Montefiore Health System Q3 2018 Financials

Montefiore
THE UNIVERSITY HOSPITAL FOR

ALBERT EINSTEIN COLLEGE OF MEDICINE
November 29, 2018
Mr. Larry N. Volk

Senior Director, Portfolio Monitoring
Dormitory Authority of the State of New York
515 Broadway
Albany, NY 12207-2964
Ms. Diana O'Brien

Vice President
Digital Assurance Certification
390 North Orange Avenue, Suite 1750
Orlando, FL 32801
Re: Montefiore Obligated Group Revenue Bonds, Series 2018A & 2018B
Dear Mr. Volk and Ms. O'Brien:
Enclosed are the following documents for Montefiore Medical Center (MMC) and Montefiore Health
System (MHS) for the period ended September 30, 2018:
• Interim Unaudited Consolidated Financial Statements (MMC and MHS)

• Utilization Statistics and Net Patient Service Revenue by Payor Source (MMC)
These documents satisfy the reporting requirements under the following agreements:
• Supplemental Master Indenture For Obligation No. 1, dated as of August I, 2018

• Supplemental Master Indenture For Obligation No. 2, dated as of August 1, 2018
If you have any questions, please call me at (914) 349-84 73.
Sincerely,
Marc Lupia
Director, Financial Reporting
Enclosures
cc: Alan Sileo Lindsay Baker Quintanna Walker -BNYMellon
11 1 East 2101• Street

Bronx, New York 10467
Montefiore Medical Center
Utilization Statistics
Net Patient Service Revenue By Payor Source
Nine Months Ended

September 30,
Utilization 2017
Licensed beds 1,558 1,558
Discharges(] l 66,035 66,994
Patient days<') 385,941 380,381
Average length of stay ( days )° l 5.8 5.7
2
Case mix index<l l.56 1.54
Average % occupancy<') 90 .7% 89.4%
3 190,652
Emergency room visits< l 192,533
Ambulatory procedures 36,299 36,411
Montefiore Med ical Group Primary Care visits 577,638 590,857
Home Care Visits 151,298 137,322
4 4,285, 124
Faculty Practice Group Worked RVUs< l 4,098,513
(1) Excludes normal newborns

(2) Case mix valued at the federal MS DRG grouper.
(3) Excludes patients seen in emergency department and admitted to the Medical Center.
(4) Relative value units (RVUs) are a measure of value used in Medicare reimbursement formula
for physician services.
Nine Months Ended

Percent of Net Patient Service Revenue by Payor Source 2017 2018
Medicaid and Medicaid Managed Care 33.0% 34 .7%
Medicare and Medicare Managed Care 34 .9% 32 .4%
Commercial and Managed Care 31.3% 32.2%
Other 0.8% 0 .7%
Total 100.0% 100.0%
Consolidated Financial Statements (Unaudited)
For the Nine Months Ended September 30, 2018 and 2017
1
Contents
Consolidated Statements of Financial Position Page 3
Consolidated Statements of Operations Page 4
Consolidated Statements of Changes in Net Assets Page 5
Consolidated Statements of Cash Flows Page 6
Notes to Consolidated Financial Statements Page 7
2
Consolidated Statements of Financial Position
Unaudited Audited
September 30, December 31,
2018 2017
(In Thousands)
Assets
Current assets:
Cash and cash equivalents $ 157,203 $ 253,978
Marketable and other securities 1,358,592 656,290
Assets limited as to use, current portion 10,880 15,976
Receivables for patient care, less allowances for doubtful accounts 269,473 243,095
Other receivables 66,557 48,616
Estimated insurance claims receivable, current portion 81,097 81,097
Other current assets 60,893 56,305
Due from members, current portion 78,964 32,476
Total current assets 2,083,659 1,387,833
Assets limited as to use, net of current portion 157,875 200,092
Property, buildings and equipment, net 1,016,148 1,056,355
Estimated insurance claims receivable, net of current portion 459,548 459,548
Other noncurrent assets 261,178 218,432
Due from members, net of current portion 170,221 167,464
Total assets $ 4,148,629 $ 3,489,724
Liabilities and net assets

Current liabilities:
Accounts payable and accrued expenses $ 291,112 $ 277,149
Accrued salaries, wages and related items 259,534 285,851
Professional and other insured liabilities, current portion 64,286 52,022
Estimated insurance claims liabilities, current portion 81,097 81,097
Estimated third-party payer liabilities 51,670 41,492
Long-term debt, current portion 16,419 74,475
Total current liabilities 764,118 812,086
Long-term debt, net of current portion 1,372,225 724,216
Noncurrent defined benefit pension and other postretirement health plan liabilities 189,335 190,153
Professional and other insured liabilities, net of current portion 131,192 139,541
Employee deferred compensation 49,594 45,570
Estimated insurance claims liabilities, net of current portion 459,548 459,548
Estimated third-party payer liabilities, net of current portion 211,011 211,014
Other noncurrent liabilities 97,597 63,179
Total liabilities 3,274,620 2,645,307
Commitments and contingencies
Net assets:
Unrestricted 764,829 732,749
Temporarily restricted 75,311 78,062
Permanently restricted 33,869 33,606
Total net assets 874,009 844,417
Total liabilities and net assets $ 4,148,629 $ 3,489,724
See accompanying notes.
3
Consolidated Statements of Operations
Unaudited Nine Months Ended

September 30,
2018 2017
(In Thousands)
Operating revenue
Net patient service revenue before bad debt expense $ 2,618,250 $ 2,605,717
Bad debt expense – (52,845)
Net patient service revenue 2,618,250 2,552,872
Grants and contracts 61,393 58,445
Contributions 4,763 1,338
Other revenue 216,218 161,337
Total operating revenue 2,900,624 2,773,992
Operating expenses
Salaries and wages 1,373,858 1,302,448
Employee benefits 389,099 387,772
Supplies and other expenses 974,429 928,933
Depreciation and amortization 117,612 115,618
Interest 29,804 24,083
Total operating expenses 2,884,802 2,758,854
Excess of operating revenues over operating expenses

before other items 15,822 15,138
Net realized and changes in net unrealized gains
and losses on marketable and other securities 9,689 29,467
Malpractice insurance program adjustments 42,278 1,209
Net periodic pension and other postretirement benefit costs (non-service
related) (8,858) (6,792)
Gain on debt refinancing 2,134 –
Excess of revenues over expenses 61,065 39,022
Transfer of Montefiore Consolidated Ventures, Inc. to MHS – 41,435
Transfers to members, net (28,985) (30,567)
Increase in unrestricted net assets $ 32,080 $ 49,890
4
Consolidated Statements of Changes in Net Assets
Unaudited Nine Months Ended September 30, 2018 and 2017
Temporarily Permanently Total Net

Unrestricted Restricted Restricted Assets
(In Thousands)
Net assets at December 31, 2016 $ 689,397 $ 78,181 $ 31,704 $ 799,282

Increase in unrestricted net assets 49,890 – – 49,890
Restricted gifts, bequests, and
similar items – 4,668 1,322 5,990
Restricted investment income – (699) – (699)
Net assets released from
restrictions – (3,122) – (3,122)
Total changes in net assets 49,890 847 1,322 52,059
Net assets at September 30, 2017 $ 739,287 $ 79,028 $ 33,026 $ 851,341
Net assets at December 31, 2017 $ 732,749 $ 78,062 $ 33,606 $ 844,417

similar items – 63 – 63
Restricted investment income – 51 263 314
restrictions – (2,865) – (2,865)
Total changes in net assets 32,080 (2,751) 263 29,592
Net assets at September 30, 2018 $ 764,829 $ 75,311 $ 33,869 $ 874,009
5
Consolidated Statements of Cash Flows

September 30,
2018 2017
(In Thousands)
Operating activities
Increase in net assets $ 29,592 $ 52,059
Adjustments to reconcile increase in net assets to net cash provided by
operating activities:
Bad debt expense – 52,845
Transfers to members, net 28,985 30,567
Transfer of Montefiore Consolidated Ventures, Inc. to MHS – (41,435)
Net realized gains and losses on marketable and other securities (7,876) (8,248)
Change in net unrealized gains and losses on marketable and other
securities (1,813) (21,219)
Equity earnings from investments (24,290) (2,183)
Amortization of long-term mortgage premium (565) (229)
Amortization of deferred financing costs 796 758
Write-off of long-term mortgage premium and deferred financing costs as
a result of debt refinancing 4,005 –
Changes in operating assets and liabilities:
Receivables for patient care (26,378) 9,526
Accounts payable and accrued expenses 13,963 (113,745)
Accrued salaries, wages and related items (26,317) (32,131)
Noncurrent defined benefit and postretirement health plan liabilities (818) 10,202
Net change in all other operating assets and liabilities (54,321) (52,694)
Net cash provided by (used in) operating activities 52,575 (309)
Investing activities
Acquisition of property, buildings and equipment, net (77,405) (64,966)
Advances to Montefiore Health System, Inc. on MHS Note and other – (4,218)
Payments from Montefiore Health System, Inc. on MHS Note 1,605 1,526
(Increase) decrease in marketable and other securities, net (692,613) 16,689
Decrease in assets limited to use, net 47,313 22,640
Net cash used in investing activities (721,100) (28,329)
Financing activities
Payments of long-term debt (45,601) (44,947)
Extinguishment of long-term debt (545,139) –
Proceeds from long-term debt 1,200,939 36,699
Payments of deferred financing costs (24,482) (208)
Payments to members, net (13,967) (25,113)
Net cash provided by (used in) financing activities 571,750 (33,569)
Net decrease in cash and cash equivalents (96,775) (62,207)

Cash and cash equivalents at beginning of year 253,978 170,595
Cash and cash equivalents at end of period $ 157,203 $ 108,388
6
Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018
1. Organization
Montefiore Medical Center and its controlled organizations (collectively, the Medical Center) comprise an
integrated health care delivery system. The majority of the facilities are located in the Bronx, New York.
The Medical Center is incorporated under New York State Not-for-Profit Corporation law and provides
health care and related services, primarily to residents of the Metropolitan New York area. The Medical
Center is a not-for-profit membership organization whose sole member is Montefiore Health System, Inc.
(MHS). In addition, MHS is the sole member of several other health care related entities (members).
Montefiore Medicine Academic Health System, Inc. (MMAHS) is the sole member of MHS.
The Medical Center, together with its members, provides patient care, teaching, research, community
services and care management. The Medical Center operates many community benefit programs, including
wellness programs, community education programs and health screenings, as well as a variety of community
support services, health professionals’ education, school health programs and subsidized health services.
The accompanying consolidated financial statements include the accounts of the following tax-exempt and
taxable organizations.
• Montefiore Medical Center • Montefiore Consolidated Ventures, Inc. (MCV),

