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 - September 30, 2015 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	68,730	$	56,647	$	62,045	$	—		$	187,422
Restricted cash and marketable securities	—		—		11,789		—			11,789
Accounts receivable, net	—		160,685		115,552		—			276,237
Supplies inventory	—		255		20,632		—			20,887
Prepaid and other current assets	33,969		50,302		19,516		(12,136		)	91,651
Total current assets	102,699		267,889		229,534		(12,136		)	587,986
Property and equipment, net	12,819		9,468		168,112		—			190,399
Investments in and receivables from unconsolidated affiliates	4,115,444		1,729,729		—		(5,732,296		)	112,877
Goodwill	—		1,559,463		—		2,029,854			3,589,317
Intangible assets, net	62,201		1,217,937		2,429		—			1,282,567
Other assets	3,408		1,040		21,624		(1,998		)	24,074
Total assets	$	4,296,571	$	4,785,526	$	421,699	$	(3,716,576	)	$	5,787,220
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	8,700	$	—	$	11,282	$	—		$	19,982
Accounts payable	1,696		4,686		28,067		(3,699		)	30,750
Accrued salaries and benefits	28,070		141,388		17,465		—			186,923
Accrued interest	17,835		—		11		—			17,846
Other accrued liabilities	14,856		81,017		43,127		(8,437		)	130,563
Total current liabilities	71,157		227,091		99,952		(12,136		)	386,064
Long-term debt	2,200,425		—		57,759		(27,888		)	2,230,296
Deferred income taxes	238,773		408,936		—		(1,998		)	645,711
Other long-term liabilities	4,473		66,862		19,336		—			90,671
Intercompany payable	—		1,228,157		—		(1,228,157		)	—
Noncontrolling interests – redeemable	—		—		64,595		120,666			185,261
Equity:
Total AmSurg Corp. equity	1,781,743		2,854,480		133,171		(2,987,651		)	1,781,743
Noncontrolling interests – non-redeemable	—		—		46,886		420,588			467,474
Total equity	1,781,743		2,854,480		180,057		(2,567,063		)	2,249,217
Total liabilities and equity	$	4,296,571	$	4,785,526	$	421,699	$	(3,716,576	)	$	5,787,220



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 Operations - For the Three Months Ended September 30, 2015 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Net revenue	$	5,975		$	339,484	$	314,382	$	(9,614	)	$	650,227
Operating expenses:
Salaries and benefits	17,642			231,769		78,249		(128		)	327,532
Supply cost	—			476		45,182		(20		)	45,638
Other operating expenses	7,054			34,742		66,522		(9,466		)	98,852
Transaction costs	270			1,837		—		—			2,107
Depreciation and amortization	1,017			14,906		8,183		—			24,106
Total operating expenses	25,983			283,730		198,136		(9,614		)	498,235
Net gain on deconsolidations	—			9,112		—		—			9,112
Equity in earnings of unconsolidated affiliates	96,232			64,423		—		(155,720		)	4,935
Operating income	76,224			129,289		116,246		(155,720		)	166,039
Interest expense, net	11,766			17,845		631		—			30,242
Earnings from operations before income taxes	64,458			111,444		115,615		(155,720		)	135,797
Income tax expense	21,797			15,210		511		—			37,518
Net earnings	42,661			96,234		115,104		(155,720		)	98,279
Less net earnings attributable to noncontrolling interests	—			—		55,618		—			55,618
Net earnings attributable to AmSurg Corp. shareholders	42,661			96,234		59,486		(155,720		)	42,661
Preferred stock dividends	(2,264		)	—		—		—			(2,264		)
Net earnings attributable to AmSurg Corp. common shareholders	$	40,397		$	96,234	$	59,486	$	(155,720	)	$	40,397



Condensed Consolidating Statement of Operations - For the Nine Months Ended September 30, 2015 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	20,145		$	954,642	$	915,791		$	(27,956	)	$	1,862,622
Operating expenses:
Salaries and benefits	50,796			671,988		227,703			(380		)	950,107
Supply cost	—			1,361		132,705			(54		)	134,012
Other operating expenses	19,471			106,452		196,023			(27,522		)	294,424
Transaction costs	862			4,698		—			—			5,560
Depreciation and amortization	2,907			43,830		23,799			—			70,536
Total operating expenses	74,036			828,329		580,230			(27,956		)	1,454,639
Net gain on deconsolidations	—			5,889		(35		)	—			5,854
Equity in earnings of unconsolidated affiliates	233,362			183,519		—			(405,306		)	11,575
Operating income	179,471			315,721		335,526			(405,306		)	425,412
Interest expense, net	35,630			53,223		1,818			—			90,671
Earnings from operations before income taxes	143,841			262,498		333,708			(405,306		)	334,741
Income tax expense	46,467			29,134		1,359			—			76,960
Net earnings	97,374			233,364		332,349			(405,306		)	257,781
Less net earnings attributable to noncontrolling interests	—			—		160,407			—			160,407
Net earnings attributable to AmSurg Corp. shareholders	97,374			233,364		171,942			(405,306		)	97,374
Preferred stock dividends	(6,792		)	—		—			—			(6,792		)
Net earnings attributable to AmSurg Corp. common shareholders	$	90,582		$	233,364	$	171,942		$	(405,306	)	$	90,582



