Abington Health - DAC

Abington Health Consolidated Financial Statements June 30, 2011 and 2010

Abington Health Index June 30, 2011 and 2010

Page(s)

Report of Independent Auditors ................................................................................................................ 1

Financial Statements

Consolidated Balance Sheets ....................................................................................................................... 2

Consolidated Statements of Operations ....................................................................................................... 3

Consolidated Statements of Changes in Net Assets .................................................................................... 4

Consolidated Statements of Cash Flows ...................................................................................................... 5

Notes to Consolidated Financial Statements .......................................................................................... 6–23

Consolidating Statements

Consolidating Balance Sheet ...................................................................................................................... 24

Consolidating Statement of Operations ...................................................................................................... 25

PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1700, 2001 Market Street, Philadelphia, PA 19103-7042 T: (267) 330 3000, F: (267) 330 3300, www.pwc.com/us

Report of Independent Auditors

Board of Trustees

Abington Health

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of

operations, changes in net assets, and of cash flows present fairly, in all material respects, the financial

position of Abington Health as of June 30, 2011 and 2010 and the results of its operations, changes in net

assets and its cash flows for the years then ended, in conformity with accounting principles generally

accepted in the United States of America. These financial statements are the responsibility of

management. Our responsibility is to express an opinion on these financial statements based on our

audits. We conducted our audits of these statements in accordance with auditing standards generally

accepted in the United States of America. Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements, assessing the accounting principles used and significant estimates made by

management, and evaluating the overall financial statement presentation. We believe that our audits

provide a reasonable basis for our opinion.

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements

taken as a whole. The consolidating information is presented for purposes of additional analysis of the

consolidated financial statements rather than to present the financial position and results of operations of

the individual companies. Accordingly, we do not express an opinion on the financial position or the

results of operations of the individual companies. However, the consolidating information has been

subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in

our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken

as a whole.

September 30, 2011

Abington Health Consolidated Balance Sheets June 30, 2011 and 2010

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

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2011 2010

Assets

Current

Cash and cash equivalents 49,580,430$ 48,199,982$

Investments 400,676,463 330,341,330

Patient and third-party receivables, net of

doubtful accounts of approximately $22,569,000 and

$14,464,000 in 2011 and 2010, respectively 116,547,174 94,835,379

Other accounts receivable 2,585,152 3,799,924

Prepaid expenses and other assets 8,750,908 8,321,716

Total current assets 578,140,127 485,498,331

Net pledges receivable 5,522,572 6,586,406

Assets whose use is limited 86,274,162 81,992,521

Property and equipment, net of accumulated depreciation 490,845,154 486,796,256

Other assets, including funds held in trust by

others for the benefit of Abington Health 71,325,849 61,828,216

Deferred financing costs and other prepaid assets 10,861,141 8,113,075

Total assets 1,242,969,005$ 1,130,814,805$

Liabilities and Net Assets

Current

Current maturities of long-term debt 8,667,745$ 8,263,200$

Accounts payable 29,964,428 26,088,048

Accrued salaries and wages 33,254,360 31,972,974

Other liabilities 13,257,252 11,035,400

Total current liabilities 85,143,785 77,359,622

Accrued insurance and other liabilities 40,142,544 41,529,803

Pension liability 93,090,914 133,554,575

Long-term debt, net of current maturities 326,867,400 335,584,732

Total liabilities 545,244,643 588,028,732

Net assets

Unrestricted 575,379,873 433,759,569

Temporarily restricted 45,058,363 41,205,213

Permanently restricted 77,286,126 67,821,291

Total net assets 697,724,362 542,786,073

Total liabilities and net assets 1,242,969,005$ 1,130,814,805$

Abington Health Consolidated Statements of Operations Years Ended June 30, 2011 and 2010


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2011 2010

Revenues

Net patient service revenue 758,779,369$ 760,128,143$

Other operating revenue 19,677,010 20,377,180

Net assets released from restrictions 4,812,628 2,565,815

Total revenues 783,269,007 783,071,138

Expenses

Salaries, wages and employee benefits 427,246,528 432,821,266

Utilities, purchased services and other 104,151,482 107,246,863

Supplies 128,079,865 130,220,635

Depreciation and amortization 40,041,371 40,080,043

Interest 17,825,082 16,804,014

Insurance 20,523,629 25,014,168

Provision for bad debts 28,790,258 29,173,545

Total expenses 766,658,215 781,360,534

Income from operations 16,610,792 1,710,604

Income from investments, trusts, estates and contributions 12,659,941 9,599,021

Excess of revenues over expenses 29,270,733 11,309,625

Change in net unrealized gains 59,147,486 33,271,488

Change in pension liability 47,648,978 (34,040,663)

Net assets released from restrictions used for capital 5,553,106 5,739,344

Increase/(decrease) in unrestricted net assets 141,620,303$ 16,279,794$

Abington Health Consolidated Statements of Changes in Net Assets Years Ended June 30, 2011 and 2010


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Temporarily Permanently Total

Unrestricted Restricted Restricted Net Assets

Net assets at June 30, 2009 417,479,775$ 37,325,341$ 63,645,517$ 518,450,633$

Excess of revenues over expenses 11,309,625 - - 11,309,625

Contributions - 9,956,672 121,477 10,078,149

Investment income - 1,021,106 41,278 1,062,384

Increase/(decrease) in value of split interest agreements

and beneficial interests in trusts - (2,337,093) 3,211,430 874,337

Net change in unrealized gains/(loss) on investments 33,271,488 3,329,679 1,016,256 37,617,423

Net assets released from restrictions used for capital 5,739,344 (5,739,344) - -

Change in pension liability (34,040,663) - - (34,040,663)

Net assets released from restrictions used for operations (2,351,148) (214,667) (2,565,815)

Increase/(decrease) in net assets 16,279,794 3,879,872 4,175,774 24,335,440

Net assets at June 30, 2010 433,759,569 41,205,213 67,821,291 542,786,073

Excess of revenues over expenses 29,270,733 - - 29,270,733

Contributions - 8,590,955 209,856 8,800,811

Investment income - 1,577,797 261,069 1,838,866

Increase/(decrease) in value of split interest agreements

and beneficial interests in trusts - 1,844,978 7,168,355 9,013,333

Net change in unrealized gains/(loss) on investments 59,147,486 2,004,084 2,026,625 63,178,195

