This document is dated as of July 26, 2019

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS. Certain ofthe discussions

included in the following document may include certain "forward-looking statements" which involve
known and unknown risks and uncertainties inherent in the operation of healthcare facilities. Actual
actions or results may differ materially from those discussed below. Specific factors that might cause such
differences include competition from other healthcare facilities in the service area ofNYU Winthrop
Hospital and Subsidiaries facilities, federal and state regulation of healthcare providers, and reimbursement
policies of the state and federal governments and managed care organizations. In particular, statements
preceded by, followed by or that include the words "believes," "estimates," "expects," "anticipates,"
"plans," "intends," "scheduled" or other similar expressions are or may constitute forward-looking
statements. NYU Winthrop Hospital and Subsidiaries does not undertake to update any of the statement in
light of new information or future events, except to the extent required by applicable law.

QUARTERLY REPORT
For the third quarter ended May 31, 2019

Concerning

NYU Winthrop Hospital and Subsidiaries

The information in this report

has been provided by
NYU Winthrop Hospital and Subsidiaries

Contact Person:
Palmira M. Cataliotti
Sr. Vice President/CFO

Telephone: 516-663-2311
 NYU Winthrop Hospital and Subsidiaries

Unaudited Consolidated Financial Statements

For the nine months ended

May 31, 2019 and May 31, 2018
(UNAUDITED)
 NYU Winthrop Hospital and Subsidiaries
For the nine months ended
May 31, 2019 and May 31, 2018

Page Table Of Contents

1- v1. Management Discussion & Analysis

1. Utilization and Payor Mix

2. Liquidity

3. Consolidated Statements Of Financial Position

4. Consolidated Statements Of Activities

5. Consolidated Statements Of Changes In Net Assets

6. Consolidated Statements Of Cash Flows

7.-10. Notes To Financial Statements

 NYU Winthrop Hospital and Subsidiaries

Management Discussion and Analysis

For the nine Months ended May 31, 2019 and May 31, 2018

Management's Discussion of Recent Operations and Financial Position of NYU Winthrop Hospital and
Subsidiaries ("NYU Winthrop")

Operations

For the nine months ended May 31, 2019 NYU Winthrop's operating gain was $148.5 million, a 11.1%
operating margin compared to $29.4 million and a 2.4% operating margin for the comparable prior year
period. The increase is primarily attributable to increased revenue discussed further below. Operating
revenue was $1.3 billion; 95% from patient revenue and 5% from other sources. Included in other sources
is $35.6 million as a result of revenue received from the demutualization of NYU Winthrop's former
insurance program, MLMIC.

The following chart represents results for the nine months ended May 31, 2019 and May 31, 2018,
respectively.

Gain from Operations and Operating Margin

($ in millions)(Unaudited)
$160.0 11.1% 13.0%

$140.0 11.0% I

$120.0 9.0%
7.0%
$100.0
5.0%
$80.0
3.0%
$60.0
1.0%
$40.0 -1.0%
$20.0 -3.0%
$29.4
~ ~-~
Nine Months Ended 5/31/18 Nine Months Ended 5/31/19

Gain from Operations ~ Operating Margin

Net patient service revenue totaled $1.3 billion for the nine months ended May 31, 2019, 49% from
inpatient operations and 51% from outpatient operations. For the comparable prior year period, net
patient service revenue totaled $1.2 billion, 48% from inpatient operations and 52% from outpatient
operations. Management attributes net patient service revenue growth primarily to increases in volume
and increased patient acuity.
 Volume
70,000
61,211 62,455
60,000

