2011 Report to the Community

Management’s CONDENSED
FINANCIAL RESULTS –
MARCH 31, 2011

Condensed Statement of Financial Position
LHSC.s financial position continued to improve significantly over the past 12-months. A current ratio of 1.14:1 demonstrates a significant improvement in working capital and LHSC increasingly focuses its attention on increased liquidity in order to deal with expected future funding and operating expense challenges. Current and long-term obligations under various debt agreements are adequately covered and supported by sound business plans and cashflows.

Condensed Statement of Operations
LHSC ended the year with a GAAP surplus of $48.6 million or an operating margin of 4.8% of total revenues. These financial results are not entirely unexpected. During the two previous fiscal years, Management developed operating and capital plans with the intent of replenishing working capital and still ensuring a balanced operating position. The surplus is partly the result of prudent financial strategies to strategically position LHSC for future economic challenges. These strategies include a focus on clinical efficiencies, alternative optimization of revenue sources, rebuilding of LHSC.s capital asset base, and replenishment of working capital. All of these factors require balance amongst strategies to address the operating and capital needs of LHSC. Our sound financial position will allow us to address patient access and flow issues and focus resources on patient safety and infection control initiatives.

Included in the Ministry of Health and Long-Term Care (MoHLTC) and LHIN revenues are clawbacks related to unmet service volumes in priority and wait time funding initiatives.

Condensed Statement of Cash Flows
LHSC invested $24.6 million in clinical capital, building service equipment, information systems and buildings during the year. In addition LHSC spent $75.7 million in Milestone 2 redevelopment costs which is funded on a cost share basis with the MoHLTC and $31.5 million in externally funded or recoverable capital projects.

Capital spending is financed through a combination of operations and deferred contributions from both levels of government and the London Health Sciences Foundation. Total cash of $121.6 million consists of restricted cash and investments of $40.3 million in order to discharge certain future obligations and $81.3 million in unrestricted cash.

Basis of Presentation
The information contained in the condensed financial statements is in agreement with the related information in the complete audited financial statements. The condensed statements contain major subtotals and totals from the complete financial statements.

Condensed Statement of Financial Position

Condensed Statement of Financial Position image
Click to Enlarge

Condensed Statement of Operations

Condensed Statement of Operations image
Click to Enlarge

Condensed Statement of Cash Flow

Condensed Statement of Cash Flow image
Click to Enlarge