Abington Health
(A Subsidiary of Thomas Jefferson University)
Consolidated Financial Statements
June 30, 2015
Abington Health (A Subsidiary of Thomas Jefferson University)
Index
June 30, 2015
Page(s)
Independent Auditor’s Report ...............................................................................................................1-2
Consolidated Financial Statements
Balance Sheet ..............................................................................................................................................3
Statement of Operations ..............................................................................................................................4
Statement of Changes in Net Assets ...........................................................................................................5
Statement of Cash Flows .............................................................................................................................6
Notes to Financial Statements ................................................................................................................7-24
Supplemental Consolidating Information
Balance Sheet ............................................................................................................................................26
Statement of Operations ............................................................................................................................27
Independent Auditor’s Report
Board of Trustees
Abington Health
We have audited the accompanying consolidated financial statements of Abington Health (a subsidiary of
Thomas Jefferson University) and its subsidiaries, which comprise the consolidated balance sheet as of
June 30, 2015, and the related consolidated statements of operations, of changes in net assets, and of
cash flows for the year then ended.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America;
this includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, we consider internal control relevant to the Entitiy’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Abington Health, and its subsidiaries, as of June 30, 2015, and the
results of their operations, changes in their net assets, and their cash flows for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103-7042
T: (267) 330 3000, F: (267) 330 3300, www.pwc.com/us
Other Matter
Our audit was conducted for the purpose of forming an opinion on the consolidated financial
statements taken as a whole. The consolidating information is the responsibility of management
and was derived from and relates directly to the underlying accounting and other records used to
prepare the consolidated financial statements. The consolidating information has been subjected to
the auditing procedures applied in the audit of the consolidated financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the consolidated financial statements or to
the consolidated financial statements themselves and other additional procedures, in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
consolidating information is fairly stated, in all material respects, in relation to the consolidated
financial statements taken as a whole. The consolidating information is presented for purposes of
additional analysis of the consolidated financial statements rather than to present the financial
position and results of operations of the individual entities and is not a required part of the
consolidated financial statements. Accordingly, we do not express an opinion on the financial
position and results of operations of the individual entities.
September 22, 2015
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidated Balance Sheet
June 30, 2015
2015
Assets
Current
Cash and cash equivalents
Investments
Patient and third-party receivables, net of
doubtful accounts of approximately $13,085,000
Other accounts receivable
Prepaid expenses and other assets
$ 135,510,442
632,691,327
89,641,121
19,169,033
10,918,414
Total current assets
887,930,337
Net pledges receivable
Assets whose use is limited
Property and equipment, net
of accumulated depreciation
Other assets, including funds held in trust by
others for the benefit of Abington Memorial Hospital
Other noncurrent assets
Total assets
10,238,767
83,615,348
473,401,155
71,667,021
52,048,214
$ 1,578,900,842
Liabilities and Net Assets
Current
Current maturities of long-term debt
Accounts payable
Accrued salaries and wages
Third-party and other liabilities
$
Total current liabilities
13,413,200
47,328,294
49,723,930
35,789,635
146,255,059
Accrued insurance and other liabilities
Pension liability
Long-term debt, net of current maturities
68,964,011
143,887,186
315,898,917
Total liabilities
675,005,173
Net assets
Unrestricted
Temporarily restricted
Permanently restricted
758,512,143
68,837,022
76,546,504
Total net assets
903,895,669
Total liabilities and net assets
$ 1,578,900,842
The accompanying notes are an integral part of these consolidated financial statements.
3
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidated Statement of Operations
June 30, 2015
2015
Revenues
Net patient service revenue
Provision for bad debts
$
Net patient service revenue less provision for bad debts
780,570,546
24,452,401
756,118,145
Other operating revenue
Net assets released from restrictions
34,185,726
11,508,879
Total revenues
801,812,750
Expenses
Salaries, wages and employee benefits
Utilities, purchased services and other
Supplies
Depreciation and amortization
Interest
Insurance
446,159,894
125,360,708
127,806,004
46,570,324
12,942,580
10,463,043
Total expenses
769,302,553
Income from operations
32,510,197
Income from investments, trusts, estates and contributions
35,612,844
Excess of revenues over expenses
68,123,041
Change in net unrealized gains
Change in pension liability
Net assets released from restrictions used for capital
Increase in unrestricted net assets
(14,218,172)
(2,529,077)
1,496,902
$
52,872,694
The accompanying notes are an integral part of these consolidated financial statements.
4
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidated Statement of Changes In Net Assets
June 30, 2015
Unrestricted
705,639,449
Net assets at June 30, 2014
Excess of revenues over expenses
Temporarily
Permanently
Total
Restricted
Restricted
Net Assets
63,348,441
77,299,198
846,287,088
411,869
17,193,143
68,123,041
68,123,041
Contributions
-
16,781,274
Investment income
-
3,342,720
3,342,720
Increase (decrease) in value of split interest agreements
and trusts
-
Net change in unrealized gains (loss) on investments
Net assets released from restrictions used for capital
Change in pension liability
(2,014,727)
1,496,902
(1,496,902)
(1,164,563)
(872,940)
(16,232,899)
-
(2,529,077)
Net assets released from restrictions used for operations
(2,529,077)
-
Increase (decrease) in net assets
Net assets at June 30, 2015
291,623
(14,218,172)
(11,415,407)
52,872,694
$
758,512,143
(11,415,407)
5,488,581
$
68,837,022
(752,694)
$
76,546,504
57,608,581
$
903,895,669
The accompanying notes are an integral part of these consolidated financial statements.
