CONE HEAlTH QUARTERLY FINANCIAL STATEMENTS FOR THE PERIOD ENDING. September 30, 2013

Transcription

1 ~~ CONE HEAlTH QUARTERLY FINANCIAL STATEMENTS FOR THE PERIOD ENDING September 30, 2013

2 Financial Statement Summary For Period Ended September 30, 2013 The conolidated financial tatement and accompanying note reflect the financial poition and reult of operation of Cone Health a a conolidated ytem including Moe Cone Hopital Operating Corporation, Alamance Regional Medical Center, and all related affiliate for the three-month and twelve-month period ended September 30,2013. On May I, 2013, Cone Health merged with Alamance Regional Medical Center (ARM C). The financial tatement include the aet and liabilitie of ARMC and five month of operating income. Operating performance for the fical year-to-date period i below hitorical trend and below the current year plan. Year-long patient volume hortfall in outpatient area and in the recent quarter for inpatient dicharge drove revenue variance a did payer mix hift. A major revenue cycle improvement project began at the beginning of the calendar year, and the aociated budget aumption for an additional $24 million in revenue have been low to materialize depite ome poitive progre in new procee and tructure. Additionally, the ytem recognized a large amount of profeional (phyician) fee write-off on aged account reulting from poor collection. The health ytem ha terminated it relationhip with the third-party billing company for profeional fee. Expene variance have been caued by implementation cot for the converion to an electronic medical record (Epic) acro the health ytem. Penion ettlement charge aociated with a higher pace of lump-um payout to retiree have been recognized year-to-date for $5.25 million. There wa a one-time write-off of an uncollectable receivable from an indigent clinic partner. Alo, pharmaceutical expene in the recent month ha been higher than budget due to change in eligibility criteria for the federal 340B purchaing dicount program. In November 2012, Cone Health completed it converion to an electronic medical record (Epic) acro the health ytem. The ytem began the implementation in fical year 2012 and completed the larget phae of implementation for three hopital, Cancer Center, and variou ancillary facilitie in November. The implementation wa ucceful in many repect, but the aociated implementation cot were more than expected and exceeded the budgeted expene increae. Leading up to and during the implementation period, additional taffing wa needed to ait with patient care need while taff trained on the ytem; overtime expene wa higher due to taff training time; and clinician and phyician reported decreaed productivity during the initial month on the new ytem. Conultant upport wa alo ued during the go-live period to provide aroundthe-clock upport to uer. Thee taffing and conulting expene have trended down ignificantly in the econd half of the year. The total capital cot of the project wa approximately $90 million, and additional operating expene aociated with Epic during the implementation period were approximately $40 million over the coure of three fical year. Approximately 90 additional FTE' aociated with the ongoing maintenance and operation of Epic, primarily in infonnation technology, have been added pot-implementation. To mitigate the unfavorable operating performance during the year and to deal with the many factor in the healthcare environment leading to future reimburement cut and reduced patient volume, management undettook a erie of expene reduction action plan. Thoe plan include reduction in workforce of approximately 300 poition of which approximately!50 were filled. Mot of thoe reduction occurred in July and Augut. Additionally, reduction were made to 403B employer contribution, and health inurance expene wa held contant againt inflationary preure.

