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, 2016 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	4,591	$	16,215	$	53,299	$	—		$	74,105
Restricted cash and marketable securities	—		—		12,794		—			12,794
Accounts receivable, net	—		258,863		116,489		—			375,352
Supplies inventory	—		—		21,980		—			21,980
Prepaid and other current assets	45,542		24,074		26,261		(21,312		)	74,565
Total current assets	50,133		299,152		230,823		(21,312		)	558,796
Property and equipment, net	11,877		27,822		165,223		—			204,922
Investments in and receivables from unconsolidated affiliates	5,219,975		1,807,424		—		(6,848,343		)	179,056
Goodwill	—		2,123,067		—		2,051,941			4,175,008
Intangible assets, net	13,037		1,664,313		1,925		—			1,679,275
Other assets	7,186		20,825		20,251		(1,999		)	46,263
Total assets	$	5,302,208	$	5,942,603	$	418,222	$	(4,819,713	)	$	6,843,320
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	8,700	$	20	$	12,052	$	—		$	20,772
Accounts payable	3,073		1,640		29,569		(3,561		)	30,721
Accrued salaries and benefits	29,533		140,149		17,226		—			186,908
Accrued interest	30,386		—		14		—			30,400
Other accrued liabilities	5,171		69,166		35,985		(17,751		)	92,571
Total current liabilities	76,863		210,975		94,846		(21,312		)	361,372
Long-term debt	2,550,996		36		56,065		(26,054		)	2,581,043
Deferred income taxes	288,503		456,942		—		(1,998		)	743,447
Other long-term liabilities	8,568		76,144		34,766		—			119,478
Intercompany payable	—		1,228,157		—		(1,228,157		)	—
Noncontrolling interests – redeemable	—		—		60,886		116,959			177,845
Equity:
Total AmSurg Corp. equity	2,377,278		3,967,431		125,450		(4,092,881		)	2,377,278
Noncontrolling interests – non-redeemable	—		2,918		46,209		433,730			482,857
Total equity	2,377,278		3,970,349		171,659		(3,659,151		)	2,860,135
Total liabilities and equity	$	5,302,208	$	5,942,603	$	418,222	$	(4,819,713	)	$	6,843,320



Condensed Consolidating Balance Sheet - December 31, 2015 (In thousands)
	Parent Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
Assets
Current assets:
Cash and cash equivalents	$	20,437	$	27,507	$	58,716	$	—		$	106,660
Restricted cash and marketable securities	—		—		13,506		—			13,506
Accounts receivable, net	—		223,434		113,896		—			337,330
Supplies inventory	—		—		21,406		—			21,406
Prepaid and other current assets	28,739		39,046		16,062		(8,076		)	75,771
Total current assets	49,176		289,987		223,586		(8,076		)	554,673
Property and equipment, net	12,515		14,601		162,052		—			189,168
Investments in and receivables from unconsolidated affiliates	4,901,026		1,775,272		—		(6,507,128		)	169,170
Goodwill	—		1,956,741		—		2,013,469			3,970,210
Intangible assets, net	12,780		1,579,537		2,320		—			1,594,637
Other assets	4,653		1,717		17,078		(1,998		)	21,450
Total assets	$	4,980,150	$	5,617,855	$	405,036	$	(4,503,733	)	$	6,499,308
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	8,700	$	—	$	11,677	$	—		$	20,377
Accounts payable	2,816		3,760		29,837		(3,852		)	32,561
Accrued salaries and benefits	31,510		158,705		12,322		—			202,537
Accrued interest	30,463		—		17		—			30,480
Other accrued liabilities	13,962		76,590		32,909		(4,224		)	119,237
Total current liabilities	87,451		239,055		86,762		(8,076		)	405,192
Long-term debt	2,326,103		—		55,249		(23,396		)	2,357,956
Deferred income taxes	268,573		432,923		—		(1,998		)	699,498
Other long-term liabilities	4,560		71,509		20,114		—			96,183
Intercompany payable	—		1,228,157		—		(1,228,157		)	—
Noncontrolling interests – redeemable	—		—		63,060		112,672			175,732
Equity:
Total AmSurg Corp. equity	2,293,463		3,646,211		132,267		(3,778,478		)	2,293,463
Noncontrolling interests – non-redeemable	—		—		47,584		423,700			471,284
Total equity	2,293,463		3,646,211		179,851		(3,354,778		)	2,764,747
Total liabilities and equity	$	4,980,150	$	5,617,855	$	405,036	$	(4,503,733	)	$	6,499,308



