HARFORD MEMORIAL HOSPITAL, INC. AND UPPER CHESAPEAKE ...

HARFORD MEMORIAL HOSPITAL, INC. AND UPPER CHESAPEAKE MEDICAL CENTER, INC. Combined Financial Statements and Combining Schedules

December 31, 2012 and 2011 (With Independent Auditors' Report Thereon)

HARFORD MEMORIAL HOSPITAL, INC. AND UPPER CHESAPEAKE MEDICAL CENTER, INC.

Table of Contents

Independent Auditors' Report Combined Balance Sheets Combined Statements of Operations and Changes in Net Assets Combined Statements of Cash Flows Notes to Combined Financial Statements Schedule 1 ? Combining Balance Sheet Information Schedule 2 ? Combining Statement of Operations Information

Page 1 3 4 5 6 34 35

KPMG LLP 1 East Pratt Street Baltimore, MD 21202-1128

Independent Auditors' Report

The Boards of Directors Harford Memorial Hospital, Inc. and

Upper Chesapeake Medical Center, Inc.:

Report on the Financial Statements We have audited the accompanying combined financial statements of Harford Memorial Hospital, Inc. and Upper Chesapeake Medical Center, Inc. (the Hospitals or the Obligated Group), which comprise the combined balance sheets as of December 31, 2012 and 2011, and the related combined statements of operations and changes in net assets, and cash flows for the years then ended, and the related notes to the combined financial statements.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance 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 combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits 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 combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the combined 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 combined 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 combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International"), a Swiss entity.

Opinion In our opinion, the combined financial statements referred to above present fairly in all material respects, the financial position of Harford Memorial Hospital, Inc. and Upper Chesapeake Medical Center, Inc. as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in accordance with U.S. generally accepted accounting principles. As discussed in note 1(w) to the combined financial statements, the Hospitals changed their presentation of provision for bad debts as a result of the adoption of Accounting Standards Update No. 2011-07, Health Care Entities: Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and Allowance for Doubtful Accounts for Certain Health Care Entities. Supplemental Information Our audit was conducted for the purpose of forming an opinion on the combined financial statements as a whole. The supplementary information included in Schedules 1 and 2 is presented for purposes of additional analysis and is not a required part of the combined 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 combined financial statements. The information has been subjected to the auditing procedures applied in the audit of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the combined financial statements as a whole.

April 26, 2013

2

HARFORD MEMORIAL HOSPITAL, INC. AND UPPER CHESAPEAKE MEDICAL CENTER, INC.

Combined Balance Sheets

December 31, 2012 and 2011

(In thousands)

Assets

Current assets:

Cash and cash equivalents

$

Current portion of assets held by trustee (notes 2, 7 and 13)

Current portion of board designated and other investments (note 2)

Patient accounts receivable, net of allowance and contractuals

of $19,428 and $17,806 in 2012 and 2011, respectively (note 3)

Prepaid expenses and other current assets

Total current assets

Due from affiliates (note 12) Assets held by trustee, less current portion (notes 2, 7 and 13) Board designated and other investments, less current portion (note 2) Property, plant, and equipment, net (note 4) Economic interest in net assets of foundation Other assets (note 5)

Total assets

$

Liabilities and Net Assets

Current liabilities:

Accounts payable

$

Accrued salaries, benefits, and other (notes 8 and 9)

Current portion of long-term debt (notes 7 and 13)

Advances from third-party payors

Total current liabilities

Due to affiliates (note 12) Long-term debt, less current portion (notes 7 and 13) Other long-term liabilities (notes 1, 7 and 9) Pension liability (note 8)

Total liabilities

Unrestricted net assets Temporarily restricted net assets

Total net assets

Total liabilities and net assets

$

2012

37,073 2,563 41,529

40,626 12,497

134,288

28,960 4,044 49,268

213,589 11,390

1,379 442,918

22,593 26,446

2,980 7,522

59,541

1,456 186,499 59,091

9,703

316,290

115,238 11,390

126,628 442,918

See accompanying notes to combined financial statements.

2011

35,903 2,848

41,081

38,378 11,148

129,358

27,759 4,069

43,904 191,826

7,007 1,641 405,564

21,382 25,994

895 6,833

55,104

-- 172,898

55,659 10,200

293,861

104,696 7,007

111,703 405,564

3

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download