Financial Information for the Company and Its Subsidiaries

The 2020 Senior Unsecured Notes are senior unsecured obligations of the Company and are guaranteed by its existing and subsequently acquired or organized wholly-owned domestic subsidiaries. The 2020 Senior Unsecured Notes are guaranteed on a full and unconditional and joint and several basis, with limited exceptions considered customary for such guarantees, including the release of the guarantee when a subsidiary's assets are sold. The following condensed consolidating financial statements present the Company (as parent issuer), the subsidiary guarantors, the subsidiary non-guarantors and consolidating adjustments. These condensed consolidating financial statements have been prepared and presented in accordance with Rule 3-10 of Regulation S-X "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." The operating and investing activities of the separate legal entities are fully interdependent and integrated. Accordingly, the results of the separate legal entities are not representative of what the operating results would be on a stand-alone basis.



Condensed Consolidating Balance Sheet - June 30, 2014 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	3,836	$	—	$	41,075	$	—		$	44,911
Accounts receivable, net	—		—		110,538		—			110,538
Supplies inventory	—		—		18,808		—			18,808
Deferred income taxes	3,386		—		—		—			3,386
Prepaid and other current assets	26,784		—		12,393		(4,519		)	34,658
Total current assets	34,006		—		182,814		(4,519		)	212,301
Property and equipment, net	9,837		—		159,002		—			168,839
Investments in unconsolidated affiliates and other	1,514,925		1,479,602		932		(2,968,913		)	26,546
Goodwill and intangible assets, net	19,990		—		839		1,794,493			1,815,322
Total assets	$	1,578,758	$	1,479,602	$	343,587	$	(1,178,939	)	$	2,223,008
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	10,714	$	—	$	9,494	$	—		$	20,208
Accounts payable	3,269		—		27,163		(4,079		)	26,353
Accrued liabilities	23,849		—		16,211		(440		)	39,620
Total current liabilities	37,832		—		52,868		(4,519		)	86,181
Long-term debt	535,071		—		54,118		(32,396		)	556,793
Deferred income taxes	194,181		—		—		—			194,181
Other long-term liabilities	7,372		—		18,323		—			25,695
Noncontrolling interests – redeemable	—		—		63,070		113,993			177,063
Equity:
Total AmSurg Corp. equity	804,302		1,479,602		114,690		(1,594,292		)	804,302
Noncontrolling interests – non-redeemable	—		—		40,518		338,275			378,793
Total equity	804,302		1,479,602		155,208		(1,256,017		)	1,183,095
Total liabilities and equity	$	1,578,758	$	1,479,602	$	343,587	$	(1,178,939	)	$	2,223,008



Condensed Consolidating Balance Sheet - December 31, 2013 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	6,710	$	—	$	44,130	$	—		$	50,840
Accounts receivable, net	—		—		105,072		—			105,072
Supplies inventory	33		—		18,381		—			18,414
Deferred income taxes	3,097		—		—		—			3,097
Prepaid and other current assets	23,993		—		13,971		(4,362		)	33,602
Total current assets	33,833		—		181,554		(4,362		)	211,025
Property and equipment, net	9,829		—		160,066		—			169,895
Investments in unconsolidated affiliates and other	1,484,974		1,453,596		—		(2,922,178		)	16,392
Goodwill and intangible assets, net	20,684		—		978		1,758,970			1,780,632
Total assets	$	1,549,320	$	1,453,596	$	342,598	$	(1,167,570	)	$	2,177,944
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	10,714	$	—	$	10,130	$	—		$	20,844
Accounts payable	1,972		—		29,487		(3,958		)	27,501
Accrued liabilities	27,419		—		14,510		(404		)	41,525
Total current liabilities	40,105		—		54,127		(4,362		)	89,870
Long-term debt	561,429		—		53,246		(31,377		)	583,298
Deferred income taxes	176,020		—		—		—			176,020
Other long-term liabilities	7,569		—		17,934		—			25,503
Noncontrolling interests – redeemable	—		—		63,704		113,993			177,697
Equity:
Total AmSurg Corp. equity	764,197		1,453,596		114,671		(1,568,267		)	764,197
Noncontrolling interests – non-redeemable	—		—		38,916		322,443			361,359
Total equity	764,197		1,453,596		153,587		(1,245,824		)	1,125,556
Total liabilities and equity	$	1,549,320	$	1,453,596	$	342,598	$	(1,167,570	)	$	2,177,944



