PHOEBE PUTNEY HEALTH SYSTEM, INC. CONSOLIDATED FINANCIAL ... Phoebe Putney Health Ventures, Inc. engages

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  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    __________

    CONSOLIDATED FINANCIAL STATEMENTS

    for the years ended July 31, 2015 and 2014

  • C O N T E N T S __________

    Pages Independent Auditor’s Report 1-2 Consolidated Financial Statements: Balance Sheets 3-4 Statements of Operations and Changes in Net Assets 5-6 Statements of Cash Flows 7-8 Notes to Consolidated Financial Statements 9-62 Independent Auditor’s Report on Consolidating Information 63 Consolidating Balance Sheet 64-71 Consolidating Statement of Excess Revenues (Expenses) 72-75 Independent Auditor’s Report on Supplemental Information 76 Service to the Community 77-86

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED BALANCE SHEETS, July 31, 2015 and 2014 __________

    2015 2014

    ASSETS Current assets: Cash and cash equivalents $ 103,279,531 $ 99,078,553 Patient accounts receivable, net of allowance for doubtful accounts of $50,000,000 in 2015 and $55,000,000 in 2014 120,613,906 112,738,393 Supplies, at lower of cost (first-in, first-out) or market 12,472,879 11,463,221 Estimated third-party payor settlements 7,493,478 1,000,702 Other current assets 12,430,527 17,151,372 Total current assets 256,290,321 241,432,241 Assets limited as to use: Internally designated for capital improvements 338,041,357 332,622,604 Internally designated for self-insurance 71,782,064 71,112,670 Externally designated by donors 9,221,112 9,238,241 Total assets limited as to use 419,044,533 412,973,515 Property and equipment, net 397,355,017 398,922,441 Other assets: Deferred financing cost 2,903,467 3,045,923 Goodwill 130,664,387 130,734,787 Other assets 7,132,303 11,035,092 Total other assets 140,700,157 144,815,802 Total assets $ 1,213,390,028 $ 1,198,143,999

    3

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED BALANCE SHEETS, July 31, 2015 and 2014 __________

    2015 2014

    LIABILITIES AND NET ASSETS Current liabilities: Current portion of long-term debt $ 6,173,553 $ 6,003,553 Accounts payable 23,217,615 23,511,737 Accrued expenses 66,662,658 50,807,520 Total current liabilities 96,053,826 80,322,810 Long-term debt, net of current portion 291,416,360 297,589,914 Accrued pension cost 99,690,852 68,031,420 Accrued self-insurance cost 43,933,112 45,717,258 Derivative financial instruments 10,473,619 8,087,979 Total liabilities 541,567,769 499,749,381 Net assets: Unrestricted 662,601,147 689,156,377 Temporarily restricted 7,201,779 7,274,971 Permanently restricted 2,019,333 1,963,270 Total net assets 671,822,259 698,394,618 Total liabilities and net assets $ 1,213,390,028 $ 1,198,143,999

    The accompanying notes are an integral part of these financial statements.

    4

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

    for the years ended July 31, 2015 and 2014 __________

    2015 2014 Unrestricted revenues, gains and other support: Patient service revenue (net of contractual allowances and discounts) $ 726,765,660 $ 720,132,034 Provision for bad debts ( 89,523,101) (112,400,948) Net patient service revenue 637,242,559 607,731,086 Other revenue 36,584,984 39,381,119 Total revenues, gains and other support 673,827,543 647,112,205 Expenses: Salaries and wages 281,792,527 295,873,538 Employee health and welfare 57,171,203 71,576,844 Medical supplies and other 173,380,044 174,598,499 Provision for bad debts - Dorminy 161,892 22,683,706 Purchased services 94,507,343 60,771,316 Depreciation and amortization 44,775,869 44,875,131 Interest 7,111,586 7,336,259 Total expenses 658,900,464 677,715,293 Operating income (loss) 14,927,079 ( 30,603,088) Nonoperating gains: Investment income 4,311,070 40,686,483 Excess revenues 19,238,149 10,083,395

