Combining Statement of Financial Position - Obligated Group Only 6. Combining Statement of Operations - Obligated Group Only 8

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Consolidated Financial Statements and Supplementary Information For the Six Months Ended June 30, 2015 and 2014 Contents Page 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 Consolidating Statement of Financial Position 5 Combining Statement of Financial Position - Obligated Group Only 6 Consolidating Statement of Operations 7 Combining Statement of Operations - Obligated Group Only 8 Utilization Statistics - Obligated Group 9 Payer Mix - Obligated Group 10 Notes to Consolidated Financial Statements 11

Consolidated Statements of Financial Position June 30, 2015 and December 31, 2014 (In Thousands) Assets Current assets: Cash and cash equivalents 397,555 (Unaudited) (Audited) June 30, December 31, 2015 2014 $ $ 194,570 Marketable securities and other investments 1,873,144 1,905,161 Accounts receivable for services to patients, net of allowance for doubtful accounts 854,560 774,831 Accounts receivable for physician activities, net 69,049 74,058 Assets limited as to use, current portion 94,882 104,566 Pledges receivable, current portion 33,555 36,129 Insurance claims receivable, current portion 92,198 83,268 Other current assets 231,041 172,369 Total current assets 3,645,984 3,344,952 Assets limited as to use, net of current portion 1,546,997 1,365,666 Pledges receivable, net of current portion 102,910 101,423 Property, plant and equipment, net 4,170,689 3,762,104 Insurance claims receivable, net of current portion 282,186 289,953 Other assets 281,145 182,254 Total assets $ 10,029,911 $ 9,046,352 Liabilities and net assets Current liabilities: Short-term borrowings $ 110,218 $ 110,218 Accounts payable and accrued expenses 669,085 607,224 Accrued salaries and related benefits 616,625 595,405 Current portion of capital lease obligations 4,936 5,902 Current portion of long-term debt 51,454 55,357 Current portion of insurance claims liability 92,198 83,268 Current portion of malpractice and other insurance liabilities 81,163 81,344 Current portion of third-party payer structured liabilities 4,346 4,346 Current portion of estimated payable to third-party payers 294,913 247,935 Total current liabilities 1,924,938 1,790,999 Accrued retirement benefits, net of current portion 768,149 706,145 Capital lease obligations, net of current portion 128,050 197,825 Long-term debt, net of current portion 2,215,130 1,856,298 Insurance claims liability, net of current portion 282,186 289,953 Malpractice and other insurance liabilities, net of current portion 861,205 781,199 Third-party payer structured liabilities, net of current portion 11,217 13,266 Other long-term liabilities 587,180 577,276 Total liabilities 6,778,055 6,212,961 Commitments and contingencies Net assets: Unrestricted 2,732,404 2,340,552 Temporarily restricted 357,351 357,127 Permanently restricted 162,101 135,712 Total net assets 3,251,856 2,833,391 Total liabilities and net assets $ 10,029,911 $ 9,046,352 See accompanying notes. 1

Consolidated Statements of Operations For the Six Months Ended June 30, 2015 and 2014 (In Thousands) (Unaudited) (Unaudited) 2015 2014 Operating revenue: Net patient service revenue $ 3,378,231 $ 2,971,900 Physician practice revenue 537,727 461,379 Provision for bad debts (53,393) (49,717) Total patient revenue, net of provision for bad debts 3,862,565 3,383,562 Other operating revenue 218,405 167,528 Health insurance premium revenue 95,284 31,208 Net assets released from restrictions used for operations 33,098 23,456 Total operating revenue 4,209,352 3,605,754 Operating expenses: Salaries 2,105,918 1,850,251 Employee benefits 553,307 469,071 Supplies and expenses 1,248,601 1,033,326 Depreciation and amortization 195,843 168,468 Interest 52,979 46,584 Total operating expenses 4,156,648 3,567,700 Excess of operating revenue over operating expenses 52,704 38,054 Non-operating gains and losses: Investment income 27,915 62,575 Change in net unrealized gains and losses and change in value of equity method investments 15,483 28,423 Change in fair value of interest rate swap agreements designated as derivative instruments 372 392 Loss on refunding and redemption of long-term debt (56,975) - Contribution received in the acquisiton of Phelps Memorial Hospital and Northern Westchester Hospital 266,053 - Gain from acquired interest in Optum360 85,000 - Other non-operating gains and losses (1,717) (7,247) Total non-operating gains and losses 336,131 84,143 Excess of revenue and gains and losses over expenses 388,835 122,197 Net assets released from restrictions for capital asset acquisitions 3,765 3,134 Change in fair value of interest rate swap agreements designated as cash flow hedges 600 459 Other changes in net assets (1,348) (1,132) Increase in unrestricted net assets $ 391,852 $ 124,658 See accompanying notes. 2

Consolidated Statements of Changes in Net Assets For the Six Months Ended June 30, 2015 and 2014 (In Thousands) (Unaudited) Temporarily Permanently Total Unrestricted Restricted Restricted Net assets, December 31, 2013 $ 2,988,926 $ 2,508,405 $ 346,046 $ 134,475 Contributions and grants 53,568-52,899 669 Investment income 5,866-5,866 - Change in net unrealized gains and losses and change in value of equity method investments 1,578-1,578 - Excess of revenue and gains and losses over expenses 122,197 122,197 - - Net assets released from restrictions for: Capital asset acquisitions - 3,134 (3,134) - Operations (23,456) - (23,456) - Non-operating activities (5,002) - (5,002) - Change in fair value of interest rate swap agreements designated as cash flow hedges 459 459 - - Other changes in net assets (1,132) (1,132) - - Increase in net assets 154,078 124,658 28,751 669 Net assets, June 30, 2014 $ 3,143,004 $ 2,633,063 $ 374,797 $ 135,144 (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 - Contribution received in the acquisiton of Phelps Memorial Hospital and Northern Westchester Hospital 35,061-25,855 9,206 Excess of revenue and gains and losses over expenses 388,835 388,835 - - 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 418,465 391,852 224 26,389 Net assets, June 30, 2015 $ 3,251,856 $ 2,732,404 $ 357,351 $ 162,101 See accompanying notes. 3

Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2015 and 2014 (In Thousands) (Unaudited) (Unaudited) 2015 2014 Cash flows from operating activities Increase in net assets $ 418,465 $ 154,078 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Contribution received in the acquisition of Phelps Memorial Hospital and Northern Westchester Hospital (301,114) - Permanently restricted contributions (17,183) (669) Depreciation and amortization 195,843 168,468 Net realized gains and losses, change in net unrealized gains and losses and change in value of equity method investments (34,984) (84,649) Change in fair value of interest rate swap agreements (972) (851) Gain from acquired interest in Optum360 (85,000) - Loss on refunding and redemption of long-term debt 56,975 - Changes in operating assets and liabilities: Accounts receivable for services to patients, net (25,987) (46,875) Accounts receivable for physician activities, net 5,009 (3,849) Pledges receivable 27,502 (7,653) Current portion of estimated payable to third party-payers 44,936 (2,094) Accrued retirement benefits, net of current portion 10,315 3,572 Malpractice and other insurance liabilities 55,537 22,749 Net change in all other operating assets and liabilities (39,431) 2,063 Net cash provided by operating activities 309,911 204,290 Cash flows from investing activities Capital expenditures (300,182) (244,987) Net cash from sale of marketable securities and other investments and assets limited as to use 3,562 117,895 Cash received in the acquisition of Phelps Memorial Hospital and Northern Westchester Hospital 71,050 - Payments for joint venture acquisitions, net (6,915) - Net cash used in investing activities (232,485) (127,092) Cash flows from financing activities Principal payments on long-term debt and capital lease obligations (47,196) (32,595) Payments on refunded and redeemed long-term debt (535,214) (10,005) Payments on short-term borrowings (110,000) (28,322) Principal payments on third-party payer structured liabilities (2,049) (3,047) Proceeds from short-term borrowings 110,000 28,000 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 2,318 1,095 Net cash provided by (used in) financing activities 125,559 (44,874) Net increase in cash and cash equivalents 202,985 32,324 Cash and cash equivalents, beginning of period 194,570 210,601 Cash and cash equivalents, end of period $ 397,555 $ 242,925 Supplemental disclosure of cash flow information Cash paid during the period for interest (exclusive of amount capitalized) $ 55,224 $ 44,545 Supplemental disclosure of noncash investing and financing activities Assets acquired under capital lease obligations and long-term debt $ - $ 26,087 See accompanying notes. 4

