SRSA

DISCLOSURE SCHEDULES TO
SYSTEM RESTRUCTURING AND SUPPORT AGREEMENT

BY AND AMONG
DAUGHTERS OF CHARITY MINISTRY SERVICES CORPORATION,
A CALIFORNIA NONPROFIT RELIGIOUS CORPORATION,
DAUGHTERS OF CHARITY HEALTH SYSTEM,
A CALIFORNIA NONPROFIT RELIGIOUS CORPORATION,
CERTAIN FUNDS MANAGED BY BLUEMOUNTAIN CAPITAL MANAGEMENT,
LLC, A DELAWARE LIMITED LIABILITY COMPANY,
AND
INTEGRITY HEALTHCARE, LLC
A DELAWARE LIMITED LIABILITY CORPORATION
DATED: July 17, 2015
LIST OF SCHEDULES
Schedule
Description of Schedule
1.1(b)
System Office Employees
1.1(c)
Collective Bargaining Agreements and Defined Church Contribution Plans
2.1(e)
Third-Party Lenders and Funds Managed by Blue Mountain
2.1(k)
IT Agreement
2.2(a)
Retained Intellectual Property
2.2(c)
Religious Artifacts and Donor-Restricted Assets
2.2(e)
Retained Assets
2.6
Designated Account
2.6(c)
Transaction Costs
2.6(d)
Termination Costs for Nonqualified Executive Retirement Plans
4.2(b)
Required Approvals
4.2(c)
Mission Critical Contracts; Required Consents
4.4
Financial Statements & GAAP Exceptions
4.6
Medicare or Medi-Cal Notices & Investigations
4.7(b)
Government Actions to Terminate or Decertify
4.7(c)
Excluded Employees and Exclusion from Federal Health Care Programs
4.7(d)
Corporate Integrity Agreements
4.9(b)
Violations of Environmental Laws
4.10(a)
Owned Real Property
4.10(b)
Proceedings Related to Real Property
4.10(c)
Real Estate Leases
4.10(f)
Unsatisfied Requests for Repairs, Restorations or Improvements
4.11
Material Litigation or Proceedings
4.12
Medical Staff Matters
4.13(a)
Tax Returns
4.13(b)
Taxes
4.14(a)
Employee Benefits and Retirement Plans
4.14(c)
Liability with Respect to Plans
4.14(e)
Retiree Welfare Benefits and Retirement Plans
4.15(a)
DCHS Employees
4.15(b)
Grievances and Unfair Labor Practice Complaints
4.15(c)
Compliance with Legal Requirements Relating to Employee Health and

Safety
4.16
Insurance
4.19
Cost Reports
5.10
Brokers Fees Blue Mountain
6.2(g)
Retention Payments
6.4(b)
Regulatory Approvals DCHS
6.9
D&O Insurance
6.10
Fiduciary Liability Insurance
6.13
Licensed Intellectual Property
7.1(a)(ii)
Regulatory Approvals Blue Mountain
7.1(a)(iii)
Change of Control Applications and Notices Blue Mountain/Integrity
7.2(b)
DCHS and its Affiliates Severance Policies
7.12
Right of First Offer for Religious Assets
8.8
Transaction Documents
DISCLOSURE SCHEDULES
These Disclosure Schedules (the Disclosure Schedules) are being delivered to certain
funds managed by BlueMountain Capital Management, LLC (Blue Mountain) and Integrity
Healthcare, LLC (Integrity) by Daughters of Charity Ministry Services Corporation
(DOCMSC) and Daughters of Charity Health System (DCHS) pursuant to that certain
System Restructuring and Support Agreement dated as of the date hereof by and among DCHS,
Blue Mountain and Integrity (the Agreement). Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Agreement.
All disclosures in the Disclosure Schedules are made generally and any item disclosed in
any section of the Disclosure Schedules shall be deemed to have been disclosed for any other
sections of the Disclosure Schedules to the extent the Agreement requires such disclosure and so
long as the applicability of such disclosure to such section is reasonably apparent on its face. The
inclusion of information in the Disclosure Schedule shall not be construed as an admission that
such information is material to DCHS, Blue Mountain or Integrity. In addition, matters reflected
in the Disclosure Schedules are not necessarily limited to matters required by this Agreement to
be reflected in the Disclosure Schedules. Any description of any agreement, document,
instrument, plan, arrangement or other item set forth on any Disclosure Schedule hereto is a
summary only and is qualified in its entirety by the terms of such agreement, document,
instrument, plan, arrangement or item, copies of which have been made available to Blue
Mountain. No disclosure in any Disclosure Schedule hereto relating to any possible breach or
violation of any agreement, permit or Law shall be construed as an admission that any such
breach or violation exists or has actually occurred, or shall constitute an admission of liability to
any third party.
Schedule 1.1(b)
System Office Employees
LHM Leaders:
Joanne Allen, President and CEO, Seton Medical Center
Catherine Fickes, President and CEO, St. Vincent Medical Center
Gerald Kozai, President and CEO, St. Francis Medical Center
Gregory Hoffman, Former CFO, DCHS Medical Foundation
Manish (Mike) Patel, CIO, DCHS Medical Foundation
Erica Luna, DCHS Medical Foundation
Dean Didech MD, DCHS Medical Foundation
[WITHHELD]
Caritas Business Services:

Tina Cordero, Financial Reporting, Director/Corporate Responsibility Officer
Tina McIntosh, Director, PFS, Caritas Business Services
DCHS System Office
Robert Issai, President and CEO
Samantha Schumacher, Executive Assistant
Elizabeth Nikels, VP Marketing and Communications
Annie Melikian, CFO
Gertrudes Cary, Controller
Johnette Chong, Director Financial Services
Mark Perucho, Senior Accountant
Peter Vincent, Director, Financial Reporting Systems
Todd Schroeder, Director, Reimbursement & Revenue
Stephanie Battles, VP Human Resources
Denise Delmar, Project Administrator
Marian Graney, Director Telecom
Michael Day, VP IT & Strategy
Richard Hutsell, VP IT & CIO
Vera Dubuk, Director HR Information Systems
David Siva, Sr. Director IT
Gaynor Rabin, VP Managed Care/Cont. Payor Relations
Jeffrey Park, Manager, Managed Care Analytics
Constance Palmer, Sr. Contract Analyst
Mark Ramirez, VP Supply Chain Management
Mathew Hopper, Executive Administrative Assistant
Robert Cook, VP Risk Management
Pascale Roy, General Counsel
Robert Walter, VP Facility Planning & Development
Patricia Maes, Executive Assistant
Mary McTiernan, Executive Assistant / Receptionist
Schedule 1.1(c)
Collective Bargaining Agreements and Defined Church Contribution Plans
Collective Bargaining Agreements:
California Licensed Vocational Nurses Association (CLVNA)
Collective Bargaining Agreement between OConnor Hospital and California Licensed
Vocational Nurses Association
Collective Bargaining Agreement between Saint Louise Regional Hospital and California
Licensed Vocational Nurses Association
California Nurses Association (C.N.A.)
Master Agreement between Daughters of Charity Health System and California Nurses
Association
Agreement between OConnor Hospital and California Nurses Association
Agreement between Seton Medical Center and California Nurses Association
Agreement between Saint Louise Regional Hospital and California Nurses Association
Agreement between St. Vincent Medical Center and California Nurses Association
International Union of Operating Engineers, Stationary Engineers, Local 39, AFL-CIO
(Local 39)
Collective Bargaining Agreement by and between Daughters of Charity OConnor Hospital and
International Union of Operating Engineers, Stationary Engineers, Local 39
Collective Bargaining Agreement by and between Saint Louise Regional Hospital and
Collective Bargaining Agreement by and between Seton Medical Center/Seton Coastside and
Service Employees International Union United Healthcare Workers West (SEIU-UHW)
SEIU Healthcare UHW United Healthcare Workers West; United Healthcare Workers West
Service Employees International Union, CTW, CLC Collective Bargaining Agreement with
OConnor Hospital, Saint Louise Regional Hospital, Seton Medical Center, Seton Medical
Center-Coastside, St. Francis Medical Center, St. Vincent Medical Center
United Healthcare Workers West Service Employees International Union and San Jose Medical
Management, Inc. (Expired in September 2014)
United Nurses Association of California (UNAC)

Labor Management Agreement between St. Francis Medical Center and St. Francis Registered
Nurses Association, United Nurses Associations of California/Union of Health Care
Professionals (UNAC/UHCP) NUHHCE, AFSCME, AFL-CIO
Engineers and Scientists of California Local 20, AFL-CIO (ESC Local 20)
Agreements between OConnor Hospital and Engineers and Scientists of California,
International Federation of Professional and Technical Engineers, Local 20, AFL-CIO/CLC
Agreements between Seton Medical Center and Engineers and Scientists of California,
Agreements between Saint Louise Regional Hospital and Engineers and Scientists of California,
Side Letter Agreements
Side Letter Agreement between Local 20 and OConnor Hospital dated July 16, 2014
Side Letter Agreement between CNA and Saint Louise Regional Hospital dated January 6, 2010
Side Letter Agreement between SEIU and Saint Louise Regional Hospital dated May 6 2012, Re
article 36 of the collective bargaining agreement and Lead X Ray Clerk II-classification and
wages.
Side Letter Agreement between SEIU and Saint Louise Regional Hospital dated June 9, 2010:
Re ED Unit Clerks and New Alternative and Work Schedule.
Side Letter Agreement between CNA and St Louise Regional Hospital dated January 6, 2010, Re
The addition of RNs at the Urgent Care Center, including an alternative work schedule.
Please note that the following Side Letters between SEIU and Saint Louise Regional Hospital
have been included in the current collective bargaining agreement:
Settlement Agreement among St Louise Regional Hospital, Victoria Hughes and SEIU
dated October 19, 2011 Re: The addition of the Nuclear Med Tech to the SEIU CBA
Side Letter Agreement between SEIU and Saint Louise Regional Hospital dated
December 16, 2011 Re the addition of the Certified Surgical Tech to the SEIU CBA
Side Letter Agreement between CNA and St Vincent Medical Center dated January 2008 Re
Nurses commitment to helping SVMC achieve its goals for core measures and patient
satisfaction standard.1
Memorandum of Agreement Regarding Side Letters between OConnor Hospital and SEIUUHW dated February 28, 2013
Side Letter Agreement between CNA and Saint Louise Regional Hospital-dated July 1, 2015 Re
Retention Bonus Maternal Child Health Department.
1
This letter was not incorporated in the current collective bargaining agreement. It was an oversight, and St.
Vincent Medical Center is of the view that it is still in force. St. Vincent will request that it be included in the next
collective bargaining agreement.
Side Letter Agreement between UNAC and St. Francis Medical Center dated March 19, 2015,
Re Fatigue Language for Surgery, ER, Cath Lab.
Defined Contribution Church Plans
1.
DCHS Medical Foundation Management Bargaining Unit 401(k) Plan
2.
DCHS Medical Foundation 401(k) Plan
3.
Seton CNA Money Purchase Plan
4.
Kennedy Savings Plan
5.
Seton Coastside Annuity Plan
Schedule 2.1(e)
Third-Party Lenders and Funds Managed by Blue Mountain
BlueMountain Guadalupe Peak Fund L.P.

BlueMountain Summit Opportunities Fund II (US) L.P.
BlueMountain Montenvers Master Fund SCA SICAV-SIF
BlueMountain Foinaven Master Fund L.P.
BlueMountain Logan Opportunities Master Fund L.P.
BlueMeridian Capital, LLC
BMSB L.P., a Delaware limited partnership
4811-9519-5173.1
Schedule 2.1(k)
IT Agreement
Area
Data Center:
Facilities that house IT infrastructure components such as
servers, storage, and backup for each site and enterprise level
components.
Management/Monitoring System
Cooling
Power
Generators
Uninterrupted Power Supply
Racks & Cabinets
Servers
Storage System
Data Backup System
Network Infrastructure:
Site and interconnecting network communications infrastructure
and services.
Routers
Core Switches
Distribution Switches
Access Layer / Closet Switches
Firewalls
Intrusion Prevention / Detection
Internet Services
Wireless controllers
Wireless access points
Applications and Data:

Software that is configured to support the operations of the
organization. This also includes that data that is collected,
processed, and stored on these systems.
Inpatient EMR/EHR
Medical Imaging - PACS, Cardiology, GI
Ambulatory EMR/EHR
Pharmacy, Radiology, Clinical Labs, & Ancillary Services
ERP/Supply Chain/Asset Management/GL/AP/Budget
Revenue Cycle
Value
Payroll/Timesheets
DecisionSupport
PatientPortal
EmployeePortal
PublicPortal
AntiVirus
Groupware
Email
ActiveDirectory
DNS
DHCP
ProductivitySuite(wordprocessor,spreadsheet,etc.)
SingleSignOn
Softwarelicensesforapplications,workstations,servers,etc.
Telecommunicationsservices:
Voice,paging,nursecall,andothercommunicationsservices.
Management/MonitoringSystem
Phonehandsets
PhoneSwitch
UnifiedCommunicationSystem
DistributedAntennaSystemforCellularNetworks
TelcoServices
Licensingandmaintenancecontracts:
Softwarelicensesandhardwaremaintenancecontractrightsto
utilizeandreceivemaintenance/supportservicesforthe
organizationsITassets.
ITInfrastructureperipheraldevices:
Desktop,mobile,andhandhelddevicesthatconnecttothe
network,application,andotherITservices.
Management/MonitoringSystem
Workstations
Thin/ZeroClients
WorkstationsonWheels
Printers
Barcodescanners
Barcodeprinters
Badgereaders
Schedule 2.2(a)
Retained Intellectual Property
1) Trademarks
a. Daughters of Charity Ministry Services Corp.
b. Daughters of Charity Health System
c. DCHS
d. Daughters of Charity Health System (logos)
e. DCHS Medical Foundation

f. DCHSMF
g. DCHS Medical Foundation (logo)
2) Domain Names
a. http://www.dochs.org
b. http://www.medfoundation.dochs.org
c. http://www.dchsmedicalfoundation.org
d. http://www.dchsmed.org
e. http://www.dchsmed.com
f. http://www.dchsmf.org
g.
h.
i.
j.
k.
l.
m.
http://www.daughtersofcharity.com
http://www.dchsaccess.org
http://www.dchspacs.org
http://www.dochs.net
http://www.docmsc.org
http://www. mydchsbenefits.com
http://www.mydchsbenefits.org
3) Copyrights
a. Vincentian values: Catholic evaluative criteria program (Registration #
TX0001514463).
b. All copyrightable content that appears on the websites identified in Section 2 above
or on any social media accounts maintained by Sellers, including without limitation
Facebook, Twitter and Google+ and all copyrights content that contains, uses or
references the DCHS Marks or the Retained Marks.
Schedule 2.2(c)
Religious Artifacts and Donor-Restricted Assets
1.
Religious items including art and small religious statuettes
2.
All artwork, including all signed and unsigned Ansel Adams prints
3.
Three-dimensional items such as sisters' habit/nurses' uniform, patient trays depicting

religious scenes, etc.
4.
Any items located within cornerstones of earlier hospital buildings (1800s to 1980s) that
are of the nature of memorabilia
Schedule 2.2(e)
Retained Assets
1.
Board of Directors Minutes of Meetings (1800s to 2015) - Sisters provided hospital

sponsorship from date of incorporation to present time for all the DCHS Local Health
Ministries and DCHS Medical Foundation
2.
Archival material related to the Office of Hospital Administrator (now called CEO)
(1800s to 1970s) - Sisters were the chief administrators from establishment of the
hospital until c. 1996 at certain of the DCHS Local Health Ministries
3.
Ledgers such as earliest Daily Admissions/Discharges Receipts/Expenses, etc. from the

DCHS Local Health Ministries (1800s)
4.
Historical documents related to hospital such as original articles of incorporation/by-laws;

original property deeds; construction/expansion and other property related records;
annual reports; audited financial statements; publications/brochures (sampling); long
range reports (strategic plans); significant correspondence, etc. for all of the DCHS Local
Health Ministries and DCHS Medical Foundation (1800s to 2015)
5.
Correspondence between Sisters and Myles/Amanda OConnor as well as Archbishop

Riordan from OConnor Hospital in San Jose, CA (1800s-1920s)
6.
Historical documents related to school of nursing as well as its yearbooks from OConnor
Hospital in San Jose, CA (1800-1930s)
7.
Original photographs: of hospital buildings of the DCHS Local Health Ministries, 1800s
to present; of Sisters especially in original habit/cornette and earlier modified habits,
1800s-1970s; of school of nursing students, primarily group photographs from early
decades, 1900-1930s
8.
Other archival material related to materials relating to replacement of Hospital at St.

Francis Medical Center, creation of St Francis Career College and opening of first clinics
9.
The property at 25 San Fernando, Daly City, CA 94015
10.
The property at 253 S. Lake Street, Los Angeles, CA 90057
11.
All furniture, fixtures and equipment at the Los Altos Hills corporate office
12.
Receivables payable in favor of DCHS by Daughters of Charity Ministry Services

Corporation and any non-DCHS affiliated entities, which includes GRACE, Inc.,
Daughters of Charity of St. Vincent de Paul, Province of the West and the entity that
owns the program Meals on Wheels
13.
Property of Casa de Amigos at St. Vincent Medical Center
Schedule 2.6
Designated Account
To be established prior to Closing.
Schedule 2.6(c)
Transaction Costs
Estimated Transaction Fees and Closing Costs
Category
Outstanding Monthly
Professional Fees at
Closing
Est. Amount
$4.0 million
Notes / Description
Estimated two months of professional fees
Transaction and
Success Fees
$11.0 million
Estimated back-end transaction and success fees payable

at Closing
Transfer Taxes
$2.0 million
Estimated taxes related to the transfer of Real Estate.

The documentary transfer tax will be $1.10 per $1,000
for all properties PLUS a city transfer tax in the
following two cities:
Los Angeles - $4.50 per $1,000
San Jose - $3.30 per $1,000
Calculated tax based on May 2015 book value of PP&E.
Holdback Amount
$11.5 million
Amount funded into segregated deposit account

controlled by DOCMSC at Closing pursuant to Section
2.3(a) of Agreement
Retention Plan
$1.0 million
Represents gross amount payable to participants at

Closing (both identified and TBD reserve) pursuant to
Section 6.2(g) of Agreement
401(a)(17)
Retirement Plan
$3.1 million
Represents estimated Total Net Lump Sum Payable

funded at Closing pursuant to Section 2.7(d) of
Agreement (estimate as of August 1, 2015)
Post-Closing, Wind
Down & Other Costs
$5.4 million
Other unanticipated closing transaction fees, wind down

costs, etc.
Total Estimated
Transaction Fees
$38.0 million
Assumptions:
No bankruptcy
No labor disruptions
Receipt of Quality Assurance Fees as projected
Schedule 2.6(d)
Termination Costs for Nonqualified Executive Retirement Plans
Daughters of Charity Health System 401(a)(17) Retirement Plan estimated to be

$3,050,000 as of August 1, 2015, as may be modified from time to time
Daughters of Charity Health System 401(a)(17) Supplemental Retirement Plan Account

estimated to be $656,917 as of June 30, 2015 2
Note to draft: This plan is fully funded and funds are held by a TPA, Transamerica.
Schedule 4.2(b)
Required Approvals
1. Written notice to and consent of the California Attorney General as required under
California Corporations Code Section 5914.
Schedule 4.2(c)
Mission Critical Contracts; Required Consents
Daughters of Charity Health System

Vendor
iSirona, LLC
Talyst, Inc.
CliniComp, Intl.
Macquarie Equipment Finance, LLC
Cisco Capital
Agreement Title
Master Software and License Agreement
between iSirona, LLC and Daughters of Charity
Health System
Master Software License and Support
Agreement between Talyst Inc. and Daughters
of Charity Health System
Software License Agreement between
CliniComp Intl., Inc. and Daughters of Charity
Health System
Master Equipment Lease Agreement between
Daughters of Charity Health System and
Macquarie Equipment Finance, LLC
Master Agreement to Lease Equipment dated as
of April 25, 2008
LHMs
LHM
SFMC
Vendor
Blue Shield
SFMC
County of Los Angeles
SFMC
SFMC
SFMC
SFMC
SMC
Blue Shield
SMC
Smith & Nephew, Inc.
SMC
Blue Shield
Agreement Title
Fee for Service Hospital Agreement between
California Physicians' Service, dba Blue Shield of
California, and St. Francis Medical Center
South Los Angeles Medical Services Preservation
Fund Strategic Initiative Program Agreement
dated as of July 1, 2008
Department of Mental Health Legal Entity
Agreement dated as of July 1 2010
Nutrition Education Obesity Prevention Los
Angeles Service Contract dated as of November
19, 2013
Children's Health Outreach, Enrollment,
Utilization and Retention Services dated as of July
1, 2013
Paramedic Base Hospital Services Agreement
dated as of January 1, 2013
California, and Staint Louise Regional Hospital
Placed Equipment Agreement dated as of
February 28, 2014
Fee For Service Hospital Agreement between St.
Francis Medical Center and California Physicians'
OCH
Blue Shield
SVMC
Blue Shield
Service, dba Blue Shield of California

California, and Seton Medical Center
California, and St. Vincent Medical Center
DCHS Medical Foundation
San Jose Medical Group, Inc. Professional Services Contract for physician services
AllCare Medical Group & Allied IPA, Professional Services Agreement for physician services
CFL Childrens Medical Associates, Inc. Professional Services Agreement
NCA IPA Professional Services Agreement
OConnor Genral Surgery Professional Services Agreement
Morgan Hill Internal Medicine Professional Services Agreement
AllScripts, EMR system for San Jose Medical Group
Schedule 4.4
Financial Statements & GAAP Exceptions
(a) DCHS unaudited income statements for the eleven-month period ending on May 31, 2015
attached hereto.
(b) DCHS audited consolidated balance sheets and income statements for the fiscal year of
DCHS ended on June 30, 2015, June 30, 2014 and June 30, 2013, attached hereto.
Off-Balance Sheet Liabilities4
Series 2014 Bridge Financing
Series 2014 Bonds Interest/Call

Premium
[TBD]
Series 2005 Bonds Interest (through

first call date)
Retirement Plan for Hospital
Employees (MEPP)
[TBD]
60,793
Retirement Plan for Local 39

(MEPP)
1,326
Self-Disclosure Item
Contract Early Termination
Penalties
Pending Litigation Exposure
Tail Liability Cost
[TBD]
4,220
Operating Leases
Employee Costs Paid at Closing
39,442
14,643

Miscellaneous Items
OCH Philanthropic Foundation
Carbone Trust
TBD
360
6,550
TBD
Note to draft: Numbers are represented in thousands.
Expected draws in the future, approximately $46 million

drawn to date
Depending on timing of transaction close, will be the lesser
of: (a) prefunding of interest to maturity and (b) 2% call
premium
First call date for Series 2005 Bonds is July 1, 2015.
Monthly interest accrual is ~$1.25mm.
Unfunded liability per 2/15/2015 Towers Watson Actuarial
Report page 16 (NOTE: does not represent potential
withdrawal liability).
Calculation per Local 39 TPA (Cherion) Report on Employer
Withdrawal Liability (October 2013) sent request to Pascal
Roy on June 30.
IT Contract Penalty (subject to change based on transaction
structure)
Estimate per Legal to be updated by Pascal Roy
Estimate for extended reporting period or tail liability costs
applicable to certain lines of insurance coverage (i.e., D&O,
Fiduciary Liability, Excess Hospital Professional Liability,
Physician Professional Liability, etc.) Includes Medical
Foundation. Subject to change.
Represents March FY2015 and beyond Audited FS
Includes: (a) Estimated lump-sum benefit to participants; (b)
KERP; and (c) Severance/COBRA/Related Employer Taxes
Various performance based incentive payments per PSAs
In process of hiring an attorney to see what the potential
exposure is OCH Foundation Trustee this was brought to
OCH attention in June 2015
CONSOLIDATED FINANCIAL STATEMENTS

AND SUPPLEMENTARY SCHEDULES
As of and for the Years Ended June 30, 2013 and 2012
With Report of Independent Auditors

Consolidated Financial Statements and Supplementary Schedules
Contents
Report of Independent Auditors.......................................................................................................1
Consolidated Financial Statements
Consolidated Balance Sheets ...........................................................................................................2
Consolidated Statements of Operations and Changes in Net Assets ...............................................3
Consolidated Statements of Cash Flows..........................................................................................5
Notes to Consolidated Financial Statements....................................................................................7
Supplementary Schedules
Report of Independent Auditors on Supplementary Information ..................................................56
Consolidating Balance Sheets........................................................................................................57
Consolidating Statements of Operations........................................................................................61
Ernst & Young LLP

Sacramento Office
2901 Douglas Boulevard
Suite 300
Roseville, California 95661
Tel: +1 916 218-1900
Fax: +1 916 218-1999
www.ey.com
Report of Independent Auditors

The Board of Directors
We have audited the accompanying consolidated financial statements of Daughters of Charity Health System, which
comprise the consolidated balance sheet as of June 30, 2013, and the related consolidated statement of operations and
changes in net assets, and cash flows for the year then ended, and the related notes to the consolidated financial statements.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S.
generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due
to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Daughters of Charity Health System at June 30, 2013, and the consolidated results of its operations and changes
in net assets, and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.
As discussed in Note 2 to the combined financial statements, the Daughters of Charity Health System changed the
presentation and classification of the provision for bad debts on the Consolidated Statement of Operations and Changes in
Net Assets as a result of the adoption of Accounting Standards Update No. 2011-07, Presentation and Disclosure of Patent
Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.
Report of Other Auditors on June 30, 2012 Financial Statements
The consolidated financial statements of Daughters of Charity Health System for the year ended June 30, 2012, were
audited by other auditors who expressed an unmodified opinion on those statements on November 27, 2012,
(November 26, 2013, as to the effects of the restatement discussed in Note 8 and the Ascension Health Affiliation
Agreement discussed in Note 12).
November 26, 2013
1
A member firm of Ernst & Young Global Limited

Consolidated Balance Sheets
(In Thousands )
Assets
Current assets:
Cash and cash equivalents
Interest in pooled investment fund short-term
2013
$
Patient accounts receivable net of allowance for doubtful accounts of

$40 million and $53 million in 2013 and 2012, respectively
Due from government agencies
Other current assets
Total current assets
Liabilities and net assets

Current liabilities:
Accounts payable
Current portion of long-term debt
Due to government agencies
Accrued liabilities
Other liabilities:
Long-term debt net of current portion
Workers compensation and hospital professional and general liability
Pension obligations
Other long-term liabilities
Total other liabilities
Net assets:
Unrestricted
Temporarily restricted
Permanently restricted
Total net assets
31,160
62,478
93,638
2012
34,870
72,859
107,729
153,851
22,336
119,354
389,179
159,092
22,420
140,405
429,646
112,882
63,491
40,859
217,232
169,447
69,172
41,853
280,472
10,905
369,530
13,283
$ 1,000,129
7,141
374,236
14,254
$ 1,105,749
Assets limited as to use:

Interest in pooled investment fund long-term
Other investments
Under bond indenture agreements
Goodwill and intangibles net
Property and equipment net
Other long-term assets
June 30
37,234
22,915
20,163
137,284
217,596
26,463
13,283
22,143
169,097
230,986
437,344
43,527
234,074
3,654
718,599
460,227
40,650
266,997
3,782
771,656
20,666
33,988
9,280
63,934
$ 1,000,129
60,776
33,467
8,864
103,107
$ 1,105,749
See accompanying notes.

Consolidated Statements of Operations and Changes in Net Assets
(In Thousands )
Year Ended June 30

2013
2012
Unrestricted revenues and other support:
Net patient service revenue
Provision for doubtful accounts
Net patient service revenue less provision for doubtful accounts
Premium revenue
Other operating revenue
Contributions
Total unrestricted revenues and other support
Expenses:
Salaries and benefits
Supplies
Purchased services and other
Depreciation and amortization
Interest net
Total expenses
$ 1,271,229 $ 1,213,366
(40,354)
(34,409)
1,178,957
1,230,875
41,056
65,489
32,799
29,435
21,049
16,723
1,273,861
1,342,522
783,586
170,262
393,619
60,439
25,336
1,433,242
730,244
161,876
360,897
56,642
25,202
1,334,861
Operating loss
Investment income net
(90,720)
16,252
(61,000)
1,500
Deficit of revenues over expenses
(74,468)
(59,500)
Net assets released from restrictions used for purchase of property

and equipment
Change in funded status of pension plans
Other
Decrease in unrestricted net assets
1,248
32,581
529
(40,110)
2,726
(42,782)
1,537
(98,019)

Consolidated Statements of Operations and Changes in Net Assets (continued)
(In Thousands )
Temporarily restricted net assets:

Contributions
Net assets released from restrictions:
Operations
Property and equipment
Other
Increase in temporarily restricted net assets
Permanently restricted net assets:
Net realized and unrealized gains (losses) on investments
Contributions
Increase in permanently restricted net assets
Decrease in net assets
Net assets beginning of year
Net assets end of year
Year Ended June 30

2013
2012
$
17,800
24,743
(15,584)
(1,248)
(447)
521
(16,263)
(2,726)
(496)
5,258
138
278
416
(189)
598
409
(39,173)
(92,352)
103,107
$ 63,934
195,459
$ 103,107

Consolidated Statements of Cash Flows
(In Thousands )
Operating activities
Adjustments to reconcile decrease in net assets to net cash used in
operating activities:
Provision for and write-off of doubtful accounts
Changes in fair value and unrealized and realized (gains) losses on investments, net
Amortization of bond premium
Amortization of deferred debt issuance cost
Asset impairment
Gains on disposal of property and equipment
Changes in operating assets and liabilities:
Patient accounts receivable
Accounts payable
Accrued liabilities
Workers compensation and hospital professional and general liabilities
Pension obligations
Net cash used in operating activities
Investing activities
Purchases of investments and deposits to interest in pooled investment fund long-term
Proceeds from sales of investments and withdrawals from the interest in pooled
investment fund long-term
Net withdrawals from (deposits to) interest in pooled investment fund short-term
Purchase of assets for health-related activity
Cash and cash equivalent movements in assets limited as to use
Changes in assets under bond indenture agreements
Purchases to property and equipment
Cash proceeds from disposal of property and equipment
Net cash provided by (used in) investing activities
Financing activities
Repayment of debt
Cash contributions received for the purchase of property and equipment
Net cash used in financing activities
Year Ended June 30

2013
2012
$ (39,173)
$ (92,352)
60,439
40,354
(13,110)
(468)
223
(32,581)
10
(221)
56,642
34,409
1,017
(582)
235
42,782
1,141
(10)
(35,113)
(1,896)
15,753
436
10,771
(23,855)
2,877
(342)
(128)
(16,024)
(45,367)
18,460
(51,740)
2,135
(2,640)
14,514
5,672
7,439
(1,239)
(9,484)
(348,774)
(336,993)
418,656
11,102
(4,738)
(2,985)
994
(50,066)
271
24,460
377,030
(27,000)
(7,800)
(29)
954
(40,805)
19
(34,624)
(13,283)
1,137
(12,146)
(10,589)
1,714
(8,875)

Consolidated Statements of Cash Flows (continued)
(In Thousands )
Year Ended June 30

2013
2012
Decrease in cash and cash equivalents
Cash and cash equivalents beginning of year
Cash and cash equivalents end of year
Supplemental disclosures of cash flow information
Cash paid for interest net of amounts capitalized
Supplemental disclosures of noncash items
Capitalized interest
(Decrease) increase in receivable for investments sold
(Decrease) increase in payable for investments purchased
Accrued additions to property and equipment
Purchase of assets for health-related activity acquired through the issuance
of notes payable
(3,710) $ (52,983)
87,853
34,870
31,160 $ 34,870
25,581
$ 25,549
$
1,078 $ 1,483
$ (1,894) $ 3,037
$ (10,125) $ 15,035
$
4,462 $ 2,295
$
500
5,200

Notes to Consolidated Financial Statements
June 30, 2013
1. Organization
The Daughters of Charity Health System (Parent), a California nonprofit religious corporation,
was formed in June 2001 by the Daughters of Charity Ministry Services Corporation (Ministry
Services), a California not-for-profit religious corporation. Ministry Services is the sole
corporate member of DCHS. DCHS is the sole corporate member of six California not-for-profit
religious corporations that operate six acute care hospitals and other facilities (the Hospitals,
see list below) in the state of California. Daughters of Charity Health System and the following
list of affiliated entities (collectively, DCHS) became one of the largest not-for-profit health
care systems in the state of California, with approximately 1,660 licensed acute care and skilled
nursing beds.
DCHS consists of Parent* and the following:
OConnor Hospital*
Saint Louise Regional Hospital*
St. Francis Medical Center Lynwood*
St. Vincent Medical Center*
Seton Medical Center*
Seton Medical Center Coastside (a division of Seton Medical Center)*
Caritas Business Services
Marillac Insurance Company, Ltd. (Marillac)
OConnor Hospital Foundation
Saint Louise Regional Hospital Foundation
St. Francis Medical Center of Lynwood Foundation
St. Vincent Medical Center Foundation
Seton Health Services Foundation
St. Vincent de Paul Ethics Corporation
St. Vincent Dialysis Center
De Paul Ventures, LLC (see Note 2)
DCHS Medical Foundation (see Note 2)
* Part of the Obligated Group (see discussion below and Note 9)

The Daughters of Charity of St. Vincent de Paul (the Daughters of Charity) commenced its
health care mission in California in 1856, with four of the Hospitals having been sponsored by
the Daughters of Charity since their formation.

Notes to Consolidated Financial Statements (continued)
1. Organization (continued)
DCHS established an Obligated Group (see listing of entities included in the Obligated Group
above) to access the capital markets. Obligated Group members are jointly and severally liable
for the long-term debt outstanding under the Bond Master Indenture.
2. Summary of Significant Accounting Policies
Consolidation
The accompanying consolidated financial statements include the accounts of DCHS after
elimination of intercompany transactions.
Use of Estimates
The preparation of the consolidated financial statements in conformity with United States (U.S.)
generally accepted accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash and highly liquid marketable securities with
original maturities, at the time of purchase, of three months or less.
Patient Accounts Receivable, Allowance for Doubtful Accounts, and Net Patient Service
Revenue
Patient accounts receivable and net patient service revenue are reported at the estimated net
realizable amounts from patients, third-party payers, and others for services rendered, including
estimated settlements under reimbursement agreements with third-party payers. Settlements with
third-party payers are accrued on an estimated basis in the period in which the related services
are rendered and are adjusted in future periods as final settlements are determined.

