Sheet1Northwestern Memorial HealthCare and SubsidiariesRatiosFormulaCalculationResultCurrent RatioCurrent Assets7082731.32Current Liabilities 536050Average Collection PeriodNet Receivable27977564.55daysNet Patient Service Revenue / 365(1582051 / 365)Days Cash on Hand, Short-Term Sources Cash + Marketable Securities25226862.74days(Total Expenses − Depreciation) / 3654020.67Average Payment PeriodTotal Current liabilities536050133.32days(Total expenses − Depreciation) / 3654020.67Operating MarginOperating Income883085.19%Total Operating revenue1701540Excess MarginExcess of revenue over expenses1217997.16%Total Operating revenue1701540Return on Net AssetsExcess of revenue over expenses1217994.65%Net Assets2618574Total Assets turnover(Total Operating Revenue + Other Income) 17350310.37timesTotal Assets4701684Fixed Assets turnover(Total Operating Revenue + Other Income) 17350311.28timesNet Fixed Assets1358051Inventory Turnover(Total Operating Revenue + Other Income) 173503155.03timesInventory31528Net Assets FinancingNet Asset x 1002618574 x 10055.69%Total Assets4701684Long-Term Debt to CapitalizationLong Term Debt x 1001547060 x 10037.14%(Long term debt + Net Assets)4165634Debt service coverage ratioExcess of revenue over expenses + Depreciation exp + Int exp2636955.97timesdebt principal payment + interest expense44201Cash flow to debtExcess of rev over exp + Depreciation exp23399411.23%current liabilities + long-term debt2083110
Sheet2
Sheet3
FIN 3660
Assignment Chapter 7 NAME:
1. Discuss three types of supplemental disability benefits that life insurance policies often provide.
a.
b.
c.
2. Regarding the waiver of premium (WP) rider on a life insurance policy:
a. What does this rider provide?
b. What must a policyowner do to qualify for WP benefits?
c. What is the definition of “total disability” under most WP riders?
d. Name three disabilities that are typically excluded from the WP benefits.
3. Provide an example of the use of each of the following:
(1) Accelerated Death Benefit (also called _____________):
(2) Terminal Illness benefit:
(3) Dread Disease Benefit:
(4) Second Insured Rider:
4. Your friend Michael is married and has two teenage school children. His wife does not work outside their home, on which they have a $190,000 mortgage. Michael has asked you for advice on the best type of life insurance to purchase and what riders he would need. Briefly discuss the type of coverage he should purchase as well as three riders that he should purchase with his life insurance policy.
5. Rebekah Kraft, age 29, died when the commercial airplane on which she was traveling as a passenger crashed, killing everyone on board. At the time of her death, Ms. Kraft was insured by a $300,000 whole life insurance policy with a typical double indemnity accidental death benefit rider. This information indicates that the insurer is liable for paying the designated beneficiary of Ms. Kraft’s policy $____________________________.
6. Liam Morris is the.
This is the brief document about Birla Sun Life Group..which include almost all its insurance plans, and policies. This documents also help those students and people how are seeking to get to know about BSLI. I provide all the detailed history about birla group in this documents..:)
This document provides an overview of life insurance, including how much coverage is needed, the different types of policies, taxation of life insurance benefits, and additional benefits that may be available. It discusses term life insurance, whole life insurance, universal life insurance, and cash value life insurance. The summary highlights the key factors to consider when determining how much coverage and what type of policy best fits an individual's needs and objectives.
Assignment 7, Chapter 15 NAME _______________________________
FIN 3610
1. a. Explain the various definitions of disability that are found in disability-income insurance. Not sure about the answer
The definition of total disability is stated in the policy. There are several definitions of total disability:
(1) Inability to perform all duties of the insured’s own occupation
(2) Most insurers today use amodified own occupationdefinition of total disability. Because of injury or sickness, you are unable to perform the material and substantial duties of your own occupation, and are not engaged in any other occupation.
(3) Inability to perform the duties of any occupation for which the insured is reasonably fitted by education, training, and experience
(4) Inability to perform the duties of any gainful occupation
(5) Loss-of-income test in some companies
Some individual disability income policies have a two-part definition. For some initial period of disability, such as two to five years, total disability is defined in terms of your own occupation. After the initial period of disability expires, the any occupation definition of disability is applied.
b. Briefly explain the following disability-income insurance provisions: Residual disability, Benefit period, Elimination period, Waiver of premium. Not sure about the answer
(1) Residual disability means that a pro rata disability benefit is paid to an insured whose earned income is reduced because of an accident or sickness.
(2) The benefit period is the length of time that disability benefits are payable after the elimination period is met.
(3) An elimination period is a waiting period during which time benefits are not paid. Insurers offer a range of benefit periods, such as 30, 60, 90, 180, or 365 days.
(4) Most policies include a waiver-of-premium provision. The insured must meet the definition of disability stated in the policy. If the insured is totally disabled for 90 days, future premiums will be waived as long as the insured remains disabled.
2. Identify five major provisions of the Affordable Care Act that will have an impact on individuals and families. Document your source and attach a copy of your information.
Need plz Document your source and attach a copy of your information.
Plz look for website about these info.
Provisions in the Affordable Care Act that will affect individuals and families include the following:
Individual mandate. Beginning in 2014, most citizens in the United States and legal residents must have qualifying health insurance or pay a financial penalty.
Preexisting conditions exclusions prohibited. Children under age 19 with a preexisting condition cannot be denied coverage or rated up because of a preexisting condition. Beginning in 2014, adults cannot be denied coverage or rated up because of a preexisting condition.
Retention of coverage until age 26. The new law allows young adults to remain on their parents’ policy until age 26.
Guaranteed acces ...
The document provides information on individual disability income insurance products from The Standard. It describes The Protector+ policy which offers benefits such as guaranteed renewable coverage to age 66/67, a definition of total disability, waiver of premium if disabled, and optional riders for additional coverage like cost of living increases or a noncancelable option. It also briefly outlines a similar individual policy called The Protector.
The document discusses key concepts related to life insurance underwriting. It defines underwriting as the process by which an insurance company evaluates the risk of a potential client in order to set premium payments and specify coverage. Several factors are considered in life insurance underwriting, including sex, physical condition, medical history, family history, occupation, habits, and marital status. Underwriting is important as it helps prevent high-risk individuals from being insured, decides whether to offer or deny coverage, and sets the premium rate. The document also discusses different types of life insurance like term life, whole life, and endowment insurance.
The document provides an overview of various life insurance policy provisions and options. It discusses topics like assignment of policies, grace periods, contestability periods, reinstatement clauses, beneficiary designations, cash surrender values, policy loans, policy riders, participating policies, settlement options, and more. The level of detail in the document is intended to educate insurance agents on the ins and outs of life insurance policies so they can effectively communicate options to clients.
This document provides information about life insurance policies in India. It discusses different types of life insurance policies like term insurance, whole life insurance, endowment policies, money back plans, children's policies, annuity plans, and unit linked insurance plans. It also answers frequently asked questions about life insurance policies, including how premiums, surrender values, and claims are calculated for conventional and unit linked policies. The document aims to educate policyholders about various aspects of life insurance.
This is the brief document about Birla Sun Life Group..which include almost all its insurance plans, and policies. This documents also help those students and people how are seeking to get to know about BSLI. I provide all the detailed history about birla group in this documents..:)
This document provides an overview of life insurance, including how much coverage is needed, the different types of policies, taxation of life insurance benefits, and additional benefits that may be available. It discusses term life insurance, whole life insurance, universal life insurance, and cash value life insurance. The summary highlights the key factors to consider when determining how much coverage and what type of policy best fits an individual's needs and objectives.
Assignment 7, Chapter 15 NAME _______________________________
FIN 3610
1. a. Explain the various definitions of disability that are found in disability-income insurance. Not sure about the answer
The definition of total disability is stated in the policy. There are several definitions of total disability:
(1) Inability to perform all duties of the insured’s own occupation
(2) Most insurers today use amodified own occupationdefinition of total disability. Because of injury or sickness, you are unable to perform the material and substantial duties of your own occupation, and are not engaged in any other occupation.
(3) Inability to perform the duties of any occupation for which the insured is reasonably fitted by education, training, and experience
(4) Inability to perform the duties of any gainful occupation
(5) Loss-of-income test in some companies
Some individual disability income policies have a two-part definition. For some initial period of disability, such as two to five years, total disability is defined in terms of your own occupation. After the initial period of disability expires, the any occupation definition of disability is applied.
b. Briefly explain the following disability-income insurance provisions: Residual disability, Benefit period, Elimination period, Waiver of premium. Not sure about the answer
(1) Residual disability means that a pro rata disability benefit is paid to an insured whose earned income is reduced because of an accident or sickness.
(2) The benefit period is the length of time that disability benefits are payable after the elimination period is met.
(3) An elimination period is a waiting period during which time benefits are not paid. Insurers offer a range of benefit periods, such as 30, 60, 90, 180, or 365 days.
(4) Most policies include a waiver-of-premium provision. The insured must meet the definition of disability stated in the policy. If the insured is totally disabled for 90 days, future premiums will be waived as long as the insured remains disabled.
2. Identify five major provisions of the Affordable Care Act that will have an impact on individuals and families. Document your source and attach a copy of your information.
Need plz Document your source and attach a copy of your information.
Plz look for website about these info.
Provisions in the Affordable Care Act that will affect individuals and families include the following:
Individual mandate. Beginning in 2014, most citizens in the United States and legal residents must have qualifying health insurance or pay a financial penalty.
Preexisting conditions exclusions prohibited. Children under age 19 with a preexisting condition cannot be denied coverage or rated up because of a preexisting condition. Beginning in 2014, adults cannot be denied coverage or rated up because of a preexisting condition.
Retention of coverage until age 26. The new law allows young adults to remain on their parents’ policy until age 26.
Guaranteed acces ...
The document provides information on individual disability income insurance products from The Standard. It describes The Protector+ policy which offers benefits such as guaranteed renewable coverage to age 66/67, a definition of total disability, waiver of premium if disabled, and optional riders for additional coverage like cost of living increases or a noncancelable option. It also briefly outlines a similar individual policy called The Protector.
The document discusses key concepts related to life insurance underwriting. It defines underwriting as the process by which an insurance company evaluates the risk of a potential client in order to set premium payments and specify coverage. Several factors are considered in life insurance underwriting, including sex, physical condition, medical history, family history, occupation, habits, and marital status. Underwriting is important as it helps prevent high-risk individuals from being insured, decides whether to offer or deny coverage, and sets the premium rate. The document also discusses different types of life insurance like term life, whole life, and endowment insurance.
The document provides an overview of various life insurance policy provisions and options. It discusses topics like assignment of policies, grace periods, contestability periods, reinstatement clauses, beneficiary designations, cash surrender values, policy loans, policy riders, participating policies, settlement options, and more. The level of detail in the document is intended to educate insurance agents on the ins and outs of life insurance policies so they can effectively communicate options to clients.
This document provides information about life insurance policies in India. It discusses different types of life insurance policies like term insurance, whole life insurance, endowment policies, money back plans, children's policies, annuity plans, and unit linked insurance plans. It also answers frequently asked questions about life insurance policies, including how premiums, surrender values, and claims are calculated for conventional and unit linked policies. The document aims to educate policyholders about various aspects of life insurance.
Chapter 22_Insurance Companies and Pension FundsRusman Mukhlis
This document summarizes key topics related to insurance companies and pension funds. It discusses the fundamentals of insurance, types of insurance like life and health insurance, and how insurance companies are organized and regulated. It also covers the different types of pension plans like defined benefit and defined contribution, and how pension plans are regulated in the US by acts like ERISA.
The document provides an overview of accident, livestock, and cattle insurance. It defines accident insurance and describes its key types including death and dismemberment insurance, general accident insurance, and disability insurance. It discusses the features, benefits, and importance of accident insurance. It also defines livestock insurance and cattle insurance, discussing their importance and principles. The document describes the claims and settlement processes for accident, livestock, and cattle insurance policies.
The document provides an overview of personal accident insurance policies. It discusses key aspects such as:
- Personal accident policies provide compensation for accidental death, permanent or temporary disability.
- Policies offer coverage for a wide range of contingencies like death, loss of limbs, paralysis, and temporary disability.
- Coverage amounts are specified for different types of injuries, with permanent total disability covered at 100% of the capital sum insured.
- Additional benefits sometimes include reimbursement of carriage of deceased and education funds for dependents in case of death of the insured.
Chapter1.pptx CỦA MÔN LIFE CÔ NGUYỆT ÍNSURANCEHXunNguyn1
The document discusses various topics related to life insurance including types of policies, provisions, underwriting, and financial investment. It defines life insurance, discusses individual and group policies as well as key components like premiums and benefits. Statistics are also provided on the global and Vietnamese life insurance markets and leading insurance companies worldwide.
Life Insurance is a form of risk management primarily used to transfer the risk of uncertain loss.
It provides compensation for financial loss only not profit.
Life insurance is a protection against the RISK of financial loss that would result from the premature death of an insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The death benefit is paid by a life insurer in consideration of premium payments made by the insured.
This document provides an overview of traditional and indexed life insurance. It discusses key questions people have when purchasing life insurance, such as how much is needed and what type to buy. It defines term and cash value life insurance, and describes various term and cash value policies. It also summarizes how life insurance is taxed, including premiums, dividends, loans/withdrawals, and modified endowment contracts. The document aims to help readers understand their options so they can select the best life insurance for their needs and objectives.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types of insurers pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation at the state level oversees insurance company operations and solvency.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation by states aims to ensure solvency and protect policyholders.
Unclaimed money from lapsed insurance policies amounts to billions of rupees in India. Insurance companies benefit when policyholders allow their term life or whole life policies to lapse by collecting premiums for years but never having to pay out claims. To help ensure policyholders receive money due to them, the Insurance Regulatory and Development Authority of India (IRDAI) now requires insurance companies to disclose unclaimed amounts over Rs. 1,000 on their websites semiannually, with the total unclaimed exceeding Rs. 110 billion as of June 30, with over half of that belonging to LIC.
The document provides an overview of insurance concepts including the definition of insurance, features of insurance contracts, need for insurance, objectives of insurance contracts, insurable risks, legal aspects of insurance contracts, types of insurance policies, and reinsurance. It defines insurance as a contract where an individual or organization receives financial protection and reimbursement of damages from an insurer in exchange for payment of a premium. Key features of insurance include risk sharing among a large number of insured persons, payment on a contingency or insurable event, and payment of a premium. [END SUMMARY]
Primerica's SuccessRIGHTNow Licensing System helps users obtain their insurance license through online pre-licensing courses guided by a Licensing Coach. The document provides an overview of insurance basics concepts like pure risk, policyowner, insured, and beneficiary. It also summarizes the underwriting process, common types of life insurance policies including term and whole life, and key policy provisions, options, and riders. Basic annuity concepts are also introduced.
This document provides an overview and comparison of different types of life insurance policies, including term life insurance, whole life insurance, universal life insurance, and indexed universal life insurance. It discusses features such as premium amounts, death benefit amounts, cash value accumulation, and guarantees for each type of policy. The document aims to help readers understand life insurance and choose the most appropriate policy based on their needs and objectives.
- Insurance companies provide insurance policies to policyholders in exchange for premium payments. The policies are legally binding contracts where the insurance company agrees to pay specified sums if future events occur, such as death or an accident.
- Insurance companies accept the risk from policyholders in exchange for premiums. They determine which applications to accept and how much to charge through underwriting. Premiums provide stable revenue while payments to policyholders are the major expense.
- There are various types of insurance like life, health, property & casualty, liability, and investment-oriented products. Insurance companies combine these types of insurance in different ways and are regulated at the state level in the US.
Term Life InsuranceLife and Health Insurance FIN 3660Chapte.docxmehek4
Term Life Insurance
Life and Health Insurance FIN 3660
Chapter 5
Outline
Needs Met by Life Insurance
Personal Needs
Business Needs
Term Life Insurance
Characteristics of Term Life Insurance Products
Plans of Term Life Insurance Coverage
Features of Term Life Insurance Policies
2
Needs Met by Life Insurance
Personal Needs
Most common personal needs that life insurance can meet are:
Dependents’ support
Estate planning
Paying debts and final expenses
3
Dependents Support
Life insurance can provide funds to support the family members of a deceased loved one until they obtain new methods of support or until they adjust to living on a lower income.
The proceeds can also be used to supplement the family’s income.
In many jurisdictions, the beneficiary of a lump sum of money after the death of a loved one is usually not taxed on the money they receive.
4
Estate Planning
Estate- the accumulated assets an individual owns when he/she dies.
