Tarrant County Hospital District 
d/b/a JPS Health Network 
A Component Unit of Tarrant County, Texas 
Accountants’ Report and Financial Statements
September 30, 2012 and 2011

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
September 30, 2012 and 2011
Contents
Independent Accountants’ Report on Financial Statements and 
Supplementary Information ............................................................................................... 1 
Management’s Discussion and Analysis ............................................................................. 3 
Financial Statements 
Balance Sheets .................................................................................................................................... 9 
Statements of Revenues, Expenses and Changes in Net Assets ....................................................... 10 
Statements of Cash Flows ................................................................................................................ 11 
Notes to Financial Statements .......................................................................................................... 13 
Supplementary Information 
Balance Sheet Information ............................................................................................................... 36 
Statement of Revenues, Expenses and Change in Net Assets Information ...................................... 37 
Required Supplementary Information 
Schedule of Funding Progress – Pension Plan ................................................................................. 38 

 
Independent Accountants’ Report on Financial
Statements and Supplementary Information
Board of Managers 
Tarrant County Hospital District 
  d/b/a JPS Health Network 
Fort Worth, Texas 
We have audited the accompanying balance sheets of Tarrant County Hospital District d/b/a JPS Health 
Network (the District), a component unit of Tarrant County, Texas, as of September 30, 2012 and 2011, 
and the related statements of revenues, expenses and changes in net assets and cash flows for the years 
then ended.  These financial statements are the responsibility of the District’s management.  Our 
responsibility is to express an opinion on these 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 financial statements are free of material misstatement.  An audit includes examining, 
on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also 
includes assessing the accounting principles used and significant estimates made by management, as well 
as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable 
basis for our opinion. 
In our opinion, the financial statements referred to above present fairly, in all material respects, the 
financial position of the District as of September 30, 2012 and 2011, and the changes in its financial 
position and its cash flows for the years then ended in conformity with accounting principles generally 
accepted in the United States of America. 
Accounting principles generally accepted in the United States of America require that the management’s 
discussion and analysis and pension information listed in the table of contents be presented to supplement 
the basic financial statements.  Such information, although not part of the basic financial statements, is 
required by the Governmental Accounting Standards Board, who considers it to be an essential part of 
financial reporting for placing the basic financial statements in an appropriate operational, economic or 
historical context.  We have applied certain limited procedures to the required supplementary information 
in accordance with auditing standards generally accepted in the United States of America, which 
consisted of inquiries of management about the methods of preparing the information and comparing the 
information for consistency with management’s responses to our inquiries, the basic financial statements 
and other knowledge we obtained during our audits of the basic financial statements.  We do not express 
an opinion or provide any assurance on the information because the limited procedures do not provide us 
with sufficient evidence to express an opinion or provide any assurance. 

 
Tarrant County Hospital District 
  d/b/a JPS Health Network 
Page 2 
Our audit was performed for the purpose of forming an opinion on the basic financial statements as a 
whole.  The other supplementary information listed in the table of contents is presented for purposes of 
additional analysis and is not a required part of the basic financial statements.  Such information has not 
been subjected to the auditing procedures applied in the audit of the basic financial statements, and 
accordingly, we do not express an opinion or provide any assurance on it. 
January 30, 2013 

