NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION

HCA Inc. is a 100% owned direct subsidiary of HCA Healthcare, Inc. On December 6, 2012, HCA Healthcare, 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, 2018 and 2017 and condensed consolidating statements of comprehensive income and cash flows for each of the three years in the period ended December 31, 2018, 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 YEAR ENDED DECEMBER 31, 2018

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
Revenues	$	—		$	—		$	27,482		$	19,195		$	—		$	46,677

Salaries and benefits		—			—			12,287			9,138			—			21,425
Supplies		—			—			4,560			3,164			—			7,724
Other operating expenses		8			—			4,463			4,137			—			8,608
Equity in earnings of affiliates		(3,688	)		—			(7	)		(22	)		3,688			(29	)
Depreciation and amortization		—			—			1,335			943			—			2,278
Interest expense (income)		64			3,580			(1,635	)		(254	)		—			1,755
Gains on sales of facilities		—			—			(357	)		(71	)		—			(428	)
Losses on retirement of debt		—			9			—			—			—			9
Management fees		—			—			(639	)		639			—			—

		(3,616	)		3,589			20,007			17,674			3,688			41,342

Income (loss) before income taxes		3,616			(3,589	)		7,475			1,521			(3,688	)		5,335
Provision (benefit) for income taxes		(171	)		(834	)		1,714			237			—			946

Net income (loss)		3,787			(2,755	)		5,761			1,284			(3,688	)		4,389
Net income attributable to noncontrolling interests		—			—			99			503			—			602

Net income (loss) attributable to HCA Healthcare, Inc.	$	3,787		$	(2,755	)	$	5,662		$	781		$	(3,688	)	$	3,787

Comprehensive income (loss) attributable to HCA Healthcare, Inc.	$	3,779		$	(2,745	)	$	5,712		$	713		$	(3,680	)	$	3,779

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2017

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
Revenues	$	—		$	—		$	25,774		$	17,840		$	—		$	43,614

Salaries and benefits		—			—			11,619			8,440			—			20,059
Supplies		—			—			4,286			3,030			—			7,316
Other operating expenses		6			—			4,249			3,796			—			8,051
Equity in earnings of affiliates		(2,476	)		—			(6	)		(39	)		2,476			(45	)
Depreciation and amortization		—			—			1,237			894			—			2,131
Interest expense (income)		64			3,088			(1,309	)		(153	)		—			1,690
Gains on sales of facilities		—			—			(2	)		(6	)		—			(8	)
Losses on retirement of debt		—			39			—			—			—			39
Management fees		—			—			(621	)		621			—			—

		(2,406	)		3,127			19,453			16,583			2,476			39,233

Income (loss) before income taxes		2,406			(3,127	)		6,321			1,257			(2,476	)		4,381
Provision (benefit) for income taxes		190			(1,154	)		2,293			309			—			1,638

Net income (loss)		2,216			(1,973	)		4,028			948			(2,476	)		2,743
Net income attributable to noncontrolling interests		—			—			108			419			—			527

Net income (loss) attributable to HCA Healthcare, Inc.	$	2,216		$	(1,973	)	$	3,920		$	529		$	(2,476	)	$	2,216

Comprehensive income (loss) attributable to HCA Healthcare, Inc.	$	2,276		$	(1,953	)	$	3,898		$	591		$	(2,536	)	$	2,276

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING COMPREHENSIVE INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2016

(Dollars in millions)


	HCA Healthcare, Inc. Issuer			HCA Inc. Issuer			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Condensed Consolidated
Revenues	$	—		$	—		$	24,427		$	17,063		$	—		$	41,490

Salaries and benefits		—			—			10,971			7,926			—			18,897
Supplies		—			—			4,090			2,843			—			6,933
Other operating expenses		6			—			3,912			3,578			—			7,496
Equity in earnings of affiliates		(2,738	)		—			(7	)		(47	)		2,738			(54	)
Depreciation and amortization		—			—			1,141			825			—			1,966
Interest expense (income)		64			2,756			(970	)		(143	)		—			1,707
Losses (gains) on sales of facilities		—			—			4			(27	)		—			(23	)
Losses on retirement of debt		—			4			—			—			—			4
Legal claim benefits		—			(246	)		—			—			—			(246	)
Management fees		—			—			(588	)		588			—			—