Consolidating Statement of Financial Position June 30, 2015 (Unaudited and In Thousands) North Shore- North Shore- Phelps Northern North Shore- North Shore- Long Island Long Island Memorial Westchester The Feinstein Long Island Long Island Jewish Health Jewish Hospital Hospital Hospice Institute for Jewish Health Jewish Health Captive Health Endoscopy Other System, Inc. Obligated Association Association The Long Care Medical System System Insurance Dolan Family Insurance Center of Garden City Health System Total Eliminations Group and Subsidiaries and Subsidiaries Island Home Network, Inc. Research Foundation, Inc. Laboratories Companies Health Center Companies Long Island SurgiCenter Entities Assets Current assets: Cash and cash equivalents $397,555 $- $212,098 $27,258 $48,861 $5,450 $6,195 $- $19,726 $- $3,765 $261 $66,537 $628 $775 $6,001 Marketable securities and other investments 1,873,144-1,820,393 5,888-76 22,131 20 12,807-11,829 - - - - - Accounts receivable for services to patients, net of allowance for doubtful accounts 854,560 (13,128) 770,728 25,559 26,457 13,028 8,011 - - 16,168-158 - - - 7,579 Accounts receivable for physician activities, net 69,049-59,242 820 166 - - - - - - - - - - 8,821 Assets limited as to use, current portion 94,882-68,290-4,164 - - - - - 22,428 - - - - - Pledges receivable, current portion 33,555 - - - - - 121-33,388 - - - - - - 46 Insurance claims receivable, current portion 92,198 (34,026) 110,378 13,800-1,541 44 113 7 341 - - - - - - Other current assets 231,041 (100) 166,380 6,649 9,651 1,381 356 16,726 19 3,089 1,666 1,205 17,678 - - 6,341 Total current assets 3,645,984 (47,254) 3,207,509 79,974 89,299 21,476 36,858 16,859 65,947 19,598 39,688 1,624 84,215 628 775 28,788 Due from affiliates, net - (152,893) 53,370 - - - - - - 19,145 80,378 - - - - - Note receivable from affiliate - (27,489) 27,489 - - - - - - - - - - - - - Assets limited as to use, net of current portion 1,546,997 (206,519) 1,281,040 16,075 70,439 7,000 1,783 71,410 70,609-209,636 6,134 6,354 - - 13,036 Pledges receivable, net of current portion 102,910 - - 4,323 6,977-313 - 89,785 - - - - - - 1,512 Property, plant and equipment, net 4,170,689-3,687,806 139,138 169,986 55,663 782 55,393 1,296 8,141-714 2,227 311 694 48,538 Insurance claims receivable, net of current portion 282,186 (166,329) 430,149 9,839-6,469 178 460 30 1,390 - - - - - - Other assets 281,145 (378,790) 557,039 4,121 7,879 9,428 216 2,500 - - 28,861 - - 29,939 6,374 13,578 Total assets $10,029,911 ($979,274) $9,244,402 $253,470 $344,580 $100,036 $40,130 $146,622 $227,667 $48,274 $358,563 $8,472 $92,796 $30,878 $7,843 $105,452 Liabilities and net assets (deficit) Current liabilities: Short-term borrowings $110,218 $- $110,218 $- $- $- $- $- $- $- $- $- $- $- $- $- Accounts payable and accrued expenses 669,085 (13,228) 520,860 8,997 36,107 3,340 1,983 11,032 87 25,397 3,136 247 35,115 70 2 35,940 Accrued salaries and related benefits 616,625-545,465 14,696 9,186 6,014 1,843 4,661 768 6,660-428 2,042 92-24,770 Current portion of capital lease obligations 4,936-3,093-600 1,096 - - - - - - - - - 147 Current portion of long-term debt 51,454-46,512 1,665 2,407 870 - - - - - - - - - - Current portion of insurance claims liability 92,198 (34,026) 110,378 13,800-1,541 44 113 7 341 - - - - - - Current portion of malpractice and other insurance liabilities 81,163 (14,392) 66,283 - - 799 - - - - 28,473 - - - - - Current portion of third-party payer structured liabilities 4,346-4,346 - - - - - - - - - - - - - Current portion of estimated payable to third-party payers 294,913-286,133 360 4,267 1,343 - - - 1-29 2,633 - - 147 Total current liabilities 1,924,938 (61,646) 1,693,288 39,518 52,567 15,003 3,870 15,806 862 32,399 31,609 704 39,790 162 2 61,004 Due to affiliates, net - (73,292) - - 164 4,762 468 11,206 21 - - 8,906 1,820 247 29 45,669 Note payable to affiliate - (27,489) - - - 27,489 - - - - - - - - - - Accrued retirement benefits, net of current portion 768,149-700,713 4,629 52,421 10,386 - - - - - - - - - - Capital lease obligations, net of current portion 128,050-127,150-900 - - - - - - - - - - - Long-term debt, net of current portion 2,215,130-2,091,287 36,149 62,595 25,099 - - - - - - - - - - Insurance claims liability, net of current portion 282,186 (166,329) 430,149 9,839-6,469 178 460 30 1,390 - - - - - - Malpractice and other insurance liabilities, net of current portion 861,205 (66,724) 622,191 3,889 23,735 3,157 - - - - 274,957 - - - - - Third-party payer structured liabilities, net of current portion 11,217-11,217 - - - - - - - - - - - - - Other long-term liabilities 587,180-569,373 937 3,603 1,346 576 99 7,342 1,304 - - 124 - - 2,476 Total liabilities 6,778,055 (395,480) 6,245,368 94,961 195,985 93,711 5,092 27,571 8,255 35,093 306,566 9,610 41,734 409 31 109,149 Commitments and contingencies Net assets (deficit): Unrestricted 2,732,404 (343,839) 2,596,421 147,203 123,188 6,325 33,077 30,376 6,828 13,181 51,997 (7,329) 51,062 30,469 7,812 (14,367) Temporarily restricted 357,351 (208,677) 327,550 9,072 18,360-1,583 49,145 147,860 - - 1,788 - - - 10,670 Permanently restricted 162,101 (31,278) 75,063 2,234 7,047-378 39,530 64,724 - - 4,403 - - - - Total net assets (deficit) 3,251,856 (583,794) 2,999,034 158,509 148,595 6,325 35,038 119,051 219,412 13,181 51,997 (1,138) 51,062 30,469 7,812 (3,697) Total liabilities and net assets (deficit) $10,029,911 ($979,274) $9,244,402 $253,470 $344,580 $100,036 $40,130 $146,622 $227,667 $48,274 $358,563 $8,472 $92,796 $30,878 $7,843 $105,452 5