3 Conolidated Balance Sheet September 30, 2013 and September 30, 2012 Audited Audited Aet September 30, 2013 September 30, 2012 Liabilitie and Net Aet September 30, 2013 September 30, 2012 Current Aet Current Liabilitie Cah $ 11,895,416 $ 3,080,668 Accrued Payroll $ 33,732,708 $ 38,462,300 Short-term invetment 45,164,085 26,775,497 Account Payable 67,706,929 38,297,025 Patient Receivable (net) (Note 1) 189,623, '1 03,806 PAL & Retirement 38,595,171 40,691 '156 Other Receivable 39,703,256 23,461,789 Bond Payable (Note 5) 8,730, ,000 Inventorie 24,400,975 16,460,184 Short Term Debt, Line of Credit (Note 5 73,381,510 48,945,389 Prepaid Expene 12,671,633 9,231,766 Other Current Liabilitie 45,251,972 40,308,718 Other Current Aet 5,932,737 8,676,253 Total Current Liabilitie 267,398, ,079,589 Total Current Aet 329,391, ,789,963 Plant and Property(net) Debt and Other Liabilitie Land and Land Improvement 44,760,400 22,180,840 Bond Payable (Note 5) 314,014, ,370,000 Building and Fixed Equipment 446,806, ,235,448 Long Term Debt (Note 5) 33,933,812 18,247,930 Moveable Equipment 301,976, ,009,859 Capital Leae Obligation 5,133,566 4,164,845 Real Etate 12,254,925 13,436,523 Other Non-Current Liabilitie 181,971, ,872, ,799, ,862,670 Total Liabilitie 802,451, ,734,445 Contruction/Equipment In Progre 65,718, ,508,557 Total Plant and Property (Note 2 871,517, ,371,227 Net Aet Other Non Current Aet Unretricted 1,289,739,815 1,073,385,564 Marketable Securitie (Note 3) 816,405, ,852,990 Noncontrolling Interet 3,405,014 3,546,142 Joint Venture (Note 4) 38,500,147 38,089,643 Total Unretrictred Net Aet 1,293,144,829 1,076,931,706 Invetment in Unrelated Partie 75,000 Debt Service Fund Held By Bond Tru~ 869,808 31,710,252 Subtotal Invetment 855,850, ,652,885 Temporarily Retricted 9,325,632 Total Retrictred Net Aet 9,325,632 Deferred Cot 2,872,156 2,937,105 Other Aet 38,977,983 40,846,055 Total Net Aet 1,302,470,461 1,087,393,034 Non-Compete Agreement Goodwill 6,311,558 5,530,244 Total Other Non-Current Aet 48,161,697 49,313,404 TOTAL ASSETS $ $ TOTAL LIAB. AND NET ASSETS ~2,104,921,776 $

4 Note to the Conolidated Balance Sheet September 30, 2013 and September 30, 2012 Footnote (1) Patient account receivable are hown net of an allowance for uncollectible account. The balance preented include ettlement from third party payer. primarily Medicare and Medicaid a a reult of ubequent period cot ettlement a well a amount due to third party payer and patient (credit balance). In addition, amount due from collection agencie on bad debt collection are hown a recovery accrual. September 30, 2013 September 30, 2012 Patient Account Receivable S 515,779,310 Le Credit Balance --~"("1~,9>'06Ffi,36'"1/-) Gro Patient Account Recetvable Net of Credit Bait- 513,872,949 Plu Recovery Accrual 4,232,257 Plu Withhold 200,000 Plu Settlement Account (1,653,594) Gro Patient Account Rece1vabte 516,651,612 Allowance for Uncollectible (327,028,145) Net Account Receivable.;;,'~~1"8"9",6~2"3",4"6"7~ 464,507,581 (3,775,846) 460,731,735 5,329, ,495 (3,587,633) 463,088,354 (271,984,547) 191,103,807 (2) Plant and property balance are hown at cot net of accumulated depreciation. Depreciation i provided over the etimated ueful life of each cla of depreciable aet and icomputed on the traight-line method for financial reporting purpoe. Land and Land lmprovemenl Building and Fixed Equipment Moveable Equipment Real Etate 1 '' Subtotal Conlruclion/Equipment In Progre Cot 53,332, ,404, ,485,519 26,244,498 $1,510,466,533 65,718,941 September 30, 2013 Depreciation (8,571,975) (341,597,422) (340,508,522) (13,989,573) ($704,667,492) N/A "" 44,760,400 $ 446,806, ,976, ,925 $805,799,041 