Consolidated Financial Statements and Supplementary Information For the Six Months Ended June 30, 2016 and 2015 Contents Page Consolidated Financial Statements: Consolidated Statements of Financial Position 1 Consolidated Statements of Operations 2 Consolidated Statements of Changes in Net Assets 3 Consolidated Statements of Cash Flows 4 Supplementary Information: Consolidating Statement of Financial Position 5 Combining Statement of Financial Position - Northwell Health Obligated Group 6 Consolidating Statement of Financial Position - Phelps Memorial Hospital 7 Consolidating Statement of Financial Position - Northern Westchester Hospital 8 Consolidating Statement of Operations 9 Combining Statement of Operations - Northwell Health Obligated Group 10 Consolidating Statement of Operations - Phelps Memorial Hospital 11 Consolidating Statement of Operations - Northern Westchester Hospital 12 Utilization Statistics - Northwell Health Obligated Group 13 Payer Mix - Northwell Health Obligated Group 14 Notes to Consolidated Financial Statements 15
Consolidated Statements of Financial Position June 30, 2016 and December 31, 2015 (In Thousands) Assets Current assets: Cash and cash equivalents 423,579 (Unaudited) (Audited) June 30, December 31, 2016 2015 $ $ 432,829 Marketable securities and other investments 1,929,901 1,844,892 Accounts receivable for services to patients, net of allowance for doubtful accounts 999,640 876,130 Accounts receivable for physician activities, net 113,139 111,902 Assets limited as to use, current portion 115,719 101,683 Pledges receivable, current portion 34,594 35,097 Insurance claims receivable, current portion 67,729 71,068 Other current assets 257,378 207,968 Total current assets 3,941,679 3,681,569 Assets limited as to use, net of current portion 1,476,142 1,508,032 Pledges receivable, net of current portion 90,216 91,090 Property, plant and equipment, net 4,479,236 4,315,166 Insurance claims receivable, net of current portion 266,924 278,530 Other assets 278,268 264,340 Total assets $ 10,532,465 $ 10,138,727 Liabilities and net assets Current liabilities: Short-term borrowings $ 110,218 $ 110,218 Accounts payable and accrued expenses 876,939 733,653 Accrued salaries and related benefits 626,417 625,383 Current portion of capital lease obligations 4,900 3,138 Current portion of long-term debt 56,693 55,613 Current portion of insurance claims liability 67,729 71,068 Current portion of malpractice and other insurance liabilities 103,019 101,720 Current portion of third-party payer structured liabilities 4,346 4,346 Current portion of estimated payable to third-party payers 270,634 235,768 Total current liabilities 2,120,895 1,940,907 Accrued retirement benefits, net of current portion 810,689 782,972 Capital lease obligations, net of current portion 175,070 171,888 Long-term debt, net of current portion 2,194,234 2,199,401 Insurance claims liability, net of current portion 266,924 278,530 Malpractice and other insurance liabilities, net of current portion 926,828 881,794 Third-party payer structured liabilities, net of current portion 3,724 8,303 Other long-term liabilities 618,992 635,892 Total liabilities 7,117,356 6,899,687 Commitments and contingencies Net assets: Unrestricted 2,897,968 2,710,921 Temporarily restricted 348,764 363,573 Permanently restricted 168,377 164,546 Total net assets 3,415,109 3,239,040 Total liabilities and net assets $ 10,532,465 $ 10,138,727 See accompanying notes. 1
Consolidated Statements of Operations For the Six Months Ended June 30, 2016 and 2015 (In Thousands) (Unaudited) (Unaudited) 2016 2015 Operating revenue: Net patient service revenue $ 3,732,766 $ 3,378,231 Physician practice revenue 620,731 537,727 Provision for bad debts (60,842) (53,393) Total patient revenue, net of provision for bad debts 4,292,655 3,862,565 Other operating revenue 248,162 218,405 Net health insurance premium revenue 253,543 95,284 Net assets released from restrictions used for operations 28,516 33,098 Total operating revenue 4,822,876 4,209,352 Operating expenses: Salaries 2,302,818 2,105,918 Employee benefits 606,410 553,307 Supplies and expenses 1,588,742 1,248,601 Depreciation and amortization 203,563 195,843 Interest 54,860 52,979 Total operating expenses 4,756,393 4,156,648 Excess of operating revenue over operating expenses 66,483 52,704 Non-operating gains and losses: Investment income 16,442 27,915 Change in net unrealized gains and losses and change in value of equity method investments 50,862 15,483 Change in fair value of interest rate swap agreements designated as derivative instruments 190 372 Loss on refunding and redemption of long-term debt - (56,975) Contributions received in the acquisitons of Peconic Bay Medical Center (2016), Phelps Memorial Hospital (2015) and Northern Westchester Hospital (2015) 36,370 259,807 Gain from acquired interest in Optum360-115,600 Other non-operating gains and losses (4,319) (1,717) Total non-operating gains and losses 99,545 360,485 Excess of revenue and gains and losses over expenses 166,028 413,189 Net assets released from restrictions for capital asset acquisitions 24,573 3,765 Change in fair value of interest rate swap agreements designated as cash flow hedges (776) 600 Recovery of fair value of endowment corpus 502 - Other changes in net assets (3,280) (1,348) Increase in unrestricted net assets $ 187,047 $ 416,206 See accompanying notes. 2
