New Jersey Healthcare Financial Management Association

Business Continuity & Facility Readiness: Are Institutions Ready for Today’s World

Tuesday, April 22, 2014 and Thursday, April 24, 2014

Richard Baum, Assistant Treasurer, and James Martin, Controller

NYU Langone Medical Center

Disclaimer

The information contained in these slides and the accompanying oral presentation (collectively, the “Presentation Information”) is

being provided for informational purposes only and should not be relied upon in making an investment decision with respect to any

security issued by NYUHC. The Presentation Information is not an offer to sell securities or the solicitation of an offer to buy

securities, nor shall it constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would

be unlawful. NYUHC may only sell securities by means of an offering memorandum or official statement.

The Presentation Information contains forward-looking statements. All statements other than statements of historical facts contained

in the Presentation Information, including statements regarding NYUHC’s strategy, plans and objectives of management, prospects,

future results of operations and financial position, future revenue, member growth and rate of adoption, projected costs, and market

estimates and growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”

“predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all

forward-looking statements contain these identifying words. NYUHC has based these forward-looking statements largely on

NYUHC’s current expectations and projections about future events and financial trends that management of NYUHC believes may

affect NYUHC’s financial condition, results of operations, business strategy and financial needs. NYUHC does not assume any

obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as

required by law.

No user of the Presentation Information should place undue reliance on NYUHC’s forward-looking statements because they involve

known and unknown risks, uncertainties and other factors that are beyond NYUHC’s control and that could materially affect actual

results, levels of activity, performance, or achievement. If any of these risks or uncertainties materialize, or if NYUHC’s underlying

assumptions prove to be incorrect, actual results or events could differ materially from the plans, intentions and expectations

disclosed in the forward-looking statements made in the Presentation Information.

The Presentation Information includes both GAAP and non-GAAP financial measures. NYUHC’s management uses certain non-

GAAP financial measures to assess NYUHC’s business and operations. Non-GAAP information should not be construed as an

alternative to GAAP information, as the items excluded from the non-GAAP measures often have a material impact on NYUHC’s

financial results. NYUHC uses, and users of the Presentation Information should use, non-GAAP measures in conjunction with

NYUHC’s GAAP results.

2 Note: Cover image – artist’s rendering of future campus including NYU School of Medicine Facilities.

New York University

NYU Langone Medical Center

NYU

Hospitals

Center

School of Medicine

(including Faculty

Group Practice)

Member of the Obligated Group

Key:

Unincorporated division of

New York University

CCC550

Sole member

Note: Neither New York University nor its School of Medicine are obligated with

respect to NYUHC’s Bonds or commercial debt. No assets or revenues of New York

University or its School of Medicine are pledged to secure or available to pay debt

service with respect to NYUHC’s debt obligations. CCC550, NYU Hospitals Center’s

wholly owned captive insurance company, is also not obligated with respect to

NYUHC’s debt obligations and no assets or revenues of CCC550 are pledged to secure

or available to pay debt service with respect to NYUHC’s debt obligations.

3

NYULMC is an integrated academic

medical center in midtown Manhattan with

outpatient centers across the region:

Tisch Hospital (546 beds).

Hospital for Joint Diseases (157 beds).

Ambulatory care network.

NYU Physician Network including NYU

School of Medicine (“NYUSM”) Faculty

Group Practice and private physicians:

2,300+ physicians.

Over 100 medical practices.

NYULMC is a virtual entity with one

management team and one board of

trustees making key decisions across

the hospital and school of medicine.

NYULMC FY 2013 operating revenues:

$3.3 billion (including NYUHC ~ $1.9

billion)

Unique Structure for NYU Langone Medical Center

Investment in Technology

EPIC - First fully integrated Clinical

and Billing system in New York

Performance Dashboards

Data Center - Key infrastructure

component for the future Campus

Transformation

Broad System Implementation

PeopleSoft - New Enterprise

Resource Planning System

Enterprise Data Warehouse &

Business Intelligence

4

Dedication to Clinical Quality

Ranked #14

in the nation on the

“Best Hospitals

Honor Roll” with 12

nationally ranked

specialties

In 2013, received the Gold

Seal of Approval by The

Joint Commission,

reflecting our commitment

to high-quality care

Ranked #1 for Patient

Safety and Quality.