2. Summary of Significant Accounting Policies (continued)

DCHS adopted the accounting standard addressing the presentation of the provision for bad
debts in 2013, and as such, patient service revenues less provision for bad debts are reported net
of the provision for bad debts on the consolidated statement of operations and changes in net
assets. DCHSs self-pay write-offs were $40,354,000 and $34,409,000 for the years ended
June 30, 2013 and 2012, respectively. The increase in write-offs resulted from DCHS engaging a
third-party collection agency to work on past due balances. The provision for bad debts for the
year ended June 30, 2012 was reclassified as a reduction of patient service revenues.
DCHS manages its risks by regularly reviewing accounts and contracts and by providing
appropriate allowances for uncollectible amounts. DCHS manages the receivables by regularly
reviewing its patient accounts and contracts and by providing appropriate allowances for
uncollectible amounts. These allowances are estimated based upon an evaluation of historical
payments, negotiated contracts and governmental reimbursements. Adjustments and changes in
estimates are recorded in the period in which they are determined.
Patient services revenues, net of contractual allowances and discounts, are as follows
(in thousands):
Year Ended June 30
2013
2012
Government
Contracted
Self-pay and others
754,971
454,262
21,642
$ 1,230,875
$ 722,073
435,496
21,388
$ 1,178,957
Significant concentrations of net patient accounts receivable are as follows:

2013
HMO/PPO/Commercial
Medicare
Medi-Cal
Other
Total
June 30
40%
30
25
5
100%
2012
43%
31
24
2
100%


Inpatient acute care services, outpatient services, and skilled nursing services rendered to
Medicare program beneficiaries are paid at prospectively determined rates per discharge. These
rates vary according to a patient classification system that is based on clinical, diagnostic, and
other factors. Certain inpatient nonacute services and defined capital and medical education costs
related to Medicare beneficiaries are paid using a cost reimbursement methodology.
Health care services are provided free of charge or at a significant discount based on a sliding
scale to individuals who meet certain financial criteria. DCHS makes every effort to determine if
a patient qualifies for charity care upon admission. If a patient is determined to qualify for
charity care, services are rendered to the patient free of cost. The costs of providing these
services are included in unsponsored community benefit expense (see Note 3).
After satisfaction of amounts due from insurance and the application of financial discounts to
patients balances, and after exhausting all reasonable efforts to collect from the patients, a
significant portion of the DCHSs uninsured and self-pay patient accounts are referred to the
third-party agencies based on DCHSs established guidelines for further collection activities. As
a result, DCHSs records a significant provision for doubtful accounts related to these uninsured
patients in the period the services are rendered.
Gross patient revenue is recorded based on usual and customary charges. Gross patient revenue
was $5,919,043,000 and $5,788,231,000 for the years ended June 30, 2013 and 2012,
respectively. The percentage of inpatient and outpatient services is as follows:
2013
Inpatient services
Outpatient services
June 30
65.2%
34.8
2012
66.0%
34.0
10


DCHS derives significant portions of its revenues from Medicare, Medicaid (Medi-Cal), and
other third-party payer programs. As a result, DCHS is exposed to certain credit risks. The
estimated percentage of gross patient revenues by major payer group is as follows:
2013
Medicare
Medicare capitated
Medi-Cal
Medi-Cal capitated
Contracted-rate payers
Commercial capitated
Commercial insurance self-pay and other payers
June 30
46.9%
1.4
23.5
1.0
19.9
0.1
7.2
100.0%
2012
46.9 %
1.4
23.5
0.9
20.8
0.2
6.3
100.0%
Certain entities of DCHS have agreements with third-party payers that provide for payments to
DCHS at amounts different from its established rates. Payment arrangements include
prospectively determined rates per discharge, reimbursed costs, discounted charges, and per diem
payments.
Medi-Cal and contracted-rate payers are paid on a per diem, per discharge, modified cost, or
capitated basis or a combination of these.
Net patient revenue included $12,214,000 and $13,275,000, for the years ended June 30, 2013
and 2012, respectively, which related to prior years reimbursement settlements from Medicare,
Medi-Cal, and other programs.
DCHSs St. Francis Medical Center qualified for and received Medi-Cal funding as a
disproportionate-share hospital from the state of California under Senate Bill (SB) 855. Related
revenues were $31,299,000 and $26,332,000, for the years ended June 30, 2013 and 2012,
respectively, and are included in net patient service revenue. Amounts to be received in future
years, if any, are subject to annual determination.
11


The St. Francis Medical Center also received funding for Medi-Cal disproportionate-share
hospitals under Senate Bill 1255 (SB 1255). These SB 1255 funds are paid from the Emergency
Services and Supplemental Payments Fund Related revenues were $7,700,000 and $9,100,000,
for the years ended June 30, 2013 and 2012, respectively, and are included in net patient service
revenue. This funding must be applied for and approved each year.
The St. Francis Medical Center also qualifies for Medi-Cal funding as a disproportionate-share
hospital from the state of California under Senate Bill 1732 (SB 1732). This SB 1732 program
permits health care facilities servicing a disproportionate share of Medi-Cal patients to receive
supplemental reimbursement for a portion of their debt service for qualified capital projects.
St. Francis Medical Center has an amendment to its Medi-Cal contract, which was executed on
June 19, 1993, for reimbursement related to the St. Francis Medical Center Health Services
Pavilion, which was completed in 1991. Related revenues were $8,052,000 and $8,204,000, for
the years ended June 30, 2013 and 2012, respectively, and are included in net patient service
revenue.
As part of DCHSs mission to serve the community, DCHS provides care to patients even though
they may lack adequate insurance or may participate in programs that do not pay full charges.
Reserves for charity care and uncollectible amounts have been established and are netted against
patient accounts receivable in the consolidated balance sheets.
Industry Concentration
The receipt of future revenues by DCHS is subject to, among other factors, federal and state
policies affecting the health care industry. There are future revenue uncertainties that may
require that costs be controlled, which will be subject to the capability of management; future
economic conditions, which may include an inability to control expenses in periods of inflation;
increased competition; and other conditions, which are impossible to predict.
Inventories
Inventories consist of supplies and are stated at the lower of cost or market value, which is
determined using the first-in, first-out method. Inventories are reviewed for obsolescence on a
periodic basis. Amounts are included in other current assets.
12


Assets Limited as to Use
Assets limited as to use represent assets designated by the board of directors for future capital
improvements, other specific purposes for Marillac over which the board of directors retains
control, assets held by trustees under bond indenture agreements, and investments restricted by
donors. The board of directors has the full ability to utilize those Marillac assets limited as to use
to satisfy the needs of on-going operations as necessary. Excluding the assets held as part of the
pooled investment fund, described below, these assets include investments in cash, equity
securities domestic and foreign, U.S. federal and corporate obligations, to-be-announced
(TBA) mortgage-backed securities, asset-backed securities, and fixed-income securities, which
are stated at fair value. The composition and fair value of the long-term interest in the pooled
investment fund also are limited as to use and are as shown below.
Fair values are based on quoted market prices, if available, or estimated quoted market prices for
similar securities. Investment income or loss is included in deficit of revenues over expenses,
unless the income or loss is restricted by donor or law. The assets are reflected in the assets
limited as to use line item in the consolidated balance sheet.
Interest in Pooled Investment Fund
DCHS has been participating in a pooled investment fund administered by Ascension Health.
This pooled investment fund is referred to as the Health System Depository (HSD). DCHS
recognizes its rights to the assets held in the HSD as a beneficial interest in the pooled
investment fund. Beginning April 1, 2012, Ascension Health has decided to operate its
investment management activities through its subsidiary, Catholic Healthcare Investment
Management Company (CHIMCO), an investment advisor registered with the Securities and
Exchange Commission. Consequently, DCHSs HSD accounts were closed, and the remaining
balance was then invested into the newly created CHIMCO Alpha Fund, LLC (the Fund).
CHIMCO serves as a manager and the principal advisor of the Fund.
The fair value of DCHS beneficial interest in the HSD fund is determined using DCHSs
ownership percentage of the Fund based on the net asset value (NAV) of the pool. The fair value
of DCHSs investment in the Fund decreased by $66,946,000 and $453,000 as of June 30, 2013
and 2012, respectively. DCHSs total investment in the Fund, reflected at fair value, was
$175,360,000 and $242,306,000 as of June 30, 2013 and 2012, respectively. The total investment
in the Fund is comprised of cash, equity securities domestic and foreign, U.S. federal and
corporate obligations, TBA mortgaged-backed securities, asset-backed securities, and fixedincome securities, which are stated at fair value.
13


As of June 30, 2013 and 2012, investment balances of approximately $62,478,000 and
$72,859,000, respectively, in the Fund represented cash invested in a short-term pooled
investment account. A centralized cash management arrangement that allows DCHS to access
the Fund on demand using the Funds short-term investments accounts.
Investments
All debt and equity securities are carried at estimated fair value using quoted market prices.
Investments received through gifts are recorded at estimated fair value at the date of donation.
Gains and losses that result from market fluctuations are recognized in the period that such
fluctuations occur. Realized gains or losses resulting from sales or maturities are calculated on an
adjusted-cost basis. Adjusted-cost is the original cost of the security adjusted for any purchases
or sales during the year. Dividend and interest income are accrued when earned.
Investment income includes the following (in thousands):
Year Ended June 30
2013
2012
Interest and dividends
Investment fees
Unrealized gain (loss) on investments net
Net realized gain on sales of securities
Amounts included in changes in restricted net assets
Investment income
3,238 $
(288)
5,856
8,025
16,831
(579)
16,252 $
2,858
(253)
(12,016)
11,147
1,736
(236)
1,500
Derivative Financial Instruments

During the fiscal years ended June 30, 2013 and 2012, DCHS entered into forward contracts
related to the purchase and sale of TBA mortgage-backed securities under a dollar-roll strategy.
The contracts represent a commitment to purchase or sell the security at a fixed price on a
specified future date and include net settlement provisions, therefore, meeting the definition of a
derivative under Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 815, Derivatives and Hedging. The Company has recorded the gross
14


amounts of benefits and obligations as assets and liabilities, respectively, as the contracts are not
settled daily. As of June 30, 2013 and 2012, the value of the benefits was $3,200,000 and
$3,684,000, respectively, and the value of the obligations was $3,208,000 and $7,357,000,
respectively. These amounts represent pending unsettled benefits and obligations, and have been
included in the other current assets and the accrued liabilities line items within the consolidated
balance sheets. The amount of net realized gain (loss) included in investment income within the
consolidated statements of operations and changes in net assets and unrealized gains were
immaterial for the years ended June 30, 2013 and 2012, respectively, to the consolidated
financial statements.
DCHS enters into TBA transactions to generate short-term investment income; the aggregate
notional amounts transacted during the year were approximately $46 million and $60 million for
the fiscal years ended June 30, 2013 and 2012, respectively. DCHS transacts all of its TBA
transactions with its custodian and does not expect any significant occurrences of counterparty
default. All TBA securities are exchange-traded and subject to the credit risk associated with the
underlying pool of mortgages. However, management believes that such risk associated with
trading these securities is insignificant to its overall investment strategy.
Property and Equipment
Property and equipment are stated at cost, if purchased, and at fair market value, if donated.
Depreciation of property and equipment is calculated using a half-year convention and the
straight-line method for financial statement purposes. Estimated useful lives by classification are
as follows:
Land improvements
Buildings
Building service equipment
Equipment
525 years
1040 years
525 years
420 years
15


Long-Lived Asset Impairment
DCHS evaluates the carrying value of its long-lived assets for impairment periodically or
whenever events or changes in circumstances indicate that the carrying amount of the asset, or
related group of assets, may not be recoverable from estimated future undiscounted cash flows
generated by the underlying tangible assets. When carrying value of an asset exceeds the
recoverability, an asset impairment charge is recognized. When an asset is not operating at full
capacity, it is also deemed impaired. The remaining net book value is recognized as an
impairment charge in the consolidated statements of operations and changes in net assets. For the
years ended June 30, 2013 and 2012, impairments from the disposal of assets of $10,000 and
$1,141,000, respectively, were recorded.
Goodwill and Intangible Assets
Goodwill is measured as of the effective date of a business acquisition as the excess of the
aggregate of the fair value of consideration transferred over the fair value of the tangible and
intangible assets acquired and liabilities assumed. There was no impairment to goodwill recorded
for the years ended June 30, 2013 and 2012.
The changes in the carrying amount of goodwill are as follows (in thousands):
Year Ended June 30
2013
2012
Beginning balance
Addition from acquisition
Ending balance
$
$
6,779 $
3,642
10,421 $
6,779
6,779
DCHS, through the DCHS Medical Foundation, acquired intangible assets and goodwill valued
at $3,884,000 as of June 30, 2013, as a result of various physician practice acquisitions during
fiscal year 2013.
DCHS acquired intangible assets and goodwill valued at $7,141,000 as of June 30, 2012, which
were part of its asset purchase agreement with San Jose Medical Group (SJMG).
16


The goodwill impairment tests are based on financial projections prepared by management that
incorporate anticipated results from programs and initiatives being implemented. If these
projections are not met or if negative trends occur that impact outlook, the value of goodwill may
be impaired. During the fiscal year ended June 30, 2013, management noted no events or
indicators of impairment related to the recorded goodwill.
It is DCHSs policy to amortize intangible assets with a finite life over their useful lives.
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents,
accounts receivable, accounts payable, accrued liabilities, and due to/from government agencies
approximate fair value. The fair value of investments is disclosed in Notes 4 and 8, and the fair
value of debt is disclosed in Note 9.
Ownership Interests in Health-Related Activities
Generally, when the ownership interest in health-related activities is more than 50%, the
activities are consolidated, and a noncontrolling interest is recorded if appropriate. When the
ownership interest is at least 20%, but not more than 50%, it is accounted for on the equity
method, and the income or loss is reflected in the performance indicator. Activities with less than
20% ownership are carried at the lower of cost or estimated net realizable value.
Medical Foundation
The DCHS Medical Foundation (Medical Foundation) was established in December 2011 and
incorporated under the California Nonprofit Religious Corporation regulations as a not-for-profit
corporation exempted from IRC Section 501(c)(3). The sole member of this corporation is
DCHS, acting through its board of directors. On April 1, 2012, the Medical Foundation began its
operations after purchasing fixed and intangible assets from SJMG and San Jose Medical
Management Inc. for $13,000,000. Of the $13,000,000 purchase consideration, $7,800,000 was
paid in cash and the remaining $5,200,000 was in notes payable to SJMG, which were payable in
two equal installments of $2,600,000 in fiscal years 2013 and 2014. The loan contained
contingencies that would have reduced the future payments due to SJMG if it had failed to
maintain the minimum number of physicians and a minimum number of
17


physicians providing services on a full-time basis to the Medical Foundations patients. The
contingent loan payments to SJMG were based on a sliding scale, as defined in the asset
purchase agreement between the parties. SJMG had met the provision of the first years loan
contingencies by the end of the fiscal year, ending June 30, 2013. As a result, the Medical
Foundation had repaid the first installment of $2,600,000 to SJMG, which has been reflected in
DCHSs consolidated financial statements as of June 30, 2013.
During the year ended June 30, 2013, the Medical Foundation has acquired nine additional
independent physician practitioners (IPAs), comprising the IPAs tangible and intangible assets.
The total cost of these acquisitions amounted to $5,023,000, of which $4,523,000 was paid in
cash and the remaining balance of $500,000 in notes payable in two installments of $350,000
and $150,000 in fiscal years 2014 and 2015, respectively. These acquisition costs have been
reflected in DCHSs consolidated financial statements as of June 30, 2013.
The purchase consideration for the two years were allocated as follows (in thousands):
Assets purchased
Inventory
Deposit
Equipment
Leasehold improvements
Intangibles:
Finite-lived intangibles
Goodwill
2013
$
June 30
130
66
737
206
242
3,642
5,023
2012
178
3,081
2,600
362
6,779
13,000
De Paul Ventures, LLC

In August 2010, DCHS filed with the state of California to form a California limited liability
company called De Paul Ventures, LLC, which is a wholly owned and operated holding
company of DCHS. The company is formed as a means to support the mission of DCHS by
providing multiple needs of the poor, particularly for housing, health, and social services.
Around the same time, De Paul Ventures, LLC entered into an operating agreement to form De
Paul Ventures San Jose ASC, LLC, and became the sole Member of De Paul Ventures San
Jose ASC, LLC.
18


In February 2011, De Paul Ventures San Jose ASC, LLC entered into a partnership agreement
with Physician Surgery Services, a California limited liability partnership, dba Advanced
Surgery Center. De Paul Ventures San Jose ASC, LLC received a 25% partnership interest, as
a limited partner, in exchange for DCHSs cash investment of $1,170,250. Physician Surgery
Services, LLC is made up of various physician owners and operates a freestanding surgery center
in San Jose, California. DCHSs investment of $1,170,250 in the partnership interest of
Physician Surgery Services, LLC is reflected under De Paul Ventures, LLC as a separate
nonobligated entity in the consolidated balance sheets of DCHS as of June 30, 2013 and 2012.
DCHS received a total of $554,000 and $504,000, as partnership distribution from the activities
of DePaul Ventures San Jose ASC, LLC, for the years ended June 30, 2013 and 2012,
respectively.
In April 2013, De Paul Ventures, LLC formed De Paul Ventures San Jose Dialysis, LLC, a
California limited liability company, and became the sole member of De Paul Ventures San Jose
Dialysis, LLC. In May 2013, De Paul Ventures San Jose Dialysis, LLC entered into an
agreement to acquire a 10% interest in Priday Dialysis, LLC, a Delaware limited liability
company. The latter is an ambulatory health care center specializing in end-stage renal disease
treatment. De Paul Ventures San Jose Dialysis, LLCs investment in Priday Dialysis, LLC is
valued at $215,000 and has been included in DCHSs consolidated financial statements as of
June 30, 2013.
Guarantees
In the normal course of its business, DCHS enters into various types of guarantees with
counterparties in connection with certain derivative, underwriting, asset sale, and other
transactions. DCHS also provides indemnifications against potential losses to certain parties
involved in their bond financing. The indemnifications are ordinarily documented in standard
contract terms. Generally, there are no stated or notional amounts included in these
indemnifications, and the events or contingences triggering the obligations to indemnify are
generally not expected to occur. There have been no claims, and none are expected to occur;
therefore, it is not possible to develop an estimate of the maximum payout and fair value under
these guarantees and indemnifications. DCHS has not recorded any liabilities in the consolidated
financial statements as of June 30, 2013 and 2012, related to any guarantees or indemnification
arrangements.
19


Self Insurance
DCHS is self-insured for hospital professional and general liabilities by a wholly owned selfinsured captive insurance company. The provisions for estimated hospital professional and
general liability claims include estimates of the ultimate costs for both uninsured reported claims
and claims incurred-but-not-reported (IBNR), in accordance with actuarial projections or paid
claims lag models based on past experience. Such claim reserves are based on the best data
available to DCHS; however, these estimates are subject to a significant degree of inherent
variability. There is at least a reasonable possibility that a material change to the estimated
reserves will occur in the near term. Such estimates are continually monitored and reviewed, and
as reserves are adjusted, the differences are reflected in current operations. Management is of the
opinion that the associated liabilities recognized in the accompanying consolidated financial
statements are adequate to cover such claims.
DCHS has entered into reinsurance, stop loss, and excess policy agreements with independent
insurance companies to limit its losses on hospital professional and general liability claims.
Hospital professional and general liabilities were $14,909,000 and $11,994,000 discounted at a
rate of 3% and 5% as of June 30, 2013 and 2012, respectively. Management is not aware of any
potential hospital professional and general liability claims whose settlement would have a
material adverse effect on the DCHSs consolidated financial position.
Workers Compensation Insurance
DCHS is insured for workers compensation claims with major independent insurance
companies, subject to certain deductibles of $500,000 per occurrence as of June 30, 2013 and
2012. Based on actuarially determined estimates, provisions have been made in the consolidated
financial statements, with the current portion included within accrued liabilities and the
noncurrent portion within workers compensation and hospital professional and general
liabilities, for all known claims and incurred but not reported claims as of June 30, 2013 and
2012. Workers compensation liabilities were $22,891,000 and $23,418,000 discounted using a
rate of 3% and 5%, as of June 30, 2013 and 2012, respectively. Estimation differences between
actual payments and amounts recorded in previous years are recognized as expense in the year
such amounts become determinable.
20


Temporarily and Permanently Restricted Net Assets
Temporarily restricted net assets are those for which use by DCHS has been limited by donors to
a specific time period or purpose. Permanently restricted net assets have been restricted by
donors to be maintained by DCHS in perpetuity.
California Hospital Fee Program
California legislation established a program that imposes a Quality Assurance Fee (QA Fee) on
certain general acute-care hospitals in order to make supplemental and grant payments and
increased capitation payments (Supplemental Payments) to hospitals up to the aggregate upper
payment limit for various periods. There have been three such programs since inception. The
first two programs were the 21-month program (21-Month Program) covering the period April 1,
2009 to December 31, 2010, and the six-month program (Six-Month Program) covering the
period January 1, 2011 to June 30, 2011 (the Original Programs), and the third, a 30-month
program covering the period from July 1, 2011 to December 31, 2013 (30-Month Program,
collectively, the Programs). The 30-Month Program was signed into law by the Governor of
California in September 2011. The Programs are designed to make supplemental inpatient and
outpatient Medi-Cal payments to private hospitals, including additional payments for certain
facilities that provide high-acuity care and trauma services to the Medi-Cal population. This
hospital QA Fee program provides a mechanism for increasing payments to hospitals that serve
Medi-Cal patients, with no impact on the states General Fund (GF). Payments are made directly
by the state or Medi-Cal managed care plans, which will receive increased capitation rates from
the state in amounts equal to the Supplemental Payments. Outside of the legislation, the
California Hospital Association (CHA) has created a private program, operated by the California
Health Foundation and Trust (CHFT), which was established to alleviate disparities potentially
resulting from the implementation of the Programs.
The Original Programs required full federal approval (i.e. by the Centers for Medicare and
Medicaid Services (CMS)) in order for them to be fully enacted. If final federal approval was not
ultimately obtained, provisions in the underlying legislation allowed for the QA Fee, previously
assessed, and Supplemental Payments, previously received, to be returned and recouped,
respectively. As such, revenue and expense recognition was not allowed until full CMS approval
was obtained. Full CMS approvals for the 21-Month Program and 6-Month Program were
obtained in December 2010 and December 2011, respectively. For the year ended June 30, 2012,
DCHS recognized payments to the California Department of Health Care Services (DHCS) for
the QA Fee in the amount of $28,091,000 and pledge payments to the CHFT of approximately
21


$1,327,000 within purchased services and other expenses. DCHS recognized Supplemental
Payment revenue for the year ended June 30, 2012, in the amount of $55,237,000 pertaining to
the 6-Month Program within net patient service revenues.
In June 2012, the legislation governing the 30-Month Program was amended to allow for the feefor-service portion to be administered separately from the managed care portion. Accordingly,
upon CMS approval of the fee-for-service portion of the 30-Month Program in June 2012, for the
year ended June 30, 2012, DCHS recognized $51,296,000 in accrued liabilities for the 30-Month
Program QA Fee payments, which was expensed within purchased services and other expenses.
Additionally, Supplemental Payment revenue in the amount of $78,904,000 was recognized
within net patient service revenue and as the payments were not yet received, a receivable was
recorded in other current assets.
In May and June 2013, CMS approved the managed care portion of the 30-Month Program
covering the period from July 1, 2011 to June 30, 2013. Accordingly, DCHS recognized the
impact of the managed care portion for the approved period and continued to recognize the feefor-service portion of the 30-Month Program. DCHS recognized payments to DHCS for the QA
Fee in the amount of $97,609,000 and pledge payments to CHFT of $4,938,000 within purchased
services and other expenses. During the year ended June 30, 2013, DCHS also recognized
Supplemental Payment revenue in the amount of $169,454,000 pertaining to the 30-Month
Program within net patient service revenues.
Meaningful Use Incentives
The American Recovery and Reinvestment Act of 2009 established payments under the
Medicare and Medi-Cal programs for certain professionals and hospitals that meaningfully use
certified electronic health record (EHR) technology. The Medicare incentive payments are paid
out to qualifying hospitals over four consecutive years on a transitional schedule. To qualify for
Medi-Cal incentives, hospitals and physicians must annually meet EHR meaningful use
criteria that become more stringent over three stages as determined by CMS. For the years ended
June 30, 2013 and 2012, DCHS has recorded meaningful use incentive payments of $6,492,000
and $8,409,000, respectively. These incentive payments have been recorded as other operating
revenue in the DCHS consolidated financial statements.
22


Premium Revenue
Certain entities of DCHS have at-risk agreements with various payers to provide medical
services to enrollees. Under these agreements, DCHS receives monthly payments based on the
number of enrollees, regardless of services actually performed by DCHS. DCHS accrues costs
when services are rendered under these contracts, including estimates of IBNR claims and
amounts receivable/payable under risk-sharing arrangements.
The IBNR accrual includes an estimate of the costs of services for which DCHS is responsible,
including out-of-network services.
Other Operating Revenue
Included in other operating revenue are amounts from investments in health-related activities,
rental income, cafeteria, and other nonpatient care revenue.
Contributions
Unconditional promises to give cash and other assets to DCHS are reported at fair value at the
date the promise is received. The gifts are reported as either temporarily or permanently
restricted support if they are received with donor stipulations that limit the use of the donated
assets. 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. Net assets released from restrictions used for operations are also included
in other operating revenue as contribution revenue to the Hospitals.
Interest Expense
Interest expense on debt issued for construction projects, net of income earned on the funds held
pending use, is capitalized from the date of the borrowing until the projects are placed in service.
Interest components include the following (in thousands):
Year Ended June 30
2013
2012
Total interest expense
Less: capitalized interest expense
Net interest expense
$
$
26,414 $
(1,078)
25,336 $
26,685
(1,483)
25,202
23


Income Taxes
DCHS has established its status as an organization exempt from income taxes under the Internal
Revenue Code (IRC) Section 501(c)(3) and the laws of California. Certain activities of the
operating entities of DCHS may be subject to income taxes; however, such activities are not
significant to the consolidated financial statements.
Performance Indicator
Management considers the deficit of revenues over expenses to be DCHSs performance
indicator. Deficit of revenues over expenses includes all changes in unrestricted net assets,
except net assets released from restrictions used for purchase of property and equipment and the
change in funded status of pension plans.
Transactions Between Related Organizations
DCHS and various members of DCHS pay for sisters services provided to it by its sponsoring
congregation at amounts comparable to low-wage employees salaries.
Certain Obligated Group members have a policy whereby assets are periodically transferred as
charitable distributions to subsidiaries of DCHS that are not members of the Obligated Group.
These transfers are accounted for as direct charges to the Obligated Group members unrestricted
net assets. It is anticipated that Obligated Group members will continue to make asset transfers to
the subsidiaries. These transfers are eliminated upon consolidation.
Asset Retirement Obligations (AROs)
AROs are legal obligations associated with the retirement of long-lived assets. These liabilities
are initially recorded at fair value, and the related asset retirement costs are capitalized by
increasing the carrying amount of the related assets by the same amount as the liability. Asset
retirement costs are subsequently depreciated over the useful lives of the related assets.
Subsequent to initial recognition, DCHS records period-to-period changes in the ARO liability
resulting from the passage of time. DCHSs ARO liabilities recorded in the consolidated
financial statements at June 30, 2013 and 2012, were $3,043,000 and $3,034,000, respectively.
24


Revenue Guarantees
DCHS has agreements with physicians whereby minimum revenues are guaranteed by DCHS for
stipulated dollar amounts over specified periods, as defined in the contracts. DCHS records a
liability for the amount of the guaranteed revenue at the time the contract is entered into and
adjusts the liability as it is expended. DCHS has recorded liabilities of $1,014,000 and
$1,117,000 as of June 30, 2013 and 2012, respectively.
Recent Accounting Pronouncements
In July 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update (ASU) No. 2011-07, Presentation and Disclosure of Patient Services Revenue, Provision
for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities (ASU
2011-07) which amended Accounting Standards Codification (ASC) No. 954, Health Care
Entities, to provide greater transparency regarding a health care entitys net patient revenue and
related allowance for doubtful accounts. The provisions of ASU 2011-07, which was adopted by
DCHS retrospectively, beginning July 1, 2012, required a change in the presentation of the
provision for bad debts associated with patient services revenue by reclassifying the provision
from operating expenses to a deduction from net patient revenue and enhanced disclosures about
net patient revenue and the policies for recognizing and assessing bad debts. As a result, the
provision for bad debts associated with patient care has been reclassified for comparative periods
presented in DCHSs financial statements.
In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210), Disclosures
about Offsetting Assets and Liabilities (ASU 2011-11). The update requires entities to disclose
information about offsetting related transactions to enable users of its financial statements to
understand the effect of those transactions on its financial position. This disclosure requirement
of ASU 2011-11, which is applied retrospectively, is effective for DCHS beginning in July 1,
2013. Adoption of ASU 2011-11, is not expected to have a material impact on the consolidated
financial statements of DCHS.
In October 2012, the FASB issued ASU No. 2012-05, Statement of Cash Flows (Topic 230),
Not-for-Profit-Entities: Classification of the Sale Proceeds of Donated Financial Assets in the
Statement of Cash Flow. The amendments in this update require not-for-profit entities to classify
cash receipts from the sale of donated financial assets as cash flows from operating activities,
unless the donor restricted the use of contributed resources to long-term purposes, in which case
cash receipts should be classified as cash flows from financing activities. The amendments in
25


this update are effective for DCHS prospectively beginning July 1, 2013. The adoption of ASU
2012-05, is not expected to have a material impact on the consolidated financial statements of
DCHS.
In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210), Clarifying the
Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in this update are
intended to clarify ASU No. 2011-11. The amendments in ASU No. 2013-01 clarify that the
scope of ASU No. 2011-11, and applies to derivatives accounted for in accordance with
ASC 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase
agreements and reverse repurchase agreements, and securities borrowing and securities lending
transactions that are subject to an enforceable master netting arrangement or similar agreements.
The effective date of application of this amendment is July 1, 2013. The adoption of ASU
No. 2013-01 will not materially affect DCHSs investment in forward contracts with net
settlement provision related to the purchase and sale of TBA mortgage-backed securities within a
dollar-roll strategy.
In July 2013, the FASB issued ASU No. 2013-09, Fair Value Measurement (Topic 820),
Deferral of the Effective Date of Certain Disclosures from Non-public Employee Benefit Plans in
Update No. 2011-04. The amendments in this update defer indefinitely the effective date of
certain required disclosures in ASU No. 2011-04 of quantitative information about the
significant unobservable inputs used in Level 3 fair value measurements for investments held by
a nonpublic employee benefit plan in its plan sponsors own nonpublic entity equity securities.
The effective date of the application of this amendment is July 2013. The adoption of ASU
No. 2013-09 is not expected to have a material impact on the consolidated financial statements,
of DCHS.
In April 2013, the FASB issued ASU No. 2013-06, Not-for-Profit Entities (Topic 958), Services
Received from Personnel of an Affiliate, which requires that a recipient non-for-profit entity
recognize all services from personnel of an affiliate that directly benefit the recipient not-forprofit entity, and for which the affiliate does not charge the recipient not-for-profit entity. The
amendments in ASU 2013-06 are effective prospectively for fiscal years beginning after June 15,
2014. The adoption of ASU 2013-06 is not expected to have a material impact on the
consolidated financial statements of DCHS.
26

3. Unsponsored Community Benefit Expense

The following is a summary of DCHSs community service in terms of services to the poor and
benefits to the broader community for the year ended June 30, 2013. The summary has been
prepared in accordance with the Catholic Health Association of the United States publication, A
Guide for Planning and Reporting Community Benefit (dollars in thousands):
Total
Community Benefit
Expense at Cost
Percentage
of Total
Amount
Expenses
Benefits for the poor:
Traditional charity care
Unpaid costs of public programs Medi-Cal
Nonbilled services
Cash and in-kind donations
Other
Total quantifiable benefits for the poor
Benefits for the broader community:

Nonbilled services
Education and research
Other
Total quantifiable benefits for the broader
community
Total quantifiable community benefits
Unpaid costs of Medicare program
Total quantifiable community benefits and unpaid
costs of Medicare program
36,718
366,465
15,579
15
5,707
424,484
Unsponsored
Community Benefit
Expense at Cost
Percentage
of Total
Amount
Expenses
Direct
Offsetting
Revenue
(Unaudited)
2.6 % $
25.6
262,552
1.1
1,887
0.4
800
29.7
265,239
36,718
103,913
13,692
15
4,907
159,245
2.6 %
7.3
1.0
0.3
11.2
830
500
339
1,943
0.1
0.1
604
27
32
226
473
307
1,943
0.1
3,612
428,096
0.2
29.9
663
265,902
2,949
162,194
0.1
11.3
542,864
37.9
421,456
121,408
8.5
970,960
67.8 % $
687,358
283,602
19.8 %
Benefits for the Poor

Benefits for the poor include services provided to persons who cannot afford health care because
of inadequate resources and/or who are uninsured or underinsured.
27

3. Unsponsored Community Benefit Expense (Unaudited) (continued)

Benefits for the Broader Community
Benefits for the broader community include services and programs provided to other needy
populations that may not qualify as poor, but that need special services and support. Examples
include the elderly, substance abusers, victims of child abuse, and persons with acquired immune
deficiency syndrome. They also include the cost of health promotion and education, health
clinics and screenings, and medical research, which benefit the broader community.
Traditional Charity Care
Traditional charity care covers services provided to persons who cannot afford to pay and who
meet DCHSs criteria for financial assistance. DCHS utilizes information obtained directly from
patients as well as information from publicly available sources in determining charity care
eligibility. The amounts above reflect the costs of these services (based on DCHSs relationship
of costs to charges) before and after contributions and other revenues received as direct
assistance for the provision of charity care. The amount of services quantified at customary
charges was $121,836,000 and $108,031,000 for the years ended June 30, 2013 and 2012,
respectively. The amount of traditional charity care at cost was $36,718,000 and $22,130,000 for
the year ended June 30, 2013.
Unpaid Costs of Public Programs Medi-Cal
Unpaid costs of public programs are the costs of treating indigent and Medi-Cal beneficiaries in
excess of government payments. Cost is based on DCHSs relationship of costs to charges.
Nonbilled Services
Nonbilled services include the cost of services for which a patient is not billed or for which a
nominal fee has been assessed. These are services that are not expected to be financially selfsupporting. Examples are free clinic services and meal programs.
Cash and In-Kind Donations
Cash and in-kind donations are made by DCHS to special funds used to benefit the poor and the
community.
28


Education
Education includes the unpaid cost of training health professionals, such as medical residents,
nursing students, and students in allied health professions.
Research
Research includes the unpaid cost of testing medical equipment and controlled studies of
therapeutic protocols.
Other Benefits for the Broader Community Expenses
Other benefits for the broader community expenses include low- or negative-margin services,
which are services offered because of a need in the community. They do not include services
offered because they create revenues elsewhere.
Total Community Benefit Expense
Total community benefit expense is the total cost of community benefits before direct offsetting
revenue, donations, or other funds used to defray such costs.
Unsponsored Community Benefit Expense
Unsponsored community benefit expense is the total cost incurred after direct offsetting revenue,
if any, from patients, donations, and other sources.
Unpaid Costs of Medicare Program
Unpaid costs of the Medicare program are the costs of treating Medicare beneficiaries in excess
of government payments. Cost is based on DCHSs relationship of costs to charges.
29

4. Fair Value Measurements

DCHS accounts for certain assets at fair value or on a basis that approximates fair value. A fair
value hierarchy for valuation inputs prioritizes the inputs into three levels based on the extent to
which inputs used in measuring fair value are observable in the market. Each fair value
measurement is reported in one of the three levels and is determined by the lowest-level input
that is significant to the fair value measurement in its entirety. These levels are as follows:
Level 1 Quoted prices are available in active markets for identical assets as of the
measurement date. Financial assets and liabilities in Level 1 include listed equities and
money markets balances.
Level 2 Pricing inputs are based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions are observable in the
market or can be corroborated by observable market data for substantially the full term of the
assets or liabilities. Financial assets in this category generally include asset-backed securities,
corporate bonds, municipal bonds, and commingled investment funds.
Level 3 Pricing inputs are generally unobservable for the assets and include situations
where there is little, if any, market activity for the investment. The inputs used in
determination of fair value require managements judgment or estimation of assumptions that
market participants would use in pricing the assets. Therefore, the fair values are determined
using discounted cash flow models and similar techniques.
30

4. Fair Value Measurements (continued)

The following represents assets measured at fair value on a recurring basis (in thousands):
Total
Pooled investment funds:
Pooled funds short-term
Pooled funds long-term
Other investments assets limited as to use:
Cash equivalents
Debt securities issued by foreign
corporations
Debt securities issued by the U.S. Treasury
and other
U.S. government corporations
Government mortgage-backed securities
TBA mortgage-backed securities
Commercial mortgage-backed securities
Corporate U.S. debt securities
Index funds
Convertible equity
Investment held in trust account
Under bond indenture agreements assets
limited as to use:
Cash equivalents
corporations
62,478
112,882
175,360
June 30, 2013

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
62,478
112,882
175,360
11,174
11,174
2,722
2,722
6,780
3,205
3,178
3,963
18,382
9,248
348
4,491
63,491
11,174
6,780
3,205
3,178
3,963
18,382
9,248
348
4,491
52,317
15,718
15,718
25,141
40,859
$ 279,710
15,718
26,892
25,141
25,141
252,818
31


Cash equivalents
corporations
Debt securities issued by the U.S. Treasury
and other
Index funds
Under bond indenture agreements assets

limited as to use:
Cash equivalents
corporations
Total
$
72,859
169,447
242,306
June 30, 2012

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
72,859
169,447
242,306
9,657
9,657
4,015
4,015
17,429
2,750
3,676
4,515
12,601
11,882
2,647
69,172
9,657
17,429
2,750
3,676
4,515
12,601
11,882
2,647
59,515
15,716
15,716
26,137
41,853
$ 353,331
15,716
25,373
26,137
26,137
327,958
32


There were no transfers to or from Levels 1, 2 or 3 during the years presented. The Level 2
financial assets listed in fair value hierarchy tables above use the following valuation techniques
and inputs:
As described in Note 2, DCHS participates in Ascension Healths pooled CHIMCO fund,
which is carried at fair value based on quoted market prices, quoted market prices for similar
instruments, and observable and unobservable inputs. The pooled fund is composed of cash,
equity securities domestic and foreign, U.S. federal and corporate obligations, TBA
mortgage-backed securities, asset-backed securities, and fixed-income securities and is
designated as Level 2.
For marketable securities, such as foreign corporation and U.S. government debt securities,
government and commercial mortgage-backed securities, TBA mortgaged-backed securities,
corporate U.S. debt securities, index funds, and beneficial interest held in trust accounts,
wherein identical quoted market prices are not readily available, the fair value of such
investments is determined based on market participant pricing or other available market data
for comparable instruments and transactions at the measurement date in establishing the
valuation. DCHS, therefore, incorporates industry-standard valuation techniques as inputs to
fair valuation of its investments designated as Level 2.
DCHSs rationale for the assignment of levels is based on types or classes of financial assets
rather than an analysis of each individual asset. Key consideration in the assignment of levels
was given to the determination of a securitys fair valuation measurement if obtained from an
active market, and then further consideration was given for the types of inputs used to
evaluate the fair value price. This approach has been supported by managements analysis of
the methodology, the evaluated pricing models, and inputs used by its pricing vendors. It is
also consistent with industry practice.
Where quoted prices are available in an active market (exchange-traded), the securities are
classified as Level 1. It is a market in which transactions occur with sufficient frequency and
volume to provide pricing information on an ongoing basis. If quoted market prices are not
readily available for a specific financial asset, then value is determined using quoted prices of
assets with similar characteristics and is classified as Level 2. Examples of these categories
are DCHSs investment in high-yield debt securities, collateralized mortgage obligations, and
fixed-income prices provided by a broker-dealer. In cases where there is limited activity and
less transparency associated with inputs to the valuation, DCHS will designate the
investments as Level 3.
33


Included within the assets above are investments in certain securities that report fair value, using
a calculated NAV or its equivalent. The following table and explanations identify attributes
relating to the nature and risk of such investments (in thousands):
Level 2
Pooled funds short-term (1)
Pooled funds long-term (1)
Total pooled funds
TBA mortgaged-backed securities (2)
Investment held in trust account (3)
Total limited as to use
Level 2
Total pooled funds
June 30, 2013

