Supplemental Condensed Consolidating Financial Information And Other Collateral-related Information | NOTE 13 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION HCA Healthcare, Inc. has $1.000 billion aggregate principal amount of 6.250% senior unsecured notes due 2021 outstanding. 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, 2019 and 2018, condensed consolidating balance sheets at September 30, 2019 and December 31, 2018 and condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018, 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, 2019 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues $ — $ — $ 7,196 $ 5,498 $ — $ 12,694 Salaries and benefits — — 3,272 2,699 — 5,971 Supplies — — 1,174 916 — 2,090 Other operating expenses 4 — 1,178 1,170 — 2,352 Equity in earnings of affiliates (656 ) — (2 ) (2 ) 656 (4 ) Depreciation and amortization — — 362 285 — 647 Interest expense (income) 16 1,014 (505 ) (77 ) — 448 Losses (gains) on sales of facilities — — (2 ) 2 — — Losses on retirement of debt — 211 — — — 211 Management fees — — (197 ) 197 — — (636 ) 1,225 5,280 5,190 656 11,715 Income (loss) before income taxes 636 (1,225 ) 1,916 308 (656 ) 979 Provision (benefit) for income taxes 24 (279 ) 429 41 — 215 Net income (loss) 612 (946 ) 1,487 267 (656 ) 764 Net income attributable to noncontrolling interests — — 23 129 — 152 Net income (loss) attributable to HCA Healthcare, $ 612 $ (946 ) $ 1,464 $ 138 $ (656 ) $ 612 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 582 $ (954 ) $ 1,467 $ 113 $ (626 ) $ 582 HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues $ — $ — $ 6,747 $ 4,704 $ — $ 11,451 Salaries and benefits — — 3,090 2,287 — 5,377 Supplies — — 1,115 775 — 1,890 Other operating expenses 2 — 1,137 958 — 2,097 Equity in earnings of affiliates (728 ) — (2 ) (7 ) 728 (9 ) Depreciation and amortization — — 340 242 — 582 Interest expense (income) 16 913 (423 ) (64 ) — 442 Losses (gains) on sales of facilities — — (6 ) — — (6 ) Losses on retirement of debt — 9 — — — 9 Management fees — — (158 ) 158 — — (710 ) 922 5,093 4,349 728 10,382 Income (loss) before income taxes 710 (922 ) 1,654 355 (728 ) 1,069 Provision (benefit) for income taxes (49 ) (214 ) 379 57 — 173 Net income (loss) 759 (708 ) 1,275 298 (728 ) 896 Net income attributable to noncontrolling interests — — 22 115 — 137 Net income (loss) attributable to HCA Healthcare, Inc. $ 759 $ (708 ) $ 1,253 $ 183 $ (728 ) $ 759 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 754 $ (703 ) $ 1,258 $ 168 $ (723 ) $ 754 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues $ — $ — $ 21,549 $ 16,264 $ — $ 37,813 Salaries and benefits — — 9,608 7,847 — 17,455 Supplies — — 3,540 2,709 — 6,249 Other operating expenses 7 — 3,481 3,525 — 7,013 Equity in earnings of affiliates (2,504 ) — (5 ) (18 ) 2,504 (23 ) Depreciation and amortization — — 1,071 831 — 1,902 Interest expense (income) 48 3,019 (1,489 ) (192 ) — 1,386 Gains on sales of facilities — — (9 ) (8 ) — (17 ) Losses on retirement of debt — 211 — — — 211 Management fees — — (573 ) 573 — — (2,449 ) 3,230 15,624 15,267 2,504 34,176 Income (loss) before income taxes 2,449 (3,230 ) 5,925 997 (2,504 ) 3,637 Provision (benefit) for income taxes 15 (745 ) 1,351 144 — 765 Net income (loss) 2,434 (2,485 ) 4,574 853 (2,504 ) 2,872 Net income attributable to noncontrolling interests — — 64 374 — 438 Net income (loss) attributable to HCA Healthcare, Inc. $ 2,434 $ (2,485 ) $ 4,510 $ 479 $ (2,504 ) $ 2,434 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 2,354 $ (2,542 ) $ 4,518 $ 448 $ (2,424 ) $ 2,354 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Revenues $ — $ — $ 20,297 $ 14,106 $ — $ 34,403 Salaries and benefits — — 9,184 6,756 — 15,940 Supplies — — 3,383 2,339 — 5,722 Other operating expenses 7 — 3,387 