• MMC Corporation (MCORP) which is the parent to the following
• Gunhill MRI P.C. (Gunhill) organizations:
• Mosholu Preservation Corporation (MPC) – The Montefiore IPA, Inc. (MIPA)
• CMO The Care Management Company, – Bronx Accountable Healthcare Network
LLC (CMO) IPA, Inc. (ACO-IPA)
• Montefiore Proton Acquisition, LLC – University Behavioral Associates, Inc.
(MPRO) (UBA)
• MMC Residential Corp. I, Inc. (Housing I) – Montefiore Behavioral Care IPA No. 1, Inc.
• Montefiore Hospital Housing Section II, (MBCIPA)
Inc. (Housing II) – MMC GI Holdings East, Inc. (GI East)
– MMC GI Holdings West, Inc. (GI West)
• Montefiore Hudson Valley Collaborative
LLC (MHVC)
• Montefiore CERC Operations, Inc.
(CERC)
All intercompany accounts and activities have been eliminated in consolidation.
On March 1, 2017, the Medical Center entered into an agreement by which it assigned and transferred all of
its rights, title and interest in the shares of the common stock of MCV and its controlled organizations to
MHS. In accordance with Accounting Standards Codification Topic 805, Business Combinations, this
transaction was accounted for as a net asset transfer between entities under common control, with no
retrospective adjustment to the prior period consolidated financial statements. Accordingly, the activities of
MCV are included in the consolidated statements of operations and changes in net assets through the date of
transfer.
7
September 30, 2018

1. Organization (continued)
The following table summarizes the assets, liabilities and net deficiency of MCV and its controlled
organizations as of the date of transfer, March 1, 2017:
March 1, 2017*
(In Thousands)
Assets
Cash and cash equivalents $ 6,631
Marketable and other securities 23,712
Assets limited as to use 39,345
Other receivables 12,488
Due from members 8,340
Property, buildings and equipment, net 142
Other noncurrent assets 2,022
Total assets $ 92,680
Liabilities
Accounts payable and accrued expenses $ 73,965
Accrued salaries, wages, and related items 469
Due to members 59,681
Total liabilities 134,115
Net deficiency
Unrestricted net deficiency (41,435)
Total liabilities and net deficiency $ 92,680
* Represents assets, liabilities and net deficiency transferred to MHS on March 1, 2017 and excluded
from the consolidated statement of financial position as of December 31, 2017.
The following table summarizes the operating revenue and excess of revenues over expenses related to MCV
included within the consolidated statements of operations of the Medical Center through the date of transfer,
March 1, 2017:
Period from
January 1, 2017 to
March 1, 2017
(In Thousands)
Total operating revenue $ 90,590
Excess of revenues over expenses $ 1,671
8
September 30, 2018

Interim Financial Statements

The Medical Center presumes that users of this unaudited consolidated financial information have read or
have access to the Medical Center's audited consolidated financial statements which include certain
disclosures required by U.S. generally accepted accounting principles. The audited consolidated financial
statements of the Medical Center for the years ended December 31, 2017 and 2016 are on file with the
Municipal Securities Rulemaking Board and are accessible through its Electronic Municipal Market Access
Database. Accordingly, footnotes and other disclosures that would substantially duplicate the disclosures
contained in the Medical Center's most recent consolidated financial statements have been omitted from the
unaudited consolidated financial information. In the opinion of management, all material adjustments
considered necessary for a fair presentation have been included.
Health care operations and the financial results thereof are subject to seasonal variations. Quarterly and
other periodic operating results are not necessarily representative of operations for a full year for various
reasons including patient volumes associated with seasonal illnesses, elective services, variations in interest
rates, infrequent or one-time events and changes in regulatory or industry policies.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of
the consolidated financial statements. Estimates also affect the amounts of revenue and expenses reported
during the period. Actual results could differ from those estimates. Management believes that amounts
recorded based on estimates and assumptions are reasonable. For the nine months ended September 30, 2018
and 2017, there were no material changes in estimates.
Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). The core principle of ASU 2014-
09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The guidance in ASU 2014-09 supersedes the FASB’s current revenue recognition
requirements and most industry-specific guidance. The FASB subsequently issued ASU 2015-14, Revenue
from Contracts with Customers, which deferred the effective dates of ASU 2014-09. Based on ASU 2015-
14, the provisions of ASU 2014-09 became effective for the Medical Center for annual reporting periods
beginning after December 15, 2017. The Medical Center adopted ASU 2014-09 effective for its consolidated
financial statements as of and for the nine months ended September 30, 2018. The Medical Center adopted
ASU 2014-09 following the modified retrospective method of application, and as such the prior period
financial statements have not been adjusted for the adoption of ASU 2014-09. As a result of implementing
ASU 2014-09, certain patient activity where collection is uncertain previously reported as net patient service
revenue and bad debt expense in the Medical Center’s consolidated statements of operations no longer meets
the criteria for revenue recognition and, accordingly, bad debt
9
September 30, 2018

expense after the adoption date is significantly reduced with a corresponding reduction to net patient service
revenue. Such patient activity is now classified as an implicit price concession. Additionally, bad debt
expense for the nine months ended September 30, 2018 is now presented as an expense item (included as a
component of supplies and other expenses) rather than a reduction to net patient service revenue. Other
aspects of the Medical Center’s implementation of ASU 2014-09 impacting net patient service revenue,
which include judgments regarding collection analyses and estimates of variable consideration and the
addition of certain qualitative and quantitative disclosures, are reflected below within Note 2. The adoption
of ASU 2014-09 did not have a material impact in relation to other applicable revenue activity.
In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02), which will require lessees to
report most leases on their balance sheet, but recognize expenses on their income statement in a manner
similar to current accounting. The guidance also eliminates current real estate-specific provisions. For
lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct
financing leases. The provisions of ASU 2016-02 are effective for the Medical Center for annual periods
beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The
Medical Center is in the process of evaluating the impact of ASU 2016-02 on its consolidated financial
statements.
In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Financial Statement Presentation (ASU
2016-14), which eliminates the requirement for not-for-profits (NFPs) to classify net assets as unrestricted,
temporarily restricted and permanently restricted. Instead, NFPs will be required to classify net assets as net
assets with donor restrictions or without donor restrictions. Entities that use the direct method of presenting
operating cash flows will no longer be required to provide a reconciliation of the change in net assets to
operating cash flows. The guidance also modifies required disclosures and reporting related to net assets,
investment expenses and qualitative information regarding liquidity. NFPs will also be required to report all
expenses by both functional and natural classification in one location. The provisions of ASU 2016-14 are
effective for the Medical Center for annual periods beginning after December 15, 2017. Application of ASU
2016-14 to interim periods within the initial year of adoption is permitted, but not required. Early adoption
is permitted. The Medical Center is in the process of evaluating the impact of ASU 2016-14 on its
consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash
Receipts and Cash Payments (ASU 2016-15), which addresses the following eight specific cash flow issues
in order to limit diversity in practice: debt prepayment or debt extinguishment costs; settlement of zero-
coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation
to the effective interest rate of the borrowing; contingent consideration payments made after a business
combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-
owned life insurance policies, including bank-owned life insurance policies; distributions received from
equity method investees; beneficial interests in securitization transactions; and separately identifiable cash
flows and application of the predominance principle. The provisions of ASU 2016-15 are effective for the
Medical Center for annual periods beginning after December 15, 2018, and interim periods thereafter. Early
adoption is permitted. The Medical Center is in the process of evaluating the impact of ASU 2016-15 on its
10
September 30, 2018

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows – Restricted Cash (ASU 2016-
18), which requires that the statement of cash flows explain the change during the period in the total of cash,
cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts
shown on the statement of cash flows. The provisions of ASU 2016-18 are effective for the Medical Center
for annual periods beginning after December 15, 2018 and interim periods thereafter. Early adoption is
permitted. The Medical Center is in the process of evaluating the impact of ASU 2016-18 on its consolidated
financial statements.
Subsequent Events
The Medical Center evaluated subsequent events through November 29, 2018, which is the date the
unaudited consolidated financial statements were issued, for potential recognition or disclosure in the
accompanying consolidated financial statements for the nine months ended September 30, 2018. Except as
noted below, no subsequent events material to the Medical Center have occurred that require disclosure in
the consolidated financial statements.
On November 27, 2018, Mount Sinai Health System, Beth Israel Medical Center, Maimonides Medical
Center and the Medical Center, the owners of Hospitals Insurance Company (HIC) and FOJP Service
Corporation (FOJP), announced their agreement to sell HIC and FOJP to The Doctors Company for $650
million, subject to closing adjustments. The transaction is subject to regulatory approvals and is expected
to close in 2019. HIC has provided the hospitals and related physicians with medical malpractice insurance
for 40 years. The hospitals will share in the proceeds ratably according to their ownership.
2. Net Patient Service Revenue
Effective January 1, 2018 upon the adoption of ASU 2014-09, net patient service revenue is reported at the
amount that reflects the consideration to which the Medical Center expects to be entitled in exchange for
providing patient care. These amounts are due from patients, third-party payers (including health insurers
and government programs), and others and includes variable consideration (reductions to revenue) for
retroactive revenue adjustments due to settlement of ongoing and future audits, reviews, and investigations.
The Medical Center uses a portfolio approach to account for categories of patient contracts as a collective
group rather than recognizing revenue on an individual contract basis. The portfolios consist of major payer
classes for inpatient revenue and major payer classes and types of services provided for outpatient revenue.
Based on historical collection trends and other analyses, the Medical Center believes that revenue recognized
by utilizing the portfolio approach approximates the revenue that would have been recognized if an
individual contract approach were used.
11
September 30, 2018