Will- a legal document that directs how the individual’s property is to be distributed after his death.
The executor is the person who is a personal representative of the person who has died with a valid will. (administrator if they person died without a valid will)
Estate Plan- considers the amount of assets and debts that he/she is likely to have when he/she dies and how best to preserve those assets so that they can be distributed as she desires.
Life insurance is an important part of the estate plan.
Can leave home to one child and life insurance policy to the other.
5
Debts and Final Expenses
A person’s death generally does not extinguish his/her debts.
In some cases the deceased estate isn’t large enough to pay his/her debts and final expenses.
If a life insurance policy is included in the estate plan, the proceeds can help pay those remaining debts.
6
Business needs
Two reasons for a business to purchase life insurance:
To provide funds to ensure that the business continues in the event of the death of an owner, partner, or other key person.
To provide benefits for its employees.
7
Business Continuation Insurance
An insurance plan designed to enable a business owner(s) to provide for the business’ continued operation if the owner or a key person dies.
Key Person Life Insurance- individual life insurance that a business purchases on the life of a key person.
The business owner is the beneficiary of the insurance policy if the person dies.
Buy-Sell Agreement- an agreement in which one party agrees to purchase the financial interest that a second party has in a business following the second party’s death and the second party agrees to direct his estate to sell his interest in the business to the purchasing party.
8
Characteristics of Term Life Insurance Products
Provides a death benefit only is the insured dies during the period specified in the policy.
The length of the policy term varies considerably from one policy to another.
Another common type of term life insurance cover the insured un ...
1-The Basics Parts of an Insurance Contract
Declarations
Definitions
Insuring Agreement
Exclusions
Conditions
Deductibles
Miscellaneous Provisions
Insured
Rider And Endorsement
2-COINSURANCE
A coinsurance formula is used to determine the
amount paid for a covered loss. The coinsurance for-
mula is as follows:
(Amount of insurance carried/Amount of insurance required) * Loss = Amount of recovery
THE HIDDEN POWER OF
UNIVERSAL LAWS
Contents
Introduction 2
Chapter - 1 3
The Law of Attraction 3
Chapter 2 4
Your Thoughts Control You 4
Chapter 3 5
Visualize Your Thoughts 5
Chapter 4 5
The Law of Vibration 5
Chapter 5 5
Chapter 6 5
Understanding Karma 5
Chapter 7 6
Chapter 8 7
The Law of Love 7
Chapter 9 7
The Law of Allowing 7
Chapter 10 7
Summary 7
Introduction
In life, there are universal laws that govern everything we do. These laws are so perfect that if you were to align yourself with them, you could have so much prosperity that it would be coming out of your ears. This is because God created the universe in the image and likeness of him. It is failure to follow the universal laws that causes one to fail. The laws that were created consisted of the following: ·
Law of Gratitude: The Law of Gratitude states that you must show gratitude for what you have. By having gratitude, you speed your growth and success faster than you normally would. This is because if you appreciate the things you have, even if they are small things, you are open to receiving more.
Law of Attraction: The Law of Attraction states that if you focus your attention on something long enough you will get it. It all starts in the mind. You think of something and when you think of it, you manifest that in your life. This could be a mental picture of a check or actual cash, but you think about it with an image.
Law of Karma: the Law of Karma states that if you go out and do something bad, it will come back to you with something bad. If you do well for others, good things happen to you. The principle here is to know you can create good or bad through your actions. There will always be an effect no matter what.
Law of Love: the Law of Love states that love is more than emotion or feeling; it is energy. It has substance and can be felt. Love is also considered acceptance of oneself or others. This means that no matter what you do in life if you do not approach or leave the situation out of love, it won't work.
Law of Allowing: The Law of Allowing states that for us to get what we want, we must be receptive to it. We can't merely say to the Universe that we want something if we don't allow ourselves to receive it. This will defeat our purpose for wanting it in the first place.
Law of Vibration: the Law of Vibration states that if you wish on something and use your thoughts to visualize it, you are halfway there to get it. To complete the cycle you must use the Law of Vibration to feel part of what you want. Do this and you'll have anything you want in life.
For everything to function properly there has to be structure. Without structure, our world, or universe, would be in utter chaos. Successful people understand universal laws and apply them daily. They may not acknowledge that to you, but they do follow the laws. There is a higher power and this higher power controls the universe and what we get out of it. People who know this, but wish to direct their own lives, follow
This document provides an introduction to life insurance. It discusses what life insurance is, who should buy it, and the different types available. It also covers additional uses of life insurance beyond providing for dependents. The key components of how life insurance works are the death benefit, which is paid out to beneficiaries when the insured dies, and the premiums paid by the policyholder. Permanent life insurance also includes a cash value component. The document provides numerous examples and details on different types of policies and circumstances where life insurance is appropriate.
This document provides an overview of insurance planning and various insurance concepts. It discusses risk and risk management, the concept of insurance, principles of insurance including utmost good faith, insurable interest, and indemnity. It also covers types of insurance policies for life and general insurance, products, tax benefits, underwriting, and claims processes. Key terms related to insurance are defined throughout the document.
Universal life insurance separates a policy into mortality, expense, and cash value components. This allows flexibility to modify premiums or death benefits in response to changing needs. Premiums deduct monthly charges for mortality and expenses from the cash value balance, which earns interest. Universal life comes in two types - type I pays a fixed death benefit while type II pays the face value plus cash value. Universal life is useful for needs that may change over time like family protection, business planning, or accumulation goals.
Assignment details written in the attachmentsYou need to choose an.docxlesleyryder69361
Assignment details written in the attachments
You need to choose any one question.
Word limit: 2000 words
Footnotes: Oxford style
Intext reference: Harvard style
Bibliography: 15-20 sources including monographs, referred journal articles, news media report and political commentary.
Please do good work. Thank you
.
Assignment Details A high school girl has been caught shoplifting at.docxlesleyryder69361
Assignment Details A high school girl has been caught shoplifting at a high-end clothing store. Describe at least 4 of the most likely processes she will go through from the time the police arrive at the scene. Be sure to note the options available to the authorities when working with juveniles in regard to how this case is handled for each of the processes. Provide a description of the possible outcome for each option.
.
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This document summarizes key topics related to insurance companies and pension funds. It discusses the fundamentals of insurance, types of insurance like life and health insurance, and how insurance companies are organized and regulated. It also covers the different types of pension plans like defined benefit and defined contribution, and how pension plans are regulated in the US by acts like ERISA.
The document provides an overview of accident, livestock, and cattle insurance. It defines accident insurance and describes its key types including death and dismemberment insurance, general accident insurance, and disability insurance. It discusses the features, benefits, and importance of accident insurance. It also defines livestock insurance and cattle insurance, discussing their importance and principles. The document describes the claims and settlement processes for accident, livestock, and cattle insurance policies.
The document provides an overview of personal accident insurance policies. It discusses key aspects such as:
- Personal accident policies provide compensation for accidental death, permanent or temporary disability.
- Policies offer coverage for a wide range of contingencies like death, loss of limbs, paralysis, and temporary disability.
- Coverage amounts are specified for different types of injuries, with permanent total disability covered at 100% of the capital sum insured.
- Additional benefits sometimes include reimbursement of carriage of deceased and education funds for dependents in case of death of the insured.
Chapter1.pptx CỦA MÔN LIFE CÔ NGUYỆT ÍNSURANCEHXunNguyn1
The document discusses various topics related to life insurance including types of policies, provisions, underwriting, and financial investment. It defines life insurance, discusses individual and group policies as well as key components like premiums and benefits. Statistics are also provided on the global and Vietnamese life insurance markets and leading insurance companies worldwide.
Life Insurance is a form of risk management primarily used to transfer the risk of uncertain loss.
It provides compensation for financial loss only not profit.
Life insurance is a protection against the RISK of financial loss that would result from the premature death of an insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The death benefit is paid by a life insurer in consideration of premium payments made by the insured.
This document provides an overview of traditional and indexed life insurance. It discusses key questions people have when purchasing life insurance, such as how much is needed and what type to buy. It defines term and cash value life insurance, and describes various term and cash value policies. It also summarizes how life insurance is taxed, including premiums, dividends, loans/withdrawals, and modified endowment contracts. The document aims to help readers understand their options so they can select the best life insurance for their needs and objectives.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types of insurers pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation at the state level oversees insurance company operations and solvency.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation by states aims to ensure solvency and protect policyholders.
Unclaimed money from lapsed insurance policies amounts to billions of rupees in India. Insurance companies benefit when policyholders allow their term life or whole life policies to lapse by collecting premiums for years but never having to pay out claims. To help ensure policyholders receive money due to them, the Insurance Regulatory and Development Authority of India (IRDAI) now requires insurance companies to disclose unclaimed amounts over Rs. 1,000 on their websites semiannually, with the total unclaimed exceeding Rs. 110 billion as of June 30, with over half of that belonging to LIC.
The document provides an overview of insurance concepts including the definition of insurance, features of insurance contracts, need for insurance, objectives of insurance contracts, insurable risks, legal aspects of insurance contracts, types of insurance policies, and reinsurance. It defines insurance as a contract where an individual or organization receives financial protection and reimbursement of damages from an insurer in exchange for payment of a premium. Key features of insurance include risk sharing among a large number of insured persons, payment on a contingency or insurable event, and payment of a premium. [END SUMMARY]
Primerica's SuccessRIGHTNow Licensing System helps users obtain their insurance license through online pre-licensing courses guided by a Licensing Coach. The document provides an overview of insurance basics concepts like pure risk, policyowner, insured, and beneficiary. It also summarizes the underwriting process, common types of life insurance policies including term and whole life, and key policy provisions, options, and riders. Basic annuity concepts are also introduced.
This document provides an overview and comparison of different types of life insurance policies, including term life insurance, whole life insurance, universal life insurance, and indexed universal life insurance. It discusses features such as premium amounts, death benefit amounts, cash value accumulation, and guarantees for each type of policy. The document aims to help readers understand life insurance and choose the most appropriate policy based on their needs and objectives.
- Insurance companies provide insurance policies to policyholders in exchange for premium payments. The policies are legally binding contracts where the insurance company agrees to pay specified sums if future events occur, such as death or an accident.
- Insurance companies accept the risk from policyholders in exchange for premiums. They determine which applications to accept and how much to charge through underwriting. Premiums provide stable revenue while payments to policyholders are the major expense.
- There are various types of insurance like life, health, property & casualty, liability, and investment-oriented products. Insurance companies combine these types of insurance in different ways and are regulated at the state level in the US.
Term Life InsuranceLife and Health Insurance FIN 3660Chapte.docxmehek4
Term Life Insurance
Life and Health Insurance FIN 3660
Chapter 5
Outline
Needs Met by Life Insurance
Personal Needs
Business Needs
Term Life Insurance
Characteristics of Term Life Insurance Products
Plans of Term Life Insurance Coverage
Features of Term Life Insurance Policies
2
Needs Met by Life Insurance
Personal Needs
Most common personal needs that life insurance can meet are:
Dependents’ support
Estate planning
Paying debts and final expenses
3
Dependents Support
Life insurance can provide funds to support the family members of a deceased loved one until they obtain new methods of support or until they adjust to living on a lower income.
The proceeds can also be used to supplement the family’s income.
In many jurisdictions, the beneficiary of a lump sum of money after the death of a loved one is usually not taxed on the money they receive.
4
Estate Planning
Estate- the accumulated assets an individual owns when he/she dies.
Will- a legal document that directs how the individual’s property is to be distributed after his death.
The executor is the person who is a personal representative of the person who has died with a valid will. (administrator if they person died without a valid will)
Estate Plan- considers the amount of assets and debts that he/she is likely to have when he/she dies and how best to preserve those assets so that they can be distributed as she desires.
Life insurance is an important part of the estate plan.
Can leave home to one child and life insurance policy to the other.
5
Debts and Final Expenses
A person’s death generally does not extinguish his/her debts.
In some cases the deceased estate isn’t large enough to pay his/her debts and final expenses.
If a life insurance policy is included in the estate plan, the proceeds can help pay those remaining debts.
6
Business needs
Two reasons for a business to purchase life insurance:
To provide funds to ensure that the business continues in the event of the death of an owner, partner, or other key person.
To provide benefits for its employees.
7
Business Continuation Insurance
An insurance plan designed to enable a business owner(s) to provide for the business’ continued operation if the owner or a key person dies.
Key Person Life Insurance- individual life insurance that a business purchases on the life of a key person.
The business owner is the beneficiary of the insurance policy if the person dies.
Buy-Sell Agreement- an agreement in which one party agrees to purchase the financial interest that a second party has in a business following the second party’s death and the second party agrees to direct his estate to sell his interest in the business to the purchasing party.
8
Characteristics of Term Life Insurance Products
Provides a death benefit only is the insured dies during the period specified in the policy.
The length of the policy term varies considerably from one policy to another.
Another common type of term life insurance cover the insured un ...
1-The Basics Parts of an Insurance Contract
Declarations
Definitions
Insuring Agreement
Exclusions
Conditions
Deductibles
Miscellaneous Provisions
Insured
Rider And Endorsement
2-COINSURANCE
A coinsurance formula is used to determine the
amount paid for a covered loss. The coinsurance for-
mula is as follows:
(Amount of insurance carried/Amount of insurance required) * Loss = Amount of recovery
THE HIDDEN POWER OF
UNIVERSAL LAWS
Contents
Introduction 2
Chapter - 1 3
The Law of Attraction 3
Chapter 2 4
Your Thoughts Control You 4
Chapter 3 5
Visualize Your Thoughts 5
Chapter 4 5
The Law of Vibration 5
Chapter 5 5
Chapter 6 5
Understanding Karma 5
Chapter 7 6
Chapter 8 7
The Law of Love 7
Chapter 9 7
The Law of Allowing 7
Chapter 10 7
Summary 7
Introduction
In life, there are universal laws that govern everything we do. These laws are so perfect that if you were to align yourself with them, you could have so much prosperity that it would be coming out of your ears. This is because God created the universe in the image and likeness of him. It is failure to follow the universal laws that causes one to fail. The laws that were created consisted of the following: ·
Law of Gratitude: The Law of Gratitude states that you must show gratitude for what you have. By having gratitude, you speed your growth and success faster than you normally would. This is because if you appreciate the things you have, even if they are small things, you are open to receiving more.
Law of Attraction: The Law of Attraction states that if you focus your attention on something long enough you will get it. It all starts in the mind. You think of something and when you think of it, you manifest that in your life. This could be a mental picture of a check or actual cash, but you think about it with an image.
Law of Karma: the Law of Karma states that if you go out and do something bad, it will come back to you with something bad. If you do well for others, good things happen to you. The principle here is to know you can create good or bad through your actions. There will always be an effect no matter what.
Law of Love: the Law of Love states that love is more than emotion or feeling; it is energy. It has substance and can be felt. Love is also considered acceptance of oneself or others. This means that no matter what you do in life if you do not approach or leave the situation out of love, it won't work.
Law of Allowing: The Law of Allowing states that for us to get what we want, we must be receptive to it. We can't merely say to the Universe that we want something if we don't allow ourselves to receive it. This will defeat our purpose for wanting it in the first place.
Law of Vibration: the Law of Vibration states that if you wish on something and use your thoughts to visualize it, you are halfway there to get it. To complete the cycle you must use the Law of Vibration to feel part of what you want. Do this and you'll have anything you want in life.
For everything to function properly there has to be structure. Without structure, our world, or universe, would be in utter chaos. Successful people understand universal laws and apply them daily. They may not acknowledge that to you, but they do follow the laws. There is a higher power and this higher power controls the universe and what we get out of it. People who know this, but wish to direct their own lives, follow
This document provides an introduction to life insurance. It discusses what life insurance is, who should buy it, and the different types available. It also covers additional uses of life insurance beyond providing for dependents. The key components of how life insurance works are the death benefit, which is paid out to beneficiaries when the insured dies, and the premiums paid by the policyholder. Permanent life insurance also includes a cash value component. The document provides numerous examples and details on different types of policies and circumstances where life insurance is appropriate.
This document provides an overview of insurance planning and various insurance concepts. It discusses risk and risk management, the concept of insurance, principles of insurance including utmost good faith, insurable interest, and indemnity. It also covers types of insurance policies for life and general insurance, products, tax benefits, underwriting, and claims processes. Key terms related to insurance are defined throughout the document.
Universal life insurance separates a policy into mortality, expense, and cash value components. This allows flexibility to modify premiums or death benefits in response to changing needs. Premiums deduct monthly charges for mortality and expenses from the cash value balance, which earns interest. Universal life comes in two types - type I pays a fixed death benefit while type II pays the face value plus cash value. Universal life is useful for needs that may change over time like family protection, business planning, or accumulation goals.
