Consolidated Financial Statements Table of Contents September 2017 Consolidated Balance Sheets 1 Consolidated Statement of Operations 2 Consolidated Statement of Changes in Net Assets 3 Consolidated Statement of Cash Flows 4 Bond Covenant Compliance 5 Utilization Statistics 6 ~;Joseph's Healthcare Syste1n
Consolidating Balance Sheet Assets Current Assets: Cash and cash equivalents Investments Current portion of assets whose use is limited Patient accounts receivable, net Grants, notes, and other receivables Unconditional promises to give, net Supplies Prepaid expenses and other current assets Due from affiliates Total current assets As of September 2017 (In Thousands) I SJRMC I Paterson I Wayne I VHS. I 200 Hosp I Hosoitals Foundation Foundation Mana11:ement Plaza Coro. $125,575 $5,265 Sl,598 $813 $220 202,471 2,001 2,121 4,458 1,835 87,709 1,048 22,270 115 222 1,598 176 10,671 17 3,459 607 3 0 755 457,368 7,585 3,778 3,999 2,277 St. Joseph's I SJHS I Total Total Healthcare Insurance September December Inc. LTD Eliminations 2017 2016 $133,471 $139,429 206,593 178,44 1 6,916 13,209 15,894 88,757 91,097 3,413 (4,550) 21,470 8,532 1,774 2,896 10,688 10,469 799 (71) 4,797 3,663 (755) 0 11,128 (5,376) 480,759 450,421 Assets whose use is limited net of current portion Unconditional promises to give, net Due from affiliates Beneficial interest in trust Notes receivable net of current Property and equipment net Interest in net assets of foundations Investment in Joint Ventures Estimated insurance recoveries Other assets Total Liabilities and net assets Current liabilities Current portion oflongterrn debt Accounts payable Accrued salaries and expenses Accrued interest payable Due to affiliates Deferred revenue Estimated thirdparty payer settlements Total current liabilities Long tenn debt net of current Estimated thirdparty payer settlements, net of current Accrued pension liability Estimated professional liability claims payable Deferred revenuenet of current portion Other noncurrent liabilities Total liabilities Net assets: Unrestricted St Joseph's healthcare system and affiliates Noncontrolling interests in joint ventures Total unrestricted net assets Temporarily restricted Permanently restricted Total net assets Total net assets and liabilities 12,024 3,878 962 6,233 1,379 8 4,916 795 1,038 303,4 12 435 0 24,528 23,770 28,785 10,404 12 161 10 408 0 $847 924 $19,241 $5,543 $4,407 $33,038 $5,063 $655 38,374 67 26 324 20 55,5 89 26 2,679 497 643 34 149 463 0 93 276 2,020 104,188 710 153 626 1,321 344,727 25,664 7,555 167,617 620 16,206 10,104 69 104 $650 397 $779 $153 $1 246 $27 089 170,974 6,743 3,621 3,161 5,949 4,934 175,908 6,743 3,621 3,161 5,949 13,970 6,803 847 7 649 4,916 922 $197,527 $18,462 $5,390 $3 161 $5 949 $847.924 $19 241 $5,543 $4 407 $33 038 24,380 47,477 53,055 1,387 1,387 5,711 5,711 1,038 1,174 328,375 324,327 (23,770) 28,785 24,644 (10,404) 3,178 {3,178) 12,579 13,482 S3 178 $35 508 ($42.728) $906.111 $874 201 $5,718 $7,077 4,595 (4,550) 38,856 40,719 6,916 62,53 1 70,549 3,176 4,052 (826) 832 756 2,020 3,374 11,511 (5,376) 113,133 126,527 370,391 296,125 7,555 8,184 168,237 204,061 18,84 1 ( 10,404) 24,643 23,381 10 277 10,537 $30 352 ($15.780) $694 236 $668,815 3,178 5,156 (13,542) 185,240 178,821 4,934 3 820 3,178 5,156 (13,542) 190,174 182,641 (7.568) 14,052 15,096 (5,838) 7 649 7,649 $3,178 $5 156 ($26,948) $2 I l 875 $205,386 $3 178 $35,508 ($42,728) $906 111 $874,201 Page I
