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T H E UN IVE RSITY OF TEX ASS O UT HW ES T E R N MED I CA L CE NTERANNUAL FINANCIAL REPORT(WITH DETAILED SUPPORTIVE SCHEDULES)UNAUDITEDFISCAL YEAR ENDED AUGUST 31, 2015The University of Texas at Arlington The University of Texas at Austi n The University of Texas atBrownsville The University of Texas at Dallas The University of Texas at El Paso The University ofTeas-Pan American The University of Texas of the Permian Basin The University of Texas at SanAntonio The University of Texas at Tyler The University of Texas Southwestern Medical Center TheUniversity of Texas Medical Branch at Galveston The University of Texas Health Science Center atHouston The University of Texas Health Science Center at San Antonio The University of Texas M. D.Anderson Cancer Center The University of Texas Health Science Center at Tyler The University ofTexas System Administration
THE UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTERFINANCIAL STATEMENTS(WITH DETAILED SUPPORTIVE SCHEDULES)Presented herein are the financial statements with detailed supportive schedules forThe University of Texas Southwestern Medical Center for the year ended August31, 2015. These Statements and detailed supportive schedules have been preparedin compliance with applicable State statutes, Governmental Accounting StandardsBoard pronouncements, and the Texas Comptroller of Public Accounts' AnnualFinancial Reporting Requirements.This "detailed internal report" supplements the consolidated published AnnualFinancial Report of The University of Texas System and is intended to be for limiteddistribution primarily to financial and academic officers of the University who needaccess to the details included herein. It also provides an historical record oftransactions relating to this particular institution.The Annual Financial Report for public distribution for The University of Texas Systemincludes primary staMments on a consolidated System-wide basis, includingfootnotes and Managements' Discussion and Analysis.
THE UNIVERSITY OF TEXAS SYSTEMBOARD OF REGENTSAs of August 31, 2015OfficersPaul L. Foster, ChairmanR. Steven "Steve" Hicks, Vice ChairmanJeffery D. Hildebrand, Vice ChairmanFrancie A. Frederick, General Counsel to the Board of RegentsMembersTerms scheduled to expire February 1, 2017*Alex M. CranbergWallace L. Hall, Jr.Brenda PejovichHoustonDallasDallasTerms scheduled to expire February 1, 2019*Paul L. FosterJeffery D. HildebrandErnest AlisedaEl PasoHoustonMcAllenTerms scheduled to expire February 1, 2021 *AustinHoustonDallasR. Steven "Steve" HicksDavid J. BeckSara Martinez TuckerTerm scheduled to expire May 31, 2016*Justin A Drake (Student Regent)Galveston*Each Regent's term expires when a successor has been appointed, qualified, and taken the oath of office.The Student Regent serves a one-year term.
THE UNIVERSITY OF TEXAS SYSTEMSENIOR ADMINISTRATIVE OFFICIALSAs of August 31, 2015********William H. McRaven, ChancellorDavid E. Daniel, Deputy ChancellorRaymond S. Greenberg, Executive Vice Chancellor for Health AffairsScott C. Kelley, Executive Vice Chancellor for Business AffairsSteven W. Leslie, Executive Vice Chancellor for Academic AffairsStephanie A. Bond Huie, Vice Chancellor for Strategic InitiativesPatricia D. Hum, Vice Chancellor for Research and InnovationBarry R. McBee, Vice Chancellor and Chief Governmental Relations OfficerRanda S. Safady, Vice Chancellor for External RelationsDaniel H. Sharphom, Vice Chancellor and General CounselWilliam H. Shute, Vice Chancellor for Federal RelationsAmy Shaw Thomas, Vice Chancellor and Counsel for Health AffairsBruce E. Zimmerman, Chief Executive Officer and Chief Investment Officer-UTIMCO********