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Assignment details written in the attachments
You need to choose any one question.
Word limit: 2000 words
Footnotes: Oxford style
Intext reference: Harvard style
Bibliography: 15-20 sources including monographs, referred journal articles, news media report and political commentary.
Please do good work. Thank you
.
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Assignment Details A 12-year-old boy was caught in the act of sexual.docxlesleyryder69361
Assignment Details A 12-year-old boy was caught in the act of sexually assaulting a 14-year-old female acquaintance by the victim's 16-year-old brother, who had arrived home and observed the juveniles in the act. The 12-year-old juvenile suspect, in addition to sexually assaulting the victim, had beaten her with the heel of a shoe that was nearby. The victim was almost unconscious when the police arrived. Following the incident, the juvenile was arrested and detained by local police on the following charges: Attempted sexual assault of a minor Aggravated assault Minor in possession of an alcoholic beverage Unlawful possession of a controlled substance (marijuana) The juvenile suspect was a latchkey kid (a child who returns from school to an empty home) from a single-parent home. His mother works from 2 p.m.–11 p.m. Monday through Friday, so the juvenile is often alone for hours upon his return from school. After a preliminary examination, the juvenile suspect explained that the victim purchased the marijuana and the alcohol earlier that same day. The juvenile explained that the victim had invited him to her house because they had "been liking each other" for a long time. Further, the juvenile explained that the alcohol and drugs were in the home when he arrived. He said that he and the victim began by smoking marijuana and drinking beer before they began kissing and fondling one another. Next, according to the juvenile suspect, they started to have what he described as consensual sex. After a short while, they were interrupted by the victim's brother, who had come home from work. The victim’s brother then called the police to report the incident.
The juvenile had prior detentions for violation of curfew, truancy, and attempted sexual battery. No further explanations are given. Write an essay of 750–800 words, divided into 3 sections: the perspectives of the police officer, the state's attorney, and the judge. Do each of these components of the criminal justice system see the offender as a status offender for any of the charges? Discuss your opinion of the status offender from the perspective of each criminal justice component (law enforcement, state's attorney, and the judge). Are the charges viewed by each of the criminal justice components listed below as delinquent acts? Include the following:
From the perspective of the police officer What typically happens to this juvenile before he even goes to juvenile court? How does law enforcement process the incident? From the perspective of the state's attorney Make suggestions to the court on how the boy should be punished or sentenced. From the perspective of the judge Based on the facts of the case and the procedures of the juvenile justice system, what would be the most appropriate finding of the court? What options does the judge have in this incident? Be sure to cite all references in APA format. You will be marked down if you use any adult court terminology in .
Assignment Details (350 WORDS)The last quarter of the 20th c.docxlesleyryder69361
Assignment Details (350 WORDS)
The last quarter of the 20th century saw the dawning of the age of technology. Technological advances have sprung forward at such a quickening pace that it is difficult to remain on pace with it. What was once the latest, most sophisticated device yesterday, is now today’s old news and tomorrow’s junk pile.
In the war of protecting infrastructure elements and sectors, technology has replaced human presence. Technology is now the "eyes and ears" of protection. Technology is used to test steel and concrete, audit financial records, record data, project an analysis, and provide a security presence where people cannot.
Focus your discussion on the following:
Are the current types of technology used in protecting critical infrastructure effective? Why or why not?
What major technological issues can you foresee with regard to critical infrastructure protection? Explain
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Assignment Details (300 words and references)Collaborati.docxlesleyryder69361
Assignment Details (300 words and references)
Collaboration leverages the collective knowledge of a health care team. Peer evaluation and support, provided in the spirit of continuous improvement and organizational success, result in higher quality deliverables than generally possible by the efforts of an individual.
Describe the process you plan to use to conduct research, identify findings, and develop the project that is due in Unit 5.
Present a brief outline indicating how you intend to organize the project deliverable.
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Assignment Details (2-3 pages)
Research information about current considerations and challenges related to the financial and budgetary systems in health care organizations. Consider the use of data analytics and tools in the monitoring, assessing, and evaluating of the performance of health care organizations. Include a discussion of the importance and efficacy of financial statements used in the decision-making process of health care organizations.
Support your work with at least 4 academic or professional peer-reviewed sources published within the past 5 years.
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Assignment Details (250 - 300 words)Now that the research .docxlesleyryder69361
Assignment Details (250 - 300 words)
Now that the research end is in sight, are your ethical obligations as a researcher over with?
What are some important ethical obligations during the reporting and sharing of your findings?
How do you avoid these pitfalls?
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Write eight paragraphs addressing these eight prompts:
Part 1 Intercultural Competence
1. Identify and describe a specific issue of concern to a specific community for the focus of your essay. Choose from DACA and immigration laws, racism, prochoice/prolife, millennials, rape culture, gender equality, same-sex marriage, marijuana laws, religion in schools, human trafficking, white privilege, police brutality, gun control, or another social justice issue.
2. Define culture and cultural competence and discuss how your own culture has shaped your identity and world view related to the issue you chose.
3. Discuss significant characteristics about another culture and how and why they see this issue perhaps differently than you. (put yourself in their shoes, see it from their perspective)
4. Discuss how you have or how you might adjust your actions and communication style to successfully interact with someone from another culture/viewpoint.
Part 2 Engagement with Communities: Social Responsibility
5. Discuss your civic responsibility related to the issue you chose to write about in this essay.
6. Discuss effective participation in civic engagement activities related to this issue.
7. Describe your understanding of the purpose and benefits of civic engagement.
8. If you have engaged in civic activities related to this issue or another issue of importance to you, describe that experience. What was the purpose? What were the benefits? What did you learn?
.
Assignment detailed instructions Write a three-page (minimum of 750.docxlesleyryder69361
Assignment detailed instructions: Write a three-page (minimum of 750 words) essay addressing the following eight questions. The paper should be in APA format, double spaced, 12 font, and include references/bibliography(MINIMUM 3) on the fourth page.
Write eight paragraphs addressing these eight prompts:
Part 1 Intercultural Competence
1. Identify and describe a specific issue of concern to a specific community for the focus of your essay. Choose from DACA and immigration laws, racism, prochoice/prolife, millennials, rape culture, gender equality, same-sex marriage, marijuana laws, religion in schools, human trafficking, white privilege, police brutality, gun control, or another social justice issue.
2. Define culture and cultural competence and discuss how your own culture has shaped your identity and world view related to the issue you chose.
3. Discuss significant characteristics about another culture and how and why they see this issue perhaps differently than you. (put yourself in their shoes, see it from their perspective)
4. Discuss how you have or how you might adjust your actions and communication style to successfully interact with someone from another culture/viewpoint.
Part 2 Engagement with Communities: Social Responsibility
5. Discuss your civic responsibility related to the issue you chose to write about in this essay.
6. Discuss effective participation in civic engagement activities related to this issue.
7. Describe your understanding of the purpose and benefits of civic engagement.
8. If you have engaged in civic activities related to this issue or another issue of importance to you, describe that experience. What was the purpose? What were the benefits? What did you learn?
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Assignment Description 400 wordsOne of the more important me.docxlesleyryder69361
Assignment Description
400 words
One of the more important measures in regard to international economics is the balance of payments. Think of it as a national accounting measure that looks at the flow of goods and services into and out of an economy in a given period of time. It also shows capital flows into and out of a country. Until 1980, the United States tended to run a positive-to-neutral balance of payments position and was a creditor nation. In the course of the past 30 years, the United States has moved to a negative balance of payments and to being a debtor nation.
Review and discuss the following:
Discuss the importance of the balance of payments as an accounting measure.
Discuss the current account and its components and the capital and financial accounts and their components.
How important is the U.S. deficit in traded goods in regard to the balance of payments?
Here are some relevant articles to help you with this assignment:
The Changing Nature of the U.S. Balance of Payments
Balance of Payments
Please submit your assignment.
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The tourism and hospitality sector in Australia represents a significant portion of the country's GDP and employment, but was severely impacted by both the 2019-2020 bushfires and the COVID-19 pandemic. The document assigns a task to create a digital poster and 100-word disruption brief with references to highlight how these twin crises devastated the tourism and hospitality industry in Australia.
Assignment DescriptionYou will prepare and deliver a speech .docxlesleyryder69361
Assignment Description
You will prepare and deliver a speech using the power of words. You will use the devices to convey your emotions and move your audience to connect with your purpose. Get your message across to your audience by using many strategies. You will create images and emotion in your audience using storytelling, humor or sharing personal experiences (both heartbreaking and fulfilling). You will also apply the oratorical skills that you have been exploring.
Completion Instructions
Presentation Topic
: For this presentation, you will act as a representative agent for the University, recruiting prospective students from your country of origin. Prepare a speech outline that persuades the prospects. Describe, among other ideas: Your experiences, emotions and challenges of your life in Canada, moving around the City, Campus activities, career projection and Permanent Residency possibilities. Tell a story, add humor, move your audience to feel your story.
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Assignment DescriptionYou are to write an essay in which you .docxlesleyryder69361
Assignment Description:
You are to write an essay in which you contrast two viewpoints on a topic and argue for one of them. Over the coming few weeks, you will work through drafting youressay, with the goal of producing a well-written essay. Send your final essay to
[email protected]
no later than 11:59 PM on December 11, 2019. There is no need to hand in a hard copy. You must submit your work by the official deadline. Extensions may be granted only in exceptional circumstances, and when sought in advance. Students who submit the work late without an agreed extension will face the following penalty: loss of 2 marks per day.
Assignments Deadlines:
Draft:
December
2nd,
2019
Final Submission: December
11th,
2019
If you have trouble coming up with a good topic, you might want to consider the following questions:
• Are the effects of social networking sites positive or negative? • Should parents give their teenagers an allowance?• Can music help us emotionally?• Should smoking be banned?• Are cell phones dangerous?• Is social media good?
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Assignment DescriptionYou are the lead human–computer intera.docxlesleyryder69361
Assignment Description
You are the lead human–computer interaction (HCI) engineer on a major design project for an organization of your choice. Employees or customers will use this new system and user interface (UI) design to perform data entry for the organization. The UI will need to provide the required input and output to characterize the type of data collected by the organization.
Choose an organization, such as a business, nonprofit group, government, or another organization. Provide a description of your chosen organization, including the following:
Name of the organization
Business type
Size of the organization
Planned users for the interface
Type of data that must be captured
The use of the data
Part of your job is to elicit and define the UI requirements for this new design.
Write a neatly-formatted report that includes the following:
Title page
Report of 4–6 pages consisting of the following:
Introduction to the contents of the report
Description of the organization, as detailed above
Identification of the following elements that must be included in this UI design for the organization:
Fields you expect to see in this UI screen design (e.g., menus, data entry screens, boxes, help, fields, drop-down menus)
List of requirements that will ensure that this interface design can easily capture data input in multiple languages
Explanation of interface alternatives that will be needed for different language orientations (e.g., different characters for right and left)
Effective conclusion
References must be properly cited in APA style
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Assignment DescriptionYou are now ready to start representin.docxlesleyryder69361
Assignment Description
You are now ready to start representing your system integration project by utilizing a system integration framework, which you researched as part of your Discussion Board assignment. You will also decide which components you might want to acquire and which components you want to develop internally.
Assignment Guidelines
For this week’s assignment, you will provide detail on the overall system integration architecture and the implementation framework.
New Content (Week 4)
Proposed System Integration Components Architecture
Thoroughly describe the architecture of the proposed integrated system, including all interfaces and components for the system integration and deployment.
Represent this architecture diagrammatically.
Discuss which components and interfaces could be acquired and those that need to be developed from scratch.
Implementation Framework
Select and describe in detail the framework that you used to define and implement the system integration project.
Define the project in terms of the selected framework.
Discuss advantages for using the selected framework.
Discuss integration challenges that were highlighted by defining the framework.
Make sure that the document is in APA format.
Submit the document for grading.
.
Assignment DescriptionManagement is worried, after consultin.docxlesleyryder69361
Assignment Description
Management is worried, after consulting with the IT department that the current documentation of the present architecture was not done correctly and with the required details, therefore if IoT is implemented they desire more detailed graphical documentation on its implementation. Provide the following components as part of an architecture model graphic to be delivered to management for the asset tracking system:
Provide an introduction to the paper concerning the purpose of the graphic and the overall solution being recommended by the asset tracking IoT implementation (2-3 paragraphs).
Provide descriptive information regarding the architectural model graphic, and the details describing the devices, applications, Cloud/Server environment and gateway. (2 pages)
Provide the architectural graphic with the components below (Describe each of the objects on the diagram below, the interconnections or interfaces, types of data traveling across the connections, active protocols, cabling or wireless connections, and implemented security):
Devices (Generic device - Sensing and Actuating Devices)
IoT Application (transforms the data for value to the user)
Cloud/Server (data storage, processing and management)
Gateway capability (data is acquired, forwarded to the communications network)
Provide a conclusion to the paper summarizing the content and purpose of the paper.
An example of the required level of detail for your graphic can be found at
http://www.latogalabs.com/2017/05/iot-architecture-the-journey/
.
.
Assignment Description
Ego Integrity Presentation
Imagine you are working as a charge nurse in an assisted living facility. Your unit houses twenty older adults. The residents of this unit are cognitively functional without evidence of cognitive decline. The residents are elderly and do require varying degrees of physical assistance with ADLs. Create a PowerPoint outlining strategies you can incorporate in the assisted living facility to promote ego integrity for your residents. What group and individual activities can you incorporate?
Assignment Expectations:
Length: 10-15 content slides
Structure: Include a title slide, objective slide, and reference slide in APA format. These do not count towards the minimum content slide count for this assignment. Be sure to fully explain all slides in the Speaker Notes.
References: Use appropriate APA style in-text citations and references for all resources utilized to answer the questions. A minimum of two (2) scholarly sources are required for this assignment.
Rubric: This assignment uses a rubric for scoring. Please review it as part of your assignment preparation and again prior to submission to ensure you have addressed its criteria at the highest level.
Format: Save your assignment as a Microsoft PPT document (.pptx)
.
Assignment DescriptionCultural Group Exploration Assignment .docxlesleyryder69361
Assignment Description
Cultural Group Exploration Assignment (in-text citation and APA format 7th edition) Required.
Understanding the impact of culture on the health beliefs / practices of a client is an important component of assessing, planning, implementing and evaluating comprehensive nursing care. To provide culturally competent care is a worthy goal. Insensitivity to a client’s culture may render interventions fruitless.
Purpose
: The PURPOSE of this assignment is to develop in the learner an awareness of the health beliefs / practices of a culture different from their own.
Guidelines
: Download the
Cultural Exploration Guidelines
before you start the activity and refer to it as you work. Submit completed table along with reference page to your faculty mentor through the Submissions tab and then post it in your group discussion.
Cultural Exploration Table and Rubric
is attached below
.
Assignment description from the syllabusEach member of the matc.docxlesleyryder69361
Assignment description from the syllabus:
Each member of the matching team will individually submit a 3-page, double-spaced write-up on the case. To receive full credit, you should describe the firm’s opportunity/dilemma, evaluate/analyze their strategic options, and describe your recommendation on the most promising path(s) forward in their strategy. Make sure to back up your evaluation and recommendations with evidence/facts from the case. Three pages is very short—make sure that you are concise and to-the-point in zeroing in on key aspects of the case.
At the end of your write-up, ask one or two questions that you are more concerned about the firm.
ANU Press
Chapter Title: OCCUPATIONAL STRESS
Chapter Author(s): SU MON KYAW-MYINT and LYNDALL STRAZDINS
Book Title: Health of People, Places and Planet
Book Subtitle: Reflections based on Tony McMichael’s four decades of contribution to
epidemiological understanding
Book Editor(s): COLIN D. BUTLER, JANE DIXON, ANTHONY G. CAPON
Published by: ANU Press. (2015)
Stable URL: https://www.jstor.org/stable/j.ctt1729vxt.18
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
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This book is licensed under a Creative Commons Attribution-NonCommercial-
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81
4
OCCUPATIONAL STRESS
SU MON KYAW-MYINT AND LYNDALL STRAZDINS
Abstract
In 1979, Tony McMichael co-authored a paper showing how occupational stress
not only affected mental health; it also exacerbated the effect of chemical and
physical hazards on respiratory and skin symptoms. This study was among
the first to place occupational stress within the same framework as chemical
and physical hazards. It also showed that stress and mental health faced
complex assessment challenges, but that these were similar to those faced by
the assessment of exposure to chemical and physical hazards, especially in
large-scale epidemiological studies.