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Management’s Discussion and Analysis
Years Ended September 30, 2012 and 2011
(In Thousands)
Introduction 
This management’s discussion and analysis of the financial performance of Tarrant County Hospital 
District d/b/a JPS Health Network (the District) provides an overview of the District’s financial activities 
for the years ended September 30, 2012 and 2011.  It should be read in conjunction with the 
accompanying financial statements of the District.  Unless otherwise indicated, amounts are in thousands. 
Financial Highlights 
•
•
•
Cash, short-term investments and other noncurrent investments increased in 2012 by $14,141 or 3.7% 
and decreased in 2011 by $11,131 or 2.8%.  
The District’s net assets increased in each of the past two years with a $16,508 or 2.5% increase in 
2012 and a $3,165 or 0.5% increase in 2011. 
The District reported operating losses in both 2012 ($291,380) and 2011 ($302,167).  The operating 
loss in 2012 decreased by $10,787 or 3.6%, as compared to the operating loss reported in 2011.  The 
operating loss in 2011 decreased by $1,033 or 0.3%, from the operating loss reported in 2010. 
•
Net nonoperating revenues increased by $56 or 0.0% in 2012 compared to 2011 and decreased by 
$10,458 or 3.3% in 2011 compared to 2010.  
Using This Annual Report 
The District’s financial statements consist of three statements–a balance sheet; a statement of revenues, 
expenses and changes in net assets; and a statement of cash flows.  These statements provide information 
about the activities of the District, including resources held by the District but restricted for specific 
purposes by creditors, contributors, grantors or enabling legislation.  The District is accounted for as a 
business-type activity and presents its financial statements using the economic resources measurement 
focus and the accrual basis of accounting. 
The Balance Sheet and Statement of Revenues, Expenses and Changes in Net Assets 
One of the most important questions asked about any hospital’s finances is “Is the hospital as a whole 
better or worse off as a result of the year’s activities?”  The balance sheet and the statement of revenues, 
expenses and changes in net assets report information about the District’s resources and its activities in a 
way that helps answer this question.  These statements include all restricted and unrestricted assets and all 
liabilities using the accrual basis of accounting.  Using the accrual basis of accounting means that all of 
the current year’s revenues and expenses are taken into account regardless of when cash is received or 
paid.
3

 
These two statements report the District’s net assets and changes in them.  The District’s total net assets–
the difference between assets and liabilities–is one measure of the District’s financial health or financial 
position.  Over time, increases or decreases in the District’s net assets are an indicator of whether its 
financial health is improving or deteriorating.  Other nonfinancial factors, such as changes in the 
District’s patient base, changes in legislation and regulations, measures of the quantity and quality of 
services provided to its patients, and local economic factors should also be considered to assess the 
overall financial health of the District.  
The Statement of Cash Flows 
The statement of cash flows reports cash receipts, cash payments and net changes in cash and cash 
equivalents resulting from four defined types of activities.  It provides answers to such questions as where 
did cash come from, what was cash used for, and what was the change in cash and cash equivalents 
during the reporting period.  
The District’s Net Assets 
The District’s net assets are the difference between its assets and liabilities reported in the balance sheets.  
The District’s net assets increased by $16,508 (2.5%) in 2012 over 2011 and by $3,165 (0.5%) in 2011 
over 2010, as shown in Table 1: 
Table 1:  Assets, Liabilities and Net Assets 
2012
2011
2010
Assets
Cash and short-term investments
$
211,511
$
200,306
$
213,839
Patient accounts receivable, net 
Other current assets
62,726
58,645
53,821
45,200
55,626
52,177
Capital assets, net
Other noncurrent assets
303,812
188,876
303,918
179,037
293,555
176,886
Total assets
$
825,570
$
782,282
$
792,083
Liabilities
Long-term debt
Other current and noncurrent liabilities
$
54,024
100,910
$
56,352
71,802
$
58,593
82,527
Total liabilities
154,934
128,154
141,120
Net Assets
Invested in capital assets, net of related debt
Restricted expendable
250,529
4,425
248,344
2,308
232,867
8,997
Restricted nonexpendable
Unrestricted
250
415,432
250
403,226
250
408,849
Total net assets
670,636
825,570
654,128
782,282
650,963
792,083
Total liabilities and net assets
$
$
$
One of the most significant changes in the District’s assets in 2012 is the increase in amounts due from 
the state of Texas under supplemental funding programs.  Supplemental funding payments were delayed 
in 2012 as a result of the Medicaid Section 1115(a) demonstration transition, discussed more fully in  
Note 2, and the related receivable increased by $21,331 or 178.6% in 2012 as compared to 2011.  The 
District’s cash and investments and other noncurrent investments increased by $14,441 or 3.7% in 2012 
as compared to 2011 and the District’s accounts receivable increased by $8,905 or 16.5% in 2012 as 
4

