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 - June 30, 2015 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	43,658	$	27,112	$	55,519	$	—		$	126,289
Restricted cash and marketable securities	—		—		11,581		—			11,581
Accounts receivable, net	—		140,678		119,194		—			259,872
Supplies inventory	—		288		20,697		—			20,985
Prepaid and other current assets	31,245		31,467		25,379		(4,234		)	83,857
Total current assets	74,903		199,545		232,370		(4,234		)	502,584
Property and equipment, net	12,786		8,661		167,308		—			188,755
Investments in and receivables from unconsolidated affiliates	4,086,890		1,698,299		—		(5,701,510		)	83,679
Goodwill	—		1,551,050		—		2,034,971			3,586,021
Intangible assets, net	64,165		1,215,583		2,629		—			1,282,377
Other assets	3,735		1,001		19,880		—			24,616
Total assets	$	4,242,479	$	4,674,139	$	422,187	$	(3,670,773	)	$	5,668,032
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	8,700	$	—	$	11,078	$	—		$	19,778
Accounts payable	1,956		2,527		27,372		(3,341		)	28,514
Accrued salaries and benefits	26,405		100,159		15,155		—			141,719
Accrued interest	29,793		—		11		—			29,804
Other accrued liabilities	7,867		49,384		40,791		(893		)	97,149
Total current liabilities	74,721		152,070		94,407		(4,234		)	316,964
Long-term debt	2,202,600		—		55,051		(27,968		)	2,229,683
Deferred income taxes	219,566		404,101		—		—			623,667
Other long-term liabilities	7,934		64,586		19,434		—			91,954
Intercompany payable	—		1,228,157		—		(1,228,157		)	—
Noncontrolling interests – redeemable	—		—		64,511		120,666			185,177
Equity:
Total AmSurg Corp. equity	1,737,658		2,825,225		138,497		(2,963,722		)	1,737,658
Noncontrolling interests – non-redeemable	—		—		50,287		432,642			482,929
Total equity	1,737,658		2,825,225		188,784		(2,531,080		)	2,220,587
Total liabilities and equity	$	4,242,479	$	4,674,139	$	422,187	$	(3,670,773	)	$	5,668,032



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 Statement of Earnings - For the Three Months Ended June 30, 2015 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Net revenue	$	7,079		$	329,579		$	314,780	$	(9,488	)	$	641,950
Operating expenses:
Salaries and benefits	15,511			228,618			76,391		(124		)	320,396
Supply cost	—			489			45,335		(34		)	45,790
Other operating expenses	5,783			42,099			66,450		(9,330		)	105,002
Transaction costs	324			1,658			—		—			1,982
Depreciation and amortization	1,056			14,617			7,939		—			23,612
Total operating expenses	22,674			287,481			196,115		(9,488		)	496,782
Loss on deconsolidation	—			(3,035		)	—		—			(3,035		)
Equity in earnings of unconsolidated affiliates	76,931			64,513			—		(137,455		)	3,989
Operating income	61,336			103,576			118,665		(137,455		)	146,122
Interest expense, net	11,978			17,624			580		—			30,182
Earnings from operations before income taxes	49,358			85,952			118,085		(137,455		)	115,940
Income tax expense	15,683			9,021			489		—			25,193
Net earnings	33,675			76,931			117,596		(137,455		)	90,747
Net earnings attributable to noncontrolling interests	—			—			57,072		—			57,072
Net earnings attributable to AmSurg Corp. shareholders	33,675			76,931			60,524		(137,455		)	33,675
Preferred stock dividends	(2,264		)	—			—		—			(2,264		)
Net earnings attributable to AmSurg Corp. common shareholders	$	31,411		$	76,931		$	60,524	$	(137,455	)	$	31,411



Condensed Consolidating Statement of Earnings - For the Six Months Ended June 30, 2015 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	14,170		$	615,158		$	601,409		$	(18,342	)	$	1,212,395
Operating expenses:
Salaries and benefits	33,154			440,219			149,454			(252		)	622,575
Supply cost	—			885			87,523			(34		)	88,374
Other operating expenses	12,417			71,710			129,501			(18,056		)	195,572
Transaction costs	592			2,861			—			—			3,453
Depreciation and amortization	1,890			28,924			15,616			—			46,430
Total operating expenses	48,053			544,599			382,094			(18,342		)	956,404
Loss on deconsolidation	(188		)	(3,223		)	(35		)	188			(3,258		)
Equity in earnings of unconsolidated affiliates	137,318			119,096			—			(249,774		)	6,640
Operating income	103,247			186,432			219,280			(249,586		)	259,373
Interest expense, net	23,864			35,378			1,187			—			60,429
Earnings from operations before income taxes	79,383			151,054			218,093			(249,586		)	198,944
Income tax expense	24,670			13,924			848			—			39,442
Net earnings	54,713			137,130			217,245			(249,586		)	159,502
Net earnings attributable to noncontrolling interests	—			—			104,789			—			104,789
Net earnings attributable to AmSurg Corp. shareholders	54,713			137,130			112,456			(249,586		)	54,713
Preferred stock dividends	(4,528		)	—			—			—			(4,528		)
Net earnings attributable to AmSurg Corp. common shareholders	$	50,185		$	137,130		$	112,456		$	(249,586	)	$	50,185