More recently, occupational stress has been termed a ‘psychosocial hazard’ by
some jurisdictions in an attempt to place it into the existing occupational risk
management and risk assessment framework. However, progress has been slow
and regulation of occupational stress remains outside standard occupational
health and safety .
How to Make a Field Mandatory in Odoo 17Celine George
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This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
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This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
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Sheet1Northwestern Memorial HealthCare and SubsidiariesRatiosFormu.docx
1. Sheet1Northwestern Memorial HealthCare and
SubsidiariesRatiosFormulaCalculationResultCurrent
RatioCurrent Assets7082731.32Current Liabilities
536050Average Collection PeriodNet
Receivable27977564.55daysNet Patient Service Revenue /
365(1582051 / 365)Days Cash on Hand, Short-Term
Sources Cash + Marketable Securities25226862.74days(Total
Expenses − Depreciation) / 3654020.67Average Payment
PeriodTotal Current liabilities536050133.32days(Total expenses
− Depreciation) / 3654020.67Operating MarginOperating
Income883085.19%Total Operating revenue1701540Excess
MarginExcess of revenue over expenses1217997.16%Total
Operating revenue1701540Return on Net AssetsExcess of
revenue over expenses1217994.65%Net Assets2618574Total
Assets turnover(Total Operating Revenue + Other Income)
17350310.37timesTotal Assets4701684Fixed Assets
turnover(Total Operating Revenue + Other Income)
17350311.28timesNet Fixed Assets1358051Inventory
Turnover(Total Operating Revenue + Other Income)
173503155.03timesInventory31528Net Assets FinancingNet
Asset x 1002618574 x 10055.69%Total Assets4701684Long-
Term Debt to CapitalizationLong Term Debt x 1001547060 x
10037.14%(Long term debt + Net Assets)4165634Debt service
coverage ratioExcess of revenue over expenses + Depreciation
exp + Int exp2636955.97timesdebt principal payment + interest
expense44201Cash flow to debtExcess of rev over exp +
Depreciation exp23399411.23%current liabilities + long-term
debt2083110
Sheet2
Sheet3
FIN 3660
Assignment Chapter 7 NAME:
2. 1. Discuss three types of supplemental disability benefits that
life insurance policies often provide.
a.
b.
c.
2. Regarding the waiver of premium (WP) rider on a life
insurance policy:
a. What does this rider provide?
b. What must a policyowner do to qualify for WP benefits?
c. What is the definition of “total disability” under most WP
riders?
d. Name three disabilities that are typically excluded from the
WP benefits.
3. Provide an example of the use of each of the following:
(1) Accelerated Death Benefit (also called _____________):
(2) Terminal Illness benefit:
(3) Dread Disease Benefit:
(4) Second Insured Rider:
4. Your friend Michael is married and has two teenage school
children. His wife does not work outside their home, on which
they have a $190,000 mortgage. Michael has asked you for
advice on the best type of life insurance to purchase and what
riders he would need. Briefly discuss the type of coverage he
should purchase as well as three riders that he should purchase
with his life insurance policy.
5. Rebekah Kraft, age 29, died when the commercial airplane on
which she was traveling as a passenger crashed, killing
everyone on board. At the time of her death, Ms. Kraft was
insured by a $300,000 whole life insurance policy with a typical
double indemnity accidental death benefit rider. This
information indicates that the insurer is liable for paying the
designated beneficiary of Ms. Kraft’s policy
3. $____________________________.
6. Liam Morris is the policyowner-insured of a whole life
insurance policy issued by the Southern Life Insurance
Company. Mr. Morris was injured in an accident and was unable
to work for 18 months. After Mr. Morris satisfied a three-month
waiting period, Southern began paying the renewal premiums on
Mr. Morris’s policy, and the policy’s cash value continued to
increase just as if Mr. Morris were paying the premiums
himself. This information indicates that Mr. Morris’s policy
contained a
a. waiver of premium for payor benefit
b. waiver of premium for disability (WP) benefit
c. paid-up additions option benefit
d. disability income benefit
7. Fant Gritton is the policyowner-insured of a $200,000 whole
life insurance policy. The policy includes a supplemental
benefit rider that gives Mr. Gritton the right to purchase
$25,000 of additional whole life insurance at age 34, age 37,
and age 40, without submitting evidence of insurability. This
information indicates that Mr. Gritton’s policy includes the type
of supplemental benefit known as
a. an additional insured rider
b. a paid-up additions option benefit
c. a guaranteed insurability (GI) benefit
d. credit life insurance
8. One type of supplemental accident benefit is the accidental
death and dismemberment (AD&D) benefit. AD&D benefits
generally specify that the
a. insured must be totally disabled and unable to work in order
to receive any benefits.
b. insurer will pay both accidental death benefits and
dismemberment benefits for injuries suffered in the same
accident.
4. c. insured must suffer the actual physical loss of a limb to
qualify for dismemberment benefits.
d. dismemberment benefit is payable if an accident causes the
insured to lose any two limbs or sight in both eyes.
9. One benefit that may be added to an individual life insurance
policy is the disability income benefit. One true statement about
a supplemental disability income benefit is that
a. the insured must be totally disabled to receive the benefit
b. the insurer begins paying benefits at the start of the disability
c. life insurance policies that include a disability income benefit
rarely include a waiver of premium for disability (WP) benefit
as well
d. the amount of the monthly disability income benefit is a
percentage of the insured’s current earnings
10. Helen Smith, the policyowner-insured of a whole life
insurance policy, wants to add a second insured rider to the
policy so that her business partner, Jane Fox, will be provided
with life insurance coverage. The insurer most likely will base
the premium rate for the coverage provided by the rider on
a. the combined risk characteristics of Ms. Smith and Ms. Fox
b. the risk characteristics of Ms. Smith only
c. the risk characteristics of Ms. Fox only
d. a flat amount that the company charges for all second insured
riders
Life and Health Insurance FIN 3660
Chapter 7
Supplemental Benefits
Objectives
Identify and describe three types of supplemental disability
5. benefits that life insurance policies may provide.
Explain the coverage that an accidental death benefit rider
provides and give examples of common exclusions.
Identify three types of accelerated death benefit riders and
describe the differences among those riders.
Describe three types of insurance riders that expand a life
insurance policy’s coverage to insure more than one individual.
Identify two types of insurability benefit riders and explain how
they allow a life insurance policyowner to purchase additional
insurance coverage.
2
The Basics
Supplemental benefits are benefits that can be added to
individual life insurance policies.
An additional premium amount is usually charged for each
benefit.
Sometimes supplemental benefits are provided by a policy
provision, but usually they are provided by adding riders to a
life insurance policy.
This helps when customizing a policy, because a new contract is
not needed to add coverage.
3
Supplemental Disability Benefits
Disability benefits can be added to a life insurance policy.
One of the most common supplemental benefits is the waiver of
premium for disability (WP) benefit.
Under this, the insurance waives its right to collect premiums
that become due while the insured is totally disabled. The
insurer pays the premiums, so a policy that builds a cash value
will continue to increase.
In participating policy the insurance company continues to pay
policy dividends as if the policyowner were paying premiums.
6. 4
WP Benefits
The policyowner must notify the insurance company in writing
of a claim and provide proof that the insured is totally disabled
as defined by the WP benefit.
Total disability is the insured’s inability to perform the
essential duties of their own occupation or any other occupation
for which they are reasonably suited by education, training, or
experience.
The insured must be totally disabled for three to six months
before the insurer will waive premium payments.
Disabilities resulting from self-inflicted injuries and injuries
suffered while committing a crime are typically excluded.
In cases with variable premiums (universal and variable life
insurance policies), charges that are waived vary depending on
the terms of the WP benefit rider.
5
Waiver of Premium for Payor Benefit
Waiver of premium for payor benefit provides that the insurance
company will waive its right to collect a policy’s renewal
premiums if the policyowner dies or becomes totally disabled.
Usually this is included as a rider to a juvenile insurance policy,
one that is issued on the life of a child but owned and paid for
by an adult.
Premium payments are only waived until the insured reaches a
certain age.
A policyowner is totally disabled during the first two years of
disability if they are unable to perform the essential duties of
their own occupation. After that, they are considered totally
disabled if they cannot perform the essential duties of any
occupation for which they are reasonably suited by education,
training, or experience.
7. 6
Disability Income Benefit
The disability income benefit provides a monthly income
benefit to the policyowner-insured if they become totally
disabled while the policy is in force.
Definition for total disability is the same as WP, as is the wait
period.
Usually the income is a certain percentage of the policy’s face
amount.
Generally this goes hand in hand with WP.
7
Accidental Benefits
Accidental death benefit a supplemental life insurance policy
benefit that provides a death benefit in addition to the policy’s
basic death benefit if the insured dies as a result of an accident.
Double indemnity benefit when the amount of accidental death
benefit is equal to the face amount of the life insurance policy.
Determining the precise cause of an insured’s death can
sometimes be quite difficult.
Some exclusions: suicide, war related accidents, aviation-
related accidents if the insured was not a passenger, and
accidents resulting from the insured committing a crime.
Accidental death and dismemberment (AD&D) provides
accidental death benefits and provides a dismemberment benefit
payable if an accident causes the insured to lose any two limbs
or sight in both eyes.
8
Accelerated Death Benefits
Also known as a living benefit, this provides that a policyowner
8. may elect to receive all or part of the policy’s death benefit
before the insured’s death under certain conditions.
Usually only offered on policies with larger face amounts.
Three commonly offered types of accelerated death benefits:
terminal illness benefit, dread disease benefit, and long-term
care benefit.
9
Accelerated Death Benefits
Terminal illness (TI) benefit a benefit under which the insurer
pays a portion of the policy’s death benefit to a policyowner-
insured who suffers from a terminal illness and has a physician-
certified life expectancy of less than a stated time, generally 12
or 24 months.
Typically paid for by an administrative charge that the insurer
assesses when a policyowner-insured elects to exercise the TI
benefit.
10
Accelerated Death Benefits
Dread disease (DD) benefit an accelerated death benefit under
which the insurer agrees to pay a portion of the policy’s face
amount to the policyowner if the insured suffers from one of a
number of specified diseases.
Diseases included: life-threatening cancer, coronary artery
bypass surgery, heart attack, stroke, end-stage kidney failure,
AIDS
Some DD benefits include organ transplants and Alzheimer’s
disease.
11
Accelerated Death Benefits
Long-term care (LTC) insurance benefit ab accelerated death
9. benefit under which the insurer agrees to pay a monthly benefit
to a policyowner if the insured requires constant care for a
medical condition.
The care given and the medical condition required to qualify are
specified in the LTC policy rider or provision.
Premiums generally are waived on both the long-term care
benefit and the basic life insurance policy.
The amount paid is generally a percentage of the policy’s face
amount.
Typically there is a 90 day waiting period before benefits are
payable.
12
Benefits for Additional Insureds
Spouse insurance rider a supplemental life insurance policy
benefit that provides term life insurance coverage on the
insured’s spouse. Typically sold on the basis of coverage units.
Most insurance companies do not offer more than 5 or 10
coverage units.
Children’s insurance rider a supplemental life insurance policy
benefit that provides term life insurance coverage on the
insured’s children. Some insurers combine spouse and
children’s insurance coverage into one rider, a spouse and
children’s insurance rider.
Second insured rider a supplemental life insurance policy
benefit that provides term insurance coverage on the life of a
person other than the policy’s insured. Can be spouse, another
relative, or an unrelated person. Typically the coverage is
greater than the spouse’s insurance rider.
13
Insurability Benefits
Guaranteed insurability (GI) benefit a supplemental life
insurance policy benefit that gives the policyowner the right to
10. purchase additional insurance of the same type as the basic life
insurance policy. The premium for the additional coverage is
based on the insured’s attained age when the additional
insurance is purchased. If the policyowner does not exercise the
option to buy extra coverage on the specified dates, that option
is lost forever, though the policyowner is permitted to exercise
the next option when it comes due.
14
Insurability Benefits
Paid-up additions option benefit a supplemental life insurance
policy benefit that allows the owner of a whole life insurance
policy to purchase single-premium paid-up additions to the
policy on stated dates in the future without providing evidence
of the insured’s insurability.
Premiums for the paid-up additions are based on the insured’s
attained age at the time the paid-up additions are purchased.
Most riders state that if the policyowner does not exercise the
purchase option for a stated number of years, then the rider will
terminate. At that time, the paid-up additions already purchased
remain in force, but the policyowner can no longer exercise the
option to purchase new paid-up additions.
15
Questions regarding Financial Statements for Northwestern
Healthcare (pdf file)
1. Check the Excel file. From the ratios completed, state
specifically where the numbers come from, i.e. the line item
NAME, and the PAGE number.
2. Using the Ingenix Median 2009 data (see the applicable
11. column in the pictures attached) indicate whether each ratio
calculated is favorable or unfavorable as compared to the
Ingenix Data (see the 2 jpg files)
3. Identify the type of audit opinion issued by KPMG on the
financial statements for the year ending August 31, 2012.
4. Suppose Northwestern pays $2.5 million on August 31, 2012
for their malpractice insurance policy that covers the time
period of September 1, 2012 thru August 31, 2013.
a. Identify any impact to specific accounts on the balance sheet
b. Identify any impact to specific accounts on the statements of
operations
c. What is the impact to the current ratio?
5. Suppose on August 31, 2012, Northwestern receives $100,000
of IV solutions at the loading dock. The IV solutions are
received by Northwesterns’s storeroom staff and stored
appropriately in the warehouse. The invoice for paying the
vendor arrives at Northwestern on September 5, 2012.
a. Identify any impact to specific accounts on the balance sheet
b. Identify any impact to specific accounts on the statements of
operations
c. What is the impact to the current ratio?
6. What was the net cost reported by Northwestern for charity
care in 2012?
7. In 2012, supplies accounted for what portion of total
operating expenses? Insurance accounted for what portion of
total operating expenses in 2012? Was that an increase or
decrease from 2011?
8. In Fiscal Year 2012, did Northwestern’s Long-Term Debt
obligation increase from 2011? Suppose Northwestern had taken
out $5million in long-term debt to build a new surgical suite.
Where in the footnotes would this transaction have been
captured? Identify the footnote by number and explain the
impact.
9. What was the net increase (or decrease) in Cash & Cash
Equivalents in 2012? What amount of cash was provided (or
used) by Operations? What activity type used the majority of
12. Northwestern’s cash in 2012?
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N
T S
Northwestern Memorial HealthCare and Subsidiaries
Years Ended August 31, 2012 and 2011
With Reports of Independent Auditors
Ernst & Young LLP
1207-1377461
Northwestern Memorial HealthCare and Subsidiaries
Consolidated Financial Statements
13. Years Ended August 31, 2012 and 2011
Contents
Report of Independent
Auditors..................................................................................
.....................1
Consolidated Financial Statements
Consolidated Balance Sheets
...............................................................................................
............2
Consolidated Statements of Operations and Changes in Net
Assets ...............................................4
Consolidated Statements of Cash Flows
..........................................................................................6
Notes to Consolidated Financial
Statements...............................................................................
.....7
1207-1377461 1
Report of Independent Auditors
The Board of Directors
14. Northwestern Memorial HealthCare
We have audited the accompanying consolidated balance sheets
of Northwestern Memorial
HealthCare (an Illinois not-for-profit corporation) and
Subsidiaries (Northwestern Memorial) as
of August 31, 2012 and 2011, and the related consolidated
statements of operations and changes
in net assets and cash flows for the years then ended. These
financial statements are the
responsibility of Northwestern Memorial’s management. Our
responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United
States. Those standards require that we plan and perform the
audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. We were not engaged
to perform an audit of Northwestern Memorial’s internal control
over financial reporting. Our
audits included consideration of internal control over financial
reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but
15. not for the purpose of expressing
an opinion on the effectiveness of internal control over financial
reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a
test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used
and significant estimates made by management, and evaluating
the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects,
the consolidated financial position of Northwestern Memorial
HealthCare and Subsidiaries as of
August 31, 2012 and 2011, and the consolidated results of their
operations and changes in net
assets and their cash flows for the years then ended, in
conformity with U.S. generally accepted
accounting principles.
As discussed in Note 1 to the consolidated financial statements,
NMHC changed its presentation
of the provision for uncollectible accounts as a result of the
adoption of the amendments to the
16. Financial Accounting Standards Board’s Accounting Standards
Codification resulting from
Accounting Standards Update 2011-07, Presentation and
Disclosure of Patient Service Revenue,
Provision for Bad Debts, and the Allowance for Doubtful
Accounts for Certain Health Care
Entities, effective September 1, 2010.