 
compared to 2011.  In May 2012, the District began utilizing a new electronic health record and patient 
billing software program.  This implementation led to billing delays and was the primary cause for the 
increase in accounts receivable. 
The most significant change in the District’s assets in 2011 is the decrease in cash and investments and 
other noncurrent investments of $11,131 or 2.8%, which was offset by an increase in the District’s capital 
assets of $10,363 or 3.5%.  Capital assets purchased during 2011 were $24,342 higher than assets 
purchased in 2010, which relates primarily to the District’s implementation of electronic health records.  
Total assets were also impacted by amounts due from the state of Texas under supplemental funding 
programs.  Due to the timing of payments and the maximum supplemental reimbursement the District 
was eligible for in the last quarter of the State’s 2011 fiscal year, that receivable decreased by $6,984 or 
36.9% from 2010 to 2011. 
Operating Results and Changes in the District’s Net Assets 
In 2012, the District’s net assets increased by $16,508 or 2.5%, as shown in Table 2.  This increase is 
made up of several different components and represents an increase of 421.6% compared with the 
increase in net assets for 2011 of $3,165.  The District’s change in net assets decreased from $12,590 in 
2010 to $3,165 in 2011. 
Table 2:  Operating Results and Changes in Net Assets 
2012
2011
2010
Operating Revenues
Net patient service revenue
$
271,604
$
264,448
$
267,358
Texas disproportionate share and UPL program
Other operating revenues
121,596
48,373
103,309
52,450
91,780
52,306
Total operating revenues
441,573
420,207
411,444
Operating Expenses
Salaries and wages and employee benefits
Purchased services and professional fees
Supplies
Depreciation and amortization
Other operating expenses
356,588
180,248
117,048
43,396
354,123
158,739
131,964
40,454
342,987
178,633
134,577
38,308
35,673
37,094
20,139
Total operating expenses
732,953
722,374
714,644
Operating Loss
(291,380)
(302,167)
(303,200)
Nonoperating Revenues (Expenses)
Property taxes
Contributed services
279,403
23,676
2,309
275,345
26,509
3,478
284,028
27,150
4,612
Investment return, interest expense and other
Total nonoperating revenues (expenses)
305,388
305,332
315,790
Excess of Revenues Over Expenses
Before Capital Grants
14,008
2,500
3,165
-
12,590
-
Capital Grants
Increase in Net Assets
$
16,508
$
3,165
$
12,590
5