2. Net Patient Service Revenue (continued)
The Medical Center’s initial estimate of the transaction price for services provided to patients subject to
revenue recognition is determined by reducing the total standard charges related to the patient services
provided by various elements of variable consideration, including contractual adjustments, discounts,
implicit price concessions, and other reductions to the Medical Center’s standard charges. The Medical
Center determines the transaction price associated with services provided to patients who have third-party
payer coverage on the basis of contractual or formula-driven rates for the services rendered (see description
of third-party payer payment programs below). The estimates for contractual allowances and discounts are
based on contractual agreements, the Medical Center’s discount policies and historical experience. For
uninsured and under-insured patients who do not qualify for charity care, the Medical Center determines the
transaction price associated with services on the basis of charges reduced by implicit price concessions.
Implicit price concessions included in the estimate of the transaction price are based on the Medical Center’s
historical collection experience for applicable patient portfolios. Under the Medical Center’s charity care
policy, a patient who has no insurance or is under-insured and is ineligible for any government assistance
program has his or her bill reduced to (1) the lesser of charges or the Medicaid diagnostic-related group for
inpatient and (2) a discount from Medicaid fee-for-service rates for outpatient. Patients who meet the
Medical Center’s criteria for free care are provided care without charge; such amounts are not reported as
revenue.
Generally, the Medical Center bills patients and third-party payers several days after the services are
performed and/or the patient is discharged. Net patient service revenue is recognized as performance
obligations are satisfied. Performance obligations are determined based on the nature of the services
provided by the Medical Center. Net patient service revenue for performance obligations satisfied over time
is recognized based on actual charges incurred in relation to total charges. The Medical Center believes that
this method provides a reasonable depiction of the transfer of services over the term of the performance
obligation based on the services needed to satisfy the obligation. Generally, performance obligations
satisfied over time relate to patients receiving inpatient acute care services or patients receiving services in
the Medical Center’s outpatient and ambulatory care centers or in their homes (home care). The Medical
Center measures the performance obligation from admission into the hospital or the commencement of an
outpatient service to the point when it is no longer required to provide services to that patient, which is
generally at the time of discharge or the completion of the outpatient visit.
As substantially all of its performance obligations relate to contracts with a duration of less than one year,
the Medical Center has elected to apply the optional exemption provided in ASU 2014-09 and, therefore, is
not required to disclose the aggregate amount of the transaction price allocated to performance obligations
that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially
unsatisfied performance obligations referred to above are primarily related to inpatient acute care services
at the end of the reporting period for patients who remain admitted at that time (in-house patients). The
performance obligations for in-house patients are generally completed when the patients are discharged,
which for the majority of the Medical Center’s in-house patients occurs within days or weeks after the end
of the reporting period.
12
September 30, 2018

Subsequent changes to the estimate of the transaction price (determined on a portfolio basis when applicable)
are generally recorded as adjustments to patient service revenue in the period of the change. For the nine
months ended September 30, 2018, changes in the Medical Center’s estimates of implicit price concessions,
discounts, contractual adjustments or other reductions to expected payments for performance obligations
satisfied in prior years were not significant. Portfolio collection estimates are updated based on collection
trends. Subsequent changes that are determined to be the result of an adverse change in the patient’s ability
to pay (determined on a portfolio basis when applicable) are recorded as bad debt expense. Bad debt expense
for the nine months ended September 30, 2018 was not significant.
The Medical Center has determined that the nature, amount, timing and uncertainty of revenue and cash
flows are affected by the following factors: payers, lines of business and timing of when revenue is
recognized. Tables providing details of these factors are presented below.
Net patient service revenue for the nine months ended September 30, 2018, by payer is as follows
(in thousands):
Medicare and Medicare managed care $ 846,708

Medicaid and Medicaid managed care 908,113
Commercial carriers and managed care 843,299
Self-pay and other 20,130
$ 2,618,250
Deductibles, copayments and coinsurance under third-party payment programs which are the patient’s
responsibility are included within the self-pay and other category above.
Net patient service revenue for the nine months ended September 30, 2018 by line of business is as follows
(in thousands):
Inpatient services $ 1,593,643

Physician and other outpatient services 905,265
Emergency department 71,386
All other 47,956
$ 2,618,250
The Medical Center has elected the practical expedient allowed under ASU 2014-09 and does not adjust the
promised amount of consideration from patients and third-party payers for the effects of a significant
financing component due to the Medical Center’s expectation that the period between the time the service is
provided to a patient and the time that the patient or a third-party payer pays for that service will be one year
or less. However, the Medical Center does, in certain instances, enter into payment agreements with patients
that allow payments in excess of one year. For those cases, the financing component is not deemed to be
significant to the contract.
13
September 30, 2018

At September 30, 2018, accounts receivable is comprised of the following components (in thousands):
Patient receivables $ 214,183

Contract assets 55,290
$ 269,473
Contract assets are related to in-house patients who were provided services during the reporting period but
were not discharged as of the reporting date and for which the Medical Center does not have the right to bill.
The allowance for doubtful accounts was not significant at September 30, 2018. The allowance for doubtful
accounts was approximately $25.1 million at December 31, 2017.
Settlements with third-party payers (see description of third-party payer payment programs below) for cost
report filings and retroactive adjustments due to ongoing and future audits, reviews or investigations are
considered variable consideration and are included in the determination of the estimated transaction price
for providing patient care. These settlements are estimated based on the terms of the payment agreement
with the payer, correspondence from the payer and the Medical Center’s historical settlement activity (for
example, cost report final settlements or repayments related to recovery audits), including an assessment to
ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Such
estimates are determined through either a probability-weighted estimate or an estimate of the most likely
amount, depending on the circumstances related to a given estimated settlement item. Estimated settlements
are adjusted in future periods as adjustments become known (that is, new information becomes available),
or as years are settled or are no longer subject to such audits, reviews, and investigations. Adjustments arising
from a change in the transaction price were not significant for the nine months ended September 30, 2018.
Prior to the adoption of ASU 2014-09, the Medical Center recognized patient service revenue at the
estimated net realizable amounts associated with services provided to patients who have third-party payer
coverage on the basis of contractual or formula-driven rates for the services rendered and included estimated
retroactive revenue adjustments due to ongoing and future audits, reviews and investigations. Retroactive
adjustments were considered in the recognition of revenue on an estimated basis in the period that related
services were rendered, and such amounts adjusted in future periods as adjustments became known or as
years were no longer subject to such audits, reviews and investigations.
Net patient service revenue, net of contractual allowances and discounts, for the nine months ended
September 30, 2017, is as follows (in thousands):
Patient service revenue (net of contractual allowances and discounts) $ 2,605,717

Bad debt expense (52,845)
Net patient service revenue $ 2,552,872
14
September 30, 2018

3. Third-Party Payment Programs
The Medical Center has agreements with third-party payers that provide for payment for services rendered
at amounts different from its established rates. A summary of the payment arrangements with major third-
party payers follows:
Medicare Reimbursement: Hospitals are paid for most Medicare patient services under national
prospective payment systems and other methodologies of the Medicare program for certain other
services. Federal regulations provide for adjustments to current and prior years’ payment rates, based on
industry-wide and hospital-specific data.
Non-Medicare Reimbursement: In New York State, hospitals and all non-Medicare payers, except
Medicaid, workers’ compensation and no-fault insurance programs, negotiate hospitals’ payment rates.
If negotiated rates are not established, payers are billed at hospitals’ established charges. Medicaid,
workers’ compensation and no-fault payers pay hospital rates promulgated by the New York State
Department of Health (DOH). Payments to hospitals for Medicaid, workers’ compensation and no-fault
inpatient services are based on a statewide prospective payment system, with retroactive adjustments.
Outpatient services also are paid based on a statewide prospective system. Medicaid rate methodologies
are subject to approval at the Federal level by the Centers for Medicare and Medicaid Services (CMS),
which may routinely request information about such methodologies prior to approval. Revenue related
to specific rate components that have not been approved by CMS is not recognized until the Medical
Center is reasonably assured that such amounts are realizable. Adjustments to the current and prior years’
payment rates for those payers will continue to be made in future years.
Other Third-Party Payers: The Medical Center also has entered into payment agreements with certain
commercial insurance carriers and health maintenance organizations. The basis for payment to the
Medical Center under these agreements includes prospectively determined rates per discharge or days
of hospitalization and discounts from established charges.
Medicare cost reports, which serve as the basis for final settlement with the Medicare program, have been
audited by the Medicare fiscal intermediary and settled through December 31, 2001, although revisions to
final settlements or other retroactive changes could be made. Other years and various issues remain open for
audit and settlement, as are numerous issues related to the New York State Medicaid program for prior years.
As a result, there is at least a reasonable possibility that recorded estimates will change by a material amount
when open years are settled, audits are completed and additional information is obtained.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and
subject to varying interpretation. As a result of investigations by governmental agencies, various health care
organizations have received requests for information and notices regarding alleged noncompliance with
those laws and regulations, which, in some instances, have resulted in organizations entering into significant
settlement agreements. Compliance with such laws and regulations may also be subject to future government
review and interpretation as well as significant regulatory action, including fines, penalties, and potential
exclusion from the related programs. There can be no assurance that
15
September 30, 2018

3. Third-Party Payment Programs (continued)
regulatory authorities will not challenge the Medical Center’s compliance with these laws and regulations,
and it is not possible to determine the impact (if any) such claims or penalties would have upon the Medical
Center. The Medical Center is not aware of any allegations of non-compliance that could have a material
adverse effect on the accompanying consolidated financial statements and believes that it is in compliance
with all applicable laws and regulations. In addition, certain contracts the Medical Center has with
commercial payers also provide for retroactive audit and review of claims.
There are various proposals at the federal and state levels that could, among other things, significantly change
payment rates or modify payment methods. The ultimate outcome of these proposals and other market
changes, including the potential effects of or revisions to health care reform that has been or will be enacted
by the federal and state governments, cannot be determined presently. Future changes in the Medicare and
Medicaid programs and any reduction of funding could have an adverse impact on the Medical Center.
Additionally, certain payers’ payment rates for various years have been appealed by the Medical Center. If
the appeals are successful, additional income applicable to those years could be realized.
4. Benefit Plans
The Medical Center is a contributing employer to two union multiemployer pension plans. In addition, the
Medical Center also maintains two tax deferred annuity plans under Section 403(b) of the Internal Revenue
Code as well as two noncontributory defined benefit pension plans. The Medical Center also sponsors two
unfunded defined benefit postretirement health and welfare plans that cover certain full-time and part-time
employees and eligible dependents.
Contributions to union multiemployer pension plans are made in accordance with contractual agreements
under which contributions are based on a percentage of salaries or a negotiated amount. Contributions to the
non-contributory tax deferred annuity plan are based on percentages of salary. Contributions to the
noncontributory defined benefit plans are based on actuarial valuations. Benefits under the noncontributory
defined benefit plans are based on years of service and salary levels. The Medical Center’s policy is to
contribute amounts sufficient to meet funding requirements in accordance with the Employee Retirement
Income Security Act of 1974 and the Pension Protection Act of 2006.
Total expense for the various pension plans aggregated approximately $108.6 million and $103.8 million for
the nine months ended September 30, 2018 and 2017, respectively. Cash payments relative to the various
pension plans aggregated approximately $116.8 million and $103.2 million for the nine months ended
September 30, 2018 and 2017, respectively.
16
September 30, 2018
4. Benefit Plans (continued)
The following table provides the components of the net periodic benefit cost for the defined benefit pension
plans and postretirement benefit plan for the nine months ended September 30, 2018 and 2017:
Pension Postretirement
2018 2017 2018 2017
(In Thousands)
Service cost $ 4,725 $ 3,534 $ 9,338 $ 8,485
Interest cost 1,050 1,935 5,365 5,191
Expected return on plan assets (1,427) (1,355) – –
Amortization of prior
service cost (benefit) 34 252 (1,334) (1,335)
Amortization of net loss 1,354 691 2,659 1,413
Settlement cost 1,157 – – –
Net periodic benefit cost $ 6,893 $ 5,057 $ 16,028 $ 13,754
5. Long-Term Debt
In August 2018, three series of bonds were issued; the Dormitory Authority of the State of New York
(DASNY) Montefiore Obligated Group Revenue Bonds, Series 2018A (Tax-Exempt); the DASNY
Montefiore Obligated Group Revenue Bonds, Series 2018B (Federally Taxable); and the Montefiore
Obligated Group Taxable Bonds, Series 2018C (collectively, the 2018 Bonds) in the aggregate amount of
approximately $1,167 million. The proceeds from the issuance of the 2018 Bonds were used to refund or
refinance approximately $575.6 million of existing indebtedness, to provide working capital, and to fund
future capital projects. As a result of the refinancing, the Medical Center recorded a gain on refinancing of
approximately $2.1 million. The 2018 Bonds are general obligations of the Montefiore Obligated Group (of
which the Medical Center is currently the only member) and further secured by a mortgage on certain real
property.
6. Commitments and Contingencies
Litigation: Claims have been asserted against the Medical Center by various claimants arising out of
the normal course of its operations. The claims are in various stages of processing and some may ultimately
be brought to trial. Also, there are known incidents occurring through September 30, 2018 that may result
in the assertion of additional claims, and other claims may be asserted arising from services provided to
patients in the past. Medical Center management and counsel are unable to conclude about the ultimate
outcome of the actions. However, it is the opinion of Medical Center management, based on prior experience
that adequate insurance is maintained and adequate provisions for professional liabilities, where applicable,
have been established to cover all significant losses and that the eventual liability, if any, will not have a
material adverse effect on the Medical Center’s consolidated financial position.
17
September 30, 2018