50,000

40,000

30,000 25,656 26,180

19,541 20,032
20,000 15,675 16,186

10,000

0
Inpatient Discharges Emergency Room Visits Infusion/ Chemotherapy Radiation Therapy

Nine Months Ended 5/31/18 Nine Months Ended 5/31/19

Case Mix
2.5

1.98
1.91
2.0

1.52 1.58
1.5 1.33 1.32 1.34
1.22

1.0

0.5

Medicare/Medicare HMO Medicaid/Medicaid HMO Commercial Total

Nine Months Ended 5/31/18 Nine Months Ended 5/31/19

Operating expenses were $1.2 billion for the nine months ended May 31, 2019, the same as for the period
ended May 31, 2018. Salaries and Benefits were $606.2 million for the nine months ended May 31, 2019,
compared to $714.7 million for the nine months ended May 31, 2018. Management attributes the
decrease to the transfer of employed practice physicians to the NYU School of Medicine Faculty Group
Practice (the "FGP") effective January 1, 2019. Support for a portion of the physician salary costs is
included in the FGP subsidy line item on the statement of activities. Supplies and other expenses were
$401.8 million for the nine months ended May 31, 2019, compared to $360.0 million for the nine months
ended May 31, 2018. This increase correlates to an overall increase in volume. In addition, operating
expenses for the nine months ended May 31, 2019 include corporate allocations from the NYU Langone
Health System (the "System") in the amount of $32.7 million.

ii
The following non-operating gains and losses were recorded for the six months ended May 31, 2019:

• ($11.0) million of realized gains and unrealized losses on investments

• $11.3 million of other components of pension and postretirement costs.

The following other changes in unrestricted net assets, after an excess of revenue and gains over expenses
and losses of $148.8 million, were recorded for the nine months ended May 31, 2019, resulting in a $25.7
million increase in unrestricted net assets:

• ($103.8) million pension related changes other than net periodic benefit cost primarily
attributable to the decline in the pension benefit obligation discount rate
• ($20.4) million in equity transfer to the NYU School of Medicine as startup costs of the employed
physicians that moved to the FGP in January 1, 2019
• $1.0 million in contributions for capital assets acquisitions
• $0.1 million in net assets released from restrictions for capital purposes

Financial Position

As of May 31, 2019, cash and investments totaled $375.0 million, an increase of $111.7 million as
compared to August 31, 2018. Cash increased by $113.7 million offset partly by a decrease in investments
of $2.0 million. Days' cash on hand increased to 89 days, as compared to 62 in August 31, 2018.
Management attributes the improvement primarily to an increase in operating margin, $35.6 million
received from the MLMIC demutualization payout and an improvement in overall cash management.

The following chart represents the total unrestricted cash and investments, in thousands, included in the
days' cash on hand calculations at May 31, 2019 and August 31, 2018.

Total Unrestricted Cash and Investments and Days Cash on

Hand
($ in thousands) (Unaudited)
$400,000 89 100
90
$300,000 80
62 70
$200,000 $375,027 60
$263,306 50
$100,000
40
$- 30
8/31/2018 5/31/2019

Unrestricted Cash and Investments -+-Days Cash on Hand

As of May 31, 2019, the defined benefit plan projected benefit obligation ("PBO") was at 68% funded
status, with a remaining gap of $292.5 million. On an accrued benefit obligation ("ABO") basis, the plan
is 72% funded with a remaining gap of $239.6 million. Comparatively, as of August 31, 2018, the PBO was

iii
at a 75% funding level with a remaining gap of $202 million; on an ABO basis, the plan was at a 80%
funding level with a remaining gap of $154 million. Management attributes the decline in funded
percentages due to the decline in the discount rate.

Management's Discussion of Recent Utilization

For the nine months ended May 31, 2019, NYU Winthrop experienced volume and case mix growth across
multiple service lines, as shown in the graphs on page ii. Average length of stay at May 31, 2019 decreased
to 4.82 as compared to 4.89 for the prior comparable period. The Medicare case mix index adjusted
length of stay improved to 2.71 for the nine months ended May 31, 2019 as compared to 2.80 for the
prior comparable period.