Net assets released from restrictions used for capital 5,553,106 (5,553,106) - -

Change in pension liability 47,648,978 - - 47,648,978

Net assets released from restrictions used for operations - (4,611,558) (201,070) (4,812,628)

Increase/(decrease) in net assets 141,620,303 3,853,150 9,464,835 154,938,288

Net assets at June 30, 2011 575,379,873$ 45,058,363$ 77,286,126$ 697,724,362$

Abington Health Consolidated Statements of Cash Flows Years Ended June 30, 2011 and 2010


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2011 2010

Cash flows from operating activities

Increase/(decrease) in net assets 154,938,288$ 24,335,440$

Adjustments to reconcile increase in net assets to net

cash provided by operating activities

Changes in pension liability (47,648,978) 34,040,663

Depreciation and amortization 40,041,371 40,080,043

Realized and unrealized net (gain) loss investments (68,657,311) (40,197,660)

Change in value of split interest agreements

and beneficial interests in trusts (9,013,333) (874,337)

Provision for bad debts 28,790,258 29,173,545

Contributions restricted for endowment (209,856) (121,477)

Income on equity investment interests (413,705) (1,499,521)

(Gain)/loss on disposal of fixed assets 21,798 (264,078)

Changes in assets and liabilities

Accounts and pledges receivable (48,223,448) (33,529,465)

Prepaid expenses and other assets (3,471,672) 2,018,926

Accounts payable, accrued expenses and other liabilities 13,177,678 4,180,983

Net cash provided by operating activities 59,331,091 57,343,063

Cash flows from investing activities

(Increase)/decrease in assets whose use is limited 205,024 (1,259,459)

Purchases of property and equipment (43,841,006) (45,399,441)

Proceeds from sale of property and equipment 51,825 292,649

Purchases of investments, net (7,091,540) (47,056,266)

Distribution from equity investment interests 856,460 1,086,380

Net cash used in investing activities (49,819,237) (92,336,137)

Cash flows from financing activities

Increase (decrease) in line of credit - (114,525,000)

Increase in deferred financing fees (28,475) (719,638)

Contributions restricted for endowment 209,856 121,477

Net proceeds from issuance of long-term debt - 152,935,000

Repayments of long-term debt (8,312,787) (41,328,279)

Net cash (used in) provided by financing activities (8,131,406) (3,516,440)

Net increase (decrease) in cash and cash equivalents 1,380,448 (38,509,514)

Cash and cash equivalents

Beginning of year 48,199,982 86,709,496

End of year 49,580,430$ 48,199,982$

Abington Health Notes to Consolidated Financial Statements Years Ended June 30, 2011 and 2010

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1. Organization

Abington Health (“AH”) was formed in 2009 to be the controlling entity of Abington Memorial

Hospital (the “Hospital”), Lansdale Hospital Corporation (“LHC”) and Abington Health Foundation,

("AHF"). AH has applied for tax exempt status while the other three corporations are exempt from

federal income taxes under the provisions of Section 501(c)(3) of the Internal Revenue Code.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting

principles generally accepted in the United States of America. Certain previously reported amounts

have been reclassified to conform with current year presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of AHF, the Hospital and LHC. All

significant intercompany transactions and balances have been eliminated.

Excess of Revenues over Expenses

The statement of operations includes excess of revenues over expenses. Changes in unrestricted

net assets which are excluded from excess of revenues over expenses, consistent with industry

practice, include unrealized gains and losses on investments other than trading securities, pension

liability adjustments and net assets released for capital.

Use of Estimates

The preparation of the 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 at the date of the financial

statements and the reported amounts of revenue and expenses during the reporting period,

including the accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

All highly liquid temporary cash investments purchased with an original maturity of 90 days or less

are considered to be cash equivalents other than those held for investment. The carrying value

approximates its fair value.

Investments and Investment Income

Investments classified as current assets are available to fund current operations as needed. All

investments are measured and recorded at fair value based on valuation techniques as discussed

under the heading Fair Value Measurements in this Note. Investment income or loss (including

realized gains and losses on investments, interest and dividends) is included in the excess of

revenues over expenses, unless the income or loss is restricted by donor or law. Unrealized gains

and losses on investments are excluded from the excess of revenues over expenses. Other-than-

temporary impairment losses are recorded as realized losses and reported in income from

investments, trusts, estates and contributions.


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Assets Whose Use Is Limited

Assets whose use is limited represents proceeds from the sale of bonds by the Montgomery

County Higher Education and Health Authority on behalf of the Hospital. The funds, including

interest income from their temporary investment, are held by a bank trustee for debt service

reserves required by bond indentures. These amounts were established in connection with the

2009, 2002, 1998 and 1993 Bond issues discussed in Note 5, and amounted to $27,647,000 and

$27,395,000 at June 30, 2011 and 2010, respectively. Also included in Assets whose use is limited

are $31,032,000 and $27,595,000 in Temporary and Permanent restricted assets at June 30, 2011

and $29,146,000 and $25,452,000 at June 30, 2010.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date. This guidance

establishes a three-level hierarchy for fair value measurements based upon the transparency of

inputs to the valuation of an asset or liability as of the measurement date. The three levels are

defined as follows:

Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical

assets or liabilities in active markets.

Level 2 Inputs to the valuation methodology include quoted prices for similar assets or

liabilities in active markets and inputs that are observable for the asset or liability,

either directly or indirectly, for substantially the same term of the financial instrument.

Alternative investments fair value are based on their net asset value per unit as

reported by their managers.

Level 3 Inputs to the valuation methodology are unobservable.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level

of input that is significant to the fair value measurement.

Assets and liabilities that are measured at fair value are based on one or more of the three

valuation techniques that follow:

Market approach

Prices and other relevant information generated by market transactions involving identical or

comparable assets or liabilities.

Cost approach

Amount that would be required to replace the service capacity of an asset (i.e., replacement cost).

Income approach

Techniques to convert future amounts to a single present amount based on market expectations

(including present value techniques and option-pricing models).


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Property and Equipment

AH property and equipment is recorded at cost. Major renewals and improvements are capitalized

while maintenance and repairs are expensed when incurred. Provisions for depreciation are made

over the estimated useful lives of buildings and equipment using the straight-line method. When

assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are

removed from their respective accounts. The resulting gain or loss is included in the consolidated

statements of operations.