5
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidated Statement of Cash Flows
Years Ended June 30, 2015
2015
Cash flows from operating activities
Increase in net assets
Adjustments to reconcile increase in net assets to net
cash provided by operating activities
Changes in pension liability
Depreciation and amortization
Realized and unrealized loss in investments, net
Decrease in value of split interest agreements
and trusts
Provision for bad debts
Contributions restricted for endowment
Income on equity investments interests
Gain on disposal of fixed assets
Changes in assets and liabilities
Accounts and pledges receivable
Prepaid expenses and other assets
Accounts payable, accrued expenses and other liabilities
Net cash provided by operating activities
Cash flows from investing activities
Increase in assets whose use is limited
Purchases of property and equipment
Proceeds from sale of property and equipment
Purchases of investments
Sale of investments
Distribution from equity investments
Net cash used in investing activities
Cash flows from financing activities
Decrease in deferred financing fees
Contributions restricted for endowment
Repayments of long-term debt
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents
Beginning of the year
End of the year
$
57,608,581
2,529,077
46,570,324
16,232,899
872,940
24,452,401
(411,869)
(758,006)
(5,088,017)
(29,003,526)
4,481,017
15,006,798
132,492,619
(994,160)
(28,668,454)
9,751,770
(63,778,328)
28,453,606
1,337,562
(53,898,004)
252,703
411,869
(7,163,200)
(6,498,628)
72,095,987
63,414,455
$ 135,510,442
The accompanying notes are an integral part of these consolidated financial statements.
6
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
1.
Organization
Abington Health (“AH”) was formed in 2009 as a not for profit holding company and is the
controlling entity of Abington Memorial Hospital (the “Hospital”), Lansdale Hospital Corporation
(“LHC”) and Abington Health Foundation, (“AHF”). AH is the sole corporate member of each entity
and as the parent organization strives to continually develop and operate an integrated healthcare
delivery system which provides a comprehensive spectrum of medically necessary healthcare
services to the residents of Pennsylvania counties including: Montgomery, portions of Bucks and
Philadelphia. All entities are exempt from Federal income taxes under the provisions of Section
501(c) (3) of the Internal Revenue Code.
Effective April 30, 2015, Thomas Jefferson University (“TJU”) became the sole corporate member
of AH to further expand and enhance AH’s mission of improving the quality of life for all by fostering
healing, easing suffering, and promoting wellness in a culture of safety, learning and respect. TJU
is an independent, non-profit corporation organized under the laws of the Commonwealth of
Pennsylvania and recognized as a tax-exempt organization pursuant to Section 501(c) (3) of the
Internal Revenue Code. It conducts research and offers undergraduate and graduate instruction
through the Sidney Kimmel Medical College, the Jefferson Colleges of Nursing, Pharmacy, Health
Professions, Population Health, and Biomedical Sciences. TJU has approximately 3,600 students
and is located in Philadelphia, Pennsylvania.
TJU is also the sole corporate member of Thomas Jefferson University Health System (“TJUHS”),
an integrated healthcare organization that provides inpatient, outpatient, and emergency care
services through acute care, ambulatory care, physician, and other primary care services for
residents of the Greater Philadelphia Region.
These consolidated financial statements do not include the financial position of TJU nor the results
of operations for TJU.
2.
Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
Principles of Consolidation
The consolidated financial statements include the accounts of AHF, the Hospital and LHC. All
significant intercompany transactions and balances have been eliminated.
Excess of Revenues over Expenses
The statement of operations includes excess of revenues over expenses. Changes in unrestricted
net assets which are excluded from excess of revenues over expenses, consistent with industry
practice, include unrealized gains and losses on investments other than trading securities, pension
liability adjustments and net assets released for capital.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period,
including the accompanying notes. Management considers critical accounting policies to be those
that require more significant judgments and estimates in the preparation of the financial statements
7
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
including, but not limited to, recognition of net patient service revenue, which includes contractual
allowances and provisions for bad debt; estimates for healthcare professional and general
liabilities; determination of fair values of certain financial instruments; assignment of useful lives to
depreciable assets; and assumptions for measurement of pension liabilities. Management relies
on historical experience and other assumptions believed to be reasonable relative to the
circumstances in making judgments and estimates. Actual results could differ from those
estimates.
Cash and Cash Equivalents
All highly liquid temporary cash investments purchased with an original maturity of 90 days or less
are considered to be cash equivalents other than those held for investment. The carrying value
approximates their fair value.
Investments and Investment Income
Investments classified as current assets are available to fund current operations as needed. All
investments are measured and recorded at fair value based on valuation techniques as discussed
under the heading Fair Value Measurements in this Note. Investment income or loss (including
realized gains and losses on investments, interest and dividends) is included in the excess of
revenues over expenses, unless the income or loss is restricted by donor or law. Unrealized gains
and losses on investments are excluded from the excess of revenues over expenses. Other-thantemporary impairment losses are recorded as realized losses and reported in income from
investments, trusts, estates and contributions.
Assets Whose Use is Limited
Assets whose use is limited represent proceeds from the sale of bonds by the Montgomery County
Higher Education and Health Authority on behalf of the Hospital. The funds, including interest
income from their temporary investment, are held by a bank trustee for debt service reserves
required by bond indentures. These amounts were established in connection with the 2012, 2009
and 1993 Bond issues discussed in Note 6, and amounted to $486,000 on June 30, 2015. Also
included in Assets whose use is limited are $50,141,000 and $32,988,000 in Temporary and
permanently restricted assets at June 30, 2015.
Beneficial Interest in Perpetual Trusts
Beneficial interests in perpetual trusts represent AH’s interest in perpetual trusts that are
administered by independent trustees and generally consist of marketable equity securities.
Because the trusts are perpetual and the original corpus cannot be violated by spending, they are
reported as permanently restricted net assets.
Investments in Unconsolidated Organizations
Investments in unconsolidated organizations represent AH investments in joint ventures or
partnerships. Where applicable, the equity method is used to account for these investments.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. This guidance
establishes a three-level hierarchy for fair value measurements based upon the transparency of
inputs to the valuation of an asset or liability as of the measurement date. The three levels are
defined as follows:
Level 1
Inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
8
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Level 2
Inputs to the valuation methodology include quoted prices for similar assets or
liabilities in active markets and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the same term of the financial instrument.
Alternative investments fair value is based on their net asset value per unit as
reported by their managers.
Level 3
Inputs to the valuation methodology are unobservable.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level
of input that is significant to the fair value measurement.
