NOTE 12 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

During November 2010, HCA Holdings, Inc. issued $1.525 billion aggregate principal amount of 7³/₄% 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 nine months ended September 30, 2016 and 2015, condensed consolidating balance sheets at September 30, 2016 and December 31, 2015 and condensed consolidating statements of cash flows for the nine months ended September 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 SEPTEMBER 30, 2016

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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			—			905			991			—			1,897
Electronic health record incentive income		—			—			(1	)		—			—			(1	)
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 Holdings, Inc.	$	618		$	(458	)	$	764		$	267		$	(573	)	$	618

Comprehensive income (loss) attributable to HCA Holdings, Inc.	$	621		$	(432	)	$	766		$	242		$	(576	)	$	621

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE QUARTER ENDED SEPTEMBER 30, 2015

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
Revenues before provision for doubtful accounts	$	—		$	—		$	5,721		$	5,293		$	—		$	11,014
Provision for doubtful accounts		—			—			689			469			—			1,158

Revenues		—			—			5,032			4,824			—			9,856

Salaries and benefits		—			—			2,357			2,262			—			4,619
Supplies		—			—			853			791			—			1,644
Other operating expenses		7			—			865			924			—			1,796
Electronic health record incentive income		—			—			(6	)		(3	)		—			(9	)
Equity in earnings of affiliates		(464	)		—			(1	)		(8	)		464			(9	)
Depreciation and amortization		—			—			230			252			—			482
Interest expense		16			608			(156	)		(57	)		—			411
Losses (gains) on sales of facilities		—			—			(1	)		3			—			2
Legal claim costs		—			77			—			—			—			77
Management fees		—			—			(178	)		178			—			—

		(441	)		685			3,963			4,342			464			9,013

Income (loss) before income taxes		441			(685	)		1,069			482			(464	)		843
Provision (benefit) for income taxes		(8	)		(258	)		394			142			—			270

Net income (loss)		449			(427	)		675			340			(464	)		573
Net income attributable to noncontrolling interests		—			—			21			103			—			124

Net income (loss) attributable to HCA Holdings, Inc.	$	449		$	(427	)	$	654		$	237		$	(464	)	$	449

Comprehensive income (loss) attributable to HCA Holdings, Inc.	$	430		$	(418	)	$	657		$	206		$	(445	)	$	430

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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			—			2,660			2,962			—			5,627
Electronic health record incentive income		—			—			(6	)		(4	)		—			(10	)
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 Holdings, Inc.	$	1,970		$	(1,305	)	$	2,304		$	844		$	(1,843	)	$	1,970

Comprehensive income (loss) attributable to HCA Holdings, Inc.	$	1,894		$	(1,288	)	$	2,312		$	743		$	(1,767	)	$	1,894

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
Revenues before provision for doubtful accounts	$	—		$	—		$	16,519		$	15,749		$	—		$	32,268
Provision for doubtful accounts		—			—			1,535			1,304			—			2,839

Revenues		—			—			14,984			14,445			—			29,429

Salaries and benefits		—			—			6,824			6,685			—			13,509
Supplies		—			—			2,576			2,376			—			4,952
Other operating expenses		9			—			2,523			2,736			—			5,268
Electronic health record incentive income		—			—			(31	)		(15	)		—			(46	)
Equity in earnings of affiliates		(1,690	)		—			(4	)		(34	)		1,690			(38	)
Depreciation and amortization		—			—			683			741			—			1,424
Interest expense		100			1,807			(498	)		(154	)		—			1,255
Losses (gains) on sales of facilities		—			—			(5	)		3			—			(2	)
Losses on retirement of debt		122			3			—			—			—			125
Legal claim costs		—			77			—			—			—			77
Management fees		—			—			(534	)		534			—			—

		(1,459	)		1,887			11,534			12,872			1,690			26,524

Income (loss) before income taxes		1,459			(1,887	)		3,450			1,573			(1,690	)		2,905
Provision (benefit) for income taxes		(88	)		(716	)		1,284			467			—			947

Net income (loss)		1,547			(1,171	)		2,166			1,106			(1,690	)		1,958
Net income attributable to noncontrolling interests		—			—			68			343			—			411

Net income (loss) attributable to HCA Holdings, Inc.	$	1,547		$	(1,171	)	$	2,098		$	763		$	(1,690	)	$	1,547

Comprehensive income (loss) attributable to HCA Holdings, Inc.	$	1,561		$	(1,142	)	$	2,109		$	737		$	(1,704	)	$	1,561