Redemption Frequency
(If Currently Eligible)
Redemption
Notice Period
62,478
112,882
175,360
Daily
Daily
13 days
13 days
3,178
4,491
7,669
183,029
Daily
Not eligible
13 days
Not applicable
June 30, 2012

Redemption
Notice Period
72,859
169,447
242,306
Daily
Daily
13 days
13 days
3,676
2,647
6,323
248,629
Daily
Not eligible
13 days
Not applicable
Fair Value
$
Fair Value
$
(1) This category includes investments in CHIMCO Alpha Fund and is mainly invested in U.S. government, state, municipal, and
agency obligations; corporate- and foreign government-fixed maturities; and U.S. government and corporate asset-backed
securities.
(2) This category includes investments in forward contracts (derivative instruments) related to the purchase and sale of TBA
mortgage-backed securities within a dollar roll. The contracts represent a commitment to purchase and sell the securities at a
fixed price on a specified future date and include net settlement provisions. The primary objective of these funds is to seek
attractive short-term risk-adjusted absolute returns. There is no redemption limitation imposed on these investments;
therefore, the liquidity is not limited to beyond one to three business days.
(3) This category includes investments in equity securities, fixed-income securities, commodities, cash, and short-term
investments. This includes investments in donor-restricted trust funds managed by select brokerage firms. There are no
provisions for redemptions until donor restrictions are released. Distributions from some of these trust funds are received
periodically; however, redemption of the fair value of the trusts (corpus) may remain restricted during the life of these funds
or may be liquidated at a future date.
34


The investments included above are not expected to be sold at amounts that are different from
their NAV. There were no unfunded commitments at June 30, 2013 and 2012.
Investment Held in Trust Accounts
DCHS is the beneficiary of a split-interest agreement from a donor. The related assets are
controlled and invested by an independent third party. DCHS records the assets for its share
when formal written or other verifiable documentation is received. DCHSs share of the assets is
based on the present value of the estimated future distributions to be received by DCHS over the
term of the agreement. The agreements are carried at fair value based on the underlying assets.
The discount rates used to value split-interest agreements at June 30, 2013, ranged from 0.5% to
1.2%.
5. Property and Equipment
Property and equipment consists of the following (in thousands):
2013
Land
Land improvements
Buildings and service equipment
Equipment
Construction in progress
Total
Less accumulated depreciation
June 30
30,446 $
20,244
698,645
496,444
17,122
1,262,901
(893,371)
369,530 $
2012
32,223
14,857
702,720
448,496
25,232
1,223,528
(849,292)
374,236
DCHSs depreciation expense was $60,284,000 and $56,522,000 for the years ended June 30,
2013 and 2012, respectively.
35

6. Other Assets
Other current assets consist of the following (in thousands):
2013
Inventories
Prepaid expenses
Provider fee receivable
Other receivable
Pledges receivable
June 30
18,334 $
18,483
54,740
5,881
5,641
16,275
119,354 $
2012
17,466
20,533
78,904
2,589
2,793
18,120
140,405
Other long-term assets consist of the following (in thousands):

2013
Notes receivable primarily secured
Ownership interest in health-related activities net
Pledge receivable
Other
June 30
1,943 $
4,656
6,684
13,283 $
2012
1,706
8,811
211
3,526
14,254
7. Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
2013
Wages and benefits
Out-of-network cost and IBNR
Provider fee payable
Other
June 30
64,198 $
11,680
25,531
35,875
137,284 $
2012
61,966
8,674
54,323
44,134
169,097
36

8. Pension and Other Postretirement Benefit Plans

DCHS maintains two different defined benefit retirement plans that cover substantially all
eligible employees of DCHS. Benefits are generally based on age, years of service, and
employee compensation. DCHS also offers postretirement health care benefits to a limited
number of its employees. The postretirement health care benefits are determined based on age
and years of service.
The first retirement plan is a multiemployer defined benefit pension plan called Retirement Plan
for Hospital Employees (RPHE). The entities that participate in the RPHE are Seton Medical
Center, Seton Medical Center Coastside, OConnor Hospital, Saint Louise Regional Hospital,
and Caritas Business Services. Benefits are generally based on years of service and the
employees compensation. Contributions to the plan are based on actuarially determined amounts
sufficient to meet the benefits to be paid to plan participants. DCHS contributed cash of
$15,873,000 and $17,260,000 to the RPHE during the fiscal years ended June 30, 2013 and
2012, respectively.
The second retirement plan is a single-employer defined benefit pension plan (the DCHS
Retirement Plan). DCHS associates at St. Francis Medical Center, St. Vincent Medical Center,
and the system office are eligible to participate in this plan. DCHS contributed $13,018,000 and
$11,644,000 to the DCHS Retirement Plan during the fiscal years ended June 30, 2013 and 2012,
respectively.
The third retirement plan is a retiree health insurance program (the Postretirement Healthcare
Plan). DCHS employees at OConnor Hospital, St. Louise Regional Hospital, Seton Medical
Center, and Seton Medical Center Coastside are eligible to participate in this plan. The
Postretirement Healthcare Plan is an unfunded plan. DCHS contributed $200,000 and $238,000
to the Postretirement Healthcare Plan during the fiscal years ended June 30, 2013 and 2012,
respectively.
Defined Contribution Pension Plans
In addition to the above pension plans, DCHS maintains three different defined contribution
pension plans for its employees. Two of these contribution plans require employer participation
based on a percentage of the employees contributions. A third plan was adopted by DCHSs
board of directors for all its new and existing nonunion employees in September 2010. This plan
was further expanded to cover the nurses union (United Nurses Associations of California or
UNAC) of St. Francis Medical Center, effective January 1, 2012 and to the Service Employees
37

8. Pension and Other Postretirement Benefit Plans (continued)

International Union (SEIU) on January 1, 2013. The third plan is a fully employer-paid defined
contribution pension plan. During the fiscal years ended June 30, 2013 and 2012, the employers
contribution for these three defined contribution plans was $21,568,000 and $16,012,000,
respectively.
Pension Plan Curtailment
In September 2011, the union representing registered nurses (RN) of St. Francis Medical Center
had ratified freezing of the defined benefit pension plan for all its members, effective January 1,
2012. Upon freezing the defined benefit pension plan, DCHS had introduced an employer-paid
defined contribution plan (IRC 401(a)) for St. Francis Medical Centers RNs, beginning
January 1, 2012.
In April 2012, DCHSs largest union, SEIU, had ratified freezing the defined benefit pension
plan belonging to all its members in DCHSs six hospitals effective January 1, 2013. Upon
freezing the defined benefit pension plan, DCHS had introduced an employer-paid defined
contribution plan (IRC 401(a)) for its SEIU members beginning January 1, 2013.
The funded status of the DCHS Retirement Plan and Postretirement Healthcare Plan benefits is
as follows (in thousands):
Change in benefit obligation:

Benefit obligation
beginning of year
Service cost
Interest cost
Curtailments
Actuarial (gain) loss
Benefits paid
Plan amendments
Benefit obligation end of year
Accumulated benefit obligation
June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
$
$
$
474,848 $
3,426
21,608
(25,934)
(15,632)
458,316 $
448,001 $
6,083 $
331
265
(386)
(200)
(1,415)
4,678 $
4,678 $
June 30, 2012

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
410,314 $
4,940
23,159
(27,454)
78,501
(14,612)
474,848 $
462,629 $
18,475
1,109
1,027
(14,290)
(238)
6,083
6,083
38

Change in plan assets:

Fair value of plan assets
beginning of year
Actual return on plan assets
Employer contribution
Benefits paid
Administrative expenses
end of year
Funded status
June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
June 30, 2012

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
213,934 $
19,135
13,021
(15,632)
(1,538)
200
(200)
212,013 $
4,619
13,317
(14,612)
(1,403)
238
(238)
$
$
228,920 $
(229,396) $
$
(4,678) $
213,934 $
(260,914) $
(6,083)
The total underfunded status of the DCHS Retirement Plan and Postretirement Healthcare Plan is
recognized in the consolidated balance sheets as noncurrent pension obligations of $234,074,000
and $266,997,000 as of June 30, 2013 and 2012, respectively.
Amounts that have not yet been recognized as components of net period benefit cost are as
follows (in thousands):
June 30, 2013
DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
Net actuarial loss (gain)
Prior service costs
Total amount not recognized
$
$
149,190
149,190
$
$
(11,144) $
496
(10,648) $
June 30, 2012

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
180,370
180,370
$
$
(11,732)
2,196
(9,536)
39


The components of net period benefit cost and amounts recognized in the consolidated
statements of operations and changes in net assets apart from expenses are as follows
(in thousands):
Components of net periodic benefit

cost (income):
Service cost
Interest cost
Expected return on plan assets
Net prior service cost
amortization
Net loss (gain) amortization
Net periodic benefit cost (income)
Year Ended June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
$
Change in net assets apart from

periodic benefit cost:
Net actuarial (gain) loss
$
(Deduct) add:
Impact of curtailment
Amortization of prior service
cost
Amortization of actuarial
(gain) loss
Net prior service credit (plan
amendments)
Total
$
3,426 $
21,608
(16,626)
331 $
265

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
4,940 $
23,159
(16,650)
1,109
1,027
285
(974)
(93) $
7,028
18,477
285
68
2,489
(26,876) $
(386) $
91,906
(14,290)
(27,454)
4,304
12,712
(4,304)
(31,180) $
(285)
974
(7,028)
(1,415)
(1,112) $
57,424
285
68
$
(13,937)
The estimated actuarial loss and prior service cost for the DCHS Retirement Plan that will be
amortized into net periodic benefit cost over the next fiscal year is $3,438,000 and $0,
respectively.
40


Assumptions
The weighted-average assumptions used to determine benefit obligations and net period benefit
costs, are as follows:
Weighted-average assumptions used

to determine benefit obligations:
Discount rate
Rate of compensation increase
Weighted-average assumptions used to
determine net periodic benefit costs:
Discount rate
June 30, 2013

June 30, 2012
DCHS
Postretirement
DCHS
Postretirement
Retirement
Healthcare
Retirement
Healthcare
Plan
Plan
Plan
Plan
5.20%
3.50
4.89%
N/A
4.62%
3.50
4.46%
N/A
4.62%
7.25
3.50
4.46%
N/A
N/A
5.79%
7.75
4.00
5.60%
N/A
N/A
Expected Return on Plan Assets

The DCHS Retirement Plans estimated long-term rate of return on pension assets is driven
primarily by historical asset-class returns, an assessment of expected future performance, advice
from external actuarial firms, and the incorporation of specific asset-class risk factors. Asset
allocations are periodically updated using pension plan asset/liabilities studies, and DCHSs
estimated long-term rates of return are consistent with these studies. The DCHS Retirement Plan
portfolio return assumption is 7.25% and 7.75%, at June 30, 2013 and 2012, respectively.
Discount Rate
The discount rate assumptions used to determine the postretirement benefit plan obligations and
expenses reflect the prevailing rate available on high-quality, fixed-income debt instruments. The
rate was based on cash flow analysis that matched estimated future benefit payments to the
noncollateralized bond discount yield curve as of June 30, 2013 and 2012.
41


Other Benefit Assumptions
For the measurement of accumulated postretirement benefit obligations at June 30, 2013, the
Postretirement Healthcare Plan assumed health care cost trend rates start at 11% in 2013 and
decrease by 0.250.75 % annually, reaching an ultimate rate of 5.50% in fiscal year 2023.
Plan Assets and Investment Strategy
The following information represents DCHSs pension plan assets measured at fair value and
indicate the fair value hierarchy and valuation techniques utilized to determine such fair value (in
thousands):
Total Balance
Cash equivalents
Common collective trust funds
Fixed-income funds
Domestic stocks
Real estate equity investments
Foreign stock funds
Total plan assets
1,460 $
63,856
80,485
20,290
16,666
46,163
228,920 $
Total Balance
Cash equivalents
Fixed-income funds
Domestic stocks
Foreign stock funds
Total plan assets
June 30, 2013

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
1,460 $
20,290
16,666
38,416 $
$
63,856
80,485
46,163
190,504 $
June 30, 2012

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
(revised)
(revised)
3,080 $
88,452
53,428
16,370
15,439
34,966
211,735 $
3,080 $
16,370
15,439
34,889 $
$
88,452
53,428
34,966
176,846 $
Significant
Unobservable
Inputs
(Level 3)
Significant
Unobservable
Inputs
(Level 3)
42


Subsequent to the issuance of the 2012 consolidated financial statements, DCHS determined that
direct investments in domestic stocks described as Domestic stock funds of $16,370,000 and
included in Level 2 investments within the fair value hierarchy should have been described as
Domestic stocks and included as Level 1 investments in the fair value hierarchy. Additionally,
direct investments in real estate stocks described as Real estate funds of $15,439,000 and
included in Level 2 investments within the fair value hierarchy should have been described as
Real estate equity investments and included as Level 1 investments in the fair value hierarchy.
As a result, the 2012 balances and descriptions have been restated to appropriately describe the
investments and to reflect the investments in Level 1 as these securities are traded in active
markets.
As of June 30, 2013, $1,460,000 of the plans cash balance was held in a separate non-interestbearing cash account for the purpose of claims disbursement by the plans administrator.
DCHSs investment strategy for the assets of the DCHS Retirement Plan is designed to preserve
principal while earning returns relative to the overall market consistent with a prudent level of
risk. The strategy balances the liquidity needs of the DCHS Retirement Plan with the long-term
return goals necessary to satisfy future obligations. The target asset allocation is diversified
across traditional asset classes. Diversification is also achieved through participation in U.S. and
non-U.S. markets, investment manager style, philosophy, and capitalization. The complementary
investment styles and approaches used by investment managers are aimed at reducing volatility
while capturing the equity premium from the capital markets over the long-term. Risk tolerance
is established through consideration of plan liabilities, plan funded status, and DCHSs
consolidated financial condition. Consistent with DCHSs fiduciary responsibilities, the fixedincome allocation generally provides for security of principal to meet near-term expenses and
obligations. Periodic reviews of the market values and corresponding asset allocation
percentages are performed to determine whether a rebalancing of the portfolio is necessary.
Cash Contributions and Benefit Payments
DCHS expects to contribute $13,223,000 to the DCHS Retirement Plan and $192,000 to the
Postretirement Healthcare Plan in 2014.
43


The benefit payments, which reflect expected future service, as appropriate, expected to be paid
in each of the next five years, and in aggregate for the next five years are as follows (in
thousands):
DCHS
Postretirement
Retirement
Healthcare
Plan Benefits
Benefits
2014
2015
2016
2017
2018
Next five years
15,600
17,400
19,200
20,800
22,500
139,200
200
300
300
300
400
2,300
Multiemployer Plan
Certain affiliated entities in Northern California participate in multiemployer defined benefit
retirement plans as described below (in thousands):
Plan
Retirement Plan
for Hospital
Employees
Pension Plan
Employer
Identification
Number/Plan
Number
94-2995676/001
Pension Protection Act Zone Status

June 30
2013
2012
Green
Pension Protection Act Zone Status (from worst to best):

Critical Status
Seriously Endangered
Endangered
None of the above
Funding
Improvement/
Rehabilitation
Plan Status
June 30, 2013
Green
No
Red
Orange
Yellow
Green
44

Plan
Retirement Plan
for Hospital
Employees
Pension Plan
Employer
Identification
Number/Plan
Number
Contributions
2014
(expected)
2013
2012
94-2995676/001 $
16,421 $
15,873 $
17,260
Surcharge
Imposed
(during 2012)
Collective
Bargaining
Agreement
Expiration
Date
No
March 13,
2014
Since March 1, 2011, participant benefits were frozen for the non-contractual employees of the
two participating affiliates in the Retirement Plan for Hospital Employees. Beginning January 1,
2013 participant benefits were frozen for all Service Employees International Union (SEIU)
employees. Certain affiliates will continue to make periodic contributions as needed for eligible
participants.
The contributions for the multiemployer plan were approximately 55% of the total contributions
to the plans for June 30, 2013 and 2012. There are no minimum contributions required for future
periods by the collective-bargaining agreements, statutory obligations, or other contractual
obligations for both plans.
The risks of participating in multiemployer plans are different from single-employer plans in the
following aspects: (i) assets contributed to the multiemployer plan by one employer may be used
to provide benefits to employees of other participating employers; (ii) if a participating employer
stops contributing to the plan, the unfunded obligations of the plan may be borne by the
remaining participating employers; and (iii) if the affiliates choose to stop participating in the
multiemployer plan, the affiliates may be required to pay the plan an amount based on the
underfunded status of the plan, referred to as a withdrawal liability.
45

9. Long-Term Debt
Long-term debt consists of the following (in thousands):
California Statewide Communities Development Authority

Revenue $259 million Bonds Series 2005A, payable in
varying installments through 2040, fixed interest rates
ranging from 5.00% to 5.25%
$
Revenue $106 million Bonds Series 2005F, G, and H
(St. Francis Medical Center), payable in varying annual
installments through 2026, fixed interest rates ranging
from 5.00% to 5.25%
Notes payable to the Daughters of Charity Foundation,
two, $10 million face value, payable in monthly
installments of approximately $57,000 through 2032 at
0% interest
Notes payable for Health Center One Mortgage,
$6.5 million face value, payable in monthly installments
with a lump-sum payment in May 2018, fixed interest
rate of 5.85%
Notes payable to San Jose Medical Group, payable
through 2014 at 3.25% interest
Other
Less current portion
Plus bond premium
2013
June 30
259,124 $
2012
259,124
30,860
40,720
143,655
143,655
12,578
13,251
5,833
5,983
2,600
500
455,150
5,200
467,933
22,915
432,235
5,109
437,344 $
13,283
454,650
5,577
460,227
46

9. Long-Term Debt (continued)

Scheduled long-term principal debt payments as of June 30, 2013, are as follows (in thousands):
2014
2015
2016
2017
2018
Thereafter
22,915
7,989
8,308
8,814
14,290
392,834
$ 455,150
Obligated Group
DCHS and the local health ministries identified in Note 1 are the members of the Obligated
Group established pursuant to a Master Trust Indenture dated December 1, 2001 (the Master
Indenture), with U.S. Bank, National Association, as master trustee (the Master Trustee). DCHS
and such local health ministries collectively are referred to as the Obligated Group or as
Members, and each individually is sometimes referred to herein as a Member. The Obligated
Group is jointly and severally liable for the debt outstanding under the Master Indenture.
The Series 2005 Bonds (the Revenue Bonds) are a limited obligation of California Statewide
Communities Development Authority and are payable solely from payments made by the
Obligated Group. Payment of principal and interest on the Revenue Bonds is secured by the
property and equipment of each Member of the Obligated Group. Each of the Obligated Group
Members has executed one or more deeds of trust pursuant to which the respective Obligated
Group Member has granted to the trustee hereunder, as trustee for the benefit of the Master
Trustee, a first lien on, and security interest in, the Hospitals and other parcels of property owned
by such Obligated Group Members, subject to permitted liens, as security for the performance of
the Obligated Group Members obligations under the Master Indenture. Additionally, each of the
Obligated Group Members has created a gross revenue fund with its depository bank to further
secure its gross revenues for the benefit of the Master Trustee.
47


The Obligated Groups financing agreements contain restrictive covenants, including
maintenance of a debt ratio, limitations on the amount of any additional borrowings, and
limitations on the disposal or transfer of assets to nonobligated group members. Additionally, the
financing agreements require that funds are established with, and controlled by, a trustee during
the period the bonds remain outstanding. The Obligated Group has complied with such financial
covenants and restrictions at June 30, 2013.
The provisions of the Master Trust Indenture calculate the annual debt-service coverage ratio as
income available for debt service divided by the debt-service requirement for the year. Under
DCHSs interpretation, after consultation with bond counsel, the definition of income available
for debt service has been interpreted to not include $6,502,000 of the increase in fair value
recorded in fiscal year 2013 earnings for the change in fair value of the beneficial interest in
Ascension Healths CHIMCO Alpha fund.
Fair Values
The fair value of long-term debt is estimated based on the quoted market prices for the same or
similar issues or on the current rates offered for debt of the same remaining maturities. The
estimated fair values of the DCHSs debt instruments as of June 30, 2013 and 2012, are
$459,305,000 and $484,533,000, respectively. The reported fair value of DCHSs debt
instrument includes the full value of an irrevocable principal pre-payment of $9,860,000 made as
of June 30, 2013, for the year ended June 30, 2014. The fair value amounts do not represent the
amount that would be required to expend to retire the indebtedness.
48

10. Temporarily and Permanently Restricted Net Assets

Temporarily and permanently restricted net assets are available for the following purposes (in
thousands):
2013
Equipment and expansion
Research and education
Charity and other
Total temporarily restricted net assets
Permanently restricted net assets
Total restricted net assets
June 30
2012
8,086 $
2,565
23,337
33,988
7,501
5,654
20,312
33,467
9,280
43,268 $
8,864
42,331
Equipment and expansion relate to assets held by DCHS, which are restricted by donors or
grantors to be used specifically for equipment, capital projects, or other capital needs.
Research and education relate to assets held by DCHS, which are restricted by donors or grantors
to be used in specific research or education programs.
Charity and other relate mainly to assets held by DCHS, which are restricted by donors or
grantors to be used in specific health care programs for charity care and other medical and
patient services.
Permanently restricted net assets of $9,280,000 and $8,864,000 at June 30, 2013 and 2012,
respectively, are restricted to investments to be held in perpetuity, with the income expendable to
support DCHSs mission.
Endowments
DCHS and five of its consolidated charitable foundations follow the Uniform Prudent
Management of Institutional Funds Act (UPMIFA). UPMIFA eliminates the concept of historic
dollar value and allows an institution to spend or accumulate as the board determines is prudent
for the uses, benefits, purposes, and duration of the endowment fund unless the gift instrument
states a particular spending rate or formula. Californias version of UPMIFA also includes a
rebuttable provision that spending greater than 7% of the average fair market value (calculated at
least quarterly over a minimal period of three years) is presumed to be imprudent.
49

10. Temporarily and Permanently Restricted Net Assets (continued)

In accordance with UPMIFA, DCHS considers the following factors when appropriating or
accumulating an endowment fund: (i) general economic conditions, (ii) effects of inflation and
deflation, (iii) the purposes of the institution and the endowment fund, (iv) expected total return
from income and appreciation of investments, (v) DCHSs other resources, (vi) the duration and
preservation of the endowment fund, and (vii) DCHSs investment policies.
From time to time, the fair value of assets associated with individual endowment funds may fall
below the level that the donor or UPMIFA requires DCHS to retain as a fund of perpetual
duration. Deficiencies of this nature that are reported in unrestricted net assets were not material
as of June 30, 2013 and 2012. These deficiencies resulted from unfavorable investment market
fluctuations.
DCHS has adopted investment and spending policies for endowment assets that attempt to
provide a predictable stream of funding to programs supported by its endowment while seeking
to maintain the purchasing power of the endowment assets. Under these policies, as approved by
the boards of trustees of the charitable foundations, the endowment assets are invested in a
manner that is intended to produce results that exceed the price and yield results while assuming
a moderate level of investment risk.
To satisfy its long-term rate-of-return objectives, DCHS relies on a balanced investment strategy
in which investment returns are achieved through both capital appreciation (realized and
unrealized) and current yield (interest and dividends). DCHS targets a diversified asset allocation
that places a great emphasis on equity-based investments to achieve its long-term return
objectives within prudent risk constraints.
50


The endowment net asset composition by type of fund consists of the following (in thousands):
Unrestricted
Donor-restricted endowment funds
Total funds
$
$
496 $
496 $
Unrestricted
Total funds
$
$
June 30, 2013

Temporarily Permanently
Restricted
Restricted
781 $
781 $
9,280 $
9,280 $
June 30, 2012

Restricted
Restricted
254 $
254 $
364 $
364 $
8,864 $
8,864 $
Total
10,557
10,557
Total
9,482
9,482
The changes in endowment net assets are as follows (in thousands):

Unrestricted
Balance at June 30, 2011
Net gains (losses) realized and
unrealized
Contributions
unrealized
Contributions
Temporarily
Restricted
430 $
(176)
254
242
496 $
Permanently
Restricted
Total
250 $
8,455 $
9,135
114
364
(189)
598
8,864
(251)
598
9,482
417
781 $
138
278
9,280 $
797
278
10,557
51

11. Commitments, and Contingent Liabilities

Standby Letter of Credit
Marillac, a subsidiary of DCHS, pledged $20,350,000 of its assets to support a standby letter of
credit in favor of Old Republic Insurance Company (ORIC), one of the parents insurers, as of
June 30, 2013 and 2012.
Litigation
Certain entities of DCHS are defendants in various actions arising from their health care service
activities. It is the opinion of management, after consulting with legal counsel, that such actions
will not have a material adverse effect on DCHSs consolidated financial position or results of
operations as of June 30, 2013. Therefore, based on the information provided by its legal
counsel, DCHS has accrued $1,452,000 and $1,373,000 as of June 30, 2013 and 2012,
respectively, which were related to certain of these actions. DCHS evaluates recoveries from
insurance coverage separately from its liability, and when appropriate, an asset is recorded
separately from the associated liability.
As part of its ongoing compliance program, DCHS routinely reviews arrangements between
physicians and its hospitals. In September and October 2013, DCHS made a voluntary selfdisclosure to the federal government (in accordance with federal self-disclosure guidelines)
related to certain financial arrangements between physicians and one of its hospitals that might
constitute potential violations of federal regulatory standards. DCHSs voluntary disclosure
could result in payments to the government and/or the imposition of additional compliance
requirements. At this time, management cannot accurately estimate the amounts of any payments
or settlements that might result, or if additional related issues will arise. There can be no
guarantee that any resulting payments or settlements will not have a material adverse impact on
DCHSs consolidated financial position or results of operations.
Laws and Regulations
The health care industry is subject to numerous laws and regulations of federal, state, and local
governments. Compliance with such laws and regulations can be subject to future government
review and interpretation, as well as regulatory actions unknown or unasserted at this time. These
laws and regulations include, but are not necessarily limited to, matters, such as licensure,
accreditation, government health care program participation requirements, reimbursement laws
and regulations, anti-referral laws, and false claims prohibitions. In recent years, government
52

11. Commitments, and Contingent Liabilities (continued)

activity has increased with respect to investigations and allegations concerning possible
violations of reimbursement, false claims, and anti-referral statutes and regulations by health care
providers. Certain entities of DCHS are subject to such laws and regulations and to governmental
investigations, whistle-blower lawsuits, and other legal proceedings concerning such laws and
regulations. Violations of these laws and regulations could result in expulsion from government
health care programs, as well as imposition of significant fines and penalties and significant
repayments for patient services previously reimbursed.
DCHS had approximately 7,600 employees as of June 30, 2013, of whom just over 5,700 are
full-time employees. Approximately 73% of these 7,600 employees are employed by DCHS
entities and are represented by collective bargaining units. Of these employees, 33% are
represented by a collective bargaining agreement that will expire on March 13, 2014 which is
currently in the process of being negotiated. Employee strikes or other adverse labor actions may
have a material adverse impact on DCHSs consolidated financial position or results of
operations.
Health Care Reform
In March 2010, President Obama signed the Health Care Reform Legislation into law. The new
law will result in sweeping changes across the health care industry. The primary goal of this
comprehensive legislation is to extend health coverage to approximately 32,000,000 uninsured
legal U.S. residents through a combination of public program expansion and private sector health
insurance reforms. To fund the expansion of insurance coverage, the legislation contains
measures designed to promote quality and cost efficiency in health care delivery and to generate
budgetary savings in the Medicare and Medi-Cal programs. DCHS is unable to predict the full
impact of the Health Care Reform Legislation at this time due to the laws complexity and
current lack of implementing regulations or interpretive guidance. However, DCHS expects that
several provisions of the Health Care Reform Legislation will have a material effect on its
business beginning January 2014.
53


Lease Commitments
Future minimum lease payments under DCHSs significant noncancelable operating leases (with
initial or remaining lease terms in excess of one year) as of June 30, 2013, are as follows (in
thousands):
Operating
Leases
2014
2015
2016
2017
2018
Thereafter
12,152
11,418
9,595
6,312
3,447
6,292
49,216
Rent expense was $20,708,000 and $15,921,000 for the years ended June 30, 2013 and 2012.
Seismic Standards
DCHS is assessing its earthquake retrofit requirements for health care facilities under a state of
California law (SB90) that can allow a delay of up to seven years from the January 1, 2013,
deadline for Structural Performance Category 1 (SPC-1) retrofits. This affects seven buildings at
three of DCHSs hospitals. Applications for the extensions have been submitted and all have
been granted an interim administrative delay until January 1, 2015 to allow the Office of
Statewide Health and Planning Development (OSHPD) evaluation of the applications. To date
one facility has been granted an extension to January 1, 2019. The remaining are actively under
review by OSHPD.
54

12. Ascension Health Affiliation Agreement

Ascension Health Alliance and DCHS entered into an affiliation agreement in December 2012.
Pursuant to this affiliation agreement, Ascension Health Alliance will provide certain consulting
and strategic services to DCHS in an effort to enhance delivery of healthcare consistent with its
charitable mission. DCHS and its affiliates will remain independent from Ascension Health
Alliance and will not be construed as partners or joint venturers with Ascension Health Alliance
by virtue of the affiliation. The affiliation does not involve a change in corporate control of
DCHS nor a transfer of its assets or an assumption of its liabilities.
13. Subsequent Events
In October 2013, the Daughters of Charity Foundation (DOCF), an organization separate and
independent from DCHS, made a restricted donation for the benefit of DCHS by depositing
sufficient funds with the Bond Trustee to redeem the $143,655,000 principal amount of the
California Statewide Development Authority Revenue Bonds Series 2008A Bonds. The Series
2008A Bonds were redeemed at par on October 25, 2013.
In September 2013, DOCF informed DCHS that it had forgiven the outstanding balance of
$12,409,000 owed to DOCF by DCHS.
DCHS is a participant, along with other health care providers, in Premier, Inc.s group
purchasing program and DCHS also holds an investment in Premier, Inc. that is accounted for
under the cost method. On October 1, 2013, Premier, Inc. completed an initial public offering
and was reorganized from a privately held company to a public company.
DCHS has evaluated subsequent events and disclosed all material events through November 26,
2013, which is the date these financial statements of DCHS were issued.
55
Ernst & Young LLP

Sacramento Office
Suite 300
Roseville, California 95661
Tel: +1 916 218-1900
Fax: +1 916 218-1999
www.ey.com
Report of Independent Auditors on

Supplementary Information
We have audited the consolidated financial statements of Daughters of Charity Health System of
and for the year ended June 30, 2013, and have issued our report thereon dated November 26,
2013, which contained an unmodified opinion on those consolidated financial statements. Our
audit was performed for the purpose of forming an opinion on the consolidated financial
statements as a whole. The consolidating financial statement schedules for Daughters of Charity
Health System are presented for the purposes of additional analysis and are not a required part of
the consolidated financial statements. Such information is the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to
prepare the consolidated financial statements. The information has been subjected to the auditing
procedures applied in the audit of the consolidated financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the consolidated financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States. In our opinion, the information is fairly stated
in all material respects in relation to the consolidated financial statements as a whole.
November 26, 2013
56

Consolidating Balance Sheets
As of June 30, 2013
(In Thousands)
Assets
Current assets:
Subtotal
OConnor
Hospital
Saint Louise
Regional
Hospital
St. Francis
Medical
Center
Lynwood
Patient accounts receivable net

Due from related organizations
Other investments
Total assets limited as to use
Goodwill and intangible net
Total
57
9,336
14,128
23,464
1,714
819
2,533
Seton
Medical
Center
St. Vincent
Medical
Center
(2,886) $
30,765
27,879
(417) $
3,852
3,435
3,181
6,791
9,972
Seton
Medical
Center
Coastside
$
DCHS
System
Office
(61) $
(61)
(235)
4,354
4,119
34,423
2,625
8,144
14,424
83,080
10,260
123
6,991
4,917
24,824
45,081
13,294
64,840
39,228
190,322
24,007
5,252
14,213
13,005
59,912
32,069
1,042
22,058
11,191
76,332
2,810
4,000
130
6,879
49,006
22,468
75,593
9,850
9,850
249
249
82,256
82,256
5,535
1,682
7,217
289
289
828
40,859
41,687
58,379
2,094
153,403
27,957
704
53,734
138,650
143
411,371
80,844
1,246
149,219
48,675
33
125,329
2,176
2
9,057
4,378
5,643
127,301

Consolidating Balance Sheets (continued)
As of June 30, 2013
(In Thousands)
Assets
Current assets:
Subtotal
Other investments
Total
58
Eliminations
$
Obligated
Group
Subtotal
$
(140,509)
(140,509)
$ (140,509) $
10,632
60,709
71,341
Marillac
Insurance
Company
$
11,162
11,162
Caritas
Business
Services
$
All Other
Entities
1,415
928
2,343
7,951
841
8,792
148,650
22,336
28,743
105,363
376,433
9,213
20,375
1,298
169
3,810
5,201
365
8,279
22,637
99,007
1,682
40,859
141,548
47,826
47,826
13,875
13,983
27,858
361,059
9,865
888,905
68,201
485
121
4,416
10,905
7,986
3,297
72,683
DCHS
Total
Eliminations
$
(30,406)
(3,670)
(34,076)
31,160
62,478
93,638
153,851
22,336
119,354
389,179
112,882
63,491
40,859
217,232
10,905
369,530
13,283
(34,076) $ 1,000,129

As of June 30, 2013
(In Thousands)
Liabilities
Accounts payable
Accrued liabilities
Due to related organizations
Total current liabilities
OConnor
Hospital
$
5,278
1,090
620
26,677
10,268
43,933
Saint Louise
Regional
Hospital
St. Francis
Medical
Center
Lynwood
St. Vincent
Medical
Center
Other liabilities:
Hospital general liability and workers' compensation
Pension obligations
82,387
57,914
202
140,503
Net assets:
Unrestricted
Total net assets
Total
(32,421)
1,388
(31,033)
153,403 $
59
910
565
3,890
8,036
25,703
39,104
46,465
6,631
32
53,128
(39,417)
919
(38,498)
53,734 $
4,663
3,545
3,683
37,759
13,989
63,639
6,450
1,044
9,163
21,892
47,796
86,345
Seton
Medical
Center
$
109,681
83,569
148
193,398
85,873
66,650
1,934
154,457
152,083
2,251
154,334
411,371
(96,513)
2,157
2,773
(91,583)
149,219 $
5,241
1,143
2,256
23,244
14,791
46,675
Seton
Medical
Center
Coastside
$
94,024
1,787
995
96,806
(18,564)
412
(18,152)
125,329 $
78
551
1,661
16,775
19,065
DCHS
System
Office
$
12,848
12,578
4,932
12,849
43,207
150
150
18,764
5,633
17,373
33
41,803
(14,158)
4,000
(10,158)
9,057 $
42,291
42,291
127,301

As of June 30, 2013
(In Thousands)
Liabilities
Accounts payable
Accrued liabilities
Other liabilities:
Hospital general liability and workers' compensation
Pension obligations
Net assets:
Unrestricted
Total net assets
Total
60
Eliminations
$
Obligated
Group
Subtotal
(140,509)
(140,509)
$ (140,509) $
35,468
19,965
20,163
124,201
1,662
201,459
Marillac
Insurance
Company
$
8,338
8,338
Caritas
Business
Services
$
All Other
Entities
2,198
101
2,303
1,762
2,950
2,549
28,643
35,904
437,194
5,633
234,074
3,344
680,245
41,580
41,580
150
310
460
(6,699)
11,127
2,773
7,201
888,905 $
18,283
18,283
68,201
2,113
2,113
4,416
6,951
22,861
6,507
36,319
72,683
Eliminations
$
(2)
(30,406)
(30,408)
(3,686)
(3,686)
DCHS
Total
37,234
22,915
20,163
137,284
217,596
437,344
43,527
234,074
3,654
718,599
18
20,666
33,988
9,280
18
63,934
(34,076) $ 1,000,129

Consolidating Statements of Operations
For the Year Ended June 30, 2013
(In Thousands)

Net patient service revenue less
provision for doubtful accounts
Premium revenue
Contributions
61
OConnor
Hospital
Saint Louise
Regional
Hospital
St. Francis
Medical
Center
Lynwood
St. Vincent
Medical
Center
284,437
9,132
1,582
295,151
Expenses:
Supplies
Depreciation
Interest
Asset impairment
Total expenses
188,899
40,593
71,204
14,383
5,060
10
320,149
Operating (loss) income

(Deficit) excess of revenues over expenses
(24,998)
2,210
(22,788) $
78,372
779
883
80,034
57,270
7,351
22,874
4,338
2,771
94,604
(14,570)
49
(14,521) $
372,122
33,019
7,523
4,146
416,810
190,873
30,277
134,659
17,796
7,026
380,631
36,179
8,394
44,573
190,727
8,593
5,746
1,774
206,840
Seton
Medical
Center
$
245,199
6,241
593
252,033
Seton
Medical
Center
Coastside
$
100,488
46,151
81,532
9,882
4,894
242,947
159,549
36,258
69,289
10,428
5,840
281,364
(36,107)
994
(35,113) $
(29,331)
1,028
(28,303) $
20,829
470
4,001
25,300
DCHS
System
Office
$
65,591
2,110
67,701
16,740
1,600
3,289
362
(10)
21,981
19,186
219
53,525
1,117
(245)
73,802
3,319
1
3,320
(6,101)
8,218
2,117

Consolidating Statements of Operations (continued)
(In Thousands)