Combining Statement of Financial Position - Obligated Group Only June 30, 2015 (Unaudited and In Thousands) North Shore- Long Island Long Island North Shore-LIJ Total Jewish North Shore Jewish Staten Island Huntington Stern Family Obligated Health University Medical University Lenox Hill Southside Hospital Glen Cove Plainview Forest Hills Franklin Center for Group Eliminations Care, Inc. Hospital Center Hospital Hospital Hospital Association Hospital Hospital Hospital Hospital Rehabilitation Assets Current assets: Cash and cash equivalents $212,098 $- $174,912 $3,932 $3,049 $21,370 $677 $125 $7,704 $5 $1 $274 $3 $46 Marketable securities and other investments 1,820,393-29,791 760,881 533,770 283,110 12,056 2,776 122,976 75,033 - - - - Accounts receivable for services to patients, net of allowance for doubtful accounts 770,728 - - 201,337 168,210 108,777 121,465 43,103 41,559 10,108 14,600 28,219 23,642 9,708 Accounts receivable for physician activities, net 59,242 - - 55,494 33-2,156 566 533-268 109 83 - Assets limited as to use, current portion 68,290 - - 45,016 13,574 595 3,798 1,415 1,456 753 162 192 515 814 Pledges receivable, current portion - - - - - - - - - - - - - - Insurance claims receivable, current portion 110,378-1,035 26,872 23,269 14,603 20,416 6,171 5,040 2,260 2,895 4,101 3,408 308 Other current assets 166,380 (3,000) 24,574 46,007 33,489 13,940 23,050 12,653 5,272 1,565 3,327 2,036 3,370 97 Total current assets 3,207,509 (3,000) 230,312 1,139,539 775,394 442,395 183,618 66,809 184,540 89,724 21,253 34,931 31,021 10,973 Due from affiliates, net 53,370 (231,946) - 141,522 74,135 - - - 2,612 11,029 10,737 22,937-22,344 Note receivable from affiliate 27,489-27,489 - - - - - - - - - - - Assets limited as to use, net of current portion 1,281,040-497,166 171,448 263,732 144,069 56,172 55,217 68,408 6,396 583 217 3,760 13,872 Pledges receivable, net of current portion - - - - - - - - - - - - - - Property, plant and equipment, net 3,687,806-521,443 427,759 1,140,632 216,857 931,984 124,640 132,933 51,436 35,076 55,899 37,159 11,988 Insurance claims receivable, net of current portion 430,149-4,206 111,814 97,942 60,088 56,338 25,346 21,120 9,315 11,826 17,079 13,826 1,249 Other assets 557,039 (577,300) 990,588 65,214 27,095 20,176 26,018 2,780 1,462 81 199 211 407 108 Total assets $9,244,402 ($812,246) $2,271,204 $2,057,296 $2,378,930 $883,585 $1,254,130 $274,792 $411,075 $167,981 $79,674 $131,274 $86,173 $60,534 Liabilities and net assets (deficit) Current liabilities: Short-term borrowings $110,218 $- $- $7,500 $102,718 $- $- $- $- $- $- $- $- $- Accounts payable and accrued expenses 520,860-110,964 126,576 79,456 55,273 62,018 25,353 19,756 10,147 10,084 9,448 9,733 2,052 Accrued salaries and related benefits 545,465-109,091 120,916 103,649 51,420 51,765 27,476 26,065 9,187 12,152 18,683 12,310 2,751 Current portion of capital lease obligations 3,093-2,852 - - - 241 - - - - - - - Current portion of long-term debt 46,512 - - 9,509 13,459 11,370 4,795 1,080 1,100 716 1,454 1,849 405 775 Current portion of insurance claims liability 110,378-1,035 26,872 23,269 14,603 20,416 6,171 5,040 2,260 2,895 4,101 3,408 308 Current portion of malpractice and other insurance liabilities 66,283-8,624 16,157 14,680 9,839 2,905 3,614 3,045 1,557 1,517 2,225 2,120 - Current portion of third-party payer structured liabilities 4,346 - - - - 4,346 - - - - - - - - Current portion of estimated payable to third-party payers 286,133 - - 101,694 44,175 28,974 50,376 17,656 7,070 3,154 2,920 18,796 7,616 3,702 Total current liabilities 1,693,288-232,566 409,224 381,406 175,825 192,516 81,350 62,076 27,021 31,022 55,102 35,592 9,588 Due to affiliates, net - (376,197) 243,498 - - 27,037 30,193 47,888 - - - - 27,581 - Accrued retirement benefits, net of current portion 700,713-150,077 135,452 46,751 2,622 154,622 56,013 105,733 12,778 20,219 4,490 8,137 3,819 Capital lease obligations, net of current portion 127,150-124,276 - - - 2,874 - - - - - - - Long-term debt, net of current portion 2,091,287-670,391 128,393 874,854 88,160 122,707 72,509 79,767 7,568 11,782 16,116 14,151 4,889 Insurance claims liability, net of current portion 430,149-4,206 111,814 97,942 60,088 56,338 25,346 21,120 9,315 11,826 17,079 13,826 1,249 Malpractice and other insurance liabilities, net of current portion 622,191-66,732 156,358 135,123 84,799 49,593 35,716 27,334 13,252 14,322 21,798 17,164 - Third-party payer structured liabilities, net of current portion 11,217 - - - - 11,217 - - - - - - - - Other long-term liabilities 569,373-10,025 145,850 144,817 42,316 92,558 39,427 19,129 14,191 17,632 24,645 17,986 797 Total liabilities 6,245,368 (376,197) 1,501,771 1,087,091 1,680,893 492,064 701,401 358,249 315,159 84,125 106,803 139,230 134,437 20,342 Commitments and contingencies Net assets (deficit): Unrestricted 2,596,421 (350,817) 647,471 879,962 564,650 377,935 467,497 (104,221) 87,556 73,502 (27,586) (8,143) (50,728) 39,343 Temporarily restricted 327,550 (60,315) 87,764 63,982 124,240 12,102 60,315 20,764 7,197 7,557 457 187 2,451 849 Permanently restricted 75,063 (24,917) 34,198 26,261 9,147 1,484 24,917-1,163 2,797 - - 13 - Total net assets (deficit) 2,999,034 (436,049) 769,433 970,205 698,037 391,521 552,729 (83,457) 95,916 83,856 (27,129) (7,956) (48,264) 40,192 Total liabilities and net assets (deficit) $9,244,402 ($812,246) $2,271,204 $2,057,296 $2,378,930 $883,585 $1,254,130 $274,792 $411,075 $167,981 $79,674 $131,274 $86,173 $60,534 6