		(2,668	)		2,514			18,553			15,543			2,738			36,680

Income (loss) before income taxes		2,668			(2,514	)		5,874			1,520			(2,738	)		4,810
Provision (benefit) for income taxes		(222	)		(928	)		2,133			395			—			1,378

Net income (loss)		2,890			(1,586	)		3,741			1,125			(2,738	)		3,432
Net income attributable to noncontrolling interests		—			—			93			449			—			542

Net income (loss) attributable to HCA Healthcare, Inc.	$	2,890		$	(1,586	)	$	3,648		$	676		$	(2,738	)	$	2,890

Comprehensive income (loss) attributable to HCA Healthcare, Inc.	$	2,817		$	(1,505	)	$	3,637		$	533		$	(2,665	)	$	2,817

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 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	$	—		$	—		$	174		$	328		$	—		$	502
Accounts receivable, net		—			—			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 STOCKHOLDERS’ (DEFICIT) EQUITY
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 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, net		—			—			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 YEAR ENDED DECEMBER 31, 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)	$	3,787		$	(2,755	)	$	5,761		$	1,284		$	(3,688	)	$	4,389
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Change in operating assets and liabilities		—			23			(178	)		188			—			33
Depreciation and amortization		—			—			1,335			943			—			2,278
Income taxes		74			—			—			—			—			74
Gains on sales of facilities		—			—			(357	)		(71	)		—			(428	)
Losses on retirement of debt		—			9			—			—			—			9
Amortization of debt issuance costs		—			31			—			—			—			31
Share-based compensation		—			—			268			—			—			268
Equity in earnings of affiliates		(3,688	)		—			—			—			3,688			—
Other		91			—			25			(9	)		—			107

Net cash provided by (used in) operating activities		264			(2,692	)		6,854			2,335			—			6,761

Cash flows from investing activities:
Purchase of property and equipment		—			—			(2,008	)		(1,565	)		—			(3,573	)
Acquisition of hospitals and health care entities		—			—			(897	)		(356	)		—			(1,253	)
Disposal of hospitals and health care entities		—			—			770			38			—			808
Change in investments		—			—			12			45			—			57
Other		—			—			(9	)		69			—			60

Net cash used in investing activities		—			—			(2,132	)		(1,769	)		—			(3,901	)

Cash flows from financing activities:
Issuance of long-term debt		—			2,000			—			—			—			2,000
Net change in revolving bank credit facilities		—			(640	)		—			—			—			(640	)
Repayment of long-term debt		—			(1,590	)		(72	)		(42	)		—			(1,704	)
Distributions to noncontrolling interests		—			—			(83	)		(358	)		—			(441	)
Payment of debt issuance costs		—			(25	)		—			—			—			(25	)
Payment of cash dividends		(487	)		—			—			—			—			(487	)
Repurchases of common stock		(1,530	)		—			—			—			—			(1,530	)
Changes in intercompany balances with affiliates, net		2,004			2,947			(4,505	)		(446	)		—			—
Other		(252	)		—			—			4			—			(248	)

Net cash (used in) provided by financing activities		(265	)		2,692			(4,660	)		(842	)		—			(3,075	)

Effect of exchange rate changes on cash and cash equivalents		—			—			—			(15	)		—			(15	)

Change in cash and cash equivalents		(1	)		—			62			(291	)		—			(230	)
Cash and cash equivalents at beginning of period		1			—			112			619			—			732

Cash and cash equivalents at end of period	$	—		$	—		$	174		$	328		$	—		$	502

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2017

(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)	$	2,216		$	(1,973	)	$	4,028		$	948		$	(2,476	)	$	2,743
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Change in operating assets and liabilities		—			(193	)		(219	)		116			—			(296	)
Depreciation and amortization		—			—			1,237			894			—			2,131
Income taxes		433			—			—			—			—			433
Gains on sales of facilities		—			—			(2	)		(6	)		—			(8	)
Losses on retirement of debt		—			39			—			—			—			39
Amortization of debt issuance costs		—			31			—			—			—			31
Share-based compensation		—			—			270			—			—			270
Equity in earnings of affiliates		(2,476	)		—			—			—			2,476			—
Other		78			—			—			5			—			83