Consolidating Statement of Operations YTD September 30, 2017 (In thousands) Revenues: Net patient service revenue Provision for Bad Debts Net patient service revenue (net of bad debt) Other revenue Net assets released from restrictions for operations SJRMC Hospitals $585,718 (59, 177) 526,541 65,830 200 Hosp Paterson Wayne VHS Plaza Foundation Foundation Manafement Corp. $2,820 (102) 2,718 3,186 866 27 2,906 1,630 141 St. Joseph's Healthcare Inc. SJHS Insurance LTD 2,275 Eliminations (3,550) Total $588,538 (59,279) 529,259 71,540 1 771 Total revenue $592,371 $4,816 $1,007 $2,745 $2,906 $2,275 ($3,550)!602,570 Expenses: Salaries and wages Employee benefits Physicians fees Supplies and other Bad Debt Interest Depreciation and amortization $285,225 63,303 16,513 188,709 9, 141 ~101 $453 $285 $1,919 111 71 581 2,882 348 929 904 802 9 21 895 3 4 1 239 4,063 ($710) (175) (2,665) $287,172 63,891 16,513 195,170 811 10,057 25,347 Total expenses $586,992 $4,251 $7 13 $3,454 $32038 $4,063 {$3,550) $598,961 Excess of revenues over expenses $5,379 $565 $294 ($709) ($132) ($1,788) $3,609 Loss on early extinguishment of debt Investment Income Adjusted excess (deficiency) of rev over exp 3,850 $9,229 34 57 (34) 13 $599 $351 ($743) ($119) 676 ($1,112) 4,596 $8,205 Less: net gain attributable to noncontrolling interests in joint ventures Excess (deficiency) of revenues over expenses $ 3,653 5,576 $ 599 $ 35 1 $ (743) $ (1 19) $ $ (1,11 2) $ 3,653 $ 4,552 Changes in net unrealized gains and losses on investments Changes in interest in unrestricted net assets of: SJHMC foundation St. Joseph's Wayne foundation Net assets released from restrictions for capital acquisitions Investment Income and Grants 255 81 6 481 776 216 129 48 441 (816) (481) 1,089 776 Increase (decrease) in unrestricted net assets $ 7,904 480 $8 15 =$==== {$695) ($119) $0 ($671) ($1,297) $6,417 I 0/18/2017 Page2
SJRMC Hospitals Unrestricted net assets: Increase in unrestricted net assets $7,904 Temporarily restricted net assets: Contributions, grants, investment income and other support 793 Change in interest in temporarily restricted net assets of St. Joseph's Hospital and Medical Center foundation (l,018) Change in interest in temporarily restricted net assets of St. Joseph's Wayne Hospital foundation (41) Foundation cap campaign contributions Net assets released from restrictions Operations Net assets released from restrictions Capital acquisitions (776) Increase in temporarily restricted net assets ($1,042) Restr icted Net Assets: Change in beneficial interest in trusts Increase in temporarily restricted net assets $ Noncontrolling interests in joint ventures: Net gain attributable to noncontrolling interests in joint ventures 3,653 Distributions to noncontrolling interests in joint ventures (2,705) Contributions from noncontrolling interests in joint ventures 166 Increase (decrease) in noncontrolling interests 1,114 Increase (decrease) in net assets 7,976 Net assets beginning of year 189,551 Net assetsend of year $197,527 St. Joseph's Healthcare System Consolidated Schedule of Net Assets YTD September 30, 2017 (In thousands) Paterson Wayne VHS Foundation Foundation Mi?mt $815 $480 ($695) 612 100 (1,630) (141) ($1,018) ($41) $ $ $ (203) 439 (695) 18,665 4,951 3,856 $18,462 $5,390 $3, 161 200 Hosp St. Joseph's SJHS Plaza Healthcare Insurance Corp. Inc. LTD Eliminations Total {$ 119) $0 ($671) ($1,297) $6,4 17 1,018 1,505 0 (1,771) (776) $1,059 ($1,042) $ $ $ $ $ 41 3,653 (2,705) 166 1,114 (I 19) 0 (671) (238) 6,489 6,068 3,178 5,827 (26,7102 _ 205,386 $5,949 $3,178 $5,156 ($26,948) $211,875 Page 3