November 29, 2012
A member firm of Ernst & Young Global Limited
Ernst & Young LLP
155 North Wacker Drive
Chicago, IL 60606-1787
Tel: +1 312 879 2000
Fax: +1 312 879 4000
www.ey.com
August 31
2012 2011
Assets
Current assets:
Cash and cash equivalents 139,343$ 131,311$
Short-term investments 112,925 85,188
17. Current portion of investments, including
assets limited as to use 89,247 91,138
Patient accounts receivable, net of estimated
uncollectibles of $39,036 and $32,338 in 2012
and 2011, respectively 279,775 232,460
Current portion of pledges and grants receivable, net 9,257
16,250
Current portion of insurance recoverable 13,060 14,433
Inventories 31,528 31,715
Other current assets 33,138 28,239
Total current assets 708,273 630,734
Investments, including assets limited as to use,
less current portion 2,430,351 2,247,163
Property and equipment, at cost:
Land 237,953 227,820
Buildings 1,668,000 1,613,399
Equipment and furniture 522,343 509,021
Construction-in-progress 46,573 90,101
2,474,869 2,440,341
Less accumulated depreciation 1,116,818 1,100,060
1,358,051 1,340,281
Prepaid pension cost 30,814 53,216
Insurance recoverable, less current portion 74,444 71,249
Other assets, net 99,751 98,495
Total assets 4,701,684$ 4,441,138$
Northwestern Memorial HealthCare and Subsidiaries
18. Consolidated Balance Sheets
(In Thousands)
2 1207-1377461
August 31
2012 2011
Liabilities and net assets
Current liabilities:
Accounts payable 81,070$ 87,535$
Accrued salaries and benefits 94,948 85,044
Grants and academic support payable, current portion 37,588
28,250
Accrued expenses and other current liabilities 34,871
42,575
Due to third-party payors 207,440 177,399
Current accrued liabilities under self-insurance programs 65,633
72,462
Current maturities of long-term debt 14,500 13,710
Total current liabilities 536,050 506,975
Long-term debt, less current maturities 806,155 821,354
Accrued liabilities under self-insurance programs,
less current portion 420,941 414,173
Grants and academic support payable, less current portion
97,254 36,068
Due to insureds 62,415 45,303
Interest rate swaps 104,503 73,845
Pension liability 3,863 –
19. Other liabilities 51,929 70,372
Total liabilities 2,083,110 1,968,090
Net assets:
Unrestricted:
Undesignated 2,182,940 2,075,713
Board-designated 138,600 130,618
Total unrestricted 2,321,540 2,206,331
Temporarily restricted 155,263 140,388
Permanently restricted 141,771 126,329
Total net assets 2,618,574 2,473,048
Total liabilities and net assets 4,701,684$ 4,441,138$
See accompanying notes to consolidated financial statements.
1207-1377461 3
Northwestern Memorial HealthCare and Subsidiaries
Consolidated Statements of Operations
(In Thousands)
Year Ended August 31
2012 2011
Revenue
Patient service revenue 1,614,123$ 1,593,596$
Provision for uncollectible accounts 32,072 33,196
Net patient revenue 1,582,051 1,560,400
20. Rental and other revenue 100,996 101,792
Net assets released from donor restrictions
and federal and state grants 18,493 21,466
Total revenue 1,701,540 1,683,658
Expenses
Salaries and professional fees 587,971 563,583
Employee benefits 186,633 188,614
Supplies 268,197 263,831
Purchased services 173,545 170,876
Depreciation 145,686 138,249
Insurance 59,711 75,766
Rent and utilities 41,486 40,978
Repairs and maintenance 45,581 44,327
Interest 29,701 28,824
Illinois Hospital Assessment 41,395 41,395
Other 33,326 34,812
Total expenses 1,613,232 1,591,255
Operating income 88,308 92,403
Nonoperating gains (losses)
Investment return 150,762 237,074
Change in fair value of interest rate swaps (30,533) 4,527
Grants and academic support provided (106,708) (55,560)
Other 19,970 9,432
Total nonoperating gains, net 33,491 195,473
Excess of revenue over expenses 121,799 287,876
Continued on next page.
and Changes in Net Assets
1207-1377461 4
21. Northwestern Memorial HealthCare and Subsidiaries
Consolidated Statements of Operations
(In Thousands)
Year Ended August 31
2012 2011
Unrestricted net assets
Excess of revenue over expenses 121,799$ 287,876$
Net assets released from restrictions used for
property and equipment additions 1,579 380
Postretirement-benefit-related changes other than net
periodic pension cost (8,044) 40,165
Other (125) (127)
Increase in unrestricted net assets 115,209 328,294
Temporarily restricted net assets
Contributions 34,021 22,578
Investment return 9,715 16,146
Net assets released from restrictions used for:
Operating expenses, charity care, and
research and education (27,232) (22,118)
Property and equipment additions (1,579) (380)
Change in fair value of split-interest agreements 81
(192)
Other (131) (146)
Increase in temporarily restricted net assets 14,875 15,888
Permanently restricted net assets
22. Contributions 16,347 19,683
Change in fair value of split-interest agreements (1,025)
993
Other 120 (250)
Increase in permanently restricted net assets 15,442
20,426
Change in total net assets 145,526 364,608
Net assets, beginning of year 2,473,048 2,108,440
Net assets, end of year 2,618,574$ 2,473,048$
See accompanying notes to consolidated financial statements.
and Changes in Net Assets (continued)
1207-1377461 5
Northwestern Memorial HealthCare and Subsidiaries
Consolidated Statements of Cash Flows
Year Ended August 31
2012 2011
Operating activities
Change in total net assets 145,526$ 364,608$
Adjustments to reconcile change in total net assets to net
cash provided by operating activities:
Postretirement-benefit-related changes other than net periodic
pension cost 8,044 (40,165)
Change in fair value of interest rate swaps 30,658 (4,402)
Net investment return and net change in
23. unrealized investment gains/losses (153,602) (246,873)
Restricted contributions and realized investment return (56,299)
(49,409)
Depreciation and amortization 145,356 137,639
Provision for uncollectible accounts 32,164 33,296
Change in operating assets and liabilities:
Patient accounts receivable (79,479) (47,610)
Due to third-party payors 29,790 22,255
Grants and academic support payable 70,524 (4,972)
Other operating assets and liabilities 11,649 55,697
Net cash provided by operating activities 184,331 220,064
Investing activities
Purchases of trading securities (589,584) (410,539)
Sales of trading securities 410,091 296,581
Unrestricted realized investment return 124,061 95,477
Capital expenditures, net (163,456) (178,886)
Net cash used in investing activities (218,888) (197,367)
Financing activities
Payments of long-term debt (13,710) (13,140)
Restricted contributions and realized investment return 56,299
49,409
Net cash provided by financing activities 42,589 36,269
Net increase in cash and cash equivalents 8,032 58,966
Cash and cash equivalents, beginning of year 131,311
72,345
Cash and cash equivalents, end of year 139,343$ 131,311$
See accompanying notes to consolidated financial statements.
(In Thousands)
24. 1207-1377461 6
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements
(In Thousands)
Years Ended August 31, 2012 and 2011
1207-1377461 7
1. Organization and Summary of Significant Accounting
Policies
Northwestern Memorial HealthCare (NMHC) serves as the sole
corporate member of
Northwestern Memorial Hospital (NMH), Northwestern Lake
Forest Hospital (NLFH), and
Northwestern Memorial Foundation (the Foundation). NMH’s
subsidiary corporations are
Northwestern HealthCare Corporation (NHC), Northwestern
Memorial Physicians Group
(NMPG), and Northwestern Memorial Insurance Company
(NMIC). NLFH’s subsidiary
corporation is Lake Forest Health and Fitness Institute (HFI).
NMH and NLFH are both
members of the obligated group (Obligated Group) for all of the
25. outstanding bonds of NMH and
NLFH.
NMH is a major academic medical center located in the
Streeterville neighborhood of Chicago,
providing a complete range of adult inpatient and outpatient
services, primarily to residents of
Chicago and surrounding areas, in an educational and research
environment. It is licensed for
894 beds. NMH, whose origins date back to 1849, is the primary
teaching hospital for
Northwestern University’s Feinberg School of Medicine (FSM).
NLFH is a community hospital located in Lake Forest, Illinois,
providing a complete range of
adult inpatient and outpatient services, as well as skilled
nursing care, primarily to residents of
Lake Forest and the surrounding area. It is licensed for 117
acute care beds and 84 skilled
nursing care beds.
The Foundation carries out fund-raising and other related
development activities to promote and
support the tax-exempt interests and purposes of NMH and
NLFH.
Basis of Presentation
26. The accompanying consolidated financial statements include the
accounts of NMHC, the
Foundation, NMH and its subsidiaries, and NLFH and its
subsidiary (collectively referred to
herein as Northwestern Memorial). All significant intercompany
transactions and balances have
been eliminated in consolidation.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 8
1. Organization and Summary of Significant Accounting
Policies (continued)
Charity Care and Community Benefit
Northwestern Memorial provides care to patients regardless of
their ability to pay. Northwestern
Memorial developed a Free and Discounted Care Policy (the
Policy) for both the uninsured and
27. the underinsured. Under the Policy, patients are offered
discounts of up to 100% of charges on a
sliding scale, which is based on income as a percentage of the
Federal Poverty Level guidelines
(up to 600%). The Policy also contains provisions that are
responsive to those patients subject to
catastrophic healthcare expenses and uninsured patients not
covered by the provisions above.
Since Northwestern Memorial does not pursue collection of
these amounts, they are not reported
as net patient revenue, and the cost of providing such care is
recognized within operating
expenses.
Northwestern Memorial estimates the direct and indirect costs
of providing charity care by
applying a cost to gross charges ratio to the gross
uncompensated charges associated with
providing charity care to patients. Northwestern Memorial also
receives certain funds to offset or
subsidize charity care services provided. These funds are
primarily received from investment
return on free care endowment funds. The cost of providing
charity care was $57,738 and
$50,105 for the years ended August 31, 2012 and 2011,
28. respectively. In addition, funds received
to offset or subsidize charity care were $491 and $496 for the
years ended August 31, 2012 and
2011, respectively. In filing the Annual Non Profit Hospital
Community Benefits Plan Report to
the Illinois Attorney General for the year ended August 31,
2011, Northwestern Memorial
reported total community benefit of $279,435 (unaudited),
including unreimbursed cost of
charity care of $51,787 (unaudited), which is calculated using a
different methodology than that
used for the consolidated financial statements. Management is
currently collecting the
information needed to file the 2012 report.
Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting
principles (GAAP) requires management to make estimates and
assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the
29. reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid short-term
investments with maturities of
90 days or less from the date of purchase.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 9
1. Organization and Summary of Significant Accounting
Policies (continued)
Patient Accounts Receivable
Patient accounts receivable are stated at net realizable value.
Northwestern Memorial maintains
allowances for uncollectible accounts and for estimated losses
resulting from a payor’s inability
to make payments on accounts. Northwestern Memorial
estimates the allowance for uncollectible
accounts based on management’s assessment of historical and
30. expected net collections
considering historical and current business and economic
conditions, trends in healthcare
coverage, and other collection indicators. Accounts receivable
are charged to the allowance for
uncollectible accounts when they are deemed uncollectible.
Assets Limited as to Use
Assets limited as to use consist primarily of investments
designated by the appropriate board of
directors (the Board) for certain medical education and
healthcare programs. The appropriate
Board retains control of these investments and may, at its
discretion, subsequently use them for
other purposes. In addition, assets limited as to use include
investments held by trustees under
debt agreements and for self-insurance and collateral related to
interest rate swaps.
Investments
Investments in equity securities with readily determinable fair
values and all investments in debt
securities are reported at fair value based on quoted market
prices. Unless in pension plan assets,
alternative investments are reported using the equity method.
31. Alternative investments include
common collective trusts, commingled funds, 103-12 entities
and other limited partnership
interests in hedge funds, private equity, venture capital and real
estate funds. Alternative
investments in the pension plan are reported at fair value based
on net asset value (NAV) per
share or equivalent.
Derivative Instruments
Derivative instruments, specifically interest rate swaps, are
recorded on the consolidated balance
sheets at fair value. The change in the fair value of derivative
instruments is recorded in
nonoperating gains (losses).
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 10
32. 1. Organization and Summary of Significant Accounting
Policies (continued)
Inventories
Inventories, consisting primarily of pharmaceuticals and other
medical supplies, are stated at the
lower of cost on the first-in, first-out method or fair value.
Property and Equipment
Property and equipment are stated at cost and are depreciated
using the straight-line method over
the estimated useful lives of the assets. Typical useful lives are
5 to 40 years for buildings and
building service equipment and 3 to 20 years for equipment and
furniture. Interest cost incurred
on borrowed funds during the period of construction of capital
assets is capitalized as a
component of the cost of acquiring those assets.
Asset Impairment
Northwestern Memorial considers whether indicators of
impairment are present and performs the
necessary tests to determine if the carrying value of an asset is
appropriate. Impairment write-
downs are recognized in operating income at the time the
impairment is identified. There was no
33. impairment of long-lived assets in 2012 or 2011.
Deferred Charges
Deferred finance charges and bond discount or premium are
amortized or accreted using the
effective interest method or the bonds outstanding method,
which approximates the effective
interest method, over the life of the related debt.
Net Assets
Resources are classified for reporting purposes into four net
asset categories as general
unrestricted, board-designated unrestricted, temporarily
restricted, and permanently restricted,
according to the absence or existence of board designations or
donor-imposed restrictions.
Board-designated net assets are unrestricted net assets that have
been set aside by the Board for
specific purposes. Temporarily restricted net assets are those
assets, including contributions and
accumulated investment returns, whose use has been limited by
donors for a specific purpose or
time period. Permanently restricted net assets are those for
which donors require the principal of
34. the gifts to be maintained in perpetuity to provide a permanent
source of income.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 11
1. Organization and Summary of Significant Accounting
Policies (continued)
Any changes in donor restrictions that change the net asset
category of previously recorded
contributions are recorded as other in the accompanying
consolidated statements of operations
and changes in net assets in the period communicated by the
donor.
Net Patient Revenue
Northwestern Memorial has agreements with third-party payors
that provide for payments to
Northwestern Memorial at amounts different from its
established rates. Payment arrangements
35. include prospectively determined rates per admission or visit,
reimbursed costs, discounted
charges, and per diem rates. Net patient revenue is reported at
the estimated net amount due from
patients and third-party payors for services rendered, including
estimated adjustments under
reimbursement agreements with third-party payors, certain of
which are subject to audit by
administering agencies. These adjustments are accrued on an
estimated basis and are adjusted, as
needed, in future periods.
EHR Incentive Payments
The American Recovery and Reinvestment Act of 2009 included
provisions for implementing
health information technology under the Health Information
Technology for Economic and
Clinical Health Act (HITECH). The provisions were designed to
increase the use of electronic
health record (EHR) technology and establish the requirements
for a Medicare and Medicaid
incentive payment program beginning in 2011 for eligible
providers that adopt and meaningfully
use certified EHR technology. Eligibility for annual Medicare
incentive payments is dependent
36. on providers demonstrating meaningful use of EHR technology
in each period over a four-year
period. Initial Medicaid payments are available to providers that
adopt, implement, or upgrade
certified EHR technology. Providers must demonstrate
meaningful use of such technology innm
subsequent years to qualify for additional Medicaid incentive
payments.
Northwestern Memorial recognizes HITECH incentive payments
as revenue under the grant
accounting model when it is reasonably assured that the
meaningful use objectives have been
achieved. Northwestern Memorial recognized incentive
payments totaling $5,422 and $0 for the
years ended August 31, 2012 and 2011, respectively, as net
assets released from donor
restrictions and federal and state grants in the accompanying
consolidated statements of
operations and changes in net assets. Northwestern Memorial’s
compliance with the meaningful
use criteria is subject to audit by the federal government.
Northwestern Memorial HealthCare and Subsidiaries
37. Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 12
1. Organization and Summary of Significant Accounting
Policies (continued)
Contributions
Unrestricted gifts, other than long-lived assets, are recorded as
a component of other
nonoperating gains in the accompanying consolidated
statements of operations and changes in
net assets. Unrestricted gifts of long-lived assets such as land,
buildings, or equipment are
recorded at fair value as an increase in unrestricted net assets.
Contributions are reported as
either temporarily or permanently restricted net assets if they
are received with donor
restrictions. When a donor restriction expires, that is, when a
stipulated time restriction ends or
purpose restriction is accomplished, temporarily restricted net
assets are reclassified as
unrestricted net assets and reported in the accompanying
consolidated statements of operations
38. and changes in net assets as net assets released from
restrictions.