Assets and liabilities that are measured at fair value are based on one or more of the three
valuation techniques that follow:
Market Approach
Prices and other relevant information generated by market transactions involving identical or
comparable assets or liabilities.
Cost Approach
Amount that would be required to replace the service capacity of an asset (i.e., replacement cost).
Income Approach
Techniques to convert future amounts to a single present amount based on market expectations
(including present value techniques and option-pricing models).
Property and Equipment
AH property and equipment is recorded at cost. Major renewals and improvements are capitalized
while maintenance and repairs are expensed when incurred. Provisions for depreciation are made
over the estimated useful lives of buildings and equipment using the straight-line method. When
assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are
removed from their respective accounts. The resulting gain or loss is included in the consolidated
statements of operations.
Depreciation lives are as follows: land improvements 10 to 15 years, equipment 3 to 15 years,
buildings 18 to 40 years. Depreciation expense was approximately $46,461,000 for fiscal year
2015.
Temporarily and Permanently Restricted Net Assets
Temporarily restricted net assets are those whose use by the Hospital has been limited by donors
to a specific time period or purpose. Temporarily restricted net assets at June 30, 2015 were
approximately $68,837,000. Also included in temporarily restricted net assets are unrealized
investment gains of $11,755,000 as of June 30, 2015. These temporarily restricted net assets are
available for health services, education and research and capital expenditures.
9
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The net assets available by restricted purpose are as follows:
2015
Health services
Education and research
Capital
$
42,648,000
13,271,000
12,918,000
$
68,837,000
Permanently restricted net assets as of fiscal year ended June 30, 2015 was approximately
$76,547,000. These permanently restricted net assets have been restricted by the donors and are
maintained by the hospital in perpetuity, the income of which is for the most part unrestricted and is
used to support healthcare services. Permanently restricted net assets also include funds held by
independent trustees of $46,606,000 as of June 30, 2015.
Net Patient Service Revenue
The Hospital has agreements with third-party payors that provide for payments to the Hospital at
amounts different from its established rates. The basis for payment under these agreements
include prospectively determined rates per discharge and per day, discounts from established
charges, capitated per member per month payments, and certain cost reimbursement
methodologies.
Net patient service revenue is reported at the estimated net realizable amounts from patients, third
party payors, and others for services rendered, including estimated retroactive adjustments under
reimbursement agreements with third party payors. Retroactive adjustments are considered in the
recognition of revenue on an estimated basis in the period the related services are rendered and
adjusted in future periods as final settlements are determined. Medicare cost reports for all years
through 2010 and 2012 have been audited and final settled as of June 30, 2015. The 2011, 2013
and 2014 Medicare cost reports have been filed and are awaiting final settlement as of June 30,
2015. The Hospital did not have any amounts included in net patient service revenue for fiscal
year 2015, related to third party payors final settlements.
Included in the Hospital’s net patient service revenues are payments made on behalf of the
Medicare and Medicaid programs. These payments represent 29% and 5% of net patient service
revenue, respectively, for the fiscal year ended June 30, 2015. Laws and regulations governing the
Medicare and Medicaid program payments are complex and subject to interpretation. The Hospital
believes that it is in compliance with all applicable laws and regulations as they relate to these
programs. Such laws and regulations can be subject to review and interpretation by the Medicare
and Medicaid programs.
Regulatory Oversight
The healthcare industry in general and the services that the Hospital provides are subject to
extensive federal and state laws and regulations. Additionally, a portion of the Hospital’s net
revenues is from payments by government-sponsored healthcare programs, principally Medicare
and Medicaid, and is subject to audit and adjustments by applicable regulatory agencies.
Allowance for Doubtful Accounts
The Hospital records an allowance for doubtful accounts for estimated losses resulting from the
failure of patients to make payments for services. The allowance is determined by analyzing
historical data and trends. Accounts receivable are written off against the allowance for doubtful
accounts when management determines that recovery is unlikely and collection efforts cease.
10
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Other Operating Revenue
Other Operating Revenue consists primarily of outpatient pharmacy, rental income, investment
income, parking income, cafeteria sales, Medicare meaningful use funds and other assorted fees
that the Hospital receives in the course of providing health care services.
Charity Care and Financial Assistance
The Hospital and LHC, under their financial assistance policies, provide a significant amount of
services without charge or at amounts less than established rates to patients who are unable to
compensate either entity for their treatments either through third party coverage or their own
resources. Because these amounts are not expected to be paid, they are not reported as revenue.
The cost of this care is based on a calculation which applies a ratio of costs to charges to the gross
uncompensated charges associated with providing care to these patients. The ratio of costs to
charges is calculated based on the total expenses (less community benefit expense) divided by
gross patient service revenue. The estimated cost of caring for these patients for the year ending
June 30, 2015 was $12,686,000.
In addition, the Hospital and LHC provide services and supplies at amounts below cost to persons
covered by government programs, including Medicare and Medicaid. The Hospital also sponsors
certain other subsidized programs and charity services that provide substantial benefit to the
broader community. Such services and programs include community service programs designed
for specific healthcare concerns, including health education, support groups and health screenings.
Donor-Restricted Gifts
Unconditional promises to give cash and other assets are recognized at the present value of future
cash flows, and are reported at fair value at the date the promise is received. Conditional promises
to give and intentions to give are reported at fair value at the date the gift is received. The gifts are
reported as either temporarily or permanently restricted support if they are received with donor
stipulations that limit the use of the donated assets.
When a donor restriction expires, that is, when a stipulated time restriction ends or purpose
restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net
assets. Donor-restricted contributions whose restrictions are met within the same year as received
are reflected as unrestricted contributions in the accompanying financial statements.
Other Noncurrent Assets
Other noncurrent assets include hospital acquisitions whose purchase price exceeded the value of
the assets received. These amounts have been classified as Intangible Assets and are evaluated
for impairment annually or whenever events or changes in circumstances indicate that the carrying
value of the asset may not be recoverable from the estimated future cash flows expected from their
use.