Condensed Consolidating Statement of Earnings and Comprehensive Income - For the Three Months Ended June 30, 2014 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Revenues	$	6,364	$	—	$	279,518	$	(4,777	)	$	281,105
Operating expenses:
Salaries and benefits	15,282		—		69,708		(124		)	84,866
Supply cost	—		—		41,283		—			41,283
Other operating expenses	8,427		—		56,557		(4,653		)	60,331
Depreciation and amortization	815		—		7,735		—			8,550
Total operating expenses	24,524		—		175,283		(4,777		)	195,030
Gain on deconsolidation	1,366		1,366		—		(1,366		)	1,366
Equity in earnings of unconsolidated affiliates	54,639		54,639		—		(108,739		)	539
Operating income	37,845		56,005		104,235		(110,105		)	87,980
Interest expense	6,342		—		552		—			6,894
Earnings from continuing operations before income taxes	31,503		56,005		103,683		(110,105		)	81,086
Income tax expense	12,549		—		372		—			12,921
Net earnings from continuing operations	18,954		56,005		103,311		(110,105		)	68,165
Net earnings from discontinued operations	7		—		—		—			7
Net earnings and comprehensive income	18,961		56,005		103,311		(110,105		)	68,172
Less net earnings and comprehensive income attributable to noncontrolling interests:
Net earnings from continuing operations	—		—		49,211		—			49,211
Net earnings from discontinued operations	—		—		—		—			—
Total net earnings and comprehensive income attributable to noncontrolling interests	—		—		49,211		—			49,211
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	18,961	$	56,005	$	54,100	$	(110,105	)	$	18,961
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	18,954	$	56,005	$	54,100	$	(110,105	)	$	18,954
Discontinued operations, net of income tax	7		—		—		—			7
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	18,961	$	56,005	$	54,100	$	(110,105	)	$	18,961



Condensed Consolidating Statement of Earnings and Comprehensive Income - For the Six Months Ended June 30, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Revenues	$	12,491		$	—	$	541,107	$	(9,386	)	$	544,212
Operating expenses:
Salaries and benefits	29,767			—		138,539		(246		)	168,060
Supply cost	—			—		80,003		—			80,003
Other operating expenses	12,594			—		112,146		(9,140		)	115,600
Depreciation and amortization	1,640			—		15,284		—			16,924
Total operating expenses	44,001			—		345,972		(9,386		)	380,587
Gain on deconsolidation	3,411			3,411		—		(3,411		)	3,411
Equity in earnings of unconsolidated affiliates	102,691			102,691		—		(204,079		)	1,303
Operating income	74,592			106,102		195,135		(207,490		)	168,339
Interest expense	12,793			—		1,064		—			13,857
Earnings from continuing operations before income taxes	61,799			106,102		194,071		(207,490		)	154,482
Income tax expense	25,253			—		725		—			25,978
Net earnings from continuing operations	36,546			106,102		193,346		(207,490		)	128,504
Net earnings (loss) from discontinued operations	(390		)	—		172		—			(218		)
Net earnings and comprehensive income	36,156			106,102		193,518		(207,490		)	128,286
Less net earnings and comprehensive income attributable to noncontrolling interests:
Net earnings from continuing operations	—			—		92,046		—			92,046
Net earnings from discontinued operations	—			—		84		—			84
Total net earnings and comprehensive income attributable to noncontrolling interests	—			—		92,130		—			92,130
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	36,156		$	106,102	$	101,388	$	(207,490	)	$	36,156
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	36,546		$	106,102	$	101,300	$	(207,490	)	$	36,458
Discontinued operations, net of income tax	(390		)	—		88		—			(302		)
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	36,156		$	106,102	$	101,388	$	(207,490	)	$	36,156



Condensed Consolidating Statement of Earnings and Comprehensive Income - For the Three Months Ended June 30, 2013 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Revenues	$	5,460		$	—	$	265,995	$	(4,353	)	$	267,102
Operating expenses:
Salaries and benefits	14,431			—		66,771		(117		)	81,085
Supply cost	—			—		38,989		—			38,989
Other operating expenses	5,171			—		52,990		(4,236		)	53,925
Depreciation and amortization	760			—		7,365		—			8,125
Total operating expenses	20,362			—		166,115		(4,353		)	182,124
Gain on deconsolidation	—			—		—		—			—
Equity in earnings of unconsolidated affiliates	52,926			52,926		—		(105,156		)	696
Operating income	38,024			52,926		99,880		(105,156		)	85,674
Interest expense	7,026			—		486		—			7,512
Earnings from continuing operations before income taxes	30,998			52,926		99,394		(105,156		)	78,162
Income tax expense	12,332			—		378		—			12,710
Net earnings from continuing operations	18,666			52,926		99,016		(105,156		)	65,452
Net earnings (loss) from discontinued operations	(103		)	—		487		—			384
Net earnings and comprehensive income	18,563			52,926		99,503		(105,156		)	65,836
Less net earnings and comprehensive income attributable to noncontrolling interests:
Net earnings from continuing operations	—			—		47,035		—			47,035
Net earnings from discontinued operations	—			—		238		—			238
Total net earnings and comprehensive income attributable to noncontrolling interests	—			—		47,273		—			47,273
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	18,563		$	52,926	$	52,230	$	(105,156	)	$	18,563
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	18,666		$	52,926	$	51,981	$	(105,156	)	$	18,417
Discontinued operations, net of income tax	(103		)	—		249		—			146
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	18,563		$	52,926	$	52,230	$	(105,156	)	$	18,563