Consolidated Statements of Changes in Net Assets For the Six Months Ended June 30, 2016 and 2015 (In Thousands) (Unaudited) Temporarily Permanently Total Unrestricted Restricted Restricted Net assets, December 31, 2014 $ 2,833,391 $ 2,340,552 $ 357,127 $ 135,712 Contributions and grants 35,025-17,842 17,183 Investment income 3,038-3,038 - Change in net unrealized gains and losses and change in value of equity method investments 1,607-1,607 - Contributions received in the acquisitons of Phelps Memorial Hospital and Northern Westchester Hospital 35,061-25,855 9,206 Excess of revenue and gains and losses over expenses 413,189 413,189 - - Net assets released from restrictions for: Capital asset acquisitions - 3,765 (3,765) - Operations (33,098) - (33,098) - Non-operating activities (11,255) - (11,255) - Change in fair value of interest rate swap agreements designated as cash flow hedges 600 600 - - Other changes in net assets (1,348) (1,348) - Increase in net assets 442,819 416,206 224 26,389 Net assets, June 30, 2015 $ 3,276,210 $ 2,756,758 $ 357,351 $ 162,101 (Unaudited) Temporarily Permanently Total Unrestricted Restricted Restricted Net assets, December 31, 2015 $ 3,239,040 $ 2,710,921 $ 363,573 $ 164,546 Contributions and grants 44,956-41,912 3,044 Investment income 2,167-2,167 - Change in net unrealized gains and losses and change in value of equity method investments 1,527-1,527 - Contribution received in the acquisiton of Peconic Bay Medical Center 3,285-2,498 787 Excess of revenue and gains and losses over expenses 166,028 166,028 - - Net assets released from restrictions for: Capital asset acquisitions - 24,573 (24,573) - Operations (28,516) - (28,516) - Non-operating activities (9,322) - (9,322) - Change in fair value of interest rate swap agreements designated as cash flow hedges (776) (776) - - Recovery of fair value of endowment corpus - 502 (502) - Other changes in net assets (3,280) (3,280) - - Increase (decrease) in net assets 176,069 187,047 (14,809) 3,831 Net assets, June 30, 2016 $ 3,415,109 $ 2,897,968 $ 348,764 $ 168,377 See accompanying notes. 3
Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2016 and 2015 (In Thousands) (Unaudited) (Unaudited) 2016 2015 Cash flows from operating activities Increase in net assets $ 176,069 $ 442,819 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Contributions received in the acquisitions of Peconic Bay Medical Center (2016), Phelps Memorial Hospital (2015) and Northern Westchester Hospital (2015) (39,655) (294,868) Permanently restricted contributions (3,044) (17,183) Depreciation and amortization 203,563 195,843 Net realized gains and losses, change in net unrealized gains and losses and change in value of equity method investments (57,689) (34,984) Change in fair value of interest rate swap agreements 586 (972) Gain from acquired interest in Optum360 - (115,600) Loss on refunding and redemption of long-term debt - 56,975 Changes in operating assets and liabilities: Accounts receivable for services to patients, net (110,483) (25,987) Accounts receivable for physician activities, net (490) 5,009 Pledges receivable 4,425 27,502 Current portion of estimated payable to third party-payers 27,155 44,936 Accrued retirement benefits, net of current portion 23,696 10,315 Malpractice and other insurance liabilities 35,236 55,537 Net change in all other operating assets and liabilities 58,456 (39,624) Net cash provided by operating activities 317,825 309,718 Cash flows from investing activities Capital expenditures (287,977) (300,182) Net cash from sale of (invested in) marketable securities and other investments and assets limited as to use 701 (48,097) Cash received in the acquisitions of Peconic Bay Medical Center (2016), Phelps Memorial Hospital (2015) and Northern Westchester Hospital (2015) 19,100 71,243 Payments for joint venture investments, net (14,500) (6,915) Net cash used in investing activities (282,676) (283,951) Cash flows from financing activities Principal payments on long-term debt and capital lease obligations (40,816) (47,196) Payments on refunded and redeemed long-term debt - (483,555) Payments on short-term borrowings - (110,000) Principal payments on third-party payer structured liabilities (4,579) (2,049) Proceeds from short-term borrowings - 110,000 Proceeds from long-term debt - 543,569 Net proceeds received from real estate financing transactions - 169,516 Payments for financing costs - (5,385) Proceeds from permanently restricted contributions 996 2,318 Net cash (used in) provided by financing activities (44,399) 177,218 Net (decrease) increase in cash and cash equivalents (9,250) 202,985 Cash and cash equivalents, beginning of period 432,829 194,570 Cash and cash equivalents, end of period $ 423,579 $ 397,555 Supplemental disclosure of cash flow information Cash paid during the period for interest (exclusive of amount capitalized) $ 54,347 $ 55,224 See accompanying notes. 4
Consolidating Statement of Financial Position June 30, 2016 (Unaudited and In Thousands) Phelps Northern Northwell Memorial Westchester The Feinstein Other Northwell Health Hospital Hospital Hospice Institute for Northwell Northwell Regional Health Endoscopy Northwell Health, Inc. Obligated Association Association Peconic Bay The Long Care Medical Health Health Insurance Dolan Family Insurance Center of Garden City South Shore Health Total Eliminations Group and Subsidiaries and Subsidiaries Medical Center Island Home Network Research Foundation Laboratories Company Health Center Companies Long Island SurgiCenter Surgery Center Entities Assets Current assets: Cash and cash equivalents $423,579 $- $188,007 $30,753 $50,709 $20,548 $5,600 $8,391 $- $14,502 $- $78 $1 $94,176 $648 $314 $294 $9,558 Marketable securities and other investments 1,929,901-1,864,003 5,973-3,000 76 23,531 20 6,410 - - 469 26,419 - - - - Accounts receivable for services to patients, net of allowance for doubtful accounts 999,640 (30,828) 922,557 25,322 25,237 10,405 15,576 8,080 - - 13,630-223 - - - 768 8,670 Accounts receivable for physician activities, net 113,139 (4,952) 98,873 3,058 1,171 957 - - - - - - - - - - - 14,032 Assets limited as to use, current portion 115,719-84,669 1,639 2,769 4,214 - - - - - 22,428 - - - - - - Pledges receivable, current portion 34,594 - - - - - - 97-34,125 - - - - - - - 372 Insurance claims receivable, current portion 67,729 (16,691) 82,170 - - - 1,797 39 100 7 307 - - - - - - - Other current assets 257,378 (100) 172,385 7,396 6,789 8,854 2,013 263 14,918 598 3,408 17 812 34,546 43-385 5,051 Total current assets 3,941,679 (52,571) 3,412,664 74,141 86,675 47,978 25,062 40,401 15,038 55,642 17,345 22,523 1,505 155,141 691 314 1,447 37,683 Due from affiliates, net - (114,786) 13,429 - - - - - - 1,177 46,437 53,734 - - - - 9 - Note receivable from affiliate - (42,489) 42,489 - - - - - - - - - - - - - - - Assets limited as to use, net of current portion 1,476,142 (192,929) 1,106,210 23,939 81,373 6,892 