Retirement Plans
Abington Memorial Hospital sponsors a noncontributory defined benefit pension plan covering all
eligible employees. Plan benefits are generally based on years of service and employees’
earnings during the five highest of the last ten years of covered employment. Abington Memorial
Hospital’s policy is to fund annually at least the minimum amount required by the Employee
Retirement Income Security Act of 1974. On January 1, 2011, the Hospital closed the defined
benefit plan to new hires and established a defined contribution plan that is available to all new
hires after January 1, 2011. After one year of service, participants will be eligible to receive
matching funds based on contributions they make to the Hospital’s 403(b) retirement savings plan
as well as core employee contributions, which will vary based on years of service. Lansdale
Hospital sponsors a 401(k) defined contribution plan covering all eligible employees. The plan has
11
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
a 50% employer match with a 4% maximum. Total retirement plan expense was $25,773,000 for
June 30, 2015.
Accrued Insurance and Other Liabilities
Accrued insurance and other liabilities primarily consists of estimated liabilities for reported and
incurred but not reported claims related to professional liability, workers compensation and
employee health care. Professional liabilities recorded on the consolidated balance sheets have
been discounted using a 3.5% discount rate for 2015.
Accounting For Long Lived Assets
The Hospital reviews the realizably of long-lived assets and certain tangible assets whenever
events and circumstances occur which indicate recorded costs may not be recoverable. No
impairments of long-lived assets were recognized during 2015.
New Accounting Pronouncements
The Financial Accounting Standards Board ("FASB") issued an accounting standard update in May
2014 regarding the accounting for and disclosure of revenue recognition. Specifically, the update
outlined a single comprehensive model for entities to use in accounting for revenue arising from
contracts with customers, which will be common to both US GAAP and International Financial
Reporting Standards. The guidance was effective for annual periods beginning after December 15,
2016, which allowed for full retrospective adoption of prior period data or a modified retrospective
adoption. Early adoption was not permitted. In July 2015, the FASB issued an update to delay the
effective date of the new revenue standard by one year, or, in other words, to be effective for
annual and interim periods beginning after December 15, 2018. Entities will be permitted to adopt
the new revenue standard early, but not before the original public organization effective date. AH is
currently evaluating the effects of this guidance.
The FASB issued an accounting standard update in May 2015 regarding the required disclosures
for entities that elect to measure the fair value of certain investments using the net asset value per
share (or its equivalent) practical expedient in accordance with the fair value measurement
authoritative guidance. The update removes the requirement to categorize within the fair value
hierarchy, and also, limits the requirement to make certain other disclosures, for all such
investments. The amendments in this update are effective for fiscal years beginning after
December 15, 2016, and interim periods within those fiscal years, and should be applied on a
retrospective basis for the periods presented. Early adoption is permitted. AH is currently
evaluating the effects of this guidance.
The FASB issued an accounting standard update in April 2015 regarding the presentation of debt
issuance costs on the balance sheet. The update requires capitalized debt issuance costs be
presented on the balance sheet as a reduction to debt, rather than recorded as a separate asset.
The amendments in this update are effective for annual and interim periods beginning after
December 15, 2015 and should be applied on a retrospective basis for the periods presented. Early
adoption is permitted and the AH’s consolidated balance sheet at June 30, 2015 reflects capitalized
debt issuance costs as a reduction of debt.
12
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
3.
The Investments and Investment Income
Investments that are measured at fair value are presented in the consolidated balance sheets
under the following classifications:
2015
Investments
Assets whose use is limited
Other investments, including funds held in trust by others
for the benefit of Abington Health
$ 632,691,000
83,615,000
71,667,000
$ 787,973,000
The following table presents the financial instruments carried at fair value as of June 30, 2015,
categorized based on the fair value hierarchy described in Note 2:
Level 1
Level 2
Level 3
Total
Assets
Cash and cash equivalents
$
Fixed income securities
Unregistered fixed income funds
20,016,000
$
-
32,589,000
130,105,000
$
-
$
-
20,016,000
162,694,000
-
113,923,000
-
113,923,000
336,569,000
-
-
336,569,000
Mutual funds-unregistered
-
92,949,000
-
92,949,000
Beneficial interests in perpetual and charitable remainder trusts
-
-
54,999,000
54,999,000
$ 389,174,000
$ 336,977,000
$ 54,999,000
781,150,000
Mutual funds
Total assets measured at fair value
Investments not subject to fair value leveling
6,823,000
Total investments and assets whose use is limited
$ 787,973,000
As of June 30, 2015, AHF recorded transfers of $27,486,000 from Level 1 to Level 2 and
$15,891,000 from Level 2 to Level 1 due to a combination of investment portfolio additions and
rebalancing.
The following table is a roll forward of the financial instruments classified as Level 3:
Investments
$
Fair value at June 30, 2014
Contributions
Income attributed to the hospital
Distributions to the hospital
Change in value of perpetual and charitable remainder trusts
1,115,000
1,739,000
(1,739,000)
(1,619,000)
$
Fair value at June 30, 2015
13
55,503,000
54,999,000
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Investment income for 2015 is comprised of the following:
2015
Investment income included in income from
investments, trusts, estates and contributions
Interest and dividends
Net realized gains/losses
$
24,071,000
11,542,000
$
35,613,000
The following tables shows the investments’ gross unrealized losses and fair value aggregated by
investment category and length of time that individual securities have been in a continuous
unrealized loss position, as of June 30, 2015:
2015
Less Than 12 Months
Unrealized
Fair Value
Loss
12 Months or Greater
Unrealized
Fair Value
Gain (Loss)
Fixed income securities $
31,999,000
$
(2,974,000)
$
-
$
-
$
31,999,000
$
(2,974,000)
$
-
$
-
Abington Health reviews the carrying value of its investments for declines in value that could be
considered other than temporary. The unrealized losses reported involve investments where the
market value was not deemed to be impaired on an other than temporary basis under the Abington
Health’s impairment policy. Abington Health has the intent and the ability to hold these
investments until the fair value recovers back to its carrying value. In general, Abington Health
presumes that an individual security in an unrealized loss position of greater than 25% for a
continuous period of 12 months or longer has suffered a decline in value that is other than
temporary. Abington Health carries out further analysis on individual securities to either validate its
presumption or understand why the decline in value is temporary. There were no other than
temporary impairments recorded in 2015.