6. Commitments and Contingencies (continued)
Federation of Jewish Philanthropies (FOJP): In February 2014, the FOJP program and the various affiliated
captive insurance companies began an internal investigation into several insurance regulatory and related
matters that had come to the attention of the FOJP companies’ management. The FOJP Companies and legal
counsel reported the preliminary investigative findings to the New York State Department of Financial
Services (DFS), the primary State insurance regulator throughout the investigation. DFS also conducted its
own investigation of the issues that were raised and related matters. During 2017, the FOJP companies and
DFS resolved the outstanding matters through an agreed stipulation which did not have a material effect on
the Medical Center’s consolidated financial statements.
In June 2018, the Medical Center recorded approximately $42.3 million of malpractice insurance program
adjustments; approximately $30.8 million related to retroactive premium adjustments and approximately
$11.5 million related to investment gains at the captive insurance companies.
Albert Einstein College of Medicine, Inc.: On September 9, 2015, a controlled member of MMAHS, Albert
Einstein College of Medicine, Inc. (Einstein), acquired substantially all of the assets and assumed
substantially all of the liabilities of a medical school operating as a division of Yeshiva University (YU). In
connection with this transaction, Build NYC Resource Corporation loaned to Einstein, under a loan
agreement, the proceeds of $175.0 million Build NYC Resource Corporation Revenue Bonds. In accordance
with their terms, the bonds were tendered by the original bondholder and remarketed on January 28, 2016.
Prior to the remarketing, the required interest and principal payments on the bonds were guaranteed by the
Medical Center. The Medical Center was not required to make any payments under the guarantee, which
terminated upon the remarketing of the bonds on January 28, 2016.
In addition, on September 9, 2015, Einstein issued to YU a promissory note (the Note) under which it was
obligated to pay to YU twenty annual payments of $12.5 million beginning September 2017, followed by a
final, twenty-first payment of $20.0 million in September 2037. Pursuant to a guaranty agreement (Guaranty
Agreement), the Medical Center guaranteed Einstein’s obligation to make payments under the Note. If the
Medical Center was required to make payments under the Guaranty Agreement, Einstein would have been
obligated to repay the Medical Center, in full, over five years with interest. The Medical Center’s right to
repayment was subordinate in certain respects to Einstein’s obligation to make payments on the Build NYC
Resource Corporation Revenue Bonds.
In April 2017, the Note was cancelled and exchanged with three Replacement Negotiable Promissory Notes
(the Replacement Notes) in the total principal amount of $162.2 million. The Replacement Notes carry
interest rates ranging from 4.52% to 5.74% effective March 17, 2017. The Guaranty Agreement was
amended to cover payments made by Einstein under the Replacement Notes. On May 1, 2017, the aggregate
amounts payable by Einstein under the Replacement Notes were amended to $3.8 million in 2017, with
annual payments of $8.3 million from 2018 to 2020, $36.0 million in 2021, $12.5 million from 2022 to 2036,
followed by a final payment of $20.0 million in 2037.
18
September 30, 2018

In September 2017 and March 2018, approximately $1.5 million and $4.2 million, respectively, was paid by
the Medical Center on Einstein’s behalf pursuant to the Guaranty Agreement, as amended. Einstein is
obligated to repay the Medical Center in full, over five years beginning in September 2018 with interest rates
ranging from 4.73% to 5.58%. At September 30, 2018 and December 31, 2017 amounts due and payable
were approximately $5.5 million and $1.5 million, respectively.
The Medical Center has an agreement to provide operating subsidies to Einstein over a five-year period
commencing September 2015 in an aggregate amount of up to $80.0 million. The Medical Center will
provide this subsidy in varying amounts to be funded upon the receipt and approval of documentation of
unreimbursed research expenses incurred. The subsidy will total an amount not to exceed $10.0 million per
year in each of the first two years, and not to exceed $20.0 million per year in each of the third, fourth and
fifth years. During the nine months ended September 30, 2018 and 2017, the Medical Center made capital
contributions of approximately $15.0 million and $9.4 million, respectively, to Einstein in accordance with
this agreement.
The Medical Center has also agreed to provide loans to Einstein in an aggregate amount of up to $75 million
as necessary to allow it to meet its cash flow requirements. The first loan was funded in 2017 in the amount
of $35.0 million, to be repaid by Einstein over a five year period in equal annual installments, commencing
in December 2020 at an annual interest rate of 5.20%. At September 30, 2018 and December 31, 2017
amounts due and payable were approximately $36.4 million and $35.0 million, respectively.
In March 2018, the Medical Center entered into a commitment to provide financial support, including
working capital and bridge financing, as necessary, to Einstein in order for Einstein to meet its operational
needs.
Other: At September 30, 2018 and December 31, 2017, approximately 66% of the Medical Center’s
employees were covered by collective bargaining agreements. The collective bargaining agreement with
NYSNA will expire in December 2018 and the collective bargaining agreement with 1199SEIU will expire
in September 2021.
In connection with agreements entered into between MIPA and several health insurance companies, the
Medical Center has agreed to guarantee the performance and payment of certain hospital, physician and
administrative services.
Effective January 1, 2018, a controlled member of MHS acquired an equity interest in a joint venture with
Crystal Run Healthcare, LLP. In accordance with the purchase agreement, the Medical Center entered into
a security agreement by which the Medical Center deposited $30.0 million in escrow as security for the
purchase price.
19
September 30, 2018

7. Fair Value Measurements
For assets and liabilities required to be measured at fair value, the Medical Center measures fair value based
on 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. Fair value measurements are applied based on the unit
of account from the Medical Center’s perspective. The unit of account determines what is being measured
by reference to the level at which the asset or liability is aggregated (or disaggregated) for purposes of
applying other accounting pronouncements.
The Medical Center follows a valuation hierarchy that prioritizes observable and unobservable inputs used
to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for
identical assets or liabilities
Level 2: Observable inputs that are based on inputs not quoted in active markets, but corroborated by
market data.
Level 3: Unobservable inputs are used when little or no market data is available.
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. In determining fair value, the Medical Center uses valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the
extent possible and considers nonperformance risk in its assessment of fair value.
20
September 30, 2018

7. Fair Value Measurements (continued)
Financial assets carried at fair value, including assets invested in the Medical Center’s defined benefit plan,
are classified in the table below in one of the three categories described above as of September 30, 2018:
September 30, 2018
Level 1 Level 2 Level 3 Total
(In Thousands)
Assets
Cash and cash equivalents $ 157,203 $ – $ – $ 157,203
Managed cash and cash equivalents
held for investment 325,736 – – 325,736
Marketable and other securities:
U.S. non-equity mutual funds 52,320 – – 52,320
U.S. equity mutual funds 21,510 – – 21,510
U.S. Government agency
mortgage-backed securities – 37,516 – 37,516
U.S. Treasury securities 78,484 – – 78,484
U.S. Government agency-
backed securities – 8,383 – 8,383
U.S. equity securities 66,250 – – 66,250
Corporate debt – 791,243 – 791,243
Interest and other receivables 6,422 – – 6,422
707,925 837,142 – 1,545,067
Defined benefit plan assets
Cash and cash equivalents 1,401 – – 1,401
Equity mutual funds 9,343 – – 9,343
Fixed income mutual funds 3,587 – – 3,587
14,331 – – 14,331
$ 722,256 $ 837,143 $ – $ 1,559,398
Investments measured at net asset
value (defined benefit plan
assets) 13,652
$ 1,573,050
21
September 30, 2018

Financial assets carried at fair value, including assets invested in the Medical Center’s defined benefit plan,
are classified in the table below in one of the three categories described above as of December 31, 2017:
December 31, 2017

(In Thousands)
Assets
U.S. non-equity mutual funds 119,805 – – 119,805
U.S. equity mutual funds 22,434 – – 22,434
U.S. equity securities 82,195 – – 82,195
Corporate debt – 256,335 – 256,335
640,582 332,549 – 973,131
Defined benefit plan assets
Fixed income mutual funds 2,663 – – 2,663
14,921 – – 14,921
$ 655,503 $ 332,549 $ – $ 988,052
value (defined benefit plan
assets) 13,626
$ 1,001,678
At September 30, 2018 and December 31, 2017, the Medical Center’s alternative investments and collective
trusts, excluding those within the defined benefit plan, are reported using the equity method of accounting
in the amount of approximately $139.5 million and $153.2 million, respectively, and, therefore, are not
included in the tables above.
22
September 30, 2018

The following is a description of the Medical Center’s valuation methodologies for assets measured at fair
value. Fair value for Level 1 is based upon quoted market prices. Fair value for Level 2 is based on quoted
prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets
that are not active and model-based valuation techniques for which all significant assumptions are observable
in the market or can be corroborated by observable market data for substantially the full term of the assets.
Inputs are obtained from various sources, including market participants, dealers and brokers. The methods
described above may produce a fair value that may not be indicative of net realizable value or reflective of
future fair values. Furthermore, while the Medical Center believes its valuation methods are appropriate and
consistent with other market participants, the use of different methodologies or assumptions to determine
the fair value of certain financial instruments could result in a different estimate of fair value at the reporting
date.
23
Montefiore Health System, Inc.
1
Contents
Consolidated Financial Statements
Consolidated Statements of Financial Position Page 3