7,000 1,755 70,304 73,308-206,069 5,926 72,533 - - - 13,762 Pledges receivable, net of current portion 90,216 - - 3,172 3,928 - - 227-80,981 - - - - - - - 1,908 Property, plant and equipment, net 4,479,236-3,876,040 147,958 180,676 79,295 57,640 943 55,933 1,208 9,954-812 2,609 400 1,286 3,069 61,413 Insurance claims receivable, net of current portion 266,924 (192,622) 426,091 7,032 - - 6,123 147 378 25 1,160 18,590 - - - - - - Other assets 278,268 (493,426) 696,765 5,626 8,131 5,230 9,102 216 - - - 3,311 - - 29,939 6,344 3,719 3,311 Total assets $10,532,465 ($1,088,823) $9,573,688 $261,868 $360,783 $139,395 $104,927 $43,689 $141,653 $212,341 $74,896 $304,227 $8,243 $230,283 $31,030 $7,944 $8,244 $118,077 Liabilities and net assets (deficit) Current liabilities: Short-term borrowings $110,218 $- $110,218 $- $- $- $- $- $- $- $- $- $- $- $- $- $- $- Accounts payable and accrued expenses 876,939 (35,881) 564,372 9,684 27,979 15,049 3,321 1,871 11,866 191 42,272 346 189 182,548 115 260 312 52,445 Accrued salaries and related benefits 626,417-546,102 10,853 10,657 8,477 7,010 1,802 5,258 969 5,719-377 2,287 80 29 40 26,757 Current portion of capital lease obligations 4,900-1,759-573 1,560 - - - - - - - - - - 1,008 - Current portion of long-term debt 56,693-48,622 1,631 2,782 2,743 915 - - - - - - - - - - - Current portion of insurance claims liability 67,729 (16,691) 82,170 - - - 1,797 39 100 7 307 - - - - - - - Current portion of malpractice and other insurance liabilities 103,019 (5,220) 68,135 1,827 4,563 1,600 762 - - - - 31,352 - - - - - - Current portion of third-party payer structured liabilities 4,346-4,346 - - - - - - - - - - - - - - - Current portion of estimated payable to third-party payers 270,634-262,718-699 3,376 2,208 - - - 1 - - 1,602 - - - 30 Total current liabilities 2,120,895 (57,792) 1,688,442 23,995 47,253 32,805 16,013 3,712 17,224 1,167 48,299 31,698 566 186,437 195 289 1,360 79,232 Due to affiliates, net - (51,011) - 3,191 3,662 1,869 5,802 166 8,523 - - - 9,889 1,026 226 25-16,632 Note payable to affiliate - (42,489) - - - - 42,489 - - - - - - - - - - - Accrued retirement benefits, net of current portion 810,689-753,372 4,837 38,599 4,435 9,386 - - - - - - 60 - - - - Capital lease obligations, net of current portion 175,070-171,048 - - 2,878 - - - - - - - - - - 1,144 - Long-term debt, net of current portion 2,194,234-2,040,666 34,992 60,082 34,141 24,184 - - - - - - - - 169 - - Insurance claims liability, net of current portion 266,924 (192,622) 426,091 7,032 - - 6,123 147 378 25 1,160 18,590 - - - - - - Malpractice and other insurance liabilities, net of current portion 926,828 (60,064) 727,649 16,764 19,939 10,940 3,557 - - - - 208,043 - - - - - - Third-party payer structured liabilities, net of current portion 3,724-3,724 - - - - - - - - - - - - - - - Other long-term liabilities 618,992-585,012 1,692 8,228 12,247 1,318 815 99 7,184 1,304 - - 247 - - - 846 Total liabilities 7,117,356 (403,978) 6,396,004 92,503 177,763 99,315 108,872 4,840 26,224 8,376 50,763 258,331 10,455 187,770 421 483 2,504 96,710 Commitments and contingencies Net assets (deficit): Unrestricted 2,897,968 (453,379) 2,781,133 157,331 157,025 36,297 (3,945) 37,066 27,841 914 24,133 45,896 (8,138) 42,513 30,609 7,461 5,740 9,471 Temporarily restricted 348,764 (192,621) 317,606 8,637 18,948 2,996-1,405 44,331 134,043 - - 1,523 - - - - 11,896 Permanently restricted 168,377 (38,845) 78,945 3,397 7,047 787-378 43,257 69,008 - - 4,403 - - - - - Total net assets (deficit) 3,415,109 (684,845) 3,177,684 169,365 183,020 40,080 (3,945) 38,849 115,429 203,965 24,133 45,896 (2,212) 42,513 30,609 7,461 5,740 21,367 Total liabilities and net assets (deficit) $10,532,465 ($1,088,823) $9,573,688 $261,868 $360,783 $139,395 $104,927 $43,689 $141,653 $212,341 $74,896 $304,227 $8,243 $230,283 $31,030 $7,944 $8,244 $118,077 5
Combining Statement of Financial Position - Northwell Health Obligated Group June 30, 2016 (Unaudited and In Thousands) Long Island Northwell Health Total North Shore Jewish Staten Island Huntington Stern Family Obligated Northwell University Medical University Lenox Hill Southside Hospital Glen Cove Plainview Center for Group Eliminations Healthcare, Inc. Hospital Center (*) Hospital Hospital Hospital Association Hospital Hospital Rehabilitation Assets Current assets: Cash and cash equivalents $188,007 $- $136,927 $10,479 $778 $21,134 $375 $207 $18,054 $38 $14 $1 Marketable securities and other investments 1,864,003-18,397 697,654 584,059 299,465 40,341 2,769 146,729 74,589 - - Accounts receivable for services to patients, net of allowance for doubtful accounts 922,557 - - 215,579 298,519 120,920 141,802 63,973 37,996 13,861 20,852 9,055 Accounts receivable for physician activities, net 98,873 - - 93,275 2,056-1,769 762 481-530 - Assets limited as to use, current portion 84,669-10,001 45,891 18,958 593 3,904 1,690 1,779 802 206 845 Insurance claims receivable, current portion 82,170-929 19,408 22,767 11,600 14,586 5,009 3,826 1,483 2,287 275 Other current assets 172,385 (3,000) 25,538 55,553 42,288 17,193 19,752 6,301 5,358 1,372 1,943 87 Total current assets 3,412,664 (3,000) 191,792 1,137,839 969,425 470,905 222,529 80,711 214,223 92,145 25,832 10,263 Due from affiliates, net 13,429 (228,716) - 68,428 134,241 - - - - 180 16,578 22,718 Note receivable from affiliate 42,489-42,489 - - - - - - - - - Assets limited as to use, net of current portion 1,106,210-316,456 200,077 255,077 161,939 54,433 45,669 50,615 7,441 571 13,932 Property, plant and equipment, net 3,876,040-614,190 455,873 1,241,014 207,276 943,676 169,232 152,797 48,091 33,026 10,865 Insurance claims receivable, net of current portion 426,091-3,510 101,697 127,856 63,836 61,200 26,561 20,958 7,798 11,633 1,042 Other assets 696,765 (541,199) 1,101,162 87,637 12,613 11,306 23,856 1,390 - - - - Total assets $9,573,688 ($772,915) $2,269,599 $2,051,551 $2,740,226 $915,262 $1,305,694 $323,563 $438,593 $155,655 $87,640 $58,820 Liabilities and net assets (deficit) Current liabilities: Short-term borrowings $110,218 $- $- $7,500 $102,718 $- $- $- $- $- $- $- Accounts payable and accrued expenses 564,372-149,952 125,488 104,695 53,920 60,158 29,361 