Depreciation lives are as follows: land improvements 10 to 15 years, equipment 3 to 15 years,

buildings 18 to 40 years. Depreciation expense was approximately $39,718,000 and $39,403,000

for fiscal years 2011 and 2010, respectively.

Temporarily and Permanently Restricted Net Assets

Temporarily restricted net assets are those whose use by the Hospital has been limited by donors

to a specific time period or purpose. Temporarily restricted net assets at June 30, 2011 and 2010

were approximately $45,058,000 and $41,205,000, respectively. Also included in temporarily

restricted net assets are unrealized investment gains (losses) of $3,849,000 and $993,000 as of

June 30, 2011 and 2010, respectively. These temporarily restricted net assets are available for

health services, education and research and capital expenditures. The net assets available by

restricted purpose are as follows:

2011 2010

Health Services 24,278,000$ 24,883,000$

Education and Research 9,648,000 6,813,000

Capital 11,132,000 9,509,000

45,058,000$ 41,205,000$

Permanently restricted net assets as of fiscal years ended June 30, 2011 and 2010 were

approximately $77,286,000 and $67,821,000, respectively. These permanently restricted net

assets have been restricted by the donors and are maintained by the hospital in perpetuity, the

income of which is for the most part unrestricted and is used to support healthcare services.

Permanently restricted net assets also include funds held by external trustees of $49,514,000 and

$42,346,000 as of June 30, 2011 and 2010, respectively.

Net Patient Service Revenue

The Hospital has agreements with third-party payors that provide for payments to the Hospital at

amounts different from its established rates. The basis for payment under these agreements

include prospectively determined rates per discharge and per day, discounts from established

charges, capitated per member per month payments, and certain cost reimbursement

methodologies.

Net patient service revenue is reported at the estimated net realizable amounts from patients,

third-party payors, and others for services rendered, including estimated retroactive adjustments

under reimbursement agreements with third party payors. Retroactive adjustments are considered

in the recognition of revenue on an estimated basis in the period the related services are rendered

and adjusted in future periods as final settlements are determined. The Hospital has included in

net patient service revenue $0 and $527,000 in fiscal year 2011 and 2010, respectively, related to

third party payors final settlements for fiscal years 2007 and prior.


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Included in the Hospital’s net patient service revenues are payments made on behalf of the

Medicare and Medicaid programs. These payments represent 25% and 6% of net patient service

revenue, respectively, for the fiscal year ended June 30, 2011 and 24% and 6% of net patient

service revenue, respectively, for the fiscal year ended June 30, 2010. Laws and regulations

governing the Medicare and Medicaid program payments are complex and subject to interpretation.

The Hospital believes that it is in compliance with all applicable laws and regulations as they relate

to these programs. Such laws and regulations can be subject to review and interpretation by the

Medicare and Medicaid programs.

Other Operating Revenue

Other Operating Revenue consists primarily of rental income, investment income, parking income,

cafeteria sales and other assorted fees that the Hospital receives in the course of providing health

care services.

Charity Care

The Hospital and LHC, under their charity care policies, provide a significant amount of services

without charge or at amounts less than its established rates to patients who are unable to

compensate either entity for their treatments either through third party coverage or their own

resources. Because charity care amounts are not expected to be paid, they are not reported as

revenue. The amount of charity care provided on the basis of charges in fiscal year 2011 and 2010

was $57,368,000 and $51,324,000.

In addition, the Hospital and LHC provide services and supplies at amounts below cost to persons

covered by government programs, including Medicare and Medicaid. The Hospital also sponsors

certain other subsidized programs and charity services that provide substantial benefit to the

broader community. Such services and programs include community service programs designed

for specific healthcare concerns, including health education, support groups and health screenings.

Donor-Restricted Gifts

Unconditional promises to give cash and other assets are recognized at the present value of future

cash flows, and are reported at fair value at the date the promise is received. Conditional promises

to give and intentions to give are reported at fair value at the date the gift is received. The gifts are

reported as either temporarily or permanently restricted support if they are received with donor

stipulations that limit the use of the donated assets.

When a donor restriction expires, that is, when a stipulated time restriction ends or purpose

restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net

assets. Donor-restricted contributions whose restrictions are met within the same year as received

are reflected as unrestricted contributions in the accompanying financial statements.

Regulatory Oversight

The healthcare industry in general and the services that the Hospital provides are subject to

extensive federal and state laws and regulations. Additionally, a portion of the Hospital’s net

revenues is from payments by government-sponsored healthcare programs, principally Medicare

and Medicaid, and is subject to audit and adjustments by applicable regulatory agencies.

Deferred Financing Costs and Other Prepaid Assets

Deferred financing costs represent bond issuance costs which are being amortized over the life of

the bonds, using the effective interest method. Amortization expense was approximately $323,000

and $373,000 for the years ended June 30, 2011 and 2010, respectively.


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Pension Plan

Abington Memorial Hospital sponsors a noncontributory defined benefit pension plan covering all

eligible employees. Plan benefits are generally based on years of service and employees’

earnings during the five highest of the last ten years of covered employment. The Abington

Memorial Hospital’s policy is to fund annually at least the minimum amount required by the

Employee Retirement Income Security Act of 1974. In 2011 the Hospital established a defined

contribution plan that is available to all new hires after January 1, 2011. After one year of service,

participants will be eligible to receive matching funds based on contributions they make to the

Hospital's 403(b) retirement savings plan as well as core employee contributions, which will vary

based on years of service. In 2011 there was no pension expense associated with this plan.

Lansdale Hospital sponsors a 401(k) defined contribution plan covering all eligible employees. The

plan has a 50% employer match with a 4% maximum.

Accrued Insurance and Other Liabilities

Accrued insurance and other liabilities primarily consists of estimated liabilities for reported and

incurred but not reported claims related to professional liability, workers compensation and

employee health care. Professional liabilities recorded on the consolidated balance sheets have

been discounted using a 3.5% discount rate for both 2011 and 2010 respectively.

Accounting For Long Lived Assets

The Hospital reviews the realizabilty of long-lived assets and certain tangible assets whenever

events and circumstances occur which indicate recorded costs may not be recoverable. No

impairments of long-lived assets were recognized during 2011 or 2010.