Consolidated Statements of Operations Page 4
Consolidated Statements of Changes in Net Assets Page 5
Consolidated Statements of Cash Flows Page 6
Notes to Consolidated Financial Statements Page 7
2
Consolidated Statements of Financial Position
Unaudited Audited
September 30, December 31,
2018 2017
(In Thousands)
Assets
Current assets:
Cash and cash equivalents $ 315,569 $ 398,237
Marketable and other securities 1,465,374 754,309
Assets limited as to use, current portion 59,502 59,407
Receivables for patient care, less allowances for doubtful accounts 456,282 414,259
Other receivables 121,142 77,403
Estimated insurance claims receivable, current portion 95,542 95,542
Other current assets 93,770 86,140
Total current assets 2,607,181 1,885,297
Assets limited as to use, net of current portion 241,190 291,677
Property, buildings and equipment, net 1,663,569 1,677,765
Estimated insurance claims receivable, net of current portion 538,838 538,838
Other noncurrent assets 427,855 295,522
Due from members, net of current portion 40,334 36,163
Total assets $ 5,518,967 $ 4,725,262
Liabilities and net assets

Current liabilities:
Accounts payable and accrued expenses $ 543,108 $ 521,328
Accrued salaries, wages and related items 389,726 416,678
Professional and other insured liabilities, current portion 69,241 57,547
Estimated insurance claims liabilities, current portion 96,188 94,942
Estimated third-party payer liabilities 109,552 86,216
Long-term debt, current portion 56,809 104,885
Due to members 12,210 4,697
Total current liabilities 1,276,834 1,286,293
Long-term debt, net of current portion 1,457,179 816,493
Noncurrent defined benefit pension and other postretirement health plan liabilities 286,280 296,378
Professional and other insured liabilities, net of current portion 157,462 166,970
Employee deferred compensation 57,817 52,108
Estimated insurance claims liabilities, net of current portion 539,438 539,438
Estimated third-party payer liabilities, net of current portion 225,002 224,855
Other noncurrent liabilities 163,062 88,056
Total liabilities 4,163,074 3,470,591
Commitments and contingencies
Net assets:
Unrestricted 1,201,164 1,096,293
Temporarily restricted 99,350 103,283
Permanently restricted 55,379 55,095
Total net assets 1,355,893 1,254,671
Total liabilities and net assets $ 5,518,967 $ 4,725,262
3
Consolidated Statements of Operations

September 30,
2018 2017
(In Thousands)
Operating revenue
Net patient service revenue before bad debt expense $ 4,072,342 $ 3,905,518
Bad debt expense – (84,780)
Net patient service revenue 4,072,342 3,820,738
Grants and contracts 79,748 71,003
Contributions 6,164 3,647
Other revenue 222,758 161,300
Total operating revenue 4,381,012 4,056,688
Operating expenses
Salaries and wages 1,996,787 1,877,231
Employee benefits 565,311 548,319
Supplies and other expenses 1,615,115 1,457,690
Interest 35,198 28,463
Total operating expenses 4,376,769 4,069,557
Excess (deficiency) of operating revenue over operating expenses before

Value Based Payment and Vital Access Provider Programs 4,243 (12,869)
Value Based Payment and Vital Access Provider Programs 55,323 50,617
Excess of operating revenues over operating expenses
before other items 59,566 37,748
Net realized and changes in net unrealized gains
and losses on marketable and other securities 11,178 35,611
Malpractice insurance program adjustments 42,278 1,209
Net periodic pension and other postretirement benefit costs (non-service
related) (6,423) (4,961)
Grants for the purchase of property, buildings and equipment 5,715 1,521
Change in fair value of derivative instrument 848 330
Gain on debt refinancing 1,949 –
Other nonoperating income 3,719 –
Excess of revenues over expenses 118,830 71,458
Net assets released from restrictions used for purchases of property,
buildings and equipment 2,899 4,011
Transfers to members, net (16,858) (14,868)
Increase in unrestricted net assets $ 104,871 $ 60,601
4
Consolidated Statements of Changes in Net Assets
Unaudited Nine Months Ended September 30, 2018 and 2017
Temporarily Permanently Total Net

Unrestricted Restricted Restricted Assets
(In Thousands)
Net assets at December 31, 2016 $ 1,029,456 $ 105,505 $ 53,177 $ 1,188,138

similar items – 8,061 1,332 9,393
Restricted investment income – (320) – (320)
restrictions – (9,100) – (9,100)
Total changes in net assets 60,601 (1,359) 1,332 60,574
Net assets at September 30, 2017 $ 1,090,057 $ 104,146 $ 54,509 $ 1,248,712
Net assets at December 31, 2017 $ 1,096,293 $ 103,283 $ 55,095 $ 1,254,671

similar items – 3,862 20 3,882
Restricted investment income – 273 264 537
restrictions – (8,068) – (8,068)
Total changes in net assets 104,871 (3,933) 284 101,222
Net assets at September 30, 2018 $ 1,201,164 $ 99,350 $ 55,379 $ 1,355,893
5
Consolidated Statements of Cash Flows

September 30,
2018 2017
(In Thousands)
Operating activities
Increase in net assets $ 101,222 $ 60,601
Adjustments to reconcile increase in net assets to net cash provided by
operating activities:
Bad debt expense – 84,780
Transfers to members, net 16,858 14,868
Net realized gains and losses on marketable and other securities (9,877) (15,069)
Change in net unrealized gains and losses on marketable and other
securities (1,301) (20,542)
Change in fair value of derivative instrument (848) (330)
Equity earnings from investments (26,695) (2,183)
Amortization of long-term mortgage premium (565) (348)
Amortization of deferred financing costs 677 758
Write-off of long-term mortgage premium and deferred financing costs as
a result of debt refinancing 4,005 –
Changes in operating assets and liabilities:
Receivables for patient care (42,023) (102,422)
Accounts payable and accrued expenses 2,280 (24,344)
Accrued salaries, wages and related items (26,952) (30,070)
Noncurrent defined benefit and postretirement health plan liabilities (10,098) 3,103
Net change in all other operating assets and liabilities (2,047) 7,866
Net cash provided by operating activities 168,994 134,522
Investing activities
Acquisition of property, buildings and equipment, net (150,162) (128,974)
Increase in marketable and other securities, net (699,887) (47,114)
Decrease (increase) in assets limited to use, net 50,392 (39,540)
Payments for joint venture investment (25,500) –
Net cash used in investing activities (825,157) (215,628)
Financing activities
Payments of long-term debt (56,060) (51,678)
Extinguishment of long-term debt (575,639) –
Proceeds from long-term debt 1,244,675 67,400
Payments of deferred financing costs (24,482) (208)
Payments to members, net (14,999) (9,371)
Net cash provided by financing activities 573,495 6,143
Net decrease in cash and cash equivalents (82,668) (74,963)

Cash and cash equivalents at beginning of year 398,237 292,252
Cash and cash equivalents at end of period $ 315,569 $ 217,289
Supplemental disclosure of non-cash information

Deferred payments for acquisition of joint venture investment $ (64,500) $ –

6
September 30, 2018

1. Organization
Montefiore Health System, Inc. and its controlled organizations (collectively, the Health System) comprise
an integrated health care delivery system. The facilities are located in the Bronx, Westchester, Rockland and
Orange Counties in New York. The Health System is incorporated under New York State Not-for-Profit
Corporation law and provides health care and related services. Various entities within the Health System are
exempt from Federal income taxes under the provisions of Section 501(a) of the Internal Revenue Code as
organizations described in Section 501(c)(3), while other entities are not exempt from such income taxes
(the entities are collectively referred to herein as the members). The exempt organizations also are exempt
from New York State and local income taxes. Montefiore Medicine Academic Health System, Inc.
(MMAHS) is the sole member of the Health System.
The Health System, together with the members, provides patient care, teaching, research, community
services and care management. The Health System operates many community benefit programs, including
wellness programs, community education programs and health screenings, as well as a variety of community
support services, health professionals’ education, school health programs and subsidized health services.
The accompanying consolidated financial statements include the accounts of the following tax exempt and
taxable organizations. All intercompany accounts and activities have been eliminated in consolidation.
• Montefiore Health System, Inc. (MHS) • Davis Avenue Corporation (d/b/a Westchester Caring
• Montefiore New Rochelle Hospital (MNR) Services)
• Montefiore Mount Vernon Hospital (MMV) • 8 Longview Development Corporation (Longview)
• Schaffer Extended Care Center (SECC) • 11 East Post Road, LLC
• Montefiore SS Holdings, LLC (SS Holdings) • White Plains Medical Diagnostic Services P.C. (Medical
• Montefiore MV Holdings, LLC (MV Holdings) Diagnostic Services)
• Montefiore HA Holdings, LLC (HA Holdings) • Cancer and Blood Medical Services of New York, P.C.
• Montefiore North Ambulatory Care Center, Inc. (Cancer and Blood)
(NAMB) • White Plains Medical Services P.C.
• Montefiore HMO, LLC (MHMO) • The Winifred Masterson Burke Rehabilitation Hospital
• Montefiore Information Technology, LLC (MIT) (Burke)
• Montefiore Nyack Hospital (f/k/a Nyack Hospital) • St. Luke’s Cornwall Hospital (St. Luke’s) and its controlled
(Nyack) and its controlled organizations: organizations:
• Nyack Hospital Foundation, Inc. (Nyack • Hudson Vista Corporation
Foundation) • St. Luke’s Cornwall Health System, Inc.
• Highland Medical P.C. (Highland Medical) • St. Luke’s Cornwall Health System Foundation, Inc.
• White Plains Hospital Center (White Plains) and its • SLCH Insurance Co., Ltd.
controlled organizations: • Amos and Sarah Holden Home
• White Plains Hospital Center Foundation, Inc. • Hudson Vista Physician Services, P.C.
(White Plains Foundation) • Hudson Vista Medical, P.C.
• Goldsmith & Mary B. Johnes Home for Aged Couples
• St. Luke’s Cornwall JV, LLC
7
September 30, 2018