Consolidating Statement of Operations For the Six Months Ended June 30, 2015 (Unaudited and In Thousands) North Shore- North Shore- Phelps Northern North Shore- North Shore- Long Island Long Island Memorial Westchester The Feinstein Long Island Long Island Jewish Health Jewish Hospital Hospital Hospice Institute for Jewish Health Jewish Health Captive Health Endoscopy Other System, Inc. Obligated Association Association The Long Care Medical System System Insurance Dolan Family Insurance Center of Garden City Health System Total Eliminations Group and Subsidiaries and Subsidiaries Island Home Network, Inc. Research Foundation, Inc. Laboratories Companies Health Center Companies Long Island SurgiCenter Entities Operating revenue: Net patient service revenue $3,378,231 ($30,474) $3,048,418 $115,998 $126,756 $51,533 $25,692 $131 $- $- $- $2,109 $- $6,510 $3,704 $27,854 Physician practice revenue 537,727 (13,648) 457,737-7 864 - - - - - - - - - 92,767 Provision for bad debts (53,393) 29 (47,356) (1,832) (2,330) (736) (200) - - (423) - - - - - (545) Total patient revenue, net of provision for bad debts 3,862,565 (44,093) 3,458,799 114,166 124,433 51,661 25,492 131 - (423) - 2,109-6,510 3,704 120,076 Other operating revenue 218,405 (210,685) 162,788 4,228 3,273 468-25,530-146,901 7,008 1,277 3-2 77,612 Health insurance premium revenue 95,284 - - - - - - - - - - - 95,284 - - - Net assets released from restrictions used for operations 33,098-23,487 84 529-324 8,530 - - - 144 - - - - Total operating revenue 4,209,352 (254,778) 3,645,074 118,478 128,235 52,129 25,816 34,191-146,478 7,008 3,530 95,287 6,510 3,706 197,688 Operating expenses: Salaries 2,105,918 (9,048) 1,777,440 61,306 52,056 29,683 9,198 24,655-33,720-2,004 11,287 879 1,008 111,730 Employee benefits 553,307 (17,151) 476,959 15,351 17,042 10,171 2,296 8,258-11,502-822 2,435 117 119 25,386 Supplies and expenses 1,248,601 (226,226) 1,086,910 34,458 47,879 11,174 12,235 13,633-93,104 6,983 1,188 93,669 2,386 1,766 69,442 Depreciation and amortization 195,843-174,119 6,669 6,531 1,295 155 2,680-828 - 44 317 9 25 3,171 Interest 52,979 (176) 51,250 570 505 821 - - - - - - - - - 9 Total operating expenses 4,156,648 (252,601) 3,566,678 118,354 124,013 53,144 23,884 49,226-139,154 6,983 4,058 107,708 3,391 2,918 209,738 Excess (deficiency) of operating revenue over operating expenses 52,704 (2,177) 78,396 124 4,222 (1,015) 1,932 (15,035) - 7,324 25 (528) (12,421) 3,119 788 (12,050) Non-operating gains and losses: Investment income 27,915-28,626 315 76 20 195 (6) (195) (22) (1,027) - (6) (26) (11) (24) Change in net unrealized gains and losses and change in value of equity method investments 15,483-13,751 195 (1,920) - (99) 10 72-3,474 - - - - - Change in interest in acquired entities - (11,819) 12,778 - - - - - - - - - - - - (959) Change in fair value of interest rate swap agreements designated as derivative instruments 372-372 - - - - - - - - - - - - - Loss on refunding and redemption of long-term debt (56,975) - (56,975) - - - - - - - - - - - - - Contribution received in the acquisition of Phelps Memorial Hospital and Northern Westchester Hospital 266,053-266,053 - - - - - - - - - - - - - Gain from acquired interest in Optum 360 85,000-85,000 - - - - - - - - - - - - - Other non-operating gains and losses (1,717) - 1,727 248 (520) 1 118 - (3,459) - - - - - - 168 Total non-operating gains and losses 336,131 (11,819) 351,332 758 (2,364) 21 214 4 (3,582) (22) 2,447 - (6) (26) (11) (815) Excess (deficiency) of revenue and gains and losses over expenses 388,835 (13,996) 429,728 882 1,858 (994) 2,146 (15,031) (3,582) 7,302 2,472 (528) (12,427) 3,093 777 (12,865) Net assets released from restrictions for capital asset acquisitions 3,765-3,608 71 - - - 86 - - - - - - - - Change in fair value of interest rate swap agreements designated as cash flow hedges 600-565 - - 35 - - - - - - - - - - Transfers (to) from affiliates - 2,177 (86,064) 1,527 - - - 14,945 - (2,177) - - 61,149 - - 8,443 Other changes in net assets (1,348) 2,170 - - - - - - - - - - (378) (3,100) (40) - Increase (decrease) in unrestricted net assets $391,852 ($9,649) $347,837 $2,480 $1,858 ($959) $2,146 $0 ($3,582) $5,125 $2,472 ($528) $48,344 ($7) $737 ($4,422) 7

Combining Statement of Operations - Obligated Group Only For the Six Months Ended June 30, 2015 (Unaudited and In Thousands) North Shore- Long Island Long Island North Shore-LIJ Total Jewish North Shore Jewish Staten Island Huntington Stern Family Obligated Health University Medical University Lenox Hill Southside Hospital Glen Cove Plainview Forest Hills Franklin Center for Group Eliminations Care, Inc. Hospital Center Hospital Hospital Hospital Association Hospital Hospital Hospital Hospital Rehabilitation Operating revenue: Net patient service revenue $3,048,418 ($285) $- $748,753 $744,450 $430,797 $426,798 $185,610 $146,385 $48,778 $84,411 $114,362 $90,368 $27,991 Physician practice revenue 457,737-577 179,890 122,643-54,644 33,030 26,815 10,817 9,806 11,310 7,643 562 Provision for bad debts (47,356) 3,237 - (18,326) (11,369) (5,015) (4,841) (3,694) (2,250) (936) (840) (1,884) (1,240) (198) Total patient revenue, net of provision for bad debts 3,458,799 2,952 577 910,317 855,724 425,782 476,601 214,946 170,950 58,659 93,377 123,788 96,771 28,355 Other operating revenue 162,788 (472,566) 431,616 116,414 42,444 9,598 3,574 11,830 3,241 2,172 4,690 4,899 4,602 274 Net assets released from restrictions used for operations 23,487-60 7,096 7,023-9,187 75 46 - - - - - Total operating revenue 3,645,074 (469,614) 432,253 1,033,827 905,191 435,380 489,362 226,851 174,237 60,831 98,067 128,687 101,373 28,629 Operating expenses: Salaries 1,777,440 (165,149) 164,230 503,378 434,878 182,759 238,539 119,894 88,030 37,059 48,022 62,234 48,787 14,779 Employee benefits 476,959 (38,968) 47,413 108,741 109,199 61,988 62,151 34,566 24,053 10,053 15,234 20,581 16,400 5,548 Supplies and expenses 1,086,910 (265,100) 164,162 346,882 278,294 139,351 172,283 74,194 54,674 16,904 31,297 37,343 30,887 5,739 Depreciation and amortization 174,119-42,091 29,946 40,042 14,882 19,901 6,691 7,978 3,154 2,045 4,158 2,465 766 Interest 51,250 (397) 18,347 4,513 20,256 2,764 2,612 882 1,014 181 290 307 363 118 Total operating expenses 3,566,678 (469,614) 436,243 993,460 882,669 401,744 495,486 236,227 175,749 67,351 96,888 124,623 98,902 26,950 Excess (deficiency) of operating revenue over operating expenses 78,396 - (3,990) 40,367 22,522 33,636 (6,124) (9,376) (1,512) (6,520) 1,179 4,064 2,471 1,679 Non-operating gains and losses: Investment income 28,626-5,200 9,845 6,701 5,120 493-351 1,035 (22) (24) (27) (46) Change in net unrealized gains and losses and change in value of equity method investments 13,751-2,337 5,742 2,371 1,419 11 16 1,356 420 - - 8 71 Change in interest in acquired entities 12,778 5,083 (745) 8,440 - - - - - - - - - - Change in fair value of interest rate swap agreements designated as derivative instruments 372 - - - - 372 - - - - - - - - Loss on refunding and redemption of long-term debt (56,975) - - (6,110) (50,478) - - - - (158) - (229) - - Contribution received in the acquisition of Phelps Memorial Hospital and Northern Westchester Hospital 266,053-266,053 - - - - - - - - - - - Gain from acquired interest in Optum 360 85,000-85,000 - - - - - - - - - - - Other non-operating gains and losses 1,727 - - - 4,500 (2,773) - - - - - - - - Total non-operating gains and losses 351,332 5,083 357,845 17,917 (36,906) 4,138 504 16 1,707 1,297 (22) (253) (19) 25 Excess (deficiency) of revenue and gains and losses over expenses 429,728 5,083 353,855 58,284 (14,384) 37,774 (5,620) (9,360) 195 (5,223) 1,157 3,811 2,452 1,704 Net assets released from restrictions for capital asset acquisitions 3,608 - - 2,500 527 36 537 - - 8 - - - - Change in fair value of interest rate swap agreements designated as cash flow hedges 565 - - 203 362 - - - - - - - - - Transfers (to) from affiliates (86,064) - (64,029) (15,503) (6,532) - - - - - - - - - Increase (decrease) in unrestricted net assets $347,837 $5,083 $289,826 $45,484 ($20,027) $37,810 ($5,083) ($9,360) $195 ($5,215) $1,157 $3,811 $2,452 $1,704 8

