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 7³/₄% 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 and eliminations, follow.

HCA HOLDINGS, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 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	$	—		$	—		$	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 Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors		Eliminations			Condensed Consolidated
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 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 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 YEAR ENDED DECEMBER 31, 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)	$	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 Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 Holdings, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 facilities		—			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 of Regulation S-X under the Securities Act requires the filing of separate financial statements for any affiliate of the registrant whose securities constitute a substantial portion of the collateral for any class of securities registered or being registered. We believe the separate financial statements requirement applies to Healthtrust due to the pledge of its common stock as collateral for the senior secured notes. Due to the corporate structure relationship of HCA and Healthtrust, HCA’s operating subsidiaries are also the operating subsidiaries of Healthtrust. The corporate structure relationship, combined with the application of push-down accounting in Healthtrust’s consolidated financial statements related to HCA’s debt and financial instruments, results in the consolidated financial statements of Healthtrust being substantially identical to the consolidated financial statements of HCA. The consolidated financial statements of HCA and Healthtrust present the identical amounts for revenues, expenses, net income, assets, liabilities, total stockholders’ deficit, net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities. Certain individual line items in the HCA consolidated statements of stockholders’ deficit are combined into one line item in the Healthtrust consolidated statements of stockholder’s deficit.

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.