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

SEPTEMBER 30, 2016

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors		Eliminations			Condensed Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1		$	—		$	138		$	538	$	—		$	677
Accounts receivable, net		—			—			2,844			2,659		—			5,503
Inventories		—			—			905			598		—			1,503
Other		—			—			534			626		—			1,160

		1			—			4,421			4,421		—			8,843

Property and equipment, net		—			—			8,681			7,194		—			15,875

Investments of insurance subsidiaries		—			—			—			354		—			354
Investments in and advances to affiliates		26,147			—			16			200		(26,147	)		216
Goodwill and other intangible assets		—			—			1,710			4,981		—			6,691
Other		962			—			21			165		—			1,148

	$	27,110		$	—		$	14,849		$	17,315	$	(26,147	)	$	33,127

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	—		$	—		$	1,152		$	798	$	—		$	1,950
Accrued salaries		—			—			689			552		—			1,241
Other accrued expenses		15			294			541			898		—			1,748
Long-term debt due within one year		—			97			60			59		—			216

		15			391			2,442			2,307		—			5,155

Long-term debt, net		993			29,749			200			283		—			31,225
Intercompany balances		33,451			(10,811	)		(25,144	)		2,504		—			—
Professional liability risks		—			—			—			1,164		—			1,164
Income taxes and other liabilities		414			551			362			419		—			1,746

		34,873			19,880			(22,140	)		6,677		—			39,290
Stockholders’ (deficit) equity attributable to HCA Holdings, Inc.		(7,763	)		(19,880	)		36,840			9,187		(26,147	)		(7,763	)
Noncontrolling interests		—			—			149			1,451		—			1,600

		(7,763	)		(19,880	)		36,989			10,638		(26,147	)		(6,163	)

	$	27,110		$	—		$	14,849		$	17,315	$	(26,147	)	$	33,127

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

(Dollars in millions)


	HCA Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors		Eliminations			Condensed Consolidated
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 NINE MONTHS ENDED SEPTEMBER 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)	$	1,970		$	(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

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

(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)	$	1,547		$	(1,171	)	$	2,166		$	1,106		$	(1,690	)	$	1,958
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Changes in operating assets and liabilities		(22	)		(56	)		(1,959	)		(1,296	)		—			(3,333	)
Provision for doubtful accounts		—			—			1,535			1,304			—			2,839
Depreciation and amortization		—			—			683			741			—			1,424
Income taxes		(148	)		—			—			—			—			(148	)
Losses (gains) on sales of facilities		—			—			(5	)		3			—			(2	)
Losses on retirement of debt		122			3			—			—			—			125
Legal claim costs		—			77			—			—			—			77
Amortization of debt issuance costs		3			24			—			—			—			27
Share-based compensation		—			—			171			—			—			171
Equity in earnings of affiliates		(1,690	)		—			—			—			1,690			—
Other		49			3			—			(14	)		—			38

Net cash (used in) provided by operating activities		(139	)		(1,120	)		2,591			1,844			—			3,176

Cash flows from investing activities:
Purchase of property and equipment		—			—			(764	)		(807	)		—			(1,571	)
Acquisition of hospitals and health care entities		—			—			(51	)		(133	)		—			(184	)
Disposition of hospitals and health care entities		—			—			19			8			—			27
Change in investments		—			—			2			92			—			94
Other		—			—			(6	)		9			—			3

Net cash used in investing activities		—			—			(800	)		(831	)		—			(1,631	)

Cash flows from financing activities:
Issuance of long-term debt		—			4,048			—			—			—			4,048
Net change in revolving credit facilities		—			(270	)		—			—			—			(270	)
Repayment of long-term debt		(1,632	)		(2,001	)		(45	)		(24	)		—			(3,702	)
Distributions to noncontrolling interests		—			—			(70	)		(297	)		—			(367	)
Payment of debt issuance costs		—			(34	)		—			—			—			(34	)
Repurchases of common stock		(1,386	)		—			—			—			—			(1,386	)
Changes in intercompany balances with affiliates, net		2,955			(623)			(1,654	)		(678	)		—			—
Other		202			—			—			(14	)		—			188

Net cash provided by (used in) financing activities		139			1,120			(1,769	)		(1,013	)		—			(1,523	)

Change in cash and cash equivalents		—			—			22			—			—			22
Cash and cash equivalents at beginning of period		—			—			87			479			—			566

Cash and cash equivalents at end of period	$	—		$	—		$	109		$	479		$	—		$	588