4.
Patient Service Revenue
Patient service revenue, net of contractual allowances and discounts (but before the provision for
bad debts), recognized in the period from major payer sources, and is as follows for the year ended
June 30, 2015:
2015
Medicare
Medicaid
Managed Care and Other
Uninsured
$ 228,398,000
41,301,000
508,709,000
2,162,000
780,570,000
Provision for Bad Debts
24,452,000
$ 756,118,000
14
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The provision for bad debt expense is based upon management’s assessment of expected net
collections considering economic conditions, historical experience, trends in healthcare coverage
and other collection indicators. Periodically throughout the year, management assesses the
adequacy of the allowance for uncollectible accounts based upon historical write-off experience by
payer category, including those amounts not covered by insurance and history of cash collections.
The results of this review are then used to make any modifications to the provision for bad debt
expense to establish an appropriate allowance for uncollectible accounts. After satisfaction of
amounts due from insurance and reasonable efforts to collect from the patient have been
exhausted both the Hospital and LH follow established guidelines for placing certain past due
patient balances with collection agencies, subject to terms of certain restrictions on collection
efforts as determined by the two healthcare entities. Accounts Receivable are written off after
collection efforts have been followed in accordance with established policies.
5.
Property and Equipment
Property and equipment are recorded at cost for purchased items and at fair value for contributed
items. Major renewals and improvements are capitalized while maintenance repairs are expensed
when incurred. Depreciation is provided over the estimated life of each class of depreciable asset
and is computed using the straight-line method. Land, buildings and equipment and accumulated
depreciation consist of the following at June 30, 2015:
2015
Land and land improvements
Buildings
Equipment
Construction-in-progress
$
79,123,000
559,836,000
382,111,000
1,836,000
1,022,906,000
Accumulated depreciation
(549,505,000)
$
6.
473,401,000
Long-term Debt
Long-term debt outstanding at June 30, 2015 consisted of the following:
2015
Amounts payable to Montgomery County Higher
Education and Health Authority
Series A Revenue Bonds 2012 (a)
Series B Revenue Bonds 2012 (a)
Series A Revenue Bonds 2009 (b)
Series A Revenue Bonds 1993 (c)
Other notes payable
Unamortized Premium
Unamortized Discount and Debt Issuance Cost
$
138,415,000
50,000,000
121,280,000
8,790,000
713,000
12,879,000
(2,765,000)
329,312,000
Current maturities
(13,413,000)
$
15
315,899,000
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Principal
Amounts payable to Montgomery County Higher
Education and Health Authority
Series A Revenue Bonds 2012 (a)
$
Series B Revenue Bonds 2012 (a)
Series A Revenue Bonds 2009 (b)
Series A Revenue Bonds 1993 (c)
Other notes payable
Total
$
138,415,000
50,000,000
121,280,000
8,790,000
713,000
319,198,000
Unamortized
Premium/
(Discount and Debt
Issuance Costs)
$
$
11,320,000
(600,000)
(134,000)
(472,000)
10,114,000
The fair value of the Hospital’s tax-exempt debt is calculated based upon yields available in the
quoted market as of June 30, 2015 for bonds with comparable maturities and credit quality. The
estimated aggregate fair value of the Hospital’s long-term debt at June 30, 2015 approximated
$341,785,000.
a.
In August 2012 at the Hospital’s request, the Montgomery County Higher Education and
Health Authority (“Authority”) issued $138,415,000 Hospital Series A (2012A) and
$50,000,000 Series B Revenue Bonds of 2012 (2012B). The Series A Bonds consist of
$80,320,000 of serial bonds maturing from June 2018 through June 2027 with interest rates of
3.25% or 5% and yields of 1.70% to 3.48%. In addition, there is another $58,095,000 of term
bonds due June 2031 with interest rates of 3.75% or 5% and yields ranging from 3.45% to
3.92%. The Series B bonds consist of $50,000,000 of variable rate direct placement bonds
maturing from June 2020 through June 2035. The proceeds of the 2012A and 2012B bonds
were used together with other available funds to finance a project consisting of: (a) the
refunding of the Authority’s 1998 bonds, (b) the refunding of the Authority’s 2002 bonds, (c)
the payment or reimbursement of the Hospital and LH of certain capital expenditures, and (d)
payment of the costs of issuance of the 2012A and 2012B Bonds. The effect of the refunding
of the 1998 and 2002 bond issues resulted in a gain of $1,363,000.
b.
In November 2009, at the Hospital’s request, the Montgomery County Higher Education and
Health Authority (“Authority”) issued $152,935,000 Hospital Revenue Bonds Series A of 2009
(Abington Memorial Hospital Obligated Group) (“2009 Bonds”). The 2009 Bonds consist of
$152,935,000 of term bonds maturing from June 2011 to June 2033 with interest rates ranging
from 3% to 5.25% with yields ranging from 2.22% to 5.27%. The proceeds from this bond
issue were used to refinance the lines of credit and advance refund a portion of the 1998
Bonds.
c.
In January 1993, at the Hospital’s request, the Authority issued Hospital Revenue Bonds,
Series A of 1993 (“1993 Bonds”). The 1993 Bonds are dated January 1, 1993 and mature in
various years through June 1, 2022, with interest rates ranging from 4.7% to 6.1%. In
July 2003, the Hospital called its 1993 bonds, consistent with the bond’s call option, at a call
price of 102%. Upon receipt of the called 1993 bonds, the Hospital remarketed them, without
a call option, resulting in a non-operating net gain to the Hospital of $3,051,000.
