Temple University - Of The Commonwealth System of … our opinion, the consolidated financial...

Temple University - Of The Commonwealth System of Higher Education Consolidated Financial Statements and Supplemental Schedules as of and for the Years Ended June 30, 2015 and 2014, and Independent Auditors’ Report

Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 USA

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INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees Temple University- Of The Commonwealth System of Higher Education Philadelphia, Pennsylvania

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Temple University- Of The Commonwealth System of Higher Education and its subsidiaries (the "University"), which comprise the consolidated balance sheets as of June 30, 2015 and 2014, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the University's preparation and fair presentation of the consolidated 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 University's 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 consolidated financial statements.

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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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Temple University – Of The Commonwealth System of Higher Education and its subsidiaries as of June 30, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Supplemental Schedules

Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplementary information on pages 29-30 are presented for the purpose of additional analysis and are not a required part of the consolidated financial statements. These schedules are the responsibility of the University's management and were derived from and relate directly to the underlying accounting and other records used to prepare the consolidated financial statements. Such schedules have been subjected to the auditing procedures applied in our audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such schedules directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, such schedules are fairly stated in all material respects in relation to the consolidated financial statements as a whole.

October 26, 2015

Temple UniversityOf The Commonwealth System of Higher Education

Consolidated Balance Sheets(in thousands)

June 30, 2015 June 30, 2014

Current assets:Cash and cash equivalents $189,008 $182,512Investments and self-insurance trust funds 894,418 850,003Accounts, loans and contributions receivable, net 379,796 416,052Inventories and other assets 51,437 38,551Deposits with trustees 31,743 24,554 Total current assets 1,546,402 1,511,672

Non-current assets:Accounts, loans and contributions receivable, net 138,806 128,194Investments and self-insurance trust funds 573,771 551,527Deposits with trustees 79,694 160,228Other assets 27,389 28,724Property, plant and equipment, net 1,771,339 1,729,246Goodwill and other intangibles 22,415 22,988Funds held in trust by others 142,716 145,432 Total non-current assets 2,756,130 2,766,339

Total assets $4,302,532 $4,278,011

Current liabilities:Accounts payable and accrued expenses $381,635 $386,808Deferred revenue 53,494 54,907Current portion of long-term debt 34,768 26,131Current portion of accrued pensions and postretirement benefits 598 641 Total current liabilities 470,495 468,487

Non-current liabilities:Accrued expenses and other liabilities 266,239 276,861Long-term debt 1,166,162 1,198,599Refundable federal student loans 51,252 50,794Accrued pensions and postretirement benefits 163,733 130,239 Total non-current liabilities 1,647,386 1,656,493

Total liabilities 2,117,881 2,124,980

Net assets: Unrestricted 1,651,970 1,642,977 Temporarily restricted 125,279 137,569 Permanently restricted 407,402 372,485 Total net assets 2,184,651 2,153,031

Total liabilities and net assets $4,302,532 $4,278,011

See notes to consolidated financial statements3


Consolidated Statement of ActivitiesFor the Year Ended June 30, 2015

(in thousands)

Temporarily PermanentlyUnrestricted Restricted Restricted TotalNet Assets Net Assets Net Assets Net Assets

Revenues:Tuition and fees (net of discounts of $97,120) $711,601 $711,601Commonwealth of Pennsylvania appropriation 121,136 121,136Federal grants and contracts 124,569 124,569Commonwealth of Pennsylvania grants and contracts 12,636 12,636Local grants and contracts 3,043 3,043Private grants and contracts 33,884 33,884Contributions for operations and endowments 19,282 $16,793 $37,688 73,763Investment return 39,393 4,219 (142) 43,470Sales of educational activities 9,475 9,475Auxiliary enterprises 97,221 97,221Patient care actvities (net of bad debt expense of $52,248) 1,609,048 1,609,048Other sources 52,801 57 52,858Net assets released from restrictions 18,611 (18,611) Total revenues 2,852,700 2,458 37,546 2,892,704

Expenses:Educational and general: Instruction 456,383 456,383 Research 171,848 171,848 Public service 21,851 21,851 Academic support 167,485 167,485 Student services 81,555 81,555 Institutional support 136,129 136,129 Student aid 12,462 12,462 Total educational and general 1,047,713 0 0 1,047,713

Auxiliary enterprises 126,826 126,826Patient care activities 1,644,368 1,644,368 Total expenses 2,818,907 0 0 2,818,907

Excess of revenues over expenses 33,793 2,458 37,546 73,797

Other changes in net assets:Investment return (11,585) (10,881) (2,629) (25,095)Commonwealth grants for property, plant and equipment (PP&E) 20,510 20,510Contributions for PP&E 567 308 875Loss on disposal of PP&E (953) (953)Actuarial change in accrued pensions and postretirement benefits (37,591) (37,591)Currency translation adjustment 77 77Net assets released from restrictions for PP&E 4,175 (4,175)Total other changes in net assets (24,800) (14,748) (2,629) (42,177)

Increase/(decrease) in net assets 8,993 (12,290) 34,917 31,620Net assets July 1, 2014 1,642,977 137,569 372,485 2,153,031Net assets June 30, 2015 $1,651,970 $125,279 $407,402 $2,184,651



Consolidated Statement of ActivitiesFor the Year Ended June 30, 2014

(in thousands)

Temporarily PermanentlyUnrestricted Restricted Restricted TotalNet Assets Net Assets Net Assets Net Assets

Revenues:Tuition and fees (net of discounts of $90,499) $672,914 $672,914Commonwealth of Pennsylvania appropriation 126,624 126,624Federal grants and contracts 123,713 123,713Commonwealth of Pennsylvania grants and contracts 12,056 12,056Local grants and contracts 3,418 3,418Private grants and contracts 34,761 34,761Contributions for operations and endowments 23,737 $21,114 $15,337 60,188Investment return 37,922 2,634 367 40,923Sales of educational activities 8,649 8,649Auxiliary enterprises 95,133 95,133Patient care actvities (net of bad debt expense of $47,318) 1,497,846 1,497,846Other sources 47,698 47,698Net assets released from restrictions 17,036 (17,036) Total revenues 2,701,507 6,712 15,704 2,723,923

Expenses:Educational and general: Instruction 433,311 433,311 Research 166,235 166,235 Public service 16,433 16,433 Academic support 156,850 156,850 Student services 76,731 76,731 Institutional support 126,527 126,527 Student aid 12,016 12,016 Total educational and general 988,103 0 0 988,103

Auxiliary enterprises 118,558 118,558Patient care activities 1,580,321 1,580,321 Total expenses 2,686,982 0 0 2,686,982

Excess of revenues over expenses 14,525 6,712 15,704 36,941

Other changes in net assets:Investment return 17,062 24,564 19,168 60,794Commonwealth grants for property, plant and equipment (PP&E) 68,795 68,795Contributions for PP&E 4,533 1,099 5,632Loss on disposal of PP&E (1,856) (1,856)Actuarial change in accrued pensions and postretirement benefits 11,664 11,664Currency translation adjustment (38) (38)Net assets released from restrictions for PP&E 4,364 (4,364)Total other changes in net assets 104,524 21,299 19,168 144,991

Increase in net assets 119,049 28,011 34,872 181,932Net assets July 1, 2013 1,523,928 109,558 337,613 1,971,099Net assets June 30, 2014 $1,642,977 $137,569 $372,485 $2,153,031



Consolidated Statements of Cash FlowsFor the Years Ended June 30

(in thousands)

2015 2014

Cash flows from operating activities: Change in net assets $31,620 $181,932Adjustments to reconcile change in net assets to net cash provided by operating activities: Currency translation adjustment (77) 38 Provision for bad debts and impairments 57,288 51,352 Depreciation 137,996 130,491 Amortization and accretion 1,081 (2,595) Realized and unrealized gain on investments (1,702) (80,566) Actuarial change in accrued pensions and postretirement benefits 37,591 (11,664) Loss on disposal of property, plant and equipment 953 1,856 Noncash contributions received (2,184) (434) Proceeds from sale of donated securities 2,184 434 Contributions, grants and investment income of and for property, plant and equipment and for long-term investment (61,205) (94,670) Changes in operating assets and liabilities: Accounts and contributions receivable (65,644) (105,189) Inventories and other assets (10,326) 186 Accounts payable and accrued expenses (1,170) 31,547 Deferred revenue (1,413) (7,212) Accrued pensions and postretirement benefits 993 (1,866) Net cash provided by operating activities 125,985 93,640

Cash flows from investing activities: Purchases of investments, deposits with trustees and self-insurance trusts (928,547) (940,487) Sales and maturities of investments, deposits with trustees and self-insurance trusts 939,651 953,722 Purchases of property, plant and equipment (198,231) (204,037) Proceeds from sale of property, plant and equipment 305 31 Loans to students (9,959) (10,987) Proceeds from collections on student loans 9,561 8,605 Net cash used by investing activities (187,220) (193,153)

