Financial Information for the Company and Its Subsidiaries

The 2020 Senior Unsecured Notes and 2022 Senior Unsecured Notes are senior unsecured obligations of the Company and are guaranteed by its existing and subsequently acquired or organized 100% owned domestic subsidiaries. The 2020 Senior Unsecured Notes and 2022 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 - December 31, 2014 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	134,351	$	23,471	$	50,257	$	—		$	208,079
Restricted cash and marketable securities	—		—		10,219		—			10,219
Accounts receivable, net	—		123,772		109,281		—			233,053
Supplies inventory	—		301		19,673		—			19,974
Prepaid and other current assets	47,997		58,388		13,795		(4,818		)	115,362
Total current assets	182,348		205,932		203,225		(4,818		)	586,687
Property and equipment, net	10,391		9,972		160,085		—			180,448
Investments in and receivables from unconsolidated affiliates	3,912,804		1,587,881		—		(5,425,210		)	75,475
Goodwill	—		1,490,981		—		1,890,168			3,381,149
Intangible assets, net	67,678		1,203,218		2,983		—			1,273,879
Other assets	3,323		943		23,086		(1,466		)	25,886
Total assets	$	4,176,544	$	4,498,927	$	389,379	$	(3,541,326	)	$	5,523,524
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	8,700	$	—	$	10,126	$	—		$	18,826
Accounts payable	1,849		35		31,781		(4,080		)	29,585
Accrued salaries and benefits	25,035		101,395		13,614		—			140,044
Accrued interest	29,621		—		23		—			29,644
Other accrued liabilities	8,051		44,305		16,368		(738		)	67,986
Total current liabilities	73,256		145,735		71,912		(4,818		)	286,085
Long-term debt	2,206,950		—		53,648		(28,412		)	2,232,186
Deferred income taxes	209,400		425,546		—		(1,466		)	633,480
Other long-term liabilities	7,391		63,616		18,436		—			89,443
Intercompany payable	—		1,219,979		8,010		(1,227,989		)	—
Noncontrolling interests – redeemable	—		—		63,544		120,555			184,099
Equity:
Total AmSurg Corp. equity	1,679,547		2,644,051		130,206		(2,774,257		)	1,679,547
Noncontrolling interests – non-redeemable	—		—		43,623		375,061			418,684
Total equity	1,679,547		2,644,051		173,829		(2,399,196		)	2,098,231
Total liabilities and equity	$	4,176,544	$	4,498,927	$	389,379	$	(3,541,326	)	$	5,523,524



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
Prepaid and other current assets	27,090		—		13,971		(4,362		)	36,699
Total current assets	33,833		—		181,554		(4,362		)	211,025
Property and equipment, net	6,024		—		157,666		—			163,690
Investments in and receivables from unconsolidated affiliates	1,484,108		1,453,596		—		(2,922,178		)	15,526
Goodwill	—		—		—		1,758,970			1,758,970
Intangible assets, net	24,489		—		3,378		—			27,867
Other assets	866		—		—		—			866
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 salaries and benefits	21,115		—		11,179		—			32,294
Accrued interest	1,847		—		38		—			1,885
Other accrued liabilities	4,457		—		3,293		(404		)	7,346
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 - Year Ended December 31, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenues	$	24,773		$	508,572	$	1,112,940		$	(24,336	)	$	1,621,949
Operating expenses:
Salaries and benefits	65,697			350,615		284,050			(5,786		)	694,576
Supply cost	—			1,292		163,004			—			164,296
Other operating expenses	18,667			53,413		231,398			(18,550		)	284,928
Transaction costs	29,004			4,886		—			—			33,890
Depreciation and amortization	4,044			25,610		30,690			—			60,344
Total operating expenses	117,412			435,816		709,142			(24,336		)	1,238,034
Gain on deconsolidation	3,411			3,411		—			(3,411		)	3,411
Equity in earnings of unconsolidated affiliates	234,246			211,889		—			(439,097		)	7,038
Operating income	145,018			288,056		403,798			(442,508		)	394,364
Interest expense, net	47,997			33,026		2,262			—			83,285
Debt extinguishment costs	16,887			—		—			—			16,887
Earnings from continuing operations before income taxes	80,134			255,030		401,536			(442,508		)	294,192
Income tax expense	29,166			17,373		1,564			—			48,103
Net earnings from continuing operations	50,968			237,657		399,972			(442,508		)	246,089
Net earnings (loss) from discontinued operations	2,733			—		(4,029		)	—			(1,296		)
Net earnings	53,701			237,657		395,943			(442,508		)	244,793
Net earnings attributable to noncontrolling interests	—			21		191,071			—			191,092
Net earnings attributable to AmSurg Corp. shareholders	53,701			237,636		204,872			(442,508		)	53,701
Preferred stock dividends	(4,503		)	—		—			—			(4,503		)
Net earnings attributable to AmSurg Corp. common shareholders	$	49,198		$	237,636	$	204,872		$	(442,508	)	$	49,198
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	46,465		$	237,636	$	209,184		$	(442,508	)	$	50,777
Earnings (loss) from discontinued operations, net of income tax	2,733			—		(4,312		)	—			(1,579		)
Net earnings attributable to AmSurg Corp. common shareholders	$	49,198		$	237,636	$	204,872		$	(442,508	)	$	49,198