65,718,941 ' Tolal Plant and Property 1,576,185,474 (704, ) 871,517,982 Cot September 30, 2012 Deprecialton 30,531,683 (8.350,843) 650,564,280 (316,328,832) 281,120,050 (154,110,191) 26,245,856 d12,809,332) $988,461,869 ( 91,599,198) 117,508,557 N/A 1,105, (491,599,198) "" 22,180, ,235, ,009,859 13,436,523 $496,862, ,508, ,371,228 (1) Real Etate invetment Adam Farm ARMC Foret Oak - land only Stoney Creek Wendover Medical Wet Wendover September 30, ,580, ,490 1,179,948 7,994,816 1,210,233 12,254,925 September 30, ,789, ,490 1,225,097 8,799,150 1,333,475 13,436,523 (3) Marketable Securitie are lited at market value. Market and cot value by manager are a follow: September 30, 2013 Health Sytem: Market Cot September 30, 2012 Market Cot Subtolal Heallh Sylem Marketable SeCl...lrilie Alamance Regional Medical Center: Subtotal Heallh Sylem Marketable Securitie Alamance Foundation: Subtotal Health Sylem Marketable Securitie Foundation: Subtotal Foundation Marketable Securitie SubTotal Marketable Securitie Annie Penn Foundalion Reclaed to Short Term or AWUIL-ST~ Total Marketable Securitie 581,335, ,066,988 72,830,277 54,819, ,269, ,749, , ,816,735 2,592,295 {7,441,301) 816,405, ,138, ,348, ,794, ,982, ,933, , ,358,501 (10.438,876) 740, Note Per Generally Accepted Accountmg Principle. alternative invetment are carried at cot on ftnancial tatement a there 15 no accepted common exchange for market valuat1on AWUIL-ST -Aet Whoe Ue I Limited- Short term

5 Note to the Conolidated Balance Sheet September 30, 2013 and September 30, 2012 (4) Joint Venture are accounted for uing the equity method. The Health Sytem' hare ha been adjuted for it' hare of the repective invetee' operation. the Health Sytem' hare of the equity i a follow: September 30, 2013 September 30, 2012 Hopice at Greenboro Clanty (HCCI) Clarity (HCCR) Greenboro HealthCare Network Piedmont Community Health Care Alliance Diagnotic Radiology & Imaging NSC Greenboro Wet (Spine Center JV holding co)* Spine Center JV Day Surgery Center of Greenboro Cardiovacular Diagnotic Center' Advanced HomeCare Call-A-Nure Guilford Adult Health Guilford Child Health Unified HomeCare Randolph Cancer Center Morehead Heart Center PACE of Guilford & Rockingham Co PACE of Southern Piedmont' Profic1ent Health LLC {booked at cot: ownerhip.::20%) Staywell Senior Care (booked at cot; ownerhip.::20%) JV held by ARMC Conolidation Elimination for ::-50% ownerhip Total Invetment in Joint Venture 11,883,682 1, (14,763) (21,343) , , , ,178 2,104,155 (253,759) (1,046,429) 1,050, ,500 1,465,594 (132,495) ,478,666 1, ,453 (34,930) (21,343) 1, , , ,053, ,906 2,484,076 (392,783) (256,958) 1,050,000 (1,382,680) 38,089,643 (5) long tenn debt conit of the following: Serie 1gg3, variable rate, principal of $7_7M in 2016 Serie 2001, fixed rate wap, principal payment begin in 2024 Serie 2004, variable rate, principal payment begin in 2016 Serie 2008, variable rate, principal payment begin in 2016 Serie 2011, fixed rate. principle payment begin in 2013 Serie 2011, variable rate, principle payment begin in 2016 Serie 2011, variable rate, principle payment begin in 2013 High Point Building Note ARMC debt ARMCnote Note payable from conolidated joint venture le current portion of long-teffil debt Total Long-term debt September 30, 2013 $ 85,200,000 47,500,000 60,170,000 47,g8o.ooo 9g,oo,ooo 21,500,000 54,514,219 74,513,635 1,585,960 4g2, ,111, September 30, ,200,000 47,500,000 60,170,000 47,980,000 g9,875,000 17,235,806 The average weighted interet rate on the Health Sytem' long-tenn debt wa approximately 1.12% on September 30, 2013 and approximately 1.60% for the September 30, 2012 period before the interet wa capitalized.