Cash flows from financing activities: Proceeds from contributions, Commonwealth grants and investment income restricted to property, plant and equipment and long-term investment 91,125 70,371 Refundable federal student loans 458 (215) Change in split interest agreements (371) 110 Proceeds from long-term debt 3,743 6,123 Payments to retire long-term debt (27,161) (36,154) Net cash provided by financing activities 67,794 40,235

Exchange rate adjustments (63) (51)Net increase/(decrease) in cash and cash equivalents 6,496 (59,329)

Cash and cash equivalents at beginning of the year 182,512 241,841Cash and cash equivalents at end of the year $189,008 $182,512

Supplemental disclosure of cash flow information: Cash paid for interest $62,656 $63,847 Property, plant and equipment acquired through capital leases $1,742 $22 Accrued property, plant and equipment $9,821 $28,544


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TEMPLE UNIVERSITY Of The Commonwealth System of Higher Education

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2015 and 2014

Note A. Summary of Significant Accounting Policies Organization and Basis of Consolidated Financial Statements: Temple University – Of The Commonwealth System of Higher Education (the University) is comprised of Temple University (TU), the academic division of the University, which is a state-related comprehensive research university with its headquarters and largest campus located in Philadelphia, Pennsylvania, and Temple University Health System, Inc. (TUHS), a Pennsylvania not-for-profit corporation of which the University is the sole member. TUHS is the parent of many health care subsidiaries in the Philadelphia area and serves principally to coordinate the activities of these subsidiaries. The consolidated financial statements include TU, TUHS and the University’s other subsidiaries, whose abbreviations used throughout these notes, are listed in the supplemental schedules at the end of this report. Basis of Accounting: The consolidated financial statements of the University have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP) for not-for-profit organizations. The University's consolidated financial statements are presented such that net assets, revenues, gains, expenses and losses are classified as unrestricted, temporarily restricted or permanently restricted based on the existence or absence of donor-imposed restrictions as follows:

Unrestricted: net assets not subject to donor-imposed restrictions. These net assets may be designated for specific purposes by action of the Board of Trustees or may otherwise be limited by contractual agreements with outside parties. Expenses are shown as decreases in unrestricted net assets.

Temporarily restricted: net assets subject to donor-imposed restrictions that can be fulfilled by actions of the University in accordance with those stipulations, or by the passage of time. Contributions and income from endowments for which restrictions have been met in the same fiscal year as their receipt are combined and reported with unrestricted revenues. The University classifies contributions to acquire long-lived assets as temporarily restricted net assets. The release of restrictions occurs when the asset is placed in service. Permanently restricted: net assets subject to donor-imposed stipulations that they be maintained permanently by the University. Donors of these assets permit the use of all or part of the income earned on these assets.

Temple University Physicians (TUP): Effective July 1, 1986, the Board of Trustees established the School of Medicine Designated Fund to account for unrestricted net assets generated by the excess of TUP revenues over expenses and transfers. TUP activity is included in Clinical Faculty Practice Plans in the supplemental information on unrestricted net assets presented at the end of these consolidated statements. Tuition Revenue: Tuition revenue is recorded at established rates, net of financial assistance provided directly by the University. The University recognizes tuition revenue in the academic period that it is earned. Any payments received in advance of the subsequent year are classified as deferred income in the consolidated balance sheets.

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Note A. Summary of Significant Accounting Policies (continued) Contributions: Contributions are reported as an increase in the appropriate net asset category. Unconditional promises to give that are expected to be collected within one year are recorded at their estimated net realizable value. Unconditional promises to give (pledges) that are expected to be collected in future years are recorded at net present value. Conditional pledges are not included as revenue until such time as the conditions are substantially met. Grants and contracts: Income from grants and contracts, including overhead recovery, is recorded as the related direct expenses are incurred. Patient Care Activity: Included are patient service revenues of TUHS as well as TU revenues from the clinical activities of TUP, Dental practices and the School of Podiatric Medicine. The University has agreements with third-party payors that provide for payments to the University at amounts different from its established rates. Payment arrangements primarily include prospectively determined rates per discharge and per-diem payments and to a lesser extent reimbursed costs and discounted charges. In addition, the University receives Medical Assistance payments for the reimbursement of services for charity and uncompensated care services (Disproportionate Share Payments). The federal funding of such costs is subject to an upper payment limit and retrospective settlement. Patient care activity revenue is reported at the estimated net realizable amounts from patients, third-party payors and others for services rendered, including retroactive adjustments under reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered or when known, and adjusted in future periods as final settlements are determined. Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates could change by a material amount in the near term. Patient care activity revenue decreased by $410,000 and increased by $5,367,000 for 2015 and 2014, respectively, related to the final settlement of prior years’ TUHS cost reports. Charity Care: The University provides care without charge or for amounts less than its established rates to patients who meet certain criteria under the University's charity care policy. Some patients qualify for charity care based on federal poverty guidelines or their financial condition being such that requiring payment would impose a hardship on the patient. The University maintains detailed records to identify and monitor the level of charity care it provides to its patients. Charity care costs are estimated by applying an overall cost to charge ratio to charity care charges. The cost to charge ratio is calculated by dividing total expenses less bad debt by total gross patient service revenue. The estimated costs incurred to provide charity care, including the estimated unreimbursed cost of services in excess of payments from Medical Assistance programs were $207,245,000 and $201,867,000, for 2015 and 2014, respectively. The University received Commonwealth of Pennsylvania grants, Access to Care Program and other support of $145,515,000 and $136,916,000 resulting in net costs of $61,730,000 and $64,951,000, for 2015 and 2014, respectively. Because the University does not pursue collection of amounts determined to qualify as charity care, they are not reported as patient care activities revenue. Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments, such as money market funds and debt instruments with original maturities of three months or less at the time of purchase. At June 30, 2015 and 2014, the University had cash balances in financial institutions, which exceed federal depository insurance limits. Management believes that credit risks related to these deposits are minimal. Cash and cash equivalents are carried at cost, which approximates fair value.

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Note A. Summary of Significant Accounting Policies (continued) Investments: Investments are comprised of the assets of the University's endowment, certain temporarily restricted funds, funds designated by the Board of Trustees to be invested as endowments, certain funds set aside to retire long-term debt, other plant-related funds and other unrestricted funds held for operating purposes. These investments vary as to their level of liquidity, with differing requirements for notice prior to redemption or withdrawal (Note H). The University reports investments, including debt and equity securities, at fair value. Investments established for endowments, and certain investments set aside to retire long-term debt are classified as non-current assets. All other investments are classified as current assets. The University also invests in various limited partnerships. Such investments are accounted for on the equity basis of accounting, which approximates fair value as determined by the fund managers and financial information provided by the limited partnership. This financial information includes assumptions and methods that are reviewed by the University. Because these investments are not readily marketable, the estimated fair values are subject to uncertainty and, therefore, may differ from the value that would have been used had a ready market existed, and such differences could be material. TU has adopted, for endowments and funds designated by the Board of Trustees to be invested as endowments, a spending rule based on 4.5% of the fair value of such investments, computed as a moving average over the past twelve quarters. For these investments the spending rule amount is reported as investment return in revenues, and the excess or shortfall of total return over the spending rule amount is reported as investment return in other changes in net assets in the consolidated statements of activities. For all other TU investments, interest and dividend income is reported as investment return in revenues and realized and unrealized gains or losses are reported as investment return in other changes in net assets in the consolidated statements of activities (Note I). TUHS interest, dividends and realized gains or losses are reported as investment return in revenues. TUHS unrealized gains or losses are reported as investment return in other changes in net assets in the consolidated statements of activities. Investment return is reported as increases to unrestricted, temporarily restricted or permanently restricted net assets based upon the existence or absence of donor imposed restrictions. Investments, in general, are exposed to various risks such as interest rate, credit and overall market volatility. As such, it is reasonably possible that changes in the value of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated financial statements. Self-Insurance Trust Funds: Self-insurance trusts funds include assets that are designated for payments of insurance risk retained by the University. The University self-insures or maintains deductibles under its various insurance policies for property, casualty, automobile, general liability, medical malpractice, worker's compensation, certain health and welfare and other claims. Provisions are made for estimated losses (claims made and claims incurred but not reported) generally based on actuarial methods, which include discounting of certain loss provisions. Accounts, Loans and Contributions Receivable: Accounts, loans and contributions receivable are reported at their net realizable value. Accounts are written off against the allowance for doubtful accounts when they are determined to be uncollectible based upon management’s assessment of individual accounts. The allowance for doubtful accounts is estimated based on historical losses and periodic review of individual accounts. The University does not accrue interest on these amounts (Note C).