Net patient service revenue less provision for
doubtful accounts
Premium revenue
Contributions
Eliminations
$
Expenses:
Supplies
Depreciation
Interest
Asset impairment
Total expenses
62
Obligated
Group
Subtotal
$ 1,191,686
41,612
(65,237)
30,245
15,089
(65,237)
1,278,632
(65,237)
(65,237)
Marillac
Insurance
Company
$
733,005
162,449
371,135
58,306
25,336
10
1,350,241
(71,609)
20,894
(50,715) $
11,691
11,691
Caritas
Business
Services
$
11,791
11,791
(100)
120
20 $
16,922
16,922
All Other
Entities
$
13,724
176
2,813
245
16,958
(36)
25
(11) $
39,189
23,877
2,048
1,634
66,748
Eliminations
$
50,570
7,813
25,250
2,133
85,766
(19,018)
1,238
(17,780) $
DCHS
Total
$ 1,230,875
65,489
(31,471)
29,435
16,723
(31,471)
1,342,522
(13,713)
(176)
(17,380)
(245)
(31,514)
43
(6,025)
(5,982) $
783,586
170,262
393,609
60,439
25,336
10
1,433,242
(90,720)
16,252
(74,468)
CONSOLIDATED FINANCIAL STATEMENTS

AND SUPPLEMENTARY SCHEDULES
With Report of Independent Auditors
Ernst & Young LLP

Consolidated Financial Statements and Supplementary Schedules
Contents
Report of Independent Auditors.......................................................................................................1
Consolidated Financial Statements
Consolidated Balance Sheets ...........................................................................................................3
Consolidated Statements of Operations and Changes in Net Assets ...............................................4
Consolidated Statements of Cash Flows ..........................................................................................6
Notes to Consolidated Financial Statements....................................................................................8
Report of Independent Auditors on Supplementary Information ..................................................57
Consolidating Balance Sheets ........................................................................................................58
Consolidating Statements of Operations ........................................................................................62
1408-1306422
Ernst & Young LLP

Sacramento Office
Suite 300
Roseville, CA 95661
Tel: +1 916 218 1900

Fax: +1 916 218 1999
ey.com
Report of Independent Auditors

We have audited the accompanying consolidated financial statements of Daughters of Charity
Health System, which comprise the consolidated balance sheets as of June 30, 2014 and 2013,
and the related consolidated statements of operations and changes in net assets and cash flows
for the years then ended, and the related notes to the consolidated financial statements.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in conformity with U.S. generally accepted accounting principles; this includes the design,
implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free of material misstatement, whether due to fraud
or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
did not audit the financial statements of Marillac Insurance Company, Ltd (Marillac), a whollyowned subsidiary, which statements reflect total assets constituting 6.68% as of June 30, 2014
and 6.82% as of June 30, 2013 and total revenues constituting .85% in 2014 and .87% in 2013 of
the related consolidated totals. Those statements were audited by other auditors whose report has
been furnished to us, and our opinion, insofar as it relates to the amounts included for Marillac, is
based solely on the report of the other auditors. 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. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on
the auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entitys internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
1408-1306422
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, based on our audits and the report of the other auditors, the financial statements
referred to above present fairly, in all material respects, the consolidated financial position of
Daughters of Charity Health System at June 30, 2014 and 2013, and the consolidated results of
its operations and changes in net assets and its cash flows for the years then ended in conformity
with U.S. generally accepted accounting principles.
Daughters of Charity Health Systems Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that
Daughters of Charity Health System will continue as a going concern. As discussed in Note 2 to
the consolidated financial statements, Daughters of Charity Health System has recurring losses
from operations and deteriorating liquidity that raise substantial doubt about its ability to
continue as a going concern. Managements plans in regard to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
November 24, 2014
1408-1306422

Consolidated Balance Sheets
(In Thousands)
June 30
Assets
Current assets:
Cash and equivalents
2014
Patient accounts receivable net of allowance for doubtful accounts

of $35 million and $40 million in 2014 and 2013, respectively
Other investments
Goodwill and intangibles net

Liabilities and net assets

Accounts payable
Accrued liabilities and other current liabilities
Other liabilities:
Workers compensation and hospital professional and general liability
Pension obligations
Net assets:
Unrestricted
Total net assets
100,355
921
101,276
2013
31,160
62,478
93,638
163,569
21,052
49,718
335,615
153,851
22,336
119,354
389,179
26,881
58,737
26,133
111,751
112,882
63,491
40,859
217,232
590
339,439
10,852
798,247
10,905
369,530
13,283
1,000,129
54,969
6,607
11,006
120,632
193,214
37,234
22,915
20,163
137,284
217,596
289,427
37,209
235,467
4,051
566,154
437,344
43,527
234,074
3,654
718,599
1,661
28,064
9,154
38,879
798,247
20,666
33,988
9,280
63,934
1,000,129
1408-1306422

Consolidated Statements of Operations and Changes in Net Assets
(In Thousands)
Unrestricted revenues and other support

Net patient service revenue
Net patient service revenue less provision for doubtful accounts
Premium revenue
Contributions
Expenses:
Supplies
Interest net
Goodwill impairment loss
Total expenses
Year Ended June 30

2014
2013
$ 1,136,718 $ 1,271,229
(40,354)
(43,282)
1,230,875
1,093,436
65,489
83,298
29,435
59,657
16,723
157,694
1,342,522
1,394,085
805,075
172,535
346,817
65,554
19,106
13,376
1,422,463
783,586
170,262
393,619
60,439
25,336
1,433,242
Operating loss
Excess (deficit) of revenues over expenses
(28,378)
16,276
(12,102)
(90,720)
16,252
(74,468)
Net assets released from restrictions used for purchase

of property and equipment
Other
Decrease in unrestricted net assets
1,319
(8,564)
342
(19,005)
1,248
32,581
529
(40,110)
1408-1306422

Consolidated Statements of Operations and Changes in Net Assets (continued)
(In Thousands)
Temporarily restricted net assets

Contributions
Net assets released from restrictions:
Operations
Property and equipment
Other
(Decrease) increase in temporarily restricted net assets
Year Ended June 30

2014
2013
$
138,443
(15,584)
(1,248)
(447)
521
(143,942)
(1,319)
894
(5,924)

Net realized and unrealized gains on investments
Contributions
Other
(Decrease) increase in permanently restricted net assets
17,800
138
278
416
354
(480)
(126)
(25,055)
(39,173)
Net assets beginning of year

Net assets end of year
63,934
38,879
103,107
63,934
1408-1306422

Consolidated Statements of Cash Flows
(In Thousands)
Operating activities
Adjustments to reconcile decrease in net assets to net cash
provided by (used in) operating activities:
Changes in fair value and unrealized and realized gains on investments, net
Amortization of bond premium
Amortization of deferred debt issuance cost
Asset and goodwill impairment
Gain on disposal of property and equipment
Gains on disposal of other assets
Gain on contribution for debt repayment
Gain on loan forgiveness
Changes in operating assets and liabilities:
Patient accounts receivable
Accounts payable
Accrued liabilities
Workers compensation and hospital professional and general liabilities
Pension obligations
Net cash provided by (used in) operating activities
Investing activities
Purchases of investments and deposits to interest in pooled investment
fund long-term
Proceeds from sales of investments and withdrawals from the interest in
pooled investment fund long-term
Net withdrawals from interest in pooled investment fund short-term
Purchase of assets for health-related activity
Cash and cash equivalent movements in assets limited as to use
Changes in assets under bond indenture agreements
Purchases of property and equipment
Proceeds from disposal of property and equipment
Proceeds from disposal of other assets
Net cash provided by investing activities
Financing activities
Retirement of debt
Repayment of debt
Cash contributions received for the purchase of property and equipment
Net cash used in financing activities
1408-1306422
Year Ended June 30

2014
2013
$
(25,055) $
(39,173)
65,554
43,282
(12,408)
(359)
1,683
8,564
13,376
(4,390)
(13,691)
(130,000)
(12,409)
60,439
40,354
(13,110)
(468)
223
(32,581)
10
(221)
(53,000)
(7,873)
64,002
486
17,735
(5,535)
(6,318)
(7,171)
397
(63,130)
(35,113)
(1,896)
15,753
436
10,771
(23,855)
2,877
(342)
(128)
(16,024)
(272,990)
(348,774)
338,273
90,644
(2,488)
348
14,726
(39,662)
5,296
18,047
152,194
418,656
11,102
(4,738)
(2,985)
994
(50,066)
271
24,460
(13,655)
(8,787)
2,573
(19,869)
(13,283)
1,137
(12,146)

Consolidated Statements of Cash Flows (continued)
(In Thousands)
Year Ended June 30

2014
2013
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents beginning of year
Cash and cash equivalents end of year
Supplemental disclosures of cash flow information

Cash paid for interest net of amounts capitalized
17,735
25,581
$
$
$
$
$
$
(130,000)
(12,409)
824
(488)
(7,132)
747
$
$
$
$
$
$
1,078
(1,894)
(10,125)
(4,462)
Supplemental disclosures of noncash items

Gain on contribution for debt repayment
Gain on loan forgiveness
Capitalized interest
Decrease in receivable for investments sold
Decrease in payable for investments purchased
Accrued additions to property and equipment
Purchases of assets for health-related activity acquired through
the issuance of notes payable
69,195 $
31,160
100,355 $
985
(3,710)
34,870
31,160
500
1408-1306422

Notes to Consolidated Financial Statements
June 30, 2014
1. Organization
The Daughters of Charity Health System (Parent), a California nonprofit religious corporation,
was formed in June 2001 by the Daughters of Charity Ministry Services Corporation (Ministry
Services), a California not-for-profit religious corporation. Ministry Services is the sole
corporate member of Daughters of Charity Health System. Daughters of Charity Health System
is the sole corporate member of six California not-for-profit religious corporations that operate
six acute care hospitals and other facilities (the Hospitals, see list below) in the state of
California. Daughters of Charity Health System and the following list of affiliated entities
(collectively, DCHS) became one of the largest not-for-profit health care systems in the state
of California, with approximately 1,660 licensed acute care and skilled nursing beds.
DCHS consists of Parent* and the following:
OConnor Hospital*
Saint Louise Regional Hospital*
St. Francis Medical Center Lynwood*
St. Vincent Medical Center*
Seton Medical Center*
Seton Medical Center Coastside (a division of Seton Medical Center)*
Marillac Insurance Company, Ltd. (Marillac)
OConnor Hospital Foundation
Saint Louise Regional Hospital Foundation
St. Francis Medical Center of Lynwood Foundation
St. Vincent Medical Center Foundation
Seton Health Services Foundation
St. Vincent de Paul Ethics Corporation
St. Vincent Dialysis Center
De Paul Ventures, LLC (see Note 2)
DCHS Medical Foundation (see Note 2)
* Part of the Obligated Group (see discussion below and Note 9)

The Daughters of Charity of St. Vincent de Paul (the Daughters of Charity) commenced its
health care mission in California in 1856, with four of the Hospitals having been sponsored by
the Daughters of Charity since their formation.
1408-1306422

1. Organization (continued)
DCHS established an Obligated Group (see listing of entities included in the Obligated Group
above) to access the capital markets. Obligated Group members are jointly and severally liable
for the long-term debt outstanding under the Bond Master Indenture.
2. Summary of Significant Accounting Policies
Basis of Presentation and Going Concern
In recent years, DCHS has experienced recurring operating losses that have been funded
primarily from cash reserves. For the year ended June 30, 2014, DCHS recorded a net operating
loss of $28,378,000 and a decline in cash, cash equivalents and long-term investments of
$83,117,000, inclusive of a one-time $130,000,000 contribution from the Daughters of Charity
Foundation that was restricted for the purpose of defeasing the Series 2008 Bonds. Refer to
Note 9 for further details on the defeased Series 2008 Bonds. DCHS anticipates that it will
continue to incur operating losses and intends to continue to fund its losses from operations. In
order to provide liquidity support, subsequent to June 30, 2014, DCHS borrowed $125,000,000
in short-term debt from the California Statewide Development Corporation. Refer to Note 12 for
further details
On October 10, 2014, DCHS Parent and Daughters of Charity Ministry Services Corporation
executed an agreement to transfer control of DCHS Parent and the other entities comprising
DCHS to Prime Healthcare Services, Inc. (Prime) and Prime Healthcare Foundation, Inc. by
means of membership substitutions, and simultaneously to convert DCHS, the hospitals and
St. Vincent Dialysis Center, Inc. into business corporations, among other actions (the
Transaction). The agreement stipulates that, upon Transaction close, DCHS shall use cash
proceeds from Prime to refund all outstanding tax-exempt bonds, Prime shall assume all pension
liabilities, and the transferred entities shall remain subject to substantially all DCHS liabilities
not repaid in cash at the time of closing. The Transaction is subject to regulatory approval and
there can be no guarantee of Transaction closure. Refer to Note 12 for further details on the
Transaction.
In the event that the Transaction does not close, the Board of DCHS will consider all
alternatives, which may include seeking alternative transactions, closure, and use of bankruptcy
proceedings to accomplish alternatives.
1408-1306422


The uncertainties surrounding future cash flows and liquidity position raise substantial doubt
regarding DCHS ability to continue as a going concern. The accompanying consolidated
financial statements have been prepared in accordance with U.S. generally accepted accounting
principles applicable to a going concern, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business for the foreseeable
future. Such financial statements do not include any adjustments relating to the recoverability of
the carrying amounts of recorded assets or the amount of liabilities that might result from the
outcome of the uncertainties described above.
Consolidation
The accompanying consolidated financial statements include the accounts of DCHS after
elimination of intercompany transactions.
Use of Estimates
The preparation of the consolidated financial statements in conformity with United States (U.S.)
generally accepted accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash and highly liquid marketable securities with
original maturities, at the time of purchase, of three months or less.
Patient Accounts Receivable, Allowance for Doubtful Accounts, and Net Patient Service
Revenue
Patient accounts receivable and net patient service revenue are reported at the estimated net
realizable amounts from patients, third-party payers, and others for services rendered, including
estimated settlements under reimbursement agreements with third-party payers. Settlements with
third-party payers are accrued on an estimated basis in the period in which the related services
are rendered and are adjusted in future periods as final settlements are determined.
1408-1306422
10


Patient service revenues less provision for bad debts are reported net of the provision for bad
debts on the consolidated statement of operations and changes in net assets. DCHSs self-pay
provision was $43,282,000 and $40,354,000 for the years ended June 30, 2014 and 2013,
respectively.
DCHS manages the receivables by regularly reviewing its patient accounts and contracts and by
providing appropriate allowances for uncollectible amounts. These allowances are estimated
based upon an evaluation of historical payments, negotiated contracts and governmental
reimbursements. Adjustments and changes in estimates are recorded in the period in which they
are determined.
Patient services revenues, net of contractual allowances and discounts, are as follows
(in thousands):
Year Ended June 30
2014
2013
Government
Contracted
Self-pay and others
Less: Provision for doubtful accounts
656,291 $ 754,971
454,262
412,280
61,996
68,147
1,271,229
1,136,718
(40,354)
(43,282)
$ 1,093,436 $ 1,230,875
Significant concentrations of net patient accounts receivable are as follows:

2014
HMO/PPO/Commercial
Medicare
Medi-Cal
Other
Total
1408-1306422
June 30
38%
29
28
5
100%
2013
40%
30
25
5
100%
11


Inpatient acute care services, outpatient services, and skilled nursing services rendered to
Medicare program beneficiaries are paid at prospectively determined rates per discharge. These
rates vary according to a patient classification system that is based on clinical, diagnostic, and
other factors. Certain inpatient nonacute services and defined capital and medical education costs
related to Medicare beneficiaries are paid using a cost reimbursement methodology.
Health care services are provided free of charge or at a significant discount based on a sliding
scale to individuals who meet certain financial criteria. DCHS makes every effort to determine if
a patient qualifies for charity care upon admission. If a patient is determined to qualify for
charity care, services are rendered to the patient free of cost. The costs of providing these
services are included in unsponsored community benefit expense (see Note 3).
After satisfaction of amounts due from insurance and the application of financial discounts to
patients balances, and after exhausting all reasonable efforts to collect from the patients, a
significant portion of the DCHSs uninsured and self-pay patient accounts are referred to the
third-party agencies based on DCHSs established guidelines for further collection activities. As
a result, DCHSs records a significant provision for doubtful accounts related to these uninsured
patients in the period the services are rendered.
Gross patient revenue is recorded based on usual and customary charges. Gross patient revenue
was $6,067,992,000 and $5,919,043,000 for the years ended June 30, 2014 and 2013,
respectively. The percentage of inpatient and outpatient services is as follows:
2014
Inpatient services
Outpatient services
1408-1306422
June 30
63.0%
37.0
2013
65.2%
34.8
12


DCHS derives significant portions of its revenues from Medicare, Medicaid (Medi-Cal), and
other third-party payer programs. As a result, DCHS is exposed to certain credit risks. The
estimated percentage of gross patient revenues by major payer group is as follows:
2014
Medicare
Medicare capitated
Medi-Cal
Medi-Cal capitated
Contracted-rate payers
Commercial capitated
Commercial insurance self-pay and other payers
June 30
44.8%
1.5
24.3
1.3
19.5
0.2
8.4
100.0%
2013
46.9%
1.4
23.5
1.0
19.9
0.1
7.2
100.0%
Medi-Cal and contracted-rate payers are paid on a per diem, per discharge, modified cost, or
capitated basis or a combination of these.
Adjustments for the finalization of prior year cost reports from both Medicare and Medi-Cal
resulted in an increase to patient service revenues of $9,291,000 and $12,214,000, for the years
ended June 30, 2014 and 2013.
DCHSs St. Francis Medical Center qualified for and received Medi-Cal funding as a
disproportionate-share hospital from the state of California under Senate Bill (SB) 855. Related
revenues were $27,381,000 and $31,299,000, for the years ended June 30, 2014 and 2013,
respectively, and are included in net patient service revenue. Amounts to be received in future
years, if any, are subject to annual determination.
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13


The St. Francis Medical Center also received funding for Medi-Cal disproportionate-share
hospitals under Senate Bill 1255 (SB 1255). These SB 1255 funds are paid from the Emergency
Services and Supplemental Payments Fund Related revenues were $9,023,000 and $7,700,000,
for the years ended June 30, 2014 and 2013, respectively, and are included in net patient service
revenue. This funding must be applied for and approved each year.
The St. Francis Medical Center also qualifies for Medi-Cal funding as a disproportionate-share
hospital from the state of California under Senate Bill 1732 (SB 1732). This SB 1732 program
permits health care facilities servicing a disproportionate share of Medi-Cal patients to receive
supplemental reimbursement for a portion of their debt service for qualified capital projects.
St. Francis Medical Center has an amendment to its Medi-Cal contract, which was executed on
June 19, 1993, for reimbursement related to the St. Francis Medical Center Health Services
Pavilion, which was completed in 1991. Related revenues were $2,475,000 and $8,052,000, for
the years ended June 30, 2014 and 2013, respectively, and are included in net patient service
revenue.
As part of DCHSs mission to serve the community, DCHS provides care to patients even though
they may lack adequate insurance or may participate in programs that do not pay full charges.
Reserves for charity care and uncollectible amounts have been established and are netted against
patient accounts receivable in the consolidated balance sheets.
Industry Concentration
The receipt of future revenues by DCHS is subject to, among other factors, federal and state
policies affecting the health care industry. There are future revenue uncertainties that may
require that costs be controlled, which will be subject to the capability of management; future
economic conditions, which may include an inability to control expenses in periods of inflation;
increased competition; and other conditions, which are impossible to predict.
Inventories
Inventories consist of supplies and are stated at the lower of cost or market value, which is
determined using the first-in, first-out method. Inventories are reviewed for obsolescence on a
periodic basis. Amounts are included in other current assets.
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14


Assets Limited as to Use
Assets limited as to use represent assets designated by the board of directors for future capital
improvements, other specific purposes for Marillac over which the board of directors retains
control, assets held by trustees under bond indenture agreements, and investments restricted by
donors. The board of directors has the full ability to utilize those Marillac assets limited as to use
to satisfy the needs of on-going operations as necessary. Excluding the assets held as part of the
pooled investment fund, described below, these assets include investments in cash, equity
securities domestic and foreign, U.S. federal and corporate obligations, to-be-announced
(TBA) mortgage-backed securities, asset-backed securities, and fixed-income securities, which
are stated at fair value. The composition and fair value of the long-term interest in the pooled
investment fund also are limited as to use and are as shown below.
Investment income or loss is included in deficit of revenues over expenses, unless the income or
loss is restricted by donor or law. The assets are reflected in the assets limited as to use line item
in the consolidated balance sheet.
Interest in Pooled Investment Fund
DCHS has been participating in a pooled investment fund administered by Ascension Health.
This pooled investment fund is referred to as the Health System Depository (HSD). DCHS
recognizes its rights to the assets held in the HSD as a beneficial interest in the pooled
investment fund. Beginning April 1, 2012, Ascension Health has decided to operate its
investment management activities through its subsidiary, Catholic Healthcare Investment
Management Company (CHIMCO), an investment advisor registered with the Securities and
Exchange Commission. Consequently, DCHSs HSD accounts were closed, and the remaining
balance was then invested into the newly created CHIMCO Alpha Fund, LLC (the Fund).
CHIMCO serves as a manager and the principal advisor of the Fund.
The fair value of DCHS beneficial interest in the HSD fund is determined using DCHSs
ownership percentage of the Fund based on the net asset value (NAV) of the pool. The fair value
of DCHSs investment in the Fund decreased by $147,558,000 and $66,946,000 as of June 30,
2014 and 2013, respectively. DCHSs total investment in the Fund, reflected at fair value, was
$27,802,000 and $175,360,000 as of June 30, 2014 and 2013, respectively. The total investment
in the Fund is comprised of cash, equity securities domestic and foreign, U.S. federal and
corporate obligations, TBA mortgaged-backed securities, asset-backed securities, and
fixed-income securities, which are stated at fair value.
1408-1306422
15


As of June 30, 2014 and 2013, investment balances of approximately $921,000 and $62,478,000,
respectively, in the Fund represented cash invested in a short-term pooled investment account,
which is a centralized cash management arrangement that allows DCHS to access the Fund on
demand using the Funds short-term investments accounts.
Investments
Investments received through gifts are recorded at estimated fair value at the date of donation.
Gains and losses that result from market fluctuations are recognized in the period that such
fluctuations occur. Realized gains or losses resulting from sales or maturities are calculated on an
adjusted-cost basis. Adjusted-cost is the original cost of the security adjusted for any purchases
or sales during the year. Dividend and interest income are accrued when earned.
Investment income includes the following (in thousands):
Year Ended June 30
2014
2013
Interest and dividends
Investment fees
Unrealized gain on investments net
Net realized gain on sales of securities
Amounts included in changes in restricted net assets
Investment income
1,559 $
(246)
8,871
6,450
16,634
(358)
16,276 $
3,238
(288)
5,856
8,025
16,831
(579)
16,252
Derivative Financial Instruments

DCHS entered into forward contracts related to the purchase and sale of TBA mortgage-backed
securities under a dollar-roll strategy. The contracts represent a commitment to purchase or sell
the security at a fixed price on a specified future date and include net settlement provisions,
therefore, meeting the definition of a derivative under Financial Accounting Standards Board
(FASB) Accounting Standards Codification (ASC) 815, Derivatives and Hedging. The Company
has recorded the gross amounts of benefits and obligations as assets and liabilities, respectively,
as the contracts are not settled daily. As of June 30, 2014, there were no open TBAs; therefore,
1408-1306422
16


there are no associated assets, liabilities or unrealized gains. As of June 30, 2013, the value of the
benefits and the value of the obligations under the outstanding contracts both approximate
$3,200,000. These amounts represent pending unsettled benefits and obligations, and have been
included in the other current assets and the accrued liabilities line items within the consolidated
balance sheets. The amount of net realized gain (loss) included in investment income within the
consolidated statements of operations and changes in net assets and unrealized gains were
immaterial for the years ended June 30, 2014 and 2013, respectively, to the consolidated
DCHS enters into TBA transactions to generate short-term investment income; the aggregate
notional amounts transacted during the year were approximately $21 million and $46 million for
the fiscal years ended June 30, 2014 and 2013, respectively. DCHS transacts all of its TBA
transactions with its custodian and does not expect any significant occurrences of counterparty
default. All TBA securities are exchange-traded and subject to the credit risk associated with the
underlying pool of mortgages. However, management believes that such risk associated with
trading these securities is insignificant to its overall investment strategy.
Property and Equipment
Property and equipment are stated at cost, if purchased, and at fair market value, if donated.
Depreciation of property and equipment is calculated using a half-year convention and the
straight-line method for financial statement purposes. Estimated useful lives by classification are
as follows:
Land improvements
Buildings
Building service equipment
Equipment
1408-1306422
525 years
1040 years
525 years
420 years
17


Long-Lived Asset Impairment
DCHS evaluates the carrying value of its long-lived assets for impairment periodically or
whenever events or changes in circumstances indicate that the carrying amount of the asset, or
related group of assets, may not be recoverable from estimated future undiscounted cash flows
generated by the underlying tangible assets. When carrying value of an asset exceeds the
recoverability, an asset impairment charge is recognized. When an asset is not operating at full
capacity, it is also deemed impaired. The remaining net book value is recognized as an
impairment charge in the consolidated statements of operations and changes in net assets. For the
years ended June 30, 2014 and 2013, losses from the disposal of assets were immaterial.
Goodwill and Intangible Assets
Goodwill is measured as of the effective date of a business acquisition as the excess of the
aggregate of the fair value of consideration transferred over the fair value of the tangible and
intangible assets acquired and liabilities assumed.
The changes in the carrying amount of goodwill are as follows (in thousands):
Year Ended June 30
2014
2013
Beginning balance
Addition from acquisition
Impairment
Ending balance
$
$
10,421 $
2,955
(13,376)
$
6,779
3,642
10,421
DCHS, through the DCHS Medical Foundation, acquired intangible assets and goodwill valued
at $3,251,000 and $3,884,000 as of June 30, 2014 and 2013, respectively, as a result of various
physician practice acquisitions during fiscal years 2014 and 2013.
The goodwill impairment tests are based on financial projections prepared by management that
incorporate anticipated results from programs and initiatives being implemented. If these
projections are not met or if negative trends occur that impact outlook, the value of goodwill is
impaired. During the year ended June 30, 2014, management determined that all goodwill was
impaired.
1408-1306422
18


It is DCHSs policy to amortize intangible assets with a finite life over their useful lives.
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents,
accounts receivable, accounts payable, accrued liabilities, and due to/from government agencies
approximate fair value. The fair value of investments is disclosed in Notes 4 and 8, and the fair
value of debt is disclosed in Note 9.
Medical Foundation
The DCHS Medical Foundation (Medical Foundation) was established in December 2011 and
incorporated under the California Nonprofit Religious Corporation regulations as a not-for-profit
corporation exempted from IRC Section 501(c)(3). The sole member of this corporation is
DCHS, acting through its board of directors.
During the years ended June 30, 2014 and 2013, the Medical Foundation has acquired eight and
nine physician groups, comprising the physician groups tangible and intangible assets,
respectively. The total purchase consideration for the year ended June 30, 2014, amounted to
$3,473,000, of which $2,488,000 was paid in cash and the remaining balance of $985,000 in
notes payable in two installments of $492,500 due in fiscal years 2015 and 2016, respectively.
The total purchase consideration for the year ended June 30, 2013, amounted to $5,023,000, of
which $4,523,000 was paid in cash and the remaining balance of $500,000 in notes payable due
in two installments of $350,000 and $150,000 in fiscal years 2014 and 2015, respectively. These
acquisition costs have been reflected in DCHSs consolidated financial statements as of June 30,
2014 and 2013.
1408-1306422
19


The purchase consideration for the two years were allocated as follows (in thousands):
Assets purchased
Inventory
Deposit
Equipment
Leasehold improvements
Intangibles:
Finite-lived intangibles
Goodwill
2014
$
June 30
217
296
2,955
3,473
2013
130
66
737
206
242
3,642
5,023
De Paul Ventures, LLC

In August 2010, DCHS filed with the state of California to form a California limited liability
company called De Paul Ventures, LLC, which is a wholly owned and operated holding
company of DCHS. The company is formed as a means to support the mission of DCHS by
providing multiple needs of the poor, particularly for housing, health, and social services.
Around the same time, De Paul Ventures, LLC entered into an operating agreement to form De
Paul Ventures San Jose ASC, LLC, and became the sole Member of De Paul Ventures San
Jose ASC, LLC.
In February 2011, De Paul Ventures San Jose ASC, LLC entered into a partnership agreement
with Physician Surgery Services, a California limited liability partnership, dba Advanced
Surgery Center. De Paul Ventures San Jose ASC, LLC received a 25% partnership interest, as
a limited partner, in exchange for DCHSs cash investment of $1,170,250. Physician Surgery
Services, LLC is made up of various physician owners and operates a freestanding surgery center
in San Jose, California. DCHSs net investment of $704,000 and $735,000 in the partnership
interest of Physician Surgery Services, LLC is reflected under De Paul Ventures, LLC as a
separate nonobligated entity in the consolidated balance sheets of DCHS as of June 30, 2014 and
2013, respectively. DCHS received a total of $627,569 and $554,000, as partnership distribution
from the activities of DePaul Ventures San Jose ASC, LLC, for the years ended June 30, 2014
and 2013, respectively.
1408-1306422
20


In April 2013, De Paul Ventures, LLC formed De Paul Ventures San Jose Dialysis, LLC, a
California limited liability company, and became the sole member of De Paul Ventures San Jose
Dialysis, LLC. In May 2013, De Paul Ventures San Jose Dialysis, LLC entered into an
agreement to acquire a 10% interest in Priday Dialysis, LLC, a Delaware limited liability
company. The latter is an ambulatory health care center specializing in end-stage renal disease
treatment. De Paul Ventures San Jose Dialysis, LLCs net investment in Priday Dialysis, LLC
was valued at $51,000 and $215,000 in DCHSs consolidated financial statements as of June 30,
Guarantees
In the normal course of its business, DCHS enters into various types of guarantees with
counterparties in connection with certain derivative, underwriting, asset sale, and other
transactions. DCHS also provides indemnifications against potential losses to certain parties
involved in their bond financing. The indemnifications are ordinarily documented in standard
contract terms. Generally, there are no stated or notional amounts included in these
indemnifications, and the events or contingences triggering the obligations to indemnify are
generally not expected to occur. There have been no claims, and none are expected to occur;
therefore, it is not possible to develop an estimate of the maximum payout and fair value under
these guarantees and indemnifications. DCHS has not recorded any liabilities in the consolidated
financial statements as of June 30, 2014 and 2013, related to any guarantees or indemnification
arrangements.
Self Insurance
DCHS is self-insured for hospital professional and general liabilities by a wholly owned
self-insured captive insurance company. The provisions for estimated hospital professional and
general liability claims include estimates of the ultimate costs for both uninsured reported claims
and claims incurred-but-not-reported (IBNR), in accordance with actuarial projections or paid
claims lag models based on past experience. Such claim reserves are based on the best data
available to DCHS; however, these estimates are subject to a significant degree of inherent
variability. There is at least a reasonable possibility that a material change to the estimated
reserves will occur in the near term. Such estimates are continually monitored and reviewed, and
as reserves are adjusted, the differences are reflected in current operations. Management is of the
opinion that the associated liabilities recognized in the accompanying consolidated financial
statements are adequate to cover such claims.
1408-1306422
21


DCHS has entered into reinsurance, stop loss, and excess policy agreements with independent
insurance companies to limit its losses on hospital professional and general liability claims.
Hospital professional and general liabilities were $6,022,000 and $14,909,000 discounted at a
rate of 3% and 3% as of June 30, 2014 and 2013, respectively. Management is not aware of any
potential hospital professional and general liability claims whose settlement would have a
material adverse effect on the DCHSs consolidated financial position.
Workers Compensation Insurance
DCHS is insured for workers compensation claims with major independent insurance
companies, subject to certain deductibles of $500,000 per occurrence as of June 30, 2014 and
2013. Based on actuarially determined estimates, provisions have been made in the consolidated
financial statements, with the current portion included within accrued liabilities and the
noncurrent portion within workers compensation and hospital professional and general
liabilities, for all known claims and incurred but not reported claims as of June 30, 2014 and
2013. Workers compensation liabilities were $26,115,000 and $22,891,000 discounted using a
rate of 3% and 3%, as of June 30, 2014 and 2013, respectively. Estimation differences between
actual payments and amounts recorded in previous years are recognized as expense in the year
such amounts become determinable.
Temporarily and Permanently Restricted Net Assets
Temporarily restricted net assets are those for which use by DCHS has been limited by donors to
a specific time period or purpose. Permanently restricted net assets have been restricted by
donors to be maintained by DCHS in perpetuity.
California Hospital Fee Program
California legislation established a program in 2009 that imposes a Quality Assurance Fee (QA
Fee) on certain general acute-care hospitals in order to make supplemental and grant payments
and increased capitation payments (Supplemental Payments) to hospitals up to the aggregate
upper payment limit for various periods. There have been four such programs (Programs) since
inception.
1408-1306422
22


The Programs are designed to make supplemental inpatient and outpatient Medi-Cal payments to
private hospitals, including additional payments for certain facilities that provide high-acuity
care and trauma services to the Medi-Cal population. This hospital QA Fee program provides a
mechanism for increasing payments to hospitals that serve Medi-Cal patients, with no impact on
the states General Fund. Payments are made directly by the state or Medi-Cal managed care
plans, which will receive increased capitation rates from the state in amounts equal to the
Supplemental Payments. Outside of the legislation, the California Hospital Association has
created a private program, operated by the California Health Foundation and Trust (CHFT),
which was established to alleviate disparities potentially resulting from the implementation of the
Programs.
The Programs require full federal approval (i.e., by the Centers for Medicare and Medicaid
Services (CMS)) in order for them to be fully enacted. If final federal approval was not
ultimately obtained, provisions in the underlying legislation allowed for the QA Fee, previously
assessed, and Supplemental Payments, previously received, to be returned and recouped,
respectively. As such, revenue and expense recognition was not allowed until full CMS approval
was obtained. Full CMS approvals for the first two programs were obtained in December 2010
and December 2011, respectively.
In June 2012, the legislation governing the third program (30-Month Program) with covering
period from July 2011 to December 2013 was amended to allow for the fee-for-service portion to
be administered separately from the managed care portion. The fee-for-service portion of the
30-Month Program was approved in June 2012, while the managed-care portion covering the
period from July 2011 to June 2013 was approved by CMS in June 2013. Final CMS approval on
the managed-care portion for the remaining six months of the 30-Month Program did not occur
prior to June 30, 2014.
DCHS recognized payments to the California Department of Health Care Services for the QA fee
in the amount of $33,411,000 and $97,609,000 and pledge payments to CHFT of approximately
$1,577,000 and $4,938,000 within purchased services and other expenses for the years ended
June 30, 2014 and 2013, respectively. DCHS also recognized Supplemental Payment revenue in
the amount of $49,606,000 and $169,454,000 pertaining to the 30-Month Program within the net
patient service revenues for the years ended June 30, 2014 and 2013, respectively.
In October 2013, the fourth program (36-Month Program) covering the period from January
2014 to December 2016 was signed into law by the Governor of California. Management expects
partial CMS approval of the 36-Month Program by December 2014.
1408-1306422
23


Meaningful Use Incentives
The American Recovery and Reinvestment Act of 2009 established payments under the
Medicare and Medi-Cal programs for certain professionals and hospitals that meaningfully use
certified electronic health record (EHR) technology. The Medicare incentive payments are paid
out to qualifying hospitals over four consecutive years on a transitional schedule. To qualify for
Medi-Cal incentives, hospitals and physicians must annually meet EHR meaningful use
criteria that become more stringent over three stages as determined by CMS. For the years ended
June 30, 2014 and 2013, DCHS has recorded meaningful use incentive payments of $10,104,000
and $6,492,000, respectively. These incentive payments have been recorded as other operating
revenue in the DCHS consolidated financial statements.
Premium Revenue
Certain entities of DCHS have at-risk agreements with various payers to provide medical
services to enrollees. Under these agreements, DCHS receives monthly payments based on the
number of enrollees, regardless of services actually performed by DCHS. DCHS accrues costs
when services are rendered under these contracts, including estimates of IBNR claims and
amounts receivable/payable under risk-sharing arrangements.
The IBNR accrual includes an estimate of the costs of services for which DCHS is responsible,
including out-of-network services.
Other Operating Revenue
Included in other operating revenue are amounts from investments in health-related activities,
rental income, cafeteria, and other nonpatient care revenue.
Contributions
Unconditional promises to give cash and other assets to DCHS are reported at fair value at the
date the promise is received. The gifts are reported as either temporarily or permanently
restricted support if they are received with donor stipulations that limit the use of the donated
assets. 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. Net assets released from restrictions used for operations are also included
in other operating revenue as contribution revenue to the Hospitals.
1408-1306422
24


Interest Expense
Interest expense on debt issued for construction projects, net of income earned on the funds held
pending use, is capitalized from the date of the borrowing until the projects are placed in service.
Interest components include the following (in thousands):
Year Ended June 30
2014
2013
Total interest expense
Less: capitalized interest expense
Net interest expense
$
$
19,930 $
(824)
19,106 $
26,414
(1,078)
25,336
Income Taxes
DCHS has established its status as an organization exempt from income taxes under the Internal
Revenue Code (IRC) Section 501(c)(3) and the laws of California. Certain activities of the
operating entities of DCHS may be subject to income taxes; however, such activities are not
significant to the consolidated financial statements.
Performance Indicator
Management considers the excess (deficit) of revenues over expenses to be DCHSs performance
indicator. Excess (deficit) of revenues over expenses includes all changes in unrestricted net
assets, except net assets released from restrictions used for purchase of property and equipment
and the change in funded status of pension plans and other.
Transactions Between Related Organizations
DCHS and various members of DCHS pay for sisters services provided to it by its sponsoring
congregation at amounts comparable to low-wage employees salaries.
1408-1306422
25