• Montefiore Consolidated Ventures, Inc. (MCV) • Montefiore Medical Center and its controlled organizations
• Hudson Valley IPA, Inc. (HIPA) (collectively, the Medical Center):
• The Montefiore IPA, Inc. (MIPA) • Montefiore Medical Center
• Bronx Accountable Healthcare Network IPA, Inc. • MMC Corporation (MCORP)
(ACO-IPA) • CMO The Care Management Company, LLC (CMO)
• University Behavioral Associates, Inc. (UBA) • Gunhill MRI P.C. (Gunhill)
• Montefiore Behavioral Care IPA No. 1, Inc. • MMC Residential Corp. I, Inc. (Housing I)
(MBCIPA) • Montefiore Hospital Housing Section II, Inc.
• CRHT Acquisition, Inc. (CRHT) (Housing II)
• MMC GI Holdings East, Inc. (GI East) • Mosholu Preservation Corporation (MPC)
• MMC GI Holdings West, Inc. (GI West) • Montefiore Proton Acquisition, LLC (MPRO)
• Montefiore Hudson Valley Collaborative LLC (MHVC)
• Montefiore CERC Operations, Inc. (CERC)
On March 1, 2017, the Medical Center entered into an agreement by which it assigned and transferred all of
its rights, title and interest in the shares of the common stock of MCV and its controlled organizations to
MHS. This transfer did not impact the Health System’s consolidated financial statements.
Effective January 1, 2018, the Health System acquired an equity interest in a joint venture with Crystal Run
Healthcare, LLP for a purchase price of $90.0 million, of which $25.0 million was paid at closing and $20.0
million, $25.0 million and $20.0 million is due on the first, second and third anniversaries of the closing
date, respectively (deferred payments). On January 4, 2018, MHS entered into a loan agreement with a bank
providing for loans of up to $50.0 million to finance the acquisition. In accordance with the purchase
agreement, the Medical Center agreed to guarantee payments made by the MHS under the loan, and entered
into a security agreement by which the Medical Center deposited $30.0 million in escrow as security for the
deferred payments.
Interim Financial Statements

The Health System presumes that users of this unaudited consolidated financial information have read or
have access to the Health System's audited consolidated financial statements which include certain
disclosures required by U.S. generally accepted accounting principles. The audited consolidated financial
statements of the Health System for the years ended December 31, 2017 and 2016 are on file with the
Municipal Securities Rulemaking Board and are accessible through its Electronic Municipal Market Access
Database. Accordingly, footnotes and other disclosures that would substantially duplicate the disclosures
contained in the Health System's most recent consolidated financial statements have been omitted from the
unaudited consolidated financial information. In the opinion of management, all material adjustments
considered necessary for a fair presentation have been included.
Health care operations and the financial results thereof are subject to seasonal variations. Quarterly and
other periodic operating results are not necessarily representative of operations for a full year for various
reasons including patient volumes associated with seasonal illnesses, elective services, variations in interest
rates, infrequent or one-time events and changes in regulatory or industry policies.
8
September 30, 2018

Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of
the consolidated financial statements. Estimates also affect the amounts of revenue and expenses reported
during the period. Actual results could differ from those estimates. Management believes that amounts
recorded based on estimates and assumptions are reasonable. For the nine months ended September 30, 2018
and 2017, there were no material changes in estimates.
Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). The core principle of ASU 2014-
09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The guidance in ASU 2014-09 supersedes the FASB’s current revenue recognition
requirements and most industry-specific guidance. The FASB subsequently issued ASU 2015-14, Revenue
from Contracts with Customers, which deferred the effective dates of ASU 2014-09. Based on ASU 2015-
14, the provisions of ASU 2014-09 became effective for the Health System for annual reporting periods
beginning after December 15, 2017. The Health System adopted ASU 2014-09 effective for its consolidated
financial statements as of and for the nine months ended September 30, 2018. The Health System adopted
ASU 2014-09 following the modified retrospective method of application, and as such the prior period
financial statements have not been adjusted for the adoption of ASU 2014-09. As a result of implementing
ASU 2014-09, certain patient activity where collection is uncertain previously reported as net patient service
revenue and bad debt expense in the Health System’s consolidated statements of operations no longer meets
the criteria for revenue recognition and, accordingly, bad debt expense after the adoption date is significantly
reduced with a corresponding reduction to net patient service revenue. Such patient activity is now classified
as an implicit price concession. Additionally, bad debt expense for the nine months ended September 30,
2018 is now presented as an expense item (included as a component of supplies and other expenses) rather
than a reduction to net patient service revenue. Other aspects of the Health System’s implementation of
ASU 2014-09 impacting net patient service revenue, which include judgments regarding collection analyses
and estimates of variable consideration and the addition of certain qualitative and quantitative disclosures,
are reflected below within Note 2. The adoption of ASU 2014-09 did not have a material impact in relation
to other applicable revenue activity.
In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02), which will require lessees to
report most leases on their balance sheet, but recognize expenses on their income statement in a manner
similar to current accounting. The guidance also eliminates current real estate-specific provisions. For
lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct
financing leases. The provisions of ASU 2016-02 are effective for the Health System for annual periods
beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The
Health System is in the process of evaluating the impact of ASU 2016-02 on its consolidated financial
statements.
9
September 30, 2018

In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Financial Statement Presentation (ASU
2016-14), which eliminates the requirement for not-for-profits (NFPs) to classify net assets as unrestricted,
temporarily restricted and permanently restricted. Instead, NFPs will be required to classify net assets as net
assets with donor restrictions or without donor restrictions. Entities that use the direct method of presenting
operating cash flows will no longer be required to provide a reconciliation of the change in net assets to
operating cash flows. The guidance also modifies required disclosures and reporting related to net assets,
investment expenses and qualitative information regarding liquidity. NFPs will also be required to report all
expenses by both functional and natural classification in one location. The provisions of ASU2016-14 are
effective for the Health System for annual periods beginning after December 15, 2017. Application of ASU
2016-14 to interim periods within the initial year of adoption is permitted, but not required. Early adoption
is permitted. The Health System is in the process of evaluating the impact of ASU 2016-14 on its
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash
Receipts and Cash Payments (ASU 2016-15), which addresses the following eight specific cash flow issues
in order to limit diversity in practice: debt prepayment or debt extinguishment costs; settlement of zero-
coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation
to the effective interest rate of the borrowing; contingent consideration payments made after a business
combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-
owned life insurance policies, including bank-owned life insurance policies; distributions received from
equity method investees; beneficial interests in securitization transactions; and separately identifiable cash
flows and application of the predominance principle. The provisions of ASU 2016-15 are effective for the
Health System for annual periods beginning after December 15, 2018, and interim periods thereafter. Early
adoption is permitted. The Health System is in the process of evaluating the impact of ASU 2016-15 on its
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows – Restricted Cash (ASU 2016-
18), which requires that the statement of cash flows explain the change during the period in the total of cash,
cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts
shown on the statement of cash flows. The provisions of ASU 2016-18 are effective for the Health System
for annual periods beginning after December 15, 2018 and interim periods thereafter. Early adoption is
permitted. The Health System is in the process of evaluating the impact of ASU 2016-18 on its consolidated
Subsequent Events
The Health System evaluated subsequent events through November 29, 2018, which is the date the unaudited
consolidated financial statements were issued, for potential recognition or disclosure in the accompanying
consolidated financial statements for the nine months ended September 30, 2018. Except as noted below,
no subsequent events material to the Health System have occurred that require disclosure in the consolidated
10
September 30, 2018

On November 27, 2018, Mount Sinai Health System, Beth Israel Medical Center, Maimonides Medical
Center and the Medical Center, the owners of Hospitals Insurance Company (HIC) and FOJP Service
Corporation (FOJP), announced their agreement to sell HIC and FOJP to The Doctors Company for $650
million, subject to closing adjustments. The transaction is subject to regulatory approvals and is expected
to close in 2019. HIC has provided the hospitals and related physicians with medical malpractice insurance
for 40 years. The hospitals will share in the proceeds ratably according to their ownership.
2. Net Patient Service Revenue
Effective January 1, 2018 upon the adoption of ASU 2014-09, net patient service revenue is reported at the
amount that reflects the consideration to which the Health System expects to be entitled in exchange for
providing patient care. These amounts are due from patients, third-party payers (including health insurers
and government programs), and others and includes variable consideration (reductions to revenue) for
retroactive revenue adjustments due to settlement of ongoing and future audits, reviews, and investigations.
The Health System uses a portfolio approach to account for categories of patient contracts as a collective
group rather than recognizing revenue on an individual contract basis. The portfolios consist of major payer
classes for inpatient revenue and major payer classes and types of services provided for outpatient revenue.
Based on historical collection trends and other analyses, the Health System believes that revenue recognized
by utilizing the portfolio approach approximates the revenue that would have been recognized if an
individual contract approach were used.
The Health System’s initial estimate of the transaction price for services provided to patients subject to
revenue recognition is determined by reducing the total standard charges related to the patient services
provided by various elements of variable consideration, including contractual adjustments, discounts,
implicit price concessions, and other reductions to the Health System’s standard charges. The Health System
determines the transaction price associated with services provided to patients who have third-party payer
coverage on the basis of contractual or formula-driven rates for the services rendered (see description of
third-party payer payment programs below). The estimates for contractual allowances and discounts are
based on contractual agreements, the Health System’s discount policies and historical experience. For
uninsured and under-insured patients who do not qualify for charity care, the Health System determines the
transaction price associated with services on the basis of charges reduced by implicit price concessions.
Implicit price concessions included in the estimate of the transaction price are based on the Health System’s
historical collection experience for applicable patient portfolios. Under the Health System’s charity care
policy, a patient who has no insurance or is under-insured and is ineligible for any government assistance
program has his or her bill reduced to (1) the lesser of charges or the Medicaid diagnostic-related group for
inpatient and (2) a discount from Medicaid fee-for-service rates for outpatient. Patients who meet the Health
System’s criteria for free care are provided care without charge; such amounts are not reported as revenue.
11

September 30, 2018
Generally, the Health System bills patients and third-party payers several days after the services are
performed and/or the patient is discharged. Net patient service revenue is recognized as performance
obligations are satisfied. Performance obligations are determined based on the nature of the services
provided by the Health System. Net patient service revenue for performance obligations satisfied over time
is recognized based on actual charges incurred in relation to total charges. The Health System believes that
this method provides a reasonable depiction of the transfer of services over the term of the performance
obligation based on the services needed to satisfy the obligation. Generally, performance obligations
satisfied over time relate to patients receiving inpatient acute care services or patients receiving services in
the Health System’s outpatient and ambulatory care centers or in their homes (home care). The Health
System measures the performance obligation from admission into the hospital or the commencement of an
outpatient service to the point when it is no longer required to provide services to that patient, which is
generally at the time of discharge or the completion of the outpatient visit.
As substantially all of its performance obligations relate to contracts with a duration of less than one year,
the Health System has elected to apply the optional exemption provided in ASU 2014-09 and, therefore, is
not required to disclose the aggregate amount of the transaction price allocated to performance obligations
that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially
unsatisfied performance obligations referred to above are primarily related to inpatient acute care services
at the end of the reporting period for patients who remain admitted at that time (in-house patients). The
performance obligations for in-house patients are generally completed when the patients are discharged,
which for the majority of the Health System’s in-house patients occurs within days or weeks after the end
of the reporting period.
Subsequent changes to the estimate of the transaction price (determined on a portfolio basis when applicable)
are generally recorded as adjustments to patient service revenue in the period of the change. For the nine
months ended September 30, 2018, changes in the Health System’s estimates of implicit price concessions,
discounts, contractual adjustments or other reductions to expected payments for performance obligations
satisfied in prior years were not significant. Portfolio collection estimates are updated based on collection
trends. Subsequent changes that are determined to be the result of an adverse change in the patient’s ability
to pay (determined on a portfolio basis when applicable) are recorded as bad debt expense. Bad debt expense
for the nine months ended September 30, 2018 was not significant.
The Health System has determined that the nature, amount, timing and uncertainty of revenue and cash flows
are affected by the following factors: payers, lines of business and timing of when revenue is recognized.
Tables providing details of these factors are presented below.
Net patient service revenue for the nine months ended September 30, 2018, by payer is as follows
(in thousands):
Medicare and Medicare managed care $ 1,403,814

