018 and 2017, segregating HCA Healthcare, Inc. issuer, HCA Inc. issuer, the subsidiary guarantors, the subsidiary non-guarantors and eliminations, follow: HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31, 2018 (Dollars in millions) HCA Healthcare, Inc. Issuer HCA Inc. Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Condensed Consolidated Revenues $ — $ — $ 6,776 $ 4,647 $ — $ 11,423 Salaries and benefits — — 3,069 2,220 — 5,289 Supplies — — 1,141 774 — 1,915 Other operating expenses 1 — 1,128 981 — 2,110 Equity in earnings of affiliates (1,090 ) — (2 ) (7 ) 1,090 (9 ) Depreciation and amortization — — 323 230 — 553 Interest expense 16 837 (367 ) (55 ) — 431 Gains on sales of facilities — — (395 ) (10 ) — (405 ) Management fees — — (158 ) 158 — — (1,073 ) 837 4,739 4,291 1,090 9,884 Income (loss) before income taxes 1,073 (837 ) 2,037 356 (1,090 ) 1,539 Provision (benefit) for income taxes (71 ) (195 ) 467 56 — 257 Net income (loss) 1,144 (642 ) 1,570 300 (1,090 ) 1,282 Net income attributable to noncontrolling interests — — 28 110 — 138 Net income (loss) attributable to HCA Healthcare, Inc. $ 1,144 $ (642 ) $ 1,542 $ 190 $ (1,090 ) $ 1,144 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 1,225 $ (615 ) $ 1,546 $ 240 $ (1,171 ) $ 1,225 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary (as adjusted) Subsidiary (as adjusted) Eliminations Condensed Revenues $ — $ — $ 6,336 $ 4,287 $ — $ 10,623 Salaries and benefits — — 2,904 1,997 — 4,901 Supplies — — 1,075 722 — 1,797 Other operating expenses 1 — 1,050 879 — 1,930 Equity in earnings of affiliates (608 ) — (2 ) (8 ) 608 (10 ) Depreciation and amortization — — 310 211 — 521 Interest expense 16 733 (290 ) (40 ) — 419 Losses (gains) on sales of facilities — — 1 (2 ) — (1 ) Management fees — — (160 ) 160 — — (591 ) 733 4,888 3,919 608 9,557 Income (loss) before income taxes 591 (733 ) 1,448 368 (608 ) 1,066 Provision (benefit) for income taxes (68 ) (270 ) 526 101 — 289 Net income (loss) 659 (463 ) 922 267 (608 ) 777 Net income attributable to noncontrolling interests — — 23 95 — 118 Net income (loss) attributable to HCA Healthcare, Inc. $ 659 $ (463 ) $ 899 $ 172 $ (608 ) $ 659 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 677 $ (456 ) $ 902 $ 180 $ (626 ) $ 677 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET MARCH 31, 2018 (Dollars in millions) HCA Healthcare, Inc. Issuer HCA Inc. Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Condensed Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 304 $ 782 $ — $ 1,086 Accounts receivable — — 3,747 2,585 — 6,332 Inventories — — 1,143 534 — 1,677 Other — — 728 568 — 1,296 — — 5,922 4,469 — 10,391 Property and equipment, net — — 11,632 6,492 — 18,124 Investments of insurance subsidiaries — — — 417 — 417 Investments in and advances to affiliates 30,752 — 31 200 (30,752 ) 231 Goodwill and other intangible assets — — 5,438 2,033 — 7,471 Other 437 85 30 113 — 665 $ 31,189 $ 85 $ 23,053 $ 13,724 $ (30,752 ) $ 37,299 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ — $ — $ 1,776 $ 762 $ — $ 2,538 Accrued salaries — — 779 459 — 1,238 Other accrued expenses 190 281 545 989 — 2,005 Long-term debt due within one year — 1,597 63 37 — 1,697 190 1,878 3,163 2,247 — 7,478 Long-term debt, net 995 30,125 293 181 — 31,594 Intercompany balances 35,687 (9,253 ) (25,158 ) (1,276 ) — — Professional liability risks — — — 1,244 — 1,244 Income taxes and other liabilities 