6 Conolidated Statement of Operation September 30,2013 and September 30, 2012 ACTUAL BUDGET Act./Bud. ACTUAL Act./ Act. ACTUAL BUDGET Act./Bud. ACTUAL Act./Act. 9/30{13 9f30f13 %VAR 9f30f12 %VAR 9f30f13 9{30/13 %VAR 9/30/12 %VAR REVENUE Net Patient Service Revenue 299,370,584 $ 334,741, % $ 239,466, % 1,098,483,179 $ 1,160,762, % 995,006, % Other Operating Revenue 10,190,053 11,337, % 6,584, % 36,472,445 39,173, % 26,661, % Total Operating Revenue 309,560, ,078, % 246,051, % 1,134,955,624 1,199,936, % 1,021,667, % EXPENSE Salarie and Wage 136,615, ,520, % 111,564, % 495,548, ,669, /o 427,090, % Fringe Benefit 45, ,883, % 36,574, % 170,525, ,143, % 140,606, % Purchaed Peronnel 2,531,235 2,575, % 2,112, % 11,150,146 7,178, % 6,035, % Supplie 61,939,229 60,656, % 47,994, % 217,727, ,856, % 192,204, % Other Operating Expene 68,654,451 69,279, % 43,804, % 214,882, ,308, % 178,114, % Depreciation/Amortization 21,843,022 23,116, % 15,192, % 74,166,825 76,189, % 57,136, % TOTAL OPERATING EXPENSE 337,535, ,031, % 257,242, % 1 '184,002,178 1,180,346, % 1,001 J 187, % INCOME FROM OPERATIONS (27,974,927) 4,047, % (11,191,548) % (49,046,554) 19,590, % 20,480, % OTHER INCOME Invetment Income 9,206,774 8,676, % 12,288, % 45,052,305 31,904, % 96,554, % Joint Venture Income 1,519,799 1,683, % 2,413, % 5,820,782 6,157, % 6,583, % Purchae Amortization Expene 10 (6,044) 10 (24,177) 10 Interet Expene (1,277,158) (1,525,456) 16.28% (50,379) % (5,389,731) (6,092,541) 11.54% (4,608,008) 16.96% Other, Net (164,459) 5,383, % (20,703,575) 99.21% (19,387,915) (11,130,674) % (36,880,798) 47.43% Total Other Income 9,284,956 14,219, % (6,058,378) % ,441 20,839, % 61,624, % EXCESS OF REVENUES OVER EXPENSE BEFORE MINORITY INTEREST (18,689,971) 18,266, % (17,249,926) 8.35% (22,951,113) 40,429, % 82,104, % Minority Interet (780,517) 668, % 306, % (1,495,564) 4,266, % 92, % EXCESS OF REVENUES OVER EXPENSE (17,909,454) 17,598, % (17,556,565) 2.0% (21,455,549) 36,162, % 82,011, % Change In Net Unrealized Gain and Loe on Invetment 15,228, ,124, % 22,976,595 (1,903,947) % 6,332, % Change In AOCI 0 13,594, ,443,394 13,594, % INCREASE IN UNRESTRICTED NET ASSETS $ {2,680,742~ $ 17,598, % $ 6,162, % $ 39,964,440 $ 34,258, % 101,938, %

7 Footnote: Cone Health September 30,2013 and September 30,2012 1) Patient ervice revenue i recorded at the amount which the hopital expect to receive. Gro charge are reduced by contractual adjutment and by amount deemed to be charity care in order to arrive at thi figure, a follow: Actual Budget Actual 9/30/13 9/30/13 9/30112 Gro Charge 741,581, ,728, ,671,147 Contractual Adjutment (364,635,764) (356,009,525) (272, 199,208) Charity Care (43,712,892) (43,645,756) (30,059,018) Bad Debt Expene (44,991,308) (24,632, 129) (17,346,896) Diproportionate Share 11,128,694 13,300,001 8,400,496 Net Patient Service Revenue 299,370, ,741, ,466,521 Actual Budget Actual 9/ /30/13 9/30/12 2,666,478,339 2,688,553,166 2,227,561,179 (1,344,590,590) (1,331,856,381) (1,081,818,412) (158,041,632) (162,855,652) (140, 118,498) (119,391,631) (86,278, 782) (73, 131,912) 54,028,693 53,200,000 62,514,529 