Recipient of the 2013

Quality Leadership Award

Commitment to the “Pursuit of Excellence”

5

PERELMAN

Expanding Inpatient and Ambulatory Facilities in Manhattan

Expanded ambulatory presence in the last

three years:

Musculoskeletal Center (110,000 sq.

ft.)

Ambulatory Center (300,000 sq. ft.)

Outpatient Surgery Center (18,000 sq.

ft.)

An extension clinic at NYUSM’s Joan

H. Tisch Center for Women’s Health

Tisch Center for Men’s Health

NYU Langone Internal Medicine – The

Miller Practice

Affiliated Hospitals (Manhattan and Brooklyn):

Bellevue Hospital Center

Gouverneur Healthcare Services

New York Harbor Veterans Affairs

Medical Center

Woodhull Hospital Medical Center

6

Expanded geographic presence

beyond Manhattan through new

physician relationships:

Outpatient care centers (i.e.

Oncology, Orthopaedics)

Specialist outreach programs

Acquired and opened outpatient

centers outside of Manhattan:

Brooklyn Endoscopy and

Ambulatory Surgery Center

Hudson Valley Cardiology

(Westchester, NY)

Columbus Medical Center

(Queens, NY)

Growing Physician Presence Across Region

* Artist rendering.

Expand NYULMC patient care, research and education footprint to 3.5 million sq. ft. of facility space

Tisch Hospital – elevator/lobby renovation - completed April 2013; 100% funded by philanthropy

Energy Building – supply electricity to First Avenue campus - construction FY 2012 - 2016

Science Building construction - NYUSM research facilities; University funded; construction FY 2013 -

2018 (300,000 sq. ft.)

ED Renovation – Tisch Hospital; expected to open Spring 2014 (change from 6,900 to 16,900 sq. ft.)

Kimmel Pavilion – new 22-story clinical pavilion on the First Avenue Campus; expected construction

FY 2014 – 2017 (830,200 sq. ft.)

7

NYULMC Campus Transformation Project*

Clinical Flexibility

Ambulatory Care Expansion (added over 800,000 square feet in past two years)

7-Day Care Initiative in process before superstorm

Ability to flex staffing and operations across facilities

Capacity for physicians to operate and take care of patient across facilities

Inpatient bed relocation to HJD campus in process

Financial Readiness

Balance sheet reserves established as cushion for operating volatility

Fixed rate debt and lines of credit capacity of $400 million in October 2012

Issuance of Series 2012A taxable debt $250 million in July 2012

Policy to invest $10 million per month from operations into capital program &

reserve fund ~ total working capital of $503 million as of November 1, 2012

Ability to access excess capital reserves from CCC550 Insurance Co. (offshore

malpractice insurance company) when needed and declared by Board of

Directors

Information technology and Management reporting

EPIC – First fully integrated clinical system in NY market

PeopleSoft – implemented in 2010; simplified supply requisitioning and ordering

Disaster Recovery Centers in New Jersey and Pennsylvania

8

NYUHC Strategic Initiatives Pre-Superstorm Sandy

9

Superstorm Sandy

Friday, October 26, 2012 – 575 patients at Tisch Hospital reduced to 322 patients by Monday, October

29, 2012

Evacuation order for Tisch Hospital issued when ConEdison power plant explosion caused

widespread damage and power loss to lower Manhattan

Tisch Hospital patients were transferred to 14 hospitals within 13 hours

10

Superstorm Sandy – Preparation & Evacuation

11

Superstorm Sandy - Evacuation

12

Press conference on December

27, 2012, to announce re-opening

of Tisch Hospital with NYULMC

Dean and CEO Robert

Grossman, Ken Langone and

Senator Charles Schumer

Superstorm Sandy

Clinical Flexibility

Dispersion of inpatient volume to HJD campus which remained open during

Superstorm Sandy

Ambulatory Care Facilities

Utilization of ambulatory locations for dispersion of outpatient volume

Continued expansion of Ambulatory Care strategy – acquired Brooklyn

Endoscopy & Ambulatory Surgery Center – Spring 2013

Urgent Care Center - In January 2013, NYUHC re-opened the Emergency

Department (ED) as an urgent care center, staffed by ED clinicians, to handle

walk-in and other urgent care cases (excluding 911 ambulance)