THE UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTERSENIOR ADMINISTRATIVE OFFICERSAs of August 31, 2015********Daniel K. Podolsky, M.D., PresidentJ. Gregory Fitz, M.D., Executive Vice President for Academic Affairs and Provost DeanBruce A. Meyer, M.D., MBA, Executive Vice President for Health System AffairsArnim Dontes, Executive Vice President for Business AffairsMichael Serber, Vice President for Financial AffairsJohn Warner, M.D., Vice President, Chief Executive Officer, University HospitalsJohn D. Rutherford, M.D., Vice President for Clinical OperationsWilliam M. Behrendt, Ph.D., Vice President for Human ResourcesSteve Moore, Vice President for Communications, Marketing, and Public AffairsRuben E. Esquivel, Vice President for Community and Corporate RelationsAmanda Billings, Vice President for DevelopmentLeah Hurley, J.D., Vice President for Legal AffairsRobin M. Jacoby, Ph.D., Vice President and Chief of StaffKirk Kirksey, Vice President for Information ResourcesWes Norred, Vice President for Student and Alumni AffairsKirby L. Vahle, Vice President for Facilities ManagementAngela Marin-Hill, Vice President for Government Affairs and PolicyAngela Wishon, JD, Vice President for Research AdministrationFrank Grassier, Vice President for Technology Development********
TABLE OF CONTENTSTHE UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTERPRIMARY STATEMENTSExhibit A- Statement of Net Position. 2Exhibit B- Combined Statement of Revenues, Expenses and Changes in Net Position. .4Exhibit C- Combined Statement of Cash Flows . 6Exhibit D- Comparison of Budget to Actual Statement of Revenues, Expenses and Changes in NetPosition.7SUPPORTING SCHEDULESSchedule A-1- Schedule of Cash, Cash Equivalents, and Investments. 10Schedule A-3A - Schedule of Legislative Appropriations . 12Schedule B-1- Schedule of Educational and General Funds - Summary of Operations . 13Schedule B-2- Schedule of Designated Funds - Summary of Operations. . 14Schedule B-3- Schedule of Auxiliary Enterprise Funds - Summary of Operations. 16Schedule B-4- Schedule of Restricted Expendable Funds - Summary of Operations. 17Schedule B-6A - Schedule of Changes in Net Position Endowment and Similar Funds - Other than State. . 18Schedule B-6C - Schedule of Changes in Net Position Endowment and Similar Funds - State (PermanentHealth Fund). 34Schedule B-8- Schedule of Changes in Net Position - Unexpended Plant Funds. 35Schedule B-11 - Schedule of Changes in Investment in Plant . 36Schedule B-13 - Schedule of Transfers Between Funds. . 37Schedule C-1- Schedule of Tuition and Fees Revenue. 38Schedule C-1A - Schedule of Hospital Revenues. 39Schedule C-2- Schedule of Expenses by Object and Fund Group. . 40Expense Class - Expense Classification Summary . 42Schedule C-2A - Schedule of Hospital Expenditures. . 43Schedule D-6- Schedule of Medical Services, Research and Development Plan - Summary of Operations. 44Schedule D-6- Schedule of Health Professions Faculty Services Plan - Summary of Operations . 46Schedule 1-A- Schedule of Federal Financial Assistance . 48Schedule 1-B- Schedule of State Grant Pass-Throughs From/To State Agencies . 72SUPPLEMENTAL SCHEDULESSchedule S-4A - Schedule of Federal Expenditures by NACUBO Expenditure Function . 76Schedule S-8- Schedule of Changes in Net Position - Unexpended Plant Funds. 77Schedule S-11A - Schedule of Changes in Investment in Plant - Land . 86Schedule S-11B - Schedule of Changes in Investment in Plant - Buildings. 88Schedule S-11C - Schedule of Changes in Investment in Plant - Facilities and Other Improvements . 91Schedule S-11D - Schedule of Changes in Investment in Plant - Equipment . 94Schedule S-11E - Schedule of Changes in Investment in Plant - Construction in Progress . 98Schedule S-11F - Schedule of Changes in Investment in Plant - Infrastructure.102Schedule S-11G - Schedule of Changes in Investment in Plant - Intangible Assets .103
PRIMARY STATEMENTS