 
Operating Losses 
The first component of the overall change in the District’s net assets is its operating income or loss–
generally, the difference between net patient service and other operating revenues and the expenses 
incurred to perform those services.  In each of the past three years, the District has reported an operating 
loss.  This is consistent with the District’s recent operating history as the District was formed and is 
operated primarily to serve lower income residents of Tarrant County.  The District levies property taxes 
to provide sufficient resources to enable the facility to serve lower income and other residents. 
The operating loss for 2012 decreased by $10,787 or 3.6% as compared to 2011.  The primary 
components of the increased operating loss are: 
•
•
•
•
•
•
An increase in net patient service revenue of $7,156 or 2.7% 
An increase in Texas Medicaid supplemental funding of $18,287 or 17.7% 
The receipt of Electronic Health Record funding of $4,760 in 2012 
An increase in professional fees and purchased services of $21,509 or 13.5% 
A decrease in supply and drug costs of $14,916 or 11.3% and 
An increase in salaries and wages of $2,465 or 0.7% 
While patient days decreased in 2012 as compared to 2011, patient service revenue increased primarily 
due to a slight increase in the acuity of patients and minor shifts in payer mix and a transfer of the 
payment of trauma funds to the Medicaid SDA.  The increase in revenue from supplemental funding from 
the Texas Medicaid program is attributable to the Medicaid Section 1115(a) demonstration, discussed in 
Note 2, and increased funding to the District for uncompensated care through that program. 
Professional fees and purchased services increased in the current year as a result of increased payments to 
physician groups providing services to indigent patients served by the District and due to increased 
consulting services utilized during the implementation of the District’s new electronic health record 
system. 
The decrease in supply and drug costs is primarily attributable to new drug related contracts which 
reduced the unit price of various drugs and led to an overall decrease in drug costs. 
The operating loss for 2011 of $302,167 was $1,033 less than the operating loss of $303,200 recognized 
in 2010.  The District had a decrease in net patient service revenue of $2,910 and an increase in Texas 
Medicaid supplemental funding of $11,529.  The increase in supplemental funding was primarily the 
result of increased Medicaid and uncompensated care patients, coupled with fluctuations in various other 
factors impacting the amount of revenue the District is eligible for under the supplemental funding 
programs.  Overall, operating revenues increased $8,763 or 2.1%, in 2011 as compared to 2010.  While 
expenses declined in some areas, the increased revenue was largely offset by an increase in salaries and 
wages of $11,136 or 3.2%.  Overall, expenses in 2011 increased by $7,730 or 1.1%, as compared to 2010. 
Nonoperating Revenues and Expenses 
Nonoperating revenues and expenses consist primarily of property taxes levied by the District and 
investment income and interest expense.  The District held property tax rates steady in 2012, but an 
increase in overall property values as well as changes in estimated uncollectible property taxes resulted in 
a net increase in property tax revenue of $4,058 or 1.5% from 2011 to 2012.  Investment return declined 
in 2012 compared to 2011, resulting primarily from a decrease in interest rates on certificates of deposit 
and debt securities.  Contributed services represent the difference between the value of services provided 
to the District’s indigent patients by area physicians and the amount the District ultimately paid for those 
services.  Contributed services decreased by $2,833 in 2012 as compared to 2011.
6

 
Interest expense decreased by $245 or 12.2% due to a decrease in long-term debt, but interest expense 
was also impacted by less interest being capitalized in conjunction with the District’s electronic medical 
records project.   
The District’s Cash Flows 
Changes in the District’s cash flows are consistent with changes in operating losses and nonoperating 
revenues and expenses for 2012, 2011 and 2010, discussed earlier. 
Capital Asset and Debt Administration 
Capital Assets
At the end of 2012, the District had $303,812 invested in capital assets, net of accumulated depreciation, 
as detailed in Note 6 to the financial statements.  In 2012, the District purchased new capital assets costing 
$44,931.  This includes $25,056 to complete the District’s new electronic health record system.  The 
District also completed a physical inventory of capital assets during 2012. 
At the end of 2011, the District had $303,918 invested in capital assets, net of accumulated depreciation.  
In 2011, the District purchased new equipment costing $26,066.  In addition, approximately $22,047 was 
spent to develop the new electronic health record system discussed above. 
Debt
At September 30, 2012, the District had $56,385 in revenue bonds and certificates of obligation   
outstanding.  The District issued no new debt in 2012 or 2011.  The District’s formal debt issuances, 
revenue bonds, are subject to limitations imposed by state law.  There have been no changes in the 
District’s debt ratings in the past three years, but the outlook changed from stable to negative on the 2006 
bonds given the dependence of the District on federal funding.  Subsequent to year-end, the District 
advanced refunded its Series 2002 Bond obligations.  See Note 9 for additional discussion. 
Other Economic Factors
The District is the Anchor facility for the Region 10 Regional Healthcare Partnership (RHP) Delivery 
System Reform Incentive Payment (DSRIP) program under the Medicaid Section 1115(a) demonstration.  
The Region 10 RHP is the result of a shared commitment by the region’s providers to a community-
oriented, regional healthcare delivery model focused on the triple aims of improving the experience
of care for patients and their families, improving the health of the region, and reducing the cost of
care without compromising quality.  Region 10’s DSRIP plan is the essential blueprint for improved
individual and population health at a lower cost, delivered more efficiently.
The District is anticipating a small increase in volumes in fiscal year 2013 from growth in the county and 
with the addition of new physicians to the medial staff.  Based on the recommendation of the District’s 
Board of  Managers, the Tarrant County Commissioners Court  set the property tax rate for fiscal year 
2013 to $0.227897 per $100 valuation. 
The Board and management continue to monitor and consider many factors that have direct or indirect 
impact on future operations.  These include: 
•
The Medicaid Section 1115(a) demonstration project which could have a material impact on the 
District’s funding for providing uncompensated care and provides funding for improvements in the 
design of the health care delivery system and associated outcomes 
•
•
The reimbursement impact of the Patient Protection and Affordable Care Act, Texas Medicaid DSH 
and other federal legislation 
Tarrant County’s population growth, as well as continued growth in the number of uninsured, 
working poor and medically indigent
7