Condensed Consolidating Statement of Earnings - For the Three Months Ended June 30, 2014 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Net revenue	$	6,364	$	—	$	276,640	$	(4,777	)	$	278,227
Operating expenses:
Salaries and benefits	15,282		—		68,896		(125		)	84,053
Supply cost	—		—		40,873		—			40,873
Other operating expenses	4,849		—		55,615		(4,652		)	55,812
Transaction costs	3,579		—		—		—			3,579
Depreciation and amortization	815		—		7,621		—			8,436
Total operating expenses	24,525		—		173,005		(4,777		)	192,753
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	37,844		56,005		103,635		(110,105		)	87,379
Interest expense	6,341		—		551		—			6,892
Earnings from continuing operations before income taxes	31,503		56,005		103,084		(110,105		)	80,487
Income tax expense	12,549		—		249		—			12,798
Net earnings from continuing operations	18,954		56,005		102,835		(110,105		)	67,689
Net earnings from discontinued operations	7		—		476		—			483
Net earnings	18,961		56,005		103,311		(110,105		)	68,172
Net earnings attributable to noncontrolling interests	—		—		49,211		—			49,211
Net earnings 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	$	53,917	$	(110,105	)	$	18,771
Discontinued operations, net of income tax	7		—		183		—			190
Net earnings attributable to AmSurg Corp. common shareholders	$	18,961	$	56,005	$	54,100	$	(110,105	)	$	18,961



Condensed Consolidating Statement of Earnings - For the Six Months Ended June 30, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Net revenue	$	12,491		$	—	$	534,683	$	(9,386	)	$	537,788
Operating expenses:
Salaries and benefits	29,767			—		136,681		(246		)	166,202
Supply cost	—			—		78,678		—			78,678
Other operating expenses	9,015			—		110,106		(9,140		)	109,981
Transaction costs	3,579			—		—		—			3,579
Depreciation and amortization	1,640			—		15,055		—			16,695
Total operating expenses	44,001			—		340,520		(9,386		)	375,135
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		194,163		(207,490		)	167,367
Interest expense	12,793			—		1,059		—			13,852
Earnings from continuing operations before income taxes	61,799			106,102		193,104		(207,490		)	153,515
Income tax expense	25,253			—		527		—			25,780
Net earnings from continuing operations	36,546			106,102		192,577		(207,490		)	127,735
Net earnings (loss) from discontinued operations	(390		)	—		941		—			551
Net earnings	36,156			106,102		193,518		(207,490		)	128,286
Net earnings attributable to noncontrolling interests	—			—		92,130		—			92,130
Net earnings 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	$	101,005	$	(207,490	)	$	36,163
Discontinued operations, net of income tax	(390		)	—		383		—			(7		)
Net earnings attributable to AmSurg Corp. common shareholders	$	36,156		$	106,102	$	101,388	$	(207,490	)	$	36,156



Condensed Consolidating Statement of Cash Flows - For the Six Months Ended June 30, 2015 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Cash flows from operating activities:
Net cash flows provided by (used in) operating activities	$	(27,553	)	$	172,907		$	232,423		$	(126,382	)	$	251,395
Cash flows from investing activities:
Acquisitions and related expenses	(51,852		)	(197,718		)	—			53,538			(196,032		)
Acquisition of property and equipment	(4,490		)	(9,424		)	(18,751		)	—			(32,665		)
Purchases of marketable securities	—			—			(1,245		)	—			(1,245		)
Maturities of marketable securities	—			—			2,988			—			2,988
Other	—			(1,441		)	(546		)	—			(1,987		)
Net cash flows used in investing activities	(56,342		)	(208,583		)	(17,554		)	53,538			(228,941		)
Cash flows from financing activities:
Proceeds from long-term borrowings	—			—			7,795			—			7,795
Repayment on long-term borrowings	(4,350		)	—			(5,938		)	—			(10,288		)
Distributions to owners, including noncontrolling interests	—			(15,108		)	(212,307		)	126,382			(101,033		)
Capital contributions	—			51,852			—			(51,852		)	—
Cash dividends for preferred shares	(4,528		)	—			—			—			(4,528		)
Changes in intercompany balances with affiliates, net	444			—			(444		)	—			—
Other financing activities, net	1,636			2,573			1,287			(1,686		)	3,810
Net cash flows provided by (used in) financing activities	(6,798		)	39,317			(209,607		)	72,844			(104,244		)
Net increase (decrease) in cash and cash equivalents	(90,693		)	3,641			5,262			—			(81,790		)
Cash and cash equivalents, beginning of period	134,351			23,471			50,257			—			208,079
Cash and cash equivalents, end of period	$	43,658		$	27,112		$	55,519		$	—		$	126,289



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:
Acquisitions and related expenses	—			(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