Net cash provided by (used in) operating activities		251			(2,096	)		5,314			1,957			—			5,426

Cash flows from investing activities:
Purchase of property and equipment		—			—			(1,681	)		(1,334	)		—			(3,015	)
Acquisition of hospitals and health care entities		—			—			(26	)		(1,186	)		—			(1,212	)
Disposal of hospitals and health care entities		—			—			14			11			—			25
Change in investments		—			—			(1	)		(72	)		—			(73	)
Other		—			—			—			(4	)		—			(4	)

Net cash used in investing activities		—			—			(1,694	)		(2,585	)		—			(4,279	)

Cash flows from financing activities:
Issuance of long-term debt		—			1,500			—			2			—			1,502
Net change in revolving bank credit facilities		—			760			—			—			—			760
Repayment of long-term debt		—			(628	)		(77	)		(48	)		—			(753	)
Distributions to noncontrolling interests		—			—			(140	)		(308	)		—			(448	)
Payment of debt issuance costs		—			(26	)		—			—			—			(26	)
Repurchases of common stock		(2,051	)		—			—			—			—			(2,051	)
Changes in intercompany balances with affiliates, net		1,867			490			(3,404	)		1,047			—			—
Other		(66	)		—			—			21			—			(45	)

Net cash (used in) provided by financing activities		(250	)		2,096			(3,621	)		714			—			(1,061	)

Change in cash and cash equivalents		1			—			(1	)		86			—			86
Cash and cash equivalents at beginning of period		—			—			113			533			—			646

Cash and cash equivalents at end of period	$	1		$	—		$	112		$	619		$	—		$	732

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

(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)	$	2,890		$	(1,586	)	$	3,741		$	1,125		$	(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			(139	)		167			—			42
Depreciation and amortization		—			—			1,141			825			—			1,966
Income taxes		123			—			—			—			—			123
Losses (gains) on sales of facilities		—			—			4			(27	)		—			(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	)		4,998			2,089			—			5,653

Cash flows from investing activities:
Purchase of property and equipment		—			—			(1,554	)		(1,206	)		—			(2,760	)
Acquisition of hospitals and health care entities		—			—			(199	)		(377	)		—			(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		—			—			(1,758	)		(1,482	)		—			(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	)		(74	)		(43	)		—			(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			(3,149	)		(247	)		—			—
Other		(103	)		—			—			5			—			(98	)

Net cash (used in) provided by financing activities		(322	)		1,756			(3,287	)		(655	)		—			(2,508	)

Change in cash and cash equivalents		—			—			(47	)		(48	)		—			(95	)
Cash and cash equivalents at beginning of period		—			—			160			581			—			741

Cash and cash equivalents at end of period	$	—		$	—		$	113		$	533		$	—		$	646

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 and cash flows are combined into one line item in the Healthtrust consolidated statements of stockholder’s deficit and cash flows.

Reconciliations of the HCA Healthcare, Inc. Consolidated Statements of Stockholders’ Deficit and Consolidated Statements of Cash Flows presentations to the Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit presentations for the years ended December 31, 2018, 2017 and 2016 are as follows (dollars in millions):


	2018			2017			2016
Presentation in HCA Healthcare, Inc. Consolidated Statements of Stockholders’ Deficit:
Repurchases of common stock	$	(1,530	)	$	(2,051	)	$	(2,751	)
Share-based benefit plans		115			281			233
Cash dividends declared ($1.40 per share)		(496	)		—			—
Other		(12	)		(10	)		(2	)

Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit:
Distributions to HCA Healthcare, Inc., net of contributions from HCA Healthcare, Inc.	$	(1,923	)	$	(1,780	)	$	(2,520	)

Presentation in HCA Healthcare, Inc. Consolidated Statements of Cash Flows (cash flows from financing activities):
Repurchases of common stock	$	(1,530	)	$	(2,051	)	$	(2,751	)
Payment of cash dividends		(487	)		—			—

Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Cash Flows (cash flows from financing activities):
Cash distributions to HCA Healthcare, Inc.	$	(2,017	)	$	(2,051	)	$	(2,751	)

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.