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AUDITED FINANCIAL STATEMENT:

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Annual Report for SouthSide Hospital, FY 2016

Care, Not Just Cure

Letter from Jack Gilbert, CEO, SouthSide Hospital

Dear Community and Friends,

We are pleased to present the Annual Report for FY 2016 for SouthSide Hospital, now providing its 53^rd year of service to the community. This hospital, founded by Dr. Wayne Jones in 1949, has seen tremendous strides in patient care, from penicillin to liver transplants, from patient care in wards to disease management programs that extend to neighborhoods.

We have been able to proceed with the new construction for the Outpatient Services Clinic, to be completed in April, 2004, which will enable us to expand outpatient services and enhance our Pediatric Asthma Care Program.

Our goals for the coming fiscal year include: Outreach programs for womens health, focusing particularly on smoking cessation and breast cancer screening, for underserved populations in the Anywhere Metropolitan Area; Expansion of the Pediatric Asthma Care Program to increase its case management services to an additional 150 families;Develop our Cardiac Care units into an integrated Center of Excellence for the diagnosis and treatment of cardiovascular disorders; Continue to maintain our reputation in the Anywhere community of providing care, not just cure to those we serve.

A review of our FY 2016 financial reports shows our strong and prudent financial focus. We look forward to many more years of service in Anywhere, USA.

Sincerely,

Jack Gilbert

FY 2016 Financial Reports:

Table AR10-1. SouthSide Hospital, Summary Income Statement, $ thousands, FY 2014-2016.

	FY 2014	FY 2015	FY 2016
Inpatient Services	$ 126,878	$ 142,063	$ 159,577
Outpatient Services	$ 52,177	$ 55,711	$ 58,530
Deductions from Patient Revenue	128,404	144,192	161,511
Net Patient Revenue	50,651	53,582	56,596
Managed Care Revenue	5,000	5,119	5,170
Other Operating Revenue	160	162	163
Total Operating Revenue	55,811	58,863	61,929
Total Operating Expenses	51,294	53,999	56,625
Non-Operating Revenue	204	183	174
Net Income	$ 3,253	$ 3,062	$ 3,757

Table AR10-2. SouthSide Hospital, Summary Balance Sheet, $ thousands, FY 20142016.

	FY 2014	FY 2015	FY 2016
Cash & Marketable Securities	$ 5,888	$ 7,428	$ 8,575
Accounts Receivable	3,108	3,522	3,744
Other Current Assets	$ 6,132	$ 6,194	$ 6,717
Total Current Assets	$ 15,128	$ 17,144	$ 19,036
Long-Term Investments	$ 3,683	$ 3,748	$ 3,892
Net PP&E (Net Fixed Assets)	$ 26,573	$ 27,319	$ 27,386
Total Assets	$ 46,626	$ 49,453	$ 51,556
Total Current Liabilities	$ 8,789	$ 9,679	$ 10,133
Long-Term Debt	$ 9,495	$ 8,370	$ 6,262
Net Assets
Unrestricted	24,550	27,626	29,511
Restricted	3,792	3,778	5,650
Total Net Assets	$ 28,342	$ 31,404	$ 35,161
Total Liabilities & Net Assets	$ 46,626	$ 49,453	$ 51,556

Table AR10-3. SouthSide Hospital, Summary Statement of Cash Flows, $ thousands, FY 20152016.

	FY 2015	FY 2016
Cash Flows from Operating Activities:
Net Income & Non-Cash Transfers	$ 5,951	$ 6,707
Adjustments to Working Capital:
Changes in Current Assets	476	745
Changes in Current Liabilities	845	358
Net Cash from Operating Activities	$ 6,320	$ 6,320
Cash Flows from Investing Activities:
Capital Expenditures (Change in Gross Fixed Assets)	$ (3,608)	$ (2,966)
Cash Flows from Financing Activities:
Change in Notes Payable	18	45
Change in Marketable Securities	142	177
Change in Long-Term Investments	65	144
Change in Long-Term Debt	(1125)	(2108)
Net Cash from Financing Activities	$ (1,314)	$ (2,384)
Net Change in Cash	$ 1,398	$ 970
Cash at Beginning of Year	$ 1,209	$ 2,607
Cash at End of Year (Cash Balance)	$ 2,607	$ 3,577

Footnotes and Notes:

Charity care totaled $2,678,000 for FY 2014, $2,955,000 for FY 2015 and $3,254,000 for FY 2016.

To the CEO of SouthSide Hospital and the Central City Community:

We have audited the accompanying consolidated financial reports for SouthSide Hospital as of December 31, for the fiscal years 2014, 2015, and 2016. These financial statements are the responsibility of the managers of SouthSide Hospital. Our responsibility is to provide our opinion on these financial statements based on the audits we have completed.

These audits were conducted in accordance with generally accepted auditing standards. These standards require that the audits provide reasonable assurance regarding whether the financial statements are free of material misstatement. We have examined evidence that supports the amounts and disclosures contained in the financial statements, have assessed the accounting principles used and the estimates made by the management, and have evaluated the presentation of these financial statements. We believe that our audits provide a reasonable basis for the opinion that we offer.

In our opinion, the financial statements presented in this annual report present fairly, in all material respects, the financial position of SouthSide Hospital as of December 31 for fiscal years 2014, 2015, and 2016. These statements conform to generally accepted accounting principles.

Thomas Writegood, CPA

Honesty Accounting Services, Inc.

February 21, 2017