Condensed Consolidating Statement of Operations - For the Three Months Ended September 30, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	5,551		$	221,013	$	280,589		$	(4,803	)	$	502,350
Operating expenses:
Salaries and benefits	14,961			153,653		71,846			(123		)	240,337
Supply cost	—			816		41,070			—			41,886
Other operating expenses	6,425			19,127		60,390			(4,680		)	81,262
Transaction costs	23,111			1,991		—			—			25,102
Depreciation and amortization	789			12,320		7,729			—			20,838
Total operating expenses	45,286			187,907		181,035			(4,803		)	409,425
Equity in earnings of unconsolidated affiliates	58,649			48,225		—			(104,716		)	2,158
Operating income	18,914			81,331		99,554			(104,716		)	95,083
Interest expense	23,865			14,630		559			—			39,054
Debt extinguishment costs	16,887			—		—			—			16,887
Earnings (loss) from continuing operations before income taxes	(21,838		)	66,701		98,995			(104,716		)	39,142
Income tax expense (benefit)	(8,566		)	8,051		537			—			22
Net earnings (loss) from continuing operations	(13,272		)	58,650		98,458			(104,716		)	39,120
Net earnings (loss) from discontinued operations	3,438			—		(5,135		)	—			(1,697		)
Net earnings (loss)	(9,834		)	58,650		93,323			(104,716		)	37,423
Less net earnings attributable to noncontrolling interests	—			—		47,257			—			47,257
Net earnings (loss) attributable to AmSurg Corp. shareholders	(9,834		)	58,650		46,066			(104,716		)	(9,834		)
Preferred stock dividends	(2,239		)	—		—			—			(2,239		)
Net earnings (loss) attributable to AmSurg Corp. common shareholders	$	(12,073	)	$	58,650	$	46,066		$	(104,716	)	$	(12,073	)
Amounts attributable to AmSurg Corp. common shareholders:
Earnings (loss) from continuing operations, net of income tax	$	(15,511	)	$	58,650	$	50,880		$	(104,716	)	$	(10,697	)
Discontinued operations, net of income tax	3,438			—		(4,814		)	—			(1,376		)
Net earnings (loss) attributable to AmSurg Corp. common shareholders	$	(12,073	)	$	58,650	$	46,066		$	(104,716	)	$	(12,073	)



Condensed Consolidating Statement of Operations - For the Nine Months Ended September 30, 2014 (In thousands)
	Parent Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	18,042		$	221,013	$	815,272		$	(14,189	)	$	1,040,138
Operating expenses:
Salaries and benefits	44,728			153,653		208,527			(369		)	406,539
Supply cost	—			816		119,748			—			120,564
Other operating expenses	15,440			19,127		170,496			(13,820		)	191,243
Transaction costs	26,690			1,991		—			—			28,681
Depreciation and amortization	2,429			12,320		22,784			—			37,533
Total operating expenses	89,287			187,907		521,555			(14,189		)	784,560
Gain on deconsolidation	3,411			3,411		—			(3,411		)	3,411
Equity in earnings of unconsolidated affiliates	161,340			150,916		—			(308,795		)	3,461
Operating income	93,506			187,433		293,717			(312,206		)	262,450
Interest expense	36,658			14,630		1,618			—			52,906
Debt extinguishment costs	16,887			—		—			—			16,887
Earnings from continuing operations before income taxes	39,961			172,803		292,099			(312,206		)	192,657
Income tax expense	16,687			8,051		1,064			—			25,802
Net earnings from continuing operations	23,274			164,752		291,035			(312,206		)	166,855
Net earnings (loss) from discontinued operations	3,048			—		(4,194		)	—			(1,146		)
Net earnings	26,322			164,752		286,841			(312,206		)	165,709
Less net earnings attributable to noncontrolling interests	—			—		139,387			—			139,387
Net earnings attributable to AmSurg Corp. shareholders	26,322			164,752		147,454			(312,206		)	26,322
Preferred stock dividends	(2,239		)	—		—			—			(2,239		)
Net earnings attributable to AmSurg Corp. common shareholders	$	24,083		$	164,752	$	147,454		$	(312,206	)	$	24,083
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax	$	21,035		$	164,752	$	151,885		$	(312,206	)	$	25,466
Discontinued operations, net of income tax	3,048			—		(4,431		)	—			(1,383		)
Net earnings attributable to AmSurg Corp. common shareholders	$	24,083		$	164,752	$	147,454		$	(312,206	)	$	24,083



