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, 2018 and 2017, condensed consolidating balance sheets at September 30, 2018 and December 31, 2017 and condensed consolidating statements of cash flows for the nine months ended September 30, 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 SEPTEMBER 30, 2018

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 QUARTER ENDED SEPTEMBER 30, 2017

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors (as adjusted)			Subsidiary Non- Guarantors (as adjusted)			Eliminations			Condensed Consolidated
Revenues	$	—		$	—		$	6,303		$	4,393		$	—		$	10,696

Salaries and benefits		—			—			2,915			2,166			—			5,081
Supplies		—			—			1,033			744			—			1,777
Other operating expenses		—			—			1,093			982			—			2,075
Equity in earnings of affiliates		(436	)		—			(1	)		(12	)		436			(13	)
Depreciation and amortization		—			—			311			228			—			539
Interest expense (income)		16			792			(342	)		(39	)		—			427
Gains on sales of facilities		—			—			(3	)		(4	)		—			(7	)
Losses on retirement of debt		—			39			—			—			—			39
Management fees		—			—			(159	)		159			—			—

		(420	)		831			4,847			4,224			436			9,918

Income (loss) before income taxes		420			(831	)		1,456			169			(436	)		778
Provision (benefit) for income taxes		(6	)		(307	)		528			33			—			248

Net income (loss)		426			(524	)		928			136			(436	)		530
Net income attributable to noncontrolling interests		—			—			24			80			—			104

Net income (loss) attributable to HCA Healthcare, Inc.	$	426		$	(524	)	$	904		$	56		$	(436	)	$	426

Comprehensive income (loss) attributable to HCA Healthcare, Inc.	$	451		$	(522	)	$	907		$	76		$	(461	)	$	451

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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 COMPREHENSIVE INCOME STATEMENT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors (as adjusted)			Subsidiary Non- Guarantors (as adjusted)			Eliminations			Condensed Consolidated
Revenues	$	—		$	—		$	19,008		$	13,044		$	—		$	32,052

Salaries and benefits		—			—			8,689			6,189			—			14,878
Supplies		—			—			3,163			2,206			—			5,369
Other operating expenses		5			—			3,207			2,758			—			5,970
Equity in earnings of affiliates		(1,702	)		—			(4	)		(32	)		1,702			(36	)
Depreciation and amortization		—			—			923			658			—			1,581
Interest expense (income)		48			2,280			(947	)		(124	)		—			1,257
Gains on sales of facilities		—			—			(6	)		(4	)		—			(10	)
Losses on retirement of debt		—			39			—			—			—			39
Management fees		—			—			(479	)		479			—			—

		(1,649	)		2,319			14,546			12,130			1,702			29,048

Income (loss) before income taxes		1,649			(2,319	)		4,462			914			(1,702	)		3,004
Provision (benefit) for income taxes		(93	)		(856	)		1,619			232			—			902

Net income (loss)		1,742			(1,463	)		2,843			682			(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	)	$	2,769		$	396		$	(1,702	)	$	1,742

Comprehensive income (loss) attributable to HCA Healthcare, Inc.	$	1,812		$	(1,458	)	$	2,778		$	452		$	(1,772	)	$	1,812

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

SEPTEMBER 30, 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	$	—		$	—		$	105		$	473		$	—		$	578
Accounts receivable		—			—			3,854			2,678			—			6,532
Inventories		—			—			1,088			546			—			1,634
Other		47			—			667			552			—			1,266

		47			—			5,714			4,249			—			10,010

Property and equipment, net		—			—			12,192			6,849			—			19,041
Investments of insurance subsidiaries		—			—			—			367			—			367
Investments in and advances to affiliates		32,263			—			29			209			(32,263	)		238
Goodwill and other intangible assets		—			—			5,736			2,023			—			7,759
Other		389			106			29			105			—			629

	$	32,699		$	106		$	23,700		$	13,802		$	(32,263	)	$	38,044

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	—		$	—		$	1,627		$	787		$	—		$	2,414
Accrued salaries		—			—			914			542			—			1,456
Other accrued expenses		10			296			790			1,074			—			2,170
Long-term debt due within one year		—			97			61			33			—			191