Subsequent Events

The Hospital has performed an evaluation of subsequent events through September 22, 2011,

which is the date the financial statements were widely distributed.

New Accounting Pronouncements

Mergers and Acquisitions

In April 2009, the Financial Accounting Standards Board (FASB) issued a standard which provides

guidance on improving the quality of information in financial reports provided by a not-for-profit

organization regarding business combinations with one or more other not-for-profit entities,

businesses or nonprofit activities. The guidance will distinguish mergers (carryover method) from

acquisitions (acquisition method) as well as provide updated accounting for goodwill and

intangibles. Additional disclosures will be required in order to enable users of financial statements

to evaluate the nature and financial effects of the merger or acquisition. This standard is effective

for fiscal years beginning after December 15, 2009. Disclosures pertaining to any future mergers

or acquisitions occurring after July 1, 2010 will be expanded in accordance with this standard for

the consolidated financial statements beginning in fiscal year 2011.

Presentation of Insurance Claims and Related Insurance Recoveries

In August 2010, new guidance was issued for the presentation of insurance claims and associated

insurance recoveries for healthcare organizations. Under the new guidance, health care entities

are required to reflect their "gross" exposure to claims liabilities with a corresponding receivable for

insurance recoveries in order to be consistent with other industries. This guidance will become

effective for the Hospital on July 1, 2011.

Charity Care Disclosure

In August 2010, the FASB issued new guidance regarding the measurement basis used in the

disclosure of charity care. The guidance requires that the disclosures related to the level of charity


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care provided should be based on a healthcare organization's estimated direct and indirect costs of

providing the services and that a healthcare organization should separately disclose the amount of

charity care reimbursed by third parties. In addition, disclosure of the method used to identify or

determine such costs is required. This guidance will become effective for the Hospital on July 1,

2011.

3. Investments and Investment Income

Investments that are measured at fair value are presented in the consolidated balance sheets

under the following classifications:

2011 2010

Investments 400,676,000$ 330,341,000$

Assets whose use is limited 86,274,000 81,992,000

Other investments, including funds held in trust by others

for the benefit of Abington Health 71,326,000 61,828,000

558,276,000$ 474,161,000$

The following table presents the financial instruments carried at fair value as of June 30, 2011,

categorized based on the fair value hierarchy described in Note 2:

Assets Level 1 Level 2 Level 3 Total

Cash and cash equivalents 55,749,000$ -$ -$ 55,749,000$

Fixed Income securities 10,762,000 - - 10,762,000

Unregistered Fixed Income funds - 76,780,000 - 76,780,000

Mutual Funds 219,350,000 - - 219,350,000

Mutual Funds-Unregistered - 135,106,000 - 135,106,000

Beneficial interests in perpetual and charitable remainder trusts - - 55,321,000 55,321,000

Total assets measured at fair value 285,861,000$ 211,886,000$ 55,321,000$ 553,068,000

Investments not subject to fair value leveling 5,208,000

Total investments and assets whose use is limited 558,276,000$

The following table is a roll forward of the financial instruments classified as Level 3:

Investments

Fair value June 30, 2010 47,511,000$

Investment income and net market appreciation 7,810,000

Fair value June 30, 2011 55,321,000$


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The following table presents the financial instruments carried at fair value as of June 30, 2010,

categorized based on the fair value hierarchy described in Note 2:

Total

Assets Level 1 Level 2 Level 3 Fair Value


Fixed Income securities 9,928,000 - - 9,928,000

Unregistered Fixed Income Funds - 75,798,000 - 75,798,000

Mutual Funds 167,450,000 - - 167,450,000

Mutual Funds-unregistered - 112,927,000 - 112,927,000

Beneficial interests in perpetual and charitable remainder trusts - - 47,511,000 47,511,000

Total assets measured at fair value 233,094,000$ 188,725,000$ 47,511,000$ 469,330,000

Investments not subject to fair value leveling 4,831,000

Total investments and assets whose use is limited 474,161,000$

The following table is a roll forward of the financial instruments classified as Level 3:

Investments

Fair value June 30, 2009 39,134,000$

Investment income and net market appreciation 8,377,000

Fair value June 30, 2010 47,511,000$

Investment income for 2011 and 2010 is comprised of the following:

2011 2010

Investment income included in income from

investments, trusts, estates and contributions

Interest and dividends 7,181,000$ 6,979,000$

Net realized gains 5,479,000 2,620,000

Total investment income 12,660,000$ 9,599,000$

There are no investments in a continuous unrealized loss position as of June 30, 2011.

The following table shows the investments' gross unrealized losses and fair value, aggregated by

investment category and length of time that individual securities have been in a continuous

unrealized loss position, as of June 30, 2010:

Unrealized Unrealized

Fair value Loss Fair value Loss

Mutual funds 9,468,000$ (287,000)$ 30,650,000$ (5,697,000)$

9,468,000$ (287,000)$ 30,650,000$ (5,697,000)$

Less than 12 months 12 months or greater


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The unrealized losses reported involve investments where the market value was not deemed to be

impaired on an other than temporary basis under the Abington Health’s impairment policy.

Abington Health has the intent and the ability to hold these investments until the fair value recovers

back to its carrying value. Abington Health reviews the carrying value of its investments for

declines in value that could be considered other than temporary. In general, Abington Health

presumes that an individual security in an unrealized loss position of greater than 25% for a

continuous period of 12 months or longer has suffered a decline in value that is other than

temporary. Abington Health carries out further analysis on individual securities to either validate its

presumption or understand why the decline in value is temporary. There were no other than

temporary impairments recorded in 2011 and none as of June 30, 2010.

The Hospital entered into two interest rate swap option agreements dated April 2003 and July 2003

at a notional amount of $35 million each (fixed interest rate 3.3%) and termination dates of

April 2010 and July 2010, respectively. The Hospital received option premiums of $1.1 million and

$1.1 million, respectively, associated with these agreements which have been classified as

deferred revenue and amortized, as non-operating revenue, over the remaining life of the

agreements. The Hospital recognized $291,000 during 2010 in amortized non-operating income

associated with these option agreements.

The aggregate fair value of all swap agreements was zero as of June 30, 2011 and 2010,

respectively.