2The University of Texas Southwestern Medical CenterExhibit A Statement of Net PositionAs of August 31, 2015Educational ExpendableLoan FundsASSETS AND DEFERRED OUTFLOWSCurrent Assets:Cash & Cash EquivalentsRestricted Cash & Cash EquivalentsBalance inState AppropriationsAccounts Receivable, Net:Federal {allow. 0.00 in2015 & 0.00 in 2014)Other lntergov. {allow. 0.00 in 2015 & 0.00 in 2014)Patient & Healthcare(allow. 24,786,876.55 in 2015 & 412,741,915.28 in 2014)Interest and Dividend ReceivablesContributions (allow. 0.00 in 2015 & 52,298.93 in 2014)Other (allow. 494,620.15 in 2015 & 349,813.63 in 2014)Due From System AdministrationDue From Other InstitutionsDue From Other AgenciesInventoriesLoans & Contracts (allow. 38,384.79 in 2015 & 43,407.08 in 2014)Other Current AssetsTotal Current Assets 03.568,695.0030,125,617.92270,258.7410 117 444.97428,312,869.9864 778.028,298,426. 01,055. 1332,688.871,153,748.4861,266,341.86Noncurrent Assets:Cash and Cash Equivalents (Noncurrent Restricted)Restricted InvestmentsLoans & Contracts (allow. 217,514.93 in 2015 & 240,341.08 in 2014)Funds Held by System Administration (Restricted)Contributions Rec. (allow. 0.00 in 2015 & 363,513.50 in 2014)Unrestricted InvestmentsOther Noncurrent AssetsGross Capital/Intangible AssetsAccumulated Depreciation/Amortization3 ,498.419,875,215.14Total 4,834,358.0811,061,652.49Total Assets and Deferred 3.11148,593.667,335,791.75Total Noncurrent AssetsLIABILITIES AND DEFERRED INFLOWSCurrent Liabilities:Accounts Payable and Accrued LiabilitiesSalaries PayableDueTo System AdministrationDue To Other InstitutionsDue To Other State AgenciesUnearned RevenueEmployees' Compensable Leave - Current PortionNotes, Loans, and Leases PayablePayable From Restricted AssetsAssets Held for OthersOther Current LiabilitiesTotal Current LiabilitiesNoncurrent Liabilities:Employees' Compensable LeaveNotes, Loans, and Leases PayableOther Noncurrent 750.0064,570,803.05221,766,805. 19.556,834,283.6631,837,986.0619,000,000.002 719 163.0853,557, 149.14Total Liabilities71,405,086. al Liabilities and Deferred Inflows71,405,086. ,138,744.85} 725.1916,703,428.0516,703,428.05Total Noncurrent LiabilitiesNET POSITIONNet Investment in Capital AssetsRestricted for:NonexpendablePermanent Health, True Endowments, and AnnuitiesExpendableCapital ProjectsFunds Functioning as Endowment (Restricted)Other ExpendableUnrestrictedTotal Net 7,271.0911,061,432.94
3Endowment and SimilarEndowment andFunds-StateSimilar Funds-Other Unexpended PlantPermanent Health FundThan StateFundsInvestment in PlantAgency 200,780.5165,592, ,945,931.013,109,038,868.62(17140.001 ,830.26)1,969,037,038.3665,592, 100.0065,592, 47.65)(699,747.65)Current 0,395,876.661,153,748.4810 4,942.5911 822 88,251, 1,027,021.297.88)4,342,628,661.434,949,201, 175.704,949,201, 002 719 51.34Prior 8.3637,138,689.031 929 ,377.2920, .814,447,793,436.29
4The University of Texas Southwestern Medical CenterExhibit B Statement of Revenues, Expenses, and Changes in Net PositionForthe Year Ended August 31, 2015Educational andGeneralDesignatedAuxiliary EnterprisesRestrictedExpendableLoan FundsEndowment andSimilar Funds State PermanentHealth FundOperating Revenues:Student Tuition and Fees Discounts and 2,116.81)(975,224.14)(396,208.47)Federal Sponsored ProgramsFederal Sponsored Programs Pass-Through from State Agencies56,149,159.34128,075,784.34586,578.67State Sponsored Programs Pass-Through from State Agencies575,748.05Local Sponsored ProgramsPrivate Sponsored ProgramsSales and Services of Educational Activities(99,277.50)Sales and Services of 3,806.99(2,803,824.84)2,446,871,684.79Discounts and Allowances Sales and Services of Hospitals(1,485,516, 145.72)Professional Fees (Patient Charges)1,605,087,345.21Discounts and Allowances Professional Fees (Patient Charges)(1,134,320,746.27)Auxiliary Enterprises25,495,056.73Other Operating Revenues49,551.65Total Operating 240.33Operating ,630.43Public Service842,598.63Hospitals I 198.95759,444.55Academic Support8,755,978.829,854,141.17Student nal ions and Maintenance of 11,179,781.03Scholarships and Fellowships80,303.00Auxiliary 56,470,776.16)150,950.94Depreciation and AmortizationTotal Operating ExpensesOperating Income (Loss)Nonoperating Revenues (Expenses):State Appropriations171,528,976.45Federal Nonexchange Sponsored ProgramsFederal Nonexchange Pass-ThroughState Nonexchange Pass-ThroughGift Contributions for