Hackensack Meridian Health, Inc.

Hackensack Meridian

Health, Inc.

Consolidated Financial Statements and Consolidating Supplemental Schedule December 31, 2022 and 2021

Hackensack Meridian Health, Inc.

Index December 31, 2022 and 2021

Page(s) Report of Independent Auditors ........................................................................................................... 1?2 Consolidated Financial Statements Balance Sheets ............................................................................................................................................ 3 Statements of Operations ............................................................................................................................ 4 Statements of Changes in Net Assets ......................................................................................................... 5 Statements of Cash Flows ........................................................................................................................... 6 Notes to Financial Statements ............................................................................................................... 7?41 Consolidating Supplemental Schedule Statement of Operations ............................................................................................................................ 42 Note to Supplemental Schedule ................................................................................................................ 43

Report of Independent Auditors

To Board of Trustees of Hackensack Meridian Health, Inc.

Opinion

We have audited the accompanying consolidated financial statements of Hackensack Meridian Health, Inc. and its subsidiaries (the "Network"), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations, of changes in net assets and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Network as of December 31, 2022 and 2021, and the results of its operations, changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Network and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Network's ability to continue as a going concern for one year after the date the financial statements are issued.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017 T: (646) 471 3000, us

In performing an audit in accordance with US GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Obtain an understanding of internal control relevant to the audit 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 Network's internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Network's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Supplemental Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The accompanying detail from the consolidating statement of operations as of and for the year ended December 31, 2022 (the "supplemental information") is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. The supplemental 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 supplemental information has been subjected to the auditing procedures applied in the audit 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 of America. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the consolidated financial statements taken as a whole.

New York, New York April 20, 2023

2

Hackensack Meridian Health, Inc.

Consolidated Balance Sheets December 31, 2022 and 2021

(in thousands)

Assets Current assets

Cash and cash equivalents Patient accounts receivable, net Pledges receivable, net Current assets held for sale Other current assets Assets limited as to use and investments, current portion

Total current assets

Assets limited as to use and investments, noncurrent portion Investment in joint ventures Property and equipment, net Operating lease right-of-use assets Other assets held for sale Other assets

Total assets

Liabilities and Net Assets Current liabilities

Current maturities of long-term debt and finance lease obligations Current portion of operating lease obligations Accounts payable and accrued expenses Current liabilities held for sale Other current liabilities

Total current liabilities

Long-term debt and finance lease obligations, less current maturities Long-term operating lease obligations Accrued pension benefits Other liabilities held for sale Other liabilities

Total liabilities

Net assets Without donor restrictions controlled by the Network Without donor restrictions attributable to noncontrolling interests

Net assets without donor restrictions

Net assets with donor restrictions

Total net assets

Total liabilities and net assets

2022

2021

$

221,189 $

388,483

756,330

720,440

79,881

72,857

16,609

20,761

586,322

511,141

1,309,005

1,369,088

2,969,336

3,082,770

2,813,344 185,814

3,408,719 266,545 152,005 158,230

3,770,142 170,506

3,174,922 218,323 153,776 172,727

$ 9,953,993 $ 10,743,166

$

159,849 $

80,507

37,889

35,531

1,135,424

1,125,389

593

5,383

196,437

520,081

1,530,192

1,766,891

2,997,127 237,632 57,338 30,696 444,675

3,068,244 190,689 110,470 40,970 454,860

5,297,660

5,632,124

4,272,065 55,375

4,731,239 79,915

4,327,440

4,811,154

328,893

299,888

4,656,333

5,111,042

$ 9,953,993 $ 10,743,166

The accompanying notes are an integral part of these consolidated financial statements. 3

Hackensack Meridian Health, Inc.

Consolidated Statements of Operations Years Ended December 31, 2022 and 2021

(in thousands)

Unrestricted revenues and other support Net patient service revenue Other revenue Net gain on equity investments Net assets released from restriction used for operating activities

Total unrestricted revenues and other support

Expenses Salaries and contracted labor Physician salaries and fees Employee benefits Supplies and other Depreciation and amortization Interest

Total expenses

Excess of revenues over expenses before other operating adjustments

Other operating adjustments Investment (loss) income, net Net unrealized realized gain on derivative instruments Other gains, net

(Deficit) excess of revenues over expenses

Other adjustments in net assets without donor restrictions Net assets released from restriction for capital acquisitions Pension-related adjustments Other changes (Distributions to) contributions from noncontrolling interests

(Decrease) increase in net assets without donor restrictions before discontinued operations

Loss on discontinued operations

(Decrease) increase in net assets without donor restrictions

2022

2021

$ 6,319,095 505,795 900 21,989

6,847,779

$ 6,072,280 478,133 40,397 16,052

6,606,862

2,746,695 531,840 566,047

2,551,932 269,234 84,541

6,750,289

97,490

2,495,018 495,302 591,601

2,484,920 266,780 90,394

6,424,015

182,847

(603,355) -

45,033

(460,832)

326,075 9,253

49,762

567,937

49,835 6,887

(29,448) (10,691)

(444,249) (39,465)

$ (483,714) $

21,318 161,524

2,809 5,405

758,993 (52,513) 706,480

The accompanying notes are an integral part of these consolidated financial statements. 4

Hackensack Meridian Health, Inc.