4. Property and Equipment

Property and equipment are recorded at cost for purchased items and at fair value for contributed

items. Major renewals and improvements are capitalized while maintenance repairs are expensed

when incurred. Depreciation is provided over the estimated life of each class of depreciable asset

and is computed using the straight-line method. Land, buildings and equipment and accumulated

depreciation consist of the following at June 30, 2011 and 2010:

2011 2010

Land and land improvements 40,235,000$ 40,214,000$

Buildings 544,912,000 535,888,000

Equipment 431,663,000 407,075,000

Construction-in-progress 9,881,000 1,940,000

1,026,691,000 985,117,000

Accumulated depreciation (535,846,000) (498,321,000)

490,845,000$ 486,796,000$


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5. Long-Term Debt

Long-term debt outstanding at June 30, 2011 and 2010 consisted of the following:

2011 2010

Amounts payable to the Montgomery County Higher

Education and Health Authority

Series A Revenue Bonds 2009 (a) 147,415,000$ 152,935,000$

Series A Revenue Bonds 2002 (b) 145,000,000 145,000,000

Series A Revenue Bonds 1998 (c) 25,360,000 25,360,000

Series A Revenue Bonds 1993 (d) 16,820,000 19,520,000

Other notes payable 940,000 1,033,000

335,535,000 343,848,000

Current maturities (8,668,000) (8,263,000)

326,867,000$ 335,585,000$

The fair value of the Hospital’s tax-exempt debt is calculated based upon yields available in the

quoted market as of June 30, 2011 and 2010 for bonds with comparable maturities and credit

quality. The estimated aggregate fair value of the Hospital’s long-term debt at June 30, 2011 and

2010 approximated $340,958,000 and $348,366,000, respectively.

a. In November 2009, at the Hospital’s request, the Montgomery County Higher Education and

Health Authority (“Authority”) issued $152,935,000- Hospital Revenue Bonds Series A of 2009

(Abington Memorial Hospital Obligated Group) (“2009 Bonds”). The 2009 Bonds consist of

$152,935,000 of term and premium of $1,269,000 maturing from June 2011 to June 2033 with

interest rates ranging from 3% to 5.25% with yields ranging from 2.22% to 5.27%. The

proceeds from this bond issue were used to refinance the lines of credit and advance refund a

portion of the 1998 Bonds.

b. In October 2002, at the Hospital’s request, the Authority issued $145,000,000 Hospital

Revenue Bonds Series A of 2002 (Abington Memorial Hospital Obligated Group) (“2002

Bonds”). The 2002 Bonds consist of $145,000,000 of term bonds maturing from June 2019 to

June 2032 with interest rates ranging from 5% to 5.125% with yields ranging from 4.870% to

5.3%.

c. In April 1998, at the Hospital’s request, Authority issued $105,590,000 Hospital Revenue

Bonds Series A of 1998 (“1998 Bonds”). The 1998 Bonds consist of $60,120,000 of serial

bonds maturing from June 1998 to June 2013 with interest rates ranging from 4.25% to

5.05%. In addition, this issue includes $20,110,000 of 4.875% term bonds due June 2018,

with a yield of 5.225% and $25,360,000 of 5.0% term bonds due June 2028, with a yield of

5.275%.

A portion of the proceeds from the sale of these bonds, together with other available funds,

were used to advance refund approximately $33,095,000 of the Hospital’s 1991 Bonds and

$30,680,000 of the Hospital’s 1993 Bonds. These advanced refunded bonds are no longer

considered an obligation of the Hospital and, accordingly, have not been included in the

accompanying consolidated balance sheets. The remaining bond proceeds were used to


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reimburse the Hospital for the costs of constructing, renovating, equipping and improving

facilities on the Hospital’s main campus and on its satellite facilities.

d. In January 1993, at the Hospital’s request, the Authority issued Hospital Revenue Bonds,

Series A of 1993 (“1993 Bonds”). The 1993 Bonds are dated January 1, 1993 and mature in

various years through June 1, 2022, with interest rates ranging from 4.7% to 6.1%. In

July 2003, the Hospital called its 1993 bonds, consistent with the bond’s call option, at a call

price of 102%. Upon receipt of the called 1993 bonds, the Hospital remarketed them, without

a call option, resulting in a non-operating net gain to the Hospital of $3,051,000.

The Hospital and AHF formed an Obligated Group, consisting of the Hospital and AHF, and have

entered into a Master Trust Indenture, dated June 1, 2004. Pursuant to this agreement, the

Hospital and AHF, have as members of the Obligated Group assumed financial liability for all

outstanding Hospital bond issues including the 1993, 1998 and 2002 bonds. Lansdale Hospital

Corporation became part of the obligated group upon issuance of the 2009 bonds. Under the

terms of the Master Trust Indenture, The Obligated Group has pledged and granted a lien on and a

security interest in their gross revenues. The Obligated Group generated the required income

available for debt service, as defined in the financing agreement, as amended and restated, of at

least 110% of annual debt service.

Principal and interest on all outstanding bond issues, with the exception of the 2009 and 2002

bonds, are covered by Municipal Bond insurance.

Cash paid for interest approximated $17,467,000 and $16,070,000 in 2011 and 2010, respectively.

Aggregate annual maturities for long-term debt for each of the five fiscal years and thereafter

subsequent to June 30, 2011 are as follows:

2012 8,668,000$

2013 9,043,000

2014 9,518,000

2015 8,558,000

2016 12,018,000

2017 and thereafter 287,730,000

6. Insurance Coverages

Professional Liability and Other Insurance

In compliance with the Healthcare Services Malpractice Act of Pennsylvania (“Act 111”, of 1975),

The Hospital and LHC utilize a captive insurance company to provide its professional liability

insurance. Specifically, the Hospital insurance provider, Cassatt RRG is owned by 8 regional non-

profit hospitals including Abington Memorial Hospital. Cassatt RRG is incorporated under the laws

of the state of Vermont and operates as a Risk Retention Group under the Federal Liability Risk

Retention Act of 1986. Cassatt RRG reinsures with Cassatt Insurance Company, LTD which is

owned by the 7 regional non-profit hospitals including the Hospital and incorporated as an

insurance company under the laws of Bermuda.