		10			393			3,392			2,436			—			6,231

Long-term debt, net		996			31,471			281			168			—			32,916
Intercompany balances		36,790			(7,734	)		(27,263	)		(1,793	)		—			—
Professional liability risks		—			—			—			1,239			—			1,239
Income taxes and other liabilities		508			—			364			516			—			1,388

		38,304			24,130			(23,226	)		2,566			—			41,774

Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc.		(5,605	)		(24,024	)		46,846			9,441			(32,263	)		(5,605	)
Noncontrolling interests		—			—			80			1,795			—			1,875

		(5,605	)		(24,024	)		46,926			11,236			(32,263	)		(3,730	)

	$	32,699		$	106		$	23,700		$	13,802		$	(32,263	)	$	38,044

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2017

(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	$	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 NINE MONTHS ENDED SEPTEMBER 30, 2018

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
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

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors (as adjusted)			Subsidiary Non- Guarantors (as adjusted)			Eliminations			Condensed Consolidated
Cash flows from operating activities:
Net income (loss)	$	1,742		$	(1,463	)	$	2,843		$	682		$	(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	)		(191	)		210			—			(289	)
Depreciation and amortization		—			—			923			658			—			1,581
Income taxes		(9	)		—			—			—			—			(9	)
Gains on sales of facilities		—			—			(6	)		(4	)		—			(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	)		3,766			1,546			—			3,692

Cash flows from investing activities:
Purchase of property and equipment		—			—			(1,161	)		(872	)		—			(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		—			—			1			(16	)		—			(15	)
Other		—			—			(7	)		1			—			(6	)

Net cash used in investing activities		—			—			(1,164	)		(2,008	)		—			(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	)		(54	)		(42	)		—			(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			(2,439	)		798			—			—
Other		(66	)		—			1			28			—			(37	)

Net cash (used in) provided by financing activities		(73	)		1,694			(2,597	)		528			—			(448	)

Change in cash and cash equivalents		1			—			5			66			—			72
Cash and cash equivalents at beginning of period		—			—			114			532			—			646

Cash and cash equivalents at end of period	$	1		$	—		$	119		$	598		$	—		$	718

The above supplemental condensed consolidating financial information for the quarter and nine months ended September 30, 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 and nine months ended September 30, 2017 is summarized as follows (dollars in millions):


	As Previously Reported			Adjustment			As Adjusted
Quarter ended September 30, 2017
Net income (loss) attributable to HCA Healthcare, Inc.:
HCA Healthcare, Inc. Issuer	$	426		$	—		$	426
HCA Inc. Issuer		(524	)		—			(524	)
Subsidiary Guarantors		787			117			904
Subsidiary Non-Guarantors		173			(117	)		56
Eliminations		(436	)		—			(436	)

Condensed Consolidated	$	426		$	—		$	426


	As Previously Reported			Adjustment			As Adjusted
Nine months ended September 30, 2017
Net income (loss) attributable to HCA Healthcare, Inc.:
HCA Healthcare, Inc. Issuer	$	1,742		$	—		$	1,742
HCA Inc. Issuer		(1,463	)		—			(1,463	)
Subsidiary Guarantors		2,467			302			2,769
Subsidiary Non-Guarantors		698			(302	)		396
Eliminations		(1,702	)		—			(1,702	)

Condensed Consolidated	$	1,742		$	—		$	1,742


	As Previously Reported			Adjustment			As Adjusted
Nine months ended September 30, 2017
Net cash provided (used in) operating activities:
HCA Healthcare, Inc. Issuer	$	74		$	—		$	74
HCA Inc. Issuer		(1,694	)		—			(1,694	)
Subsidiary Guarantors		3,342			424			3,766
Subsidiary Non-Guarantors		1,970			(424	)		1,546
Eliminations		—			—			—

Condensed Consolidated	$	3,692		$	—		$	3,692