, Inc. Consolidated Statements of Cash Flows (Ju Tltousands) Cash flows from operations (Decrease) increase in net assets Adjustments to reconcile increase in net assets to net cash Depreciation and amortization Amortization of deferred financing costs Accounts receivables Grants notes and other receivables Estimated thirdparty payers settlements Supplies Prepaid expenses and other current assets Assets held by related organization (Foundations) Benefical Interests in trusts Other assets Accounts payable Accrued salaries and expenses Accrued bond interest Accrued Pension liability Defened Revenue Due to 3 rd Parties/Deferred Revenue current Other liabilities Cash flows provided by operating activities 9 Months Ended September 2017 $6,490 24,101 2,340 (9,566) (1,983) (219) (3,353) 1 921 (1,822) (8,018) (876) (35,824) 76 771 ($26,960) 12 Months Ended December 2016 ($12,620) 36,812 2,275 (5,453) (395) (5,943) (1,960) (524) (6) ( 1,960) (3,044) (1,884) 11,356 (3,490) 12,359 (118) 2, 175 $27,580 Cash flows from investing activities Acquisition of property, building and equipment Proceeds from Sales of Investments Net change in restricted cash Cash flows from investing activities (28,148) (32,293) 8,264 ($52,178) (28,700) (24,724) 14,820 ($38,604) Cash flows from financing activities Issuance of longterm debt Repayment of longtenn debt/notes receivable Temporarily restricted contributions, investment income & other Change in due from affiliates Cash flows from by financing activities Increase (decrease) in cash and cash equivalents Beginning cash and cash equivalents Ending cash and cash equivalents 81,200 (8,157) 211 (74) $73,181 (5,958) 139,429 $133,471 271,505 (223,755) 4,715 $52,465 4 1,441 97,988 $139,429 Page4
Financial Covenant Compliance (In Thousands) Series 2016 and 2017 Bonds (Calculated on Obligated Group) Loan Guarantor Yes a. Cushion ratio b. Debt service coverage ratio Trigger event only ratios* c. Days cash on hand (as of2016 Audit) * Only required if both 11 required ratios" are not maintained for two consecutive quarters. as of Sept 2017 Bond Requirements Variance 15.59 1.25 12.47 3.41 1.25 2.16 167.1 60.0 107.08 Series 2010 Bonds (200 Hospital Plaza) d. Debt service coverage ratio e. Rate Coverage ratio Yes 1.47 1.00 0.47 1.47 1.20 0.27 Blue Moon 51 % JV Term Loan Fixed rate d. Debt service coverage ratio (tested annually) Surgery Management 62% JV Loan Agreement d. Debt service coverage ratio (Effective June, 2015, tested annually) Yes No 3.51 1.25 2.26 1.39 1.25 0.14 Definitions: a. Unrestricted cash and investments divided by maxinnnn annual debt service lb. Fiscal year end net income plus interest, deprec, arnort, and all other noncash expenses including asset impairment divided by maximum annual debt service c. Unrestricted cash divided by 12/31/2016 audited operating expenses (net of deprec, Interest, bad debt) divided by 366 days. d. Annualized net income plus interest, deprec, amort, and all other noncash expenses divided by maximum annual debt service e. Annualized net income plus interest, deprec, amort, and all other noncash expenses, plus Operating Reserve Fund, divided by maximum annual debt service Page 5
St. Joseph's Regional Medical Center PATERSON AND WAYNE CAMPUSES Consolidated Comparative Statistics Month to Date Sct>17 Sep17 Actual Budi:et Inpatient Discharges 2,797 2,918 Observation Discharges 215 219 Total 3,012 3,137 Patient Days (a) 15,799 15,511 Average Daily Census 527 517 Length of Stay (b) 5.49 5.32 Medicare CMl Paterson 1.7222 1.8454 Medicare CMI Wayne 1.5796 1.3900 CMI Paterson 1.4319 1.4531 CMI Wayne 1.4519 1.2674 IP Gross ('000) 231,414 234,293 OP Gross ('000) 79 319 74,512 Total Gross 310,733 308,805 l/p Dischari:es lb) ~ ~ Medicare 666 24% 785 27% Medicare Mgd Care 263 9 /o 2 17 7% Medicaid J33 5% 263 9% Medicaid Mgd Care 840 30% 848 