Unconditional promises to give cash or other assets are reported
as pledges receivable and
contributions within the appropriate net asset category. An
allowance for uncollectible pledges
receivable is estimated based on historical experience and other
collection indicators. Pledges
receivable with payment terms extending beyond one year are
discounted using market rates of
return reflecting the terms and credit of the pledges at the time
a pledge is made.
Northwestern Memorial is a beneficiary of several split-interest
agreements, primarily perpetual
trusts held by others. The Foundation recognizes its interest in
these perpetual trusts as
temporarily or permanently restricted net assets based on the
Foundation’s percentage of the fair
value of the trusts’ assets.
Nonoperating Gains (Losses)
Nonoperating gains (losses) consist primarily of investment
returns (including realized gains and
losses; net change in unrealized investment gains and losses;
39. changes in Northwestern
Memorial’s proportionate share of its equity interest in
alternative investments, interest, and
dividends), unrestricted contributions received, grants and
academic support provided to external
organizations, net assets released from restriction and used for
grants and academic support, and
changes in fair value of interest rate swaps.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 13
1. Organization and Summary of Significant Accounting
Policies (continued)
Excess of Revenue Over Expenses
The accompanying consolidated statements of operations and
changes in net assets include the
excess of revenue over expenses. Changes in unrestricted net
assets, which are excluded from the
40. excess of revenue over expenses, consist primarily of
contributions of long-lived assets
(including assets acquired using contributions, which, by donor
restriction, are to be used for the
purposes of acquiring such assets), transfers between net asset
categories based on changes in
donor restrictions, and postretirement-benefit-related changes
other than net periodic pension
cost.
New Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board
(FASB) issued Accounting
Standards Update (ASU) 2010-06, Improving Disclosures about
Fair Value Measurements
(ASU 2010-06). ASU 2010-06 amends Accounting Standards
Codification (ASC) 820, Fair
Value Measurement, to require a number of additional
disclosures regarding fair value
measurements. These disclosures include the amounts of
significant transfers between Level 1
and Level 2 of the fair value hierarchy and the reasons for these
transfers; the reasons for any
transfer in or out of Level 3; and information in the
41. reconciliation of recurring Level 3
measurements about purchases, sales, issuances, and settlements
on a gross basis, as well as
clarification on previous reporting requirements. This new
guidance is effective for the first
reporting period, including interim periods, beginning after
December 15, 2009, for all
disclosures except the requirement to separately disclose
purchases, sales, issuances, and
settlements of recurring Level 3 measurements, which was
effective for Northwestern Memorial
in fiscal year 2012. Northwestern Memorial adopted this
guidance in fiscal year 2010, with the
exception of the additional Level 3 disclosures, which were
adopted in fiscal year 2012. The
adoption of ASU 2010-06 had no effect on the consolidated
financial statements of Northwestern
Memorial.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
42. 1207-1377461 14
1. Organization and Summary of Significant Accounting
Policies (continued)
In August 2010, the FASB issued ASU 2010-23, Measuring
Charity Care for Disclosure
(ASU 2010-23). The provisions of ASU 2010-23 are intended to
reduce the diversity in how
charity care is calculated and disclosed across healthcare
entities that provide it. Charity care is
required to be measured at cost, defined as the direct and
indirect costs of providing the charity
care. Funds received to offset or subsidize the cost of charity
care provided, for example from
gifts or grants restricted for charity care, should be separately
disclosed. As a healthcare entity
does not recognize revenue when charity care is provided, this
update only requires enhanced
disclosures and has no effect on the consolidated statements of
operations and changes in net
assets. This new guidance is effective for fiscal years beginning
after December 15, 2010, with
retrospective application required and with early application
43. permitted. Northwestern Memorial
adopted this guidance in fiscal year 2012. The adoption of ASU
2010-23 had no effect on the
consolidated financial statements of Northwestern Memorial.
In August 2010, the FASB issued ASU 2010-24, Presentation of
Insurance Claims and Related
Insurance Recoveries (ASU 2010-24). ASU 2010-24 prohibits
the netting of insurance
recoveries against a related claim liability and requires the
claim liability to be reported without
consideration of insurance recoveries unless a right of setoff
exists. This guidance is effective for
fiscal years, and interim periods within those years, beginning
after December 15, 2010, with
early application permitted. Northwestern Memorial has adopted
this guidance in fiscal year
2012. The effect of the adoption of ASU 2010-24 resulted in an
increase in current portion of
insurance recoverable of $836 and an increase in insurance
recoverable, less current portion of
$1,686, with offsetting increases in current accrued liabilities
under self-insurance programs of
$836 and in accrued liabilities under self-insurance programs,
less current portion of $1,686 as of
44. September 1, 2011. There was no effect on the consolidated
statements of operations and
changes in net assets or consolidated statements of cash flows.
In December 2010, the FASB issued ASU 2010-29, Disclosure
of Supplementary Pro Forma
Information for Business Combinations (ASU 2010-29). ASU
2010-29 clarifies the disclosure
requirement for pro forma revenue and earnings for comparative
current and prior reporting
periods. Pro forma information should be disclosed as though
the business combination(s) that
occurred during the current year had occurred as of the
beginning of the comparable prior fiscal
year only. ASU 2010-29 also expands the disclosures to include
a description of the nature and
amount of material, nonrecurring pro forma adjustments directly
attributable to the business
combination(s). This guidance is effective for business
combinations for which the acquisition
date is on or after the beginning of the first annual reporting
period beginning on or after
45. Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 15
1. Organization and Summary of Significant Accounting
Policies (continued)
December 15, 2010, with early adoption permitted. This
guidance was effective for and adopted
by Northwestern Memorial in fiscal year 2012. The adoption of
ASU 2010-29 had no effect on
the consolidated financial statements of Northwestern
Memorial.
In May 2011, the FASB issued ASU 2011-04, Amendments to
Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs (ASU 2011-04). ASU
2011-04 changes the wording used to describe many of the
requirements in U.S. GAAP for
measuring fair value and for disclosing information about fair
value measurements. This update
was issued to improve the comparability of fair value
measurements presented and disclosed in
46. financial statements prepared in accordance with U.S. GAAP
and International Financial
Reporting Standards (IFRS). ASU 2011-04 includes
amendments that clarify the FASB’s intent
about the application of existing measurement and disclosure
and changes certain principles and
requirements for measuring fair value and for disclosing
information about fair value
measurements. This new guidance is effective for interim and
annual periods beginning after
December 15, 2011. Early application is not permitted. This
guidance was effective for and
adopted by Northwestern Memorial in the third quarter of fiscal
year 2012. This adoption had no
effect on the consolidated financial position and the
consolidated results of their operations and
changes in net assets.
In July 2011, the FASB issued ASU 2011-07, Presentation and
Disclosure of Patient Service
Revenue, Provision for Bad Debts, and the Allowance for
Doubtful Accounts for Certain Health
Care Entities (ASU 2011-07). ASU 2011-07 requires healthcare
entities that recognize
47. significant amounts of patient service revenue at the time of
service, even though they do not
assess the patient’s ability to pay, to present the provision for
bad debts related to patient service
revenue as a deduction from patient service revenue on the
statement of operations. In addition,
enhanced disclosure about the entity’s policies for recognizing
revenue and assessing bad debts,
including disclosures of patient service revenue (net of
contractual allowances and discounts) as
well as qualitative and quantitative information about changes
in the allowance for doubtful
accounts, is required. This new guidance is effective for fiscal
years and interim periods within
those fiscal years beginning after December 15, 2011, with
early adoption permitted.
Northwestern Memorial adopted this guidance as of and for the
year ended August 31, 2012,
with retrospective application to all periods presented. The
adoption of ASU 2011-07 had the
effect of reducing net patient revenue by $33,196 with
offsetting reduction in operating expenses
for the year ended August 31, 2011, on the consolidated
statements of operations and changes in
48. net assets of Northwestern Memorial. There was no effect on
operating income. The provision
for non-patient related doubtful accounts of $100 is included in
other operating expenses.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 16
1. Organization and Summary of Significant Accounting
Policies (continued)
In December 2011, the FASB issued ASU 2011-11, Disclosures
about Offsetting Assets and
Liabilities (ASU 2011-11). ASU 2011-11 enhances disclosures
about financial and derivative
instruments that are either offset on the statement of financial
position or subject to an
enforceable master netting agreement or similar agreement,
irrespective of whether they are
offset on the statement of financial position. This new guidance
is effective for fiscal years and
interim periods within those years beginning on or after January
49. 1, 2013. This guidance will be
effective for Northwestern Memorial in fiscal year 2014.
Northwestern Memorial is evaluating
the effect this guidance will have on its consolidated financial
statement disclosures.
2. Investments and Other Financial Instruments
The composition of investments and cash and cash equivalents
at August 31 is as follows:
2012 2011
Measured at fair value:
Cash and short-term investments $ 304,586 $ 235,892
Equity securities 50,496 43,510
Mutual funds 736,486 608,099
Common collective trusts 72,893 192,900
Commingled funds 199,661 212,726
103-12 entities 123,182 131,546
Corporate bonds 60,861 37,403
U.S. government and agency issues 818
Foreign government issues 1,388 573
1,550,371 1,462,649
50. Accounted for under the equity method:
Alternative investments 1,221,495 1,092,151
$ 2,771,866 $ 2,554,800
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 17
2. Investments and Other Financial Instruments (continued)
Investments and other financial instruments consist of the
following:
2012 2011
Assets limited as to use:
Trustee-held funds $ 26,296 $ 7,247
Self-insurance programs 540,796 498,098
Board-designated funds 138,600 130,618
Total assets limited as to use 705,692 635,963
51. Donor-restricted funds 245,498 215,594
Unrestricted, undesignated funds 1,568,408 1,486,744
Total investments, excluding short-term investments 2,519,598
2,338,301
Other financial instruments:
Cash and cash equivalents and short-term investments 252,268
216,499
$ 2,771,866 $ 2,554,800
The composition and presentation of investment returns are as
follows for the years ended
August 31:
2012 2011
Interest and dividend income $ 14,935 $ 40,682
Investment expenses (4,547) (3,988)
Realized gains on alternative investments, net 34,925 21,266
Realized gains on other investments, net 85,622 43,338
Net increase in unrealized gains on alternative investments
30,680 86,883
Net increase in unrealized gains on other investments (1,138)
52. 65,039
$ 160,477 $ 253,220
Reported as:
Nonoperating investment return $ 150,762 $ 237,074
Temporarily restricted – investment return 9,715 16,146
$ 160,477 $ 253,220
Northwestern Memorial’s investments measured at fair value
include mutual funds; common
equities; corporate and U.S. government debt issues; state,
municipal, and foreign government
debt issues; commingled funds; common collective trusts; and
103-12 entities.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 18
2. Investments and Other Financial Instruments (continued)
Commingled investments, common collective trusts, and 103-12
53. investment entities are
commingled investment funds formed from the pooling of
investments under common
management. Unlike a mutual fund, these investments are not a
registered investment company
and, therefore, are exempt from registering with the Securities
and Exchange Commission.
The investment strategy for the mutual funds, commingled
funds, common collective trusts, and
103-12 investment entities involves maximizing the overall
returns by investing in a wide variety
of assets, including domestic large cap equities, domestic small
cap equities, international
developed equities, natural resources, and private equity limited
partnerships (LPs).
Northwestern Memorial’s non-pension plan investments
measured under the equity method of
accounting include absolute return hedge funds, equity
long/short hedge funds, real estate,
natural resources, and private equity limited partnerships,
collectively referred to as alternative
investments. Alternative investments in the pension plan assets
are measured at fair value.
Absolute return hedge funds include funds with the ability to
54. opportunistically allocate capital
among several strategies. The funds typically diversify across
strategies in an effort to deliver
consistently positive returns regardless of the movement within
global markets. These funds
generally exhibit relatively low volatility and are generally
redeemable quarterly with a 60-day
notice period. Equity long/short hedge funds include hedge
funds that invest both long and short
in U.S. and international equities. These funds typically focus
on diversifying or hedging across
particular sectors, regions, or market capitalizations and are
generally redeemable quarterly with
a 60-day notice period.
Real estate includes LPs that invest in land and buildings and
seek to improve property level
operations by increasing lease rates, recapitalizing properties,
rehabilitating aging/distressed
properties, and repositioning properties to attract higher-quality
tenants. Real estate LPs typically
use moderate leverage. Natural resources include a diverse set
of LPs that invest in oil and
natural gas-related companies, commodity-oriented companies,
and timberland. Private equity
55. includes LPs formed to make equity and debt investments in
operating companies that are not
publicly traded. These LPs typically seek to influence decision-
making within the operating
companies. Investment strategies in this category may include
venture capital, buyouts, and
distressed debt. These three categories of investments can never
be redeemed with the funds.
Distributions from each fund will be received as the underlying
assets of the fund are expected to
be liquidated periodically over the lives of the LPs, which
generally run 10 to 12 years.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 19
2. Investments and Other Financial Instruments (continued)
Certain alternative investments are subject to various
redemption restrictions. As of
56. August 31, 2012, $631,905 of these alternative investments
cannot be redeemed for at least one
year from the balance sheet date. In addition, $520,753 is
subject to redemption limits and
lockup provisions that expire within one year of the balance
sheet date.
At August 31, 2012, Northwestern Memorial had commitments
to fund an additional $244,234 to
alternative investment entities, which is expected to occur over
the next 12 years.
3. Fair Value Measurements
Northwestern Memorial follows the requirements of ASC 820 in
regards to measuring the fair
value of certain assets and liabilities as well as disclosures
about fair value measurements. ASC
820 defines fair value as the price that would be received for an
asset or paid for a transfer of a
liability in an orderly transaction on the measurement date.
The methodologies used to determine fair value of assets and
liabilities reflect market participant
objectives and are based on the applications of a three-level
valuation hierarchy that prioritizes
observable market inputs over unobservable inputs. The three
57. levels are defined as follows:
• Level 1 – Inputs to the valuation methodology are quoted
prices (unadjusted) for identical
assets or liabilities in active markets.
• Level 2 – Inputs to the valuation methodology include quoted
prices for similar assets or
liabilities in active markets and inputs that are observable for
the asset or liability, either
directly or indirectly, for substantially the full term of the
financial instrument. Examples
of Level 2 inputs are quoted prices for similar assets or
liabilities in nonactive markets or
pricing models with inputs that are observable for substantially
the full term of the asset
or liability.
• Level 3 – Inputs to the valuation methodology are significant
to the fair value of the asset
or the liability and less observable. These inputs reflect the
assumptions market
participants would use in the estimation of the fair value of the
asset or the liability.
Fair Values
A financial instrument’s categorization within the valuation
58. hierarchy is based on the lowest
level of input that is significant to the fair value measurement.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 20
3. Fair Value Measurements (continued)
The following table presents the financial instruments measured
at fair value on a recurring basis as of
August 31, 2012:
Level 1 Level 2 Level 3 Total
Assets
Cash and cash equivalents $ 139,343 $ $ $ 139,343
Investments:
Short-term investments:
Currency 7,592 7,592
59. Fixed income 105,333 105,333
Total short-term investments 7,592 105,333 112,925
Mutual funds:
Fixed income 346,876 346,876
International equities 84,175 84,175
U.S. equities 305,435 305,435
Total mutual funds 736,486 736,486
Common collective trusts:
International equities 39,892 39,892
U.S. equities 33,001 33,001
Total common collective trusts 72,893 72,893
Commingled funds:
International equities 21,321 21,321
Natural resources 26,495 26,495
Global equities 151,845 151,845
Total commingled funds 199,661 199,661
60. Bonds:
Corporate bonds 60,861 60,861
U.S. government and agencies issue 818 818
Foreign government issues 1,388 1,388
Total bonds 63,067 63,067
Equity securities 50,443 53 50,496
103-12 entities international equities 123,182 123,182
Cash equivalents in investment accounts 52,318 52,318
Total investments 846,839 564,189 1,411,028
Beneficial interests in trusts 11,594 11,594
Total assets $ 986,182 $ 575,783 $ $ 1,561,965
Liabilities
Interest rate swaps $ $ 104,503 $ $ 104,503
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
61. 1207-1377461 21
3. Fair Value Measurements (continued)
The following table presents the financial instruments measured
at fair value on a recurring basis as of
August 31, 2011:
Level 1 Level 2 Level 3 Total
Assets
Cash and cash equivalents $ 131,311 $ $ $ 131,311
Investments:
Short-term investments:
Currency 12,174 12,174
Fixed income 73,014 73,014
Total short-term investments 12,174 73,014 85,188
Mutual funds:
Fixed income 376,590 376,590
International equities 68,748 68,748
62. U.S. equities 162,761 162,761
Total mutual funds 608,099 608,099
Common collective trusts:
International equities 40,065 40,065
U.S. equities 152,835 152,835
Total common collective trusts 192,900 192,900
Commingled funds:
International equities 74,106 74,106
Natural resources 22,439 22,439
Global equities 116,181 116,181
Total commingled funds 212,726 212,726
Bonds:
Corporate bonds 37,403 37,403
Foreign government issues 573 573
Total bonds 37,976 37,976
Equity securities 43,461 49 43,510
63. 103-12 entities international equities 131,546 131,546
Cash equivalents in investment accounts 19,393 19,393
Total investments 683,127 648,211 1,331,338
Beneficial interests in trusts 12,010 12,010
Total assets $ 814,438 $ 660,221 $ $ 1,474,659
Liabilities
Interest rate swaps $ $ 73,845 $ $ 73,845
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 22
3. Fair Value Measurements (continued)
There were no transfers into or out of Level 2 or Level 1 during
the year ended August 31, 2012.