1,098,483,179 1,160,762,351 $ 995,006,886 2) Bad debt expene repreent that portion of net patient ervice revenue which, while not a contractual adjutment or charity care, prove to be uncollectible. Bad debt expene include the proviion for uncollectible le any recoverie of account previouly written off, a follow: Actual Budget Actual 9/30/13 9/ /30112 Proviion for bad debt (46,653,153) (25,619, 179) (18,101,198) Collection Cot (354,331) (377,504) (162,062) Recoverie 2,016,176 1,364, ,364 Bad debt expene (44,991,308) (24,632, 129) (17,346,896) Actual Budget Actual 9/30/ /30/12 (125,113,583) (90,260,073) (76,254,351) (1,483,120) (1,476,925) (1,107,756) 7,205,072 5,458,216 4,230,195 ($119,391,631) ($86, ) ($73, 131,912) {3) Net realized gain and loe from ale of ecuritie a well a interet and dividend income are included in Invetment Income. Unrealized gain and loe are included after revenue over expene. Thoe amount by manager are a follow: September September September Se11:tember 30,2012 Invetment Unrealized Invetment Unrealized Invetment Unrealized Invetment Unrealized Income Gain(Loe) Income Gain(Loe) Income Gain(Loe) Income Gain( Loe) Health Sytem Subtotal - Health Sytem Invetment Income/Unrealized Gain/Lo 5,568,414 10,927,741 10,230,154 8,903,144 37,431,858 21,175,485 79,021,232 9,071,324 Alamance Regional Medical Center: Subtotal - ARMC Invetment Income/Unrealized Gain/Lo 2,885,717 (67,277) 1,944,138 (1,425, 723) Alamance Foundation: Subtotal - ARMC Foundation Invetment Income/Unrealized Gainll< $ 173,006 2,018, , ,624 Foundation Subtotal- Foundatlon Invetment Income/Unrealized Gain/lo 579,637 2,349,570 2,058,141 1,221,485 5,325,249 2,707,209 17,532,832 (2, 739,039) Total-lnvetmentlncome/Unrealized Gain/lo 9,206,774 15,228,712 12,288,295 10,124,629 45,052,305 22,976,595 96,554,064 6,332,285 Per Generally Accepted Accounting Principle gain or lo on market value cannot be recognized bec<jue common exchange doe not exit

8 Cone Heallh September 30,2013 and September 30,2012 (4) Other, Net include income from the joint venture a well a expene related to the operation of the Parent and Foundation. The joint venture income i included in the tatement on the equity method in the amount attributable to the Health Sytem' interet in the venture. Actual Budget Actual Actual Budget Actual 09/30/13 09/30/13 09/30/12 09/30/13 09/30/13 09/30/12 Joint Venture Income (Non-Operating Entitie): Clarity (HCCI) , , , , ,846 Clarity (HCCR) 31,163 20,000 27,242 31,163 20,000 27,242 Greenboro HealthCare Network 431,467 25, ,537 62, , ,975 Piedmont Community Health Care Alliance (172) (687) 1,401 Day Surgery Center of Greenboro 9,256 2,985 11,985 28,778 18,946 36,381 Conolidation Elimination for >50% ownerhip Sub-total Non-Operating Joint Venture Income 743, , , , , ,845 Joint Venture Income (Operating Entitie): Advanced HomeCare (29,361) 956, ,634 2,292,843 3,825,801 4,005,931 Hopice at Greenboro (95,855) 105, , , , ,693 Diagnotic Radiology & Imaging 414, , ,430 1,778,114 1,500,000 1,158,903 NSC Greenboro Wet (Spine JV Holding Cor 260, , ,891 1,656,739 1,512,019 1,591,709 Cardiovacular