Operations1,691,310.73Investment Income36,582.47Net Increase (Decrease) in Fair Value of 2,868, 111.27)(441,465.10)(2,310,900.00)Gain (Loss) on Sale of Capital AssetsOther Nonoperating Revenues1,997,787.88Other Nonoperating (Expenses)Net Nonoperating Revenues (Expenses)lncome/(Loss) Before Other Revenue, Expenses, Gains/(Losses), 6.15)236,600,964.493,215,321.0861,264, 196.00(265, 139.73)(2,310,900.00)Gifts and Sponsored Programs for Capital Acquisitions266,161.1210,638,975.07Additions to Pennanent Endowments I Annuities4,312,195.13Reclass from/(to) Other InstitutionsCapital Asset Purchases(37,868.80)Transactions Between Funds(13,084,385.26)(93,089.55)616,450.51Transfers Between Institutions & System, Debt Service - MandatoryTransfers Between Institutions & System Admin. - Non mandatory(12,330,403.00)Transfers From Other State ,317,283.54)(4,418,594.92)12,272,067.26(95, ,037,271.0911,061,432.9465,592, 100.0019,935.178,695.00Transfers to Other State Agencies(81,078.10)Legislative Appropriations LapsedTransfers Between FundsChange in Net PositionBeginning Net PositionEnding Net Position
5Endowment andSimilar Funds Other Than StateUnexpended PlantFundsInvestment in PlantCurrent YearTotalsPrior .87(1,485,516, 9452,449,637.6231,564, ,263.57)(5,440, 613,996.19(90, 486, 170,997.79(11,679,337 .16)(107,491,179.11)920,348, 294, 7,038.364,507,610,377.294,447,793,436.29
6The University of Texas Southwestern Medical CenterExhibit C - Statement of Cash FlowsFor the Year Ended August 31, 2015Current Year TotalsCash Flows from Operating Activities:Proceeds from Tuition and FeesProceeds from Patients and CustomersProceeds from Sponsored ProgramsProceeds from AuxiliariesProceeds from Other RevenuesPayments to SuppliersPayments to EmployeesPayments for Loans ProvidedProceeds from Loan ProgramsNet Cash Provided (Used) by Operating ActivitiesCash Flows from Noncapital Financing Activities:Proceeds from State AppropriationsProceeds from Operating GiftsProceeds from Private Gifts for Endowment and Annuity Life PurposesProceeds from Other Nonoperating RevenuesReceipts for Transfers from System or Other AgenciesPayments for Transfers to System or Other AgenciesProceeds from Nonexchange Sponsored ProgramsNet Cash Provided by Noncapital Financing ActivitiesPrior Year 3,025,820.6561,493,589.31(772,324,817 .87)(1,359,653,483.61)(1,071, 107.35)1,211 ,665.37(63,526, 159.88)21,969,356.711,295,062,161.77490, 123,939.6719,578,490.0871,065, 132.66(638,560,966.36)(1,308, 7.8812,992,757.12(18,291,227 15, 6, 180.10)(90, 6.432,286,879.23(298,483,376.79)(91 3.93(28, 193,186.99)85,068,581.9654,966, )(3,889,952.88)129,746,091.46 125,856,138.58(84,958,923.50)214,705,014.96 13.64139,686,910.65Net Cash Provided (Used) by Operating Activities (63,526, 159.88) (49,804,673.17)Non Cash Transactions:Net Increase (Decrease) in Fair Value of InvestmentsMiscellaneous Noncash Transactions(138,296,988.92)(3,806,251.04)Cash Flows from Capital and Related Financing Activities:Nonmandatory Capital Related TransfersProceeds from Capital Appropriations, Grants, and GiftsProceeds from Sale of Capital AssetsPayments for Additions to Capital AssetsMandatory Transfers to System for Capital Related DebtNet Cash Provided (Used) by Capital and Related Financing ActivitiesCash Flows from Investing ActivitiesProceeds from Sales of Investments Invested by SystemProceeds from Interest and Investment IncomeProceeds from Interest and Investment Income Invested by System· Payments to Acquire Investments Invested by SystemNet Cash Provided (Used) by Investing ActivitiesNet Increase (Decrease) inCashCash and Cash Equivalents (Beginning of the Year)Cash and Cash Equivalents (End of the Year)Reconciliation of Net Operating Revenues (Expenses) to Net CashProvided (Used) by Operating ActivitiesOperating Income (Loss)Adjustments to Reconcile Operating Results to Net Cash:Depreciation and Amortization ExpenseBad Debt ExpenseChanges in Assets and Liabilities:Accounts ReceivableInventoriesLoans and ContractsOther Current and Noncurrent AssetsAccounts PayableDue to SystemUnearned RevenueAssets Held for OthersEmployees' Compensable LeaveOther Current and Noncurrent LiabilitiesTotal Adjustments181,818,927.10(7,247,827.09)