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The Hospital and LHC maintain primary professional liability insurance in the amount of $500,000

per occurrence and $2,500,000 per annual aggregate, utilizing a guaranteed cost policy

underwritten by Cassatt RRG, Inc. In addition, as required by state legislation, the two entities

participate in the “Pennsylvania Medical Care and Reduction of Error Fund (“MCARE Fund”) which

provides limits of $500,000 per occurrence and $1,500,000 per annual aggregate in excess of the

primary limits. Premium payments for the MCARE Fund are based upon each individual licensed

healthcare provider’s rating with the Joint Underwriters Association and may be subject to future

increases to cover any funding deficiencies within the CAT Fund. The MCARE care Fund is

scheduled, under current legislation, to be phased out in 2015. The MCARE care Fund currently

has an unfunded liability and depending upon the ultimate resolution of this matter the Hospital

may incur additional insurance costs.

The Hospital and LHC believe that Cassatt Insurance Company has been adequately funded and

has sufficient reserves to meet its projected liabilities; however, the Hospital may incur additional

insurance costs depending on the claims experience of Cassatt Insurance Company. The Cassatt

RRG, Inc. policy also provides general liability coverage in the amount of $1,000,000 per

occurrence and $2,000,000 per annual aggregate. Cassatt Insurance Company has also

historically provided professional liability insurance coverage above the MCARE Fund per claim

limit. For the period ended June 30, 2011, Cassatt Insurance Company provides coverage in

excess of the MCARE per claim limit to $7,000,000 and through reinsurance provides layered

excess professional liability coverage of $12,000,000 per occurrence with a $19,000,000 annual

aggregate.

The Hospital and LHC supplement the above coverage with the purchase of an Umbrella Liability

policy, also written by Cassatt RRG, Inc., providing nonprofessional layered liability coverage of

$49,000,000 per occurrence with a $49,000,000 annual aggregate. For the years ended

June 30, 2011 and 2010, the annual general and professional liability insurance premiums paid

(including the MCARE Fund and excess policy) were approximately $20,362,000 and $24,254,000,

respectively.

In February 2002, PHICO Insurance Company (“PHICO”), at the request of the Pennsylvania

Insurance Department, was placed in liquidation by an order of the Commonwealth Court of

Pennsylvania (“Liquidation Order”). The Hospital had placed its primary malpractice insurance

coverage through PHICO from July 1997 through June 2000. The Liquidation Order refers these

claims to the various state guaranty associations. These state guaranty association statutes

generally provide for coverage between $100,000 – $300,000 per insured claim, depending upon

the state. All Pennsylvania unsettled claims, including the Hospital’s are being taken over by the

Pennsylvania Property and Casualty Insurance Guarantee Association (“PPCIGA”). These funds

generally provide coverage of up to $300,000.

At this time, Abington Memorial Hospital believes that the resolution of these claims will not have a

material adverse effect on the Hospital’s financial position, cash flow or results of operations.

However, because the rules related to state guaranty association funds are subject to

interpretation, and because these claims are still in the process of resolution, the Hospital’s

conclusions may change as this process progresses.

At June 30, 2011 and 2010, the estimated liability recorded in the accompanying balance sheets

related to professional liability amounted to approximately $20,476,000 and $22,844,000,

respectively.


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Workers' Compensation Insurance

Abington Memorial Hospital is self insured for workers' compensation claims. At June 30, 2011

and 2010, the estimated liability recorded in the accompanying balance sheets amounted to

approximately $4,585,000 and $3,613,000, respectively. The Hospital has historically purchased

stop loss insurance for individual claims, and currently purchases stop-loss insurance for individual

claims in excess of $500,000. Lansdale Hospital Corporation has purchased a $250,000

deductible commercial workers compensation policy through Travelers Insurance Company.

7. Pension Plan

Current accounting guidance requires employers to recognize the overfunded or underfunded

projected benefit obligation (“PBO”) of a defined benefit pension plan as an asset or liability in the

statement of financial position. The PBO represents the actuarial present value of benefits

attributable to employee service rendered to date, including the effects of estimated future salary

increases. Employers are also required to recognize annual changes in gains or losses, prior

service costs, or other credits that have not been recognized as a component of net periodic

pension cost through unrestricted net assets.

Current accounting guidance requires an employer to measure defined benefit plan assets and

obligation as of the date of its year-end balance sheet, with limited exceptions. The plan has a

measurement date of June 30th.

Items included in unrestricted net assets represent amounts that have not been recognized in net

periodic pension expense. The components recognized in unrestricted net assets, as of

June 30, 2011 and 2010 include:

2012 2011

Amortization of net actuarial loss 3,323,000$ 7,491,000$

Amortization service cost 699,000 759,000

4,022,000$ 8,250,000$

Year-end amounts in unrestricted net assets expected to be recognized as components of net

periodic pension expense during the next fiscal year are as follows:

2011 2010

Amounts recognized in unrestricted net assets

Net actuarial loss 76,217,000$ 123,107,000$

Prior service cost 1,162,000 1,921,000

77,379,000$ 125,028,000$


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The following table sets forth the change in the Hospital’s projected benefit obligation and the

change in the fair value of plan assets, as well as the amounts recognized in the financial

statements, at June 30, 2011 and 2010:

2011 2010

Change in projected benefit obligation

Benefit obligation, beginning of year 363,562,000$ 282,116,000$

Service cost 19,496,000 14,796,000

Interest cost 21,537,000 19,179,000

Actuarial gain (loss) 492,000 54,467,000

Benefits paid (8,072,000) (6,996,000)

Projected benefit obligation, end of year 397,015,000 363,562,000

Change in plan assets

Fair value of plan assets, beginning of year 230,007,000 187,138,000

Actual return on plan assets, net of expenses 58,655,000 29,865,000

Employer contributions 23,334,000 20,000,000

Benefits paid (8,072,000) (6,996,000)

Fair value of plan assets, end of year 303,924,000 230,007,000

Funded status 93,091,000 133,555,000

Reconciliation of the funded status

Unrecognized prior service cost (1,162,000) (1,921,000)

Unrecognized actuarial loss (76,217,000) (123,107,000)

Cumulative contributions in excess of (less than)

Cumulative net periodic benefit cost (15,712,000) (8,527,000)

Net amount recognized at year-end (93,091,000) (133,555,000)

Amounts recognized in the statement of

financial position consist of

Accrued pension liability (93,091,000) (133,555,000)