Certain Obligated Group members have a policy whereby assets are periodically transferred as
charitable distributions to subsidiaries of DCHS that are not members of the Obligated Group.
These transfers are accounted for as direct charges to the Obligated Group members unrestricted
net assets. It is anticipated that Obligated Group members will continue to make asset transfers to
the subsidiaries. These transfers are eliminated upon consolidation.
Asset Retirement Obligations (AROs)
AROs are legal obligations associated with the retirement of long-lived assets. These liabilities
are initially recorded at fair value, and the related asset retirement costs are capitalized by
increasing the carrying amount of the related assets by the same amount as the liability. Asset
retirement costs are subsequently depreciated over the useful lives of the related assets.
Subsequent to initial recognition, DCHS records period-to-period changes in the ARO liability
resulting from the passage of time. DCHSs ARO liabilities recorded in the consolidated
financial statements at June 30, 2014 and 2013, were $3,227,000 and $3,043,000, respectively.
Revenue Guarantees
DCHS has agreements with physicians whereby minimum revenues are guaranteed by DCHS for
stipulated dollar amounts over specified periods, as defined in the contracts. DCHS records a
liability for the amount of the guaranteed revenue at the time the contract is entered into and
adjusts the liability as it is expended. DCHS has recorded liabilities of $1,396,000 and
$1,014,000 as of June 30, 2014 and 2013, respectively.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update (ASU) No. 2014-15, Presentation of Financial Statements Going Concern (ASU 201415), which requires the entitys management to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a
going concern within one year after the date that the financial statements are issued (or within
one year after the date that the financial statements are available to be issued when applicable).
The amendments in this update are effective for DCHS beginning July 1, 2015. DCHS is
currently evaluating the impact of the adoption of ASU No. 2014-15 on the consolidated
1408-1306422
26


In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers
(ASU 2014-09). The guidance outlines a comprehensive model for entities to use in accounting
for revenue arising from contracts with customers and supersedes the revenue recognition
requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The core
principle of the guidance is that an entity recognizes revenue to depict the transfer of promised
good or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The adoption of ASU 2014-09 is
effective for DCHS beginning July 1, 2017. DCHS is currently evaluating the impact of the
adoption of ASU 2014-09 on the consolidated financial statements.
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and
Disclosures of Disposals of Components of an Entity (ASU 2014-08), which changes the criteria
for reporting discontinued operation and requires entities to disclose additional information about
disposal transactions that do not meet the discontinued operations criteria. The adoption of ASU
2014-08 is effective for DCHS beginning July 1, 2015. The adoption of ASU No. 2014-08 is not
expected to have a material impact on the consolidated financial statements of DCHS.
In April 2013, the FASB issued ASU No. 2013-06, Not-for-Profit Entities (Topic 958), Services
Received from Personnel of an Affiliate (ASU 2013-06), which requires that a recipient non-forprofit entity recognize all services from personnel of an affiliate that directly benefit the recipient
not-for-profit entity, and for which the affiliate does not charge the recipient not-for-profit entity.
The adoption of ASU 2013-06 is effective for DCHS beginning July 1, 2015. The adoption of
ASU 2013-06 is not expected to have a material impact on the consolidated financial statements
of DCHS.
1408-1306422
27

3. Unsponsored Community Benefit Expense (Unaudited)

The following is a summary of DCHSs community service in terms of services to the poor and
benefits to the broader community for the year ended June 30, 2014. The summary has been
prepared in accordance with the Catholic Health Association of the United States publication, A
Guide for Planning and Reporting Community Benefit (dollars in thousands) (unaudited):
Total
Community Benefit
Expense at Cost
Percentage
of Total
Amount
Expenses
Benefits for the poor:
Traditional charity care
Unpaid costs of public programs
Medi-Cal
Nonbilled services
Other
Total quantifiable benefits for the poor
Benefits for the broader community:
Nonbilled services
Education and research
Other
Total quantifiable benefits for the broader
community
Unpaid costs of Medicare program
and unpaid costs of Medicare program
21,768
1.5%
Direct
Offsetting
Revenue
(Unaudited)
$
Unsponsored
Community Benefit
Expense at Cost
Percentage
of Total
Amount
Expenses
$ 21,768
1.5%
348,813
14,800
11
3,943
389,335
24.7
1.0
0.3
27.5
206,536
4,419
706
211,661
142,277
10,381
11
3,237
177,674
10.1
0.7
0.2
12.5
3,349
467
333
2,064
0.2
0.1
1,684
46
1,665
467
287
2,064
0.1
0.1
6,213
395,548
0.3
27.8
1,730
213,391
4,483
182,157
0.2
12.7
545,292
38.7
390,945
154,347
10.9
604,336
$ 336,504
$ 940,840
66.5%
23.6%
Benefits for the Poor

Benefits for the poor include services provided to persons who cannot afford health care because
of inadequate resources and/or who are uninsured or underinsured.
1408-1306422
28


Benefits for the Broader Community
Benefits for the broader community include services and programs provided to other needy
populations that may not qualify as poor, but that need special services and support. Examples
include the elderly, substance abusers, victims of child abuse, and persons with acquired immune
deficiency syndrome. They also include the cost of health promotion and education, health
clinics and screenings, and medical research, which benefit the broader community.
Traditional Charity Care
Traditional charity care covers services provided to persons who cannot afford to pay and who
meet DCHSs criteria for financial assistance. DCHS utilizes information obtained directly from
patients as well as information from publicly available sources in determining charity care
eligibility. The amounts above reflect the costs of these services (based on DCHSs relationship
of costs to charges) before and after contributions and other revenues received as direct
assistance for the provision of charity care. The amount of traditional charity care at cost was
$21,768,000 and $36,718,000 for the years ended June 30, 2014 and 2013, respectively.
Unpaid Costs of Public Programs Medi-Cal
Unpaid costs of public programs are the costs of treating indigent and Medi-Cal beneficiaries in
excess of government payments. Cost is based on DCHSs relationship of costs to charges.
Nonbilled Services
Nonbilled services include the cost of services for which a patient is not billed or for which a
nominal fee has been assessed. These are services that are not expected to be financially
self-supporting. Examples are free clinic services and meal programs.
Cash and In-Kind Donations
Cash and in-kind donations are made by DCHS to special funds used to benefit the poor and the
community.
1408-1306422
29


Education
Education includes the unpaid cost of training health professionals, such as medical residents,
nursing students, and students in allied health professions.
Research
Research includes the unpaid cost of testing medical equipment and controlled studies of
therapeutic protocols.
Other Benefits for the Broader Community Expenses
Other benefits for the broader community expenses include low- or negative-margin services,
which are services offered because of a need in the community. They do not include services
offered because they create revenues elsewhere.
Total Community Benefit Expense
Total community benefit expense is the total cost of community benefits before direct offsetting
revenue, donations, or other funds used to defray such costs.
Unsponsored Community Benefit Expense
Unsponsored community benefit expense is the total cost incurred after direct offsetting revenue,
if any, from patients, donations, and other sources.
Unpaid Costs of Medicare Program
Unpaid costs of the Medicare program are the costs of treating Medicare beneficiaries in excess
of government payments. Cost is based on DCHSs relationship of costs to charges.
1408-1306422
30

4. Fair Value Measurements

DCHS accounts for certain assets at fair value or on a basis that approximates fair value. A fair
value hierarchy for valuation inputs prioritizes the inputs into three levels based on the extent to
which inputs used in measuring fair value are observable in the market. Each fair value
measurement is reported in one of the three levels and is determined by the lowest-level input
that is significant to the fair value measurement in its entirety. These levels are as follows:
Level 1 Quoted prices are available in active markets for identical assets as of the
measurement date. Financial assets and liabilities in Level 1 include listed equities and
money markets balances.
Level 2 Pricing inputs are based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not active,
and model-based valuation techniques for which all significant assumptions are
observable in the market or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. Financial assets in this category
generally include asset-backed securities, corporate bonds, municipal bonds, and
commingled investment funds.
Level 3 Pricing inputs are generally unobservable for the assets and include situations
where there is little, if any, market activity for the investment. The inputs used in
determination of fair value require managements judgment or estimation of assumptions
that market participants would use in pricing the assets. Therefore, the fair values are
determined using discounted cash flow models and similar techniques. There were no
Level 3 investments at June 30, 2014 and 2013.
1408-1306422
31


The following represents assets measured at fair value on a recurring basis (in thousands):

Cash equivalents
Debt securities issued by foreign corporations
Debt securities issued by the U.S. Treasury and
other U.S. government corporations
Index funds
Convertible equity
Under bond indenture agreements assets limited as to use:
Cash equivalents
1408-1306422
Total
$
921
26,881
27,802
June 30, 2014

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
$
921
26,881
27,802
10,665
2,364
10,665
2,364
8,608
2,243
2,872
15,987
10,458
199
5,341
58,737
10,665
8,608
2,243
2,872
15,987
10,458
199
5,341
48,072
2,000
24,133
26,133
$ 112,672
2,000
2,000
12,665
24,133
24,133
100,007
32


Cash equivalents
Debt securities issued by the U.S. Treasury and other
Index funds
Convertible equity
Under bond indenture agreements assets limited as to use:
Cash equivalents
1408-1306422
Total
$
62,478
112,882
175,360
June 30, 2013

Quoted Prices
in Active
Significant
Markets for
Other
Identical
Observable
Assets
Inputs
(Level 1)
(Level 2)
$
62,478
112,882
175,360
11,174
2,722
11,174
2,722
6,780
3,205
3,178
3,963
18,382
9,248
348
4,491
63,491
11,174
6,780
3,205
3,178
3,963
18,382
9,248
348
4,491
52,317
15,718
25,141
40,859
$ 279,710
15,718
15,718
26,892
25,141
25,141
252,818
33


There were no transfers to or from Levels 1, 2 or 3 during the years presented. The Level 2
financial assets listed in fair value hierarchy tables above use the following valuation techniques
and inputs:
As described in Note 2, DCHS participates in Ascension Healths pooled CHIMCO fund,
which is carried at fair value based on quoted market prices, quoted market prices for similar
instruments, and observable and unobservable inputs. The pooled fund is composed of cash,
equity securities domestic and foreign, U.S. federal and corporate obligations, TBA
mortgage-backed securities, asset-backed securities, and fixed-income securities and is
designated as Level 2.
For marketable securities, such as foreign corporation and U.S. government debt securities,
government and commercial mortgage-backed securities, TBA mortgaged-backed securities,
corporate U.S. debt securities, index funds, and beneficial interest held in trust accounts,
wherein identical quoted market prices are not readily available, the fair value of such
investments is determined based on market participant pricing or other available market data
for comparable instruments and transactions at the measurement date in establishing the
valuation. DCHS, therefore, incorporates industry-standard valuation techniques as inputs to
fair valuation of its investments designated as Level 2.
DCHSs rationale for the assignment of levels is based on types or classes of financial assets
rather than an analysis of each individual asset. Key consideration in the assignment of levels
was given to the determination of a securitys fair valuation measurement if obtained from an
active market, and then further consideration was given for the types of inputs used to
evaluate the fair value price. This approach has been supported by managements analysis of
the methodology, the evaluated pricing models, and inputs used by its pricing vendors. It is
also consistent with industry practice.
Where quoted prices are available in an active market (exchange-traded), the securities are
classified as Level 1. It is a market in which transactions occur with sufficient frequency and
volume to provide pricing information on an ongoing basis. If quoted market prices are not
readily available for a specific financial asset, then value is determined using quoted prices of
assets with similar characteristics and is classified as Level 2. Examples of these categories
are DCHSs investment in high-yield debt securities, collateralized mortgage obligations, and
fixed-income prices provided by a broker-dealer. In cases where there is limited activity and
less transparency associated with inputs to the valuation, DCHS will designate the
investments as Level 3.
1408-1306422
34


Included within the assets above are investments in certain securities that report fair value, using
a calculated NAV or its equivalent. The following table and explanations identify attributes
relating to the nature and risk of such investments (in thousands):
Level 2
Total pooled funds
Level 2
Total pooled funds
June 30, 2014

Redemption
Notice Period
921
26,881
27,802
Daily
Daily
13 days
13 days
5,341
5,341
33,143
Not eligible
Not applicable
June 30, 2013

Redemption
Notice Period
62,478
112,882
175,360
Daily
Daily
13 days
13 days
3,178
4,491
7,669
183,029
Daily
Not eligible
13 days
Not applicable
Fair Value
$
Fair Value
$
(1) This category includes investments in CHIMCO Alpha Fund and is mainly invested in U.S. government, state, municipal, and
agency obligations; corporate- and foreign government-fixed maturities; and U.S. government and corporate asset-backed
securities.
(2) This category includes investments in forward contracts (derivative instruments) related to the purchase and sale of TBA
mortgage-backed securities within a dollar roll. The contracts represent a commitment to purchase and sell the securities at a
fixed price on a specified future date and include net settlement provisions. The primary objective of these funds is to seek
attractive short-term risk-adjusted absolute returns. There is no redemption limitation imposed on these investments;
therefore, the liquidity is not limited to beyond one to three business days.
(3) This category includes investments in equity securities, fixed-income securities, commodities, cash, and short-term
investments. This includes investments in donor-restricted trust funds managed by select brokerage firms. There are no
provisions for redemptions until donor restrictions are released. Distributions from some of these trust funds are received
periodically; however, redemption of the fair value of the trusts (corpus) may remain restricted during the life of these funds
or may be liquidated at a future date.
1408-1306422
35


The investments included above are not expected to be sold at amounts that are different from
their NAV. There were no unfunded commitments at June 30, 2014 and 2013.
Investment Held in Trust Accounts
DCHS is the beneficiary of a split-interest agreement from a donor. The related assets are
controlled and invested by an independent third party. DCHS records the assets for its share
when formal written or other verifiable documentation is received. DCHSs share of the assets is
based on the present value of the estimated future distributions to be received by DCHS over the
term of the agreement. The agreements are carried at fair value based on the underlying assets.
DCHS used 2.2% discount rate to value split-interest agreements at June 30, 2014.
5. Property and Equipment
Property and equipment consists of the following (in thousands):
2014
Land
Land improvements
Buildings and service equipment
Equipment
Construction in progress
Total
Less accumulated depreciation
June 30
29,955 $
20,244
709,161
522,180
14,082
1,295,622
(956,183)
339,439 $
2013
30,446
20,244
698,645
496,444
17,122
1,262,901
(893,371)
369,530
DCHSs depreciation expense was $65,349,000 and $60,284,000 for the years ended June 30,
1408-1306422
36

6. Other Assets
Other current assets consist of the following (in thousands):
2014
Inventories
Prepaid expenses
Provider fee receivable
Other receivable
Pledges receivable
June 30
21,253
5,175
3,881
4,969
6,669
7,771
49,718
2013
18,334
18,483
54,740
5,881
5,641
16,275
119,354
Other long-term assets consist of the following (in thousands):

2014
Notes receivable primarily secured
Ownership interest in health-related activities net
Other
$
$
June 30
1,546 $
4,417
4,889
10,852 $
2013
1,943
4,656
6,684
13,283
7. Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
2014
Wages and benefits
Out-of-network cost and IBNR
Provider fee payable
Other
1408-1306422
June 30
62,592
17,324
2,653
38,063
120,632
2013
64,198
11,680
25,531
35,875
137,284
37

8. Pension and Other Postretirement Benefit Plans

DCHS maintains two different defined benefit retirement plans that cover substantially all
eligible employees of DCHS. Benefits are generally based on age, years of service, and
employee compensation. DCHS also offers postretirement health care benefits to a limited
number of its employees. The postretirement health care benefits are determined based on age
and years of service.
The first retirement plan is a multiemployer defined benefit pension plan called Retirement Plan
for Hospital Employees (RPHE). The entities that participate in the RPHE are Seton Medical
Center, Seton Medical Center Coastside, OConnor Hospital, Saint Louise Regional Hospital,
and Caritas Business Services. Benefits are generally based on years of service and the
employees compensation. Contributions to the plan are based on actuarially determined amounts
sufficient to meet the benefits to be paid to plan participants. DCHS contributed cash of
$14,788,000 and $15,873,000 to the RPHE during the fiscal years ended June 30, 2014 and
2013, respectively.
The second retirement plan is a single-employer defined benefit pension plan (the DCHS
Retirement Plan). DCHS associates at St. Francis Medical Center, St. Vincent Medical Center,
and the system office are eligible to participate in this plan. DCHS contributed $19,333,000 and
$13,018,000 to the DCHS Retirement Plan during the fiscal years ended June 30, 2014 and 2013,
respectively.
The third retirement plan is a retiree health insurance program (the Postretirement Healthcare
Plan). DCHS employees at OConnor Hospital, St. Louise Regional Hospital, Seton Medical
Center, and Seton Medical Center Coastside are eligible to participate in this plan. The
Postretirement Healthcare Plan is an unfunded plan. DCHS contributed $114,000 and $200,000
to the Postretirement Healthcare Plan during the fiscal years ended June 30, 2014 and 2013,
respectively.
Defined Contribution Pension Plans
In addition to the above pension plans, DCHS maintains three different defined contribution
pension plans for its employees. Two of these contribution plans require employer participation
based on a percentage of the employees contributions. A third plan was adopted by DCHSs
board of directors for all its new and existing nonunion employees in September 2010. This plan
was further expanded to cover the nurses union (United Nurses Associations of California or
1408-1306422
38


UNAC) of St. Francis Medical Center, effective January 1, 2012, and to the Service Employees
International Union (SEIU) on January 1, 2013. The third plan is a fully employer-paid defined
contribution pension plan. During the fiscal years ended June 30, 2014 and 2013, the employers
contribution for these three defined contribution plans was $24,935,000 and $21,568,000,
respectively.
Pension Plan Amendments
In April 2012, DCHSs largest union, SEIU, had ratified freezing the defined benefit pension
plan belonging to all its members in DCHSs six hospitals effective January 1, 2013. Upon
freezing the defined benefit pension plan, DCHS had introduced an employer-paid defined
contribution plan (IRC 401(a)) for its SEIU members beginning January 1, 2013.
The funded status of the DCHS Retirement Plan and Postretirement Healthcare Plan benefits is
as follows (in thousands):
Change in benefit obligation:

Benefit obligation
beginning of year
Service cost
Interest cost
Actuarial (gain) loss
Benefits paid
Plan amendments
Benefit obligation end of year
Accumulated benefit obligation
1408-1306422
June 30, 2014

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
$
$
$
458,316 $
1,931
23,425
37,663
(15,812)
505,523 $
493,968 $
4,678 $
240
223
(25)
(114)
5,002 $
5,002 $
June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
474,848 $
3,426
21,608
(25,934)
(15,632)
458,316 $
448,001 $
6,083
331
265
(386)
(200)
(1,415)
4,678
4,678
39

Change in plan assets:

beginning of year
Actual return on plan assets
Employer contribution
Benefits paid
Administrative expenses
end of year
Funded status
June 30, 2014

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
228,920 $
44,231
19,333
(15,812)
(1,614)
114
(114)
213,934 $
19,135
13,021
(15,632)
(1,538)
200
(200)
$
$
275,058 $
(230,465) $
$
(5,002) $
228,920 $
(229,396) $
(4,678)
Amounts that have not yet been recognized as components of net period benefit cost are as
follows (in thousands):
June 30, 2014
DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
Prior service costs
Total amount not recognized
1408-1306422
$
$
157,007
157,007
$
$
(10,211) $
424
(9,787) $
June 30, 2013

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
149,190
149,190
$
$
(11,144)
496
(10,648)
40


The components of net period benefit cost and amounts recognized in the consolidated
statements of operations and changes in net assets apart from expenses are as follows
(in thousands):
Components of net periodic benefit

cost (income):
Service cost
Interest cost
Net prior service cost
amortization
Net loss (gain) amortization
Net periodic benefit cost (income)

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
$
Change in net assets apart from

periodic benefit cost:
$
(Deduct) add:
Amortization of prior service
cost
Amortization of actuarial
(loss) gain
Net prior service credit (plan
amendments)
Total
$
1,931 $
23,425
(16,209)
240 $
223
3,438
12,585
72
(958)
(423) $
11,255
(25) $
(3,438)
7,817 $
(72)
958
861 $

DCHS
Postretirement
Retirement
Healthcare
Plan
Plan
3,426 $
21,608
(16,626)
4,304
12,712
331
265
285
(974)
(93)
(26,876) $
(386)
(4,304)
(31,180) $
(285)
974
(1,415)
(1,112)
The estimated actuarial loss and prior service cost for the DCHS Retirement Plan that will be
amortized into net periodic benefit cost over the next fiscal year is $4,226,000 and $0,
respectively.
1408-1306422
41


Assumptions
The weighted-average assumptions used to determine benefit obligations and net period benefit
costs, are as follows:
Weighted-average assumptions used

to determine benefit obligations:
Discount rate
Weighted-average assumptions used to
determine net periodic benefit costs:
Discount rate
June 30, 2014

June 30, 2013
DCHS
Postretirement
DCHS
Postretirement
Retirement
Healthcare
Retirement
Healthcare
Plan
Plan
Plan
Plan
4.70%
3.50
4.40%
N/A
5.20%
3.50
4.89%
N/A
5.20%
7.25
3.50
4.89%
N/A
N/A
4.62%
7.25
3.50
4.46%
N/A
N/A
Expected Return on Plan Assets

The DCHS Retirement Plans estimated long-term rate of return on pension assets is driven
primarily by historical asset-class returns, an assessment of expected future performance, advice
from external actuarial firms, and the incorporation of specific asset-class risk factors. Asset
allocations are periodically updated using pension plan asset/liabilities studies, and DCHSs
estimated long-term rates of return are consistent with these studies. The DCHS Retirement Plan
portfolio return assumption is 7.25%, at June 30, 2014 and 2013.
Discount Rate
The discount rate assumptions used to determine the postretirement benefit plan obligations and
expenses reflect the prevailing rate available on high-quality, fixed-income debt instruments. The
rate was based on cash flow analysis that matched estimated future benefit payments to the
noncollateralized bond discount yield curve as of June 30, 2014 and 2013.
1408-1306422
42


Other Benefit Assumptions
For the measurement of accumulated postretirement benefit obligations at June 30, 2014, the
Postretirement Healthcare Plan assumed health care cost trend rates start at 9.25% in 2014 and
decrease by 0.25-0.75 % annually, reaching an ultimate rate of 5.50% in fiscal year 2023.
Plan Assets and Investment Strategy
The following information represents DCHSs pension plan assets measured at fair value and
indicate the fair value hierarchy and valuation techniques utilized to determine such fair value
(in thousands):
Total Balance
Cash equivalents
Fixed-income funds
Domestic stocks
Foreign stock funds
Total plan assets
3,770 $
78,701
96,353
21,839
19,330
55,065
275,058 $
Total Balance
Cash equivalents
Fixed-income funds
Domestic stocks
Foreign stock funds
Total plan assets
1408-1306422
June 30, 2014

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
3,770 $
21,839
19,330
44,939 $
June 30, 2013

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
1,460 $
63,856
80,485
20,290
16,666
46,163
228,920 $
1,460 $
20,290
16,666
38,416 $
Significant
Other
Observable
Inputs
(Level 2)
78,701
96,353
55,065
230,119
Significant
Other
Observable
Inputs
(Level 2)
63,856
80,485
46,163
190,504
43


As of June 30, 2014, $3,770,000 of the plans cash balance was held in a separate non-interestbearing cash account for the purpose of claims disbursement by the plans administrator.
DCHSs investment strategy for the assets of the DCHS Retirement Plan is designed to preserve
principal while earning returns relative to the overall market consistent with a prudent level of
risk. The strategy balances the liquidity needs of the DCHS Retirement Plan with the long-term
return goals necessary to satisfy future obligations. The target asset allocation is diversified
across traditional asset classes. Diversification is also achieved through participation in U.S. and
non-U.S. markets, investment manager style, philosophy, and capitalization. The complementary
investment styles and approaches used by investment managers are aimed at reducing volatility
while capturing the equity premium from the capital markets over the long-term. Risk tolerance
is established through consideration of plan liabilities, plan funded status, and DCHSs
consolidated financial condition. Consistent with DCHSs fiduciary responsibilities, the fixedincome allocation generally provides for security of principal to meet near-term expenses and
obligations. Periodic reviews of the market values and corresponding asset allocation
percentages are performed to determine whether a rebalancing of the portfolio is necessary.
Cash Contributions and Benefit Payments
DCHS expects to contribute $14,923,000 to the DCHS Retirement Plan and $216,000 to the
Postretirement Healthcare Plan in 2015.
1408-1306422
44


The benefit payments, which reflect expected future service, as appropriate, expected to be paid
in each of the next five years, and in aggregate for the next five years are as follows
(in thousands):
DCHS
Postretirement
Retirement
Healthcare
Plan Benefits
Benefits
2015
2016
2017
2018
2019
Next five years
17,200
19,000
20,700
22,500
24,600
147,300
200
300
300
300
400
2,200
Multiemployer Plan
Certain affiliated entities in Northern California participate in multiemployer defined benefit
retirement plans as described below (in thousands):
Plan
Pension Plan
Employer
Identification
Number/Plan
Number
Retirement Plan
for Hospital
Employees
94-2995676/001
Pension Protection Act Zone Status

June 30
2014
2013
Green
Pension Protection Act Zone Status (from worst to best):

Critical Status
Seriously Endangered
Endangered
None of the above
1408-1306422
Funding
Improvement/
Rehabilitation
Plan Status
June 30, 2014
Green
No
Red
Orange
Yellow
Green
45

Plan
Retirement Plan
for Hospital
Employees
Pension Plan
Employer
Identification
Number/Plan
Number
Contributions
2015
(expected)
2014
2013
94-2995676/001 $ 14,309 $
14,788 $
15,873
Surcharge
Imposed
(during 2013)
Collective
Bargaining
Agreement
Expiration
Date
No
April 30,
2015
Since March 1, 2011, participant benefits were frozen for the non-contractual employees of the
two participating affiliates in the Retirement Plan for Hospital Employees. Beginning January 1,
2013 participant benefits were frozen for all Service Employees International Union (SEIU)
employees. Certain affiliates will continue to make periodic contributions as needed for eligible
participants.
The contributions for the multiemployer plan were approximately 43% of the total contributions
to the plans for June 30, 2014 and 2013. There are no minimum contributions required for future
periods by the collective-bargaining agreements, statutory obligations, or other contractual
obligations for both plans.
The risks of participating in multiemployer plans are different from single-employer plans in the
following aspects: (i) assets contributed to the multiemployer plan by one employer may be used
to provide benefits to employees of other participating employers; (ii) if a participating employer
stops contributing to the plan, the unfunded obligations of the plan may be borne by the
remaining participating employers; and (iii) if the affiliates choose to stop participating in the
multiemployer plan, the affiliates may be required to pay the plan an amount based on the
underfunded status of the plan, referred to as a withdrawal liability.
1408-1306422
46

9. Long-Term Debt
Long-term debt consists of the following (in thousands):

$
Revenue $106 million Bonds Series 2005F, G, and H
(St. Francis Medical Center), payable in varying annual
installments through 2026, fixed interest rates ranging
from 5.00% to 5.25%
Notes payable to the Daughters of Charity Foundation,
two, $10 million face value, payable in monthly
installments of approximately $57,000 through 2032 at
0% interest
Notes payable for Health Center One Mortgage,
$6.5 million face value, payable in monthly installments
with a lump-sum payment in May 2018, fixed interest
rate of 5.85%
Notes payable to San Jose Medical Group, payable
through 2014 at 3.25% interest
Other
Less current portion
Plus bond premium
1408-1306422
2014
June 30
256,170 $
2013
259,124
28,305
30,860
143,655
12,578
5,674
5,833
1,135
291,284
2,600
500
455,150
6,607
284,677
4,750
289,427 $
22,915
432,235
5,109
437,344
47


Scheduled long-term principal debt payments as of June 30, 2014, are as follows (in thousands):
2015
2016
2017
2018
2019
Thereafter
6,607
6,760
6,594
11,879
7,090
252,354
$ 291,284
Obligated Group
DCHS and the local health ministries identified in Note 1 are the members of the Obligated
Group established pursuant to a Master Trust Indenture dated December 1, 2001 (the Master
Indenture), with U.S. Bank, National Association, as master trustee (the Master Trustee). DCHS
and such local health ministries collectively are referred to as the Obligated Group or as
Members, and each individually is sometimes referred to herein as a Member. The Obligated
Group is jointly and severally liable for the debt outstanding under the Master Indenture.
The Series 2005 Bonds (the Revenue Bonds) are a limited obligation of California Statewide
Communities Development Authority and are payable solely from payments made by the
Obligated Group. Payment of principal and interest on the Revenue Bonds is secured by the
property and equipment of each Member of the Obligated Group. Each of the Obligated Group
Members has executed one or more deeds of trust pursuant to which the respective Obligated
Group Member has granted to the trustee hereunder, as trustee for the benefit of the Master
Trustee, a first lien on, and security interest in, the Hospitals and other parcels of property owned
by such Obligated Group Members, subject to permitted liens, as security for the performance of
the Obligated Group Members obligations under the Master Indenture. Additionally, each of the
Obligated Group Members has created a gross revenue fund with its depository bank to further
secure its gross revenues for the benefit of the Master Trustee.
1408-1306422
48


The Obligated Groups financing agreements contain restrictive covenants, including
maintenance of a debt ratio, limitations on the amount of any additional borrowings, and
limitations on the disposal or transfer of assets to nonobligated group members. Additionally, the
financing agreements require that funds are established with, and controlled by, a trustee during
the period the bonds remain outstanding. The Obligated Group has complied with such financial
covenants and restrictions at June 30, 2014.
Loan Forgiveness and Contributions To Pay Off Debts
On September 12, 2013, The Daughters of Charity Foundation (DOCF), an organization separate
and independent from DCHS, unconditionally forgave the line of credit that was owed by DCHS
to DOCF, amounting to $12,408,000 as of that date. This balance was part of DCHS notes
payable to DOCF payable in monthly installments through 2032.
In October 2013, DOCF made a restricted donation of $130,000,000 for the benefit of DCHS by
depositing sufficient funds with the bond trustee to redeem the $143,655,000 principal amount of
the California Statewide Development Authority Revenue Bonds Series 2008A Bonds. The
Series 2008A Bonds were redeemed at par on October 25, 2013. The Series 2008A Bonds
included a debt service reserve fund of $13,655,000, which was released as part of the
redemption.
DCHS recognized the contributions made by DOCF aggregating $130,000,000 as contribution
revenue on the consolidated statement of operations and changes in net assets for the year ended
June 30, 2014.
Fair Values
The fair value of long-term debt is estimated based on the quoted market prices for the same or
similar issues or on the current rates offered for debt of the same remaining maturities. The
estimated fair values of the DCHSs debt instruments as of June 30, 2014 and 2013, are
$277,294,000 and $459,305,000, respectively, and are valued using Level 2 inputs. The reported
fair value of DCHSs debt instrument excludes the full value of an irrevocable principal prepayment of $5,510,000 and $9,860,000 made as of June 30, 2014 and 2013, respectively. The
fair value amounts do not represent the amount that would be required to expend to retire the
indebtedness.
1408-1306422
49

10. Temporarily and Permanently Restricted Net Assets

Temporarily and permanently restricted net assets are available for the following purposes
(in thousands):
2014
Equipment and expansion
Research and education
Charity and other
Total temporarily restricted net assets
Total restricted net assets
June 30
2013
9,322 $
3,033
15,709
28,064
8,086
2,565
23,337
33,988
9,154
37,218 $
9,280
43,268
Equipment and expansion relate to assets held by DCHS, which are restricted by donors or
grantors to be used specifically for equipment, capital projects, or other capital needs.
Research and education relate to assets held by DCHS, which are restricted by donors or grantors
to be used in specific research or education programs.
Charity and other relate mainly to assets held by DCHS, which are restricted by donors or
grantors to be used in specific health care programs for charity care and other medical and
patient services.
Permanently restricted net assets of $9,154,0000 and $9,280,000 at June 30, 2014 and 2013,
respectively, are restricted to investments to be held in perpetuity, with the income expendable to
support DCHSs mission.
Endowments
DCHS and five of its consolidated charitable foundations follow the Uniform Prudent
Management of Institutional Funds Act (UPMIFA). UPMIFA eliminates the concept of historic
dollar value and allows an institution to spend or accumulate as the board determines is prudent
for the uses, benefits, purposes, and duration of the endowment fund unless the gift instrument
states a particular spending rate or formula. Californias version of UPMIFA also includes a
rebuttable provision that spending greater than 7% of the average fair market value (calculated at
least quarterly over a minimal period of three years) is presumed to be imprudent.
1408-1306422
50


In accordance with UPMIFA, DCHS considers the following factors when appropriating or
accumulating an endowment fund: (i) general economic conditions, (ii) effects of inflation and
deflation, (iii) the purposes of the institution and the endowment fund, (iv) expected total return
from income and appreciation of investments, (v) DCHSs other resources, (vi) the duration and
preservation of the endowment fund, and (vii) DCHSs investment policies.
From time to time, the fair value of assets associated with individual endowment funds may fall
below the level that the donor or UPMIFA requires DCHS to retain as a fund of perpetual
duration. Deficiencies of this nature that are reported in unrestricted net assets were not material
as of June 30, 2014 and 2013. These deficiencies resulted from unfavorable investment market
fluctuations.
DCHS has adopted investment and spending policies for endowment assets that attempt to
provide a predictable stream of funding to programs supported by its endowment while seeking
to maintain the purchasing power of the endowment assets. Under these policies, as approved by
the boards of trustees of the charitable foundations, the endowment assets are invested in a
manner that is intended to produce results that exceed the price and yield results while assuming
a moderate level of investment risk.
To satisfy its long-term rate-of-return objectives, DCHS relies on a balanced investment strategy
in which investment returns are achieved through both capital appreciation (realized and
unrealized) and current yield (interest and dividends). DCHS targets a diversified asset allocation
that places a great emphasis on equity-based investments to achieve its long-term return
objectives within prudent risk constraints.
The endowment net asset composition by type of fund consists of the following (in thousands):
Unrestricted
Total funds
1408-1306422
$
$
June 30, 2014

Restricted
Restricted
1,259 $
1,259 $
1,013 $
1,013 $
9,154 $
9,154 $
Total
11,426
11,426
51

Unrestricted
Total funds
$
$
June 30, 2013

Restricted
Restricted
496 $
496 $
781 $
781 $
9,280 $
9,280 $
Total
10,557
10,557
The changes in endowment net assets are as follows (in thousands):

Unrestricted
unrealized
Contributions (other)
unrealized
Other
1408-1306422
Temporarily
Restricted
Permanently
Restricted
Total
254 $
364 $
8,864 $
242
496
417
781
138
278
9,280
797
278
10,557
354
(480)
9,154 $
1,349
(480)
11,426
763
1,259 $
232
1,013 $
9,482
52

11. Commitments, and Contingent Liabilities

Standby Letter of Credit
Marillac, a subsidiary of DCHS, pledged $25,850,000 and $23,350,0000 of its assets as of
June 30, 2014 and 2013, respectively, to support a standby letter of credit in favor of Old
Republic Insurance Company (ORIC), one of the parents insurers.
Litigation
Certain entities of DCHS are defendants in various actions arising from their health care service
activities. It is the opinion of management, after consulting with legal counsel, that such actions
will not have a material adverse effect on DCHSs consolidated financial position or results of
operations as of June 30, 2014. Therefore, based on the information provided by its legal
counsel, DCHS has accrued $1,515,000 and $1,452,000 as of June 30, 2014 and 2013,
respectively, which were related to certain of these actions. DCHS evaluates recoveries from
insurance coverage separately from its liability, and when appropriate, an asset is recorded
separately from the associated liability.
As part of its ongoing compliance program, DCHS routinely reviews arrangements between
physicians and its hospitals. In September and October 2013, DCHS made a voluntary
self-disclosure to the federal government (in accordance with federal self-disclosure guidelines)
related to certain financial arrangements between physicians and one of its hospitals that might
constitute potential violations of federal regulatory standards. DCHSs voluntary disclosure
could result in payments to the government and/or the imposition of additional compliance
requirements. At this time, management cannot accurately estimate the amounts of any payments
or settlements that might result, or if additional related issues will arise. There can be no
guarantee that any resulting payments or settlements will not have a material adverse impact on
DCHSs consolidated financial position or results of operations.
Laws and Regulations
The health care industry is subject to numerous laws and regulations of federal, state, and local
governments. Compliance with such laws and regulations can be subject to future government
review and interpretation, as well as regulatory actions unknown or unasserted at this time. These
laws and regulations include, but are not necessarily limited to, matters, such as licensure,
accreditation, government health care program participation requirements, reimbursement laws
and regulations, anti-referral laws, and false claims prohibitions. In recent years, government
1408-1306422
53


activity has increased with respect to investigations and allegations concerning possible
violations of reimbursement, false claims, and anti-referral statutes and regulations by health care
providers. Certain entities of DCHS are subject to such laws and regulations and to governmental
investigations, whistle-blower lawsuits, and other legal proceedings concerning such laws and
regulations. Violations of these laws and regulations could result in expulsion from government
health care programs, as well as imposition of significant fines and penalties and significant
repayments for patient services previously reimbursed.
DCHS had approximately 7,600 employees as of June 30, 2014, of whom just over 6,100 are
full-time employees. Approximately 73% of these 7,600 employees are employed by DCHS
entities and are represented by collective bargaining units. Majority of the employees are
represented by collective bargaining agreements with Service Employees International Union
(SEIU) and California Nurses Association (CNA). Agreement with SEIU, representing 38% of
these employees, will expire on April 30, 2015, and agreement with CNA, representing 22% of
these employees, expired in March 2013, but extended until February 28, 2015. These contracts
are currently in the process of being negotiated. Employee strikes or other adverse labor actions
may have a material adverse impact on DCHSs consolidated financial position or results of
operations.
Lease Commitments
Future minimum lease payments under DCHSs significant noncancelable operating leases (with
initial or remaining lease terms in excess of one year) as of June 30, 2014, are as follows
(in thousands):
Operating
Leases
2015
2016
2017
2018
2019
Thereafter
13,486
11,472
7,344
4,370
2,608
8,029
47,309
Rent expense was $22,042,000 and $20,708,000 for the years ended June 30, 2014 and 2013.
1408-1306422
54