16
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The Hospital and AHF formed an Obligated Group, consisting of the Hospital and AHF, and have
entered into a Master Trust Indenture, dated June 1, 2004. Pursuant to this agreement, the
Hospital and AHF have as members of the Obligated Group assumed financial liability for all
outstanding Hospital bond issues including the 1993 bonds. Lansdale Hospital Corporation
became part of the obligated group upon issuance of the 2009 bonds. Under the terms of the
Master Trust Indenture, the Obligated Group has pledged and granted a lien on and a security
interest in their gross revenues. The Obligated Group generated the required income available for
debt service, as defined in the financing agreement, as amended and restated, of at least 110% of
annual debt service.
Principal and interest on the 1993 bonds are covered by Municipal Bond insurance.
Cash paid for interest approximated $13,969,000 in 2015.
Deferred financing costs represent bond issuance costs which are being amortized over the life of
the bonds, using the effective interest method. Amortization expense, in relation to the bonds, was
approximately $227,000 for the year ended June 30, 2015.
Aggregate annual maturities for long-term debt for each of the five fiscal years and thereafter
subsequent to June 30, 2015 are as follows:
2016
2017
2018
2019
2020
2021 and thereafter
7.
13,413,000
11,078,000
11,138,000
11,483,000
12,433,000
259,653,000
Insurance Coverage
Professional Liability and Other Insurance
In compliance with the Healthcare Services Malpractice Act of Pennsylvania (“Act 111”, of 1975),
The Hospital and LHC utilize a captive insurance company to provide its professional liability
insurance. Specifically, the Hospital insurance provider, Cassatt RRG, is owned by various
regional non-profit hospitals including Abington Memorial Hospital. Cassatt RRG is incorporated
under the laws of the state of Vermont and operates as a Risk Retention Group under the Federal
Liability Risk Retention Act of 1986. Cassatt RRG reinsures with Cassatt Insurance Company,
LTD which is owned by the various regional non-profit hospitals, including the Hospital, and
incorporated as an insurance company under the laws of Bermuda.
The Hospital and LHC maintain primary professional liability insurance in the amount of $500,000
per occurrence and $2,500,000 per annual aggregate, utilizing a guaranteed cost policy
underwritten by Cassatt RRG, Inc. In addition, as required by state legislation, the two entities
participate in the “Pennsylvania Medical Care and Reduction of Error Fund (“MCARE Fund”) which
provides limits of $500,000 per occurrence and $1,500,000 per annual aggregate in excess of the
primary limits. Premium payments for the MCARE Fund are based upon each individual licensed
healthcare provider’s rating with the Joint Underwriters Association and may be subject to future
increases to cover any funding deficiencies within the Fund. The MCARE Fund currently has an
unfunded liability and depending upon the ultimate resolution of this matter the Hospital may incur
additional insurance costs.
17
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The Hospital and LHC believe that Cassatt Insurance Company has been adequately funded and
has sufficient reserves to meet its projected liabilities; however, the Hospital may incur additional
insurance costs depending on the claims experience of Cassatt Insurance Company. The Cassatt
RRG, Inc. policy also provides general liability coverage in the amount of $1,000,000 per
occurrence and $2,000,000 per annual aggregate. Cassatt Insurance Company has also
historically provided professional liability insurance coverage above the MCARE Fund per claim
limit. For the period ended June 30, 2015, Cassatt Insurance Company provides coverage in
excess of the MCARE per claim limit to $4,000,000 and through reinsurance provides layered
excess professional liability coverage of $15,000,000 per occurrence with a $45,000,000 annual
aggregate.
The Hospital and LHC supplement the above coverage with the purchase of an Umbrella Liability
policy, also written by Cassatt RRG, Inc., providing nonprofessional layered liability coverage of
$49,000,000 per occurrence with a $49,000,000 annual aggregate. For the year ended June 30,
2015, the annual general and professional liability insurance premium paid (including the MCARE
Fund and excess policy) was approximately $8,267,000.
At June 30, 2015, the estimated liability recorded in the accompanying balance sheets related to
professional liability amounted to approximately $59,111,000. Anticipated insurance recoveries
from third parties associated with these liabilities for June 30, 2015 was $46,218,000.
Workers’ Compensation Insurance
Abington Memorial Hospital is self-insured for workers’ compensation claims. At June 30, 2015,
the estimated liability recorded in the accompanying balance sheets amounted to approximately
$7,113,000. The Hospital has historically purchased stop loss insurance for individual claims, and
currently purchases stop-loss insurance for individual claims in excess of $750,000. Lansdale
Hospital Corporation has purchased a $250,000 deductible (per claim) commercial worker’s
compensation policy through PMA Insurance Group.
8.
Pension Plan
Current accounting guidance requires employers to recognize the overfunded or underfunded
projected benefit obligation (“PBO”) of a defined benefit pension plan as an asset or liability in the
statement of financial position. The PBO represents the actuarial present value of benefits
attributable to employee service rendered to date, including the effects of estimated future salary
increases. Employers are also required to recognize annual changes in gains or losses, prior
service costs, or other credits that have not been recognized as a component of net periodic
pension cost through unrestricted net assets.
Current accounting guidance requires an employer to measure defined benefit plan assets and
obligation as of the date of its year-end balance sheet, with limited exceptions. The plan has a
measurement date of June 30th.