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Note A. Summary of Significant Accounting Policies (continued) Inventories: Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out or average cost method. Goodwill and Other Intangibles: Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or when indicators of a potential impairment are present. The University’s annual impairment date is June 30th. The annual evaluation for impairment of goodwill and indefinite-lived intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans (Note M). The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed on a straight-line basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted and impairment charges recorded. Fair Value of Assets and Liabilities: The University has categorized its assets measured at estimated fair value into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation (Note H). A reasonable estimate of the fair value of loans receivable from students under government loan programs and refundable federal student loans could not be made because the loans are not readily saleable. These loans are recorded at cost, less an allowance for doubtful accounts (Note C). Funds Held In Trust By Others: The University is the irrevocable beneficiary of the income from certain perpetual trusts administered by third parties. The University’s beneficial interest is reported at the fair value of the underlying trust assets. Because the trusts are perpetual and the original corpus cannot be used, these funds are reported as permanently restricted net assets. As the University does not have the ability to redeem funds held in trust by others, these assets are categorized as Level 3 assets (Note H). Long-lived Tangible Asset Impairment: The University reviews long-lived tangible assets for impairment whenever events or changes indicate that the carrying value of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to their expected future cash flows. If such assets are considered to be impaired, the impairment is measured by the amount the carrying value exceeds the fair value of the assets. Based on the results of the University’s review, a $1,144,000 impairment was recorded in the consolidated statements of activities during the fiscal year ended June 30, 2015. There was no impairment of long-lived assets recorded during the fiscal year ended June 30, 2014.

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Note A. Summary of Significant Accounting Policies (continued) Asset Retirement Obligations: The University recognizes the fair value of a liability for legal obligations associated with asset retirements in the period in which it is incurred if a reasonable estimate of the fair value of the obligation can be made. When the liability is initially recorded, the University capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value, and the capitalized cost associated with the retirement obligation is depreciated over the useful life of the related asset. Upon settlement of the obligation, any difference between the cost to settle the asset retirement obligation and the liability recorded is recognized as a gain or loss in the consolidated statements of activities. At June 30, 2015 and 2014, the recorded asset retirement obligation liability is $19,712,000 and $17,933,000, respectively. Accretion costs for 2015 and 2014 were $1,450,000 and $1,102,000 respectively, and costs abated in 2015 and 2014 were $329,000 and $(2,584,000), respectively. Defined Benefit Pension and Other Postretirement Plans: The University recognizes the over funded or under funded status of its defined benefit and postretirement plans as an asset or liability in its balance sheets and recognizes changes in the funded status of the plans that arise during the period, but are not recognized as components of net periodic benefit cost, as actuarial change in accrued pensions and postretirement benefits in the consolidated statements of activities. Income Taxes: Substantially all of the controlled entities of the University are nonprofit corporations and have been recognized as tax-exempt pursuant to Section 501(c)(3) of the Internal Revenue Code. The University’s federal Exempt Organization Business Income Tax Returns for 2015, 2014, 2013, and 2012 remain subject to examination by the Internal Revenue Service. GAAP requires that a tax position be recognized or derecognized based on a “more likely than not” threshold. This applies to positions taken or expected to be taken in a tax return. The University does not believe its consolidated financial statements include any material uncertain tax positions that require disclosure.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements: In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the practical expedient, as defined by ASC 820, Fair Value Measurement. This update is effective for fiscal years beginning after December 15, 2016. Management is currently evaluating the impact of the adoption of ASU 2015-07 on the University’s financial statements and disclosures. In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. To simplify the presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction of the carrying amount of that debt liability, consistent with debt discounts. This update is effective for fiscal years beginning after December 15, 2015 and is to be applied retrospectively. Management is currently evaluating the impact of the adoption of ASU 2015-03 on the University’s financial statements and disclosures.

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Note B. Investments and Self-Insurance Trust Funds The fair values of investments and self-insurance trust funds are as follows:

June 30, 2015 June 30, 2014 Investments: Corporate bonds and notes $ 290,857,000 $ 251,561,000 U.S. government securities 302,015,000 319,922,000 Fixed income funds 355,987,000 402,979,000 Money market funds 56,806,000 44,616,000 Equity funds and securities 324,384,000 276,767,000 Limited partnerships 101,898,000 77,430,000 Other 21,789,000 12,375,000 $ 1,453,736,000 $ 1,385,650,000

Self-insurance trust funds: Corporate bonds and notes $ 3,537,000 $ 3,770,000 U.S. government securities 9,907,000 9,961,000 Money market funds 1,009,000 2,149,000 $ 14,453,000 $ 15,880,000

Investment return reported in the consolidated statements of activities is as follows:

2015 2014 Interest and dividends $ 16,673,000 $ 21,151,000 Realized and unrealized gains, net 1,702,000 80,566,000 $ 18,375,000 $ 101,717,000

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Note C. Accounts, Loans and Contributions Receivable

Accounts receivable are shown net of allowances as follows:

June 30, 2015 June 30, 2014 Student $ 40,562,000 $ 36,430,000 Patients 242,811,000 222,444,000 Health care programs 37,856,000 55,024,000 Grants and contracts 35,981,000 32,899,000 Commonwealth construction 2,806,000 59,095,000 Recoveries from insurance providers 37,271,000 40,238,000 Pennsylvania Department of Welfare Access to Care 9,525,000 Other 33,577,000 28,590,000 440,389,000 474,720,000 Less: Allowance for doubtful patient accounts (44,172,000) (39,330,000) Allowance for doubtful student and other accounts (12,214,000) (10,089,000) Accounts receivable, net $ 384,003,000 $ 425,301,000

The University provides health care services primarily to area residents through its inpatient and outpatient care facilities in the Greater Philadelphia Metropolitan Area. The University serves a disproportionately high number of poor or indigent patients and accordingly, derives a substantial portion of its patient care revenues from the Federal Government (Medicare) and the Commonwealth of Pennsylvania (Medical Assistance) programs. At June 30, 2015 and 2014, the University had net accounts receivable from Medicare of $29,517,000 and $23,217,000, respectively, and from Medical Assistance of $45,413,000 and $42,065,000, respectively.

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Note C. Accounts, Loans and Contributions Receivable (continued)

Net patient service revenue recognized from major payer sources based on primary insurance designation is as follows:

June 30, 2015 June 30, 2014 Medicare and Medicaid $ 1,012,368,000 $ 959,788,000 Self-pay 21,609,000 19,768,000 Other third-party payers 627,319,000 565,610,000 1,661,296,000 1,545,166,000 Less: Allowance for doubtful accounts (52,248,000) (47,318,000) Patient service revenue, net $ 1,609,048,000 $ 1,497,848,000

Loans to students are disbursed based on financial need and consist of loans granted by the University under federal government loan programs and loans granted from institutional resources. Upon the earlier of graduation or no longer having full time student status, the students have a grace period, which varies by loan type, until repayment of loans is required. Loans to students are shown net of allowances as follows:

June 30, 2015 June 30, 2014 Federal government loan programs: Perkins loan program $ 40,709,000 $ 40,496,000 Health professional and disadvantaged student loans 18,392,000 18,359,000 Nursing student loans 361,000 426,000 59,462,000 59,281,000 Institutional loan programs 1,488,000 1,477,000 60,950,000 60,758,000 Less: Allowance for doubtful accounts Balance, beginning of period (9,178,000) (9,030,000) Current year activity 206,000 (148,000) Balance, end of period (8,972,000) (9,178,000) Student loans receivable, net $ 51,978,000 $ 51,580,000

Student loans are considered past due when payment has not been received in over 30 days. At June 30, 2015 and 2014, past due student loans were $13,691,000 and $13,752,000, respectively. Allowances for doubtful accounts are established based on prior collection experience and current economic factors which, in management’s judgment, could influence the ability of loan recipients to repay the amounts per the loan terms. Further, the University does not evaluate the credit quality of the student loans receivable after the initial approval and calculation of the loans.

Contributions receivable are unconditional promises to give, restricted by donors for scholarships, capital acquisitions and other operating purposes. They are expected to be realized in the following periods:

June 30, 2015 June 30, 2014 Less than one year $ 25,695,000 $ 27,740,000 One to five years 28,198,000 25,516,000 More than five years 49,356,000 31,699,000 103,249,000 84,955,000 Less: Allowance for uncollectible contributions (3,588,000) (4,343,000) Present value discount (17,040,000) (13,247,000) Contributions receivable, net $ 82,621,000 $ 67,365,000

The rates used to calculate the present value discount are primarily tied to U.S. Government treasury notes and were between 0.36% and 6.0% and 0.36% and 5.60% for the years ended June 30, 2015 and 2014, respectively. The University recognized $41,111,000 and $17,368,000 in contribution revenue from new pledges and collected $5,181,000 and $2,959,000 of those new pledges in 2015 and 2014, respectively.