Physician retention

Minimal loss of physicians to competing facilities attributable to storm

Physician malpractice insurance coverage extended to all physicians practicing

at NYUHC facilities only

13

How NYUHC Withstood Superstorm Sandy

Commitment to Nursing and Staff

No terminations of staff; continuous pay provided throughout storm and recovery

Redeployment of employees to active sites

Ambulatory Surgery Center

34th Street Clinical Cancer Center

Center for Musculoskeletal Care

Hospital for Joint Diseases

NYUSM Faculty Group Practice off-site locations

Operational downtime utilized to train staff on Epic inpatient installation; implemented

at HJD on December 2, 2012, Schwartz Health Care Center on December 15, 2012

and Tisch surgical suites on December 27, 2012

Financial Capabilities

Continued investment of $10 million per month from operations into capital program &

reserve fund – total working capital of $709 million as of February 28, 2013

Increase in total working capital lines of credit to $500 million

CCC550 Insurance Co. (offshore malpractice insurance company) ~ $51 million

dividend declared and paid to NYUHC in November 2012

Philanthropic support - $45 million received for construction of Kimmel Pavilion in

November 2012

Quick, coordinated action for initial FEMA funding and continuing strong FEMA support

14

How NYUHC Withstood Superstorm Sandy (continued)

Oct 29:

Superstorm Sandy

Strikes NY Metro

Area

Tisch evacuated

HJD remains

open

Oct 31: Center for

Musculoskeletal

Care re-opens

Nov 1-9: 34th

Street Cancer

Center,

Ambulatory Care

Center, and

Ambulatory

Surgery Centers

re-opens

Dec 17: HCC re-

opens for

procedural and

surgical services

Dec 27: Tisch

Hospital begins

phased re-opening

including inpatient

and outpatient

surgery

October

2012 November December January 2013

Jan 14: Inpatient services

such as Medicine,

Pediatrics, Neurology,

Epilepsy are operational;

Emergency Department is

re-opened as an Urgent

Care Center for handling

of walk-in and other

urgent care cases

(excluding 911

ambulance)

Mar 2013: Infusion services

opened at ACC

Apr 2013: Infusion center opens

in Long Island in conjunction with

existing physician practice

May 2013: Rusk Rehab beds

opened at HJD

March - August January – March 2014

Apr 2014:

NYUHC

Emergency

Department

planned to

reopen

Summer 2013:

NYUHC

inpatient

psychiatry and

complex rehab

services

reopen

* All planned future events are subject to change. 15

NYUHC Operational Timeline in Response to Superstorm Sandy*

Nov 16: NYUHC publishes

voluntary disclosure filing on

DAC/EMMA related to Sandy

Nov 30: NYUHC publishes

FY2012 annual disclosure on

DAC/EMMA

Jan 7: NYUHC

presents at

JPMorgan

Healthcare

Conference;

publishes

presentation on

EMMA

October

2012 November December January – February 2013

Jan 28: NYUHC

publishes

FY2013 Q1

disclosure on

DAC/EMMA

(quarter end

11/30/12)

March - August

Spring 2013: Rating

agencies affirm

NYUHC ratings

(A3/A-/A-, stable

outlook)

Summer 2013:

NYUHC issues $350

million taxable bonds

in line with its’

campus

transformation plan

Feb 1: NYUHC holds

investor update call

and publishes

voluntary disclosure

filing on DAC/EMMA

Dec 14: NYUHC

publishes FY2012

audit report on

DAC/EMMA

16

NYUHC Investor Communication Post Superstorm Sandy

NYUHC has been out front in its communications to the investor community

Repeated market updates on implications of Superstorm Sandy

Investment banking conferences

Transaction marketing (net roadshow, tour of NYUHC facility)