Medicaid and Medicaid managed care 1,140,496
Commercial carriers and managed care 1,488,402
Self-pay and other 39,630
$ 4,072,342
12
September 30, 2018

Deductibles, copayments and coinsurance under third-party payment programs which are the patient’s
responsibility are included within the self-pay and other category above.
Net patient service revenue for the nine months ended September 30, 2018 by line of business is as follows
(in thousands):
Inpatient services $ 2,087,539

Physician and other outpatient services 1,275,687
Emergency department 144,317
Member premium revenue 549,474
All other 15,325
$ 4,072,342
The Health System has elected the practical expedient allowed under ASU 2014-09 and does not adjust the
promised amount of consideration from patients and third-party payers for the effects of a significant
financing component due to the Health System’s expectation that the period between the time the service is
provided to a patient and the time that the patient or a third-party payer pays for that service will be one year
or less. However, the Health System does, in certain instances, enter into payment agreements with patients
that allow payments in excess of one year. For those cases, the financing component is not deemed to be
significant to the contract.
At September 30, 2018, accounts receivable is comprised of the following components (in thousands):
Patient receivables $ 374,182

Contract assets 82,100
$ 456,282
Contract assets are related to in-house patients who were provided services during the reporting period but
were not discharged as of the reporting date and for which the Health System does not have the right to bill.
The allowance for doubtful accounts was not significant at September 30, 2018. The allowance for doubtful
accounts was approximately $64.3 million at December 31, 2017.
Settlements with third-party payers (see description of third-party payer payment programs below) for cost
report filings and retroactive adjustments due to ongoing and future audits, reviews or investigations are
considered variable consideration and are included in the determination of the estimated transaction price
for providing patient care. These settlements are estimated based on the terms of the payment agreement
with the payer, correspondence from the payer and the Health System’s historical settlement activity (for
example, cost report final settlements or repayments related to recovery audits), including an assessment to
ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Such
estimates are determined through either a probability-weighted estimate or an estimate of the most likely
amount, depending on the circumstances related to a given estimated settlement item.
13
September 30, 2018

Estimated settlements are adjusted in future periods as adjustments become known (that is, new information
becomes available), or as years are settled or are no longer subject to such audits, reviews, and investigations.
Adjustments arising from a change in the transaction price were not significant for the nine months ended
September 30, 2018.
Under certain managed care contracts, the Health System receives from the insurer a monthly premium per
enrollee during the term of enrollment. The premium revenue, which is based on individual contracts, is
recognized in the period earned and is included within net patient service revenue in the accompanying
consolidated statements of operations. Under such arrangements, the Health System manages and, directly
and through arrangements with other health care providers, delivers health care services to enrollees in
accordance with the terms of the subscriber agreements.
Prior to the adoption of ASU 2014-09, the Health System recognized patient service revenue at the estimated
net realizable amounts associated with services provided to patients who have third-party payer coverage on
the basis of contractual or formula-driven rates for the services rendered and included estimated retroactive
revenue adjustments due to ongoing and future audits, reviews and investigations. Retroactive adjustments
were considered in the recognition of revenue on an estimated basis in the period that related services were
rendered, and such amounts adjusted in future periods as adjustments became known or as years were no
longer subject to such audits, reviews and investigations.
Net patient service revenue, net of contractual allowances and discounts, for the nine months ended
September 30, 2017, is as follows (in thousands):
Patient service revenue (net of contractual allowances and

discounts) $ 3,905,518
Bad debt expense (84,780)
Net patient service revenue $ 3,820,738
3. Third-Party Payment Programs
The Health System has agreements with third-party payers that provide for payment for services rendered
at amounts different from its established rates. A summary of the payment arrangements with major third-
party payers follows:
Medicare Reimbursement: Hospitals are paid for most Medicare patient services under national
prospective payment systems and other methodologies of the Medicare program for certain other
services. Federal regulations provide for adjustments to current and prior years’ payment rates, based on
industry-wide and hospital-specific data.
14
September 30, 2018

3. Third-Party Payment Programs (continued)
Non-Medicare Reimbursement: In New York State, hospitals and all non-Medicare payers, except
Medicaid, workers’ compensation and no-fault insurance programs, negotiate hospitals’ payment rates.
If negotiated rates are not established, payers are billed at hospitals’ established charges. Medicaid,
workers’ compensation and no-fault payers pay hospital rates promulgated by the New York State
Department of Health (DOH). Payments to hospitals for Medicaid, workers’ compensation and no-fault
inpatient services are based on a statewide prospective payment system, with retroactive adjustments.
Outpatient services also are paid based on a statewide prospective system. Medicaid rate methodologies
are subject to approval at the Federal level by the Centers for Medicare and Medicaid Services (CMS),
which may routinely request information about such methodologies prior to approval. Revenue related
to specific rate components that have not been approved by CMS is not recognized until the Health
System is reasonably assured that such amounts are realizable. Adjustments to the current and prior
years’ payment rates for those payers will continue to be made in future years.
Other Third-Party Payers: The Health System also has entered into payment agreements with certain
commercial insurance carriers and health maintenance organizations. The basis for payment to the
Health System under these agreements includes prospectively determined rates per discharge or days of
hospitalization and discounts from established charges.
Medicare and Medicaid regulations require annual retroactive settlements for reimbursements through cost
reports filed by the various Health System hospitals. These retroactive settlements are estimated and
recorded in the consolidated financial statements in the year in which they occur. The estimated settlements
recorded at September 30, 2018 and December 31, 2017 could differ from actual settlements based on the
results of cost report audits.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and
subject to varying interpretation. As a result of investigations by governmental agencies, various health care
organizations have received requests for information and notices regarding alleged noncompliance with
those laws and regulations, which, in some instances, have resulted in organizations entering into significant
settlement agreements. Compliance with such laws and regulations may also be subject to future government
review and interpretation as well as significant regulatory action, including fines, penalties, and potential
exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge
the Health System’s compliance with these laws and regulations, and it is not possible to determine the
impact (if any) such claims or penalties would have upon the Health System. The Health System is not
aware of any allegations of non-compliance that could have a material adverse effect on the accompanying
consolidated financial statements and believes that it is in compliance with all applicable laws and
regulations. In addition, certain contracts the Health System has with commercial payers also provide for
retroactive audit and review of claims.
15
September 30, 2018

4. Benefit Plans
Certain entities in the Health System provide pension and similar benefits to their employees through several
plans, including various multiemployer plans for union employees, two noncontributory defined benefit
pension plans for eligible employees of the Medical Center, a noncontributory defined benefit pension plan
for eligible employees of Nyack, a noncontributory defined benefit retirement plan covering employees of
White Plains (frozen in 2006), a noncontributory defined benefit retirement plan for St. Luke’s employees
(frozen in 2010), and a noncontributory defined benefit pension plan for employees of Burke (frozen
effective December 31, 2017) (the non-multiemployer plans are collectively referred to as the Pension
Plans). The entities also provide several other contributory defined contribution plans.
It is the policy for the entities to contribute amounts sufficient to meet funding requirements in accordance
with the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006.
Amounts contributed to the Pension Plans are based on actuarial valuations. The benefits for participants or
their beneficiaries in the Pension Plans are based on years of service and employees’ compensation during
their years of employment as applicable to each plan.
Certain entities in the Health System provide certain health care and life insurance benefits to certain eligible
retired non-union employees and their dependents through several defined benefit postretirement or health
and welfare plans (the Postretirement Plans).
Total expense related to these plans included in employee benefits expense in the accompanying
consolidated statements of operations, aggregated approximately $123.9 million and $118.9 million for the
nine months ended September 30, 2018 and 2017, respectively. Cash payments relative to the various
pension plans aggregated approximately $145.7 million and $127.9 million for the nine months ended
September 30, 2018 and 2017, respectively.
The following table provides the components of the net periodic benefit cost for the nine months ended
September 30, 2018 and 2017:
Pension Plans Postretirement Plans

2018 2017 2018 2017
(In Thousands)
Service cost $ 5,656 $ 5,753 $ 9,484 $ 8,641
Interest cost 9,136 13,916 5,527 5,355
Expected return on plan assets (12,110) (15,331) – –
Amortization of prior
service cost (benefit) 34 252 (1,334) (1,335)
Amortization of net loss 1,354 691 2,659 1,413
Settlement cost 1,157 – – –
Net periodic benefit cost $ 5,227 $ 5,281 $ 16,336 $ 14,074
16
September 30, 2018

5. Long-Term Debt
In August 2018, three series of bonds were issued; the Dormitory Authority of the State of New York
(DASNY) Montefiore Obligated Group Revenue Bonds, Series 2018A (Tax-Exempt); the DASNY
Montefiore Obligated Group Revenue Bonds, Series 2018B (Federally Taxable); and the Montefiore
Obligated Group Taxable Bonds, Series 2018C (collectively, the 2018 Bonds) in the aggregate amount of
approximately $1,167 million. The proceeds from the issuance of the 2018 Bonds were used to refund or
refinance approximately $575.6 million of existing indebtedness, to provide working capital, and to fund
future capital projects. As a result of the refinancing, the Health System recorded a gain on refinancing of
approximately $1.9 million. The 2018 Bonds are general obligations of the Montefiore Obligated Group (of
which the Medical Center is currently the only member) and further secured by a mortgage on certain real
property.
6. Commitments and Contingencies
Litigation: Claims have been asserted against the Health System by various claimants arising out of
the normal course of its operations. The claims are in various stages of processing and some may ultimately
be brought to trial. Also, there are known incidents occurring through September 30, 2018 that may result
in the assertion of additional claims, and other claims may be asserted arising from services provided to
patients in the past. Health System management and counsel are unable to conclude about the ultimate
outcome of the actions. However, it is the opinion of Health System management, based on prior experience
that adequate insurance is maintained and adequate provisions for professional liabilities, where applicable,
have been established to cover all significant losses and that the eventual liability, if any, will not have a
material adverse effect on the Health System’s consolidated financial position.
Federation of Jewish Philanthropies (FOJP): In February 2014, the FOJP program and the various affiliated
captive insurance companies began an internal investigation into several insurance regulatory and related
matters that had come to the attention of the FOJP companies’ management. The FOJP Companies and legal
counsel reported the preliminary investigative findings to the New York State Department of Financial
Services (DFS), the primary State insurance regulator throughout the investigation. DFS also conducted its
own investigation of the issues that were raised and related matters. During 2017, the FOJP companies and
DFS resolved the outstanding matters through an agreed stipulation which did not have a material effect on
the Health System’s consolidated financial statements.
In June 2018, the Medical Center recorded approximately $42.3 million of malpractice insurance program
adjustments; approximately $30.8 million related to retroactive premium adjustments and approximately
$11.5 million relating to investment gains at the captive insurance companies.
17
September 30, 2018