Unrestricted net assets (cumulative actuarial loss and

prior service cost) 77,379,000 125,028,000

Net amount recognized (15,712,000)$ (8,527,000)$

Accumulated benefit obligation at the end of year 328,373,000$ 294,665,000$

The principal assumptions used in determining the actuarial present value of the benefit obligations

were as follows:

2011 2010

Weighted average assumptions as of June 30

Discount rate 5.90 % 6.00 %

Rate of compensation increase 4.00 % 4.00 %


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2011 2010

Components of net periodic benefit cost

Service cost 19,496,000$ 14,796,000$

Interest cost 21,537,000 19,179,000

Expected return on plan assets (18,765,000) (15,372,000)

Amortization of prior service cost 759,000 766,000

Recognized actuarial gain or loss 7,492,000 5,167,000

Net periodic benefit cost 30,519,000$ 24,536,000$

Plan assets are allocated at June 30, 2011 and June 30, 2010 as follows:

Allocation Percentage

June 30

2011 2010

Equity securities 71.60 % 68.60 %

Debt securities and cash equivalents 28.40 % 31.40 %

100.00 % 100.00 %

The following table presents the Plan’s financial instruments as of June 30, 2011, measured at fair

value on a recurring basis using the fair value hierarchy defined in note 2.

Level 1 Level 2 Level 3 Total

Pension investment program


Equity securities 177,820,000 39,796,000 217,616,000

Debt securities 81,910,000 81,910,000

Total pension investment program 182,218,000$ 121,706,000$ -$ 303,924,000$

The following table presents the Plan’s financial instruments as of June 30, 2010, measured at fair

value on a recurring basis using the fair value hierarchy defined in note 2.

Level 1 Level 2 Level 3 Total

Pension investment program


Equity securities 130,807,000 26,915,000 157,722,000

Debt securities 68,960,000 68,960,000

Total pension investment program 134,132,000$ 95,875,000$ -$ 230,007,000$

The Hospital invests plan assets with the objective of funding plan liabilities, maintaining liquidity

sufficient to pay current year benefit requirements, earn a return above the actuarial assumption

and diversify adequately among asset classes so as to earn a reasonable return relative to the risk

of capital loss. Consistent with this investment objective the Plan has established a target

investment allocation of 69% (range 65%-75%) equity and 31% (range 25%-35%) fixed income.


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The principal assumptions used in determining the Net Periodic Benefit Cost are as follows:

2011 2010

Discount rate 6.00 % 6.90 %

Rate of compensation increase 4.00 % 4.00 %

Expected return on plan assets 8.00 % 8.00 %

The Hospital’s expected rate of return on plan assets assumption was developed based on

historical returns for the major asset classes. This review also considered both current market

conditions and projected future conditions. The Hospital selected 8.00% at June 30, 2011 and

June 30, 2010, as the expected long-term return.

Employer contributions expected for fiscal year 2012 is $24,000,000.

Estimated Future Benefit Payments for the next five fiscal years:

2012 10,337,000$

2013 11,641,000

2014 13,124,000

2015 14,784,000

2016 16,524,000

8. Concentration of Credit Risk

The Hospital provides healthcare services to its patients, most of whom are local residents and are

insured under third-party agreements and publicly funded programs. The mix of receivables from

patients and third-party payors was as follows:

2011 2010

Medicare 24 % 21 %

Medicaid 8 % 9 %

Blue cross 16 % 15 %

Managed care payors 38 % 41 %

Other third-party payors 8 % 11 %

Patients (self-pay) 6 % 3 %

100 % 100 %

9. Commitments and Contingencies

Litigation

Abington Health is involved in litigation arising in the ordinary course of business. In the opinion of

management, all such matters are adequately covered by commercial insurance or by accruals,

and if not so covered, are without merit or are of such kind, or involve such amounts, as would not

have a material adverse effect on the financial position or results of operations of the Hospital.

Former employees of the Hospital have filed a class action lawsuit in which a variety of claims are

alleged involving compensation practices and pay or hour credits under pension or 403(b) plans.


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Similar lawsuits have been filed against several Philadelphia area hospitals by the same law firm.

The Hospital is in the process of defending this lawsuit.

10. Functional Expenses

The Hospital serves patients who reside principally in the Montgomery and Bucks county

communities through a number of specialty inpatient and outpatient programs, including cardiology,

oncology, psychiatry, obstetrics, perinatology, neonatology, pediatrics, rehabilitative medicine and

trauma care. Expenses for primary, secondary and tertiary services (including those listed above)

are as follows:

2011 2010

Healthcare services 624,255,000$ 635,871,000$

General and administrative 142,403,000 145,490,000

766,658,000$ 781,361,000$

11. Funds Held in Trust by Others

Non-operating revenue includes approximately $1,822,000 and $2,098,000 received by the

Hospital in 2011 and 2010, respectively, as beneficiary of several trust funds which are controlled

by outside trustees. The Hospital is an income beneficiary of these trusts for which the assets

have been placed in perpetuity with a trustee. These assets, with a fair market value of

approximately $49,514,000 and $42,346,000, respectively, have been included as part of other

investments and permanently restricted net assets at June 30, 2011 and 2010, respectively.

12. Pledges Receivable

At June 30, 2011, AH’s pledges receivable of $5,523,000 consists of unconditional promises to

give and are expected to be realized as follows:

Between one year and five years 5,637,000$

More than five years -

5,637,000

Discount and allowance for uncollectible pledges (114,000)

Net pledges 5,523,000$

13. Endowments

Abington Health endowments consists of approximately 21 individual donor restricted endowment

funds for a variety of purposes plus the following where the assets have been designated for

endowment: pledges receivables, split interest agreements, and other net assets. The net assets

associated with endowment funding are classified and reported based on the existence or absence

of donor imposed restrictions.


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The Board of Trustees has interpreted the State Prudent Management of Institution Funds Act

(“SPMIFA”) as requiring the preservation of the fair value of the original gift as of the date if the

donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of

this interpretation AH classifies as permanently restricted net assets (a) the original value of gifts

donated to a permanent endowment, (b) the original value of subsequent gifts to a permanent

endowment, and (c) accumulations to a permanent endowment made in accordance with the

direction of the applicable donor gift instrument at the time the accumulation is added to the fund.

The remaining portion of the donor-restricted endowment fund, except for beneficial interests in

perpetual trust, that is not classified in permanently restricted net assets is classified as temporary

restricted net assets until those amounts are appropriated for expenditure by AH a manner

consistent with the standard of prudence prescribed by SPMIFA.