North Shore - Long Island Jewish Obligated Group Utilization Statistics Six Months Ended June 30, 2014 2015 Inpatient Discharges (excl. Nursery) 121,933 123,071 Patient Days (excl. Nursery) 715,541 708,629 Average Length of Stay (in Days) 5.87 5.76 Average Daily Census 3,953 3,915 Licensed Beds (excl. Nursery) 5,433 5,435 Beds Available (excl. Nursery) (1) 4,598 4,516 Occupancy Percentage (1) 85.1% 86.1% Normal Newborn Discharges 12,270 12,176 Total Discharges 134,203 135,247 Outpatient Emergency Room Visits (2) 255,110 274,842 Emergency Room Admissions 79,579 81,622 Total ER Encounters 334,689 356,464 Health Center Visits 440,812 433,950 Ambulatory Surgery Visits 68,746 71,149 Home Care Visits (excl. HHA/PCA visits) 177,343 192,359 Other Outpatient Visits and Encounters (3) 472,836 545,505 (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) (3) The increase in Emergency Room Visits was primarily related to the July 2014 opening of Lenox Health at Greenwich Village, Manhattan's first freestanding emergency center and operating as a division of Lenox Hill Hospital. 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 the North Shore-Long Island Jewish Health System that are in the Obligated Group. 9

North Shore - Long Island Jewish Obligated Group Payer Mix Percent of Gross Revenue (Inpatient & Outpatient) Six Months Ended June 30, 2014 2015 Medicare (1) 42% 43% Medicaid (2) 19% 20% Commercial 32% 31% Self Pay 3% 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 the North Shore-Long Island Jewish Health System that are in the Obligated Group. 10

Notes to Consolidated Financial Statements June 30, 2015 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 2014 audited consolidated financial statements of North Shore-Long Island Jewish Health System, Inc. and its member corporations and other affiliated entities (collectively, the Health System ). The Health System presumes that users of this interim financial information have read or have access to the Health System 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 the Health System for the years ended December 31, 2014 and 2013 are on file with the Municipal Securities Rulemaking Board and are accessible through its Electronic Municipal Market Access database. Information contained in the Health System s audited consolidated financial statements for the years ended December 31, 2014 and 2013 is incorporated herein. Footnotes and other disclosures that would substantially duplicate the disclosures contained in the Health System 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. The Health System is an integrated health care delivery system in the New York metropolitan area. Various entities within the Health System 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. 11

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, Steven and Alexandra Cohen Children s Medical Center of New York and Zucker Hillside Hospital Staten Island University Hospital ( Staten Island ) Lenox Hill Hospital ( Lenox ) Southside Hospital ( Southside ) Other Entities Forest Hills Hospital ( Forest Hills ) Franklin Hospital ( Franklin ), including the accounts of North Shore-LIJ Orzac Center for Rehabilitation Glen Cove Hospital ( Glen Cove ) Huntington Hospital Association ( Huntington ) Plainview Hospital ( Plainview ) South Oaks Hospital ( South Oaks ) Phelps Memorial Hospital Association ( Phelps ) Northern Westchester Hospital Association ( NWH ) North Shore-Long Island Jewish Health System, Inc. and North Shore-Long Island Jewish Health Care, Inc. ( HCI ) parent holding companies North Shore-LIJ Stern Family Center for Rehabilitation ( Stern ) skilled nursing facility and rehabilitation center Broadlawn Manor Nursing and Rehabilitation Center ( Broadlawn ) 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, diagnostic laboratory, 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 Regional Claims Recovery Service billing and collection services Endoscopy Center of Long Island, LLC outpatient endoscopy center 70% owned by the Health System North Shore Medical Accelerator, P.C. outpatient radiation oncology center 70% owned by the Health System 12 North Shore-Long Island Jewish Health System Laboratories laboratory services The Feinstein Institute for Medical Research medical research North Shore-Long Island Jewish Health System 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 partial capitation Medicaid Managed Long-Term Care 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 North Shore-LIJ and Yale New Haven Medical Air Transport, LLC medical air transport company 90% owned by the Health System Endo Group, LLC (d/b/a Garden City SurgiCenter ) outpatient ambulatory surgery center 70% owned by the Health System Other affiliated professional corporations