Current Activities

NYU Langone Health System affiliation

On April 1, 2017, the System became the sole member of Winthrop-University Hospital Association and
Winthrop-University Hospital Association's corporate name was changed to "NYU Winthrop Hospital"
("NYU Winthrop"). The System is not a member of the NYU Winthrop Obligated Group. The System
committed to expend at least $100 million through a subordinated, non-interest bearing loan to NYU
Winthrop to improve the operations of NYU Winthrop and its affiliates and realize cost efficiencies.
Pursuant to the terms of the Affiliation Agreement, in the second phase of the affiliation, which was
originally scheduled to occur no later than April 1, 2022, NYU Winthrop will merge with and into NYU
Langone Hospitals ("NYULH"), an affiliate hospital ofthe System, and the loan will be forgiven. Until NYU
Winthrop merges with and into NYULH, none of the System, NYULH or any of their affiliates will have any
obligation with respect to the NYU Winthrop Obligated Group's outstanding debt.

On November 13, 2018 the NYU Winthrop board voted to accelerate the planned merger with and into to
NYULH on or about August 2019, and the NYULH and Health System Boards approved such action on
November 26, 2018. Upon completion of the merger, the loans will be forgiven. Regulatory approval for
the merger has been obtained, and the merger is expected to be implemented on or about August 1,
2019. Once the merger is completed, all of the assets and all of the liabilities of NYU Winthrop will become
assets and liabilities of NYULH.

loans with NYU Langone Hospitals

NYU Winthrop and NYULH entered into two loans, in September 2017 and October 2017, in the amounts
of $48.1 million and $45.0 million, respectively. The loans are primarily for information technology ("IT")
integration and Epic implementation in addition to equipment purchases and various renovations. As of
May 31, 2019, $86.3 million is outstanding. The terms of these loans allow for forgiveness of debt upon
the planned full asset merger.

iv
Epic Ambulatory Implementation

NYU Winthrop has embarked on a network integration strategy supported by enhanced clinical and
financial information technology systems. A portion of the common platform is facilitated by Epic, a
shared ambulatory IT platform that will include technology designated to support clinical, quality and
financial improvement. The Epic Ambulatory implementation occurred in fiscal year 2018 and included
over 120 locations, affecting approximately 187,000 patients in the NYU Winthrop ambulatory network,
600 employed providers and 1,900 support staff and other users. It is anticipated that Epic will be installed
across the NYU Winthrop enterprise by October 2019.

PeopleSoft Implementation

NYU Winthrop implemented the PeopleSoft Financials IT system on September 1, 2018. PeopleSoft
Financials is an Enterprise Resource Planning tool that is used to initiate and manage most of the activities
that are performed in the Finance and Supply Chain areas across NYULH. The Winthrop PeopleSoft
Financials Integration Project encompassed all activities that were necessary to bring the NYU Winthrop
organization into closer coordination with the NYULH's PeopleSoft Financials. Work began in May 2017
with organizational and project planning activities and concluded with the "go-live" event on September
1, 2018.

Merger with Lutheran Certified Home Health Agency

NYU Winthrop received final approval in August 2018 from the New York State Department of Health to
merge the Lutheran Certified Home Health Agency ("Lutheran CHHA") into the NYU Winthrop Certified
Home Health Agency ("NYU Winthrop CHHA"). Historically, NYULH did not have internal home health
care capabilities. The service was provided primarily by the Visiting Nurse Service of New York. As a result
of the relationship between the Lutheran CHHA and the NYU Winthrop CHHA, NYULH will have the ability
to provide home health services. The merger of the CHHAs will offer patient care covering the five
boroughs of New York City and Nassau and Suffolk counties.

Joint Commission
In March 2019, NYU Winthrop Hospital received the Joint Commission' s Gold Seal for Inpatient Diabetes
Care, making the hospital the only academic medical center in New York State to receive this
recognition. In addition, the hospital recently received the Gold Seal of the Joint Commission for
Perinatal Care.

Newsday ranking
Following a survey of employees on Long Island by Newsday. Newsday named NYU Winthrop Hospital
one of the top places to work in the fall of 2018. In addition, NYU Winthrop Hospital was recognized as
hospital of the year by Long Island Business News.