20,790 8,904 9,517 1,587 Accrued salaries and related benefits 546,102-127,570 123,833 130,510 46,723 45,989 29,588 20,855 8,475 10,590 1,969 Current portion of capital lease obligations 1,759-1,511 - - - 248 - - - - - Current portion of long-term debt 48,622-741 9,942 19,203 8,425 4,915 1,145 1,170 749 1,521 811 Current portion of insurance claims liability 82,170-929 19,408 22,767 11,600 14,586 5,009 3,826 1,483 2,287 275 Current portion of malpractice and other insurance liabilities 68,135-15,545 14,225 16,751 8,737 4,032 3,627 2,596 1,181 1,441 - Current portion of third-party payer structured liabilities 4,346 - - - - 4,346 - - - - - - Current portion of estimated payable to third-party payers 262,718 - - 54,028 99,554 40,307 27,331 19,619 2,762 8,103 7,231 3,783 Total current liabilities 1,688,442-296,248 354,424 496,198 174,058 157,259 88,349 51,999 28,895 32,587 8,425 Due to affiliates, net - (353,511) 133,459 - - 31,636 108,175 70,948 9,293 - - - Accrued retirement benefits, net of current portion 753,372-169,665 133,436 65,094 3,060 177,169 63,116 103,319 13,477 21,020 4,016 Capital lease obligations, net of current portion 171,048-101,720-66,667-2,661 - - - - - Long-term debt, net of current portion 2,040,666-692,176 116,021 871,432 78,208 115,189 69,963 77,097 6,679 9,976 3,925 Insurance claims liability, net of current portion 426,091-3,510 101,697 127,856 63,836 61,200 26,561 20,958 7,798 11,633 1,042 Malpractice and other insurance liabilities, net of current portion 727,649-88,409 176,629 202,741 91,550 61,242 44,938 33,871 12,389 15,880 - Third-party payer structured liabilities, net of current portion 3,724 - - - - 3,724 - - - - - - Other long-term liabilities 585,012-5,242 139,041 213,331 43,149 86,715 48,183 16,611 12,475 19,548 717 Total liabilities 6,396,004 (353,511) 1,490,429 1,021,248 2,043,319 489,221 769,610 412,058 313,148 81,713 110,644 18,125 Commitments and contingencies Net assets (deficit): Unrestricted 2,781,133 (338,099) 656,044 929,500 581,305 412,861 454,779 (111,391) 117,216 62,499 (23,467) 39,886 Temporarily restricted 317,606 (56,386) 86,976 72,651 106,442 11,696 56,386 22,896 7,066 8,607 463 809 Permanently restricted 78,945 (24,919) 36,150 28,152 9,160 1,484 24,919-1,163 2,836 - - Total net assets (deficit) 3,177,684 (419,404) 779,170 1,030,303 696,907 426,041 536,084 (88,495) 125,445 73,942 (23,004) 40,695 Total liabilities and net assets (deficit) $9,573,688 ($772,915) $2,269,599 $2,051,551 $2,740,226 $915,262 $1,305,694 $323,563 $438,593 $155,655 $87,640 $58,820 (*) Effective January 14, 2016, Forest Hills Hospital and Franklin Hospital merged into Long Island Jewish Medical Center. 6
Consolidating Statement of Financial Position - Phelps Memorial Hospital June 30, 2016 (Unaudited and In Thousands) Phelps Memorial Hospital Phelps Memorial Phelps Phelps Association and Hospital Professional Medical Subsidiaries Eliminations Association Building Co. Associates Assets Current assets: Cash and cash equivalents $30,753 $- $17,409 $2,021 $11,323 Marketable securities and other investments 5,973-5,973 - - Accounts receivable for services to patients, net of allowance for doubtful accounts 25,322-25,322 - - Accounts receivable for physician activities, net 3,058-1,616-1,442 Assets limited as to use, current portion 1,639-1,639 - - Other current assets 7,396-7,082 314 - Total current assets 74,141-59,041 2,335 12,765 Due from affiliates, net - (16,505) 16,505 - - Assets limited as to use, net of current portion 23,939-23,939 - - Pledges receivable, net of current portion 3,172-3,172 - - Property, plant and equipment, net 147,958-138,368 9,590 - Insurance claims receivable, net of current portion 7,032-7,032 - - Other assets 5,626 (1,634) 7,260 - - Total assets $261,868 ($18,139) $255,317 $11,925 $12,765 Liabilities and net assets (deficit) Current liabilities: Accounts payable and accrued expenses $9,684 $- $9,684 $- $- Accrued salaries and related benefits 10,853-10,584-269 Current portion of long-term debt 1,631-1,550 81 - Current portion of malpractice and other insurance liabilities 1,827-1,827 - - Total current liabilities 23,995-23,645 81 269 Due to affiliates, net 3,191 (16,505) 29 699 18,968 Accrued retirement benefits, net of current portion 4,837-4,837 - - Long-term debt, net of current portion 34,992-31,435 3,557 - Insurance claims liability, net of current portion 7,032-7,032 - - Malpractice and other insurance liabilities, net of current portion 16,764-16,764 - - Other long-term liabilities 1,692-1,692 - - Total liabilities 92,503 (16,505) 85,434 4,337 19,237 Commitments and contingencies Net assets (deficit): Unrestricted 157,331 (1,634) 157,849 7,588 (6,472) Temporarily restricted 8,637-8,637 - - Permanently restricted 3,397-3,397 - - Total net assets (deficit) 169,365 (1,634) 169,883 7,588 (6,472) Total liabilities and net assets (deficit) $261,868 ($18,139) $255,317 $11,925 $12,765 7
Consolidating Statement of Financial Position - Northern Westchester Hospital June 30, 2016 (Unaudited and In Thousands) Northern Westchester Northern Northern Hospital Westchester Westchester Association and Hospital Hospital Center Other Subsidiaries Eliminations Association Foundation Subsidiaries Assets Current assets: Cash and cash equivalents $50,709 $- $50,575 $- $134 Accounts receivable for services to patients, net of allowance for doubtful accounts 25,237-25,237 - - Accounts receivable for physician activities, net 1,171-1,171 - - Assets limited as to use, current portion 2,769-2,769 - - Other current assets 6,789-6,764-25 Total current assets 86,675-86,516-159 Due from affiliates, net - (3,934) 3,059-875 Assets limited as to use, net of current portion 81,373-59,867 21,506 - Pledges receivable, net of current portion 3,928 - - 3,928 - Property, plant and equipment, net 180,676-165,868-14,808 Other assets 8,131-7,502-629 Total assets $360,783 ($3,934) $322,812 $25,434 $16,471 Liabilities and net assets Current liabilities: Accounts payable and accrued expenses $27,979 $- $27,566 $66 $347 Accrued salaries and related benefits 10,657-10,648 9 - Current portion of capital lease obligations 573-573 - - Current portion of long-term debt 2,782-2,782 - - Current portion of malpractice and other insurance liabilities 4,563-4,563 - - Current portion of estimated payable to third-party payers 699-699 - - Total current liabilities 47,253-46,831 75 347 Due to affiliates, net 3,662 (3,934) - 1,131 6,465 Accrued retirement benefits, net of current portion 38,599-38,599 - - Long-term debt, net of current portion 60,082-60,082 - - Malpractice and other insurance liabilities, net of current portion 19,939-19,939 - - Other long-term liabilities 8,228-7,174-1,054 Total liabilities 177,763 (3,934) 172,625 1,206 7,866 Commitments and contingencies Net assets: Unrestricted 157,025-144,722 3,698 8,605 Temporarily restricted 18,948-4,555 14,393 - Permanently restricted 7,047-910 6,137 - Total net assets 183,020-150,187 24,228 8,605 Total liabilities and net assets $360,783 ($3,934) $322,812 $25,434 $16,471 8