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Note D. Pensions and Postretirement Benefits Faculty, administration and certain clerical employees are offered pension benefits through the University's participation in the Teacher's Insurance and Annuity Association, the College Retirement Equities Fund, Fidelity Investments and other defined contribution pension plans. The policy of the University is to contribute its share of the annual amount accrued in connection with these plans. Pension expense for these plans was $59,845,000 and $56,858,000 in 2015 and 2014, respectively. Certain union employees are covered by multi-employer pension plans to which the University contributes. A contributor to a multi-employer plan is liable, upon termination of the plan or its withdrawal from the plan, for its share of the plan's unfunded vested liabilities. Until either event occurs, the University's share, if any, of the unfunded vested liabilities cannot be determined. At present, the University has no plans to withdraw from the union multi-employer pension plans. Pension expense for these plans was $6,608,000 and $5,946,000 in 2015 and 2014, respectively. The University maintains postretirement benefits and defined benefit pension plans covering certain employees and makes contributions to the plans that comply with the funding provisions of the Internal Revenue Code. Covered retirees are eligible to begin receiving benefits payments at age 62, and upon the accumulation of 10 years of service. The activity of these benefits plans for the years ended June 30, 2015 and 2014 is as follows:

Benefit Obligations and Funded Status Pensions Postretirement Benefits 2015 2014 2015 2014 Change in benefit obligation: Benefit obligation, beginning of period $ 208,017,000 $ 192,497,000 $ 406,635,000 $ 375,544,000 Service cost 2,662,000 2,254,000 15,957,000 14,553,000 Interest cost 8,831,000 9,133,000 17,320,000 17,228,000 Plan participant contributions 189,000 185,000 2,408,000 2,431,000 Actuarial loss/(gain) 6,992,000 13,783,000 (6,045,000) 12,444,000 Benefits paid (7,984,000) (7,869,000) (17,657,000) (15,565,000) Plan expenses (1,339,000) (1,966,000) Benefit obligation, end of period 217,368,000 208,017,000 418,618,000 406,635,000 Change in plan assets: Fair value of plan assets, beginning of period 187,287,000 167,785,000 301,555,000 262,782,000 Actual return on plan assets 450,000 25,174,000 (3,600,000) 41,587,000 Employer contributions 4,700,000 3,978,000 7,759,000 10,320,000 Plan participant contributions 189,000 185,000 2,408,000 2,431,000 Plan expenses (1,339,000) (1,966,000) Benefits paid (7,984,000) (7,869,000) (17,657,000) (15,565,000) Fair value of plan assets, end of period 183,303,000 187,287,000 290,465,000 301,555,000 Funded status $ (34,065,000) $ (20,730,000) $ (128,153,000) $ (105,080,000) Amounts recognized in the balance sheets: Assets $ 2,113,000 $ 5,059,000 Liabilities (36,178,000) (25,789,000) $ (128,153,000) $ (105,080,000) Net amount recognized $ (34,065,000) $ (20,730,000) $ (128,153,000) $ (105,080,000) Accumulated amounts recognized in other changes in net assets: Prior service cost/(benefit) $ 1,000 $ (9,655,000) Unrecognized net loss $ 91,256,000 78,407,000 71,529,000 $ 36,638,000 Net amount recognized $ 91,256,000 $ 78,408,000 $ 61,874,000 $ 36,638,000

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Note D. Pensions and Postretirement Benefits (continued)

Assumed health care cost trend rates have a significant effect on amounts reported for the postretirement benefits plan. A one-percentage point change in the assumed health care trend rate would have the following effects for the year ended or as of June 30, 2015:

Plan Assets The long-term investment strategy for pension and postretirement benefits plans assets is to: meet present and future benefit obligations to all participants and beneficiaries; cover reasonable expenses incurred to provide such benefits; and provide a total return that maximizes the ratio of assets to liabilities by maximizing investment return at the appropriate level of risk (Note H). The expected return on plan assets equals a weighted average of the individual expected returns for each asset category in the plans’ portfolio. The target ranges for the pension plan investment portfolio is equity funds and securities 30% to 90% and fixed income and cash 10% to 70%. The target ranges for the postretirement benefits plan investment portfolio is equity funds and securities 25% to 75% and fixed income and cash 25% to 75%. The actual asset allocation as of June 30 is as follows:

Benefit Obligations and Funded Status Pensions Postretirement Benefits 2015 2014 2015 2014 Weighted-average assumptions used to determine the benefit obligations: Discount rates 4.35% - 4.65% 4.25% - 4.50% 2.95% - 4.50% 2.65% - 4.35% Rate of compensation increase 3.00% - 4.00% 3.00% - 4.00% N/A N/A Health care cost trend rate 6.75% 7.40% Ultimate rate 5.00% 5.00% Year that ultimate rate is reached 2021 2018 Net Periodic Cost Pensions Postretirement Benefits 2015 2014 2015 2014 Components of net periodic cost: Service cost $ 2,662,000 $ 2,254,000 $ 15,957,000 $ 14,553,000 Interest cost 8,831,000 9,133,000 17,320,000 17,228,000 Expected return on plan assets (11,959,000) (12,037,000) (22,308,000) (19,529,000) Amortization of prior service cost/(credit) 1,000 14,000 (8,092,000) (8,091,000) Amortization of net actuarial loss 5,650,000 4,958,000 2,718,000 4,188,000 Net periodic cost $ 5,185,000 $ 4,322,000 $ 5,595,000 $ 8,349,000 Weighted-average assumptions used to determine net periodic cost: Discount rates 4.25% - 4.50% 4.65% - 5.05% 2.65% - 4.35% 2.95% - 4.80% Expected return on plan assets 6.50% - 7.50% 7.00% - 7.50% 7.50% 7.50% Rate of compensation increase 3.00% - 4.00% 3.00% - 4.00% N/A N/A Health care cost trend rate 7.00% - 7.20% 7.50% - 8.00% Ultimate rate 5.00% 5.00% Year that ultimate rate is reached 2021 2018

Increase Decrease Effect on service cost and interest cost components of net periodic postretirement benefits cost $ 5,528,000 $ (4,444,000) 16.73% (13.45)% Effect on benefit obligation, end of year $ 59,381,000 $ (49,169,000) 14.43% (11.95)%

Pensions Postretirement Benefits Asset class 2015 2014 2015 2014 Equity funds and securities 76% 74% 73% 69% Fixed income and cash 24% 26% 27% 31%

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Note D. Pensions and Postretirement Benefits (continued)

Cash Flows The following table shows expected cash flows of the pension and postretirement benefits plans:

The actuarial present value of accumulated plan benefits related to a non-active group annuity pension plan has neither been determined nor included above because a guarantee of payment to the plan's beneficiaries has been made by The Equitable Life Assurance Society of America. This plan had total net assets available for benefits of $1,916,000 and $2,078,000 at June 30, 2015 and 2014, respectively.

********************************* Note E. Deposits with Trustees The University has on deposit with trustees amounts established for construction and debt repayment. These deposits are primarily invested in U.S. Government securities and money market funds. See Note G for bond descriptions. A summary of these deposits stated at fair value and the related debt is as follows:

June 30, 2015 June 30, 2014 Construction Funds: PHEFA, First Series of 2012 $ 7,581,000 $ 75,322,000 PHEFA, First Series of 2010A 1,694,000 2,758,000 THHEFAP, First Series of 2012 (TUHS) 26,962,000 39,094,000 $ 36,237,000 $ 117,174,000 Debt Repayment Funds: THHEFAP, First Series of 2012 (TUHS) $ 45,475,000 $ 36,403,000 THHEFAP, First Series of 2007 (TUHS) 29,725,000 29,756,000 $ 75,200,000 $ 66,159,000 Capitalized Interest Fund: THHEFAP, First Series of 2012 (TUHS) $ 0 $ 1,449,000 $ 0 $ 1,449,000 Total Deposits with Trustees $ 111,437,000 $ 184,782,000

Pensions

Postretirement Benefits

Expected contributions for next fiscal year: Employer $ 3,278,000 $ 11,998,000 Employee 2,408,000 Estimated future benefit payments reflecting expected future service for fiscal years ending: 6/30/2016 $ 10,085,000 $ 18,875,000 6/30/2017 10,768,000 19,934,000 6/30/2018 11,340,000 21,064,000 6/30/2019 11,872,000 22,102,000 6/30/2020 12,404,000 22,957,000 Thereafter 67,801,000 127,940,000

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Note F. Property, Plant and Equipment Property, plant and equipment are summarized as follows:

June 30, 2015 June 30, 2014 Land and land improvements $ 96,822,000 $ 72,738,000 Land - Commonwealth of Pennsylvania 12,442,000 12,445,000 Buildings 1,876,367,000 1,742,465,000 Buildings - Commonwealth of Pennsylvania 232,135,000 234,378,000 Equipment and library books 1,063,550,000 1,011,576,000 Equipment - Commonwealth of Pennsylvania 34,549,000 36,163,000 Construction in progress 78,103,000 139,495,000 3,393,968,000 3,249,260,000 Less accumulated depreciation (1,622,629,000) (1,520,014,000) Property, plant and equipment, net $ 1,771,339,000 $ 1,729,246,000

Property, plant and equipment are stated at cost or, if acquired by gift at the fair value at the date of acquisition. Buildings and equipment are depreciated primarily by the straight-line method over their estimated useful lives. Estimated useful lives are as follows: land improvements, 15 years; buildings, between 20 and 40 years; leasehold improvements, the lesser of the asset life or term of the lease; and equipment and library books, between 3 and 20 years. Depreciation expense was $137,996,000 and $130,491,000 in 2015 and 2014, respectively.