V
U.S. News & World Report rankings

NYU Winthrop Hospital was named one of the " Best Regional Hospitals" in the New York Metro Area for
2018-2019 by U.S. News & World Report. NYU Winthrop ranked #6 in New York and #8 in the entire New
York Metro area. In addition, NYU Winthrop was recognized for 11 high performing types of care, which
include seven high performing specialties and four procedures and conditions of common care.

NYU Winthrop was also named to U.S. News & World Report's 2018-2019 "Best Children's Hospitals"
rankings for demonstrating excellence in the specialty of pediatric diabetes and endocrinology.

Healthgrades ranking

NYU Winthrop Hospital was named a " Distinguished Hospital for Clinical Excellence" by Healthgrades for
2018, placing the Hospital in the top 5% of hospitals nationwide for the fourth consecutive year.

vi
 NYU Winthrop Hospital and Subsidiaries
Utilization & Payor Mix
Nine Months Ended May 31, 2019 and May 31, 2018

Utilization 2019 2018

Discharges (less Newborn) 26,180 25,656
Patient Days (less Newborn) 126,380 125,372
Average Length of Stay 4.82 4.89
% of Occupancy (based on
available beds) 90.4% 89.9%
Medicare CMI Adjusted Length of Stay 2.71 2.80
Normal Newborn Discharges 2,209 2,384
Emergency Room Visits 62,455 61 ,211
Emergency Room Treat and
Release Visits 43,962 43,899
Observation Visits 3,408 634
Clinic Visits 35,332 35,855
Ambulatory Surgery Visits 20,072 19,300
Outpatient Visits 217,776 210,472
Certified Beds 591 591
Robotic Surgery 1,448 1,131
Cyberknife 2 ,115 2,085
Sleep Studies 2,599 2,459
Infusion/Chemotherapy 20,032 19,541
Radiation Therapy 16,186 15,675
Average Beds Available 511 511
Medicare Case Mix Index 2.01 1.98

Revenue Payor Mix 2019 2018

Medicare/Managed Medicare 29.71 % 32.76%
Medicaid/Managed Medicaid 7.54% 7.25%
Blue Cross 30.73% 25.86%
Managed Care 29.94% 32.04%
Worker Comp/No Fault 1.11 % 0.96%
Self Pay/Other 0.98% 1.13%
Total 100 00% 100 00%

-1-
 NYU Winthrop Hospital and Subsidiaries

Liquidity

Nine Months Year

Ended Ended
3/31/2019 8/31/2018
(Unaudited) (Audited)

Cash and cash equivalents (1) $ 243,370,883 $ 129,692,586

Marketable securities and Investments 131 ,655,884 133,613,421
Total cash and investments $ 375,026,767 $ 263,306,007

Operating Expenses (2) $ 1,610,196,151 $ 1,614,771,397

Less: Depreciation and amortization (2) 78,569,149 69,592,746
Adjusted operating expenses (2) $ 1,531 ,627,002 $ 1,545,178,651

Gross Days Cash on Hand 89 62

Net Days Cash on Hand (3) 83 56

(1) Cash and cash equivalents includes any outstanding amounts under lines of credit.
(2) Calculated using twelve months ended February 28, 2019 and August 31, 2018.
(3) Net days cash on hand excludes any outstanding amounts under lines of credit.