Items included in unrestricted net assets represent amounts that have not been recognized in net
periodic pension expense. The components recognized in unrestricted net assets, as of June 30,
is as follows:
2015
Net actuarial loss
Prior service cost
$ 139,390,000
3,000
$ 139,393,000
18
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Year-end amounts in unrestricted net assets expected to be recognized as components of net
periodic pension expense during the next fiscal year are as follows:
2015
Amortization of net actuarial loss
Amortization of service cost
$
6,494,000
2,000
$
6,496,000
The following table sets forth the change in the Hospital’s projected benefit obligation and the
change in the fair value of plan assets, as well as the amounts recognized in the financial
statements, at June 30, 2015:
2015
Change in projected benefit obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gain) loss
Benefits paid
$ 637,330,000
26,837,000
28,350,000
(4,285,000)
(13,167,000)
Projected benefit obligation at end of year
675,065,000
Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets, net of expenses
Employer contributions
Benefits paid
493,946,000
26,398,000
24,000,000
(13,166,000)
Fair value of plan assets at end of year
Funded status
531,178,000
$ 143,887,000
Reconciliation of the funded status
Unrecognized prior service cost
Unrecognized actuarial loss
Cumulative contributions (less than) in excess of
Cumulative net periodic benefit cost
Net amount recognized at year-end
$
(3,000)
(139,390,000)
(4,494,000)
$ (143,887,000)
Amounts recognized in statement of
financial position consist of
Accrued pension liability
$ (143,387,000)
Accumulated benefit obligation at the end of year
$ 575,831,000
19
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The principal assumptions used in determining the actuarial present value of the benefit obligations
were as follows:
2015
Weighted average assumptions as of June 30
Discount rate
Rate of compensation increase
4.70 %
4.06 %
2015
Components of net periodic benefit cost
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial gain or loss
Net periodic benefit cost
$
26,837,000
28,349,000
(39,809,000)
3,000
6,594,000
$
21,974,000
Plan assets are allocated at June 30, 2015 as follows:
Allocation Percentage
June 30
2015
Equity securities
Cash and Debt securities
71.10 %
28.90
100.00 %
The following table presents the Plan’s financial instruments as of June 30, 2015, measured at fair
value on a recurring basis using the fair value hierarchy defined in Note 2.
Level 1
Pension investment program
Cash and cash equivalents
Equity securities
Debt securities
Total pension investment program
Level 2
Level 3
Total
$ 12,980,000
301,635,000
-
$
76,030,000
140,533,000
$
-
$ 12,980,000
377,665,000
140,533,000
$314,615,000
$216,563,000
$
-
$531,178,000
The Hospital invests plan assets with the objective of funding plan liabilities, maintaining liquidity
sufficient to pay current year benefit requirements, earn a return above the actuarial assumption
and diversify adequately among asset classes so as to earn a reasonable return relative to the risk
of capital loss. Consistent with this investment objective the Plan has established a target
investment allocation of 57.5% (range 50%-70%) equity, 37.5% (range 30%-50%) fixed income,
and 5% (range 0%-10%) alternative investments.
20
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
The principal assumptions used in determining the Net Periodic Benefit Cost are as follows:
2015
Discount rate
Rate of compensation increase
Expected return on plan assets
4.50 %
4.06 %
8.00 %
The Hospital’s expected rate of return on plan assets assumption was developed based on
historical returns for the major asset classes. This review also considered both current market
conditions and projected future conditions.
Employer contributions expected for fiscal year 2016 is $24,000,000.
Estimated Future Benefit Payments for the next five fiscal years:
2016
2017
2018
2019
2020
9.
16,126,000
17,885,000
19,824,000
22,122,000
24,651,000
Concentration of Credit Risk
The Hospital provides healthcare services to its patients, most of who are local residents and are
insured under third-party agreements and publicly funded programs. The mix of receivables from
patients and third-party payors was as follows:
2015
Medicare
Medicaid
Blue Cross
Managed Care
Other third-party payors
Self-Pay
10.
21%
7%
14%
42%
9%
7%
100%
Lease Commitments
The Hospital and LHC lease office space and certain equipment under operating leases. Rental
expense was approximately $8,770,000 in 2015.
21
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Future payments for operating leases as of June 30, 2015 are as follows:
2016
2017
2018
2019
2020
2021 and thereafter
11.
3,791,000
2,835,000
1,742,000
1,337,000
1,300,000
11,946,000
Other Commitments and Contingencies
Litigation
Abington Health is involved in litigation arising in the ordinary course of business. In the opinion of
management, all such matters are adequately covered by commercial insurance or by accruals,
and if not so covered, are without merit or are of such kind, or involve such amounts, as would not
have a material adverse effect on the financial position or results of operations of the Hospital.
12.
Functional Expenses
The Hospital serves patients who reside principally in the Montgomery and Bucks county
communities through a number of specialty inpatient and outpatient programs, including cardiology,
oncology, psychiatry, obstetrics, perinatology, neonatology, pediatrics, orthopedics, rehabilitative
medicine and trauma care. Expenses for primary, secondary and tertiary services (including those
listed above) are as follows:
2015
Healthcare services
General and administrative
$ 642,884,000
126,419,000
$ 769,303,000
13.
Funds Held in Trust by Others
Nonoperating revenue includes approximately $1,739,000 received by the Hospital in 2015, as
beneficiary of several trust funds which are controlled by outside trustees. The Hospital is an
income beneficiary of these trusts for which the assets have been placed in perpetuity with a
trustee. These assets, with a fair market value of approximately $46,606,000, respectively, have
been included as part of other investments and permanently restricted net assets at June 30, 2015.
22
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
14.
Pledges Receivable
At June 30, 2015, AH’s pledges receivable of $10,239,000 consists of unconditional promises to
give and are expected to be realized as follows:
2015
Between one year and five years
More than five years
$
10,528,000
10,528,000
Discount and allowance for uncollectible pledges
Net pledges
15.
(289,000)
$
10,239,000
Endowments
Abington Health endowments consist of individual donor restricted funds for a variety of purposes
plus the following where the assets have been designated for endowment: pledges receivables,
split interest agreements, and other net assets. The net assets associated with endowment
funding are classified and reported based on the existence or absence of donor imposed
restrictions.
The Commonwealth of Pennsylvania law permits AMH to allocate to income each year a portion of
endowment return. The law allows non-profit organizations to spend a percentage of the market
value of their endowment funds, including realized and unrealized gains. The percentage, which
by law must be between 2% and 7%, is to be elected annually. In 2015 AMH’s Board of Trustees
adopted a spending policy which elected a payout of 7% of endowment market value based on an
average spanning three years.
The Board of Trustees has interpreted the State Prudent Management of Institution Funds Act
(“SPMIFA”) as requiring the preservation of the fair value of the original gift as of the date of the
donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of
this interpretation AH classifies as permanently restricted net assets (a) the original value of gifts
donated to a permanent endowment, (b) the original value of subsequent gifts to a permanent
endowment, and (c) accumulations to a permanent endowment made in accordance with the
direction of the applicable donor gift instrument at the time the accumulation is added to the fund.