Albert Einstein College of Medicine, Inc.: On September 9, 2015, a controlled member of MMAHS, Albert
Einstein College of Medicine, Inc. (Einstein), acquired substantially all of the assets and assumed
substantially all of the liabilities of a medical school operating as a division of Yeshiva University (YU). In
connection with this transaction, Build NYC Resource Corporation loaned to Einstein, under a loan
agreement, the proceeds of $175.0 million Build NYC Resource Corporation Revenue Bonds. In accordance
with their terms, the bonds were tendered by the original bondholder and remarketed on January 28, 2016.
Prior to the remarketing, the required interest and principal payments on the bonds were guaranteed by the
Medical Center. The Medical Center was not required to make any payments under the guarantee, which
terminated upon the remarketing of the bonds on January 28, 2016.
In addition, on September 9, 2015, Einstein issued to YU a promissory note (the Note) under which it was
obligated to pay to YU twenty annual payments of $12.5 million beginning September 2017, followed by a
final, twenty-first payment of $20.0 million in September 2037. Pursuant to a guaranty agreement (Guaranty
Agreement), the Medical Center guaranteed Einstein’s obligation to make payments under the Note. If the
Medical Center was required to make payments under the Guaranty Agreement, Einstein would have been
obligated to repay the Medical Center, in full, over five years with interest. The Medical Center’s right to
repayment was subordinate in certain respects to Einstein’s obligation to make payments on the Build NYC
Resource Corporation Revenue Bonds.
In April 2017, the Note was cancelled and exchanged with three Replacement Negotiable Promissory Notes
(the Replacement Notes) in the total principal amount of $162.2 million. The Replacement Notes carry
interest rates ranging from 4.52% to 5.74% effective March 17, 2017. The Guaranty Agreement was
amended to cover payments made by Einstein under the Replacement Notes. On May 1, 2017, the aggregate
amounts payable by Einstein under the Replacement Notes were amended to $3.8 million in 2017, with
annual payments of $8.3 million from 2018 to 2020, $36.0 million in 2021, $12.5 million from 2022 to 2036,
followed by a final payment of $20.0 million in 2037.
In September 2017 and March 2018, approximately $1.5 million and $4.2 million, respectively, was paid by
the Medical Center on Einstein’s behalf pursuant to the Guaranty Agreement, as amended. Einstein is
obligated to repay the Medical Center in full, over five years beginning in September 2018 with interest rates
ranging from 4.73% to 5.58%. At September 30, 2018 and December 31, 2017 amounts due and payable
were approximately $5.5 million and $1.5 million, respectively.
The Medical Center has an agreement to provide operating subsidies to Einstein over a five-year period
commencing September 2015 in an aggregate amount of up to $80.0 million. The Medical Center will
provide this subsidy in varying amounts to be funded upon the receipt and approval of documentation of
unreimbursed research expenses incurred. The subsidy will total an amount not to exceed $10.0 million per
year in each of the first two years, and not to exceed $20.0 million per year in each of the third, fourth and
fifth years. During the nine months ended September 30, 2018 and 2017, the Medical Center made capital
contributions of approximately $15.0 million and $9.4 million, respectively, to Einstein in accordance with
this agreement.
18
September 30, 2018

The Medical Center has also agreed to provide loans to Einstein in an aggregate amount of up to $75 million
as necessary to allow it to meet its cash flow requirements. The first loan was funded in 2017 in the amount
of $35.0 million, to be repaid by Einstein over a five year period in equal annual installments, commencing
in December 2020 at an annual interest rate of 5.20%. At September 30, 2018 and December 31, 2017
amounts due and payable were approximately $36.4 million and $35.0 million, respectively.
In March 2018, the Medical Center entered into a commitment to provide financial support, including
working capital and bridge financing, as necessary, to Einstein in order for Einstein to meet its operational
needs.
Other: At September 30, 2018 and December 31, 2017, approximately 57% of the Health System’s
employees were covered by collective bargaining agreements. The Medical Center, MNR, MMV and SECC
entered into collective bargaining agreements with NYSNA which will expire in December 2018. Nyack’s
contract with NYSNA was effective through December 31, 2017. A new contract is currently being
negotiated. For the duration of the negotiations, NYSNA employees are being compensated under the terms
of the previous contract. The Medical Center, MNR, MMV and SECC collective bargaining agreements
with 1199SEIU will expire in September 2021 and St. Luke’s collective bargaining agreement with
1199SEIU will expire in September 2018 and is currently being negotiated. Nyack’s and White Plains’
contracts with 1199SEIU expire on April 30, 2019.
In connection with agreements entered into between MIPA and several health insurance companies, the
Medical Center has agreed to guarantee the performance and payment of certain hospital, physician and
administrative services.
In September 2018, the Health System entered into a commitment to loan up to $12.5 million to St. John’s
Riverside Hospital (SJRH) to support its working capital and operational needs. No amounts have been
loaned at September 30, 2018. In August 2018, SJRH’s board voted to begin exclusive negotiations to join
the Health System. SJRH and the Health System currently have a clinical affiliation.
19
September 30, 2018

7. Fair Value Measurements
For assets and liabilities required to be measured at fair value, the Health System measures fair value based
on 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. Fair value measurements are applied based on the unit
of account from the Health System’s perspective. The unit of account determines what is being measured by
reference to the level at which the asset or liability is aggregated (or disaggregated) for purposes of applying
other accounting pronouncements.
The Health System follows a valuation hierarchy that prioritizes observable and unobservable inputs used
to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for
identical assets or liabilities
Level 2: Observable inputs that are based on inputs not quoted in active markets, but corroborated by
market data.
Level 3: Unobservable inputs are used when little or no market data is available.
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. In determining fair value, the Health System uses valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the
extent possible and considers nonperformance risk in its assessment of fair value.
20
September 30, 2018

Financial assets carried at fair value, including assets invested in the Health System’s defined benefit pension
plans, are classified in the table below in one of the three categories described above as of September 30,
2018:
September 30, 2018

(In Thousands)
Assets
Managed cash and cash
equivalents held for investment 395,699 – – 395,699
Non-equity mutual funds 130,912 – – 130,912
Equity securities 89,362 – – 89,362
Corporate debt – 793,811 – 793,811
Investment contracts – 2,295 – 2,295
1,077,255 844,652 – 1,921,907
Defined benefit pension plan
assets
232,306 2,445 – 234,751
$ 1,309,561 $ 847,097 $ – $ 2,156,658
value (defined benefit pension
plan assets) 109,728
$ 2,266,386
21
September 30, 2018

Financial assets carried at fair value, including assets invested in the Health System’s defined benefit pension
plans, are classified in the table below in one of the three categories described above as of December 31,
2017:
December 31, 2017

(In Thousands)
Assets
Equity securities 107,234 – – 107,234
Corporate debt – 266,888 – 266,888
974,441 347,569 – 1,322,010
Defined benefit pension plan
assets
237,032 2,406 – 239,438
$ 1,211,473 $ 349,975 $ – $ 1,561,448
value (defined benefit pension
plan assets) 110,156
$ 1,671,604
22
September 30, 2018

At September 30, 2018 and December 31, 2017, the Health System’s alternative investments and collective
trusts, excluding those within the defined benefit plan, are reported using the equity method of accounting
in the amount of approximately $159.7 million and $181.6 million, respectively, and, therefore, are not
included in the tables above.
The following is a description of the Health System’s valuation methodologies for assets measured at fair
value. Fair value for Level 1 is based upon quoted market prices. Fair value for Level 2 is based on quoted
prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets
that are not active and model-based valuation techniques for which all significant assumptions are observable
in the market or can be corroborated by observable market data for substantially the full term of the assets.
Inputs are obtained from various sources, including market participants, dealers and brokers. The methods
described above may produce a fair value that may not be indicative of net realizable value or reflective of
future fair values. Furthermore, while the Health System believes its valuation methods are appropriate and
consistent with other market participants, the use of different methodologies or assumptions to determine
the fair value of certain financial instruments could result in a different estimate of fair value at the reporting
date.
23

Montefiore Health System Q3 2018 Financials

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Montefiore Health System Q3 2018 Financials

Загружено:

Авторское право:

Доступные форматы

Montefiore

THE UNIVERSITY HOSPITAL FOR

November 29, 2018

Mr. Larry N. Volk

Ms. Diana O'Brien

Dear Mr. Volk and Ms. O'Brien:

• Interim Unaudited Consolidated Financial Statements (MMC and MHS)

• Supplemental Master Indenture For Obligation No. 1, dated as of August I, 2018

If you have any questions, please call me at (914) 349-84 73.

cc: Alan Sileo Lindsay Baker Quintanna Walker -BNYMellon

11 1 East 2101• Street

Nine Months Ended

(1) Excludes normal newborns

Nine Months Ended

Consolidated Financial Statements (Unaudited)

Consolidated Statements of Financial Position Page 3

Consolidated Statements of Operations Page 4

Consolidated Statements of Changes in Net Assets Page 5

Consolidated Statements of Cash Flows Page 6

Notes to Consolidated Financial Statements Page 7

Consolidated Statements of Financial Position

Liabilities and net assets

See accompanying notes.

Consolidated Statements of Operations

Unaudited Nine Months Ended

Excess of operating revenues over operating expenses

See accompanying notes.

Consolidated Statements of Changes in Net Assets

Unaudited Nine Months Ended September 30, 2018 and 2017

Temporarily Permanently Total Net

Net assets at December 31, 2016 $ 689,397 $ 78,181 $ 31,704 $ 799,282

Net assets at December 31, 2017 $ 732,749 $ 78,062 $ 33,606 $ 844,417

See accompanying notes.

Consolidated Statements of Cash Flows

Unaudited Nine Months Ended

Net decrease in cash and cash equivalents (96,775) (62,207)

See accompanying notes.

Notes to Consolidated Financial Statements (Unaudited)

• Montefiore Medical Center • Montefiore Consolidated Ventures, Inc. (MCV),

All intercompany accounts and activities have been eliminated in consolidation.

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Total operating revenue $ 90,590

Excess of revenues over expenses $ 1,671

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Interim Financial Statements

Recent Accounting Pronouncements

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

2. Net Patient Service Revenue

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Medicare and Medicare managed care $ 846,708

Inpatient services $ 1,593,643

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

Patient receivables $ 214,183

Patient service revenue (net of contractual allowances and discounts) $ 2,605,717

Notes to Consolidated Financial Statements (Unaudited)