********************************* Note G. Debt

June 30, 2015 June 30, 2014 Long-term debt: American Athletic Conference interest free loan, paid June 2015 $ 1,000,000 TUHS Equipment Financing Arrangement with varying amounts due between 2016 and 2020 with stated rates of 1.34% and 3.80%

$ 11,358,000

11,464,000

EH Episcopal Hospital Foundation loan due December 2020 with a stated rate of 4.00%

3,294,000

3,819,000

PHEFA Temple University Revenue Bonds, First Series of 2006, net of unamortized premium – 2015, $4,247,000; 2014, $4,681,000 with varying amounts due between 2016 and 2036 with stated rates between 4.50% and 5.00% at an effective rate for 2015 of 4.60%*

293,362,000

302,501,000 PHEFA Temple University Revenue Bonds, First Series of 2010A, net of unamortized premium – 2015, $2,803,000; 2014, $2,893,000; with varying amounts due between 2016 and 2021 with stated rates between 4.00% and 5.00% at an effective rate for 2015 of 3.88%*

21,258,000

27,423,000 PHEFA Temple University Revenue Bonds, First Series of 2010B, with varying amounts due between 2016 and 2040 with stated rates between 4.21% and 6.29% at an effective rate for 2015 of 3.83%*

143,590,000

143,590,000 PHEFA Temple University Revenue Bonds, First Series of 2012, net of unamortized premium – 2015, $23,373,000; 2014, $24,315,000 with varying amounts due between 2016 and 2042 with a stated rates between 4.00% and 5.00% at an effective rate for 2015 of 3.91%*

211,788,000

216,170,000 THHEFAP TUHS Hospital Revenue Bonds, Series A and B of 2007, net of unamortized discount –2015, $609,000; 2014, $653,000, with varying amounts due between 2016 and 2035 with stated rates of 5.00% and 5.50% at an effective rate for 2015 of 5.26%**

205,815,000

208,267,000

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Note G. Debt (continued)

June 30, 2015 June 30, 2014 THHEFAP TUHS Hospital Revenue Bonds, Series A and B of 2012, net of unamortized discount –2015, $3,269,000; 2014, $2,836,000 with varying amounts due between 2016 and 2043 with stated rates of 5.00%, 5.63% and 6.25%, at an effective rate for 2015 of 5.99%**

$ 307,837,000

$ 308,269,000 Capital leases 2,628,000 2,227,000 Total long-term debt $ 1,200,930,000 $ 1,224,730,000

Bond Issues * TU Bond Issues Pennsylvania Higher Educational Facilities Authority (PHEFA), Temple University Revenue Bonds, First Series of 2006, are secured by a pledge of gross revenues of the University, excluding all revenues of TUHS, and an insurance policy issued by MBIA Insurance Corporation (MBIA). Pennsylvania Higher Educational Facilities Authority, Temple University Revenue Bonds, First Series of 2010A, are secured by a pledge of gross revenues of the University, excluding all revenues of TUHS. Pennsylvania Higher Educational Facilities Authority, Temple University Revenue Bonds, First Series of 2010B, are secured by a pledge of gross revenues of the University, excluding all revenues of TUHS. The 2010B bonds are federally taxable “Build America Bonds”, as authorized by the American Recovery and Reinvestment Act of 2009. The University received cash subsidies from the United States Treasury of $2,761,000 and $2,741,000 in 2015 and 2014, respectively. The subsidies are recorded in other sources in the consolidated statements of activities. Pennsylvania Higher Educational Facilities Authority, Temple University Revenue Bonds, First Series of 2012, are secured by a pledge of gross revenues of the University, excluding all revenues of TUHS. ** TUHS Bond Issues The Hospitals and Higher Education Facilities Authority of Philadelphia, TUHS Hospital Revenue Bonds, Series A and B of 2007, are collateralized by the assets and gross revenues of the TUHS Obligated Group and are non-recourse to TU. The Hospitals and Higher Education Facilities Authority of Philadelphia, TUHS Hospital Revenue Bonds, Series A and B of 2012, are collateralized by the assets and gross revenues of the TUHS Obligated Group and are non-recourse to TU. The University has complied with all financial debt covenants for fiscal 2015 and 2014. Leases Property, plant and equipment with respect to capital leases had a net book value of $1,519,000 and $825,000 as of June 30, 2015 and 2014, respectively. Total expense for operating leases was $47,185,000 and $43,921,000 for the years ended June 30, 2015 and 2014, respectively.

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Note G. Debt (continued) Future minimum payments by year and in the aggregate, under capital and non-cancelable operating leases, with initial or remaining terms of one year or more are as follows:

Capital Leases

Non-cancelable Operating

Leases 2016 $ 626,000 $ 24,283,000 2017 561,000 20,239,000 2018 561,000 16,314,000 2019 488,000 14,150,000 2020 224,000 14,184,000 Thereafter 188,000 79,971,000 Total minimum lease payments 2,648,000 $ 169,141,000 Amounts representing interest on capital leases (20,000) Present value of net minimum capital lease payments $ 2,628,000

Interest Total interest expense incurred was $56,031,000 and $59,220,000 for the years ended June 30, 2015 and 2014, respectively. The University capitalizes interest cost on qualifying assets. The University increased the basis of its plant assets by $5,142,000 and $5,286,000 in 2015 and 2014, respectively, for interest expense capitalized. Fair Value and Maturity The fair value of long-term debt is based on quoted market prices for similar types of borrowing arrangements or is estimated using discounted cash flows. The University considers these valuation inputs to be level 2 inputs in the fair value hierarchy. The fair value of long-term debt at June 30, 2015 and 2014 is approximately $1,218,972,000 and $1,241,701,000, respectively. Long-term debt matures in varying amounts through 2043. The aggregate amounts of principal payments, excluding capital leases, are as follows:

2016 $ 34,152,000 2017 35,180,000 2018 34,523,000 2019 33,739,000 2020 34,179,000 Thereafter 999,984,000 $ 1,171,757,000

********************************* Note H. Fair Value Measurements

Fair value is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, the University uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumption about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

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Note H. Fair Value Measurements (continued)

The fair value hierarchy and inputs used in valuation are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

• Quoted prices in active markets for similar assets or liabilities. • Quoted prices in markets that are not active for identical or similar assets or liabilities. • Inputs other than quoted prices, that are observable for the asset or liability. • Inputs that are derived primarily from or corroborated by observable market data by

correlation or other means. Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the

fair value of the assets or liabilities. Level 3 includes values determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting the University’s own assumptions.

Financial assets recorded at fair value, by level within the fair value hierarchy, are as follows:

June 30, 2015 Level 1 Level 2 Level 3 Total Investments: Corporate bonds and notes $ 290,857,000 $ 290,857,000 U.S. government securities $ 219,801,000 82,214,000 302,015,000 Fixed income funds 319,202,000 36,785,000 355,987,000 Money market funds 55,675,000 1,131,000 56,806,000 Equity funds and securities 213,094,000 98,231,000 311,325,000 Real estate 3,665,000 3,665,000 Limited partnerships 27,023,000 $ 72,681,000 99,704,000 Alternative funds 7,700,000 7,552,000 15,252,000 Municipal bonds 7,922,000 7,922,000 Other 7,332,000 7,332,000 $ 807,772,000 $ 562,860,000 $ 80,233,000 1,450,865,000 Investments carried at equity 2,871,000 $ 1,453,736,000 Self-insurance trust funds: Corporate bonds and notes $ 3,537,000 $ 3,537,000 U.S. government securities $ 8,591,000 1,316,000 9,907,000 Money market funds 1,009,000 1,009,000 $ 9,600,000 $ 4,853,000 $ 0 $ 14,453,000 Deposits with Trustees: U.S. government securities $ 70,001,000 $ 70,001,000 Money market funds $ 41,436,000 41,436,000 $ 41,436,000 $ 70,001,000 $ 0 $ 111,437,000 Funds held in trust by others $ 0 $ 0 $ 142,716,000 $ 142,716,000 Pension Plans: Fixed income funds $ 54,399,000 $ 54,399,000 Money market funds 6,117,000 6,117,000 Equity funds and securities 85,708,000 $ 14,695,000 100,403,000 Limited partnerships 2,264,000 $ 16,661,000 18,925,000 Alternative funds 3,459,000 3,459,000 $ 146,224,000 $ 16,959,000 $ 20,120,000 $ 183,303,000

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June 30, 2015 Level 1 Level 2 Level 3 Total Postretirement Plans: Fixed income funds $ 73,459,000 $ 73,459,000 Money market funds $ 5,798,000 5,798,000 Equity funds and securities 134,386,000 30,623,000 165,009,000 Limited partnerships $ 46,199,000 46,199,000 $ 140,184,000 $ 104,082,000 $ 46,199,000 $ 290,465,000