Condensed Consolidating Statement of Earnings - Year Ended December 31, 2013 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenues	$	24,167	$	—	$	1,050,547		$	(17,518	)	$	1,057,196
Operating expenses:
Salaries and benefits	61,038		—		267,014			(467		)	327,585
Supply cost	—		—		153,126			—			153,126
Other operating expenses	22,360		—		211,192			(17,051		)	216,501
Transaction costs	300		—		—			—			300
Depreciation and amortization	3,186		—		29,214			—			32,400
Total operating expenses	86,884		—		660,546			(17,518		)	729,912
Gain on deconsolidation	2,237		2,237		—			(2,237		)	2,237
Equity in earnings of unconsolidated affiliates	204,962		204,962		—			(406,773		)	3,151
Operating income	144,482		207,199		390,001			(409,010		)	332,672
Interest expense, net	27,282		—		2,243			—			29,525
Earnings from continuing operations before income taxes	117,200		207,199		387,758			(409,010		)	303,147
Income tax expense	47,139		—		1,515			—			48,654
Net earnings from continuing operations	70,061		207,199		386,243			(409,010		)	254,493
Net earnings from discontinued operations	2,642		—		4,409			—			7,051
Net earnings	72,703		207,199		390,652			(409,010		)	261,544
Net earnings attributable to noncontrolling interests	—		—		188,841			—			188,841
Net earnings attributable to AmSurg Corp. common shareholders	$	72,703	$	207,199	$	201,811		$	(409,010	)	$	72,703
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	70,061	$	207,199	$	202,759		$	(409,010	)	$	71,009
Earnings (loss) from discontinued operations, net of income tax	2,642		—		(948		)	—			1,694
Net earnings attributable to AmSurg Corp. common shareholders	$	72,703	$	207,199	$	201,811		$	(409,010	)	$	72,703



Condensed Consolidating Statement of Earnings - Year Ended December 31, 2012 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Net revenues	$	19,907		$	—	$	894,239	$	(14,901	)	$	899,245
Operating expenses:
Salaries and benefits	54,895			—		230,083		(450		)	284,528
Supply cost	—			—		126,919		—			126,919
Other operating expenses	19,799			—		180,518		(14,451		)	185,866
Transaction costs	700			—		—		—			700
Depreciation and amortization	2,860			—		26,395		—			29,255
Total operating expenses	78,254			—		563,915		(14,901		)	627,268
Equity in earnings of unconsolidated affiliates	178,137			178,137		—		(354,710		)	1,564
Operating income	119,790			178,137		330,324		(354,710		)	273,541
Interest expense, net	14,803			—		2,147		—			16,950
Earnings from continuing operations before income taxes	104,987			178,137		328,177		(354,710		)	256,591
Income tax expense	39,339			—		1,554		—			40,893
Net earnings from continuing operations	65,648			178,137		326,623		(354,710		)	215,698
Net earnings (loss) from discontinued operations	(3,085		)	—		11,030		—			7,945
Net earnings	62,563			178,137		337,653		(354,710		)	223,643
Net earnings attributable to noncontrolling interests	—			—		161,080		—			161,080
Net earnings attributable to AmSurg Corp. common shareholders	$	62,563		$	178,137	$	176,573	$	(354,710	)	$	62,563
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	65,648		$	178,137	$	170,962	$	(354,710	)	$	60,037
Earnings (loss) from discontinued operations, net of income tax	(3,085		)	—		5,611		—			2,526
Net earnings attributable to AmSurg Corp. common shareholders	$	62,563		$	178,137	$	176,573	$	(354,710	)	$	62,563