561 — 379 477 — 1,417 37,433 22,750 (21,323) 2,873 — 41,733 Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. (6,244 ) (22,665 ) 44,301 9,116 (30,752 ) (6,244 ) Noncontrolling interests — — 75 1,735 — 1,810 (6,244 ) (22,665 ) 44,376 10,851 (30,752 ) (4,434 ) $ 31,189 $ 85 $ 23,053 $ 13,724 $ (30,752 ) $ 37,299 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ 1 $ — $ 112 $ 619 $ — $ 732 Accounts receivable — — 3,693 2,808 — 6,501 Inventories — — 1,030 543 — 1,573 Other — — 663 508 — 1,171 1 — 5,498 4,478 — 9,977 Property and equipment, net — — 11,110 6,785 — 17,895 Investments of insurance subsidiaries — — — 418 — 418 Investments in and advances to affiliates 29,581 — 22 177 (29,581 ) 199 Goodwill and other intangible assets — — 4,893 2,501 — 7,394 Other 510 50 47 103 — 710 $ 30,092 $ 50 $ 21,570 $ 14,462 $ (29,581 ) $ 36,593 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ — $ — $ 1,793 $ 813 $ — $ 2,606 Accrued salaries — — 862 507 — 1,369 Other accrued expenses 29 378 536 1,040 — 1,983 Long-term debt due within one year — 97 64 39 — 200 29 475 3,255 2,399 — 6,158 Long-term debt, net 995 31,367 307 189 — 32,858 Intercompany balances 35,322 (9,742 ) (25,228 ) (352 ) — — Professional liability risks — — — 1,198 — 1,198 Income taxes and other liabilities 552 — 357 465 — 1,374 36,898 22,100 (21,309 ) 3,899 — 41,588 Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. (6,806 ) (22,050 ) 42,755 8,876 (29,581 ) (6,806 ) Noncontrolling interests — — 124 1,687 — 1,811 (6,806 ) (22,050 ) 42,879 10,563 (29,581 ) (4,995 ) $ 30,092 $ 50 $ 21,570 $ 14,462 $ (29,581 ) $ 36,593 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED MARCH 31, 2018 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 1,144 $ (642 ) $ 1,570 $ 300 $ (1,090 ) $ 1,282 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (15 ) (99 ) (347 ) (7 ) — (468 ) Depreciation and amortization — — 323 230 — 553 Income taxes 246 — — — — 246 Gains on sales of facilities — — (395 ) (10 ) — (405 ) Amortization of debt issuance costs — 8 — — — 8 Share-based compensation — — 60 — — 60 Equity in earnings of affiliates (1,090 ) — — — 1,090 — Other 21 — — 3 — 24 Net cash provided by (used in) operating activities 306 (733 ) 1,211 516 — 1,300 Cash flows from investing activities: Purchase of property and equipment — — (413 ) (281 ) — (694 ) Acquisition of hospitals and health care entities — — (373 ) (6 ) — (379 ) Disposition of hospitals and health care entities — — 767 — — 767 Change in investments — — 13 (2 ) — 11 Other — — (48 ) 8 — (40 ) Net cash used in investing activities — — (54 ) (281 ) — (335 ) Cash flows from financing activities: Net change in revolving credit facilities — 270 — — — 270 Repayment of long-term debt — (18 ) (22 ) (10 ) — (50 ) Distributions to noncontrolling interests — — (24 ) (68 ) — (92 ) Payment of debt issuance costs — (2) — — — (2 ) Payment of cash dividends (123 ) — — — — (123 ) Repurchases of common stock (423 ) — — — — (423 ) Changes in intercompany balances with affiliates, net 434 483 (919 ) 2 — — Other (195 ) — — 4 — (191 ) Net cash (used in) provided by financing activities (307 ) 733 (965 ) (72 ) — (611 ) Change in cash and cash equivalents (1 ) — 192 163 — 354 Cash and cash equivalents at beginning of period 1 — 112 619 — 732 Cash and cash equivalents at end of period $ — $ — $ 304 $ 782 $ — $ 1,086 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED MARCH 31, 2017 (Dollars in millions) HCA HCA Inc. Subsidiary (as adjusted) Subsidiary (as adjusted) Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 659 $ (463 ) $ 922 $ 267 $ (608 ) $ 777 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (15 ) (295 ) (199 ) 89 — (420 ) Depreciation and amortization — — 310 211 — 521 Income taxes 292 — — — — 292 Losses (gains) on sales of facilities — — 1 (2 ) — (1 ) Amortization of debt issuance costs — 8 — — — 8 Share-based compensation — — 73 — — 73 Equity in earnings of affiliates (608 ) — — — 608 — Other 19 — 1 10 — 30 Net cash provided by (used in) operating activities 347 (750 ) 1,108 575 — 1,280 Cash flows from investing activities: Purchase of property and equipment — — (312 ) (259 ) — (571 ) Acquisition of hospitals and health care entities — — (5 ) (85 ) — (90 ) Disposition of hospitals and health care entities — — 4 — — 4 Change in investments — — 2 (21 ) — (19 ) Other — — 1 6 — 7 Net cash used in investing activities — — (310 ) (359 ) — (669 ) Cash flows from financing activities: Net change in revolving credit facilities — 160 — — — 160 Repayment of long-term debt — (18 ) (13 ) (12 ) — (43 ) Distributions to noncontrolling interests — — (57 ) (88 ) — (145 ) Payment of debt issuance costs — (2 ) — — — (2 ) Repurchases of common stock (424 ) — — — — (424 ) Changes in intercompany balances with affiliates, net 134 610 (656 ) (88 ) — — Other (57 ) — — 7 — (50 ) Net cash (used in) provided by financing activities (347 ) 750 (726 ) (181 ) — (504 ) Change in cash and cash equivalents — — 72 35 — 107 Cash and cash equivalents at beginning of period — — 113 533 — 646 Cash and cash equivalents at end of period $ — $ — $ 185 $ 568 $ — $ 753 The above supplemental condensed consolidating financial information for the quarter ended March 31, 2017 has been adjusted to properly record the impact of certain subsidiaries that were non-guarantors becoming guarantors, primarily related to the Company acquiring previous noncontrolling interests of non-guarantor subsidiaries that then became guarantor subsidiaries. The impact of these adjustments was immaterial as they had no impact to our consolidated income statements, balance sheets or statements of cash flows, had no impact on any liquidity measures of the Company, nor did they impact any financial ratios based on our consolidated balance sheets or income statements. There was also no impact to our loan covenant reporting or compliance. The impact of the adjustments was limited to reclassifications between the Subsidiary Guarantors and Subsidiary Non-Guarantors columns of the condensed consolidating financial statements. The application of these adjustments to the consolidating information for the quarter ended March 31, 2017 is summarized as follows (dollars in millions): As Adjustment As Adjusted Quarter ended March 31, 2017 Net income (loss) attributable to HCA Healthcare, Inc.: HCA Healthcare, Inc. Issuer $ 659 $ — $ 659 HCA Inc. Issuer (463 ) — (463 ) Subsidiary Guarantors 818 81 899 Subsidiary Non-Guarantors 253 (81 ) 172 Eliminations (608 ) — (608 ) Condensed Consolidated $ 659 $ — $ 659 As Adjustment As Adjusted Quarter ended March 31, 2017 Net cash provided (used in) operating activities: HCA Healthcare, Inc. Issuer $ 347 $ — $ 347 HCA Inc. Issuer (750 ) — (750 ) Subsidiary Guarantors 983 125 1,108 Subsidiary Non-Guarantors 700 (125 ) 575 Eliminations — — — Condensed Consolidated $ 1,280 $ — $ 1,280 |