-2-
 NYU WINTHROP HOSPITAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

May 31, 2019 August 31, 2018

Assets (Unaudited) !Audited)
Current assets
Cash and cash equivalents $ 243,370,883 $ 129,692,586
Investments 131 ,655,884 133,613,421
Current portion of assets limited as to use 19,897,226 16,391 ,214
Accounts receivable for services to patients, less estimated uncollectible accounts of 226,762,750 230,044,937
Other receivables, net 5,365,515 8,720,150
Due from affiliates 3,030,374
Inventories 24,629,063 22,953,279
Prepaid expenses 5,621 ,250 13,771 ,826
Estimated receivable from third-party payors 6,874,085 5,601 ,616
Total current assets 667,207,030 560,789,029

Assets limited as to use (net of current portion) 79,037,988 82,008,349

Long-term investments 15,827,241 16,311,941
Long-term receivables and other assets 151 ,042,585 124,533,139
Property, plant, and equipment, net 637,320,600 588,615,885
Intangible assets 33,906,088 36,811 ,673
Total assets $ 1,584,341,532 $ 1,409,070,016
Liabilities and Net Assets
Current liabilities
Current portion of long-term debt $ 10,715,784 $ 11,481 ,024
Line of credit 25,000,000 25,000,000
Accounts payable and accrued expenses 165,365,051 134,047,124
Estimated liabilities due to third-party payors 34,914,051 35,141 ,218
Accrued salaries and withholding taxes payable 20,780,669 45,953,938
Accrued vacation benefits 24,887,406 32,283,368
Current portion of estimated self-insurance liability 14,871,066 14,871,066
Due to affiliates 13,047,929 7,697,693
Total current liabilities 309,581 ,956 306,475,431
Accrued retirement liabilities 294,112,936 211 ,1 73,445
Professional liabilities - net of current portion 151,776,248 145,684,288
Other long-term liabilities, net 102,626,663 79,055,730
Long-term debt, net of current portion 194,089,850 199,788,367
Due to affiliates, net of current portion 101,865,976 63,074,580
Total liabilities 1,154,053,629 1,005,251 ,841
Commitments and contingencies
Net assets
Unrestricted 405,917,050 380,171,283
Temporarily restricted 15,203,642 14,593,033
Permanently restricted 9,167,211 9,053,859
Total net assets 430,287,903 403,818,175
Total liabilities and net assets $ 1,584,341 ,532 $ 1,409,070,016

-3-
 NYU WINTHROP HOSPITAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ACTIVITIES

Nine Months Nine Months

Ended Ended
May 31, 2019 May 31, 2018
(Unaudited) (Unaudited)
Operating revenue
Net patient service revenue 1,267,672,420 1,197,796,229
Other revenue 66,932,496 20,631,747
Net assets released from restrictions 785,423 2,468,799
Total operating revenue 1,335,390,339 1,220,896,775
Operating expenses
Salaries 487,780,986 586,410,670
Employee benefits 118,396,405 128,282,918
Supplies and other expenses 401 ,791,535 359,991,488
Professional and general liability insurance 26,757,976 37,370,086
Research and other 5,125,919 4,471,833
Corporate allocations 32,682,206 15,751,619
FGP Subsidy 52,407,024 341,981
Interest expense 6,862,301 6,581,760
Depreciation and amortization 55,098,820 52,277,064
Total operating expenses 1,1 86,903,173 1,191,479,419
Gain (loss) from operations 148,487,166 29,417,356
Nonoperating gains and losses
Realized gains, net 2,268,242 3,306,094
Net change in unrealized gains on investments ( 13,252,497) 2,187,255
Gain (loss) on investment in joint ventures (25,477) 142,845
Other components of pension and postretirement costs (Note 1f) 11,324,182 11,792,251
Excess of revenue and gains over expenses and losses 148,801 ,616 46,845,801
Other changes
Pension-related changes other than net periodic benefit cost (103,770,680) 8,120,946
Net assets released from restrictions for capital asset acquisitions 114,831 1,255,155
Contribution for capital assets acquisitions 1,000,000
Transfer of equity to NYU School of Medicine (20,400,000) 2,530
Increase in unrestricted net assets $ 25,745,767 $ 56,224,432