Note A - Basis of Presentation (continued) Certain members of the Health System (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, Forest Hills, Franklin and Stern. 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 May 2014, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update No. ( ASU ) 2014-09, Revenue from Contracts with Customers. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 supersedes the FASB s current revenue recognition requirements and most industry-specific guidance. The provisions of ASU 2014-09 are effective for the Health System for annual reporting periods beginning after December 15, 2017. Early application is permitted. The Health System has not completed the process of evaluating the impact of ASU 2014-09 on its consolidated financial statements. Note D Acquisitions On January 1, 2015 (the Acquisition Date ), the Health System acquired Phelps, a not for profit 238 bed acute care hospital located in Westchester County, New York. Also on January 1, 2015, the Health System acquired NWH, a not for profit 245 bed acute care hospital in Westchester County. The Health System acquired Phelps and NWH by means of an inherent contribution where no consideration was transferred by the Health System. The Health System is accounting for these business combinations 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. The Health System is in the process of finalizing independent valuations of the assets and liabilities of Phelps and NWH and, as a result, has recognized estimated provisional values of Phelps and NWH s assets and liabilities in the accompanying unaudited interim consolidated statement of financial position as of June 30, 2015. The results of Phelps and NWH s operations have been included in the unaudited interim consolidated financial statements since the Acquisition Date. Phelps and NWH are not members of the Obligated Group. 13

Note D Acquisitions (continued) The following table summarizes the provisional, unaudited fair values of the assets acquired and liabilities assumed at the Acquisition Date: January 1, 2015 Phelps NWH Total Assets Cash and cash equivalents $ 30,167 $ 40,883 $ 71,050 Marketable securities and other investments 5,748 5,748 Accounts receivable for services to patients 24,065 29,677 53,742 Other current assets 4,675 8,991 13,666 Assets limited as to use 17,658 82,626 100,284 Pledges receivable, net 4,573 6,977 11,550 Property, plant and equipment 139,701 164,545 304,246 Insurance claims receivable 23,205 23,205 Other assets 5,770 7,983 13,753 Total assets acquired 255,562 341,682 597,244 Liabilities Accounts payable and accrued expenses 16,918 40,273 57,191 Accrued salaries and related benefits 11,297 8,697 19,994 Estimated payable to third-party payers 754 4,042 4,796 Accrued retirement benefits 51,689 51,689 Capital lease obligations 138 1,545 1,683 Long-term debt 37,814 65,775 103,589 Insurance claims liability 23,205 23,205 Malpractice and other insurance liabilities 3,902 20,386 24,288 Other long-term liabilities 5,729 3,966 9,695 Total liabilities assumed 99,757 196,373 296,130 Excess of assets acquired over liabilities assumed $ 155,805 $ 145,309 $ 301,114 Net assets acquired Unrestricted $ 144,723 $ 121,330 $ 266,053 Temporarily restricted 8,848 17,007 25,855 Permanently restricted 2,234 6,972 9,206 $ 155,805 $ 145,309 $ 301,114 The finalization of the fair value of assets and liabilities as of the Acquisition Date is pending the review of valuation results conducted by third-party experts and other procedures. 14

Note D Acquisitions (continued) The following table summarizes amounts attributable to Phelps and NWH from the Acquisition Date through June 30, 2015 that are included in the accompanying 2015 unaudited interim consolidated financial statements: Six Months Ended June 30, 2015 Phelps NWH Total Total operating revenue $ 118,478 $ 128,235 $ 246,713 Total operating expenses 118,354 124,013 242,367 Excess of operating revenue over operating expenses 124 4,222 4,346 Total non-operating gains and losses 758 (2,364) (1,606) Excess of revenue and gains and losses over expenses $ 882 $ 1,858 $ 2,740 Change in net assets: Unrestricted net assets $ 2,480 $ 1,858 $ 4,338 Temporarily restricted net assets 224 1,353 1,577 Permanently restricted net assets 75 75 Total change in net assets $ 2,704 $ 3,286 $ 5,990 The following table represents unaudited pro forma financial information for the Health System, assuming the acquisitions of Phelps and NWH had taken place on January 1, 2014. The pro forma financial information excludes the contribution received in the acquisition of Phelps and NWH, and is not necessarily indicative of the results of operations as they would have been had the transactions been effected on January 1, 2014. Six Months Ended June 30, 2015 2014 Total operating revenue $ 4,209,352 $ 3,841,247 Total operating expenses 4,156,648 3,798,928 Excess (deficiency) of operating revenue over operating expenses 52,704 42,319 Total non-operating gains and losses 70,078 84,784 Excess of revenue and gains and losses over expenses $ 122,782 $ 127,103 Change in net assets: Unrestricted net assets $ 125,799 $ 129,768 Temporarily restricted net assets (25,631) 30,087 Permanently restricted net assets 17,183 672 Total change in net assets $ 117,351 $ 160,527 15