Condensed Consolidating Statement of Cash Flows - Year Ended December 31, 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	$	96,681		$	298,415		$	430,880		$	(413,605	)	$	412,371
Cash flows from investing activities:
Acquisitions and related transactions	(2,124,124		)	(2,188,191		)	1,520			2,126,737			(2,184,058		)
Acquisition of property and equipment	(7,877		)	(9,933		)	(22,407		)	—			(40,217		)
Proceeds from sale of interests in surgery centers	—			7,069			—			—			7,069
Purchases of marketable securities	—			—			(6,474		)	—			(6,474		)
Maturities of marketable securities	—			—			3,486			—			3,486
Other	(3,068		)	(6,594		)	4,721			—			(4,941		)
Net cash flows used in investing activities	(2,135,069		)	(2,197,649		)	(19,154		)	2,126,737			(2,225,135		)
Cash flows from financing activities:
Proceeds from long-term borrowings	2,040,000			—			8,958			—			2,048,958
Repayment on long-term borrowings	(396,493		)	—			(11,982		)	—			(408,475		)
Distributions to owners, including noncontrolling interests	—			(202,247		)	(401,455		)	413,605			(190,097		)
Capital contributions	—			2,124,124			—			(2,124,124		)	—
Proceeds from preferred stock offering	172,500			—			—			—			172,500
Cash dividends for preferred shares	(4,503		)	—			—			—			(4,503		)
Proceeds from common stock offering	439,875			—			—			—			439,875
Payments of equity issuance costs	(24,494		)	—			—			—			(24,494		)
Financing cost incurred	(65,811		)	—			—			—			(65,811		)
Changes in intercompany balances with affiliates, net	2,965			—			(2,965		)	—			—
Other financing activities, net	1,990			828			1,845			(2,613		)	2,050
Net cash flows provided by (used in) financing activities	2,166,029			1,922,705			(405,599		)	(1,713,132		)	1,970,003
Net increase in cash and cash equivalents	127,641			23,471			6,127			—			157,239
Cash and cash equivalents, beginning of period	6,710			—			44,130			—			50,840
Cash and cash equivalents, end of period	$	134,351		$	23,471		$	50,257		$	—		$	208,079



Condensed Consolidating Statement of Cash Flows - Year Ended December 31, 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	$	45,127		$	208,773		$	426,572		$	(347,648	)	$	332,824
Cash flows from investing activities:
Acquisitions and related transactions	—			(74,288		)	—			694			(73,594		)
Acquisition of property and equipment	(3,693		)	—			(25,163		)	—			(28,856		)
Proceeds from sale of interests in surgery centers	—			3,553			—			—			3,553
Other	—			159			—			—			159
Net cash flows used in investing activities	(3,693		)	(70,576		)	(25,163		)	694			(98,738		)
Cash flows from financing activities:
Proceeds from long-term borrowings	152,700			—			9,504			—			162,204
Repayment on long-term borrowings	(188,081		)	—			(14,002		)	—			(202,083		)
Distributions to owners, including noncontrolling interests	—			(138,875		)	(392,922		)	347,648			(184,149		)
Changes in intercompany balances with affiliates, net	88			—			(88		)	—			—
Other financing activities, net	(6,690		)	678			1,090			(694		)	(5,616		)
Net cash flows used in financing activities	(41,983		)	(138,197		)	(396,418		)	346,954			(229,644		)
Net increase (decrease) in cash and cash equivalents	(549		)	—			4,991			—			4,442
Cash and cash equivalents, beginning of period	7,259			—			39,139			—			46,398
Cash and cash equivalents, end of period	$	6,710		$	—		$	44,130		$	—		$	50,840



Condensed Consolidating Statement of Cash Flows - Year Ended December 31, 2012 (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	$	(83,605	)	$	182,851		$	379,257		$	(182,851	)	$	295,652
Cash flows from investing activities:
Acquisitions and related transactions	(90,029		)	(280,189		)	—			92,830			(277,388		)
Acquisition of property and equipment	(3,681		)	—			(25,183		)	—			(28,864		)
Proceeds from sale of interests in surgery centers	—			7,309			—			—			7,309
Net cash flows used in investing activities	(93,710		)	(272,880		)	(25,183		)	92,830			(298,943		)
Cash flows from financing activities:
Proceeds from long-term borrowings	560,000			—			5,566			—			565,566
Repayment on long-term borrowings	(381,220		)	—			(12,944		)	—			(394,164		)
Distributions to owners, including noncontrolling interests	—			—			(345,792		)	182,851			(162,941		)
Capital contributions	—			90,029			—			(90,029		)	—
Changes in intercompany balances with affiliates, net	(2,666		)	—			2,666			—			—
Other financing activities, net	(70		)	—			3,381			(2,801		)	510
Net cash flows provided by (used in) financing activities	176,044			90,029			(347,123		)	90,021			8,971
Net increase (decrease) in cash and cash equivalents	(1,271		)	—			6,951			—			5,680
Cash and cash equivalents, beginning of period	8,530			—			32,188			—			40,718
Cash and cash equivalents, end of period	$	7,259		$	—		$	39,139		$	—		$	46,398