-4-
 NYU WINTHROP HOSPITAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

Temporarily Permanently Total

Unrestricted restricted restricted net assets

Balance, August 31, 2017 $319,302,254 $12,750,265 $8,820,073 $340,872,592

Excess of revenue and gains over expenses and losses 85,531,188 85,531 ,188
Contributions 1,080,000 3,965,029 233,786 5 ,278,815
Investment income 399,521 399,521
Realized and unrealized gains and losses 1,078,557 1,078,557
Net assets released from restrictions 1,929,873 (3,600,339) (1,670,466)
Net asset reclassification 2,530 2,530
Pension-related changes other than net periodic benefit cost (27,674,562) (27,674,562)
Total changes in net assets 60,869,029 1,842,768 233,786 62,945,583
Balance, August 31, 2018 380,171,283 14,593,033 9,053,859 403,818,175

Balance, August 31, 2018 380,171,283 14,593,033 9,053,859 403,818,175

Excess of revenue and gains over expenses and losses 148,801,616 148,801,616
Contributions 1,000,000 1,375,430 113,352 2,488,782
Investment income 414,591 414,591
Realized and unrealized gains and losses (899,289) (899,289)
Net assets released from restrictions 114,831 (280,123) (165,292)
Equity transfer (20,400,000) (20,400,000)
Pension-related changes other than net periodic benefit cost (103,770,680) (103,770,680)
Total changes in net assets 25,745,767 610,609 113,352 26,469,728
Balance, May 31, 2019 405,917,050 15,203,642 9,167,211 430,287,903

- 5-
NYU WINTHROP HOSPITAL AND SUBSIDIARIES CONSOLIDATED CASH FLOW

Nine Months Year

Ended Ended
May 31, 2019 August 31, 2018
(Unaudited) (Audited)

Cash flows from operating activities

Increase in net assets $ 26,469,728 $ 62,945,583
Adjustments to reconcile increase in net assets to net cash
provided by operating activities
Depreciation and amortization 55,098,820 69,592,746
Restricted and temporarily restricted contributions/transfers (2,488,782) (2,107,259)
Amortization of bond premium and discount (458,673)
Pension related changes other than net periodic benefit costs 103,770,680 27,674 ,562
Realized and unrealized gains and losses on investments 10,984,255 (11 ,030,820)
Change in
Accounts receivable 3,282,187 (41 ,944,350)
Other receivables, inventories, and prepaid expenses 9,829,427 (2,385,774)
Due from/to affiliates, net 2,319,862 6,484,481
Long-term receivables and other assets (26,509,446) (33,325,629)
Accounts payable and accrued expenses (1 ,251,303) (2 ,268,828)
Other current liabilities, net (1,499,636) 32,838,137
Other long-term liabilities, net 23,570,933 13,473,118
Accrued retirement liabilities (20,831 , 189) (33,343,809)
Professional liabilities 6,091 ,960 11 ,170,355
Net cash provided by operating activities 188,837,495 97,313,840
Cash flows from investing activities
Purchases of property, plant, and equipment (62,106,554) (46,894,000)
Purchases (sales) of investments, net (9,077,669) (9,398,285)
Net cash used in investing activities (71 , 184,223) (56,292,285)
Cash flows from financing activities
Repayment of long-term debt (6,463,757) (11 ,091 ,786)
Proceeds from NYU Loans 10,634,898
Proceeds from line of credit 25,000,000
Repayment of line of credit (25,000,000)
Restricted contributions 2,488,782 2 ,107,259
Net cash used in financing activities (3,974,975) 1,650,371
Net increase in cash and cash equivalents 113,678,297 42,671 ,926
Cash and cash equivalents
Beginning of year 129,692,586 87,020,660
End of year $ 243,370,883 $ 129,692,586

-6-
 NYU Winthrop Hospital and Subsidiaries

Notes to Financial Statements

May31,2019

(1) Summary of Significant Accounting Policies and Other Information

(a) Financial Information

The financial information furnished herein is unaudited and thus is subject to change; however, in
the opinion of management, the information reflects all adjustments that are necessary to fairly
state the financial position of NYU Winthrop Hospital and Subsidiaries ("NYU Winthrop"), and the
results of its operations and changes in its unrestricted net assets for the interim periods
indicated.

