New York and Presbyterian Hospital Years Ended December 31, 2019 and 2018 with Report of Independent Auditors
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C ONSOLIDATED F INANCIAL S TATEMENTS AND S UPPLEMENTARY I NFORMATION The New York and Presbyterian Hospital Years Ended December 31, 2019 and 2018 With Report of Independent Auditors Ernst & Young LLP The New York and Presbyterian Hospital Consolidated Financial Statements and Supplementary Information Years Ended December 31, 2019 and 2018 Contents Report of Independent Auditors.......................................................................................................1 Consolidated Financial Statements Consolidated Statements of Financial Position ................................................................................3 Consolidated Statements of Operations ...........................................................................................5 Consolidated Statements of Changes in Net Assets ........................................................................6 Consolidated Statements of Cash Flows ..........................................................................................7 Notes to Consolidated Financial Statements ....................................................................................8 Supplementary Information Consolidating Statement of FinanCial Position ..............................................................................77 Consolidating Statement of Operations .........................................................................................79 Ernst & Young LLP Tel: +1 212 773 3000 5 Times Square Fax: +1 212 773 6350 New York, NY 10036-6530 ey.com Report of Independent Auditors The Board of Trustees The New York and Presbyterian Hospital We have audited the accompanying consolidated finanCial statements of The New York and Presbyterian Hospital (the Hospital), which comprise the Consolidated statements of finanCial position as of December 31, 2019 and 2018, and the related consolidated statements of operations, changes in net assets, and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal Control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 involves performing procedures to obtain audit evidenCe about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the Circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal Control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the finanCial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 A member firm of Ernst & Young Global Limited Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated finanCial position of The New York and Presbyterian Hospital at DeCember 31, 2019 and 2018, and the consolidated results of its operations, changes in its net assets, and its Cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. Adoption of ASU No. 2016-02, Leases As discussed in Note 1 to the consolidated financial statements, the Hospital changed its method of accounting for leases as a result of the adoption of the amendments to the Financial Accounting Standards Board Accounting Standards Codification resulting from Accounting Standards Update No. 2016-02, Leases, effeCtive January 1, 2019. Our opinion is not modified with respeCt to this matter. Supplementary Information Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidating statements of financial position and operations as of and for the year ended December 31, 2019, are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated finanCial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, the information is fairly stated in all material respects in relation to the consolidated finanCial statements as a whole. April 20, 2020 2 A member firm of Ernst & Young Global Limited The New York and Presbyterian Hospital Consolidated Statements of Financial Position December 31 2019 2018 (In Thousands) Assets Current assets: Cash, cash equivalents and short-term investments: Cash and cash equivalents $ 359,292 $ 590,045 Short-term investments (Notes 3 and 13) 2,232,518 2,258,140 Total cash, cash equivalents and short-term investments 2,591,810 2,848,185 Patient accounts receivable – net 1,110,468 997,706 Other current assets 319,578 258,365 Assets limited as to use – current portion (Notes 3, 4, 5, 8, and 13) 63,415 63,836 Professional liabilities insurance recoveries receivable and related deposits – current portion (Note 8) 91,075 94,568 Beneficial interest in net assets held by related organizations – current portion (Note 7) 68,510 60,735 Due from related organizations – net (Note 10) 9,807 – Total current assets 4,254,663 4,323,395 Assets limited as to use – noncurrent (Notes 3, 4, 5, 8, and 13) 4,028,298 2,870,811 Property, buildings and equipment – net (Note 4) 4,958,136 4,718,139 Operating lease assets (Note 6) 398,681 – Other noncurrent assets – net 51,586 35,163 Professional liabilities insurance recoveries receivable and related deposits – noncurrent (Note 8) 328,166 293,909 Beneficial interest in net assets held by related organizations – noncurrent (Note 7) 2,101,494 1,962,300 Total assets $ 16,121,024 $ 14,203,717 3 December 31 2019 2018 (In Thousands) Liabilities and net assets Current liabilities: Long-term debt – current portion (Note 5) $ 86,165 $ 77,001 Operating lease liability – current portion (Note 6) 55,947 – Accounts payable and accrued expenses 821,917 786,989 Accrued salaries and related liabilities 478,769 420,728 Pension and postretirement benefit liabilities – current portion (Note 9) 28,410 25,872 Professional and other insurance liabilities – current portion (Note 8) 117,945 125,569 Other current liabilities (Note 2) 214,262 247,818 Due to related organizations – net (Note 10) – 16,522 Total current liabilities 1,803,415 1,700,499 Long-term debt (Note 5) 3,179,992 2,737,844 Operating lease liability (Note 6) 360,075 – Professional and other insurance liabilities (Note 8) 718,481 677,404 Pension liability (Note 9) 268,506 187,989 Postretirement benefit liability (Note 9) 69,566 63,172 Other noncurrent liabilities (Note 2) 471,333 532,600 Total liabilities 6,871,368 5,899,508 Commitments and contingencies (Notes 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13 and 14) Net assets: Net assets without donor restrictions 7,027,580 6,233,164 Net assets with donor restrictions 2,222,076 2,071,045 Total net assets 9,249,656 8,304,209 Total liabilities and net assets $ 16,121,024 $ 14,203,717 See accompanying notes. 4 The New York and Presbyterian Hospital Consolidated Statements of Operations Year Ended December 31 2019 2018 (In Thousands) Operating revenues Net patient service revenue (Note 2) $ 8,567,369 $ 8,153,755 Other revenue (Note 11) 426,675 330,141 Total operating revenues 8,994,044 8,483,896 Operating expenses Salaries and wages 4,238,758 3,944,516 Employee benefits 1,101,633 1,056,505 Supplies and other expenses 2,769,378 2,638,027 Interest and amortization of deferred financing fees 117,040 109,917 Depreciation and amortization 466,107 418,584 Total operating expenses 8,692,916 8,167,549 Operating income 301,128 316,347 Investment return – net (Note 3) 605,209 (93,143) Voluntary retirement program costs (Note 1) (35,276) – Expected return on plan assets and other components of net periodic pension and postretirement