Condensed Consolidating Statement of Earnings and Comprehensive Income - For the Six Months Ended June 30, 2013 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Revenues	$	11,176		$	—	$	522,706	$	(8,591	)	$	525,291
Operating expenses:
Salaries and benefits	29,852			—		132,421		(230		)	162,043
Supply cost	—			—		76,202		—			76,202
Other operating expenses	10,231			—		104,782		(8,361		)	106,652
Depreciation and amortization	1,532			—		14,601		—			16,133
Total operating expenses	41,615			—		328,006		(8,591		)	361,030
Gain on deconsolidation	2,237			2,237		—		(2,237		)	2,237
Equity in earnings of unconsolidated affiliates	102,881			102,881		—		(204,664		)	1,098
Operating income	74,679			105,118		194,700		(206,901		)	167,596
Interest expense	13,949			—		1,105		—			15,054
Earnings from continuing operations before income taxes	60,730			105,118		193,595		(206,901		)	152,542
Income tax expense	24,210			—		769		—			24,979
Net earnings from continuing operations	36,520			105,118		192,826		(206,901		)	127,563
Net earnings (loss) from discontinued operations	(146		)	—		692		—			546
Net earnings and comprehensive income	36,374			105,118		193,518		(206,901		)	128,109
Less net earnings and comprehensive income attributable to noncontrolling interests:
Net earnings from continuing operations	—			—		91,396		—			91,396
Net earnings from discontinued operations	—			—		339		—			339
Total net earnings and comprehensive income attributable to noncontrolling interests	—			—		91,735		—			91,735
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	36,374		$	105,118	$	101,783	$	(206,901	)	$	36,374
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	36,520		$	105,118	$	101,430	$	(206,901	)	$	36,167
Discontinued operations, net of income tax	(146		)	—		353		—			207
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders	$	36,374		$	105,118	$	101,783	$	(206,901	)	$	36,374



Condensed Consolidating Statement of Cash Flows - For the Six Months Ended June 30, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Cash flows from operating activities:
Net cash flows provided by operating activities	$	27,919		$	102,284		$	202,508		$	(179,130	)	$	153,581
Cash flows from investing activities:
Acquisition of interests in surgery centers and related transactions	—			(26,880		)	—			2,443			(24,437		)
Acquisition of property and equipment	(1,949		)	—			(14,126		)	—			(16,075		)
Proceeds from sale of interests in surgery centers	—			2,092			—			—			2,092
Other	(1,259		)	(122		)	—			—			(1,381		)
Net cash flows used in investing activities	(3,208		)	(24,910		)	(14,126		)	2,443			(39,801		)
Cash flows from financing activities:
Proceeds from long-term borrowings	70,000			—			4,246			—			74,246
Repayment on long-term borrowings	(96,358		)	—			(5,968		)	—			(102,326		)
Distributions to owners, including noncontrolling interests	—			(76,846		)	(194,294		)	179,130			(92,010		)
Changes in intercompany balances with affiliates, net	(1,020		)	—			1,020			—			—
Other financing activities, net	(207		)	(528		)	3,559			(2,443		)	381
Net cash flows used in financing activities	(27,585		)	(77,374		)	(191,437		)	176,687			(119,709		)
Net decrease in cash and cash equivalents	(2,874		)	—			(3,055		)	—			(5,929		)
Cash and cash equivalents, beginning of period	6,710			—			44,130			—			50,840
Cash and cash equivalents, end of period	$	3,836		$	—		$	41,075		$	—		$	44,911



Condensed Consolidating Statement of Cash Flows - For the Six Months Ended June 30, 2013 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Cash flows from operating activities:
Net cash flows provided by operating activities	$	32,189		$	102,630		$	205,224		$	(187,493	)	$	152,550
Cash flows from investing activities:
Acquisition of interests in surgery centers and related transactions	—			(18,424		)	—			78			(18,346		)
Acquisition of property and equipment	(1,189		)	—			(11,283		)	—			(12,472		)
Other	—			55			—			—			55
Net cash flows used in investing activities	(1,189		)	(18,369		)	(11,283		)	78			(30,763		)
Cash flows from financing activities:
Proceeds from long-term borrowings	66,700			—			4,222			—			70,922
Repayment on long-term borrowings	(89,224		)	—			(6,998		)	—			(96,222		)
Distributions to owners, including noncontrolling interests	—			(84,863		)	(194,156		)	187,493			(91,526		)
Changes in intercompany balances with affiliates, net	1,431			—			(1,431		)	—			—
Other financing activities, net	(12,371		)	602			411			(78		)	(11,436		)
Net cash flows used in financing activities	(33,464		)	(84,261		)	(197,952		)	187,415			(128,262		)
Net decrease in cash and cash equivalents	(2,464		)	—			(4,011		)	—			(6,475		)
Cash and cash equivalents, beginning of period	7,259			—			39,139			—			46,398
Cash and cash equivalents, end of period	$	4,795		$	—		$	35,128		$	—		$	39,923