Condensed Consolidating Statement of Operations - For the Three Months Ended June 30, 2016 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	7,700		$	437,042		$	324,047		$	(10,290	)	$	758,499
Operating expenses:
Salaries and benefits	22,246			305,173			76,727			(135		)	404,011
Supply cost	—			1,145			48,578			(20		)	49,703
Other operating expenses	6,034			44,213			71,033			(10,135		)	111,145
Transaction costs	2,099			3,036			—			—			5,135
Depreciation and amortization	1,103			21,192			7,759			—			30,054
Total operating expenses	31,482			374,759			204,097			(10,290		)	600,048
Net gain (loss) on disposals and deconsolidations	—			2,857			(262		)	—			2,595
Equity in earnings of unconsolidated affiliates	87,700			68,939			—			(149,288		)	7,351
Operating income	63,918			134,079			119,688			(149,288		)	168,397
Interest expense (income), net	(4,215		)	35,528			600			—			31,913
Earnings before income taxes	68,133			98,551			119,088			(149,288		)	136,484
Income tax expense	22,064			10,858			443			—			33,365
Net earnings	46,069			87,693			118,645			(149,288		)	103,119
Less net earnings (loss) attributable to noncontrolling interests	—			(7		)	57,057			—			57,050
Net earnings attributable to AmSurg Corp. shareholders	46,069			87,700			61,588			(149,288		)	46,069
Preferred stock dividends	(2,264		)	—			—			—			(2,264		)
Net earnings attributable to AmSurg Corp. common shareholders	$	43,805		$	87,700		$	61,588		$	(149,288	)	$	43,805



Condensed Consolidating Statement of Operations - For the Six Months Ended June 30, 2016 (In thousands)
	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
Net revenue	$	16,244		$	852,872		$	634,659		$	(20,598	)	$	1,483,177
Operating expenses:
Salaries and benefits	46,341			614,753			153,024			(268		)	813,850
Supply cost	—			2,152			94,547			(33		)	96,666
Other operating expenses	13,652			87,552			137,920			(20,297		)	218,827
Transaction costs	2,276			4,249			—			—			6,525
Depreciation and amortization	2,175			41,528			15,423			—			59,126
Total operating expenses	64,444			750,234			400,914			(20,598		)	1,194,994
Net gain (loss) on disposals and deconsolidations	—			2,857			(262		)	—			2,595
Equity in earnings of unconsolidated affiliates	156,742			134,375			—			(277,187		)	13,930
Operating income	108,542			239,870			233,483			(277,187		)	304,708
Interest expense (income), net	(7,034		)	68,504			1,253			—			62,723
Earnings before income taxes	115,576			171,366			232,230			(277,187		)	241,985
Income tax expense	38,644			14,632			886			—			54,162
Net earnings	76,932			156,734			231,344			(277,187		)	187,823
Less net earnings (loss) attributable to noncontrolling interests	—			(7		)	110,898			—			110,891
Net earnings attributable to AmSurg Corp. shareholders	76,932			156,741			120,446			(277,187		)	76,932
Preferred stock dividends	(4,528		)	—			—			—			(4,528		)
Net earnings attributable to AmSurg Corp. common shareholders	$	72,404		$	156,741		$	120,446		$	(277,187	)	$	72,404



Condensed Consolidating Statement of Operations - 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
Net gain (loss) on disposals and deconsolidations	—			(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 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
Less 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 Operations - 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
Net gain (loss) on disposals and deconsolidations	(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 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
Less 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 Cash Flows - For the Six Months Ended June 30, 2016 (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	$	39,294		$	131,227		$	255,297		$	(230,713	)	$	195,105
Cash flows from investing activities:
Acquisitions and related expenses	(265,258		)	(284,010		)	—			268,155			(281,113		)
Acquisition of property and equipment	(1,676		)	(19,916		)	(16,026		)	—			(37,618		)
Proceeds from sale of interests in surgery centers	—			25			—			—			25
Purchases of marketable securities	—			—			(498		)	—			(498		)
Maturities of marketable securities	—			—			2,738			—			2,738
Other	—			(4,057		)	(4,692		)	—			(8,749		)
Net cash flows used in investing activities	(266,934		)	(307,958		)	(18,478		)	268,155			(325,215		)
Cash flows from financing activities:
Proceeds from long-term borrowings	313,000			—			4,151			—			317,151
Repayment on long-term borrowings	(92,350		)	(9		)	(6,404		)	—			(98,763		)
Distributions to owners, including noncontrolling interests	—			(102,330		)	(243,972		)	230,713			(115,589		)
Capital contributions	—			265,258			—			(265,258		)	—
Changes in intercompany balances with affiliates, net	(2,657		)	—			2,657			—			—
Other, net	(6,199		)	2,520			1,332			(2,897		)	(5,244		)
Net cash flows provided by (used in) financing activities	211,794			165,439			(242,236		)	(37,442		)	97,555
Net decrease in cash and cash equivalents	(15,846		)	(11,292		)	(5,417		)	—			(32,555		)
Cash and cash equivalents, beginning of period	20,437			27,507			58,716			—			106,660
Cash and cash equivalents, end of period	$	4,591		$	16,215		$	53,299		$	—		$	74,105



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		)	—
Changes in intercompany balances with affiliates, net	444			—			(444		)	—			—
Other financing activities, net	(2,892		)	2,573			1,287			(1,686		)	(718		)
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