The remaining portion of the donor-restricted endowment fund, except for beneficial interests in
perpetual trust that is classified in permanently restricted net assets is classified as temporary
restricted net assets until those amounts are appropriated for expenditure by AH in a manner
consistent with the standard of prudence prescribed by SPMIFA.
23
Abington Health (A Subsidiary of Thomas Jefferson University)
Notes to Consolidated Financial Statements
June 30, 2015
Changes in endowment net assets for the year ended June 30, 2015:
Endowment net assets,
beginning of year
Unrestricted
Temporarily Permanently
Restricted
Restricted
$
-
$ 12,560,000
$ 77,299,000
$ 89,859,000
1,739,000
-
(1,159,000)
(1,165,000)
1,739,000
(2,324,000)
1,739,000
(1,159,000)
(1,165,000)
(585,000)
Investment return
Investment income
Net change in market value
Total investment return
Gifts
Appropriation of endowment
assets for expenditure
Transfer balance of net
appreciation to unrestricted
Endowment net assets,
end of year
16.
(3,739,000)
635,000
413,000
-
-
Total
1,048,000
(3,739,000)
2,000,000
(2,000,000)
-
-
-
$ 10,036,000
$ 76,547,000
$ 86,583,000
$
Subsequent Events
AH has performed an evaluation of subsequent events through September 22, 2015, which is the
date the financial statements were issued.
24
Supplemental Consolidating Information
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidating Balance Sheet
June 30, 2015
AMH
AHF
LHC
Elimina ting
Consolida te d
Asse ts
Current
Cash and cash equivalents
$
Investments
132,684,312
$
-
24,228
$
632,691,327
2,801,902
$
-
-
$
-
135,510,442
632,691,327
Patient and third- party receivables, net of
doubtful acc ounts of approximately $13,085,000
80,162,707
-
9,478,414
Other accounts receivable
27,470,812
367,635
1,279,658
9,918,369
-
1,000,045
250,236,200
633,083,190
14,560,019
-
10,238,767
-
-
10,238,767
1,498,289
82,117,059
-
-
83,615,348
410,905,780
-
62,495,375
-
473,401,155
others for the benefit of Abington Memorial Hospital
53,403,053
18,237,628
26,340
-
71,667,021
Other noncurrent assets
49,646,988
-
2,401,226
-
52,048,214
765,690,310
$ 743,676,644
$
$
$
Prepaid expenses and other assets
Total current assets
Net pledges receivable
Assets whose use is limited
-
89,641,121
(9,949,072)
19,169,033
-
10,918,414
(9,949,072)
887,930,337
Property and equipment, net
of accumulated depreciation
Other assets, including funds held in trust by
Total assets
$
79,482,960
$
3,779,711
$
(9,949,072)
$
1,578,900,842
Lia bilitie s a nd Ne t Asse ts
Current
Current maturities of long- term debt
$
9,633,489
-
-
2,979,740
13,413,200
Accrued salaries and wages
46,744,190
Third- party and other liabilities
33,230,131
9,601,751
2,906,825
(9,949,072)
35,789,635
132,628,118
9,803,236
13,772,777
(9,949,072)
146,255,059
Accrued insurance and other liabilities
4,106,501
$
43,020,308
Total current liabilities
201,485
-
Accounts payable
-
47,328,294
-
49,723,930
54,968,271
10,620,038
3,375,702
-
68,964,011
Pension liability
143,887,186
-
-
-
143,887,186
Long- term debt, net of current maturities
276,062,716
-
39,836,201
-
315,898,917
607,546,291
20,423,274
56,984,680
110,525,179
625,488,684
22,498,280
-
758,512,143
Total liabilities
(9,949,072)
675,005,173
Ne t a sse ts
Unrestricted
Temporarily restricted
Permanently restric ted
Total net assets
Total liabilities and net assets
$
1,012,568
67,824,454
-
-
68,837,022
46,606,272
29,940,232
-
-
76,546,504
158,144,019
723,253,370
22,498,280
-
903,895,669
765,690,310
$ 743,676,644
26
$
79,482,960
$
(9,949,072)
$
1,578,900,842
Abington Health (A Subsidiary of Thomas Jefferson University)
Consolidating Statement of Operations
Year Ended June 30, 2015
AMH
AHF
LHC
Eliminating
Consolidated
Revenues
Net patient service revenue
$
Provision for bad debts
697,654,455
$
-
$
82,916,091
$
780,570,546
21,167,038
-
3,285,363
676,487,417
-
79,630,728
-
756,118,145
Other operating revenue
31,555,534
-
2,630,192
-
34,185,726
Net assets released from restrictions
11,297,809
-
211,070
-
11,508,879
719,340,760
-
82,471,990
-
801,812,750
-
35,171,658
-
446,159,894
20,453,390
-
125,360,708
11,710,934
-
127,806,004
Net patient service revenue less
24,452,401
provision for bad debts
Total revenues
Expenses
Salaries, wages and employee benefits
410,988,236
Utilities, purchased services and other
104,486,366
Supplies
116,095,070
420,952
-
Depreciation and amortization
41,622,144
-
4,948,180
-
46,570,324
Interest
10,570,218
-
2,372,362
-
12,942,580
8,839,917
25,906
1,597,220
-
10,463,043
692,601,951
446,858
76,253,744
-
769,302,553
(446,858)
6,218,246
-
32,510,197
-
35,612,844
-
68,123,041
Insurance
Total expenses
Income from operations
26,738,809
Income from investments, trusts, estates and contributions
1,739,141
33,873,703
28,477,950
33,426,845
Excess of revenues over expenses
Change in net unrealized gains
-
Change in pension liability
Net assets released from restrictions used for capital
Increase in unrestricted net assets
$
6,218,246
-
-
(14,218,172)
(2,529,077)
-
-
-
(2,529,077)
1,496,902
-
-
-
1,496,902
27,445,775
27
(14,218,172)
$
19,208,673
$
6,218,246
$
-
$
52,872,694