Seismic Standards
DCHS is assessing its earthquake retrofit requirements for health care facilities under a state of
California law (SB90) that can allow a delay of up to seven years from the January 1, 2013,
deadline for Structural Performance Category 1 (SPC-1) retrofits. This affects seven buildings at
three of DCHSs hospitals. Applications for the extensions have been submitted and all have
been granted an interim administrative delay until January 1, 2015, to allow the Office of
Statewide Health and Planning Development (OSHPD) evaluation of the applications. To date
one facility has been granted an extension to January 1, 2019. The remaining are actively under
review by OSHPD.
12. Subsequent Events
DCHS has evaluated subsequent events and disclosed all material events through November 24,
2014, which is the date these financial statements of DCHS were issued.
Short-Term Debt
On July 30, 2014, DCHS borrowed $110,000,000 from the California Statewide Communication
Development Authority (CSCDA) in two series of bonds: the $100,000,000 California Statewide
Communities Development Authority Revenue Bonds (Daughters of Charity Health System)
Series 2014A (the 2014 Series A Bonds) and the $10,000,000 California Statewide
Communities Development Authority Revenue Bonds (Daughters of Charity Health System)
Series 2014 B (the 2014 Series B Bonds). On August 28, 2014, DCHS borrowed an additional
$15,000,000 from the CSCDA pursuant to the 2014 Series C Bond issue (collectively the Series
2014 Bonds). The Series 2014 Bonds are supported by Obligations issued pursuant to the
DCHS Master Trust Indenture dated as of December 1, 2001.
The Series 2014 Bonds are secured by: (1) a first priority lien on the accounts receivable of
St. Francis Medical Center, St. Vincent Medical Center, OConnor Hospital, Saint Louise
Regional Hospital, Seton Medical Center and Seton Coastside as a division of Seton Medical
Center; and (2) first priority Deeds of Trust and related subordination agreements with the master
trustee on certain property of St. Francis Medical Center and Saint Louise Regional Hospital
(collectively the 2014 Priority Assets). The Master Trustee has subordinated its interest in the
2014 Priority Assets to the Series 2014 Bond trustee. The Series 2014 Bonds are also secured by
a parity lien under the master indenture.
1408-1306422
55

12. Subsequent Events (continued)

The Series 2014 Bonds have a maturity date of July 10, 2015. Interest accrues at the rate of 6%
and is paid on a monthly basis. The total proceeds of the Series 2014 bonds have been deposited
with the trustee, with funds made available to DCHS subject to the satisfaction of certain
conditions. As of November 3, 2014, DCHS has drawn down $20,572,000 of the Series 2014
Bonds.
Transfer Announcement
The DCHS Board of Directors began soliciting buyers in February 2014, with the goal of
protecting the stakeholders interests and maintaining the essential services that the hospitals
provide to their communities. On October 10, 2014, after a thorough and rigorous review
process, DCHS executed an agreement to replace the sole corporate member of its five hospitals,
medical foundation, and to transfer control of its other affiliates. The sale of DCHS Hospitals is
subject to regulatory approval, including review and approval by the California Attorney General
and review and approval of the Vatican.
1408-1306422
56
1408-1306422
Ernst & Young LLP

Sacramento Office
Suite 300
Roseville, CA 95661
Tel: +1 916 218 1900

Fax: +1 916 218 1999
ey.com
Report of Independent Auditors on

Supplementary Information
We have audited the consolidated financial statements of Daughters of Charity Health System as
of and for the year ended June 30, 2014, and have issued our report thereon dated November 24,
2014, which contained an unmodified opinion on those consolidated financial statements. Our
audit was performed for the purpose of forming an opinion on the consolidated financial
statements as a whole. The consolidating financial statement schedules for Daughters of Charity
Health System are presented for the purposes of additional analysis and are not a required part of
the consolidated financial statements. Such information is the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to
prepare the consolidated financial statements. The information has been subjected to the auditing
procedures applied in the audit of the consolidated financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the consolidated financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States. In our opinion, the information is fairly stated
in all material respects in relation to the consolidated financial statements as a whole.
November 24, 2014
1408-1306422
57

Consolidating Balance Sheets
As of June 30, 2014
(In Thousands)
Assets
Current assets:
Subtotal
OConnor
Hospital
$

Other investments
Total
58
1,592
1,592
Saint Louise
Regional
Hospital
$
2,758
2,758
St. Francis
Medical
Center
Lynwood
$
38,936
5
38,941
St. Vincent
Medical
Center
$
2,822
2,822
Seton
Medical
Center
Coastside
Seton
Medical
Center
$
7,347
2
7,349
65
65
DCHS
System
Office
$
32,560
32,560
31,789
1,848
8,420
6,747
50,396
11,891
357
5,694
1,632
22,332
55,094
13,405
143,348
11,185
261,973
23,441
4,632
13,266
8,343
52,504
31,260
810
16,600
4,460
60,479
2,700
156
136
3,057
56
3,993
36,609
200
200
278
278
3,446
3,446
6,190
1,874
8,064
323
323
926
26,133
27,059
55,019
113
105,728
24,090
459
47,159
125,948
236
391,603
79,647
1,105
141,320
44,886
37
105,725
2,002
2
5,061
145
5,696
69,509
1408-1306422

As of June 30, 2014
(In Thousands)
Assets
Current assets:
Subtotal
Eliminations
Obligated
Group
Subtotal

Other investments
Total
59
86,080
7
86,087
Marillac
Insurance
Company
$
6,777
6,777
Caritas
Business
Services
$
2,186
1
2,187
DCHS
Medical
Foundation
All Other
Entities
Eliminations
1,260
1,260
4,052
913
4,965
(159,824)
(159,824)
156,175
21,052
27,716
36,496
327,526
5,603
12,380
1,350
150
3,687
6,508
506
3,732
12,006
886
7,584
13,435
11,363
1,874
26,133
39,370
42,654
42,654
4,113
4,113
15,518
10,096
25,614
331,737
7,648
(159,824) $ 706,281
55,034
418
120
4,225
590
6,942
634
24,285
342
2,519
41,910
DCHS
Total
$
(29,572)
(3,847)
(33,419)
(69)
(33,488) $
100,355
921
101,276
163,569
21,052
49,718
335,615
26,881
58,737
26,133
111,751
590
339,439
10,852
798,247
1408-1306422

As of June 30, 2014
(In Thousands)
Liabilities
Accounts payable
Accrued liabilities
OConnor
Hospital
$
11,139
771
1,067
25,620
23,101
61,698
Saint Louise
Regional
Hospital
$
Other liabilities:
Hospital general liability and workers compensation
Pension obligations
56,018
56,833
222
113,073
Net assets:
Unrestricted
Total net assets
Total
(69,043)
(69,043)
105,728 $
60
2,538
365
425
6,860
34,253
44,441
St. Francis
Medical
Center
Lynwood
$
30,596
6,723
3
37,322
(34,604)
(34,604)
47,159 $
8,799
3,414
1,355
36,865
400
50,833
St. Vincent
Medical
Center
$
9,926
675
7,172
18,345
71,972
108,090
79,114
84,866
157
164,137
56,545
67,444
2,040
126,029
176,548
85
176,633
391,603
(96,918)
1,160
2,959
(92,799)
141,320 $
Seton
Medical
Center
Coastside
Seton
Medical
Center
9,131
739
390
19,028
17,285
46,573
61,912
1,910
1,077
64,899
(5,747)
(5,747)
105,725 $
141
597
1,525
14,669
16,932
DCHS
System
Office
$
9,712
1,986
11,698
166
166
4,750
3,921
17,525
33
26,229
(12,037)
(12,037)
5,061 $
31,582
31,582
69,509
1408-1306422

As of June 30, 2014
(In Thousands)
Liabilities
Accounts payable
Accrued liabilities
Eliminations
$
Other liabilities:
Hospital general liability and workers compensat
Pension obligations
Net assets:
Unrestricted
Total net assets
Total
61
$ 51,386
5,964
11,006
110,229
(159,824)
1,856
(159,824)
180,441
Obligated
Group
Subtotal
Marillac
Insurance
Company
$
288,935
3,921
235,467
3,532
531,855
(10,219)
1,245
2,959
(6,015)
(159,824) $ 706,281 $
1,172
1,172
Caritas
Business
Services
$
60
1,984
57
2,101
DCHS
Medical
Foundation
All Other
Entities
Eliminations
3,523
643
7,170
11,336
37,159
37,159
492
204
696
16,703
16,703
55,034
2,124
2,124
4,225
12,253
12,253
24,285
107
27,659
27,766
330
330
(19,200)
26,819
6,195
13,814
$ 41,910 $
(30)
(29,572)
(29,602)
(3,871)
(15)
(3,886)
(33,488) $
DCHS
Total
54,969
6,607
11,006
120,632
193,214
289,427
37,209
235,467
4,051
566,154
1,661
28,064
9,154
38,879
798,247
1408-1306422

Consolidating Statements of Operations
(In Thousands)

Premium revenue
Contributions
OConnor
Hospital
$
249,210
21,551
1,459
272,220
Saint Louise
Regional
Hospital
$
Expenses:
Supplies
Depreciation
Interest
Total expenses
189,846
43,301
65,810
12,762
3,501
315,220

(43,000)
271
(42,729) $
62
80,236
2,518
977
83,731
St. Francis
Medical
Center
Lynwood
$
57,513
7,763
21,049
5,904
1,985
94,214
(10,483)
35
(10,448) $
298,688
40,211
3,726
5,618
348,243
St. Vincent
Medical
Center
$
173,014
10,176
15,499
1,889
200,578
Seton
Medical
Center
Coastside
Seton
Medical
Center
$
223,706
18,477
569
242,752
196,608
32,650
116,360
19,739
5,158
370,515
102,314
42,855
71,597
12,442
3,378
232,586
153,681
35,819
58,138
10,392
3,724
261,754
(22,272)
6,676
(15,596) $
(32,008)
674
(31,334) $
(19,002)
52
(18,950) $
18,894
426
4,000
23,320
DCHS
System
Office
$
16,238
1,547
3,048
356
(11)
21,178
2,142
2,142
72,794
142,408
215,202
18,716
(1,591)
53,456
907
1,324
72,812
142,390
9,703
152,093
1408-1306422

Consolidating Statements of Operations (continued)
(In Thousands)

Premium revenue
Contributions
Eliminations
$
Expenses:
Supplies
Depreciation
Interest
Goodwill impairment loss
Total expenses
63
Obligated
Group
Subtotal
$ 1,043,748
50,387
(72,702)
62,289
156,920
(72,702)
1,313,344
(72,702)
(72,702)
Marillac
Insurance
Company
$
11,879
11,879
734,916
162,344
316,756
62,502
19,059
1,295,577
10,515
10,515
17,767
17,411
35,178
1,364
2,056
3,420
Caritas
Business
Services
$
17,023
17,023
DCHS
Medical
Foundation
$
13,834
117
2,930
148
17,029
(6)
6
$
45,073
32,911
2,088
80,072
All Other
Entities
$
64,764
8,808
34,155
3,026
47
13,376
124,176
(44,104)
16
(44,088) $
4,615
18
774
5,407
Eliminations
$
5,395
1,383
1,990
26
8,794
(3,387)
1,793
(1,594) $
DCHS
Total
$ 1,093,436
83,298
(33,640)
59,657
157,694
(33,640)
1,394,085
(13,834)
(117)
(19,529)
(148)
(33,628)
(12)
(5,006)
(5,018) $
805,075
172,535
346,817
65,554
19,106
13,376
1,422,463
(28,378)
16,276
(12,102)
1408-1306422
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Schedule 4.6
Medicare or Medi-Cal Notices & Investigations
Saint Louise Regional Hospital
1. Noridian Healthcare Solutions Letter re: CMS-1599-F Phase III Notification Letter dated
May 5, 2015
[WITHHELD]
2. Noridian Healthcare Solutions Letter re: CMS-1599-F Probe and Educate Findings Letter
dated March 26, 2014
3. Noridian Healthcare Solutions Letter re: CMS-1599-F Phase II Probe Findings Letter
dated September 2, 2014.
OConnor Hospital
1. U.S. Department of Health and Human Services, Office of Inspector General Letter re:
review of Medicare payments to providers dated April 16, 2015
2. Noridian Healthcare Solutions Letter re: CMS-1599-F Probe and Educate Findings Letter
dated March 26, 2014
3. Noridian Healthcare Solutions Letter re: CMS-1599-F Phase II Probe Findings Letter
dated September 9, 2014
Seton Medical Center
1. California Department of Public Health letter to Seton Medical Center dated July 1, 2015
regarding termination of participation in Medi-Cal program. On June 30, 2015, Seton
Medical Center (SMC) received a letter from the Department of Health & Human
Services, Centers for Medicare & Medicaid Services (CMS) stating that a May 18,
2015, survey by the California Department of Public Health (CDPH) uncovered
noncompliance with the Emergency Medical Treatment and Labor Act (EMTALA).
The letter provided notice of a projected September 27, 2015 date for termination of
SMCs participation as a general acute care hospital in the Title XVIII Medicare program
if the cited EMTALA deficiencies are not corrected. Additionally, SMC received a letter
from CDPH dated July 1, 2015, notifying SMC that due to CMSs proposed termination
of SMC from the Medicare program, SMCs participation in the Medi-Cal program is
subject to termination on September 27, 2015. The letter stated that if CMS revises its
determination, SMC will continue to be eligible for Medi-Cal participation. On July 10,
2015, SMC submitted a Plan of Correction to CMS San Francisco Regional Office
pertaining to the EMTALA deficiencies identified by the May 18, 2015 CDPH survey to
CMS on July 10, 2015. A copy of the Plan of Correction was also faxed to the local
CDPH office on July 10, 2015.
Schedule 4.7(b)
Government Actions to Terminate or Decertify
1. Resolution of Seton Medical Centers self disclosure of potential noncompliance of 44 physician office leases with the lease exception of the Stark
Law (Self-Disclosure) of September 16, 2013 for resolution through the
Self-Referral Disclosure Protocol established by the Centers for Medicare &
Medicaid Services (CMS) to the extent a resolution could involve
termination or decertification of participation in a federal health care program.
[WITHHELD]
2. On June 30, 2015, Seton Medical Center (SMC) received a letter from the
Department of Health & Human Services, Centers for Medicare & Medicaid
Services (CMS) stating that a May 18, 2015, survey by the California
Department of Public Health (CDPH) uncovered noncompliance with the
Emergency Medical Treatment and Labor Act (EMTALA). The letter
provided notice of a projected September 27, 2015 date for termination of
SMCs participation as a general acute care hospital in the Title XVIII
Medicare program if the cited EMTALA deficiencies are not corrected.
Additionally, SMC received a letter from CDPH dated July 1, 2015, notifying
SMC that due to CMSs proposed termination of SMC from the Medicare
program, SMCs participation in the Medi-Cal program is subject to
termination on September 27, 2015. The letter stated that if CMS revises its
determination, SMC will continue to be eligible for Medi-Cal participation.
On July 10, 2015, SMC submitted a Plan of Correction to CMS San Francisco
Regional Office pertaining to the EMTALA deficiencies identified by the May
18, 2015 CDPH survey. A copy of the Plan of Correction was faxed to the
local CDPH office on July 10, 2015.
Schedule 4.7(c)
Excluded Employees and Exclusion from Federal Health Care Programs
Excluded Employees
Employee Name
LHM
[WITHHELD]
Cantu RN, Jaime
OCH
Resolution
Employee voluntarily resigned in lieu of termination
on 07/06/2015. All reimbursement received from
government-sponsored health programs for patients
treated by this employee is in the process of being
returned. Also, the applicable proportionate amount of
the employee's salary and benefit expense will be
eliminated from the LHM's Medicare and Medi-Cal
cost reports.
Exclusion from Federal Health Care Programs

Schedule 4.7(b) is hereby incorporated by reference.
Schedule 4.7(d)
Corporate Integrity Agreements
Such officers, directors or managing employees of DCHS or any DCHS Affiliate to the extent
such persons were subject to or bound by the Corporate Integrity Agreement dated January 13,
2003 between the Office of Inspector General of the Department of Health and Human Services,
Daughters of Charity Health System and Robert F. Kennedy Medical Center.
Schedule 4.9(b)
Violations of Environmental Laws
On July 11, 2014, DCHS received a letter from the United States Environmental
Protection Agency (the EPA) inviting DCHS to enter into a de minimis settlement
related to the cleanup of the Casmalia Resources Hazardous Waste Management Facility
in Santa Barbara County, California. On August 14, 2014, DCHS elected Settlement
Option A and paid $1976 to settle any potential liability with the EPA.
[WITHHELD]
Schedule 4.10(a)
Owned Real Property
St. Francis Medical Center
Description
Hospital Patient Tower
Health Services Pavilion
Progressive Care Unit
Family Life Center (Freestanding)
Power Plant
Parking Structure #1
Huntington Park Medical Office
Building
Maywood Medical Office Building
Parking Lot
Ministry Services Building
Twenty-Nine Palms Property
Five Unit Apartment
Address
APN
3630 E. Imperial Highway

Lynwood, CA 90262
Lynwood, CA 90262
Lynwood, CA 90262
Lynwood, CA 90262
Lynwood, CA 90262
Lynwood, CA 90262
2700 E. Slauson Ave
Huntington Park, CA 90255
L.A. County: 6173-021-008
5953 S. Atlantic Blvd 5

Maywood, CA 90270
3633 Martin Luther King Jr. Blvd
Lynwood, CA 90262
3663 Martin Luther King Jr. Blvd
Lynwood, CA 90262
Highway 81
San Bernardino, CA
3570 Brenton Avenue
Lynwood, CA 90262
L.A. County: 6313-013-028
[Included in Hospital APN]

L.A. County: 6320-006-069
L.A. County: 6173-015-047

L.A. County: 6173-019-022
San Bernardino County:
0625-251-13-0000
L.A. County: 6191-016-008
St. Vincent Medical Center

Description
Hospital
Central Plant
Stauffer Wing Conference Rooms
(Included as part of Hospital
above)
Doheny Building (Included as part
of Hospital above)
Cath Village (Included as part of
Hospital above)
Annex / Boiler (Included as part of
Central Plant and Hospital
above)
5
Address
2131 W 3rd Street
Los Angeles, CA 90057
2131 W 3rd Street
2131 W 3rd Street
APN
L.A. County 5154-018-018
2131 W 3rd Street

2131 W 3rd Street
2131 W 3rd Street
Also known as 5931 and 5957 S. Atlantic Blvd (including surface parking).


Description
Parking Structure
Mark Taper a/k/a MTTC Building
(Connected to Hospital via Sky
Bridge)
Seton Hall Convent / Guest Lodge
[Note, multiple addresses listed]
St. Vincent Professional Office
Building (POB)
St. Vincent Professional Office
Building (POB) Parking Structure
Ocean View Pavilion
Record Storage
Vacant Land
Eight Unit Apartment Building
Four Units
Four Units
One Unit
Four Units
Three Units
Four Units
Eight Units
Eight Units
Two Units
Vacant Land
Vacant Land 6
Factional Timeshare 7
Vacant Land 8
Address
2131 W 3rd Street
2200 W 3rd Street
APN
262 S Lake Street / 272 S Lake

Street / 2120 Valley
199 & 201 S. Alvarado St.
201 S. Alvarado St.
2222 Ocean View Ave.
143 S Alvarado St.
171 S Alvarado St.
275 & 277 S. Grand View St. and
2302 W Miramar
2318 & 2320 W Miramar
2322 & 2324 W Miramar St
2328 W Miramar St
2334 & 2334 1/2 and 2332 & 2332
1/2 W Miramar St
2340 W Miramar St
274 - 276 S. Park View St.
2312 & 2314 W Miramar.
2301, 2329, 2351 W 3rd St
San Bernardino, CA
L.A. County: 5145-018-021
2600 Avenida Del Presidente

San Clemente, CA 92672
Rio Grande Estates, Unit 25
Valencia, NM
L.A. County: 5154-034-006
L.A. County: 5154-018-019

[Included in POB APN]
L.A. County: 5154-033-021
L.A. County: 5154-008-012
L.A. County: 515 4-018-020
L.A. County: 5154-017-007
L.A. County: 5154-017-009

L.A. County: 5154-017-010
L.A. County: 5154-017-011
L.A. County : 5154-017-012
L.A. County: 5154-017-013

L.A. County: 5154-017-014
L.A. County: 5154-017-015
L.A. County: 5154-017-016
L.A. County: 5154-017-008
L.A. County: 5154-017-017
San Bernardino County: 0420204-05-0000
898-066-66
101121384255100000
Note to draft: Per County of San Bernardino Assessor Website: No Property Address Found. TRACT 4408
LOT 34 TRACT NO 4408 LOT 34 EX MNL RST RESERVATION OF RECORD.
7
Note to draft: Owned by SVMC Foundation; Fractional timeshare of a condominium.
Description
Mineral Rights 9
Vacant Land
Address
1601 Otto Road
Cheyenne, WY 82001
Salton Sea, California
Property in Imperial County
APN
Well No. King Ranch 11-15H
Wilshire Escrow Company
(Land was leased to Edward
Parker)
OConnor Hospital
Description
Acute Care Hospital (1953)
Acute Care Hospital With 2005 ED
Addition (1969)
Acute Care Hospital With 2005 ED
Addition (1981)
Central Plant Building (Newer and
Older Sections)
Acute Care Hospital w 2005 ED
Addition (2005)
Parking Garage and Two Lots
(Surrounds Building)
O'Connor Medical Office Building
Clarmar Building
Barclay Building Medical Office
Condo (Basement Storage)10
Condo (Units 204A & 204B) 11
Joint Venture Ownership Interest
in Health Center One Office
Building12
Condo (Unit 105)13
Address
2105 Forest Ave
San Jose, CA 95128
2105 Forest Ave
San Jose, CA 95128
2105 Forest Ave
San Jose, CA 95128
2105 Forest Ave
San Jose, CA 95128
2105 Forest Ave
San Jose, CA 95128
2105 Forest Ave
San Jose, CA 95128
2101 Forest Ave
San Jose, CA 95128
2030 Forest Ave
San Jose, CA 95128
2039 Forest Ave, Unit B2
San Jose, CA 95128
2039 Forest Ave, Unit 204
San Jose, CA 95128
455 O'Connor Dr.
San Jose, CA 95128
2039 Forest Ave, Unit 105
San Jose, CA 95128
APN
Santa Clara County: 274-40-081
N/A
N/A
Note to draft: Owned by SVMC Foundation; Lot 10 of Bock 572 of Rio Grande Estates, Unit 25.
Note to draft: SVMC does not own land, only mineral rights; Abandoned Well; Township 13 North, Range 68
West, 6th P.M. (Niobrara Reservoir) Field: Wildcat (Well No. King Ranch 11-15H).
10
Note to draft: Sale of 2039 Forest Ave., Suites 105, 204 and Unit B2 to Indian Health Center is in process and
scheduled to close by 8/31/15.
11
12
OCH has a preferred equity position of $4,008,000. In the remaining equity, OCH has a 75% equity share (with
Toeniskoetter having the remaining 25% share).
13
9

Description
Hospital (Including Helipad)
Single Dwelling (Vacant House)
Medical Office Building
Previous Hospital Facility (Vacant)
Address
9400 No Name Uno
Gilroy, CA 95020
705 Las Animas Road
Gilroy, CA 95020
18550 Saint Louise Drive,
Morgan Hill, CA 95037
18500 Saint Louise Drive,
APN
Santa Clara County 835-05-032

Description
Hospital / CT / Linear Accelerator
Employee Open Air Parking Lot
Green Space / Hill
Serramonte Medical Dental Center

SMOC #1 Medical Office Building
SMOC #2 Medical Office Building
Open Air Parking Lot
Parking Lot "H" (Open Air)
Parking Lot "I" (Open Air)
Parking Structure (4 Tier)
Two Physician Parking Lots (Open
Air)
Vacant Land / Green Space
Residence
West Bay Home Health Medical
Office & Carport
Vacant Land
Vacant Land
Address
1900 Sullivan Ave
Daly City, CA 94015
Adjacent to Parking Lot F Triangle
of Hospital
Daly City, CA 94015
Between Parking Lot F and
Hospital
Daly City, CA 94015
1500 Southgate Ave
Daly City, CA 94015
1800 Sullivan Ave
Daly City, CA 94015
1850 Sullivan Ave
Daly City, CA 94015
1800 Sullivan Ave
Daly City, CA 94015
1800 Sullivan Ave
Daly City, CA 94015
1800 Sullivan Ave
Daly City, CA 94015
1800 Sullivan Ave
Daly City, CA 94015
1850 Sullivan Ave
Daly City, CA 94015
Located behind:
205 San Fernando Way
Daly City, CA 94015
202 Alta Loma
Daly City, CA 94015
1784 Sullivan Ave
Daly City, CA 94015
3405 Spring Valley Road
Clearlake Oaks, CA 95423
3449 Wolf Creek Road
Clearlake Oaks, CA 95423
APN
San Mateo County: 008-084-370

N/A
N/A
N/A
N/A

Lake County: 062-251-09
Lake County: 062-112-03
Seton Medical Center Coastside

Description
Hospital & Nursing Home (with
Two Trailers)
Address
600 Marine Blvd
Moss Beach, CA 94038
APN
Schedule 4.10(b)
Proceedings Related to Real Property
None.
Schedule 4.10(c)
Real Estate Leases
Leases as Tenant
Vendor
(Other
Party)
595 Colorado
Associates,
LLC
Hudson
Towers at
Shore Center,
LLC
Leased Address
Contracting
Entity
System
Caritas
Business
Services
Effective
Date
9/1/2005
7th & 8th Floor, 203

Redwood Shores
Parkway, Redwood City,
CA
Expiration Date
8/14/2015
Description
Pasadena Office Lease
3/31/2018
OConnor Hospital
Vendor (Other
Party)
Campbell-Gateway
Square
Contracting
Entity
OCH
Effective
Date
06/02/1993
Expiration
Date
08/31/2023
Description
Campbell-Gateway
Square
OCH
12/01/2015
11/30/2020
Lease Campbell-Gateway Sq. 50 E

Hamilton, Ste. 200, Campbell
O'Connor Health
Center 1
OCH
01/31/1996
07/31/2017
Original lease for entire premises at 455

O'Connor Dr, SJ. Subsequent
amendments have carved out portions
of the premises for various temporary
periods of times (see separate leases for
these carved out portions). Premises
under this lease are managed by
O'Connor Health
Center 1
OCH
12/01/1997
11/30/2017
Portion of premises carved out of

Master Lease at 455 O'Connor Dr, SJ.
As of 12/1/13, this portion is for suites
210-220 (previously was 200-210-220240). OCH manages these premises.
O'Connor Health
Center 1
OCH
01/20/1999
06/30/2015
(month-tomonth)

This portion is for suite 170. OCH
manages these premises & uses it for
hospital dept. Separate lease for
basement storage unit C.
OCH leases one-half (bottom floor) of

the medical office building in this
project at 50 E. Hamilton Ave,
Campbell. OCH manages the premises
and subleases it out.
Vendor (Other
Party)
O'Connor Health
Center 1
Contracting
Entity
OCH
Effective
Date
07/01/2005
Expiration
Date
06/30/2018
Description
OConnor Health
Center 1
OCH
05/18/1999
07/31/2010

This portion is for suite 150. OCH
manages these premises & subleases it
out.
OConnor Building,
LLC
OCH
08/28/2006
08/27/2016
OCH leases suite 201 in the medical

office bldg. known as Forest Medical
Arts Building at 125 Ciro Ave, SJ.
Premises are used for hospital's Wound
Care Clinic.
Suite 250 - Portion of premises carved

out of Master Lease at 455 O'Connor
Dr, SJ. This portion is for suite 250
OCH manages these premises & uses it
for hospital dept.

Vendor (Other
Party)
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
Contracting
Entity
SLRH
Effective
Date
01/05/1990
Expiration
Date
1/31/2016
Description
Suite 225, Breast Care Center
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
SLRH
02/07/2005
02/28/2016
Suite 120, HR
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
SLRH
01/01/2010
12/31/2015
Suite 220, EH
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
SLRH
01/01/2010
12/31/2014
Suite 135, HBRC (Health Benefits

Resource Center)
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
SLRH
08/15/2007
8/31/2011
Suite 240, Community Health
Azusa Housing
Partners, LP and
JDMN 26 Investors,
LLC
SLRH
4/12/2012
2/28/2013
Suite 240, IT Office Space for ARCIS
South Valley Medical

Plaza, LLC
SLRH
06/08/2009
09/30/2015
Suite 210, IT Staff
Vendor (Other
Party)
Williams Scotsman,
Inc. (Reliant Asset
Management, LLC)
Contracting
Entity
SLRH
Effective
Date
03/26/2012
Expiration
Date
11/25/2015
Description
Modular building lease for offices at
590 Cohansey Ave.

Vendor (Other Party)
Contracting
Entity
Effective
Date
Expiration
Date
Kimco Westlake LP
Lease-as Tenant
09/23/2005
09/22/2015
Westlake Shopping Center
Raymond Dugan
Velasco, MD
Lease-as Tenant
05/01/2015
09/29/2016
Sublease of Timothy Mulligan
The Roman Catholic

Archbishop of San
Francisco
Lease-as Tenant
03/01/1999
07/31/2018
Coastside Parking (Our Lady of Lourdes

Chapel)
Tozer, Dolores and

James
Lease-as Tenant
10/17/2007
10/16/2017
251 Michelle Court Warehouse
Pacific Cardiovascular
Lease-as Tenant
5/1/2003
4/30/2016
1500 Southgate, Suite 209, Daly City, CA
Lease-as Tenant
Description
1900 Sullivan Ave, Daly City

Vendor (Other
Party)
Huffburt Property
LLC (FKA James H.
DeWald Trust)
Contracting
Entity
SFMC
Effective
Date
04/04/2003
Expiration
Date
04/30/2016
Description
Pu, Chung Suk FKA

Win Property
Management
SFMC
7/
7/31/2014
(month-tomonth)
Lease as Tenant 4382-4390 Tweedy

Blvd., South Gate
Smallwood Plaza
SFMC
04/01/2007
04/30/2018
"Space for SFMC

Downey Clinic
7840 Imperial Highway #B Downey,
CA"
St. Francis-Lynwood
Medical Plaza, L.P.
SFMC
01/01/2006
12/31/2015
3628 East Imperial Hwy, Lynwood, CA
Sunshine Capital
Group
SFMC
01/01/2008
9/30/2018
Lease - Stockwell Building 3680 E.

Imperial Hwy, Suite 405, Lynwood, CA
90262
9404 Burtis Street - South Gate
Vendor (Other
Party)
Automac, Inc.
Contracting
Entity
SFMC
Effective
Date
Expiration
Date
9/30/2019
Description
MOB Garage Lease, 3630 E. Imperial
Hwy, Lynwood, CA

Vendor (Other
Party)
Bakersfield Land &
Cattle Company, LLC
Contracting
Entity
SVMC
Effective
Date
Expiration
Date
6/19/2012
6/30/2016
Effective
Date
12/2/2002
Expiration
Date
3/31/2018
Description
Assignment and Amendment of Lease

Vendor (Other
Party)
EOP -Towers at
Shores Center, LLC
Contracting
Entity
CBS
Description
Lease agreement for the building at 203
Redwood Shores Pkwy, Stes 700, 750
and 800, Redwood City, California
consisting of approximately 50,015
square feet (net) of office and
conference space.
Leases as Sublessor
Location Name
All Care Medical Group
All Care Medical Group
UD Ultrasound
Samaritan Endoscopy
Address
2675 E. Slauson Avenue, Huntington Park,
CA 90255
2675 E. Slauson Avenue, Huntington Park,
CA 90255
1201 Marina Village Parkway, Suite 301,
Alameda, CA 94501
2585 Good Samaritan #301, San Jose, CA
95124
Sublessee Business Name

Edmond Jandaza DDS
HEP Pharmacy Inc. Southeast Pharmacy
UD Ultrasound
Physicians Surgery Services LP
Leases as Landlord
OConnor Hospital
Contracting
Entity
Effective
Date
Expiration
Date
Description
Aesthetic & Refractive

Surgery Medical Center
OCH
10/15/1997
07/31/2017
Pham MD, Randall - Office sublease

455 O'Connor Dr #180, San Jose
Andrade, Paul MD and

Tsu, Jacqueline MD (cotenants)
OCH
05/01/2014
04/30/2016
MOB Office lease 2101 Forest Ave

#128, San Jose
Bassiri, Ali MD
OCH
08/01/2011
07/31/2016
Office Lease for 2101 Forest Ave# 112

San Jose, Ca 95128
Contracting
Entity
Effective
Date
Expiration
Date
Description
Chu, Margaret MD
OCH
12/01/2006
09/30/2016

#222, San Jose
Clerk, Alex MD
OCH
09/01/1998
07/31/2017
HC1 - Office sublease 455 O'Connor Dr

#110, San Jose
Clinical Wound Solutions,

LLC
OCH
02/05/2014
05/30/2016
Office Sublease inside Wound Care

Clinic at 125 Ciro Ave #201, SJ (100sf)
- room known as "DME Room"
Cordero, Mario N. MD
OCH
09/08/2014
08/31/2016
Clarmar Bldg - Office lease, 2030

Forest Ave #100, San Jose
OCH
12/01/2013
11/30/2018
HC1 - Office sublease, 455 O'Connor

Dr #210 & 220 & 290, San Jose
OCH
07/01/2014
06/30/2019
CGS - office sublease 50 E. Hamilton

Ave #120, Campbell (3,457 rsf)
Horvath, Dagmar MD
OCH
10/01/2011
09/30/2015
Office Lease 2101 Forest Ave #130, SJ
Hurwitz, Al MD AND Jay

S Raju, MD (co-tenants)
OCH
08/01/1997
07/31/2017
HC1 - office sublease, 455 O'Connor Dr

#350, SJ
Idowu, Olajire MD
OCH
10/01/2013
09/30/2015
2101 Forest, Ste. 132
Indian Health Center of

Santa Clara Valley, Inc.
OCH
06/25/2012
06/30/2017
HC1 #200-240 sublease at 455

O'Connor Dr, San Jose

Santa Clara Valley, Inc. 14
OCH
05/01/2015
04/30/2020
Lease of 2039 Forest Unit 105 and Unit

B-2

Santa Clara Valley, Inc.
OCH
05/01/2015
06/30/2016
Lease at 2030 Forest Ave. Ste. 110, San

Jose

Santa Clara Valley, Inc. 15
OCH
05/01/2015
04/30/2020
Lease 2039 Forest, Unit 204
Jue, Dyron MD
OCH
06/21/2010
06/30/2015

#100, San Jose
Kim, Dai Jung MD
OCH
11/01/2011
10/31/2015

#126, San Jose
Laboratory Corporation of
America, Inc.
OCH
01/19/2009
11/30/2015
Sublease to LabCorp at Campbell

Gateway Square (50 E. Hamilton Ave
#180, Campbell CA)
Lee, Sang Hyun MD
OCH
06/01/2013
03/31/2016
HC1 #280 office sublease, 455

O'Connor Dr, San Jose
Lerman, Bruce DPM
OCH
03/01/2010
03/31/2016
Office Lease for 2101 Forest Ave #118,

San Jose CA 95128
Mama Baby OB-GYN, Inc.