Consolidating Statement of Operations For the Six Months Ended June 30, 2016 (Unaudited and In Thousands) Phelps Northern Northwell Memorial Westchester The Feinstein Other Northwell Health Hospital Hospital Hospice Institute for Northwell Northwell Regional Health Endoscopy Northwell Health, Inc. Obligated Association Association Peconic Bay The Long Care Medical Health Health Insurance Dolan Family Insurance Center of Garden City South Shore Health Total Eliminations Group and Subsidiaries and Subsidiaries Medical Center (*) Island Home Network Research Foundation Laboratories Company Health Center Companies Long Island SurgiCenter Surgery Center Entities Operating revenue: Net patient service revenue $3,732,766 ($59,099) $3,339,235 $110,897 $128,918 $73,721 $57,999 $23,321 $38 $- $- $- $2,280 $- $8,657 $4,321 $3,259 $39,219 Physician practice revenue 620,731 (22,744) 478,809 13,660 4,673 2,017 1,113 - - - - - - - - - - 143,203 Provision for bad debts (60,842) 9 (51,941) (930) (2,576) (1,431) (1,098) (105) - - (455) - (1) - - - - (2,314) Total patient revenue, net of provision for bad debts 4,292,655 (81,834) 3,766,103 123,627 131,015 74,307 58,014 23,216 38 - (455) - 2,279-8,657 4,321 3,259 180,108 Other operating revenue 248,162 (317,361) 249,569 4,346 3,127 1,940 245-23,728-171,433 6,097 1,066 5,018 - - - 98,954 Net health insurance premium revenue 253,543 (275) - - - - - - - - - - - 253,818 - - - - Net assets released from restrictions used for operations 28,516-19,898 215 329 - - 424 7,540 - - - 110 - - - - - Total operating revenue 4,822,876 (399,470) 4,035,570 128,188 134,471 76,247 58,259 23,640 31,306-170,978 6,097 3,455 258,836 8,657 4,321 3,259 279,062 Operating expenses: Salaries 2,302,818 (34,130) 1,925,613 64,807 55,875 30,781 33,753 9,650 27,496-37,564-1,989 14,776 981 1,096 666 131,901 Employee benefits 606,410 (20,617) 515,967 19,073 16,381 8,613 11,507 2,523 8,617-12,778-819 2,971 219 196 97 27,266 Supplies and expenses 1,588,742 (341,375) 1,233,470 34,777 47,762 31,644 12,092 10,382 13,271-109,713 6,097 1,162 288,577 2,514 2,002 1,248 135,406 Depreciation and amortization 203,563-181,185 5,469 5,692 2,614 1,373 166 2,948-881 - 45 282 10 38 47 2,813 Interest 54,860 (288) 51,523 669 878 1,174 871 - - - - - - - - - 33 - Total operating expenses 4,756,393 (396,410) 3,907,758 124,795 126,588 74,826 59,596 22,721 52,332-160,936 6,097 4,015 306,606 3,724 3,332 2,091 297,386 Excess (deficiency) of operating revenue over operating expenses 66,483 (3,060) 127,812 3,393 7,883 1,421 (1,337) 919 (21,026) - 10,042 - (560) (47,770) 4,933 989 1,168 (18,324) Non-operating gains and losses: Investment income 16,442-15,933 121 41 48 27 292 9 (21) (33) 83 - - (13) (11) (5) (29) Change in net unrealized gains and losses and change in value of equity method investments 50,862-43,936 422 433 (654) - 575 8 (23) - 5,252-913 - - - - Change in interest in acquired entities - (29,220) 30,688 - - - - - - - - - - - - - - (1,468) Change in fair value of interest rate swap agreements designated as derivative instruments 190-190 - - - - - - - - - - - - - - - Contribution received in the acquisition of Peconic Bay Medical Center 36,370-36,370 - - - - - - - - - - - - - - - Other non-operating gains and losses (4,319) - 1,729 169 (143) - - 286 - (6,512) - - - - - - - 152 Total non-operating gains and losses 99,545 (29,220) 128,846 712 331 (606) 27 1,153 17 (6,556) (33) 5,335-913 (13) (11) (5) (1,345) Excess (deficiency) of revenue and gains and losses over expenses 166,028 (32,280) 256,658 4,105 8,214 815 (1,310) 2,072 (21,009) (6,556) 10,009 5,335 (560) (46,857) 4,920 978 1,163 (19,669) Net assets released from restrictions for capital asset acquisitions 24,573-23,917 23 - - - - 633 - - - - - - - - - Change in fair value of interest rate swap agreements designated as cash flow hedges (776) - 392 - - (1,010) (158) - - - - - - - - - - - Recovery of fair value of endowment corpus 502-119 - - - - - 325 58 - - - - - - - - Transfers (to) from affiliates - 3,060 (110,558) - 15,000 - - - 20,387 6,000 (3,060) - - 57,100 - - - 12,071 Other changes in net assets (3,280) 4,903 - (181) - 122 - - - - - - - (550) (5,100) (813) (685) (976) Increase (decrease) in unrestricted net assets $187,047 ($24,317) $170,528 $3,947 $23,214 ($73) ($1,468) $2,072 $336 ($498) $6,949 $5,335 ($560) $9,693 ($180) $165 $478 ($8,574) (*) Peconic Bay Medical Center's operating results above are from the January 15, 2016 acquisition date. 9