Diagnotic Center 79,454 (1,874) 61, , , ,445 Call-A-Nure 92,013 25,000 30, , ,000 36,956 Guilford Adult Health (6,154) (217,894) (29,228) (217,894) Guilford Child Health Unified HomeCare Randolph Cancer Center 321,969 (22,715) 512,077 38,136 Morehead Heart Center The Healthcare Alliance PACE of Guilford & Rockingham Co. 79,047 (367) 139,025 (1,468) (36,173) PACE of Southern Piedmont (256,441) (273,063) (132,236) (789,471) (566,835) (251,634) Conolidation Elimination for >50% ownerhip {83,329) {103,068) (361,692) (1,171,971) {1,344,341) {1,788,520) Sub-total Operating Joint Venture Income 775,808 1,461,083 1,543,715 5,425,844 5,844,333 5,833,552 Total Joint Venture Income 1,519,799 1,683,896 2,413,325 5,820,782 $ 6,157,592 6,583,397 Other Expene Invetment Manager Fee 601,480 $ 388, ,800 2,274,113 1,555,750 2,207,027 Debt Expene 372, , ,355 1,073, , ,950 Allocated Expene (1,084,697) (2,712,996) 3,194,744 9,605,003 9,676,719 10,700,403 Contribution Expene 10, ,237 1,010,250 10, ,237 Other, Micellaneou (1,079,171) (4,038,291) 6,471,878 2,732,527 (1,864,084) 11,760,287 Foundation Operating expene 349, , ,161 1,369,532 1,157,389 1,305,534 Foundation Grant expene 1,748,404 11,980 10,249,010 1,718,398 47,920 10,188,205 Total Expene 908,450 (5,161,131) 21,573,185 19,782,853 11,443,933 37,630,643 Other, Net {164,459) 5,383,944 (20,703,575) (19,387,915) (11,130,674) (36,880,798)

9 September 30,2013 and September 30,2012 (5) Detail and reconciliation of conolidated exce of revenue over expene for the Operating, Parent, Foundation and other conolidated entitie. Attual Budget Actual Actual Budget Actual 09/30/ /13 09/30/12 09/30(13 09/30/13 09/30/12 Operating Entitie Income from Operation (1~~ ) ,120 {10,356,487) {33,718,293) 27,051,136 20,326,126 ParenUOther Entity Income from Operation (15,749,772) (6, ) (751,325) {15,110,368) (7,186,501) 631,346 Operating Grant Revenue from Foundation (eliminated) {49,830) { ) (83,736)!217,893) (274,523) {477,133) Total Income from Operation (27,974,928) 4,047,385 (11,191,548) (49,046,554) 19,590,112 20,480,339 Operating Entitie Non-Operating Income 5, ,907,947 2,458,099 12,245,278 11,456,663 8,977,087 Parent Non-Operating Income 15, ,397,491 (2,369,851) 17,159,055 5,029,228 41,510,481 Other Conolidated Affiliate Non-Operating Income (10,925,135) (3, 189,351) (5,997,198) (2,609,567) 4,958,614 11,533,181 Foundation Income from Operation.(179,436) 103,098 (149,428) {699,325) (605,379) (396,271) Total Non-Operating Income 9,284,957 14,219,185 (6,058,378) 26,095,441 20,839,126 61,624,478 Exce of Rev over Exp before Minority Interet (1tl,689,971) 18,266,570 (17,249,926) 40,429,238 82,104,817 Minority Interet (780,517) 668, ,639 4,266,941 92,991 Exce of Revenue over Expene (1'1.909,454) 17,598,552 (17,556,565) 36,162,297 82,011,826 (6) The Parent Company (non-conolidated) Income Statement i a follow: Actual Budget Actual Actual Budget Actual 09/ /30/13 09/ /30/13 09/30/ INCOME: Invetment Income $5,354,424 $6,315,356 $10,405,708 $36,563,578 $25,262,826 $76,600,534 Leae Income 1,687,562 8,751,926 6,398,841 27,449,642 28,694,206 25,212,590 Joint Venture