AND Smriti Nalwa, MD
OCH
01/01/2010
07/31/2017
HC1 #390 - sublease 455 O'Connor Dr,

SJ
14
Note to draft: Lease includes an option for the Indian Health Center to purchase the properties, which will be exercised by
August 31, 2015.
15
Note to draft: Lease includes an option for the Indian Health Center to purchase the properties, which will be exercised by
August 31, 2015.
Contracting
Entity
Effective
Date
Expiration
Date
Description
Matsumoto, Edeane MD
OCH
08/01/2011
07/31/2016

#227, San Jose
Med-Place Pharmacy
OCH
04/01/2015
12/31/2016
MOB Office Lease #122 - Retail

Pharmacy
Paincare of Silicon Valley,

Inc.
OCH
11/01/2009
10/31/2015
MOB Office lease, 2101 Forest Ave

#220A, SJ
Qureshi, Farda MD
OCH
08/15/2011
08/31/2016
MOB Office Lease Ste 117 - 2101

Forest Ave, SJ (1,001sf)
Rezaee, Mehrdad MD
OCH
05/01/2007
10/31/2015
Clarmar Bldg - Office Lease 2030

Forest Ave #210, San Jose
Rosanelli Medical
Associates
OCH
03/01/2010
10/31/2015
CGS - Office sublease, 50 E. Hamilton

Ave #160, Campbell
SavCo Pharmacy (Jwalant

Patel d.b.a SavCo
Pharmacy)
OCH
06/19/2012
12/31/2016
Office sublease 455 O'Connor Dr #190,

San Jose
Sehhat, Mina M.D.
OCH
08/05/2011
08/31/2016
Office Lease for 2101 Forest Ave #104,

SJ (830sf)
Uyeyama, Ronald R. MD
and Ronald R. Uyeyama,
MD, Inc. (co-tenants)
OCH
01/01/2014
12/31/2016
MOB Office lease, 2101 Forest Ave

#102
Valley Medical Oncology

Consultants
OCH
06/01/2014
12/31/2016
MOB lease 2101 Forest Ave., Suite 124
Vujjeni, Valli MD
OCH
11/15/2008
05/31/2016
Medical Office Lease, 2101 Forest Ave

#120, SJ (960sf)
Wu, Jerwin MD
OCH
08/01/2011
12/31/2016
Office lease 2101 Forest Ave #134, SJ
Yu, Andy MD
OCH
04/01/2014
03/31/2016
MOB Office Lease 2101 Forest Ave

#106

Vendor (Other
Party)
Chhiap, Visoth MD
Contracting
Entity
SLRH
Effective
Date
3/14/2006
Expiration
Date
3/31/2016
Description
DePaul Suite 204
DCHS Medical
Foundation
SLRH
10/15/2004
12/31/2015
DePaul MOB Suite 208
Eli Chen, MD, Inc.
SLRH
09/01/2012
12/31/2015
DePaul Suite 203
Fritter, Schulz &

Conlan
SLRH
08/01/2004
12/31/2015
DePaul Suite 100
Gangani, Yasmeen
MD
SLRH
08/13/2006
1/31/2016
DePaul MOB Suite102
Khan, Mazhar MD
SLRH
5/01/2005
04/30/2016
DePaul MOB Suite 205
Prasad, Rajesh MD
SLRH
03/01/2005
12/31/2015
DePaul Suite107
Vendor (Other
Party)
Shah, Nimisha MD
Contracting
Entity
SLRH
Effective
Date
06/01/2004
Expiration
Date
12/31/2015
Description
DePaul Suite101
Wong, Rodney MD
SLRH
01/01/2005
12/31/2015
DePaul Suite 201

Vendor (Other
Party)
Contracting
Entity
Effective
Date
Expiration
Date
Description
Antonini, Charles Jr.

MD
Apothecary Pharmacy
SMC
05/01/2008
06/30/2018
1800 Sullivan, Suite 107
SMC
04/01/2004
09/30/2018
1500 Southgate, Suite 109
Aquino, Melinda M.D.
SMC
12/01/2013
11/30/2018
AT&T
SMC
07/01/1989
Cellular Site Lease - 1850 Sullivan - 1st Floor
Bay Area Digestive

Health Medical Group,
Inc.
Bay Area Family
Practice Medical
Group
Bay Area Obstetrics &
Gynecology
Belluomini, Paul
DDS, Kis, John I.
DDS, Pham, Hung
DDS, West, Stephen
F. DDS
Buckley, Daniel J. MD
SMC
07/01/2003
06/28/2015
(month-tomonth)
06/30/2018
SMC
04/01/2014
03/31/2016
SMC
09/01/2001
04/30/2018
SMC
02/01/2005
11/30/2018
SMC
02/01/2005
04/30/2017
SMC
03/01/2008
03/31/2018
SMC
09/01/2012
08/31/2017
SMC
05/01/2014
04/30/2016
SMC
03/01/2012
02/28/2017
SMC
12/31/2012
09/30/2016
SMC
07/01/2005
06/30/2016
SMC
12/03/2003
12/31/2015
Roof Space ETS Receiver Site Agmt - Antenna

and Receiver for the sole and exclusive use of
the Daly City Police Department, and other Law
Enforcement Agencies in San Mateo County.
California Skin
Institute, A Medical
Corporation
Carsolin-Chang,
Cynthia M.D.
Cavero, Patricia MD
Comprehensive
Diabetes-Endocrine
Medical Associates,
Inc.
DCHS Medical
Foundation
Edgardo G Alicaway,
M.D., P.C.
Electronic Tracking
Systems LLC
Vendor (Other
Party)
Contracting
Entity
Effective
Date
Expiration
Date
Description
Family Medical
Group, A Professional
Corporation
Hamby, Dennis L. MD
SMC
04/01/2008
02/29/2016
SMC
02/28/2010
07/31/2016
Hartman, Paul D. MD
SMC
07/01/2005
02/28/2018
Hermenegildo G.
Angeles, Jr., M.D., A
Professional
Corporation
James M. Feeney, MD
and David A.
Vaughn, MD, a
California partnership
John Lai and Kevin
Wong, Medical
Corporation
John W. Wilson, MD,
Inc.
Kini, Divya R. MD,
Inc.
Kutzscher, Bernd,
M.D.
Lee, Damon MD
SMC
11/30/2012
11/30/2018
SMC
07/01/2005
04/30/2016
SMC
04/01/2012
06/30/2017
1500 Southgate, Suite 115, then Suite 207

thereafter
SMC
07/01/2012
06/30/2017
SMC
04/01/2007
03/31/2018
SMC
07/01/2003
12/31/2017
SMC
06/01/1992
01/31/2016
1800 Sullivan, Suite 304C
SMC
08/01/2005
02/28/2017
SMC
02/01/2006
03/31/2017
Lee, Shu May MD,

Inc.
Longar, Susan MD
Medicus Integrated
Health Services, Inc.
Meyers, Joseph MD
SMC
11/01/2006
02/28/2017
SMC
08/01/2008
12/31/2015
Moloney, Sean MD
SMC
10/01/2009
02/28/2016
Moretti, Leslie C. MD
Inc.
Mulligan, Timothy,
MD
Myint, Julia MD
SMC
02/01/2010
02/28/2016
SMC
10/01/2013
09/30/2016
SMC
03/01/2005
03/31/2016
SMC
04/01/2013
03/31/2016
SMC
07/01/2003
02/28/2016
SMC
07/01/2003
02/28/2016
Palo Alto Medical

Foundation Health
Care, Research and
Education
Palo Alto Medical
Foundation Health
Care, Research and
Education
Palo Alto Medical
Foundation Health
Care, Research and
Education
Vendor (Other
Party)
Peninsula Allergy
Associates
Peninsula Orthopedic
Associates, Inc.
Perez, Robert G. MD
Contracting
Entity
Effective
Date
Expiration
Date
Description
SMC
07/01/2003
06/30/2016
SMC
11/09/2007
11/30/2017
1850 Sullivan, Suite 330 and 330B
SMC
07/01/2008
04/30/2017
Pharmacia, Inc.
SMC
03/01/2005
01/03/2019
San
Francisco/Peninsula
Ear, Nose and Throat
Associates, Inc.
Schulkin, Frank M.D.
SMC
02/01/2005
01/31/2016
SMC
04/01/2013
03/31/2018
Sprint PCS
SMC
02/10/1997
07/31/2017
PCS Site Agreement - 1900 Sullivan Rooftop
Stavosky, James W.,

M.D.
SMC
05/01/2012
06/30/2018
1800 Sullivan, Suite 401 (See prior agreements

with Daly City Podiatry Group)
Tony Lee Wong,

M.D., Inc.
Tortorice, Frank MD
SMC
03/01/2013
02/28/2016
SMC
03/01/2005
03/31/2017
Tsang, David MD
SMC
04/24/2015
05/31/2016
Tsang, Ellick MD
SMC
08/01/2012
10/31/2015
1800 Sullivan, Suite 304A
Valdez Medical Corp.
SMC
11/01/2006
06/30/2017
Valle, Herminigildo
MD
Verizon/GTE
Mobilenet
SMC
01/01/1994
06/30/2016
SMC
12/15/1993
01/31/2019
Roof Space - HWY 280/SERRAMONTE Cell

Site CA0478
Wave Crest Medicine,

Incorporated
Women's Health
Group
Wu, James C. MD,
Inc.
Yan, Alice MD
SMC
07/01/2005
08/31/2018
SMC
02/01/2006
07/31/2015
SMC
01/14/2008
03/13/2016
SMC
07/01/2012
06/30/2017
Gee, Jeff, MD
SMC
3/1/2014
2/28/2016
1500 Southgate, Suite 102A
Moskowitz, Richard,
MD
SMC
3/1/2014
2/28/2016
1500 Southgate, Suite 102B

Vendor (Other
Party)
Contracting
Entity
Effective
Date
Expiration
Date
Description
Ardmore Medical
Group (Alan Kim,
M.D.)
SFMC
10/1/2003
9/30/2016
St. Francis Medical Office Building Lease

(Maywood Full Service)
St. Johns Well Child

and Family Center
SFMC
5/2015
12/31/15
Sub-Landlord: 3628 E. Imperial Hwy,

Lynwood

Vendor (Other
Party)
Alvarado Eye Surgery
Center, LLC
Contracting
Entity
SVMC
Effective
Date
6/1/2007
Expiration
Date
05/31/2016
Description
Lease
Arase, Randal P MD
SVMC
02/01/2005
01/31/2016
POB Lease
Batra, Narinder, M. D.
SVMC
01/01/2014
12/31/2018
Lease
Bussarakumn,
Mingquan M.D.
SVMC
03/01/2009
02/28/2018
POB Lease
Clinical Monsignor
Oscar A. Romero
SVMC
06/01/2009
05/31/2019
Lease - POB 100
Daughters of Charity
Foundation
SVMC
01/01/2014
01/01/2016
Lease - Seton Hall
Daughters of Charity
St. Vincent de Paul
Province of the West
SVMC
03/01/2011
02/28/2016
Lease
De Los Santos, Victor

DDS
SVMC
7/1/2013
06/30/2018
Lease of POB offices
Deno D. Kang, M. D.
SVMC
11/01/2013
10/31/2016
Lease
ExamWorks, Inc.
SVMC
10/19/2011
10/18/2015
Rental Agreement of room
Felix Sigal, DPM, a

Professional
Corporation
SVMC
08/01/2014
07/31/2017
Lease
Greater Los Angeles

Cardiology
SVMC
05/01/2002
10/31/2015
Lease of POB 612 & 620
Kades, Wagdy MD
SVMC
07/01/2006
06/30/2016
POB Lease #626
Kahn, Chalison, a
Medical Corporation
SVMC
10/1/2012
09/30/2015
POB Lease #825
Katz, James R, MD
SVMC
7/1/2013
11/30/2015
POB Lease #415
Khwarg, Steven MD
SVMC
11/01/2005
10/31/2015
POB Lease #325
Khwarg, Steven MD
SVMC
10/01/2010
10/31/2015
Lease - Suite 320A
Vendor (Other
Party)
Khwarg, Steven MD
Contracting
Entity
SVMC
Effective
Date
10/01/2011
Expiration
Date
10/31/2015
Description
Lease #312B
Knights of Malta Free

Clinic
SVMC
11/1/2005
10/31/2015
Lease #112 A & B, 122 (Oceanview)
Lee, Kyu B M.D.
SVMC
07/01/2005
06/30/2018
POB Lease #814
Levine Medical
Corporation and
Steven Steinschriber
MD
SVMC
12/1/2013
11/30/2015
POB Lease #500
Los Angeles
Hematology Oncology
Medical Group
SVMC
7/1/2013
06/30/2016
Lease POB #110
Malamud, Ariel, M. D.
SVMC
05/01/2014
04/30/2017
Lease
McPherson, Edward,
M. D.
SVMC
03/01/2011
02/29/2016
Lease of POB #501
Med-Neuro,
Corporation
SVMC
8/1/2012
12/31/2015
POB Lease #828
Modern Parking, Inc.
SVMC
07/01/2011
06/30/2016
Parking Facilities Lease
Morguelan, Barry MD
SVMC
8/1/2013
07/31/2020
POB Lease #602
Naraghi, Robert and

Shah, Tariq, MD
SVMC
10/06/2011
10/05/2015
Taper Bldg. Lease #370
Mendez National
Institute of
Transplantation
Foundation
SVMC
12/01/2013
11/30/2015
Lease #390
Ranavat, Amritlal MD
SVMC
07/01/2005
12/31/2015
POB Lease #824
Roberts, Ngan,
Sugerman, A Medical
Group, Inc.
SVMC
08/01/2006
07/31/2015
POB Lease #717
Roberts, Walter MD
SVMC
01/01/2013
12/31/2017
POB Lease #406
Samuel K. Lee, M. D.,

Inc.
SVMC
10/01/2012
09/30/2022
POB Lease #622
Scheele, Wolfgang
MD
SVMC
07/01/2005
06/30/2017
POB Lease #609
Southern California
Infectious Disease
Med. Grp.
SVMC
09/01/2006
08/31/2015
POB Lease #820
Vendor (Other
Party)
Spektor, Elena MD
Contracting
Entity
SVMC
Effective
Date
9/1/2011
Expiration
Date
08/31/2016
Description
Lease POB #808
St. Vincent Dialysis

Center
SVMC
5/1/2005
04/30/2016
Lease - #219 & 220
Suchov, Mordo MD
SVMC
08/01/2009
07/31/2016
Lease #711
Tanenbaum, Barton
MD
SVMC
09/01/2007
08/31/2015
POB Lease Agreement #215
Viracor-IBT
Laboratories, Inc.
SVMC
11/01/2006
11/07/2016
Lease - Oceanview, 2nd floor
Wong, Louis & Mary

Jo, MD
SVMC
07/01/2012
06/30/2018
Lease
Wong, Michael, M. D.
SVMC
07/01/2005
06/30/2016
Lease POB 719
Yokoyama, Chester
SVMC
3/1/2000
08/31/2015
POB #115 Lease
Yokoyama, Taro MD
SVMC
10/01/2013
10/31/2016
POB #702 Lease
DCHS Medical Foundation Leases

Location Name
Northern Region
Corporate Office
Record Storage Site
Type
Landlord Business Name
400 Race St, San Jose, CA 95126

806 W Home Street, Suite A, San
Jose CA 95126
Admin
Storage
1/1/2011
10/1/2011
12/31/2015
9/30/2014
MSO Offices
Month to Month
McKee Clinic
227 North Jackson Avenue, San

Jose, CA 95116
Clinic
4/13/2010
4/30/2017
San Jose Medical

Group clinic site
Willow Glen Clinic
625 Lincoln Avenue, San Jose,

CA 95126
2585 Good Samaritan
#001,002,101,102,201,202,203,3
04, San Jose, CA 95124
2585 Good Samaritan #301, San
Jose, CA 95124
Jose, CA 95124
Jose, CA 95124
455 O'Connor Drive, Suite 280,
San Jose, CA 95128
Clinic
4/1/1998
9/29/2016
Clinic
NMSBPCSLDHB, LP
The James P. & Jean
McCarthy Revocable
Intervivos
Medical Office Buildings
of California, LLC
(MedCap Properties)
Sobrato Group Inc. (aka SI
52 LLC)
Samaritan Properties, LLC
12/1/2011
11/30/2016
San Jose Medical

Group clinic site
San Jose Medical
Group clinic site
Clinic
12/1/2011
11/30/2016
Clinic
4/1/2012
11/30/2016
Clinic
1/15/2014
11/30/2016
Clinic
O'Connor Hospital
6/14/2013
3/31/2016

San Jose, CA 95124
San Jose, CA 95124
455 O'Connor Drive Ste 150, San
Jose, CA 95128
Clinic
O'Connor Hospital
1/1/2014
12/31/2018
Clinic
O'Connor Hospital
1/1/2014
12/31/2018
Clinic
O'Connor Hospital
7/1/2013
7/31/2017
455 O'Connor Drive, Suite

200/210/220/240/290
Clinic
O'Connor Hospital
1/1/2013
11/30/2019
18550 De Paul Drive, Suite 208,

1800 Sullivan Avenue, Suite 504,
Clinic
Saint Louise Regional

Hospital
10/15/2004
10/31/2014
5/1/2013
9/30/2016
Good Samaritan
Clinic
Good Samaritan
Endoscopy
Good Samaritan
#105 FP
Good Samaritan
Clinic
O'Connor General
Surgery (Dr.
Walsh)
O'Connor
Oncology
O'Connor OBGYN
O'Connor Urgent
Care & Infusion
Center
Family Medicine
Associates
Morgan Hill
Internal Medicine
Daly City Internal
Address
Clinic
Start
End
Comments
Subleased to ASC JV
with DPV as a partner
Vacant- Looking to
sublease
Vacant- Looking to
sublease
Vacant- Looking to
sublease
Will end 9/30/2015 as
part of pending PSA
termination
Month-to-MonthSLRH is landlord
Medicine
Daly City, CA 94015
Center For Life

Children's Medical
Associates, Inc.
Gilroy Family
Practice
McKee Clinic (Dr.
Kansara)
Family Medicine
Associates (Dr.
Fulmer)
2039 Forest Avenue, Suite 304,

San Jose, CA 95128
Clinic
Padua Properties, LLC
7/1/2009
6/30/2029
8833 Monterey Road, Suite D,

Gilroy, CA 95020
200 Jose Figueres Avenue, Suite
395, San Jose, CA 95116
50 E Hamilton Ave Suite #120
Campbell, CA 95008
Clinic
George & Linda Green
7/15/2013
7/15/2018
Clinic
Rasik Kansara M.D.
10/1/2013
9/30/2014
Clinic
O'Connor Hospital
7/1/2014
6/30/2019
Samaritan Family
Practice
15425 Los Gatos Blvd Suite #

101 & 120, Los Gatos CA 95032
Clinic
McCarthy LG Boulevard,
LLC
9/1/2014
1/31/2025
966 S. Western Avenue, Los

Angeles, CA 90006
2675 E. Slauson Avenue,
Huntington Park, CA 90255
1145 E. Compton Blvd,
Compton, CA 90221
Clinic
Daehan Plaza, LLC
12/15/2009
12/31/2017
Clinic
Southeast Medical Center

LLC
1145 E. Compton Blvd
LLC
1/1/2013
12/31/2022
4/4/2013
4/3/2018
3617 Martin Luther King Jr.

Blvd, Suite 2, Lynwood, CA
90262
Clinic
Jose N. Montano, M.D., A

Professional Corporation
1/1/2013
12/31/2018
Southern Region
Los Angeles
Family Practice
All Care Medical
Group
Compton Obstetrics
and Gynecology
Lynwood General
Surgery
part of pending PSA

termination
Clinic
Vacant- Looking to
sublease
Month to Month
Will be assigned to a
3rd part as part of the
pending PSA
termination
part of pending PSA
termination
Vacant- Looking to
sublease
Will end 12/31/2015

as part of PSA
termination.
part of PSA
termination
Schedule 4.10(f)
Unsatisfied Requests for Repairs, Restorations or Improvements
Various seismic-related items16 applicable to the hospitals, details of which DCHS has disclosed to Blue
Mountain in the following documents:
[WITHHELD]
Seismic Updates
Pursuant to California Senate Bill 90 (Chapter 19, Statutes of 2011) (SB90), DCHS submitted a
report to the Office of Statewide Health Planning and Development (OSHPD) on or before
December 31, 2014 demonstrating its financial capacity to implement required seismic updates at
OConnor Hospital, St. Vincent Medical Center and Seton Medical Center. DCHS is not currently
in a position to fund such construction or demonstrate its ability to do so to OSHPD.
OConnor Hospital
Seismic Compliance Information Statement (Not dated, data room folder 3.11.5)
OCH Photo (Not dated, data room folder 3.11.5)
CA Seismic Codes SB 1953 Category Definitions
OCH Structural Performance Categories and Non-Structural Performance Categories Ratings and
Seismic Status, dated 4.7.2014
DCHS Seismic Compliance dated 05.2014
OConnor Hospital has been upgraded to NPC-2 status for all acute care & support buildings as of
December 16, 2014, and has been approved for the NPC-3 extension provided by California Senate
Bill 499 (Chapter 601, Statutes of 2009) (SB499). As a result, OConnor will not need to be
upgraded to NPC-5 status prior to January 1, 2030. Currently, OSHPD has proposed that new
provisions be added to the Cal. Building Standards Code regarding SPC-4D status in 2016 which
may provide for an alternative methodology for gaining seismic compliance.
Seismic Compliance Information Statement (Not dated, and contains information on both OCH and
SLRH)
SLRH Photo (Not dated, data room folder 4.11.5)
CA Seismic Codes SB 1953 Category Definitions
OCH Structural Performance Categories and Non-Structural Performance Categories Ratings and
Seismic Status, dated 4.7.2014
DCHS Seismic Compliance dated 05.2014
Seton Medical Center and Seton Medical Center - Coastside
Seton Photo (Not dated, data room folder 7.11.5)
SMC SMCC Structural Performance Categories and Non-Structural Performance Categories
Ratings, dated 4.7.2014
DCHS Seismic Compliance 05.2014
Seton Measure A Strategic Plan 1.31.2014
16
All SPC-1 buildings have been granted SB90 extensions for SPC-2 and all NPC-2 buildings have been granted SB499
deferrals to NPC-5. A new structural performance category, SPC-4D has been instituted that may allow SPC-1 buildings be
retrofitted such that they may continue in use beyond January 2030. St. Vincent Medical Center and O'Connor Hospital
intend to commission structural analyses to determine if their buildings may qualify.
Schedule 4.11
Material Litigation or Proceedings
1. Sedgewicks DCHS Workers Compensation Loss Run of current open and re-opened claims as of
May 31, 2015 are hereby incorporated by reference.
[WITHHELD]
2. Sedgewicks DCHS Professional/General Liability Loss Run of open and re-opened claims, suits
and PCEs as of May 31, 2015 are hereby incorporated by reference.
3. Schedules 4.6, 4.7(b), 4.9(b), 4.10(b), 4.15(b) and 4.15(c) are hereby incorporated by reference.
4. Seton Medical Center, OConnor Hospital and Saint Louise Regional Medical Center
On February 9, 2015, Local 39 Health and Welfare, and Pension Fund based on Lindquist audit on
payroll compliance for July 1, 2007 to July 31 2011 demanded payment for $573,367.44. Seton
Medical Center, OConnor Hospital and Saint Louise Regional Medical Center conducted their own
audit and dispute Lindquists findings because the work hours identified by Lindquist to arrive at its
conclusion are generally for work not covered for the purposes of the Pension and Health and
Welfare Trusts. On June 5, 2015, DCHS, on behalf of Seton Medical Center, OConnor and Saint
Louise Regional Hospital, exposed its position to the Pension and Health and Welfare Trusts, Ms.
Linda Baldwin Jones, Weinberg, Roger & Rosenfeld. DCHS has not received any response as of
July 8, 2015. As per the Trust Agreement governed by ERISA, the dispute can be submitted to
arbitration.
5. St. Francis Medical Center
SEIU Training and Education Fund based on an audit conducted by Linquist claimed an
underpayment of $30,356.34 for 2005 to April 2014. St. Francis Medical Center is disputing the
methodology followed by Linquist. On May 11, 2015, St. Francis Medical Center offered a
payment of $10,923.90 for the contribution years of 2005-2015 (based on an underpayment of
$19,012.22 for contribution years 2005-2012 and an overpayment of $8,088.32 for contribution
years 2013-2015). On July 2 2015, the settlement for underpayments for St. Vincent Medical
Center, OConnor Hospital, Seton Medical Center and Saint Louise Regional Hospital was accepted
by SEIU Board of Trustees Training and Education Fund.
On July 23, 2013, the Department of Health and Human Services, Office of Inspector General
Office (DHHS/OIG), sent a Request for Information or Service to St. Francis Medical Center
requesting additional information regarding St. Francis Medical Center Foundation HRSA Grant
#T0AHP15700. On September 23, 2013, St. Francis Medical Center met with DHHS/OIG and was
instructed by DHHS/OIG staff to produce requested information to DHHS/OIG office on a rolling
basis with the first submission of information being provided by October 5, 2013 and the final
submission of all requested information being made by October 31, 2013. St. Francis Medical
Center submitted all the requested information within the allotted timeframe. On April 6, 2015,
DHHS/OIG emailed St. Francis Medical Center, requesting a meeting. SFMC and DHHS/OIG met
on April 15, 2015. St. Francis Medical Center has not received any contact from DHHS/OIG since
the April 15, 2015 meeting.
In September 2014, St. Francis Medical Center received notice of two citations from the Division of
Occupational Safety and Health (Cal-OSHA), based on allegations related to implementation and
Schedule 4.12
Medical Staff Matters
On July 8, 2015, Seton Medical Center MEC issued a letter of concern to a physician regarding
behavior towards staff. The physician was not subject to disciplinary action that impacts his
membership or privileges.
[WITHHELD]
Schedule 4.13(a)
Tax Returns
None, unless currently reflected in financial statements.
Schedule 4.13(b)
Taxes
None.
Schedule 4.14(a)
Employee Benefits and Retirement Plans
(i)
DCHS Retirement Plan (Church Plan) John Hancock Retirement Services
DCHS Retirement Plan TSA Match (Church Plan) John Hancock Retirement Services
Retirement Plan for Hospital Employees (RPHE) (Multiemployer Plan)
Stationary Engineers Local 39 Pension Plan (Multiemployer Plan)
DCHS Supplemental Retirement Plan (TSA) (Church Plan) Transamerica Retirement Solutions (TRS)
DCHS Supplemental Retirement Plan 401(a) (Employer Match benefit) (Church Plan) - TRS
DCHS Retirement Plan Account (Church Plan) - TRS
DCHS 401(a) (17) Retirement Plan DCHS (Nonqualified Plan)
DCHS 401(a) (17) Retirement Plan Account TRS (Nonqualified Plan)
DCHS Medical Foundation Management Bargaining Unit 401(k) Plan (Church Plan) Wells Fargo
DCHS Medical Foundation 401(k) Plan (Church Plan) Wells Fargo
Seton CAN Money Purchase Plan
Kennedy Savings Plus Plan
Seton Coastside Annuity Plan
(ii)
Medical and Pharmacy benefits - Blue Shield of California, Anthem Blue Cross, Kaiser
Dental - Delta Dental
Dental - CIGNA Dental
Vision Vision Services Plan (VSP) and Anthem Blue View
Healthcare Reimbursement Account WageWorks and FSA Vita Flex
Dependent Care Reimbursement Account WageWorks and FSA Vita Flex
Hartford (for leave management)
Hartford (for group short term and long term disability) and Sun Life for Long Term
Employee Term Life Insurance - UNUM and Sun Life
Spouse and/or Child Term Life UNUM
Group AD&D UNUM and Sun Life
Group AD&D for dependents Sun Life
Voluntary Long Term Care for employee and eligible family members - UNUM
Group Variable Life MetLife for certain executives
Executive Disability - UNUM
Employee Assistance Program (may not be material) Optum Health and ComPsych
The following LHM union health plans:
Location
Group
Med
Dental
Vision
DCHS CBS
Non-Union
DCHS POS Custom Plan
Delta PPO 800
VSP Core
DCHS CBS
Non-Union
DCHS HMO NCAL
CIGNA DHMO
VSP Buyup
DCHS CBS
Non-Union
Waive
Delta PPO 1200
Waive
DCHS CBS
Non-Union
DCHSMF
Non-union
PPO 500
Delta Dental
Anthem Blue View
Non-union
PPO 1500
waive
waive
Non-union
HMO - Anthem
Non-union
HMO - Kaiser
Non-union
Waive
SEIU
Delta Dental
Anthem Blue View
SEIU
PPO 1500
HMO High Option Anthem
waive
waive
SEIU
HMO Low Option Anthem
SEIU
HMO - Kaiser
SEIU
waive
Location
Group
Med
Dental
Vision
O'Connor
CNA
DCHS PPO
Delta PPO 800
VSP
O'Connor
CNA
DCHS HMO OCH
CIGNA DHMO
Waive
O'Connor
CNA
Waive
Delta PPO 1200
O'Connor
CNA
O'Connor
CLVNA
DCHS PPO
Delta PPO 800
VSP
O'Connor
CLVNA
DCHS HMO OCH
CIGNA DHMO
Waive
O'Connor
CLVNA
Waive
Delta PPO 1200 Ortho
Waive
Waive
Location
Group
Med
Dental
Vision
O'Connor
CLVNA
O'Connor
Local 20
O'Connor
O'Connor
O'Connor
Local 20
O'Connor
Non-Union
Delta PPO 800
VSP Core
O'Connor
Non-Union
DCHS HMO OCH
CIGNA DHMO
VSP Buyup
O'Connor
Non-Union
Waive
Delta PPO 1200
Waive
O'Connor
Non-Union
O'Connor
SEIU
O'Connor
SEIU
DCHS HMO OCH
VSP Buyup
O'Connor
SEIU
Waive
Waive
Waive
Location
Group
Med
Dental
Vision
Seton
CNA
DCHS EPO CNA
VSP
Seton
CNA
DCHS HMO NCAL
Waive
Waive
Seton
CNA
Waive
Seton
Local 20
Delta PPO 800
VSP Core
Seton
Local 20
DCHS HMO NCAL
CIGNA DHMO
VSP Buyup
Seton
Local 20
Waive
Delta PPO 1500
Waive
Seton
Local 20
Seton
Non-Union
Delta PPO 800
VSP Core
Seton
Non-Union
DCHS HMO NCAL
CIGNA DHMO
VSP Buyup
Seton
Non-Union
Waive
Delta PPO 1500
Waive
Seton
Non-Union
Seton
SEIU
Seton
SEIU
DCHS HMO NCAL
VSP Buyup
Seton
SEIU
Waive
Waive
Waive
Location
Group
Med
Dental
Vision
St Francis
Non-Union
DCHS HMO SF
Delta PPO 800
VSP Core
St Francis
Non-Union
DCHS POS SF
CIGNA DHMO
VSP Buyup
St Francis
Non-Union
Waive
Delta PPO 1500
Waive
St Francis
Non-Union
St Francis
SEIU
DCHS HMO SF
Delta PPO 800
VSP Core
St Francis
SEIU
DCHS POS SF
CIGNA DHMO
VSP Buyup
St Francis
SEIU
Waive
Delta PPO 1500
Waive
St Francis
SEIU
St Francis
UNAC
DCHS HMO SF
Delta PPO 800
VSP
St Francis
UNAC
DCHS POS SF
CIGNA DHMO
VSP Buyup
St Francis
UNAC
Waive
Delta PPO 1500
Waive
St Francis
UNAC
Waive
Delta PPO 800
VSP Core
Local 20
DCHS HMO OCH
CIGNA DHMO
VSP Buyup
Local 20
Waive
Delta PPO 1200
Waive
Waive
Waive
Delta PPO 800
VSP Core
Waive
Waive
Delta PPO 800
VSP Core
Waive
Waive
Waive
Location
Group
Med
Dental
Vision
Location
Group
Med
Dental
Vision
St Louise
CNA
DCHS PPO
Delta PPO 800
VSP
St Louise
CNA
DCHS POS SLRH
CIGNA DHMO
Waive
St Louise
CNA
Waive
Delta PPO 1200
St Louise
CNA
St Louise
CLVNA
DCHS PPO
Delta PPO 800
VSP
St Louise
CLVNA
DCHS POS SLRH
CIGNA DHMO
Waive
St Louise
CLVNA
Waive
St Louise
CLVNA
St Louise
Local 20
St Louise
St Louise
St Louise
Local 20
St Louise
Non-Union
DCHS PPO
Delta PPO 800
VSP Core
St Louise
Non-Union
DCHS POS SLRH
CIGNA DHMO
VSP Buyup
St Louise
Non-Union
Waive
Delta PPO 1200
Waive
St Louise
Non-Union
St Louise
SEIU
St Louise
St Louise
St Louise
SEIU
Location
Group
Med
Dental
Vision
St Vincent
CNA
DCHS HMO SV+SO
Delta PPO 800
VSP
St Vincent
CNA
DCHS POS SV+SO
CIGNA DHMO
Waive
St Vincent
CNA
Waive
Delta PPO 1500
St Vincent
CNA
St Vincent
Non-Union
DCHS HMO SV+SO
Delta PPO 800
VSP Core
St Vincent
Non-Union
DCHS POS SV+SO
CIGNA DHMO
VSP Buyup
St Vincent
Non-Union
Waive
Delta PPO 1500
Waive
St Vincent
Non-Union
St Vincent
SEIU
DCHS HMO SV+SO
Delta PPO 800
VSP Core
St Vincent
SEIU
DCHS POS SV+SO
CIGNA DHMO
VSP Buyup
St Vincent
SEIU
Waive
Delta PPO 1500
Waive
St Vincent
SEIU
Location
Group
Med
Dental
Vision
System Office
Non-Union
Delta PPO 800
VSP Core
System Office
Non-Union
DCHS HMO NCAL
CIGNA DHMO
VSP Buyup
System Office
Non-Union
DCHS HMO SV+SO
Delta PPO 1200
Waive
System Office
Non-Union
Waive
Waive
Waive
Waive
DCHS PPO
Delta PPO 800
VSP Core
Local 20
DCHS POS SLRH
CIGNA DHMO
VSP Buyup
Local 20
Waive
Delta PPO 1200
Waive
Waive
Waive
DCHS PPO
Delta PPO 800
VSP Core
SEIU
DCHS POS SLRH
CIGNA DHMO
VSP Buyup
SEIU
Waive
Waive
Waive
Waive
Waive
Waive
(iii)
The Collective Bargaining Agreements listed on Schedule 1.1(c) are hereby incorporated by reference.
Bonus DCHS and its Local Health Ministries do not offer a bonus plan, except Schedule 6.2(g) is hereby
incorporated.
Incentive DCHS and its Local Health Ministries do not offer a bonus incentive plan.
Deferred Compensation DCHS provides and funds a non-qualified benefit for non-represented associates who
have earnings over the IRS limit established in Section 401(a)(17) (Daughters of Charity Health System
401(a)(17) Retirement Plan. There are no other deferred compensation plans offered.
Change in Control DCHS and its Local Health Ministries do not offer or fund a change in control benefit with
the exception of benefits provided as part of certain employment agreements referenced in Schedule 6.2(g).
Severance Please see Schedules 1.1(b) and 7.2(b)
Fringe Benefits
DCHS System Office offers $12,000 per year car allowance for some executives (VP and up).
Some LHMs offer a smaller car allowance.
Various LHMs and CBS offer immaterial fringe benefits such as use of on-site gym, free parking, flu
vaccinations, credits or incentives for taking public transportation or carpooling.
Performance or Retention Plan DCHS and its Local Health Ministries do not offer a performance or retention
plan benefit material to this transaction, except Schedule 6.2(g) is hereby incorporated.
Schedule 4.14(c)
Liability with Respect to Plans
1. The matters set forth in the presentation titled Projected Contributions and Employer
Withdrawal Liability, dated February 19, 2014, are hereby incorporated by reference.
2. The matters set forth in the Daughters of Charity Health System and Daughters of Charity
Health System Retirement Plan Actuarial Valuation Report regarding Employer Contributions
for the Plan Year Beginning January 1, 2014, dated March 2015, are hereby incorporated by
reference.
3. The matters set forth in the Retirement Plan for Hospital Employees Actuarial Valuation Report
for Purposes of Determining Contributions for the Plan Year Beginning January 1, 2014, dated
February 2015, are hereby incorporated by reference.
for the Plan Year Beginning January 1, 2012, dated February 2013, is hereby incorporated by
reference.
for the Plan Year Beginning January 1, 2013, dated February 2014, are hereby incorporated by
reference.
6. A class action lawsuit has been filed in the United States District Court, Northern District of
California, alleging that the Daughters of Charity Health System Retirement Plan is not a church
plan exempt from the Employee Retirement Income Security Act of 1974 (ERISA), and
seeking relief for alleged violations of ERISA requirements with respect to plan funding,
reporting and disclosures, fiduciary duties, prohibited transactions and other matters. Morris v.
Daughters of Charity Health Sys., N.D. Cal., No. 3:14-cv-04681-LB, complaint filed 10/21/14.
Stay of action in force through September 22, 2015.
Schedule 4.14(e)
Retiree Welfare Benefits and Retirement Plans
OConnor Hospital
While there is no formal plan, OConnor Hospitals policy is to subsidize the cost of continuing benefits
under COBRA for former associates between the ages of 55 65 with the amount subsidized based on
the employees years of service.
Per Collective Bargaining Agreement between SEIU-UHW and OConnor Hospital, Seton Medical
Center and Saint Louise Regional Medical Center the hospitals subsidize the cost of continuing benefits
under COBRA for former associates ages 55-65 with the amount subsidized based on years of service.
Per Collective Bargaining Agreement between CNA and OConnor Hospital, Seton Medical Center and
Saint Louise Regional Medical Center, the hospitals subsidize the cost of continuing benefits under
COBRA for former associates ages 55-65 with the amount subsidized based on years of service.
Per Collective Bargaining Agreement between CLVNA and Saint Louise Regional Hospital and
OConnor Hospital the hospitals subsidize the cost of continuing benefits under COBRA for former
associates ages 55-65 with the amount subsidized based on years of service.
Per negotiated and ratified Tentative Agreements between Engineers and Scientists Local 20 and
OConnor Hospital, Seton Medical Center and Saint Louise Regional Medical Center the hospitals
subsidize the cost of continuing benefits under COBRA for former associates ages 55-65 with the
amount subsidized based on years of service.
Per Collective Bargaining Agreement between CNA and OConnor Hospital, Seton Medical Center and
Saint Louise Regional Medical Center, the hospitals subsidize the cost of continuing benefits under
COBRA for former associates ages 55-65 with the amount subsidized based on years of service.
Per negotiated and ratified Tentative Agreements between Engineers and Scientists Local 20 and
OConnor Hospital, Seton Medical Center and Saint Louise Regional Medical Center the hospitals
subsidize the cost of continuing benefits under COBRA for former associates ages 55-65 with the
amount subsidized based on years of service.
Per Collective Bargaining Agreement between CNA and OConnor Hospital, Seton Medical Center
and Saint Louise Regional Medical Center, the hospitals subsidize the cost of continuing benefits
under COBRA for former associates ages 55-65 with the amount subsidized based on years of
service.
Schedule 4.15(a)
DCHS Employees
See attached table, hereby incorporated
[WITHHELD]
Schedule 4.15(b)
Grievances and Unfair Labor Practice Complaints 16
Unfair Labor Practices Proceedings DCHS Medical Foundation
Date Rec'd
Filed on June 5,
2015
ULP #
UHW-SEIU UHW
West, NLRB 32CA-153653
Manager/Dept.
DCSH Medical
Foundation
Union
SEIU-UHW West
Type
ULP alleging violation
of 8 (A) (i) of the
NLRA
Filed on June 3,
2015
Decertification
Petition-NLRB-32RD-1533446
Petitioner
Desire Garcia
SEIU-UHW West
Decertification
petition-request for
vote (election) on June
18, 2015
[WITHHELD]
Summary
In response to 32-RD-1533446Decertification Request filed on
June 3, 2015 filed this ULP
alleging that DCHSMF
Management maintained
unlawful and employment
policies
STATUS
PENDING
Under investigation.
On July 27, 2015
NLRB dismissed a
portion of SEIU-UHW
West allegations with
balance pending
conclusion of
investigation.
Hearing scheduled on
June 11, 2015
postponed until
determination of ULP
32-CA-153653
Unfair Labor Practices Proceedings-St. Francis