NYU Winthrop presumes that users of this interim financial information have read or have access
to the Winthrop's audited financial statements and that the adequacy of additional disclosure
needed for a fair presentation may be determined in that context. The Financial Statements of
Winthrop for the fiscal year ended August 31 , 2018 are on file at www.emma.msrb.org.
Accordingly, footnotes and other disclosures that would substantially duplicate the disclosures
contained in the Winthrop's most recent audited financial statements have been omitted.

Patient volumes and net operating revenues are subject to seasonal variations caused by a
number of factors, including, but not necessarily limited to, seasonal cycles of illness, climate and
weather conditions, vacation patterns of both hospital patients and admitting physicians and other
factors relating to the timing of elective hospital procedures. Quarterly operating results are not
necessarily representative of operations for a full year for various reasons, including levels of
occupancy and other patient volumes, interest rates, unusual or non-recurring items and other
seasonal fluctuations. These same considerations apply to all year-to-year comparisons.

(b) Organization
NYU Winthrop, located in Mineola, New York, is a not-for-profit, acute care teaching hospital that
provides a full range of inpatient and outpatients services to the community. NYU Langone Health
System ("NYUHS") is the sole corporate member of NYU Winthrop and the entities listed below.

The accompanying consolidated financial statements include the accounts of NYU Winthrop and
its wholly owned, for-profit and not-for-profit subsidiaries, and affiliated professional corporations:
Winthrop-University Hospital Services Corp. ("WUHSC") (formerly known as Nassau Hospital
Office Corporation), Winthrop Clinical Partners, Inc. ("WCPI") and various faculty, community and
hospital-based physician services.

For purposes of disclosure within these consolidated financial statements, the consolidated
entities listed above are collectively referred to as NYU Winthrop unless explicitly referred to as
the Hospital entity only.

(c) Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of
America.

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 NYU Winthrop Hospital and Subsidiaries

Notes to Financial Statements

May 31 , 2019

Amounts due from or due to the entities of the Hospital, WUHSC, WCPI or the others
consolidated entities as of May 31, 2019, as well as the transactions between those entities
recorded during the year then ended have been eliminated in consolidation. Amounts due from or
to NYU Winthrop and NYUHS (or other nonconsolidated NYU affiliates) are included as due to
affiliates on the consolidated balance sheet as of May 31, 2019 and August 31 , 2018 and
transactions between those entities for the nine months ended May 31 , 2019 are included in
operating revenue or operating expense in the consolidated statement of operations.

(d) Use of Estimates

The preparation of 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, including estimated uncollectibles for accounts receivable for
services to patients, and liabilities, including estimated payables to third party payors, malpractice
insurance liabilities, and disclosure of contingent assets and liabilities, at the date of the
consolidated financial statements. Estimates also affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates.

(e) Tax Status

NYU Winthrop is exempt from income taxes under Internal Revenue Code Section 501(c) (3).
WUHSC is exempt under Internal Revenue Code Section 501(c) (2). Their income is generally
not subject to Federal or New York State income taxes. Various faculty and network practices
are taxable entities. The tax accounts related to these entities are not material to the
consolidated financial statements. The taxable faculty, community, and hospital based physician
services have generated net operating loss carryforwards for which the related deferred tax asset
has been fully reserved due to the uncertainty of the entities' abilities to use these loss
carryforwards in the future.

Management annually reviews its tax positions and has determined that there are no material
uncertain tax positions that require recognition in the consolidated financial statements.

