Trinity Health FY18 Annual Operating Income Jumps More Than 50% Over Prior Year

Livonia, Mich., October 5, 2018 --- Trinity Health released its fiscal year 2018 results today, reporting operating income (before other items) of $401.3 million and corresponding operating margin and operating cash flow margin of 2.2% and 8.1%, respectively, for the year. The year was marked by a $135.2 million increase in year-over-year operating income, representing an improvement of more than 50% over fiscal year 2017, during which the system reported results of $266.1 million in annual operating income. Trinity Health's comparable fiscal year 2017 operating margin and operating cash flow margin were 1.5% and 7.6%, respectively.

"Trinity Health's people-centered health system strategy is delivering results including strong stewardship," said Richard J. Gilfillan, M.D., CEO. "Our year-end financial report reflects our colleagues' commitment and dedication to the people we serve and to delivering better health, better care and lower costs.”

For the year ended June 30, 2018, Trinity Health increased revenue by $700 million to $18.3 billion, a 4.1% increase over the prior year. Excluding the effect of acquisitions, the increase is primarily the result of growth in patient volumes, payment rates and case mix. Expenses increased by $582.4 million, or 3.4%, to $17.9 billion.

"Throughout fiscal year 2018, we kept our focus on improving performance across all aspects of our people-centered care continuum which helped buffer continued unfavorable industry trends," said Ben Carter, executive vice president and chief financial officer. "In particular, our efforts centered on clinical and administrative efficiencies related to both productivity and supply costs, as well as improving performance in value-based care delivery models."

Other items incurred during the year resulted in a net charge to operations of $264.4 million for non-cash asset impairment charges that are helping the system right-size inpatient physical plant utilization and reposition in some markets. The system's decision to move to a single, enterprise-wide electronic health record and revenue cycle management system platform resulted in $107.8 million of the impairments. The single, fully integrated record system will enable Trinity Health improve the experience of both its patients and physicians.

Highlights of results for the fiscal year ended June 30, 2018, include:

• Total assets of $26.2 billion and net assets of $13.3 billion
• Total unrestricted revenue of $18.3 billion, a 4.1% increase over fiscal year 2017 and representing a 3.1% increase prior to the impact of acquisitions
• Operating income before other items of $401.3 million, a $135.2 million increase over fiscal year 2017
• Excess of revenue over expense of $901.5 million with a net margin of 4.7%
• Unrestricted cash and investments of $8.9 billion
• Days cash on hand of 187 days