LHM
SFMC
Grievance #
21-CA-146244
Initial Action
5/20/15 Dismissed
Current Status
6/3/15 UNACs Appeal acknowledged
UNAC 2015 June 9 Grievances-St. Francis

Griev. #
Manager / Dept.
Associate
/Grievant
Grievance
Type
Summary
SB04-14
Kim Washington
York/Nursing
admin
Lydia Oliver
Union
Exposed to unsafe
conditions. Loss of
wages/benefits-Work
16
St. Francis and UNAC resolve most of the grievances filed without going to arbitration.
DATE
CLOSE
D
NA
STEP I
Response
made
9/25/2014
CS denied
Status
STEP 2
Status
Union
requesting
meeting to
10/1/14
Open
Most likely
will be settled
Schedule 4.15(c)
Compliance with Legal Requirements Relating to Employee Health and
Safety
1. Correspondence from St. Francis Medical Center to from the Division of Occupational Safety and
Health (Cal-OSHA) dated May 15, 2015.
[WITHHELD]
2. Order from Cal-OSHA Board of Appeals re: St. Francis Medical Center issued April 8, 2015.
3. Cal-OSHA Investigation Report at St. Francis Medical Center began on March 10, 2014 and CalOSHA has yet to publish a report.
4. In September 2014, St. Francis Medical Center received notice of two citations from Cal-OSHA
based on allegations related to implementation and maintenance of its Injury Illness Prevention
Program. Both citations were given at the "serious" level. St. Francis Medical Center settled the
matter with Cal-OSHA for a "general" and "serious" level violation. In March 2015, Cal-OSHA
approved an abatement plan as part of the resolution, with the agreement that St. Francis Medical
Center would continue to work with Cal-OSHA on implementation over the next two months. As
part of the abatement plan, St. Francis Medical Center, among other items, updated its Injury Illness
Prevention Program (IIPP) and Security Management Plans, updated certain investigation
methods, revised its Public Safety Code Grey policy, increased public safety staffing, installed panic
alarms, and agreed to review certain other policies and further amend if necessary. St. Francis
Medical Center has not yet been released from Cal-OSHA regarding this abatement plan. St.
Francis Medical Center is working with Cal-OSHA and providing relevant documentation showing
that it put the full abatement plan into place and updated its IIPP.
5. On September 17, 2014, St. Francis Medical Center received a letter from Cal-OSHA requesting
corrections including the installation of two stationary roof top ladders and the placement of
protective guard rails. St. Francis Medical Center began addressing non-structural issues
immediately and contracted with RCP for the structural repairs including the related submission of
plans and documents to Office of Statewide Health Planning and Development (OSHPD). The
structural repairs are estimated to cost $10,700 and are still pending approval by OSHPD of the
submitted plans.
Schedule 4.16
Insurance22
Policy Description
Policy No.
Carrier
General Limits (See policy for complete set of limits)
Effective
Primary Professional
(Claims-Made) &
Commercial General
Liability
DOC PLGL-26000-012
Marillac Insurance
Company Ltd.
Commercial General Liability

$ 2,000,000 Each Occurrence
$10,000,000 Annual Aggregate
Professional Liability (Claims Made) Excludes RFK
Retroactive Date: 12-1-01
$ 3,000,000 Each Claim
Defense Costs in addition to the limits
12/31/14 to
12/31/15
Umbrella Excess Liability

(Professional LiabilityClaims Made & General
Liability-Occurrence
Form)
MAR-XS-123103-1-A
Marillac Insurance
Company Ltd.
(Reinsured by the
reinsurance companies
listed below)
Professional Liability (Claims-Made) Retro Date: 12-1-01

$80,000,000 Each Occurrence/Claim
$80,000,000 Aggregate
$
100,000 Continuing Retained Limit
Excess Scheduled Underlying Insurance
100% Reinsured as illustrated below:
12/31/14 to
12/31/5
First Facultative
Reinsurance Layer
Reinsurance Certificate
No. RBN G21816838
08
ACE Insurance
Company

$15,000,000 Aggregate (Defense cost included in limit)
$100,000 Continuing Underlying Limit
12/31/14 to
12/31/15
Second Facultative
Reinsurance Layer
No. HMU
2097462209-7
CNA Insurance
Company

12/31/14 to
12/31/15
Third Facultative
Reinsurance Layer
No. WD 1400827
Swiss Re

12/31/14 to
12/31/15
Fourth Facultative
Reinsurance Layer
No. WD 1400828
London [Chaucer,
Atlantic Specialty (One
Beacon), and Barbican]

$30,000,000 Aggregate (Defense cost included in limit) update
the 12-14
12/31/14 to
12/31/15
22
Note to draft: Updated policy description information for policies expiring as of 7/1/15 is pending.
Policy Description
Policy No.
Carrier
Effective
Workers Compensation
and Employers Liability
MWC 302584 00
Old Republic Insurance

Company
Coverage A: Statutory
Coverage B: Employers Liability Limits
$1,000,000 Each Accident
$1,000,000 Each Employee
$1,000,000 Policy Limit
Deductible:
$500,000 Deductible including ALAE
7/1/14
to
7/1/15
Workers Compensation
Deductible Buy Down
DED.WC-07.01.14-15
Marillac Insurance
Company Ltd. (MICL)
Coverage A: $500,000
Coverage B: $500,000
(This policy applies to Deductibles under the Old Republic
MWC302584 00 policy for 1-1-03/04 thru 7-1-14/15)
Deductible: varies (See deductible schedule by year)
7/1/14
to
7/1/15
Special Excess Reinsurance Workers

Compensation
XWC112103402
PPIC (Reinsured by
MICL formerly DCHS
SP)
$250,000 Each Claim/Occurrence
7-5-78
to
1-1-02
Commercial General
Liability (occurrence
form) for St. Francis
Medical Center and City
of Lynwood Parking
Agreement
HPL G2181684A 08
Illinois Union
Insurance Company
(ACE) Non-Admitted
Insurer
Commercial General Liability Occurrence Form

$3,000,000 General Aggregate Limit (Other than ProductsCompleted Operations)
$1,000,000 Products-Completed Operations Aggregate Limit
$1,000,000 Personal & Advertising Injury Limit
$1,000,000 Each Occurrence Limit
$ 50,000 Damages to Rented Premises Limit
$ 5,000 Medical Expense Limit
Deductible
$ 10,000 Each Occurrence
NONE Aggregate
Allocated Loss Adjustment Expense will not contribute to the
erosion of the limits.
1/5/15
to
1/5/16
Directors & Officers

Liability (Claims-Made),
including Employment
Practices Liability
01-365-42-54
National Union Fire

Insurance Company of
Pittsburgh, Pa. (AIG)
Claims-Made Form:
$10,000,000 Aggregate Policy Limit (inclusive of defense
costs). Prior and Pending Litigation Date: 12/31/01
$500,000 Side A Excess/$50,000 Crisis Fund Mgmt. $250,000
D&O/$350,000 EPLI Retentions-Judgment, Settlement &
Defense Costs
$1,500,000 Anti-Trust Retention/20% Coinsurance
$5,000,000 Xs $5,000,000 Antitrust Claims Prior and Pending
Litigation Date 7/30/06
7/1/14
to
7/1/15
Does Not Include Robert

F. Kennedy Medical
Center on or after 12-3104
Policy Description
Policy No.
Carrier
Effective

Liability (Claims-Made),
including Employment
Practices Liability
BLX10005157900
Endurance Risk
Solutions Assurance
Co.
Claims-Made Form:
$10,000,000 Aggregate Excess of National Union $10M Policy
Following National Union Fire Form
7/1/14
to
7/1/15
Punitive Damages
Intentional Acts EPLI
Liability Wrap-around
21188104
American International
Reinsurance Company,
Ltd.
$10,000,000 Each Claim Sub-Limit

$10,000,000 Aggregate Sub-Limit
7/1/14
to
7/1/15
Punitive Damages
Intentional Acts EPLI
Liability Wrap-around
MCPD203094
Magna Carta Insurance,

LTD Aon (Bermuda)
LTD Reinsured by
Endurance Risk
Solutions Assurance
Co.
$10,000,000 X/s $10,000,000 Each Claim Sub-Limit

$10,000,000 Aggregate Sub-Limit
7/1/14
to
7/1/15
Fiduciary Liability
(Claims-Made)
8224-0373
Federal Insurance
Company
$10,000,000 Each Claim

$10,000,000 Each Policy Aggregate
$100,000 All Defense Settlement Fees/Settlement
Program Notices /
$
50,000 Retention/ Settlement
Pending & Prior Date Retroactive date: 1-1-02
7/1/14
to
7/1/15
Crime/Fidelity
8224-0373
Federal Insurance
Company
$10,000,000 Employee Theft; Premises; Transit; Forgery;

Computer Fraud/; Funds Transfer Fraud; Money Order &
Counterfeit Currency Fraud; Credit Card Fraud; and Client
Coverage
$25,000 Expense Coverage
$100,000 Deductible
7/1/14
to
7/1/15
Automobile Liability
4032998158
Transportation
Insurance Company
$1,000,000 Liability
$1,000,000 Uninsured/Underinsured Motorists
$5,000 Medical Payments
Basic-Personal Injury Protection
Physical Damage Deductibles:
$1,000 Comprehensive and Collision
7/1/14
to
7/1/15
Policy Description
Policy No.
Carrier
Effective
Heliport Liability and

Non-Owned Aircraft
Liability
BA-14-07-00036
StarNet Insurance
Company (Berkley
Aviation)
$10,000,000 Each Occurrence- Non Owned Aircraft

$10,000,000 Personal Injury Aggregate
$10,000,000 Each Occurrence Aviation Premises
$25,000 Medical Payments Each Passenger
$10,000 Personal Effects
$75,000 Fire Legal.
Subject to a maximum of 60 seats
7/1/14
to
7/1/16
(MultiYear)
Property
4029501903
Continental Casualty
Company
$750,000,000 Real & Personal Property, Business Interruption

(Total Values of $ 2,356,325,894)
$25,000 Deductible, Except $10,000 DCMF and $50,000
Emergency evacuation expense and
$50,000 Flood & Back-up of Sewers
$500,000 100 yr. & $250,000 500 Year Flood Plan (NO
Earthquake coverage provided)
Terrorism Risk Insurance Act Applicable (See Policy for
details).
7/1/14
to
7/1/15
Equipment Breakdown
(a/k/a Boiler &
Machinery)
FBP2273630
The Hartford Steam

Boiler Inspection and
Insurance Company
$100,000,000 Equipment Breakdown

$25,000 Deductible applies to: Seton Medical Center, OConnor
Hospital, St. Vincent Medical Center & St. Francis Medical
Center and
$10,000 Deductible applies to Seton Medical Center Coastside,
DePaul Health Center, Saint Louise Regional Hospital and
$5,000 Deductible applies to DCHS Corporate (Los Altos Hills,
Redwood City & Pasadena) and Medical Foundation Offices
and Caritas Business Services
7/1/14
to
7/1/15
Provider Capitation Stop

Loss (Applicable to St.
Vincent Medical Center,
St. Francis Medical
Center, OConnor
Hospital, and the Medical
Foundation)
P0312544002
PartnerRe America
Insurance Company
Maximum Limit per covered person $1,000,000 per policy

90% Coinsurance, if claim received by 1-1-2017
50% Coinsurance, if claim NOT received by 1-1-2017
Self-Insured Retentions:
Commercial
$225,000 retention
Medicare
$175,000 retention
Medi-Connect
$175,000 retention
Medi-Cal
$125,000 retention
Medi-Cal SPD
$250,000 retention
1/1/2015 to
1/1/2016
Policy Description
Policy No.
Excess Tail Professional

Liability (Claims-Made)
for Robert F. Kennedy
Medical Center only
RFK070103042-1

Liability Tail (ClaimsMade) for Robert F.
Kennedy Medical Center
only
EPG0001340
Primary Professional
(Claims-Made) Tail
Liability for Robert F.
Kennedy Medical Center
only
Carrier
Effective

Defense cost included in limits
Seven (7) year Discovery Period Expires 12-30-2011
12/30/04
to
12/31/04
Expired
12/30/11
Mt. Hawley Insurance

Company (RLI Group)
Claims-Made Form:
$5,000,000 Aggregate Policy Limit
$150,000 Self Insured Retention- Claims other than a Wrongful
Employment Practice Claims
$150,000 Self Insured Retention-Wrongful Employment
Practice Claims
Six (6) year Discovery Period, expires 2/15/11
Prior or Pending Litigation Date: 12/31/01
2/15/05
to
2/15/11
Expired
2/15/11
RFK07010304-1
Marillac Insurance
Company, Ltd.

$2,000,000 Each Claim
Defense Costs in addition to the limits
12/30/04
to
12/31/04
Sexual Misconduct
Liability Insurance for St.
Francis Medical Center
Childrens Counseling
Centre Program only
WD1400327
Beazley (Lloyds of
London)
$2,000,000 Each Victim Limit

$2,000,000 Aggregate of Limit includes cost of defense
$ 50,000 Self Insured Retention Any One Victim includes
cost of defense
Retroactive Date: June, 2009
7/1/14
to
7/1/15
Storage Tank Liability for

OConnor Hospital
G24668538 006
ACE American
Insurance Company
$1,000,000 Each Incident

$4,000,000 Aggregate Limit of Limit of Liability (Claims and
Remediation Costs)for all
Storage Tank Incidents
$2,000,000 Aggregate Limit of Liability for all Legal Defense
Expenses for all Storage Tank
Incidents
$6,000,000 Total Policy Aggregate Limit of Liability for all
$5,000 Deductible Each Claim
Retroactive Date: 6/30/2008
6/30/14
to
6/30/15
No. HPC 4275958 00
Marillac Insurance
Company, Ltd.
100% Reinsured by:

Zurich
Policy Description
Policy No.
Carrier
Effective

DePaul Health Center
G24776062 002
ACE American
Insurance Company

Incidents
12/2/14
to
12/2/15

St. Francis Medical
Center
G24761307 002
ACE American
Insurance Company

Incidents
Covered Locations: See Storage Tank Schedule in Policy
9/5/14
to
9/5/15

Hospital
G24728298 003
ACE American
Insurance Company
$1,000,000 Per UST Tank Incident

$2,000,000 Per AST Tank Incident
Remediation Costs) for all Storage Tank Incidents
Expenses for all Storage Tank Incidents
9/18/14
to
9/18/15
Policy Description
Policy No.
Carrier
Effective

St. Vincent Medical
Center
G24728298 003
ACE American
Insurance Company
$1,000,000 Per UST Tank Incident

$2,000,000 Per AST Tank Incident
9/18/14
to
9/18/15

G24730268 003
ACE American
Insurance Company
ACE American Insurance Company

10/8/14
to 10/8/15
Patient Trust Fund Bond:

OConnor Hospital
83BSBBF7648
Hartford
State of CaliforniaPatient Property Bond
$50,000
12/01/1415

Hospital
83BSBBF7637
Hartford
$10,000
12/01/1415

83BSBBF7661
Hartford
$35,000
12/01/1415

Coastside
83BSBBF7598
Hartford
$75,000
12/01/1415

St. Francis Medical
Center
83BSBBF7621
Hartford
$5,000
12/01/1415
Policy Description
Policy No.
Carrier
Effective
St. Francis Medical

Center Physician
Program
XMP0038169
Preferred Professional
Insurance-Company
$1,000,000 Per Incident

Limit applies separately to each named physician provider
shown on the policy
(Retro Date: Various- by physician provider
1/1/15
to
1/1/16
Ayman Alladawi, M.D.,

Inc
XCC0038152
Insurance-Company
$1,000,000 Each Business Entity Incident (Excludes Physicians)

Retro Date:10/1/09
1/1/15
to
1/1/16
California Cardiothoracic
Associates
XCC0038157
Insurance-Company

Retro Date:1/1/06
1/1/15
to
1/1/16
Karol L. Bowens M. D. A
Medical Corporations
XCC0038162
Insurance-Company

Retro Date:7/1/03
1/1/15
to
1/1/16
Jorge F. Carreon, M.D.,

Inc
XCC0038163
Insurance-Company

Retro Date:7/1/04
1/1/15
to
1/1/16
Maternal-Fetal Medicine
Associates
XCC0038159
Insurance-Company

Retro Date:10/1/09
1/1/15
to
1/1/16
Medhat Seif, M.D., Inc.
XCC0038160
Insurance-Company

Retro Date:10/1/09
1/1/15
to
1/1/16
Silas J. Thomas, M.D.

Inc.
XCC0038164
Insurance-Company

Retro Date:7/1/03
1/1/15
to
1/1/16
Womens Medical Center

of Los Angeles, Inc.
XCC0038158
Insurance-Company

Retro Date:7/1/03
1/1/15
to
1/1/16
St. Francis Radiology

Medical Group
XCC0038167
Insurance-Company

Retro Date:3/15/05
1/1/15
to
1/1/16
Policy Description
Frontline Emergency Care
Specialists
Policy No.
XCC0038149
Carrier
Insurance-Company
Effective

Retro Date:1/1/04
1/1/15
to
1/1/16

Limit applies separately to each named PA provider shown on
the policy
(Retro Date: Various- by physician provider)
St. Francis Multispecialty
Medical Group, Inc
XCC0038166
Insurance-Company

Retro Date:2/1/02
1/1/15
to
1/1/16

Limit applies separately to each named PA provider shown on
the policy
Dr. Romanenko Inc. A
Professional Corporation
XCC0038198
Insurance-Company

Retro Date: 3/1/13
1/1/15
to
1/1/16
John K. Jones, MD, Inc.
XCC0038199
Insurance-Company
$1,000,000 Each Business Entity Incident(Excludes Physicians)

Retro Date: 3/1/13
1/1/15
to
1/1/16
Wilson A. Morales, MD,

Inc.
XCC0038200
Insurance-Company

Retro Date: 6/1/13
1/1/15
to
1/1/16
Gwen Maria Allen, MD,

Inc.
XCC0038197
Insurance-Company

Retro Date: 3/1/13
1/1/15
to
1/1/16
Occupational Health
Services Medical Group,
Inc.
XCC0038151
Insurance-Company

Retro Date:2/1/02
1/1/15
to
1/1/16
SMC
Policy Description
Policy No.
Carrier
Effective
Bay Area Obstetrics &

Gynecology (formerly
Wheeler, Consiglieri,
Selinger, Scheirfele,
Zaglin, MD, Inc)
XCC0038165
Insurance-Company
$1,000,000Each Business Entity Incident (Excludes physician)

Retro Date: 5/7/03
1/1/15
to
1/1/16
St. Elizabeth Ann Seton

New Life Center
XMP0038179
Insurance-Company

shown on the policy (NO Entity coverage)
1/1/15
to
1/1/16
SLRH
Hospital (On-Call)
XMP0036949
Insurance-Company

shown on the policy
7/5/14
to
7/5/15
OCH
OConnor Hospital FP
Residency & Sport Med.
Fellowship Program
XMP0036919
Insurance-Company

shown on the policy
7/1/14
to
7/1/15
Family Medicine
Associates of San Jose,
Inc.
XCC0036917
Insurance-Company
$1,000,000Each Business Entity Incident (Excludes Physicians)

Retro Date: 7/1/05
7/1/14
to
7/1/15
OConnor Hospital
(Administration)
XMP0038071
Insurance-Company
$1,000,000Each Business Entity Incident (Excludes Physicians)

Retro Date: 1/1/14
1/1/15
to
1/1/16
SVMC
Policy Description
St. Vincent Medical
Center
Policy No.
XMP0036907
Carrier
Insurance-Company
Effective

Limit applies to all 3 named physician providers shown on the
policy
7/1/14
to
7/1/15
DCHS Medical Foundation related IPA Insurance Plans

PROVIDER NAME
INSURANCE
POLICY#
RETRO DATE
LIMITS OF
LIABILITY
EXP.
DATE
9/1/1983
1M/3M
12/31/2015
4/1/1982
6/21/1995
2M/4M
2M/4M
12/31/2015
12/31/2015
SOCAL
MONTANO MD,JOSE N.
THOMAS MD,SILAS J.
GRELL PA,YOLANDA
CHERN MD,ANNIE
DUCHICELA MD,KEEGAN
FORESEE FNP,JEAN A.
FULMER DO,CHRISTIAN J.
HARTMAN MD,ANDREW N.
HENEHAN DO,MICHAEL
HOCKENBROCK MD,AMY W.
(FMA)
KENT MD,GEORGE P.
MAXEY MD,MICHELLE
NORMAN MD,ROBERT M.
RAI MD,DALJEET S.
SCHECHTMAN MD,ANDREW
CAP
3903
COMPTON OB/GYN
CAP
4296
MPT (Mutual Protection
4296
Trust w/ CAP)
FMA
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
710313
612809
612809
714614
704624
613397
612809
8/1/2010
8/1/2010
3/22/1999
8/1/2007
8/16/2004
8/12/1985
9/1/2014
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2015
1/1/2016
1/1/2016
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
612818
612821
612819
612878
704624
10/1/1998
10/1/1998
10/1/1998
10/1/1998
8/16/2004
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
STEVENS MD,MICHAEL B.
SUN MD,FRANCES
TORRES MD,ELISE C.
YU MD,GRACE
NORCAL
NORCAL
NORCAL
NORCAL
612811
612816
712349
706753
PCFL/CFL
10/1/1998
10/1/1998
2/1/2012
8/1/2006
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
AMINOVA MD,ALLA
LEE MD,JOSEPH PEI-TE
MIRZA MD,MUNEEZA
PADUA MD,NARCISO T.
PADUA MD,ROSEMARIE R.
VUONG NP,LYNN
WATSON MD,AMY
WENNER MD,WALDEMAR H.
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
701429
712308
701429
028803
609592
701429
701429
610605
7/1/2002
8/17/2012
10/1/2009
12/11/1991
10/1/1996
7/1/2014
5/6/2011
5/1/1997
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
8/1/1977
1M/3M
1/1/2016
O'CONNOR SURGERY
WALSH MD,HUGH G.
NORCAL
006624
SAN JOSE MEDICAL GROUP

ABOLLHASSANI
MD,MANDANA
AUNG MD,LAI LAI
BABAKI MD,ARASH S.
BAKHTAR DO,OMID
BALESTRA MD,RICARDO R.
BOUVIER DO,DENIS P.
GILL MD,MUHAMMAD A.
GUPTA MD,ANAMIKA
KELLY MD,ROBERT J.
MOLLICK MD,JOSEPH A.
MONACO MD,NICHOLAS B.
NORCAL
712913
1M/3M
1/1/2016
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
712946
713939
101620
714449
101620
713057
712512
710773
101620
712912
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
PARADA MD,THEODOR S.
PARAGUYA MD,LAUREEN V.
RAI MD,BAROON
SANJORJO MD,JOSEPHUS L.
SMITH MD,GEORGE F.
ADROUNY MD,ADOUR R.
AGARWAL MD,MANOJ
ANKOLEKAR MD,SHEETAL
AZIZ MD,HUMA
BHUVA MD,DINESH N.
BOMMAKANTI MD,SAILAJA R.
BORAU MD,NICOLE C.
BRUHN MD,CHARLES J.
BUESCHER MD,ELIZABETH A
CHAN DO,VIRGINIA
CHECHELNITSKY
MD,MARINA S.
CORSIGLIA MD,VICTOR F.
CUMMINGS MD,CYNTHIA L.
DELA CRUZ OD,EMMANUEL II
DIDECH MD,DEAN M.
FARR MD,SARA
FELDMAN MD,ARTHUR B.
FILUK MD,ROBERT B.
FIRMAN MD,JAMES
GHEORGHIU MD,IOANA A.
GRAY PA,MICHAEL
HOCKENBROCK MD,AMY W.
HUANG MD,PAUL I.
HUNG DO,CHIA-YI SELENA
HUR MD,JIM RONG
HUSAIN MD,SHABNAM
IKOSSI MD,DANAGRA G.
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
101620
712911
714764
101620
091720
101620
713131
713219
702562
019408
614601
101620
027430
712980
712436
613425
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
LOA
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
016227
022127
101620
019418
101620
016255
024773
101620
101620
101620
101620
710340
712859
026319
602315
709302
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
10/15/2013
IYENGAR MD,JAIDEEP J.
JOHNSTON PA-C,BRIAN D.
KAILEH MD,LYTH H.
KANSARA MD,RASIK
KEARNS MD,LELANYA B.
KHAN DO,SHALLA S.
KHODOSH MD,RITA
KOMSHIAN MD,SHAHE V.
LAM MD,OSAMA F.
LOPEZ DO,JOSHUA D.
LOPEZ MD,ANTHONY C.
LU MD,PEI-HUA (PEGGY)
MALIK MD,TAHIRA Z.
MATARANGAS DPM,SANDI E.
MAZEKE-KELLEY MD,LA
CRISTA W.
MORGAN MD,DANIEL H.
MURAWSKI MD,MARTA C.
NEACSU MD,ANCA V.
NEGIN MD,HARLEY B.
NEVITT PA-C,LISA
NEWMAN MD,ILENE
NGO MD,HIEP Q.
NGUYEN DO,THANH-TAM N.
ORTIZ MD,VERONICA N.
OYKHMAN MD,VLADIMIR
PARAMESWARAN MD,VIDYA
PARIKH MD,AKIK K
PARSI MD,VIDA K.
PIPLANI MD,KOMPAL
POSERIA MD,NUTAN
REYES-VILLA MD,DANIEL J.
RUFFY MD,MAURO B.
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
713722
101620
712185
713609
706576
708683
711469
601202
600412
708823
27540
609637
617288
101620
611025
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
714951
703258
707631
024223
101620
025089
709997
714463
715802
024165
704248
700214
709818
712512
713424
708624
708219
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
SACHS MD,HARVEY J.
SAGDEO MD,ANJALI V.
SAHA MD,VARSHA
SHAH MD,VIDHI
SHARMA MD,SHASHI P.
SIFFLET MD,LEO J.
SUNDARAMURTHY
MD,SAIGEETHA
TRANDUC MD,MATTHEW
HUNG
VERRETTE DPM,ROBERT D.
VO MD,THAI D.
WEINSTOCK MD,HENRY
WONG MD,DAVID C.
WU MD,BENJAMIN M.
YANG MD,ALICE L.
JOYCE MD,WILLIAM BRIAN
MINOOEE MD,AREZOU
RATHI MD,DEEPA
TOMPKINS FNP,JAIME R.
PASCUA MD,ROELIZA E.
SMITH DPM,MATTHEW S.
ESFAHANI MD,MAHSA
LEE MD,SANDRA Y.
SAVUR MD,SHEILA A.
CHAUDHARY MD,JOCELIZA
G.
HAGGERTY MD,JENNIFER
KAMARAJU MD,MANJULA
KUROIWA PA-C,TARA N.
WARSHAL MD,WILLIAM
WOODS MD,NORMAN
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
NORCAL
024185
605267
609410
709592
026464
003073
101620
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
NORCAL
705200
1M/3M
1/1/2016
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
1/1/2016
9/21/1998
1M/3M
4/1/2016
11/15/2009
9/6/1994
2/20/2013
4/30/2001
4/1/1998
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
4/1/2016
4/1/2016
4/1/2016
4/1/2016
4/1/2016
NORCAL
101620
NORCAL
711920
NORCAL
022020
NORCAL
703492
NORCAL
703228
NORCAL
708695
NORCAL
020951
NORCAL
714065
NORCAL
714064
NORCAL
020951
NORCAL
701597
NORCAL
101620
NORCAL
704429
NORCAL
706108
NORCAL
703787
SAMARITAN FAMILY PRACTICE
TDC
0054985
TDC
TDC
TDC
TDC
TDC
0054985
0054985
0054985
0054985
0054985
DUTTON NP,JULIE L.
TDC
0054985
12/1/2013
1M/3M
4/1/2016
ALLCARE MEDICAL GROUP

CASTILLO MD,REYNALDO B.
CASTILLO MD,ROMEO A.
CURTIS DC,ROBERT S.
ESPENAN MD,PIERRE A.
ESTRADA NP,YVONNE
HAROON MD,YASMIN
KEITH MD,ARTHUR L.
LEHMAN NP,STEPHANIE C.
LEWIS MD,BEVERLY
ROTENBERG MD,SAMUEL
SIDDIQUI MD,JAMAL
SMITH MD,MONT A.
YAZDI MD,REZA
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
TDC
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
0068686
10/29/1984
10/1/2002
10/10/2002
10/1/2002
7/19/2007
8/19/2014
10/1/2002
10/1/2002
10/1/2002
10/1/2002
3/1/2001
4/1/2002
10/1/2002
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
1M/3M
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
10/1/2015
Northern Cal Advantage Medical

Group, Inc.
ACORD
NOCAL-3/
002339200
3/25/2015
1M/3M
3/25/2016
Schedule 4.19
Cost Reports
None.
Schedule 5.10
Brokers Fees Blue Mountain
LSA Capital, Inc.
The Parties agree that this Schedule may be amended or supplemented by BlueMountain prior to
Closing.
Schedule 6.2(g)
Retention Payments
See attached table, hereby incorporated
[WITHHELD]
Schedule 6.4(b)
Regulatory Approvals DCHS
California Corporations Code Section 5914
2.
Premerger filing required under the Hart-Scott-Rodino Antitrust Improvements Act of

1976, as amended (HSR Act)
Schedule 6.9
D&O Insurance
The estimate for D&O and EPL insurance is $1,630,000.
Schedule 6.10
Fiduciary Liability Insurance
The estimate for Fiduciary Liability insurance is $130,000.
Schedule 6.13
Licensed Intellectual Property
None; provided, however, that the Parties agree that BlueMountain shall have the right to
supplement or amend this Schedule 6.13 between the Effective Date and Closing subject to its
further due diligence review.
Schedule 7.1(a)(ii)
Regulatory Approvals Blue Mountain
California Corporations Code Section 5914.
2.
Premerger filing required under the Hart-Scott-Rodino Antitrust Improvements Act of

1976, as amended (HSR Act).
3. Application with the California Department of Public Health, Licensing and Certification
Program (CDPH) pursuant to Section 1265 of the California Health and Safety Code,
for Integrity to manage the System.
4. Application to the California Board of Pharmacy, for the change of membership of the
Daughters of Charity Health System.
The Parties agree that this Schedule remains subject to supplement or amendment prior to
Closing based on Blue Mountains due diligence review.
Schedule 7.1(a)(iii)
Change of Control Applications and Notices Blue Mountain/Integrity
1. To the extent required by Law, application with CDPH regarding change of ownership of
the System.
2. To the extent required by Law, application with CDPH Laboratory Field Services
division regarding the Systems federal Clinical Laboratory Improvement Amendment
certificates.
3. To the extent required by Law, application with CDPH Laboratory Field Services
division regarding the Systems California clinical laboratory facility permits.
4. To the extent required by Law, change of licensee information with the California Office
of Statewide Planning and Health Development.
The Parties agree that this Schedule remains subject to supplement or amendment prior to
Closing based on Blue Mountains due diligence review.
Schedule 7.2(b)
DCHS and its Affiliates Severance Policies
1. Policy re: Reduction in Force of associates of Caritas Business Services, dated March 31,
2008
2. Policy re: Reduction in Force of associates of Daughters of Charity Health System
Office, dated October 24, 2008
3. Policy re: Reduction in Force of associates of OConnor Hospital
4. Policy re: Reduction in Force of associates of Saint Louise Regional Hospital
5. Policy re: Reduction in Force of associates of Seton Medical Center
6. Memo regarding Severance Guidelines for Severance Benefits for Hospital Vice
Presidents, dated September 25, 2006
7. Severance Guidelines for St. Vincent Medical Center
See attached table, hereby incorporated, for specific severance amounts.
[WITHHELD]
Schedule 7.12
Right of First Offer for Religious Assets
Various large religious statues, including Our Lady of Guadalupe currently located at St. Francis
Medical Center and the Statute of Jesus in the main hallway at Seton Medical Center.
Schedule 8.8
Transaction Documents
Resignation/Withdrawal of DOCMSC as sole member of DCHS
Transitional Consulting Services Agreement
Health System Management Agreement
Commitment Letter
Debt Facility Documents
Real Estate Purchase Option Agreement
Operating Asset Purchase Option Agreement
IT Agreement
Assigment and Assumption Agreement
Desposit Escrow Agreement
DCHS Amended Articles and evidence of filing
DCHS Amended Bylaws
DCHS Affiliate Amended Articles and evidence of filing
DCHS Affiliate Amended Bylaws
Joint Defense and Common Interest Agreement
Closing Compliance Officers Certificate of BlueMountain
Closing Compliance Officers Certificate of Integrity
Closing Compliance Officers Certificate of DCHS
Closing Compliance Officers Certificate of DOCMSC
Secretarys Certificate of BlueMountain
Secretarys Certificate of Integrity
Secretarys Certificate of DCHS
Secretarys Certificate of DOCMSC

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DISCLOSURE SCHEDULES TO

SYSTEM RESTRUCTURING AND SUPPORT AGREEMENT

System Office Employees

Collective Bargaining Agreements and Defined Church Contribution Plans

Third-Party Lenders and Funds Managed by Blue Mountain

Retained Intellectual Property

Religious Artifacts and Donor-Restricted Assets

Termination Costs for Nonqualified Executive Retirement Plans

Mission Critical Contracts; Required Consents

Financial Statements & GAAP Exceptions

Medicare or Medi-Cal Notices & Investigations

Government Actions to Terminate or Decertify

Excluded Employees and Exclusion from Federal Health Care Programs

Corporate Integrity Agreements

Violations of Environmental Laws

Owned Real Property

Proceedings Related to Real Property

Real Estate Leases

Unsatisfied Requests for Repairs, Restorations or Improvements

Material Litigation or Proceedings

Medical Staff Matters

Employee Benefits and Retirement Plans

Liability with Respect to Plans

Retiree Welfare Benefits and Retirement Plans

Grievances and Unfair Labor Practice Complaints

Compliance with Legal Requirements Relating to Employee Health and

Brokers Fees Blue Mountain

Regulatory Approvals DCHS

Fiduciary Liability Insurance

Licensed Intellectual Property

Regulatory Approvals Blue Mountain

Change of Control Applications and Notices Blue Mountain/Integrity

DCHS and its Affiliates Severance Policies

Right of First Offer for Religious Assets

Caritas Business Services:

United Nurses Association of California (UNAC)

DCHS Medical Foundation Management Bargaining Unit 401(k) Plan

DCHS Medical Foundation 401(k) Plan

Seton CNA Money Purchase Plan

Kennedy Savings Plan

Seton Coastside Annuity Plan

BlueMountain Guadalupe Peak Fund L.P.

Applications and Data:

e. DCHS Medical Foundation

Religious items including art and small religious statuettes

Three-dimensional items such as sisters' habit/nurses' uniform, patient trays depicting

Board of Directors Minutes of Meetings (1800s to 2015) - Sisters provided hospital

Ledgers such as earliest Daily Admissions/Discharges Receipts/Expenses, etc. from the

Historical documents related to hospital such as original articles of incorporation/by-laws;

Correspondence between Sisters and Myles/Amanda OConnor as well as Archbishop

Other archival material related to materials relating to replacement of Hospital at St.

The property at 25 San Fernando, Daly City, CA 94015

The property at 253 S. Lake Street, Los Angeles, CA 90057

Receivables payable in favor of DCHS by Daughters of Charity Ministry Services

Property of Casa de Amigos at St. Vincent Medical Center

Estimated back-end transaction and success fees payable

Estimated taxes related to the transfer of Real Estate.

Amount funded into segregated deposit account

Represents gross amount payable to participants at

Represents estimated Total Net Lump Sum Payable

Other unanticipated closing transaction fees, wind down

Daughters of Charity Health System 401(a)(17) Retirement Plan estimated to be

Daughters of Charity Health System 401(a)(17) Supplemental Retirement Plan Account