Other Income 291, ,186 ( ) 1,729,210 1,052,742 Total Income 13,333,443 15,330,468 16,411,237 65,742,430 55,009, , ,064,570 Expene: Interet Expene 1,277,158 1,525,456 50,379 5,389,731 6,092,541 4,608,008 Debt Expene 372, , ,355 1,073, , ,950 Invetment Expene 601, , ,800 2,274,113 1,555,750 2,207,027 Depreciation/Amortization Exp. 1,730,842 8,732, ,378 27,602,839 28,738,826 24,888,086 Contribution Expene 10, ,237 1,010,250 10, ,237 Other Micellaneou Expene 5,169,611 2,742,153 8,660,520 16,738,777 10,232,972 16,050,032 Allocated Expene (1,084,697) (2,712,996) 3,194,744 9,605,003 9,676,719 10,700,403 Total Expene 14,067,034 10,897,780 19,532,413 63,693,743 57,167,047 59,922,743 Exce of Revenue over Expene (733,591) 4,432,688 (3,121,176) 2.048,687 (2,157,273) 42,141,827 Change in Unrealized Gain & loe on Invetment 10,532,258 8,516,122 21,118,004 8,248,240 Increae In Unretricted Net Aet!:1,798,667 4,432,688 5,394,946 23,166,691 (2,157,273) 50,390,067

10 Conolidated Ratio Analyi For the Fical Year Ending September 30, 2004 through September 30, Key Ratio: Current Ratio Day Cah on Hand Day in Acct Receivable Operating Margin 4.82% 4.00% 3.75% 4.82% 5.27% 5.46% 4.78% Return on Operating Aet 12.45% 10.60% 10.41% 11.90% 13.22% 13.72% 11.32% Long Term Debt Service Coverage Ratio Average Age of Plant % 2.30% -4.32% 8.79% 5.48% -7.73% for 2012 & 2013, ratio include only 5-month of revenue and expene from ARMC, but balance heet input data include full amount of ARMC account bal

11 CONE HEALTH OPERATIONS Statitic by Category September 30, 2013 and September 30, 2012 Bed In Service Moe H Cone Memorial Hopital Weley Long Community Hopital Annie Penn Hopital Women' Hopital of Greenboro Behavioral Health Hopital Bed In Service- Operating Corp Actual 09/30/ Budget 09/30/ Act./Bud. % Var Actual 09/30/ Act./ Act. % Var -4.15% 40.16% % 0_00% 0_00% -1.40% Actual 09/30! Budget Act./Bud. Actual Act./Act. 09/30!13 % Var 09/30/12 % Var % 47.41% % Alamance Regional Medical Center Bed in Service - Conolidated 1,131 1,131 1, % 1,144 1,144 1, % Number of Inpatient Moe H Cone Memorial Hopital Weley Long Community Hopital Annie Penn Hopital Women' Hopital of Greenboro Behavioral Health Hopital Number of Inpatient- Operating Corp 6,073 2, , ,224 6,231 2, , , % -0.95% -3.30% 1.67% -6.92% -1.92% 6,303 2, , , % -2.07% -7_82% -0.74% 12.47% -2.17% 24,951 10,298 3,506 7,747 3,219 49,721 25,425 10,162 3,408 7,722 3,675 50, % 1.34% 2.88% 0.32% % -1.33% 25,116 9,906 3,394 7,733 3,196 49, % 3.96% 3.30% 0.18% 0_72% 0.76% Alamance Regional Medical Center 2,876 2, % 2, % 4,796 4, % 4, % Number of Inpatient- Conolidated 15,100 15, % 15, % 54,517 55, % 54, % Average Length of Stay Moe H Cone Memorial Hopital Weley Long Community Hopital Annie Penn Hopital Women' Hopital of Greenboro Behavioral Health Hopital Average Length of Stay- Operating Corp % 1.90% 11.99% -4.34% 0.53% 1.61% % 6.23% 9.43% -2.06% 4.77% 4.30% % -3.99% 4.16% -4.53% -6.24% -2.58% % 2.54% 5.79% 0.86% -3.09% 2.71% Alamance Regional Medical Center % % % % Average Length of Stay- Conolidated % % % % Average Dally Cenu Moe H Cone Memorial Hopital Weley