Condensed Consolidating Statement of Cash Flows - For the Nine Months Ended September 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	$	(20,702	)	$	313,286		$	368,391		$	(233,773	)	$	427,202
Cash flows from investing activities:
Acquisitions and related expenses	(29,157		)	(236,107		)	—			31,774			(233,490		)
Acquisition of property and equipment	(5,659		)	(15,418		)	(25,929		)	—			(47,006		)
Purchases of marketable securities	—			—			(1,743		)	—			(1,743		)
Maturities of marketable securities	—			—			4,233			—			4,233
Other	—			(779		)	(3,195		)	—			(3,974		)
Net cash flows used in investing activities	(34,816		)	(252,304		)	(26,634		)	31,774			(281,980		)
Cash flows from financing activities:
Proceeds from long-term borrowings	—			—			10,197			—			10,197
Repayment on long-term borrowings	(6,525		)	—			(9,212		)	—			(15,737		)
Distributions to owners, including noncontrolling interests	—			(59,616		)	(332,301		)	233,773			(158,144		)
Capital contributions	—			29,157			—			(29,157		)	—
Cash dividends for preferred shares	(6,792		)	—			—			—			(6,792		)
Financing cost incurred	(294		)	—			—			—			(294		)
Changes in intercompany balances with affiliates, net	524			—			(524		)	—			—
Other, net	2,984			2,653			1,871			(2,617		)	4,891
Net cash flows used in financing activities	(10,103		)	(27,806		)	(329,969		)	201,999			(165,879		)
Net increase (decrease) in cash and cash equivalents	(65,621		)	33,176			11,788			—			(20,657		)
Cash and cash equivalents, beginning of period	134,351			23,471			50,257			—			208,079
Cash and cash equivalents, end of period	$	68,730		$	56,647		$	62,045		$	—		$	187,422



Condensed Consolidating Statement of Cash Flows - For the Nine Months Ended September 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	$	103,091		$	225,098		$	309,033		$	(361,171	)	$	276,051
Cash flows from investing activities:
Acquisitions and related expenses	(2,147,585		)	(2,142,611		)	1,574			2,149,974			(2,138,648		)
Acquisition of property and equipment	(3,653		)	(2,337		)	(17,119		)	—			(23,109		)
Proceeds from sale of interests in surgery centers	—			4,969			—			—			4,969
Purchases of marketable securities	—			—			(3,486		)	—			(3,486		)
Other	(2,555		)	(648		)	5,285			—			2,082
Net cash flows used in investing activities	(2,153,793		)	(2,140,627		)	(13,746		)	2,149,974			(2,158,192		)
Cash flows from financing activities:
Proceeds from long-term borrowings	2,040,000			—			6,399			—			2,046,399
Repayment on long-term borrowings	(394,318		)	—			(8,725		)	—			(403,043		)
Distributions to owners, including noncontrolling interests	—			(206,580		)	(294,034		)	361,171			(139,443		)
Capital contributions	—			2,147,585			—			(2,147,585		)	—
Proceeds from preferred stock offering	172,500			—			—			—			172,500
Cash dividends for preferred shares	(2,239		)	—			—			—			(2,239		)
Proceeds from common stock offering	439,875			—			—			—			439,875
Payments of equity issuance costs	(24,366		)	—			—			—			(24,366		)
Financing costs incurred	(65,673		)	—			—			—			(65,673		)
Changes in intercompany balances with affiliates, net	731			—			(731		)	—			—
Other, net	1,311			(206		)	2,656			(2,389		)	1,372
Net cash flows provided by (used in) financing activities	2,167,821			1,940,799			(294,435		)	(1,788,803		)	2,025,382
Net increase in cash and cash equivalents	117,119			25,270			852			—			143,241
Cash and cash equivalents, beginning of period	6,710			—			44,130			—			50,840
Cash and cash equivalents, end of period	$	123,829		$	25,270		$	44,982		$	—		$	194,081