Reconciliation to the Consolidated Balance Sheets
64. A reconciliation of the fair value of assets to the consolidated
balance sheets at August 31, 2012
and 2011, is as follows:
2012 2011
Short-term investments measured at fair value $ 112,925 $
85,188
Investments, including assets limited as to use
measured at fair value 1,298,103 1,246,150
Total investments at fair value 1,411,028 1,331,338
Alternative investments accounted for under equity
method included in investments, including assets limited
as to use 1,221,495 1,092,151
Total investments $ 2,632,523 $ 2,423,489
Other long-term assets:
Beneficial interests in trusts at fair value $ 11,594 $ 12,010
Other long-term assets, net 88,157 86,485
Total other long-term assets $ 99,751 $ 98,495
Valuation Techniques and Inputs
65. Beneficial Interests in Trusts – The fair value of beneficial
interests in trusts is based on either
the Foundation’s percentage of the fair value of the trusts’
assets or the Foundation’s percentage
of the fair value of the trusts’ assets adjusted for any
outstanding liabilities (discounted using a
rate per IRS regulations), based on each trust arrangement.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 23
3. Fair Value Measurements (continued)
Interest Rate Swaps – The fair value of interest rate swaps is
based on generally accepted
valuation techniques, including discounted cash flow analysis
on the expected cash flows of each
derivative and quoted prices from dealer counterparties and
other independent market sources.
66. The valuation incorporates observable interest rates and yield
curves for the full term of the
swaps. The valuation is also adjusted to incorporate
nonperformance risk for NMH or the
respective counterparty. The adjustment is based on the credit
spread for entities with similar
credit characteristics as NMH or market-related data for the
respective counterparty.
Northwestern Memorial pays fixed rates ranging from 3.3% to
3.9% and receives cash flows
based on rates equal to 63% of London Interbank Offered Rate
(LIBOR) plus 28 basis points.
Investments – The fair value of Level 1 investments, which
consist of equity securities and
certain mutual funds, is based on quoted market prices that are
valued on a daily basis. Level 2
investments consist of U.S. government securities, corporate
bonds, commingled funds, common
collective trusts, interest in 103-12 entities, and fixed income
instruments issued by
municipalities and foreign government agencies. The fair value
of the U.S. government securities
and corporate bonds is established based on values obtained
from nationally recognized pricing
67. services that value the investments based on similar securities
and matrix pricing of similar
quality and maturity securities. The fair values of commingled
funds, common collective trusts,
and 103-12 entities are based on either the fair value of the
underlying investments of the fund,
as determined by the fund, or based on the ownership interest in
the NAV per share or its
equivalent, of the respective fund.
Northwestern Memorial’s investments are exposed to various
kinds and levels of risk. Equity
securities and equity mutual funds expose Northwestern
Memorial to market risk, performance
risk, and liquidity risk. Market risk is the risk associated with
major movements of the equity
markets. Performance risk is that risk associated with a
company’s operating performance. Fixed
income securities and fixed income mutual funds expose
Northwestern Memorial to interest rate
risk, credit risk, and liquidity risk. As interest rates change, the
value of many fixed income
securities is affected, including those with fixed interest rates.
Credit risk is the risk that the
obligor of the security will not fulfill its obligations. Liquidity
68. risk is affected by the willingness
of market participants to buy and sell particular securities.
Liquidity risk tends to be higher for
equities related to small capitalization companies and certain
alternative investments. Due to the
volatility in the capital markets, there is a reasonable possibility
of subsequent changes in fair
value, resulting in additional gains and losses in the near term.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 24
3. Fair Value Measurements (continued)
The carrying values of cash and cash equivalents, accounts
receivable, accounts payable, accrued
expenses and other current liabilities, and short-term
borrowings are reasonable estimates of their
fair values due to the short-term nature.
69. The estimated fair value of the long-term debt portfolio,
including the current portion, was
$871,382 and $874,400 at August 31, 2012 and 2011,
respectively. The fair value of this Level 2
liability is based on quoted market prices for the same or
similar issues and the relationship of
those bond yields with various market indices. The market data
used to determine yield and
calculate fair value represents Aa/AA-rated tax-exempt
municipal healthcare bonds. The effect
of third-party credit valuation adjustments, if any, is
immaterial.
The fair value of pledges receivable, a Level 2 asset, is based
on discounted cash flow analysis
and approximated the carrying value at August 31, 2012 and
2011.
4. Self-Insurance Liabilities and Related Insurance
Recoverables
NMH retains certain levels of professional and general liability
risks covering itself and NMPG.
NMH also retains certain levels of workers’ compensation risks.
For those risks, NMH has
established trust funds to pay claims and related costs.
NMIC provides coverage, on a claims-made basis, in excess of
70. the amounts retained by NMH
for professional and general liability claims occurring and
reported between October 1, 2002 and
November 1, 2004. NMIC is fully reinsured for these risks.
Effective November 1, 2004, NMIC provides, on a claims-made
basis, professional and general
liability coverage to NMH and professional liability coverage to
Northwestern Medical Faculty
Foundation, Inc. (NMFF) under a joint indemnification
program. NMFF is an unconsolidated,
not-for-profit, multi-specialty group practice, which serves as
the clinical faculty practice plan
arm of FSM and is one of the faculty components of the
academic medical center. NMIC also
provides excess general liability coverage to otherwise
commercially insured NMHC
subsidiaries. NMIC receives funding from the covered entities
for the risk it covers under its
indemnity policies. Under the terms of a mutual funding
agreement, NMH is required to
maintain cash and investments, and NMFF is required to
maintain a deposit at NMIC sufficient
to fund actuarially determined tail liabilities, to be covered by
NMIC upon any cancelation,
71. nonrenewal, or other termination for any reason of NMIC’s
ongoing joint coverage of both NMH
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 25
4. Self-Insurance Liabilities and Related Insurance
Recoverables (continued)
and NMFF. NMFF also maintains a deposit at NMIC at a level
deemed actuarially sufficient to
fund its premium obligations under a premium funding
arrangement. Total NMFF deposits at
NMIC, which are reported as due to insureds in the
accompanying consolidated balance sheets,
amounted to $62,415 and $45,303 at August 31, 2012 and 2011,
respectively.
NLFH retains certain levels of professional and general liability
risks for occurrences on or after
January 1, 2003. Prior to June 1, 2011, NLFH purchased
72. commercial insurance for risks in
excess of its self-insured retention levels. For the period June 1,
2011 to June 1, 2012, NMIC
provides professional and general liability coverage to NLFH in
excess of its self-insured
retention levels. NMIC is fully reinsured for these risks.
Effective June 1, 2012, NMIC provides,
on a claims-made basis, professional and general liability
coverage to NLFH through an
integrated program shared by NMH and NMFF. NLFH
purchased tail coverage for claims
incurred but not reported as of December 31, 2002.
Northwestern Memorial’s self-insurance liability and related
amounts recoverable from
reinsurers are reported in the accompanying consolidated
balance sheets at present value based
on a discount rate of 1.5% and 3.0% as of August 31, 2012 and
2011, respectively. This discount
rate is based on several factors, including rolling averages of
risk-free rates based on estimated
payment patterns of the underlying liability. The undiscounted
gross liabilities for the self-
insured programs were $520,866 and $549,206 at August 31,
2012 and 2011, respectively. The
73. estimated undiscounted amounts recoverable from reinsurers
were $93,708 and $96,907 at
August 31, 2012 and 2011, respectively. Provisions for the
professional and general liability
risks are based on an actuarial estimate of losses using actual
loss data adjusted for industry
trends and current conditions and on an evaluation of claims by
Northwestern Memorial’s legal
counsel. The provision for estimated self-insured claims
includes estimates of ultimate costs for
both reported claims and claims incurred but not reported.
NMH purchased tail coverage for risks in excess of its self-
insured retentions following the
expiration of the claims-made professional and general liability
program covering the period
from October 1, 1999 to October 1, 2002. In conjunction with
this transaction, NMH recorded a
deferred gain that is being amortized over the estimated runoff
period. The balance of the
deferred gain was $3,121 and $4,582 at August 31, 2012 and
2011, respectively.
In the opinion of management, based in part on the advice of
outside legal counsel, adequate
74. provision has been made at August 31, 2012, for all claims
incurred to date. Management further
believes that the ultimate disposition of these claims will not
have a material adverse effect on
the financial position of Northwestern Memorial.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 26
5. Employee Benefits Obligations
There are two noncontributory defined benefit pension plans
(the Plans) maintained within the
Northwestern Memorial HealthCare controlled group that
covered specified employees of
controlled group organizations. The sponsors for the Plans
approved resolutions to amend the
Plans effective at the end of the day on December 31, 2012. The
amendments implement a hard
freeze, such that no participant will earn any additional or new
benefits under the Plans on and
75. after January 1, 2013, and no compensation earned or service
performed by any Plan participant
on and after January 1, 2013, will count for any purpose other
than continued vesting under the
Plans in benefits earned prior to 2013.
The following table summarizes the change in the projected
benefit obligation:
NMH NLFH
2012 2011 2012 2011
Projected benefit obligation,
beginning of year $ 414,020 $ 398,443 $ 101,995 $ 93,853
Service cost 17,426 18,509 4,135 4,111
Interest cost 21,306 20,532 5,285 4,859
Curtailment gain (43,638) (5,106)
Net actuarial loss (gain) 46,983 (6,241) 17,157 1,599
Expenses paid (927)
Benefits paid (13,711) (17,223) (2,739) (2,427)
Projected benefit obligation,
end of year $ 441,459 $ 414,020 $ 120,727 $ 101,995
The following table summarizes the changes in the Plans’
assets:
76. NMH NLFH
2012 2011 2012 2011
Plan assets at fair value,
beginning of year $ 456,904 $ 422,507 $ 112,327 $ 97,917
Actual return on the
Plans’ assets, net of
expenses 29,080 51,620 7,276 11,837
Employer contribution 5,000
Benefits paid (13,711) (17,223) (2,739) (2,427)
Plan assets at fair value,
end of year $ 472,273 $ 456,904 $ 116,864 $ 112,327
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 27
5. Employee Benefits Obligations (continued)
The following table sets forth the Plans’ funded status, as well
77. as recognized amounts in the
consolidated balance sheets as of August 31:
NMH NLFH
2012 2011 2012 2011
Plan assets at fair value $ 472,273 $ 456,904 $ 116,864 $
112,327
Projected benefit obligation 441,459 414,020 120,727 101,995
Funded status recognized as
prepaid pension cost/
(pension payable) $ 30,814 $ 42,884 $ (3,863) $ 10,332
The accumulated benefit obligations of the Plans are $562,003
and $480,742 as of
August 31, 2012 and 2011, respectively.
Included in unrestricted net assets are the Plans’ amounts that
have not yet been recognized in
net periodic pension cost at August 31 as follows:
NMH NLFH
2012 2011 2012 2011
Unrecognized prior service
78. cost $ (13) $ (648) $ $
Unrecognized actuarial loss (117,037) (117,449) (19,784)
(6,709)
$ (117,050) $ (118,097) $ (19,784) $ (6,709)
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 28
5. Employee Benefits Obligations (continued)
Changes in the Plans’ assets and benefit obligations recognized
in unrestricted net assets during
2012 and 2011 include the following:
NMH NLFH
2012 2011 2012 2011
Current year actuarial (loss)
gain $ (50,541) $ 26,818 $ (13,075) $ 3,017
79. Effect of curtailment
accounting on gain 43,638
Recognized actuarial loss 7,315 11,501
Current year amortization of
prior service cost 125 125
Current year amortization of
curtailment accounting
credit 510
$ 1,047 $ 38,444 $ (13,075) $ 3,017
The Plans’ prior service cost and actuarial loss included in
unrestricted net assets expected to be
recognized in net periodic pension cost during 2013 are $125
and $7,315, respectively.
Net periodic pension cost included in operating results for the
years ended August 31 consists of
the following:
NMH NLFH
2012 2011 2012 2011
Service cost of benefits
earned during the year $ 17,426 $ 18,509 $ 4,135 $ 4,111
Interest cost of projected
80. benefit obligation 21,306 20,532 5,285 4,859
Expected return on the
Plans’ assets (33,564) (31,044) (8,301) (7,221)
Recognized actuarial loss 7,315 11,501
Amortization of prior
service costs 125 125
Recognized loss due to
curtailment 510
Net periodic pension cost $ 13,118 $ 19,623 $ 1,119 $ 1,749
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 29
5. Employee Benefits Obligations (continued)
The following table sets forth the weighted-average assumptions
used to determine the projected
benefit obligation and benefit cost as of August 31:
2012 2011
81. Used to determine projected benefit obligation
Discount rate 4.25% 5.25%
Rate of compensation increase 3.50 3.50
2012 2011
Used to determine benefit cost
Discount rate 5.25% 5.25%
Expected long-term rate of return on the Plans’ assets 7.50 7.50
Rate of compensation increase 3.50 3.50
The expected long-term rate of return on assets is determined
based on a capital market asset
model, which assumes that future returns are based on long-
term, historical performance as
adjusted for contemporary dividend yields. The adjusted
historical returns were weighted by the
current long-term asset allocation targets and reduced by 100
basis points to produce a more
normal risk premium. Northwestern Memorial’s investment
advisor assisted with the analysis.
The Plans’ asset allocation and investment strategies are
designed to earn returns on plan assets
82. consistent with a reasonable and prudent level of risk.
Investments are diversified across classes,
sectors, and manager style to minimize the risk of loss.
Northwestern Memorial uses investment
managers specializing in each asset category and, where
appropriate, provides the investment
manager with specific guidelines that include allowable and/or
prohibited investment types.
Northwestern Memorial regularly monitors manager
performance and compliance with
investment guidelines.
The target allocation of the Plans’ assets as of August 31 is as
follows:
2012 2011
Cash and cash equivalents –% –%
Equity securities 42 42
Alternative investments 44 44
Fixed income 14 14
100% 100%
Northwestern Memorial HealthCare and Subsidiaries
83. Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 30
5. Employee Benefits Obligations (continued)
The following table presents the Plans’ financial instruments as
of August 31, 2012, measured at
fair value on a recurring basis by the valuation hierarchy
described in Note 4:
Level 1 Level 2 Level 3 Total
103-12 investment entities:
International equities $ $ 35,169 $ $ 35,169
Private equity 1,910 1,910
Total 103-12 investment entities 35,169 1,910 37,079
Common collective trusts:
Fixed income 5,965 5,965
International equities 21,815 21,815
Private equity 2,961 2,961
U.S. equities 12,928 12,928
Total common collective trusts 40,708 2,961 43,669
U.S. government debt:
84. Treasury notes 1,257 1,257
Corporate debt:
Corporate debt instruments other 8,020 8,020
Corporate debt instruments
preferred 8,043 8,043
Total corporate debt 16,063 16,063
Equity securities:
U.S. equities 15,018 16 15,034
Hedge funds and other:
Absolute return hedge fund 8,222 63,681 71,903
Equity long/short hedge fund 7,821 75,986 83,807
Fixed income 1,377 1,377
Natural resources 3,387 3,579 6,966
Total hedge funds and other 20,807 143,246 164,053
Interest in limited partnerships:
Natural resources 17,807 17,807
Private equity 36,866 68,249 105,115
Real estate 21,846 21,846
Total interest in limited partnerships 36,866 107,902 144,768
Mutual funds:
85. Fixed income 57,694 57,694
International equities 30,607 30,607
U.S. equities 78,913 78,913
Total mutual funds 167,214 167,214
Grand total $ 182,232 $ 150,886 $ 256,019 $ 589,137
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 31
5. Employee Benefits Obligations (continued)
The following table presents the Plans’ financial instruments as
of August 31, 2011, measured at
fair value on a recurring basis by the valuation hierarchy
described in Note 4:
Level 1 Level 2 Level 3 Total
103-12 investment entities:
International equities $ $ 42,949 $ $ 42,949
Private equity 2,223 2,223
Total 103-12 investment entities 42,949 2,223 45,172
86. Common collective trusts:
Fixed income 5,782 5,782
International equities 23,659 23,659
Private equity 3,593 3,593
U.S. equities 44,081 44,081
Total common collective trusts 73,522 3,593 77,115
Corporate debt:
Corporate debt instruments other 2,922 2,922
Corporate debt instruments
preferred 6,903 6,903
Total corporate debt 9,825 9,825
Equity securities:
U.S. equities 12,641 15 12,656
Hedge funds and other:
Absolute return hedge fund 65,649 65,649
Equity long/short hedge fund 66,573 66,573
Fixed income 1,551 1,551
Natural resources 10,591 10,591
Total hedge funds and other 1,551 142,813 144,364
Interest in limited partnerships:
87. Natural resources 17,009 17,009
Private equity 25,247 71,825 97,072
Real estate 18,857 18,857
Total interest in limited partnerships 25,247 107,691 132,938
Mutual funds:
Fixed income 66,592 66,592
International equities 23,739 23,739
U.S. equities 56,830 56,830
Total mutual funds 147,161 147,161
Grand total $ 159,802 $ 153,109 $ 256,320 $ 569,231
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 32
5. Employee Benefits Obligations (continued)
The fair value of Level 1 investments, which consist of equity
securities and certain mutual
funds, is based on quoted market prices and are valued on a
daily basis. Level 2 investments
88. consist of U.S. government securities, corporate bonds,
commingled funds, common collective
trusts, interest in 103-12 entities, and fixed income instruments
issued by municipalities or
foreign government agencies. Included in Level 2 investments
are certain hedge funds and
limited partnerships that can be liquidated without restrictions.