(f) New Authoritative Pronouncements

In May 2014, the FASB issued Accounting Standard Update ("ASU") 2014-09, Revenue from
Contracts with Customers. This standard implements a single framework for recognition of all
revenue earned from customers. This framework ensures that entities appropriately reflect the
consideration to which they expect to be entitled in exchange for goods and services by allocating
transaction price to identified performance obligations and recognizing revenue as performance
obligations are satisfied. Qualitative and quantitative disclosures are required to enable users of
financial statements to understand the nature, amount, timing, and uncertainty of revenue and
cash flows arising from contracts with customers. The standard is effective for fiscal years
beginning after December 15, 2017. Under adoption of ASU 2014-09 in fiscal year 2019, net
patient service revenue will be reported at the amount that reflects the consideration to which
NYU Winthrop expects to be entitled in exchange for providing patient care. NYU Winthrop has
implemented the standard using the modified retrospective approach in fiscal year 2019 and
concluded that there will be no opening net asset impact.

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 NYU Winthrop Hospital and Subsidiaries

Notes to Financial Statements

May 31 , 2019

In February 2016, the FASS issued ASU 2016-02, Leases. Under the new guidance, lessees will
be required to recognize the following for all leases (with the exception of leases with a term of
twelve months or less) at the commencement date: (a) a lease liability, which is a lessee's
obligation to make lease payments arising from a lease, measured on a discounted basis; and (b}
a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use
of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely
unchanged. The guidance requires a modified retrospective transition approach for leases
existing at, or entered into after, the beginning of the earliest comparative period presented in the
financial statements. The modified retrospective approach would not require any transition
accounting for leases that expire before the earliest comparative period presented. A full
retrospective transition approach is not permitted. This guidance will be effective for NYU
Winthrop beginning in fiscal year 2020. Early application is permitted. NYU Winthrop is currently
assessing the impact this standard will have on its consolidated financial statements in future
years.

In August 2016, the FASS issued ASU 2016-14, Presentation of Financial Statements for Not for
Profit Entities. This standard marks the completion of the first phase of a larger project aimed at
improving not for profit financial reporting. Under the new guidance, net asset reporting will be
streamlined and clarified. The existing three category classification of net assets (i.e.,
unrestricted, temporarily restricted, and permanently restricted) will be replaced with a simplified
model that combines temporarily restricted and permanently restricted into a single category
called "net assets with donor restrictions". There will be new requirements to reporting expenses
and additional disclosures to highlight restrictions on the use of resources that make otherwise
liquid assets unavailable for meeting near term financia l requirements. The standard is effective
for NYU Winthrop beginning in fiscal year 2019 with early adoption permitted. In the year of
application, not for profit entities are required to disclose the nature of any reclassifications or
restatements resulting from the adoption and their effect, if any, on the change in the net asset
classes for each year presented. The requirements must be applied retrospectively; however,
entities can elect not to provide certain comparative disclosures in the year of adoption. NYU
Winthrop has implemented the standard retrospectively in fiscal year 2019 and concluded that
there will be no opening net asset impact.

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 NYU Winthrop Hospital and Subsidiaries

Notes to Financial Statements

May 31 , 2019

(2) Contingencies
NYU Winthrop has been named as defendant in legal actions involving alleged professional
liability, regulatory compliance, and other claims arising from the normal conduct of their affairs,
certain of which seek damages in unstated amounts or in amounts in excess of applicable
insurance limits. It is the opinion of the NYU Winthrop's management, based on a review of the
aforementioned claims by defense attorneys, that insurance coverage and self insurance
reserves are adequate and that the final disposition of such claims will not have a material
adverse effect on the NYU Winthrop's consolidated balance sheet, results of operations, or
liquidity. In addition, there are known, and possibly unknown, incidents occurring through May
31, 2019 that may result in the assertion of additional claims. In management's opinion, any
liability that may arise from settlement of such claims will be settled either within insurance
coverage or self insured liability estimates or otherwise will not have any material adverse effect
on the NYU Winthrop's consolidated balance sheet, results of operations, or liquidity.

(3) Pension Plans

The hospital contributed $38,330,109 to its retirement plans for the nine months ended May
31 , 2019. The Hospital has pension expense of $33,351 ,013 for the same interim period .

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