Long Community Hopital Annie Penn Hopital Women' Hopital of Greenboro Behavioral Health Hopital Average Dally cenu- Operating Corp % -2.87% % 6.14% -7.41% -3.50% _ % -8.22% % 1.34% 7.07% -6.38% _3 313_ % 5.35% -1.34% 4.82% -6.92% 1.23% % 1.54% -2.39% -0.48% 4.29% -1.70% Alamance Regional Medical Center % % % % Average Dally Cenu -Conolidated _47% % % % Average Dally Cenu- Long Term Care Penn Nuring Center Average Daily Cenu LTC 87_ _ % 0.84% % 1.83% % -1.83% % 0.71% Alamance Extended Care Edgewood Place TVAB Skilled Nuring Average Daily Cenu CCRC _ % % % % % 0.44% _7 19_ _23% % -5.54% % % 2.63%

12 CONE HEALTH OPERATIONS Operational Statitic by Category September 30, 2013 and September 30, 2012 Actual Budget Act./Bud. Actual Act./Act Actual Budget Act./Bud. Actual Act./Act. 09/30/13 09/30/13 % Var 09/30/12 %Var 09/30/13 09/30/13 % Var 09/30/12 % Var Surgical Procedure Moe H Cone Memorial Hopital 3,154 3, % 3, % 12,835 13, % 13, % Weley Long Community Hopital 1,485 1, % 1, % 5,911 5, % 5, % Annie Penn Hopital % % 2,363 2, % 2, % Women' Hopital of Greenboro 1,142 1, % 1, % 4,555 4, % 4, % Day Surgery Moe Cone 1,248 1, % 1, % 4,822 4, % 4, % Day Surgery Weley Long % % 1,616 2, % 2, % Surgical Procedure- Operating corp 7,940 8, % 7, % 32,102 33, % 32, % Alamance Regional Medical Center 1,964 2, % 2, % 3,322 3, % 3, % Surgical Procedure- Conolidated , % 10, % 35,424 37, % 36, % Deliverie Annie Penn Hopilal Women' Hopital of Greenboro 1,600 1, % 1, % 6,205 6, % 6, % Deliverie- Operating Corp 1,603 1, % 1, % 6,208 6, % 6, % Alamance Regional Medical Center % % % Deliverie - Conolidated 1,921 1, % 1, % 6,755 6, % 6, % Emergency Department Viit Moe H Cone Memorial Hopital 23, % 23, % 94,084 92, % 90, % Urgent Care Center 5,840 8, % 8, % 28,771 32, % 32, % Kernerville Urgent Care 1,157 1, % 1, % 5,714 6, % 5, % Weley Long Community Hopital 13,293 12, % 12, % 51,942 48, % 47, % Med Center High Point 6,581 6, % 6, % 27,201 25, % 25, % Annie Penn Hopital 9,183 8, % 8, % 35,667 35, % 33, % MAU Viit 5, % 5, % 20,410 19, % 19, % ED Viit- Operating Corp 64,402 64, % 65, % 263, , % 254, % Alamance Regional Medical Cenler 14,683 14, % 14, % 23,979 24, % 23, % ED Viit -conolidated 79,085 79, % 80, % 287, , % 278, % 0/PViit Moe H Cone Memorial Hopital 51,311 56, % 47, % 198, , % 194, % Weley Long Community Hopital 14,530 16, % 13, % 57,529 63, % 56, % Annie Penn Hopllal 14,670 14, % 13, % 57,510 58, % 55, % Women' Hopital of Greenboro 10,037 10, % 8, % 38,098 40, % 36, % Behavioral Health Hopital 4,901 5, % 4, % 18,563 20, % 18, % Health Service Diviion 14,547 13, % 11, % 52,505 52, % 49, % Regional Cancer Center 14,692 15, % 15, % 57,603 64, % 63, % OIP VIit- Operating Corp 124, , % 115, % 480, , % 475, % Alamance Regional Medical Center 29,732 31, % 30, % 50,054 52, % 50, % 0/P VIit- conolidated 154, , % 145, % 530, , % 526, % Moe Cone Phyician Service (TCTS, WS, RCP, UMFC, etc.) Phyician Office Viit 20,917 23, % 21, % 85,040 93, % 88, % Phyician Hopital Viit 28,673 29, % 27, % 119, , % 110, % Phyician Procedure 15,576 11, % 12, % 51,444 46, % 47, % 65,166 65, % 62, % 256, , % 245, %