Combining Statement of Operations - Northwell Health Obligated Group For the Six Months Ended June 30, 2016 (Unaudited and In Thousands) Long Island Northwell Health Total North Shore Jewish Staten Island Huntington Stern Family Obligated Northwell University Medical University Lenox Hill Southside Hospital Glen Cove Plainview Forest Hills Franklin Center for Group Eliminations Healthcare, Inc. Hospital Center (*) Hospital Hospital Hospital Association Hospital Hospital Hospital (*) Hospital (*) Rehabilitation Operating revenue: Net patient service revenue $3,339,235 ($209) $- $859,908 $1,007,217 $446,035 $468,874 $212,480 $159,283 $49,916 $92,697 $8,779 $6,810 $27,445 Physician practice revenue 478,809 - - 191,496 159,467 46 34,211 41,135 31,216 8,485 11,006 768 523 456 Provision for bad debts (51,941) 3,239 - (19,486) (15,214) (4,296) (7,119) (3,812) (2,274) (845) (1,130) (514) (276) (214) Total patient revenue, net of provision for bad debts 3,766,103 3,030-1,031,918 1,151,470 441,785 495,966 249,803 188,225 57,556 102,573 9,033 7,057 27,687 Other operating revenue 249,569 (546,720) 498,662 135,870 67,872 10,855 64,564 8,221 3,004 2,308 4,426 96 155 256 Net assets released from restrictions used for operations 19,898-718 6,774 8,965-3,329 68 44 - - - - - Total operating revenue 4,035,570 (543,690) 499,380 1,174,562 1,228,307 452,640 563,859 258,092 191,273 59,864 106,999 9,129 7,212 27,943 Operating expenses: Salaries 1,925,613 (185,886) 171,336 560,816 581,195 191,834 276,942 128,100 89,832 35,499 51,658 4,844 3,807 15,636 Employee benefits 515,967 (43,110) 46,609 123,641 155,941 66,372 68,927 36,756 25,620 9,374 17,162 1,622 1,243 5,810 Supplies and expenses 1,233,470 (314,694) 215,463 399,156 385,103 154,566 187,267 83,831 62,734 17,406 32,344 2,621 1,893 5,780 Depreciation and amortization 181,185-45,890 30,947 46,570 14,305 21,718 7,268 7,815 3,256 2,167 310 178 761 Interest 51,523-19,070 3,063 21,801 2,430 2,559 1,102 937 154 256 21 24 106 Total operating expenses 3,907,758 (543,690) 498,368 1,117,623 1,190,610 429,507 557,413 257,057 186,938 65,689 103,587 9,418 7,145 28,093 Excess (deficiency) of operating revenue over operating expenses 127,812-1,012 56,939 37,697 23,133 6,446 1,035 4,335 (5,825) 3,412 (289) 67 (150) Non-operating gains and losses: Investment income 15,933-1,738 5,337 4,523 3,052 112 48 447 641 (27) (1) (1) 64 Change in net unrealized gains and losses and change in value of equity method investments 43,936-6,503 13,933 10,981 6,954 927 67 3,147 1,365 - - 1 58 Change in interest in acquired entities 30,688 (11,471) 38,110 4,049 - - - - - - - - - - Change in fair value of interest rate swap agreements designated as derivative instruments 190 - - - - 190 - - - - - - - - Contribution received in the acquisition of Peconic Bay Medical Center 36,370-36,370 - - - - - - - - - - - Other non-operating gains and losses 1,729 - - - 4,500 (2,771) - - - - - - - - Total non-operating gains and losses 128,846 (11,471) 82,721 23,319 20,004 7,425 1,039 115 3,594 2,006 (27) (1) - 122 Excess (deficiency) of revenue and gains and losses over expenses 256,658 (11,471) 83,733 80,258 57,701 30,558 7,485 1,150 7,929 (3,819) 3,385 (290) 67 (28) Net assets released from restrictions for capital asset acquisitions 23,917 - - 667 18,970 222 3,986 1 71 - - - - - Change in fair value of interest rate swap agreements designated as cash flow hedges 392 - - 141 251 - - - - - - - - - Recovery of fair value of endowment corpus 119 - - 119 - - - - - - - - - - Transfers (to) from affiliates (110,558) - (90,413) (11,011) (62,152) - - - - - - 3,837 49,181 - Increase (decrease) in unrestricted net assets $170,528 ($11,471) ($6,680) $70,174 $14,770 $30,780 $11,471 $1,151 $8,000 ($3,819) $3,385 $3,547 $49,248 ($28) (*) Effective January 14, 2016, Forest Hills Hospital and Franklin Hospital merged into Long Island Jewish Medical Center. As such, the Forest Hills Hospital and Franklin Hospital columns above only reflect the results of operations through January 13, 2016. Beginning January 14, 2016, the operating results of these hospitals are included with the Long Island Jewish Medical Center column. 10
Consolidating Statement of Operations - Phelps Memorial Hospital For the Six Months Ended June 30, 2016 (Unaudited and In Thousands) Phelps Memorial Hospital Phelps Memorial Phelps Phelps Association and Hospital Professional Medical Subsidiaries Eliminations Association Building Co. Associates Operating revenue: Net patient service revenue $110,897 $- $110,897 $- $- Physician practice revenue 13,660-5,338-8,322 Provision for bad debts (930) - (929) (1) Total patient revenue, net of provision for bad debts 123,627-115,306-8,321 Other operating revenue 4,346 (1,175) 4,247 1,050 224 Net assets released from restrictions used for operations 215-215 - - Total operating revenue 128,188 (1,175) 119,768 1,050 8,545 Operating expenses: Salaries 64,807-54,911-9,896 Employee benefits 19,073-16,738-2,335 Supplies and expenses 34,777 (1,175) 32,727 423 2,802 Depreciation and amortization 5,469-5,325 144 - Interest 669-545 124 - Total operating expenses 124,795 (1,175) 110,246 691 15,033 Excess (deficiency) of operating revenue over operating expenses 3,393-9,522 359 (6,488) Non-operating gains and losses: Investment income 121-121 - - Change in net unrealized gains and losses and change in value of equity method investments 422-422 - - Other non-operating gains and losses 169-169 - - Total non-operating gains and losses 712-712 - - Excess (deficiency) of revenue and gains and losses over expenses 4,105-10,234 359 (6,488) Net assets released from restrictions for capital asset acquisitions 23-23 - - Other changes in net assets (181) 446 - (627) - Increase (decrease) in unrestricted net assets $3,947 $446 $10,257 ($268) ($6,488) 11
Consolidating Statement of Operations - Northern Westchester Hospital For the Six Months Ended June 30, 2016 (Unaudited and In Thousands) Northern Westchester Northern Northern Hospital Westchester Westchester Association and Hospital Hospital Center Other Subsidiaries Association Foundation Subsidiaries Operating revenue: Net patient service revenue $128,918 $128,918 $- $- Physician practice revenue 4,673 4,673 - - Provision for bad debts (2,576) (2,576) - - Total patient revenue, net of provision for bad debts 131,015 131,015 - - Other operating revenue 3,127 2,312-815 Net assets released from restrictions used for operations 329 329 - - Total operating revenue 134,471 133,656-815 Operating expenses: Salaries 55,875 55,868-7 Employee benefits 16,381 16,381 - - Supplies and expenses 47,762 47,360-402 Depreciation and amortization 5,692 5,148-544 Interest 878 878 - - Total operating expenses 126,588 125,635-953 Excess (deficiency) of operating revenue over operating expenses 7,883 8,021 - (138) Non-operating gains and losses: Investment income 41 (196) - 237 Change in net unrealized gains and losses and change in value of equity method investments 433 433 - - Other non-operating gains and losses (143) 80 (223) - Total non-operating gains and losses 331 317 (223) 237 Excess (deficiency) of revenue and gains and losses over expenses 8,214 8,338 (223) 99 Transfers from affiliates 15,000 15,000 - - Increase (decrease) in unrestricted net assets $23,214 $23,338 ($223) $99 12