The fair value of the U.S.
government securities and corporate bonds is established based
on values obtained from
nationally recognized pricing services that value the
investments based on similar securities and
matrix pricing of similar quality and maturity securities. The
fair values of the commingled
funds, common collective trusts, and 103-12 entities are based
on either the fair value of the
underlying investments of the fund, as determined by the fund,
or based on the Master Trust’s
ownership interest in the NAV per share of its equivalent of the
respective fund. The Plans
utilize the NAV as the practical expedient for the fair value
estimate as permitted. All Level 2
investments can be redeemed without restrictions on the
financial statement date or shortly
89. thereafter.
The fair value of Level 3 investments, which primarily consist
of alternative investments
(principally limited partnership interests in hedge, private
equity, real estate, and natural
resources funds) and certain common collective trusts and 103-
12 investments, are based on
NAV. The fair values of the securities held by limited
partnerships that do not have readily
determinable fair values are determined by the general partner
taking into consideration, among
other things, the financial performance of underlying
investments, recent sales prices of
underlying investments, and other pertinent information. In
addition, actual market exchanges at
period-end provide additional observable market inputs of the
exit price. NAV is calculated by
the investment’s management monthly for all of the Master
Trust’s alternative investments other
than limited partnerships, whose NAV is calculated on a
quarterly basis. The methods described
above may produce a fair value calculation that may not be
indicative of net realizable value or
90. reflective of future fair values. Furthermore, while the Plans
believe 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.
All financial instruments with redemption restrictions in the
near future or early withdrawal fees
are categorized as Level 3 investments. Some of the redemption
restrictions are temporary in
nature. If restrictions expire and an investment can be redeemed
at NAV, such investment is
reclassified from Level 3 to Level 2 of the fair value hierarchy.
During the years ended
August 31, 2012 and 2011, $28,405 and $0 was transferred from
Level 3 to Level 2,
respectively.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
91. 1207-1377461 33
5. Employee Benefits Obligations (continued)
Investments in LPs, which cannot be redeemed on request,
totaled $100,971 as of
August 31, 2012. Certain marketable alternative investments are
subject to various redemption
restrictions. As of August 31, 2012, $38,481 of these alternative
investments cannot be redeemed
for at least one year. In addition, $156,774 is subject to
redemption limits and lockup provisions
that expire within one year of the balance sheet date.
The table below sets forth a summary of changes in the fair
value of the Plans’ Level 3 assets for
the period from September 1, 2010 to August 31, 2012:
103-12
Investment
Entities
Common
Collective
Trusts
92. Hedge Funds
and Other
Interest in
Limited
Partnerships Total
Value at September 1, 2010 $ 2,237 $ 3,802 $ 121,375 $ 84,874
$ 212,288
Gain (loss) realized on assets
sold during the period 239 642 (2,219) 6,333 4,995
Change in unrealized (loss) gain
related to holdings at
August 31, 2011 (119) (697) 11,310 4,514 15,008
Purchases at cost 51 165 24,400 21,742 46,358
Sales at cost (185) (319) (12,053) (9,772) (22,329)
Value at August 31, 2011 2,223 3,593 142,813 107,691
256,320
Gain realized on assets sold
during the period 299 512 5 6,470 7,286
Change in unrealized (loss)
93. gain related to holdings at
August 31, 2012 (477) (874) 6,520 992 6,161
Purchases at cost 64 65 15,227 19,027 34,383
Sales at cost (199) (335) (1,889) (17,303) (19,726)
Transfers to Level 2 (19,430) (8,975) (28,405)
Value at August 31, 2012 $ 1,910 $ 2,961 $ 143,246 $ 107,902
$ 256,019
The Plans’ assets are managed solely in the interest of the
Plans’ participants and their
beneficiaries. The assets are invested with the investment
objective of funding the accumulated
and projected retirement benefit obligations of the Plans
consistent with the Plans’ long-term
rate-of-return assumption. A time horizon of greater than five
years is assumed, and therefore,
interim volatility in returns is regarded with appropriate
perspective.
Northwestern Memorial has no current plans to contribute to the
Plans during the year ending
August 31, 2013.
Northwestern Memorial HealthCare and Subsidiaries
94. Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 34
5. Employee Benefits Obligations (continued)
Benefit payments, which reflect future service, as appropriate,
are expected to be paid as follows:
NMH NLFH
Year ending August 31:
2013 $ 16,223 $ 3,167
2014 17,149 3,561
2015 19,773 4,018
2016 20,905 4,466
2017 21,054 4,917
2018 2022 123,135 29,926
Northwestern Memorial also maintains defined contribution
plans covering substantially all of its
full-time and part-time employees. For 2012, contributions are
limited to 80% of each covered
95. employee’s salary and a matching portion of 50% of the first
6% of the employee’s contribution
per pay period, with an annual maximum of $7.5 per employee.
In addition, a non-elective
provision for those employees who are not participants in the
defined benefit plans provides for
employer contributions of 1% to 2% of each employee’s salary
provided they are employed as of
December 31 of the plan year and have one thousand hours of
service in the plan year. Effective
January 1, 2013, the employer matching portion will be 100% of
the first 6% of the employee’s
contribution per pay period, subject to the 2013 IRS limits. The
non-elective provision will be
eliminated and the final 2012 contribution will be made in early
2013. Employer contributions
related to these defined contribution plans included in employee
benefits expense in the
accompanying consolidated statements of operations and
changes in net assets totaled $13,220
and $10,862 in 2012 and 2011, respectively.
NMHC also maintains other noncontributory postretirement
benefit plans (the Noncontributory
Plans) for certain executive employees.
96. Included in unrestricted net assets are unrecognized actuarial
gain of $787 at August 31, 2012,
and an unrecognized actuarial loss of $3,376 at August 31,
2011, respectively, for the
Noncontributory Plans that have not yet been recognized in net
periodic pension cost.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 35
5. Employee Benefits Obligations (continued)
Changes in the Noncontributory Plans’ assets and benefit
obligations recognized in unrestricted
net assets during 2012 and 2011 include the following:
2012 2011
Current year actuarial gain (loss) $ 1,313 $ (2,811)
Recognized actuarial net loss 2,850 1,515
97. $ 4,163 $ (1,296)
As of August 31, 2012 and 2011, the Noncontributory Plans’
unfunded projected benefit
obligation amounted to $19,376 and $18,814, respectively, and
is included in other long-term
liabilities in the accompanying consolidated balance sheets. The
weighted-average discount rate
utilized in determining the actuarial present value was 4.25%
and 5.25% in 2012 and 2011,
respectively. The Noncontributory Plans’ actuarial loss included
in unrestricted net assets
expected to be recognized in net periodic pension cost during
2013 is $1,371.
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 36
6. Long-Term Debt
98. Long-term debt consists of the following at August 31:
2012 2011
Revenue Bonds, Series 2009A, payable in annual
installments through August 15, 2039 (fixed coupon
rates range from 5.00% to 6.00%) $ 342,260 $ 353,470
Revenue Bonds, Series 2009B, payable in annual
installments through August 15, 2039 (fixed coupon
rates range from 5.00% to 6.00%) 96,100 96,100
Variable-Rate Demand Revenue Bonds, Series 2008A,
payable in annual installments through August 15, 2038
(weighted-average interest rate was 0.13% in 2012 and
0.18% in 2011) 78,775 78,775
Variable-Rate Demand Revenue Bonds, Series 2007A,
payable in annual installments through August 15, 2042
(weighted-average interest rate was 0.14% in 2012 and
0.21% in 2011) 210,600 211,600
Revenue Bonds, Series 2003 (Lake Forest Hospital),
payable in annual installments through July 1, 2033
99. (fixed coupon rates range from 4.50% to 6.00%) 25,950 26,250
Variable-Rate Demand Revenue Bonds, Series 2002C,
payable in annual installments beginning
August 15, 2026 through August 15, 2032 (weighted-
average interest rate was 0.13% in 2012 and 0.18% in
2011) 33,000 33,000
Revenue Bonds, Series 2002A (Lake Forest Hospital),
payable in annual installments through July 1, 2029
(fixed coupon rates range from 5.75% to 6.25%) 40,850 42,050
827,535 841,245
Less:
Unamortized discount, net 6,880 6,181
Current maturities 14,500 13,710
$ 806,155 $ 821,354
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
100. (In Thousands)
1207-1377461 37
6. Long-Term Debt (continued)
NMH currently has a line of credit available for operations in
the amount of $50,000, which
expires in July 2015. Under this committed line of credit, NMH
has the option to borrow at
various rates expressed as an adjustment to the LIBOR, prime
rate, or other bank-offered rates.
At August 31, 2012 and 2011, no amount was borrowed under
the available line of credit.
NMH has standby bond purchase agreements (SBPAs) with
multiple banks that cover all of its
variable-rate demand revenue bonds (VRDBs). The short-term
credit rating for each series of
VRDBs is based on the respective bank’s short-term credit
rating. The long-term credit rating for
each series of VRDBs is based on NMH’s long-term credit
rating. Changes in credit ratings may
impact the interest paid on or remarketing of the VRDBs. The
banks provide liquidity support in
the event of a failed remarketing as follows:
101. Par Value Expiration Date
Series 2008A $ 78,775 July 2014
Series 2002C 33,000 July 2014
Series 2007A 210,600 December 2014
The SBPAs require NMH to maintain reporting, financial, and
other covenants. If an SBPA is
not renewed or replaced prior to its expiration, or if some
portion, or all, of the related VRDBs
are not successfully remarketed (“failed remarketing”) during
the term of the SBPAs, the related
VRDBs convert to a term loan at the earlier of the expiration
date of the related SBPA or after 90
consecutive days of failed remarketing. Principal payments on
the term loan would then be
payable over a three-year term. The earliest principal payment
on any term loan associated with
the bonds is 367 days from the failed remarketing date.
Therefore the VRDBs, less any current
portion, are classified as long-term debt in the accompanying
consolidated balance sheets.
102. Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 38
6. Long-Term Debt (continued)
Scheduled principal repayments for the next five years,
assuming remarketing of VRDBs, on
long-term debt are as follows:
Year ending August 31:
2013 $ 14,500
2014 15,220
2015 15,985
2016 16,785
2017 17,645
The provisions under the respective debt agreements require the
Obligated Group to maintain
reporting, financial, and other covenants. At August 31, 2012,
103. the Obligated Group was in
compliance with these provisions.
Northwestern Memorial paid interest of $40,012 in 2012 and
$41,418 in 2011 (which includes
$10,570 and $10,639, respectively, for net swap payments
included in other operating expense in
the accompanying consolidated statements of operations and
changes in net assets).
Northwestern Memorial capitalized interest of $2,452 and
$3,299 in 2012 and 2011, respectively.
7. Derivatives
Northwestern Memorial’s only derivative financial instruments
are interest rate swaps, which
NMH maintains on its VRDBs for the sole purpose of risk
management. These bonds expose
NMH to variability in interest payments due to changes in
interest rates. Management believes
that it is prudent to limit the variability of its interest payments.
To meet this objective and to
take advantage of low interest rates, NMH entered into various
interest rate swap agreements to
manage fluctuations in cash flows resulting from interest rate
risk. These swaps limit the
104. variable-rate cash flow exposure on the VRDBs to synthetically
fixed cash flows. By using
interest rate swaps to manage the risk of changes in interest
rates, NMH exposes itself to credit
risk and market risk. Credit risk is the risk that a counterparty
will fail to perform under the terms
of a derivative contract. When the fair value of a swap is
positive, the counterparty owes NMH,
which creates credit risk for NMH. When the fair value of a
swap is zero or negative, the
counterparty does not owe NMH. NMH minimizes the credit
risk in its swap contracts by
entering into transactions that require the counterparty to post
collateral for the benefit of NMH
based on the credit rating of the counterparty and the fair value
of the swap contract. The
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1207-1377461 39
105. 7. Derivatives (continued)
aggregate fair value of the swaps on the consolidated balance
sheets as of August 31, 2012 and
2011, reflects a reduction of $9,497 and $6,858, respectively,
for nonperformance risk. Market
risk is the adverse effect on the value of a financial instrument
that results from a change in
interest rates. The market risk associated with interest rate
changes is managed by establishing
and monitoring parameters that limit the types and degree of
market risk that may be undertaken.
Management also mitigates risk through periodic reviews of
their swap positions in the context
of their total blended cost of capital.
The following is a summary of the outstanding positions under
existing interest rate swap
agreements at August 31, 2012 and 2011:
Notional Amount Maturity
2012 2011 Date Rate Paid Rate Received
$ 35,250 $ 35,250 May 2035 3.310% 63% of LIBOR + 28 bps
35,250 35,250 May 2035 3.310 63% of LIBOR + 28 bps
106. 43,200 43,200 May 2035 3.313 63% of LIBOR + 28 bps
105,300 105,800 August 2042 3.889 63% of LIBOR + 28 bps
105,300 105,800 August 2042 3.889 63% of LIBOR + 28 bps
$ 324,300 $ 325,300
The fair value of derivative instruments at August 31 is as
follows:
Balance Sheet Liabilities
Location 2012 2011
Derivatives not designated as
hedging instruments:
Interest rate contracts
Interest rate swaps
liabilities $ 104,503 $ 73,845
Northwestern Memorial HealthCare and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(In Thousands)
107. 1207-1377461 40
7. Derivatives (continued)
The effects of derivative instruments on the consolidated
statements of operations and changes in
net assets for 2012 and 2011 are as follows:
Amount of Gain (Loss)
Recognized in Excess of
Revenue Over Expenses
on Derivatives
Interest Rate Contracts 2012 2011
Derivatives not designated as hedging instruments:
Operating expense – other $ (10,570) $ (10,639)
Nonoperating change in fair value of interest
rate swaps (30,533) 4,527
NMH’s derivative instruments contain provisions that require
NMH’s debt to maintain an
investment-grade credit rating from certain major credit rating
108. agencies. If NMH’s debt were to
fall below investment grade, it would be in violation of these
provisions, and the counterparties
to the derivative instruments could request immediate payment
or demand immediate and
ongoing collateralization on derivative instruments in net
liability positions. NMH has posted
collateral of $20,451 and $1,172 as of August 31, 2012 and
2011, respectively. If the credit risk-
related contingent features underlying these agreements were
triggered to the fullest extent on
August 31, 2012, NMH would be required to post $114,000 of
collateral to its counterparties.
8. Income Tax Status
NMHC, NMH, NLFH, the Foundation, HFI, and NMPG are
qualified under the Internal
Revenue Code (the Code) as tax-exempt organizations and are
exempt from tax on income
related to their tax-exempt purposes under Section 501(a) of the
Code. Accordingly, no income
taxes are provided for the majority of the income in the
accompanying consolidated financial
statements for these corporations. NMHC, NMH, NLFH, HFI,
and the Foundation had unrelated