7The University of Texas Southwestern Medical CenterExhibit D Comparison of Budget to Actual Statement of Revenues, Expenses, and Changes in Net PositionFor the Year Ended August 31, 2015OperatingBudgetOPERATING REVENUES:Net Student Tuition and FeesFederal Sponsored ProgramsState Sponsored ProgramsLocal and Private Sponsored ProgramsNet Sales and Services of Educational ActivitiesNet Sales and Services of HospitalsNet Professional FeesNet Auxiliary EnterprisesOther Operating RevenuesTotal Operating Revenues 022,523,937 112.144,014.890.38OPERATING EXPENSES:InstructionResearchPublic ServiceHospitals I ClinicsAcademic SupportStudent ServicesInstitutional SupportOperations and Maintenance of PlantScholarships and FellowshipsAuxiliary EnterprisesDepreciation and AmortizationTotal Operating Expenses673,515, 196.00314,660, ,079.00140,790,821.002.209,707.928.00730,505, 365,560.2422,535,672.05150,956.853.172,309,921 ,092.07Operating Income 504.48114,566,524.83(138,296,988.92)NONOPERATING REVENUES (EXPENSES):State AppropriationsGift Contributions for OperationsInvestment IncomeNet Increase (Decrease) in Fair Value of InvestmentsOther Nonoperating Revenues (Expenses)Net Nonoperating Revenues 0TRANSFERS AND OTHERS:Capital Appropriations, Gifts, and Sponsored ProgramsAdditions to Permanent EndowmentsTransfers for Debt ServiceTransfers and OtherTotal Transfers and 3,086.00(54,811 2.003.607.99(29,084.446.71)Change in Net Position!( 24, 18 9,4 36 .0 0)9,8 16 ,9 41. 00 5
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9SUPPORTING SCHEDULES
.0The University of Texas Southwestern Medical CenterSchedule A-1 Schedule of Cash, Cash Equivalents, and InvestmentsAs of August 31, 2015CURRENT ASSETSUnrestrictedCashNONCURRENT ASSETSRestrictedUnrestrictedRestrictedCurrent Year TotalPrior Year Total& Cash EquivalentsCash on HandPetty Cash .85287,430.50Cash in TransitSubtotal Cash on HandCash inBankDemand Cash Held by SystemDemand AccountsSubtotal Cash in 5,856,138.58129,746,091.46Cash inState TreasuryAvailable University FundPermanent University FundPermanent Health FundROI Fund 211Local Revenue FundDirect Deposit of Bills - Holding Account FundDepartmental Suspense FundUS Savings Bond Account FundDeferred Compensation 401 K FundDirect Deposit Hold - Transmit Account FundCorrection Account for Direct Deposit FundSubtotal Cash in State TreasuryCash Equivalent Investments (Intent)US Treasury Bills and NotesTime DepositsRepurchase Agreements Texas Treasury Safekeeping Trust Co.108,602,206.23108,602,206.23Money Market FundsSubtotal Cash Equivalent InvestmentsReimbursements due from State TreasuryTotal Cash and Cash Equivalents (ExhibitA) 2,821.79-115,184,141.355,159,259.54
The University of Texas Southwestern Medical CenterSchedule A-1 Schedule of Cash, Cash Equivalents, and InvestmentsAs of August 31, 2015NONCURRENT ASSETSUnrestrictedRestrictedCurrent Year TotalPrior Year TotalInvestmentsFunds Held by System Administration Pooled Operating Funds (Held by System - ITF)Funds Held for Affiliated , 501,311,829,989.12Bonds and Preferred StockStocksReal Estate Mortgages and Other NotesReal EstateMineral Rights and Other RoyaltiesPhysical CommodityInvestment FundsOther InvestmentsInvestment Derivatives Asset PositionsTotal Investments (Exhibit 411,473, 282,411,473, 158.21Securities Lending CollateralTotal Investments and Securities Lending Collateral (Exhibit A) .
.NUNAUDITEDSchedule A·3aThe University of Texas Southwestern Medical CenterSchedule of Legislative AppropriationsFortheYear EndedAugust 31,2015LegislativeBALANCESDe
THE UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTER FINANCIAL STATEMENTS (WITH DETAILED SUPPORTIVE SCHEDULES) Presented herein are the financial statements with detailed supportive schedules for The University of Texas Southwestern Medical Center for the year ended August 31, 2015.
