PHOEBE PUTNEY MEMORIAL HOSPITAL, INC. FINANCIAL ?· PHOEBE PUTNEY MEMORIAL HOSPITAL, INC. STATEMENTS…

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    __________

    FINANCIAL STATEMENTS

    for the years ended July 31, 2015 and 2014

  • C O N T E N T S __________

    Pages Independent Auditors Report 1-2 Financial Statements: Balance Sheets 3-4 Statements of Operations and Changes in Net Assets 5-6 Statements of Cash Flows 7-8 Notes to Financial Statements 9-49 Independent Auditors Report on Supplemental Information: 50 Service to the Community 51-58

  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    BALANCE SHEETS, July 31, 2015 and 2014 __________

    2015 2014

    ASSETS Current assets: Cash and cash equivalents $ 49,635,949 $ 69,240,194 Patient accounts receivable, net of allowance for doubtful accounts of $30,000,000 in 2015 and $28,000,000 in 2014 97,157,416 90,848,637 Supplies, at lower of cost (first-in, first-out) or market 11,390,227 10,538,133 Estimated third-party payor settlements 8,039,252 1,514,037 Other current assets 7,618,398 11,647,392 Total current assets 173,841,242 183,788,393 Assets limited as to use: Internally designated for capital improvements 374,977 373,107 Property and equipment, net 264,863,639 289,915,355 Other assets: Interest in net assets of Phoebe Foundation, Inc. 15,893,826 15,165,627 Deferred financing cost 2,903,467 3,045,923 Goodwill and other assets 125,151,546 125,230,662 Related party receivables 8,127,783 - Total other assets 152,076,622 143,442,212 Total assets $ 591,156,480 $ 617,519,067

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    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 16,880,324 17,329,340 Accrued expenses 30,336,367 23,833,721 Total current liabilities 53,390,244 47,166,614 Long-term debt, net of current portion 291,416,360 297,589,914 Accrued pension cost 99,690,852 68,031,420 Related party payables - 19,778,683 Derivative financial instruments 10,473,619 8,087,979 Total liabilities 454,971,075 440,654,610 Net assets: Unrestricted 126,964,293 167,626,216 Temporarily restricted 7,201,779 7,274,971 Permanently restricted 2,019,333 1,963,270 Total net assets 136,185,405 176,864,457 Total liabilities and net assets $ 591,156,480 $ 617,519,067

    See accompanying notes to financial statements.

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    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) $ 536,245,444 $ 542,620,927 Provision for bad debts ( 45,608,295) ( 75,589,368) Net patient service revenue 490,637,149 467,031,559 Other revenue 20,307,584 21,020,112 Total revenues, gains and other support 510,944,733 488,051,671 Expenses: Salaries and wages 144,151,280 153,692,470 Employee health and welfare 36,008,625 50,262,669 Medical supplies and other 190,130,377 188,241,197 Purchased services 89,160,391 70,532,607 Depreciation and amortization 37,046,282 36,876,756 Interest 7,111,586 7,322,538 Total expenses 503,608,541 506,928,237 Operating income (loss) 7,336,192 ( 18,876,566) Nonoperating gains (losses): Investment loss ( 1,891,463) ( 602,183) Loss on sale of fixed assets ( 298,494) - Total nonoperating losses ( 2,189,957) ( 602,183) Excess revenues (expenses) 5,146,235 ( 19,478,749)

    Continued

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS, Continued for the years ended July 31, 2015 and 2014

    __________

    2015 2014 Change in interest in net assets of Phoebe Foundation, Inc. $( 654,623) $ 111,743 Net assets released from restrictions 1,399,951 588,458 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 - 131,242 Increase (decrease) in unrestricted net assets ( 40,661,923) 10,265,774 Temporarily restricted net assets: Change in interest in net assets of Phoebe Foundation, Inc. 1,326,759 3,367,264 Net assets released from restriction ( 1,399,951) ( 588,458) Increase (decrease) in temporarily restricted net assets ( 73,192) 2,778,806 Permanently restricted net assets: Change in interest in net assets of Phoebe Foundation, Inc. 56,063 182,139 Increase (decrease) in net assets ( 40,679,052) 13,226,719 Net assets, beginning of year 176,864,457 163,637,738 Net assets, end of year $ 136,185,405 $ 176,864,457

    See accompanying notes to financial statements.

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

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

    __________

    2015 2014 Cash flows from operating activities: Increase (decrease) in net assets $( 40,679,052) $ 13,226,719 Adjustments to reconcile increase (decrease) in net assets to net cash provided by operating activities: Realized gain and changes in unrealized gain on investments - ( 135,217) Depreciation and amortization 37,046,282 36,876,756 Change in interest in net assets of Phoebe Foundation, Inc. ( 728,199) ( 3,661,146) Change in derivative financial instruments 2,385,640 1,292,758 Changes in: Receivables ( 6,308,779) 10,231,259 Supplies ( 852,094) 916,057 Estimated third-party payor settlements ( 6,525,215) 6,736,215 Other assets 4,250,566 1,457,590 Accounts payable and accrued expenses 6,053,630 ( 3,033,381) Accrued pension cost 31,659,432 ( 35,122,105) Net cash provided by operating activities 26,302,211 28,785,505 Cash flows from investing activities: Purchase of property and equipment ( 11,994,566) ( 13,751,112) Purchases and sale of assets limited as to use ( 1,870) 3,174,271 Net cash used by investing activities ( 11,996,436) ( 10,576,841)

    Continued

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  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    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 - Advances (to) from related parties ( 27,906,466) 5,262,820 Net cash used by financing activities ( 33,910,020) ( 160,733) Increase (decrease) in cash and cash equivalents ( 19,604,245) 18,047,931 Cash and cash equivalents, beginning of year 69,240,194 51,192,263 Cash and cash equivalents, end of year $ 49,635,949 $ 69,240,194 Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 7,351,000 $ 7,136,000

    See accompanying notes to financial statements. 8

  • PHOEBE PUTNEY MEMORIAL HOSPITAL, INC.

    NOTES TO FINANCIAL STATEMENTS July 31, 2015 and 2014

    __________

    1. Summary of Significant Accounting Policies Organization Phoebe Putney Memorial Hospital, Inc., (Corporation) located in Albany, Georgia, is a not-for-profit acute care hospital which operates satellite clinics in the surrounding counties. The Corporation provides inpatient, outpatient and emergency care services for residents of Southwest Georgia. Admitting physicians are primarily practitioners in the local area. The Corporation is a single operating entity and is a wholly-owned subsidiary of Phoebe Putney Health System, Inc. (System). Reorganization Effective September 1, 1991, the Hospital Authority of Albany-Dougherty County, Georgia (Authority) implemented a reorganization plan for the hospital whereby all the assets, management and governance of the hospital was transferred to Phoebe Putney Memorial Hospital, Inc., a not-for-profit corporation, qualified as an organization described in Section 501(c)(3) of the Internal Revenue Code, pursuant to a lease and transfer agreement. During 2009, the lease term was renewed for an additional forty years with a nominal annual lease payment. Effective August 1, 2012, the lease and transfer agreement between the Corporation and the Authority was amended and restated. The amendment was made for the transfer and inclusion of the hospital formerly known as Palmyra Park Hospital, LLC (Palmyra) which was acquired by the Authority on December 15, 2011. The amendment included the extension of the lease for a term of forty years from the date of the current amendment. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

    Continued 9

  • PHOEBE PUTNEY MEMORIAL HO