29% Other Mgd Care incl. BC 394 14% 404 14% Commercial & Other 150 5% 143 5% Charity Care 172 6% 190 7% Self Pay 179 6% 66 2% Total 2,797 100% 2,9J8 100% Sep17 Sep17 Variance Actual Budget (121) 25,904 26,713 (4) 2,075 1,803 ( 125) 27,979 28,516 288 145,312 142,069 JO 532 520 0.18 5.55 5.32 0.1232 1.8487 1.8454 0.1896 1.5920 1.4400 0.02 12 1.4861 1.4531 0.1845 1.4485 1.3423 (2,879) 2,132,760 2,140,862 4,807 728 291 682,657 J,928 2,861,051 2,823,519 ~ ~ ( J J9) J5% 6,590 25% 7,354 46 2J% 2,492 10% 2,051 (130) 50% 2,213 9% 2,411 (8) 1% 7,435 29% 7,609 (JO) 3% 3,632 14% 3,682 7 5% 1,267 5% 1,340 ( 18) 9% 1,668 6% 1,727 113 170% 607 2% 539 ( 12 1) 4% 25,904 100% 26,713 Year to Date Sep16 CYfPY Variance Actual Variance (809) 26,375 (471) 272 1895 180 (537) 28,270 cmi 3,243 139,868 5,444 12 511 22 0.23 5.37 0.19 0.0033 1.8454 0.0033 0.1520 1.4400 0.1520 0.0330 1.4531 0.0330 0.1062 1.3423 0.1062 (8,102) 2,061,744 71,016 45,634 671 347 56,944 37,532 2,733,091 127,960 ~ ~ ~ ~ 28% (764) 10% 7,172 27% (582) 8% 8% 44 J 22% 1,975 7% 5 17 26% 9 /o (198) 8% 2,342 9% (129) 6% 28% (174) 2% 7,539 29% (104) 1% 14% (50) 1% 3,674 J4% (42) 1% 5% (73) 5% J,341 5% (74) 6% 6% (59) 3% 1,708 6% (40) 2% 2% 68 13% 624 2% (1 7) 3% 100% (809) 3% 26,375 100% (471) 2% l/p Patient Da~s Cb\.% ~ Medicare 4,398 29% 5,248 34% Medicare Mgd Care 1,771 12% J,344 9% Medicaid 869 6% J,261 8% Medicaid Mgd Care 3,956 26% 3,759 24% Other Mgd Care incl. BC 1,678 11 % J,840 J2% Commercial & Other 907 6% 699 5% Charity Care 1,090 7% 1,138 7% Self Pay 696 5% 221 1% Total 15,365 100% 15,511 100% l/p Len2th of Stay Cb\ Medicare 6.60 6.69 Medicare Mgd Care 6.73 6.18 Medicaid 6.53 4.79 Medicaid Mgd Care 4.71 4.43 Other Mgd Care incl. BC 4.26 4.55 Commercial & Other 6.05 4.89 Charity Care 6.34 5.99 Self Pay ~ 3.33 Total (Average LOS).2 l w ~ ~ (850) 1 6% 46,280 32% 48,1 20 427 32% 16,728 12% J2,878 (392) 3 1% 11,480 8% 11,371 197 5% 35,467 25% 33,662 (162) 9% 16,544 12% 17,393 208 30% 6,121 4% 6,704 (48) 4% 8,951 6% 10,183 475 215% 2,230 2% J,758 (1 46) J% J43,801 100% 142,069 (0.08) 7.02 6.54 0.55 6.71 6.28 1.75 5.19 4.72 0.28 4.77 4.42 (0.29) 4.56 4.72 1.16 4.83 5.00 0.35 5.37 5.90 ~ Ml 3.26 0. 18 ~ ~ ~ ~ ~ ~ 34% ( 1,840) 4% 46,939 33% (659) 1% 9% 3,850 30% 12,495 9% 4,233 34% 8% 109 1% 11,073 8% 407 4% 24% 1,805 5% 33,760 24% 1,707 5% J2% (849) 5% 17,878 13% (1,334) 7% 5% (583) 9% 6,910 5% (789) 11% 7% ( 1,232) 12% 10,524 7% (1,573) 15% 1% 472 27% 1 950 1% 280 14% 100% 1,732 1% 141,529 100% 2,272 2% 0.48 6.54 0.48 0.43 6.33 0.39 0.47 4.73 0.46 0.35 4.48 0.29 (0.17) 4.87 (0.31) (0.17) 5.15 (0.32) (0.53) 6. 16 (0.80) Ml ill 0.55 0.2.1.uz llj2 Other Key Statistics Emergency Room Admits J,805 1,869 Treat & Release 13,293 14,136 15,098 16,005 Surgeries OR Inpatient Cases 518 642 Same Day OR Outpatient Cases 648 599 0/PMinor 5 5 1,171 1,246 Cardiac Catheterizations Inpatient Cases 106 132 Outpatient Cases 99 115 205 z47 Total Deliveries 283 ~ (64) 16,998 17,932 ~ 123,776 127 996 ~ 140 774 145,928 ( 124) 5,062 5,325 49 6,131 5,472 59 87 (75) 11,252 10,884 (26) 1,032 1,163 (16) 910 1,062 (42) 1,942 2,225 (5) 2,582 2,621 (934) 17,31 4 (316) ~ 125,233 ~ ~ 142,547 (J,773) (263) 5,367 (305) 659 6,318 (187) (28) 83 ~ m 11 768 (516) (131) 1,181 (149) (152) I 025 ~ (283) 2,206 (264) (39) 2,657 (75) Notes: (a) Patient Days in this row are based on Census Days (b) Inpatient statistics are calculated based on discharged days not census days. The prior year payor mix retlects tile cunent updated financial classification. i.e., many cases cwtently categorized as self pay will be subsequently qualified and reclassified as Medicaid or Charity Care. Page6