Consolidated Statements of Changes in Net Assets Years Ended December 31, 2022 and 2021

(in thousands)

Balances at December 31, 2020

Excess of revenues over expenses Investment income Contributions Net assets released from restriction for capital acquisitions Net assets released from restriction used for operating activities Pension-related adjustments Other changes Contributions from noncontrolling interests

Increase in net assets before discontinued operations

Loss on discontinued operations

Increase in net assets

Balances at December 31, 2021

Deficit of revenues over expenses Investment loss Contributions Net assets released from restriction for capital acquisitions Net assets released from restriction used for operating activities Pension-related adjustments Other changes Distributions to noncontrolling interests

(Decrease) increase in net assets before discontinued operations

Loss on discontinued operations

(Decrease) increase in net assets

Balances at December 31, 2022

Without Donor Restrictions

With Donor Restrictions

Total Net Assets

$ 4,104,674 $

567,937 -

238,393

19,486 68,972

$ 4,343,067

567,937 19,486 68,972

21,318

(21,318)

-

161,524

2,809 5,405

(16,052) -

10,407 -

(16,052) 161,524

13,216 5,405

758,993 (52,513) 706,480 4,811,154 (460,832)

-

49,835

6,887 (29,448) (10,691)

61,495 -

61,495 299,888

(1,057) 77,130

(49,835)

(21,989) -

24,756 -

820,488 (52,513) 767,975 5,111,042 (460,832)

(1,057) 77,130

-

(21,989) 6,887 (4,692)

(10,691)

(444,249) (39,465)

(483,714) $ 4,327,440 $

29,005 -

29,005 328,893

(415,244) (39,465)

(454,709) $ 4,656,333

The accompanying notes are an integral part of these consolidated financial statements. 5

Hackensack Meridian Health, Inc.

Consolidated Statements of Cash Flows Years Ended December 31, 2022 and 2021

(in thousands)

Cash flows from operating activities (Decrease) increase in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities

Depreciation and amortization Loss (gain) on disposal of property and equipment (Gain) loss on assets held for sale Amortization of deferred financing costs Amortization of bond premium Net unrealized/realized gain on derivative instruments Net gain on equity investments Distributions from joint ventures Realized and unrealized loss (gain) on investments Restricted contributions for capital acquisitions Pension-related adjustments Changes in assets and liabilities

Patient accounts receivable and pledges receivable Other assets Accounts payable and accrued expenses Accrued pension benefits Other liabilities

Net cash (used in) provided by operating activities

Cash flows from investing activities Purchases of property and equipment Proceeds from sales of property and equipment Contributions to joint ventures Sales of investment securities Purchases of investment securities

Net cash used in investing activities

Cash flows from financing activities Repayment on long-term debt and finance lease obligations Proceeds from borrowings (Distributions to) contributions from noncontrolling interests Restricted contributions for capital acquisitions

Net cash used in financing activities

Change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash Beginning of year

End of year

Supplemental information Cash paid for interest expense Change in noncash acquisitions of property and equipment Right-of-use assets obtained in exchange for operating lease obligations

2022

2021

$ (454,709) $ 767,975

269,234 271

(25,000) 765

(3,492) -

(900) 30,642 669,996 (8,171) (6,887)

(38,384) (120,702)

(18,337) (46,245) (277,166)

(29,085)

270,510 (6,540) 29,824 1,015 (4,047) (9,253)

(40,397) -

(295,662) (25,520)

(161,524)

(156,172) (25,287) 157,301 (45,360)

(349,520)

107,343

(527,502) 57,040 (48,047)

3,339,423 (2,973,631)

(152,717)

(474,454) 58,884 -

2,950,437 (3,131,016)

(596,149)

(260,281) 292,217 (10,691)

10,647

31,892

(149,910)

(82,329) 16,412

5,405 51,449

(9,063)

(497,869)

566,659

1,064,528

$ 416,749 $ 566,659

$

93,672 $

93,786

16,408

(15,160)

77,161

20,668

The accompanying notes are an integral part of these consolidated financial statements. 6

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