June 30, 2014 Level 1 Level 2 Level 3 Total

Investments: Corporate bonds and notes $ 251,561,000 $ 251,561,000 U.S. government securities $ 236,933,000 82,989,000 319,922,000 Fixed income funds 351,764,000 51,212,000 402,976,000 Money market funds 43,971,000 645,000 44,616,000 Equity funds and securities 172,959,000 94,341,000 267,300,000 Real estate 6,187,000 6,187,000 Limited partnerships 24,338,000 $ 50,794,000 75,132,000 Alternative funds 888,000 10,877,000 11,765,000 Other 3,253,000 3,253,000 $ 805,627,000 $ 515,414,000 $ 61,671,000 1,382,712,000 Investments carried at equity 2,938,000 $ 1,385,650,000 Self-insurance trust funds: Corporate bonds and notes $ 3,770,000 $ 3,770,000 U.S. government securities $ 8,550,000 1,411,000 9,961,000 Money market funds 2,149,000 2,149,000 $ 10,699,000 $ 5,181,000 $ 0 $ 15,880,000 Deposits with Trustees: U.S. government securities $ 95,644,000 $ 95,644,000 Money market funds $ 89,138,000 89,138,000 $ 89,138,000 $ 95,644,000 $ 0 $ 184,782,000 Funds held in trust by others $ 0 $ 0 $ 145,432,000 $ 145,432,000 Pension Plans: Fixed income funds $ 11,831,000 $ 29,349,000 $ 41,180,000 Money market funds 9,881,000 9,881,000 Equity funds and securities 83,464,000 30,449,000 113,913,000 Limited partnerships 162,000 $ 15,279,000 15,441,000 Alternative funds 6,872,000 6,872,000 $ 105,176,000 $ 59,960,000 $ 22,151,000 $ 187,287,000

Postretirement Plans: Fixed income funds $ 86,032,000 $ 86,032,000 Money market funds $ 10,224,000 10,224,000 Equity funds and securities 148,368,000 28,317,000 176,685,000 Limited partnerships $ 28,610,000 28,610,000 $ 158,592,000 $ 114,349,000 $ 28,610,000 $ 301,551,000

The University assesses the valuation hierarchy for each asset or liability measured on an annual basis. From time to time, assets or liabilities will be transferred within the fair value hierarchy as a result of changes in, among other things, inputs used, liquidity, or valuation methodologies. The University’s policy is to recognize transfers at the end of the year.

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Classification within the fair value hierarchy of assets that are measured at net asset value per share (or its equivalent) includes consideration of the University’s ability to redeem its investment with the investee at net asset value per share (or its equivalent) at the measurement date. If the University has the ability to redeem its investment with the investee at net asset value per share (or its equivalent), the fair value measurement of the investment is categorized as a Level 2 fair value measurement, whereas if the investment is subject to liquidity restrictions that will not be lifted in the near term, the fair value is categorized as a Level 3 fair value measurement. If the University cannot redeem its investment with the investee at net asset value per share (or its equivalent) at the measurement date but the investment may be redeemable with the investee at a future date, the University considers the length of time until the investment will become redeemable in determining whether the fair value measurement of the investment shall be categorized as a Level 2 or a Level 3 fair value measurement. Detailed information of the fair value of assets within Levels 2 and 3, valued using net asset value or its equivalent is as follows:

June 30, 2015

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Cash * $ 1,952,000 Multi-strategy hedge funds 66,080,000 Quarterly/Tri-annual 45-100 days Distressed debt hedge funds 5,707,000 Quarterly**/Annual 65-90 days Private equity 1,154,000 $ 147,000 Quarterly*** 90 days Stock funds 871,000 Monthly ** Global/Macro hedge funds 11,720,000 Quarterly*** 90 days Real asset funds 27,472,000 51,000 Quarterly**** 90-95 days Fixed income funds 36,785,000 Daily 2-6 days Equity funds 98,231,000 Daily $ 249,972,000 $ 198,000

June 30, 2014

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Cash * $ 974,000 Multi-strategy hedge funds 46,209,000 Quarterly/Tri-annual 45-100 days Distressed debt hedge funds 4,498,000 Quarterly**/Annual 65-90 days Private equity 1,377,000 $ 163,000 Quarterly*** 90 days Stock funds 888,000 Monthly ** Global/Macro hedge funds 7,888,000 Quarterly*** 90 days Real asset funds 25,063,000 52,000 Quarterly**** 90-95 days Fixed income funds 51,212,000 Daily 2-6 days Equity funds 94,341,000 Daily $ 232,450,000 $ 215,000

* Cash holdings of underlying managers ** Redemption is at the discretion of the fund manager *** Redemption frequency is subject to lockout periods as shown above **** Redemption frequency is subject to lockout periods as shown above Multi-strategy hedge funds include investments in long/short equity, event-driven, capital structure and fixed income arbitrage, distressed credit, and restructuring and underpriced companies.

Distressed debt hedge funds include investments in hedge funds that invest in debt obligations of distressed companies at a discount and sell the obligations following reorganization or restructuring of the companies.

Long/Short hedge funds invest with managers or private investment funds that take short positions and long positions in equity securities and use leverage to augment the effects of stock selection. Investments in this category can be redeemed annually.

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Private equity is held by the University’s hedge fund of funds managers and may include real estate, loans, and non-public company equity and debt securities. Stock funds include investments, typically through traditional, long-only stock managers, that maintain beta exposure to stocks and achieve alpha value added of at least 2% per year over a passive portfolio. Investments in this category are not currently eligible for redemption. Global/Macro hedge funds include investments in a broad diversity of asset classes and geographic markets. They may invest in the equity, global fixed income, currency and commodity sectors. Real asset funds include investments in natural resources, Treasury Inflation Protected Securities (TIPs) and commodities through public and private investments whose value is driven by economic activity and which may act as a hedge against unexpected inflation. Fixed income funds include investments in intermediate and long U.S. government securities and credit securities and U.S. fixed income index funds and commingled funds. The funds seek a high level of current income while preserving principal by investing primarily in a diversified portfolio of debt securities with a dollar-weighted average maturity between three and ten years.

Equity funds include investments in U.S., International Developed Markets and Emerging Markets equities via commingled funds and index funds. The funds seek to balance the long term growth of capital with income and high total return.

The assets held in the pension and postretirement plans categorized as Level 2 and Level 3 fixed income funds and equity funds, are also valued using net asset value or its equivalent. The following table is a roll forward of the balance sheet amounts for financial instruments measured at fair value and classified by the University within Level 3 of the valuation hierarchy defined above:

Investments Funds Held in

Trust by Others Pension Plans Postretirement

Plans Balance June 30, 2013 $ 45,399,000 $ 126,347,000 $ 6,421,000 $ 0 Purchases 15,074,000 14,312,000 26,154,000 Withdrawals (4,079,000) (62,000) Realized and unrealized gains, net 5,277,000 19,085,000 1,480,000 2,456,000 Balance June 30, 2014 $ 61,671,000 $ 145,432,000 $ 22,151,000 $ 28,610,000 Purchases 19,200,000 886,000 15,750,000 Withdrawals (4,705,000) (4,092,000) Realized and unrealized gains/(losses), net 4,067,000 (2,716,000) 1,175,000 1,839,000 Balance June 30, 2015 $ 80,233,000 $ 142,716,000 $ 20,120,000 $ 46,199,000

There were no transfers of assets into or out of Levels 1, 2 or 3 during fiscal 2015. During 2014, the University identified certain assets in equity funds and securities that were more appropriately classified in Level 2 in the fair value hierarchy. On June 30, 2014, the University transferred these assets totaling $6,258,000 from Level 1 to Level 2. There were no transfers of assets into or out of Level 3 during fiscal 2014.