Northwell Health Obligated Group Utilization Statistics Six Months Ended June 30, 2015 2016 Inpatient Discharges (excl. Nursery) 123,071 127,190 Patient Days (excl. Nursery) 708,629 714,340 Average Length of Stay (in Days) 5.76 5.62 Average Daily Census 3,915 3,925 Licensed Beds (excl. Nursery) 5,435 5,415 Beds Available (excl. Nursery) (1) 4,516 4,496 Occupancy Percentage (1) 86.1% 87.1% Normal Newborn Discharges 12,176 12,573 Total Discharges 135,247 139,763 Outpatient Emergency Room Visits 274,842 281,817 Emergency Room Admissions 81,622 83,450 Total ER Encounters 356,464 365,267 Health Center Visits 433,950 435,368 Ambulatory Surgery Visits 71,149 71,876 Home Care Admissions 16,068 17,959 Other Outpatient Visits and Encounters (2) 545,505 588,655 (1) Beds Available, which vary primarily based upon need, are reported as the number of beds at the end of each reporting period. Occupancy Percentage is calculated using the average beds available for the reporting period. (2) The increase in Other Outpatient Visits and Encounters is primarily due to the expansion of radiology and imaging services within the Obligated Group, including the opening of new imaging centers. NOTE: The utilization statistics presented above only include members of Northwell Health that are in the Obligated Group. 13
Northwell Health Obligated Group Payer Mix Percent of Gross Revenue (Inpatient & Outpatient) Six Months Ended June 30, 2015 2016 Medicare (1) 43% 42% Medicaid (2) 20% 21% Commercial 31% 31% Self Pay 2% 2% Other 4% 4% Total 100% 100% (1) Includes Medicare Managed Care. (2) Includes Medicaid Managed Care. NOTE: The payer mix information presented above only includes members of Northwell Health that are in the Obligated Group. 14
Notes to Consolidated Financial Statements June 30, 2016 (information pertaining to the six months ended June 30, 2016 and 2015 is unaudited) (in thousands) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles applied on a basis consistent with that of the 2015 audited consolidated financial statements of Northwell Health, Inc. and its member corporations and other affiliated entities (collectively, Northwell ). Northwell presumes that users of this interim financial information have read or have access to Northwell s audited consolidated financial statements and that the adequacy of additional disclosures needed for a fair presentation may be determined in that context. The audited consolidated financial statements of Northwell for the years ended December 31, 2015 and 2014 are on file with the Municipal Securities Rulemaking Board and are accessible through its Electronic Municipal Market Access database. Information contained in Northwell s audited consolidated financial statements for the years ended December 31, 2015 and 2014 is incorporated herein. Footnotes and other disclosures that would substantially duplicate the disclosures contained in Northwell s most recent audited consolidated financial statements have been omitted. Accordingly, the accompanying unaudited interim consolidated financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all transactions considered necessary for a fair presentation have been included. Patient volumes and net operating revenue and results are subject to seasonal and other variations caused by a number of factors. Monthly and periodic operating results are not necessarily representative of operations for a full year for various reasons, including occupancy levels and other patient volumes, interest rates, unusual or infrequent items and other seasonal fluctuations. These same considerations apply to year-to-year comparisons. Northwell is an integrated health care delivery system in the New York metropolitan area. Various entities within Northwell are exempt from Federal income taxes under the provisions of Section 501(a) of the Internal Revenue Code (the Code ) as organizations described in Section 501(c)(3), while other entities are not exempt from such income taxes. The exempt organizations are also exempt from New York State and local income taxes. The effect of income taxes is not material to the unaudited interim consolidated financial statements. 15
Notes to Consolidated Financial Statements (continued) (information pertaining to the six months ended June 30, 2016 and 2015 is unaudited) (in thousands) Note A - Basis of Presentation (continued) The accompanying unaudited interim consolidated financial statements include the accounts of the following principal operating organizations. All interorganization accounts and activities have been eliminated in consolidation. Hospitals North Shore University Hospital ( NSUH ), including the accounts of Syosset Hospital Long Island Jewish Medical Center ( LIJMC ), including Long Island Jewish Hospital, Long Island Jewish Forest Hills, Long Island Jewish Valley Stream, Steven and Alexandra Cohen Children s Medical Center of New York, Zucker Hillside Hospital and Orzac Center for Rehabilitation Staten Island University Hospital ( Staten Island ) Lenox Hill Hospital ( Lenox ) Other Entities Northwell Health, Inc. and Northwell Healthcare, Inc. ( HCI ) parent holding companies Northwell Health Stern Family Center for Rehabilitation ( Stern ) skilled nursing facility and rehabilitation center Broadlawn Manor Nursing and Rehabilitation Center (part of The Long Island Home) skilled nursing facility and rehabilitation center North Shore Health System Enterprises, Inc. and North Shore Health Enterprises, Inc. holding companies for certain for-profit related entities RegionCare, Inc. infusion therapy, nurse staffing and licensed home health agency services North Shore Community Services, Inc. real estate holdings and related services North Shore University Hospital Housing, Inc., North Shore University Hospital at Glen Cove Housing, Inc. and Hillside Hospital Houses, Inc. housing and auxiliary facilities for staff members, students and employees Endoscopy Center of Long Island, LLC outpatient