Endowment net asset composition by type of fund as of June 30, 2011

Temporarily Permanently

Unrestricted Restricted Restricted Total

Donor-restricted endowment funds -$ -$ 77,286,126$ 77,286,126$

Total endowment funds -$ -$ 77,286,126$ 77,286,126$

Changes in endowment net assets for the year ended June 30, 2011



Endowment net assets, beginning of year -$ -$ 67,821,291$ 67,821,291$

Investment return

Investment income 1,822,428 33,501 261,069 2,116,998

Net appreciation - - 9,194,980 9,194,980

Total Investment return 1,822,428 33,501 9,456,049 11,311,978

Gifts - - 209,856 209,856

Appropriation of endowment

assets for expenditure (2,056,999) - - (2,056,999)

Donor redesignation - 201,070 (201,070) -

Transfer balance of net appreciation to

unrestricted 234,571 (234,571) - -

Endowment net assets, end of year -$ -$ 77,286,126$ 77,286,126$

Endowment net asset composition by type of fund as of June 30, 2010



Donor-restricted endowment funds -$ -$ 67,821,291$ 67,821,291$

Total endowment funds -$ -$ 67,821,291$ 67,821,291$


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Changes in endowment net assets for the year ended June 30, 2010



Endowment net assets beginning of year -$ -$ 63,645,517$ 63,645,517$

Investment return

Investment income 2,098,301 34,774 41,278 2,174,353

Net depreciation - - 4,227,685 4,227,685

Total Investment return 2,098,301 34,774 4,268,963 6,402,038

Gifts - - 121,477 121,477

Appropriation of endowment

assets for expenditure (2,347,741) - - (2,347,741)

Donor redesignation - 214,666 (214,666) -

Transfer balance of net appreciation to

unrestricted 249,440 (249,440) - -

Endowment net assets, end of year -$ -$ 67,821,291$ 67,821,291$

Supplemental Information

Abington Health Consolidating Balance Sheet Year Ended June 30, 2011

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Assets AMH AHF LHC Eliminating Consolidated

Current

Cash and cash equivalents 48,772,732$ 853,287$ (45,589)$ -$ 49,580,430$

Investments - 400,676,463 - - 400,676,463

Patient and third-party receivables, net of

doubtful accounts of approximately $22,569,000 and

$14,464,000 in 2011 and 2010, respectively 100,857,686 - 15,689,488 - 116,547,174

Other accounts receivable 12,579,870 (5,687) 358,684 (10,347,715) 2,585,152

Prepaid expenses and other assets 6,727,460 - 2,023,448 - 8,750,908

Total current assets 168,937,748 401,524,063 18,026,031 (10,347,715) 578,140,127

Net pledges receivable 4,152,482 1,170,090 200,000 - 5,522,572

Assets whose use is limited 46,244,609 8,785,346 525,658 - 55,555,613

Property and equipment, net

of accumulated depreciation 426,796,243 - 64,048,911 - 490,845,154

Other assets, including funds held in trust by

others for the benefit of Abington Health 54,721,808 47,322,590 - - 102,044,398

Deferred financing costs and other prepaid assets 10,861,141 - - - 10,861,141

Total assets 711,714,031$ 458,802,089$ 82,800,600$ (10,347,715)$ 1,242,969,005$

Liabilities and Net Assets

Current

Current maturities of long-term debt 6,592,680$ -$ 2,075,065$ -$ 8,667,745$

Accounts payable 26,443,210 61,494 3,459,724 - 29,964,428

Accrued salaries and wages 30,978,876 - 2,275,484 - 33,254,360

Other liabilities 12,921,068 3,040,240 7,643,659 (10,347,715) 13,257,252

Total current liabilities 76,935,834 3,101,734 15,453,932 (10,347,715) 85,143,785

Accrued insurance and other liabilities 28,936,422 10,236,014 970,108 - 40,142,544

Pension liability 93,090,914 - - - 93,090,914

Long-term debt, net of current maturities 275,927,623 - 50,939,777 - 326,867,400

Total liabilities 474,890,793 13,337,748 67,363,817 (10,347,715) 545,244,643

Net assets

Unrestricted 165,286,592 395,254,364 14,838,917 - 575,379,873

Temporarily restricted 13,750,675 30,709,822 597,866 - 45,058,363

Permanently restricted 57,785,971 19,500,155 - - 77,286,126

Total net assets 236,823,238 445,464,341 15,436,783 - 697,724,362

Total liabilities and net assets 711,714,031$ 458,802,089$ 82,800,600$ (10,347,715)$ 1,242,969,005$

Abington Health Consolidating Statements of Operations Year Ended June 30, 2011

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AMH AHF LHC Consolidated

Revenues

Net patient service revenue 678,113,450$ -$ 80,665,919$ 758,779,369$

Other operating revenue 18,214,159 - 1,462,851 19,677,010

Net assets released from restrictions 4,779,389 - 33,239 4,812,628

Total revenues 701,106,998 - 82,162,009 783,269,007

Expenses

Salaries, wages and employee benefits 390,736,313 - 37,966,937 428,703,250

Utilities, purchased services and other 87,865,306 202,045 14,627,409 102,694,760

Supplies 117,212,646 - 10,867,219 128,079,865

Depreciation and amortization 35,956,252 - 4,085,119 40,041,371

Interest 15,125,082 - 2,700,000 17,825,082

Insurance 18,586,118 23,892 1,913,619 20,523,629

Provision for bad debts 21,360,479 - 7,429,779 28,790,258

Total expenses 686,842,196 225,937 79,590,082 766,658,215

Income from operations 14,264,802 (225,937) 2,571,927 16,610,792

Income from investments, trusts, estates and contributions 1,822,428 10,837,513 - 12,659,941

Excess of revenues over expenses 16,087,230 10,611,576 2,571,927 29,270,733

Change in net unrealized gains (137,745) 59,285,231 - 59,147,486

Change in pension liability 47,648,978 - - 47,648,978

Net assets released from restrictions used for capital 5,553,106 - - 5,553,106

Increase/(decrease) in unrestricted net assets 69,151,569$ 69,896,807$ 2,571,927$ 141,620,303$

Abington Health - DAC

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