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Note I. Endowments In accordance with Pennsylvania law, unless otherwise specifically directed in the trust instrument, the University has adopted an investment policy seeking a total return for donor and board designated endowment assets. As such, the return is derived from capital appreciation, earnings or distributions with respect to capital or both. Annually, the University’s Board of Trustee selects a spending rule distribution percentage that is consistent with the long term preservation of the real value of the assets, but in no event shall the percentage be less than 2% nor more than 7% per year. The adopted spending rule for 2015 and 2014 was 4.5%. The University recognizes the original donor corpus and all explicit additions as permanently restricted net assets and the excess or shortfall of the spending rule in temporarily restricted net assets. Occasionally due to unfavorable market fluctuations, the fair value of some assets associated with individual donor-restricted endowment funds may fall below the level that donors require to be retained as a perpetual fund, while other assets are unaffected and maintain or exceed the level required. The aggregate amounts of deficiencies are reported in unrestricted net assets. Subsequent investment gains will be used to restore the balances to the fair value of the original amount of the gift. Board designated endowment assets and the excess or shortfall of the spending rule on these assets are recognized in unrestricted net assets. The University’s endowment balances by net asset classification and the changes in endowment assets are as follows:

Endowment Balances by Net Asset Classification

June 30, 2015

Unrestricted

Temporarily Restricted

Permanently Restricted Total

Donor-restricted endowment funds $ (282,000) $ 73,098,000 $ 334,233,000 $ 407,049,000 Board-designated endowment funds 86,550,000 86,550,000 $ 86,268,000 $ 73,098,000 $ 334,233,000 $ 493,599,000

June 30, 2014

Unrestricted Temporarily Restricted


Donor-restricted endowment funds $ (10,000) $ 83,482,000 $ 298,238,000 $ 381,710,000 Board-designated endowment funds 81,299,000 81,299,000 $ 81,289,000 $ 83,482,000 $ 298,238,000 $ 463,009,000

Changes in Endowment Net Assets

June 30, 2015

Unrestricted



Endowment net assets, beginning of the year $ 81,289,000 $ 83,482,000 $ 298,238,000 $ 463,009,000 Investment return: Investment income 6,929,000 6,929,000 Net realized and unrealized depreciation (1,001,000) (2,879,000) (1,693,000) (5,573,000) Total investment return (1,001,000) 4,050,000 (1,693,000) 1,356,000 Contributions and transfers 8,610,000 179,000 37,688,000 46,477,000 Appropriation of endowment assets for expenditure (spending rule)

(2,630,000) (14,613,000) (17,243,000)

Endowment net assets, end of the year $ 86,268,000 $ 73,098,000 $ 334,233,000 $ 493,599,000

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Note I. Endowments (continued)

Changes in Endowment Net Assets

June 30, 2014

Unrestricted



Endowment net assets, beginning of the year $ 72,332,000 $ 60,007,000 $ 274,817,000 $ 407,156,000 Investment return: Investment income 5,113,000 5,113,000 Net realized and unrealized appreciation 10,668,000 32,280,000 8,084,000 51,032,000 Total investment return 10,668,000 37,393,000 8,084,000 56,145,000 Contributions and transfers 747,000 279,000 15,337,000 16,363,000 Appropriation of endowment assets for expenditure (spending rule)

(2,458,000) (14,197,000) (16,655,000)

Endowment net assets, end of the year $ 81,289,000 $ 83,482,000 $ 298,238,000 $ 463,009,000

*********************************

Note J. Professional Liability Insurance The University purchases primary, commercial claims-made insurance coverage for professional liability claims from a commercial insurer, which in turn reinsures all of the risk with GSIC and TUHIC, wholly owned captive insurance companies domiciled in Bermuda. The net carrying amount of accrued asserted and unasserted actuarially determined professional liability claims, discounted at 1.50% and 1.25%, net of recoveries are as follows:

June 30, 2015 June 30, 2014

Accrued professional liability claims $ 231,766,000 $ 250,692,000 Less estimated insurance recoveries (17,531,000) (40,009,000) Accrued professional liability claims, net $ 214,235,000 $ 210,683,000

Professional liability claims are included in accrued expenses in the University’s balance sheets with the corresponding estimated insurance recoveries recorded in accounts receivable. The University also participates in the Commonwealth of Pennsylvania Medical Care Availability and Reduction of Error (MCare) Fund established under Act 111 and subsequently modified under Act 135, and maintains excess liability coverage through a commercial insurance carrier.

********************************* Note K. Commitments and Contingencies From time to time, claims are made against the University based on alleged negligence, acts of discrimination, medical malpractice, breach of contract or disagreements arising from the interpretation of laws or regulations. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters will not have a materially adverse effect on the University’s financial condition or change in net assets.

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Note L. Net Assets June 30, 2015 June 30, 2014 Unrestricted net assets $ 1,651,970,000 $ 1,642,977,000 Temporarily restricted net assets

Contributions and endowment income for instruction, research and support $ 102,356,000 $ 113,337,000 Term endowments and life income funds 15,741,000 16,384,000 Contributions for property, plant and equipment 7,182,000 7,848,000

$ 125,279,000 $ 137,569,000 Permanently restricted net assets

Corpus of contributions for endowments $ 334,233,000 $ 298,238,000 Corpus of contributions for student loans 207,000 208,000

Beneficial interest in Episcopal Healthcare Foundation 23,773,000 23,541,000 Beneficial interest in Fox Chase Cancer Center Foundation 49,189,000 50,498,000 $ 407,402,000 $ 372,485,000 Total net assets $ 2,184,651,000 $ 2,153,031,000

The Episcopal Healthcare Foundation (the Foundation) controls certain investments that, according to its organizational structure, are held for the benefit of TUH’s Episcopal campus operations. TUH has recognized the fair value of investments held by the Foundation in funds held in trust by others and permanently restricted net assets. The Fox Chase Cancer Center Foundation (FCCC Foundation) controls certain investments that, according to its organizational structure, are held for the benefit of ICR’s research operations and AOH’s clinical operations. ICR and AOH have recognized the fair value of investments held by the FCCC Foundation in funds held in trust by others and permanently restricted net assets.

********************************* Note M. Goodwill and Other Intangible Assets Goodwill and other intangibles at June 30, 2015 and 2014 are summarized as follows:

June 30, 2015

Weighted Average

Life (yrs.)

Gross Carrying

Value Accumulated Amortization Impairments

Net Carrying Value

Intangible assets subject to amortization:

Intellectual property 13.9 $ 5,615,000 $ (1,236,000) $ 4,379,000 Contracts and agreements 13.8 1,860,000 (435,000) 1,425000 Physician contracts 3.3 1,769,000 (1,021,000) 748,000 Other 8.7 619,000 (264,000) 355,000 Total 9,863,000 (2,956,000) 0 6,907,000 Goodwill and other intangible assets not subject to amortization:

Goodwill 524,000 N/A 524,000 Trade name – AOH 13,000,000 N/A 13,000,000 Research and development of intellectual property

1,984,000 N/A 1,984,000

Total 15,508,000 N/A 0 15,508,000 Total goodwill and other intangible assets

$ 25,371,000 $ (2,956,000) $ 0 $ 22,415,000

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Note M. Goodwill and Other Intangible Assets (continued)

June 30, 2014

Weighted Average

Life (yrs.)

Gross Carrying

Value Accumulated Amortization Impairments

Net Carrying Value

Intangible assets subject to amortization:

Intellectual property 13.9 $ 5,615,000 $ (824,000) $ 4,791,000 Contracts and agreements 13.8 1,860,000 (290,000) 1,570,000 Physician contracts 3.3 1,171,000 (453,000) 718,000 Other 8.7 619,000 (218,000) 401,000 Total 9,265,000 (1,785,000) 0 7,480,000 Goodwill and other intangible assets not subject to amortization:

Goodwill 524,000 N/A 524,000 Trade name – AOH 13,803,000 N/A $ (803,000) 13,000,000 Research and development of intellectual property

1,984,000 N/A 1,984,000

Total 16,311,000 N/A (803,000) 15,508,000 Total goodwill and other intangible assets

$ 25,576,000 $ (1,785,000) $ (803,000) $ 22,988,000

Intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated useful life of each acquired intangible asset. Amortization expense relating to intangible assets totaled $1,171,000 and $824,000 for the years ended June 30, 2015 and 2014, respectively.

Estimated amortization expense relating to intangible assets for the succeeding five years and thereafter is as follows:

2016 $ 896,000 2017 842,000 2018 734,000 2019 688,000 2020 564,000 Thereafter 3,183,000 $ 6,907,000

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Note N. Subsequent Events The University has evaluated subsequent events through October 26, 2015, the date the financial statements were issued. On July 8, 2015, the University issued $130,440,000 Philadelphia Authority for Industrial Development Revenue Bonds, First Series of 2015. The issue is secured by a pledge of gross revenues of the University, excluding all revenues of TUHS. The proceeds of the sale of the 2015 Bonds, together with other available funds, will be used to provide funds to (i) design, acquire, construct, install and develop certain capital projects of the University, (ii) create an escrow account to refund $48,140,000 of the Pennsylvania Higher Educational Facilities Authority’s Temple University Revenue Bonds, First Series of 2006 (the “2006 Bonds”) previously issued on behalf of the University and (iii) pay costs of issuing the 2015Bonds. The University and the Philadelphia Authority for Industrial Development (the “Authority) entered into a Forward Delivery Bond Purchase Contract for $134,080,000 Philadelphia Authority for Industrial Development Revenue Bonds, First Series of 2016. The issue is secured by a pledge of gross revenues of the University, excluding all revenues of TUHS. The Authority expects to issue and deliver the 2016 Bonds on January 6, 2016. The proceeds of the sale of the 2016 Bonds, together with other available funds, including premiums on the 2016 bonds, will be used to refund $143,155,000 of the 2006 Bonds.

********************************* Supplemental Schedules

The following schedules reflect the changes in unrestricted net assets for TU and its controlled entities. The columnar classification reflects the various budgetary categories and operations of the University. Clinical Faculty Practice Plans include TUP and certain School of Dentistry clinical activities. Other long-term net assets include the net book value of property, plant and equipment, net assets set aside to retire debt, University matching of federal loan programs and the unfunded liability for pensions and postretirement benefits.