    Continued

    5

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS, Continued

    for the years ended July 31, 2015 and 2014 __________

    2015 2014 Net assets released from restrictions $ 1,399,951 $ 588,458 Change in interest in net assets of Sumter Regional Hospital Foundation, Inc. ( 42,221) ( 30,330) Net actuarial gain (loss) ( 48,292,668) 27,616,806 Amortization of prior service cost 148,250 224,715 Amortization of net gain 1,590,932 1,071,559 Other changes in unrestricted net assets ( 597,623) 10,323 Increase (decrease) in unrestricted net assets ( 26,555,230) 39,564,926 Temporarily restricted net assets: Restricted donations 1,326,759 3,367,264 Net assets released from restrictions ( 1,399,951) ( 588,458) Increase (decrease) in temporarily restricted net assets ( 73,192) 2,778,806 Permanently restricted net assets: Restricted donations 56,063 182,139 Increase (decrease) in net assets ( 26,572,359) 42,525,871 Net assets, beginning of year 698,394,618 655,868,747 Net assets, end of year $ 671,822,259 $ 698,394,618

    The accompanying notes are an integral part of these financial statements.

    6

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS for the years ended July 31, 2015 and 2014

    __________

    2015 2014 Cash flows from operating activities: Change in net assets $( 26,572,359) $ 42,525,871 Adjustments to reconcile change in net assets to net cash provided by operating activities: Realized (gain) loss and changes in unrealized (gain) loss on investments ( 5,503,004) ( 40,033,287) Depreciation and amortization 44,775,869 44,875,131 Change in interest in net assets of Sumter Regional Hospital Foundation, Inc. 42,221 30,330 Change in derivative financial instruments 2,385,640 1,292,758 Changes in: Receivables ( 7,875,513) 8,276,114 Supplies ( 1,009,658) 877,005 Estimated third-party payor settlements ( 6,492,776) 6,921,145 Other assets 8,794,269 17,901,179 Accounts payable and accrued expenses 15,561,016 ( 8,286,408) Accrued pension cost 31,659,432 ( 35,122,105) Accrued self-insurance cost ( 1,784,146) ( 2,942,887) Net cash provided by operating activities 53,980,991 36,314,846 Cash flows from investing activities: Purchase of property and equipment ( 43,208,445) ( 22,058,721) Sale of assets limited as to use 97,888,513 125,813,689 Purchase of assets limited as to use ( 98,456,527) (129,431,063) Net cash used by investing activities ( 43,776,459) ( 25,676,095)

    Continued

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  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued for the years ended July 31, 2015 and 2014

    __________

    2015 2014 Cash flows from financing activities: Payments on long-term debt $(193,873,554) $( 5,423,553) Proceeds from issuance of long-term debt 187,870,000 - Net cash used by financing activities ( 6,003,554) ( 5,423,553) Increase in cash and cash equivalents 4,200,978 5,215,198 Cash and cash equivalents, beginning of year 99,078,553 93,863,355 Cash and cash equivalents, end of year $ 103,279,531 $ 99,078,553 Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 7,351,000 $ 7,136,000

    The accompanying notes are an integral part of these financial statements.

    8

  • PHOEBE PUTNEY HEALTH SYSTEM, INC.

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS July 31, 2015 and 2014

    __________

    1. Summary of Significant Accounting Policies Organization Phoebe Putney Health System, Inc. (Corporation) is the not-for-profit parent company of Phoebe Putney Memorial Hospital, Inc., a not-for-profit entity, Phoebe Putney Health Ventures, Inc., a for-profit corporation, Phoebe Physician Group, Inc., a not-for-profit corporation, Phoebe Worth Medical Center, Inc., a not-for-profit entity, Phoebe Sumter Medical Center, Inc., a not-for-profit entity, Phoebe Putney Indemnity, LLC, a single member LLC, and Phoebe Foundation, Inc., a not-for-profit entity. The above entities are consolidated and all intercompany transactions are eliminated. Phoebe Putney Memorial Hospital, Inc. (PPMH), located in Albany, Georgia, is an acute care hospital, which operates satellite clinics in the surrounding counties. It provides inpatient, outpatient and emergency care services for residents of Southwest Georgia. Admitting physicians are primarily practitioners in the local area. Phoebe Putney Health Ventures, Inc. engages in healthcare and related activities for the benefit of Phoebe Putney Health System, Inc. and Phoebe Putney Memorial Hospital, Inc. Phoebe Physician Group, Inc. was established to