Note D Acquisitions (continued) In April 2015, the Health System and Peconic Bay Medical Center ( Peconic ) entered into an agreement whereby Peconic will become a member of the Health System effective January 2016. The agreement has recently been approved by the applicable governmental and regulatory authorities. Peconic, which will not be a member of the Obligated Group, is a New York State not-for-profit corporation that operates a hospital and a skilled nursing/rehabilitation center located in eastern Suffolk County. The operating revenue of Peconic for the fiscal year ended December 31, 2014 was approximately $153,000. In April 2015, the Health System entered into an agreement with Optum360, LLC ( Optum360 ), a provider of revenue cycle management solutions and technology, for Optum360 to provide end-to-end revenue cycle services for 14 of the Health System s hospitals, effective July 2015. As part of the agreement, the Health System acquired an 8% ownership interest in Optum360. The Health System contributed certain intellectual property related to its internal revenue cycle management functions in exchange for the 8% ownership interest. A noncash gain on the transaction of $85,000, representing the difference between the fair value of the interest in Optum360 received in the transaction and the value of the assets contributed, was recorded within non-operating gains and losses in the accompanying consolidated statement of operations for the six months ended June 30, 2015. The Health System accounts for this ownership interest under the equity method. Note E Accounts Receivable and Patient Revenue Net patient service revenue and physician practice revenue (collectively, patient revenue ) are reported at estimated net realizable amounts due from patients, third-party payers and others for services rendered and include estimated retroactive revenue adjustments due to ongoing and future audits, reviews and investigations. Retroactive adjustments are considered in the recognition of revenue on an estimated basis in the period the related services are provided and are adjusted in future periods as adjustments become known or as years are no longer subject to such audits, reviews and investigations. The Health System recognizes accounts receivable and patient revenue associated with services provided to patients who have third-party payer coverage on the basis of contractual rates, governmental rates or established charges for the services rendered. For uninsured patients who are ineligible for any government assistance program, the Health System provides services without charge or at amounts less than its established rates to patients who meet the criteria of its charity care policy. Because the Health System does not pursue collection of amounts determined to qualify as charity care, such services are not reported as patient revenue. For patients who were determined by the Health System to have the ability to pay but do not, the estimated uncollectible amounts are recorded as the provision for bad debts. In distinguishing charity care from the provision for bad debts, a number of factors are considered, certain of which require a high degree of judgment. 16

Note E Accounts Receivable and Patient Revenue (continued) Patient revenue, net of contractual and charity care allowances, but before the provision for bad debts, from insured and self-pay patients is approximately $3,864,000 and $52,000, respectively, for the six months ended June 30, 2015, and approximately $3,385,000 and $48,000, respectively, for the six months ended June 30, 2014. Deductibles and copayments due from patients under third-party payment programs are included in the insured amounts above. The allowance for doubtful accounts represents the Health System s estimate of the uncollectible accounts receivable related to bad debts. Additions to the allowance for doubtful accounts result from the provision for bad debts. Accounts written off as uncollectible are deducted from the allowance for doubtful accounts. The allowance for doubtful accounts is based upon the Health System s assessment of historical and expected net collections, business and economic conditions, trends in health care coverage and other collection indicators. For receivables associated with services provided to patients who have third-party payer coverage, the Health System analyzes amounts due from third-parties and provides an allowance for doubtful accounts and a provision for bad debts, if necessary (for example, for third-party payers who are known to be having financial difficulties that make the realization of amounts due unlikely). For receivables associated with self-pay balances, which include balances for patients without insurance, patients with deductible and copayment amounts due after third-party coverage and balances for services not covered by insurance, the Health System records an allowance for doubtful accounts and provision for bad debts in the period of service based on past experience. The allowances for both doubtful accounts and anticipated charity care for selfpay balances were approximately 87% of the gross self-pay accounts receivable balance as of both June 30, 2015 and December 31, 2014. The Health System s allowance for doubtful accounts relating to accounts receivable for services to patients and accounts receivable for physician activities totaled approximately $109,800 and $102,300 at June 30, 2015 and December 31, 2014, respectively. Note F Debt In March 2015, the Health System entered into a real estate transaction to purchase a building and land that it previously occupied under a capital lease agreement. In conjunction with the transaction, the Health System obtained a mortgage for $211,000, with principal and interest payable in monthly installments through March 2045, at a fixed interest rate of 4.47%. The proceeds of the mortgage were primarily used to purchase the property, with approximately $76,000 put into an escrow fund to be used to fund future capital improvements. As a result of the transaction, capital lease obligations of approximately $70,000 were removed from the Health System s consolidated statement of financial position. 17

Note F Debt (continued) In May 2015, the Health System entered into a real estate transaction to finance the construction of a building. As a result of the financing transaction, an obligation of $28,798 was incurred and payments of principal and interest are due monthly through June 2049. In May 2015, the outstanding $13,245 of the Obligated Group s Series 2003 bonds were cash defeased. A loss on redemption of long-term debt of $457 resulted from this cash defeasance. In June 2015, the Obligated Group issued $503,640 of revenue bonds through the Dormitory Authority of the State of New York Series 2015A bonds. The Series 2015A bonds were sold at a premium of $39,929 and bear interest at fixed interest rates, payable semi-annually with a final maturity date of May 2043. The proceeds of the Series 2015A bonds were used to: (i) refund $470,385 in Series 2005A and B, Series 2007A and 2009A bonds of the Obligated Group, (ii) finance projects for certain members of the Obligated Group, (iii) pay a portion of the interest on the Series 2015A bonds, and (iv) pay costs of issuance incurred in connection with the issuance of the Series 2015A bonds. A loss on refunding of long-term debt of $56,518 resulted from the Series 2015A bond transaction. In connection with the acquisition of Phelps and NWH, the Health System assumed approximately $104,000 of outstanding debt related to these entities. Such debt is not an obligation of the Obligated Group. Note G - Interest Rate Swap Agreements In 2007, the Obligated Group entered into an interest rate swap agreement ( 2007 Swap ) with a financial institution, matched to the term and rate of the Series 2007B bonds. The terms of this swap agreement designate the 2007 Swap as a cash flow hedge under U.S. generally accepted accounting principles. Accordingly, changes in the fair value of the swap agreement are excluded from the performance indicator, which is defined as the excess of revenue and gains and losses over expenses in the accompanying unaudited interim consolidated statements of operations. The fair value of the 2007 Swap is a liability of $1,913 and $2,479 at June 30, 2015 and December 31, 2014, respectively, and is reflected in other long-term liabilities in the accompanying unaudited interim consolidated statements of financial position. 18