Financial Report 2006
Norton Healthcare Financial Report 2006
Norton Healthcare's financial performance continued to improve in 2006, as the not-for-profit health care system exceeded financial operating targets for the sixth consecutive year and contributed a record $67 million to support charitable care, education and community programs and services.
Norton Healthcare recorded a positive $85.6 million in operating income (bottom line - patient service margin plus investment income) in 2006, including a $51.3 million, or 4.5 percent, patient service margin (financial result from the system's core business, patient care services). The system's patient service margin has improved each year from a negative 7.3 percent in 2000 to a positive 4.5 percent in 2006.
Norton officials said that all of the key indicators of its financial performance and health continued to trend in a positive direction in 2006. The system's audited financial numbers for its 2006 fiscal year (January through December) included these highlights:
- Norton contributed a record $67.2 million "community dividend," comprising charitable care, discounted services, community programs and services, and educational programs support. In 2006, Norton Healthcare provided some $22.3 million in direct support to the University of Louisville, and over the past five years has provided a total of $82.4 million to support U of L. Over the past five years, Norton has contributed a total community dividend of $307.4 million.
- Norton provided free or discounted health care services to more than 55,000 uninsured patients in 2006 - some $46 million worth of care, or $126,000 each day.
- Norton Healthcare's operating income was a positive $85.6 million, a $42.6 million improvement (99 percent) from the positive $43 million recorded in FY 2005.
- Norton Healthcare's patient service margin improved by $28 million (120 percent), with a positive $51.3 million, compared with a positive $23.3 million in 2005. The 2006 number represents a $99 million improvement from Norton's performance in 2000.
- Norton recorded $3.2 billion in gross revenues and ended 2006 with $1.5 billion in total assets.
- Norton's net revenues grew by $96.3 million, or 9 percent. Since 1998, Norton's net revenues have grown from $417.9 million to $1.15 billion in 2006, an increase of 174 percent.
- Norton grew its cash reserves by $33 million to $540 million.
- Norton improved its days cash on hand to 209 days. Since 2002, the system's days cash on hand has grown from 133 days to 209 days, a 57 percent improvement. Days cash on hand is a key indicator of an organization's financial strength.
- Norton improved its maximum debt service coverage ratio from 2.5 in 2005 to 3.5 in 2006, a 40 percent increase. An improving ratio is an indicator of an organization's ability to meet debt obligations.
- Norton realized $34.4 million in investment income, compared with $19.7 million in 2005.
Norton Healthcare Combined Balance Sheet
View financial statements derived from audited financial statements that include combined balance sheets, operations and changes in net assets, cash flows and community service.
2006 Financial Statements (PDF)
Financial Glossary of Terms
Explore a glossary of the financial terms used on this site.
News Release & Media Coverage
Norton Healthcare News Release
Courier-Journal article (7-6-07) on Norton Healthcare's 2006 financial performance
Archived Financial Reports
2007 Norton Healthcare Financial Report
2006 Norton Healthcare Financial Report
2005 Norton Healthcare Financial Report
2004 Norton Healthcare Financial Report