Involvement of entire executive team in communication strategy

($000) Fiscal Year Ended August 31,

(Audited)

Three Months Ending

November 30,

(unaudited)

2011 2012 2013 2012 (3) 2013

Net Patient Service Revenue $1,625,839 $1,830,158 $1,662,617 $385,837 $481,253

Other Operating Revenue 75,380 141,287 269,326 115,822 79,118

Total Operating Revenue 1,701,219 1,971,445 1,931,943 501,659 560,371

Total Operating Expenses 1,515,456 1,722,693 1,884,135 467,931 507,389

Gain from Operations 185,763 248,752 47,808 33,728 52,982

Other (1) 460 (1,803) (41,252) (31,847) 5,981

NYUSM Mission Support (45,000) (27,750) (35,735) (35,735) (22,500)

Excess (deficiency) of

Revenue Over Expenses

141,223

$219,199

$(29,179)

$(33,854)

$36,463

Other changes in unrestricted

net assets (2)

21,551

(94,567)

169,200

10,306

8,995

Net increase (decrease) in

unrestricted net assets

$162,774

$124,632

$140,021

$(23,548)

$45,458

17

(1) FY 2013 amount consists of ($33.7 million) in impairment on disposal of property, plant and equipment related to Superstorm Sandy and other non-storm related disposals and ($7.6 million) investment return on underlying asset portfolio.

(2) Other changes in unrestricted net assets includes valuation changes to pension and postretirement obligations and contributions/net assets released for capital acquisition.

(3) Superstorm Sandy occurred on October 29, 2012. Inpatient services at Tisch Hospital were closed for 60 days and resumed on December 27, 2012. An Urgent Care Center has been operating in absence of a functioning Emergency Department. Thus, results for FY 2013 (inclusive of the three months ended November 30, 2012) include materially reduced operations.

NYUHC Financial Performance

(1) Based on Master Trust Indenture methodology.

(2) Superstorm Sandy occurred on October 29, 2012. Inpatient services at Tisch Hospital were closed for 60 days and resumed on December 27, 2012. An Urgent Care Center has been operating in absence of a functioning Emergency Department. Thus, results for FY 2013 (inclusive of the three months ended November 30, 2012) include materially reduced operations.

(3) FY 2013 & November 2013 figures above are inclusive of NYUHC’s Series 2013A $350 million taxable bond issuance.

Operating Margin (2)

12.5%

10.9%

12.6%

2.4%

6.7%

9.5%

FY10 FY11 FY12 FY13 Nov-12 Nov-13

EBIDA Margin (2)

17.8%15.8%

17.6%

8.4%

12.5%

16.0%

FY10 FY11 FY12 FY13 Nov-12 Nov-13

Cash to Debt (%) (2/3)

87

64 61 5566

52

FY10 FY11 FY12 FY13 Nov-12 Nov-13

Days Cash on Hand (1/2)

118108

135 141 144131

FY10 FY11 FY12 FY13 Nov-12 Nov-13

18

NYUHC Financial & Volume Metrics

240,770 261,835

290,881 264,734

63,381 72,823

FY10 FY11 FY12 FY13 Nov-12 Nov-13

Outpatient Visits (2)

37,408 37,929 38,045

26,676

6,540 7,998

FY10 FY11 FY12 FY13 Nov-12 Nov-13

Discharges (2)

19 19

NYUHC is a highly integrated academic medical center with close ties to New York University

“Tireless Pursuit of Excellence”

Patient care quality focus

Commitment to invest in technology

Positioning the Medical Center for the future of healthcare

Solid execution of ambulatory care strategy

Strong physician recruitment efforts

Moving forward on campus transformation plan

Updated infrastructure with storm mitigation

Maintaining strategic agility to execute plan

Balance sheet reserves provide operating flexibility

Issuance of fixed rate bonds and utilization of lines of credit for quick access to fund capital

plans

Philanthropy – continued support by NYC community for combined medical center enterprise

Conclusion