Unrestricted Net AssetsFor the Year Ended June 30, 2015

(in thousands)

Unrestricted Net AssetsTemple Temple University

University Educational Clinical Externally TotalHealth Support Faculty Educational Quasi - Sponsored Unexpended Other Total Consolidating Unrestricted

System Inc. Services Practice Plans and General Endowment Activities Capital Long-term University Eliminations Net Assets(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Revenues:Tuition and fees (net of discounts of $97,120) $20,319 $692,782 $692,782 ($1,500) $711,601Commonwealth of Pennsylvania appropriation 121,136 121,136 121,136Grants and contracts $29,565 36,028 $108,539 144,567 174,132Contributions for operations and endowments 4,813 1,531 $7 12,931 14,469 19,282Investment return 13,456 8,662 14,662 $416 $2,197 25,937 39,393Sales of educational activities 9,475 9,475 9,475Auxiliary enterprises 97,221 97,221 97,221Patient care actvities (net of bad debt expense of $52,248) 1,432,806 $173,235 3,007 176,242 1,609,048Other sources 40,652 10,216 1,242 693 12,151 (2) 52,801Net assets released from restrictions 6,236 147 12,228 12,375 18,611 Total revenues 1,527,528 20,319 173,235 980,205 7 149,602 1,109 2,197 1,306,355 (1,502) 2,852,700

Expenses:Educational and general 36,967 19,751 773,276 131,292 15,251 72,676 992,495 (1,500) 1,047,713Auxiliary enterprises 83,266 464 1,103 41,993 126,826 126,826Patient care activities 1,467,833 171,325 5,998 174 177,497 (962) 1,644,368 Total expenses 1,504,800 19,751 171,325 862,540 0 131,756 16,354 114,843 1,296,818 (2,462) 2,818,907

Transfers:Property, plant and equipment (PP&E) acquisitions (668) (14,052) (1,818) (37,219) 53,757Retirement of indebtedness (42,043) 2,175 39,868Capital replacement and expansion (58,388) (24) 58,412Transfer from TUP (4,276) 4,276Other transfers 5,295 8,603 (12,842) 5,911 (6,967) Total transfers 0 0 (4,944) (104,912) 8,603 (14,684) 29,279 86,658 0 0 0

Excess/(deficit) of revenues over expensesand internal transfers 22,728 568 (3,034) 12,753 8,610 3,162 14,034 (25,988) 9,537 960 33,793

Other changes in net assets:Investment return (7,014) (927) (3,359) 265 (550) (4,571) (11,585)Commonwealth grants for PP&E 20,510 20,510 20,510Contributions for PP&E 354 213 567 567Loss on disposal of PP&E (331) (622) (622) (953)Actuarial change in accrued pensions and postretirement (18,619) (18,972) (18,972) (37,591)Transfer from TUHS (8,720) 3,470 6,210 9,680 (960)Currency translation adjustment 77 77Net assets released from restrictions for PP&E 3,002 59 1,114 1,173 4,175Total other changes in net assets (31,682) 77 3,529 5,283 (3,359) 0 22,243 (19,931) 7,765 (960) (24,800)

(Decrease)/Increase in net assets (8,954) 645 495 18,036 5,251 3,162 36,277 (45,919) 17,302 0 8,993Unrestricted Net assets July 1, 2014 210,955 (619) 13,512 309,838 81,299 72,706 193,844 761,442 1,432,641 1,642,977Unrestricted Net assets June 30, 2015 $202,001 $26 $14,007 $327,874 $86,550 $75,868 $230,121 $715,523 $1,449,943 $0 $1,651,970

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Unrestricted Net AssetsFor the Year Ended June 30, 2014

(in thousands)

Unrestricted Net AssetsTemple Temple University

University Educational Clinical Externally TotalHealth Support Faculty Education Quasi - Sponsored Unexpended Other Total Consolidating Unrestricted

System Inc. Services Practice Plans and General Endowment Activities Capital Long-term University Eliminations Net Assets(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Revenues:Tuition and fees (net of discounts of $90,499) $21,271 $652,843 $652,843 ($1,200) $672,914Commonwealth of Pennsylvania appropriation 126,624 126,624 126,624Grants and contracts $33,561 33,897 $106,490 140,387 173,948Contributions for operations and endowments 8,390 1,441 $747 13,159 15,347 23,737Investment return 13,828 7,904 13,343 $383 $2,464 24,094 37,922Sales of educational activities 8,649 8,649 8,649Auxiliary enterprises 95,133 95,133 95,133Patient care actvities (net of bad debt expense of $47,318) 1,320,944 $174,268 2,634 176,902 1,497,846Other sources 37,516 11,212 1,189 776 13,177 (2,995) 47,698Net assets released from restrictions 5,806 11,230 11,230 17,036 Total revenues 1,420,045 21,271 174,268 940,337 747 145,411 1,159 2,464 1,264,386 (4,195) 2,701,507

Expenses:Educational and general 39,386 21,461 724,707 122,995 12,538 68,216 928,456 (1,200) 988,103Auxiliary enterprises 81,171 567 725 36,095 118,558 118,558Patient care activities 1,376,922 201,602 5,213 128 206,943 (3,544) 1,580,321 Total expenses 1,416,308 21,461 201,602 811,091 0 123,562 13,263 104,439 1,253,957 (4,744) 2,686,982

Transfers:Property, plant and equipment (PP&E) acquisitions (13,430) (3,460) (118,707) 135,597Retirement of indebtedness (38,572) 1,688 36,884Capital replacement and expansion (47,951) (198) 48,149Transfer to TUP 26,553 (26,553)Other transfers 10,632 (11,109) (1,558) 2,035 Total transfers 0 0 26,553 (115,874) 0 (14,767) (70,428) 174,516 0 0 0

Excess/(deficit) of revenues over expensesand internal transfers 3,737 (190) (781) 13,372 747 7,082 (82,532) 72,541 10,429 549 14,525

Other changes in net assets:Investment return 6,649 4,169 7,915 69 (1,740) 10,413 17,062Commonwealth grants for PP&E 68,795 68,795 68,795Contributions for PP&E 4,533 4,533 4,533Loss on disposal of PP&E (373) (4) (1,479) (1,479) (1,856)Actuarial change in accrued pensions and postretirement 4,041 7,623 7,623 11,664Transfer from TUHS (7,358) 1,470 6,437 7,907 (549)Transfer to TESS 5,686 (5,686) (5,686)Currency translation adjustment (38) (38)Net assets released from restrictions for PP&E 1,865 4 2,495 2,499 4,364Total other changes in net assets 4,824 5,644 1,474 4,920 7,915 0 75,892 4,404 94,605 (549) 104,524

Increase/(Decrease) in net assets 8,561 5,454 693 18,292 8,662 7,082 (6,640) 76,945 105,034 0 119,049Unrestricted Net assets July 1, 2013 202,394 (6,073) 12,819 291,546 72,637 65,624 200,484 684,497 1,327,607 1,523,928Unrestricted Net assets June 30, 2014 $210,955 ($619) $13,512 $309,838 $81,299 $72,706 $193,844 $761,442 $1,432,641 $0 $1,642,977

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Temple University and Subsidiary Organizations

As of June 30, 2015 The following lists the University and its subsidiary organizations included in the consolidated financial statements and their tax-exempt status. Unless otherwise indicated, all exempt organizations are such under Internal Revenue Code Section 501(c)(3). Temple University - Of The Commonwealth System of Higher Education (the University), exempt

Good Samaritan Insurance Co., Ltd. (GSIC), non-exempt (Bermuda)

Temple Educational Support Services, Ltd. (TESS), non-exempt (Japan) TUMP Offices, Inc., exempt 501(c)(2) Temple Corporation, non-exempt (inactive) VT Holdings, Inc., non-exempt (inactive) Virtual Temple, Inc., non-exempt (inactive) Global Technology Management Corp., non-exempt (inactive)

Temple University Health System, Inc. (TUHS), exempt

Temple University Hospital, Inc. (TUH), exempt

Temple University Health System Foundation (TUHSF), exempt Temple Physicians, Inc. (TPI), exempt Jeanes Hospital (JH), exempt

Episcopal Hospital (EH), exempt TUHS Insurance Co., Ltd. (TUHIC), non-exempt (Bermuda) Temple Health System Transport Team, Inc. (T3), exempt Temple Center for Population Health, LLC, exempt American Oncologic Hospital (AOH), exempt (doing business as

The Hospital of the Fox Chase Cancer Center) Institute for Cancer Research (ICR), exempt (doing business as The Research Institute of Fox Chase Cancer Center) Fox Chase Cancer Center Medical Group, Inc. (MGI), exempt Fox Chase Network, Inc. (Network), exempt Fox Chase Ltd. (Limited), non-exempt

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