endoscopy center 70% owned by Northwell North Shore Medical Accelerator, P.C. outpatient radiation oncology center 70% owned by Northwell North Shore-LIJ and Yale New Haven Medical Air Transport, LLC medical air transport company 90% owned by Northwell Southside Hospital ( Southside ) Glen Cove Hospital ( Glen Cove ) Huntington Hospital Association ( Huntington ) Plainview Hospital ( Plainview ) South Oaks Hospital (part of The Long Island Home) Phelps Memorial Hospital Association Northern Westchester Hospital Association Peconic Bay Medical Center Northwell Health Laboratories laboratory services The Feinstein Institute for Medical Research medical research Northwell Health Foundation, Inc. fundraising Hospice Care Network, Inc. hospice services North Shore-LIJ Health Plan Inc. tax-exempt health insurance entity authorized by the State of New York to operate a Medicaid Managed Long- Term Care Plan and a Fully Integrated Dual Advantage Plan North Shore-LIJ CareConnect Insurance Company Inc. for-profit health insurance entity licensed to issue commercial health insurance products in the State of New York Regional Insurance Company Ltd. captive insurance company providing excess professional liability insurance Huntington Hospital Dolan Family Health Center community health center Endo Group, LLC (d/b/a Garden City SurgiCenter ) outpatient ambulatory surgery 70% owned by Northwell Northwell Health GoHealth Urgent Care urgent care centers 90% owned by Northwell South Shore Surgery Center, LLC outpatient ambulatory surgery 50.1% owned by Northwell Other affiliated professional corporations 16
Notes to Consolidated Financial Statements (continued) (information pertaining to the six months ended June 30, 2016 and 2015 is unaudited) (in thousands) Note A - Basis of Presentation (continued) Certain members of Northwell (the Obligated Group ) are jointly and severally liable for obligations under bond indentures. The Obligated Group consists of HCI, NSUH, LIJMC, Staten Island, Lenox, Southside, Huntington, Glen Cove, Plainview and Stern. Effective January 14, 2016, Forest Hills Hospital and Franklin Hospital merged into LIJMC. In conjunction with the merger, the names of the hospitals were changed to Long Island Jewish Forest Hills and Long Island Jewish Valley Stream, respectively. Northwell maintains a controlling ownership in various entities whose results of operations are included in the accompanying consolidated financial statements. Northwell s non-controlling interest in these entities at June 30, 2016 and 2015 is immaterial, both individually and in the aggregate, to Northwell s net assets and excess of revenue and gains and losses over expenses as reported in the accompanying consolidated financial statements. Note B - Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, including estimated accounts receivable for services to patients, and liabilities, including estimated payables to third-party payers, accrued retirement benefits, and malpractice and other insurance liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Note C Recent Accounting Standards In August 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. ( ASU ) 2016-14, Not-for-Profit Entities. ASU 2016-14 requires changes to the current presentation of financial statements of not-for-profit entities. The provisions of ASU 2016-14 are effective for annual reporting periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018. Early application is permitted. Northwell has not completed the process of evaluating the impact of ASU 2016-14 on its consolidated financial statements. Note D Acquisitions On January 15, 2016 (the 2016 Acquisition Date ), Northwell acquired Peconic Bay Medical Center ( Peconic ), a not-for-profit corporation that operates a 140 bed acute care hospital and a skilled nursing/rehabilitation center located in eastern Suffolk County, New York. Northwell acquired Peconic by means of an inherent contribution where no consideration was transferred by Northwell. Northwell is accounting for the business combination by applying the acquisition method, and accordingly, the inherent contribution is valued as the excess of the fair value of assets acquired over the fair value of liabilities assumed. Northwell is in the process of finalizing 17
Notes to Consolidated Financial Statements (continued) (information pertaining to the six months ended June 30, 2016 and 2015 is unaudited) (in thousands) Note D Acquisitions (continued) an independent valuation of the assets and liabilities of Peconic and, as a result, has recognized estimated provisional values of Peconic s assets and liabilities in the accompanying unaudited interim consolidated statement of financial position as of June 30, 2016. The results of Peconic s operations have been included in the unaudited interim consolidated financial statements since the 2016 Acquisition Date. Peconic is not a member of the Obligated Group. The following table summarizes the estimated provisional, unaudited fair values of the assets acquired and liabilities assumed at the 2016 Acquisition Date: January 15, 2016 Assets Cash and cash equivalents $ 19,100 Marketable securities and other investments 4,223 Accounts receivable for services to patients 13,027 Accounts receivable for physician activities 747 Other current assets 15,572 Assets limited as to use 7,038 Pledges receivable, net 1,000 Property, plant and equipment 79,656 Other assets 5,939 Total assets acquired 146,302 Liabilities Accounts payable and accrued expenses 22,008 Accrued salaries and related benefits 8,892 Estimated payable to third-party payers 7,711 Accrued retirement benefits 4,021 Capital lease obligations 4,645 Long-term debt 37,028 Malpractice and other insurance liabilities 11,097 Other long-term liabilities 11,245 Total liabilities assumed 106,647 Excess of assets acquired over liabilities assumed $ 39,655 Net assets acquired Unrestricted $ 36,370 Temporarily restricted 2,498 Permanently restricted 787 $ 39,655 The finalization of the fair value of assets and liabilities as of the 2016 Acquisition Date is pending the review of valuation results conducted by third-party experts and other procedures. 18