2,931 — 6,325 Equity in earnings of affiliates (2,670 ) — (5 ) (20 ) 2,670 (25 ) Depreciation and amortization — — 992 705 — 1,697 Interest expense (income) 48 2,617 (1,179 ) (177 ) — 1,309 Gains on sales of facilities — — (378 ) (42 ) — (420 ) Losses on retirement of debt — 9 — — — 9 Management fees — — (473 ) 473 — — (2,615 ) 2,626 14,911 12,965 2,670 30,557 Income (loss) before income taxes 2,615 (2,626 ) 5,386 1,141 (2,670 ) 3,846 Provision (benefit) for income taxes (108 ) (610 ) 1,235 185 — 702 Net income (loss) 2,723 (2,016 ) 4,151 956 (2,670 ) 3,144 Net income attributable to noncontrolling interests — — 72 349 — 421 Net income (loss) attributable to HCA Healthcare, Inc. $ 2,723 $ (2,016 ) $ 4,079 $ 607 $ (2,670 ) $ 2,723 Comprehensive income (loss) attributable to HCA Healthcare, Inc. $ 2,735 $ (1,974 ) $ 4,091 $ 565 $ (2,682 ) $ 2,735 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2019 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 130 $ 429 $ — $ 559 Accounts receivable — — 3,970 3,161 — 7,131 Inventories — — 1,154 615 — 1,769 Other — — 644 666 — 1,310 — — 5,898 4,871 — 10,769 Property and equipment, net — — 13,074 8,928 — 22,002 Investments of insurance subsidiaries — — — 357 — 357 Investments in and advances to affiliates 35,590 — 29 214 (35,590 ) 243 Goodwill and other intangible assets — — 5,719 2,441 — 8,160 Right-of-use — — 436 1,334 — 1,770 Other 434 — 34 143 — 611 $ 36,024 $ — $ 25,190 $ 18,288 $ (35,590 ) $ 43,912 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $ — $ — $ 1,699 $ 911 $ — $ 2,610 Accrued salaries — — 993 676 — 1,669 Other accrued expenses 15 332 896 1,454 — 2,697 Long-term debt due within one year — 55 49 44 — 148 15 387 3,637 3,085 — 7,124 Long-term debt, net 997 32,555 213 332 — 34,097 Intercompany balances 37,967 (5,621 ) (32,198 ) (148 ) — — Professional liability risks — — — 1,349 — 1,349 Right-of-use — — 330 1,110 — 1,440 Income taxes and other liabilities 610 11 181 547 — 1,349 39,589 27,332 (27,837 ) 6,275 — 45,359 Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. (3,565 ) (27,332 ) 52,955 9,967 (35,590 ) (3,565 ) Noncontrolling interests — — 72 2,046 — 2,118 (3,565 ) (27,332 ) 53,027 12,013 (35,590 ) (1,447 ) $ 36,024 $ — $ 25,190 $ 18,288 $ (35,590 ) $ 43,912 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2018 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed ASSETS Current assets: Cash and cash equivalents $ — $ — $ 174 $ 328 $ — $ 502 Accounts receivable — — 3,964 2,825 — 6,789 Inventories — — 1,178 554 — 1,732 Other — — 669 521 — 1,190 — — 5,985 4,228 — 10,213 Property and equipment, net — — 12,450 7,307 — 19,757 Investments of insurance subsidiaries — — — 362 — 362 Investments in and advances to affiliates 33,166 — 29 203 (33,166 ) 232 Goodwill and other intangible assets — — 5,724 2,229 — 7,953 Other 478 64 35 113 — 690 $ 33,644 $ 64 $ 24,223 $ 14,442 $ (33,166 ) $ 39,207 LIABILITIES AND Current liabilities: Accounts payable $ — $ — $ 1,721 $ 856 $ — $ 2,577 Accrued salaries — — 998 582 — 1,580 Other accrued expenses 142 403 905 1,174 — 2,624 Long-term debt due within one year — 696 55 37 — 788 142 1,099 3,679 2,649 — 7,569 Long-term debt, net 996 30,544 212 281 — 32,033 Intercompany balances 36,951 (6,789 ) (28,415 ) (1,747 ) — — Professional liability risks — — — 1,275 — 1,275 Income taxes and other liabilities 505 — 223 520 — 1,248 38,594 24,854 (24,301 ) 2,978 — 42,125 Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. (4,950 ) (24,790 ) 48,437 9,519 (33,166 ) (4,950 ) Noncontrolling interests — — 87 1,945 — 2,032 (4,950 ) (24,790 ) 48,524 11,464 (33,166 ) (2,918 ) $ 33,644 $ 64 $ 24,223 $ 14,442 $ (33,166 ) $ 39,207 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 2,434 $ (2,485 ) $ 4,574 $ 853 $ (2,504 ) $ 2,872 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (15 ) (69 ) (137 ) (85 ) — (306 ) Depreciation and amortization — — 1,071 831 — 1,902 Income taxes 51 — — — — 51 Gains on sales of facilities — — (9 ) (8 ) — (17 ) Losses on retirement of debt — 211 — — — 211 Amortization of debt issuance costs and discounts — 23 — — — 23 Share-based compensation — — 263 — — 263 Equity in earnings of affiliates (2,504 ) — — — 2,504 — Other 82 — 13 3 — 98 Net cash provided by (used in) operating activities 48 (2,320 ) 5,775 1,594 — 5,097 Cash flows from investing activities: Purchase of property and equipment — — (1,634 ) (1,250 ) — (2,884 ) Acquisition of hospitals and health care entities — — (39 ) (1,553 ) — (1,592 ) Disposition of hospitals and health care entities — — 31 18 — 49 Change in investments — — 1 34 — 35 Other — — (7 ) 24 — 17 Net cash used in investing activities — — (1,648 ) (2,727 ) — (4,375 ) Cash flows from financing activities: Issuance of long-term debt — 6,451 — — — 6,451 Net change in revolving credit facilities — (30 ) — — — (30 ) Repayment of long-term debt — (5,213 ) (45 ) (31 ) — (5,289 ) Distributions to noncontrolling interests — — (79 ) (325 ) — (404 ) Payment of debt issuance costs — (71 ) — — — (71 ) Payment of cash dividends (414 ) — — — — (414 ) Repurchases of common stock (759 ) — — — — (759 ) Changes in intercompany balances with affiliates, net 1,253 1,183 (4,047 ) 1,611 — — Other (128 ) — — (17 ) — (145 ) Net cash ( u ) (48 ) 2,320 (4,171 ) 1,238 — (661 ) Effect on exchange rate changes on cash and cash equivalents — — — (4 ) — (4 ) Change in cash and cash equivalents — — (44 ) 101 — 57 Cash and cash equivalents at beginning of period — — 174 328 — 502 Cash and cash equivalents at end of period $ — $ — $ 130 $ 429 $ — $ 559 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (Dollars in millions) HCA HCA Inc. Subsidiary Subsidiary Eliminations Condensed Cash flows from operating activities: Net income (loss) $ 2,723 $ (2,016 ) $ 4,151 $ 956 $ (2,670 ) $ 3,144 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Changes in operating assets and liabilities (15 ) (83 ) (154 ) 105 — (147 ) Depreciation and amortization — — 992 705 — 1,697 Gains on sales of facilities — — (378 ) (42 ) — (420 ) Losses on retirement of debt — 9 — — — 9 Amortization of debt issuance costs — 23 — — — 23 Share-based compensation — — 204 — — 204 Equity in earnings of affiliates (2,670 ) — — — 2,670 — Other 67 — — 9 — 76 Net cash provided by (used in) operating activities 105 (2,067 ) 4,815 1,733 — 4,586 Cash flows from investing activities: Purchase of property and equipment — — (1,425 ) (995 ) — (2,420 ) Acquisition of hospitals and health care entities — — (894 ) (162 ) — (1,056 ) Disposition of hospitals and health care entities — — 770 32 — 802 Change in investments — — 19 46 — 65 Other — — (18 ) 12 — (6 ) Net cash used in investing activities — — (1,548 ) (1,067 ) — (2,615 ) Cash flows from financing activities: Issuance of long-term debt — 2,000 — — — 2,000 Net change in revolving credit facilities — (330 ) — — — (330 ) Repayment of long-term debt — (1,566 ) (44 ) (42 ) — (1,652 ) Distributions to noncontrolling interests — — (63 ) (252 ) — (315 ) Payment of debt issuance costs — (24 ) — — — (24 ) Payment of cash dividends (366 ) — — — — (366 ) Repurchases of common stock (1,195 ) — — — — (1,195 ) Changes in intercompany balances with affiliates, net 1,697 1,987 (3,167 ) (517 ) — — Other (242 ) — — 10 — (232 ) Net cash (used in) provided by financing activities (106 ) 2,067 (3,274 ) (801 ) — (2,114 ) Effect on exchange rate changes on cash and cash equivalents — — — (11 ) — (11 ) Change in cash and cash equivalents (1 ) — (7 ) (146 ) — (154 ) Cash and cash equivalents at beginning of period 1 — 112 619 — 732 Cash and cash equivalents at end of period $ — $ — $ 105 $ 473 $ — $ 578 |