 
•
•
•
•
Workforce shortages, particularly in the areas of nursing, therapists, medical technologists and IT 
Continued growth in medical and pharmaceutical costs, as well as advances in therapies, and 
Continued advances in health care medical equipment and computing technology 
The District’s adoption of LEAN and Six Sigma methodologies to improve efficiency and reduce 
outcome variation 
Significant Financial Practices 
The District maintains several financial practices designed to maintain its credit-worthiness and to 
position the District to carry out its defined mission of providing health care to the residents of Tarrant 
County, as well as its fiduciary responsibility to the taxpayers of Tarrant County.  Those practices are as 
follows: 
Investments Internally Designated for Capital Acquisition and Operating Activities
The Board sets aside funds for both long-term stability and capital improvements. 
Monthly Financial Reporting
The Board meets monthly and reviews the financial statements from the prior month.  This information is 
presented to show actual monthly and year-to-date revenues and expenses compared to budget and the 
prior year.  Management provides explanation for significant variances. 
Pay-As-You-Go Capital Funding
The District has maintained the practice to fund routine capital items under a pay-as-you-go basis.  This 
has been done to minimize borrowing costs as well as maintain financial flexibility. 
Budget Process
The operating and capital budgets are proposed by the District’s management and endorsed by the Board.  
Final approval is obtained from the Court.  The budget remains in effect for the entire fiscal year. 
Contacting the District’s Financial Management 
This financial report is designed to provide our readers with a general overview of the District’s finances 
and to show the District’s accountability for the money it receives.  Questions about this report and 
requests for additional financial information should be directed to the District’s Financial Offices at 1350 
South Main Street, Suite 4000, Fort Worth, Texas 76104. 
8

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Balance Sheets
September 30, 2012 and 2011
(In Thousands)
Assets
2012
2011
Current Assets
Cash and cash equivalents
Short-term investments
$
151,366
60,145
62,726
4,253
33,272
43
$
90,030
110,276
53,821
5,209
11,941
279
Patient accounts receivable, net
Property taxes receivable, net
Texas Medicaid supplemental funding receivable
Restricted pledges receivable, net
Held by trustee for self insurance, current portion
Due from third-party payers
285
-
5,501
2,200
Supplies inventory
Prepaid expenses and other assets
9,472
11,320
10,011
10,059
Total current assets
332,882
299,327
Noncurrent Cash and Investments
Held by trustee for debt service
3,006
2,958
Held by trustee for self insurance
Restricted by donors for capital acquisitions and
specific operating activities
Internally designated for capital acquisitions and 
operating activities
11,297
13,243
2,070
170,723
187,096
1,780
2,623
160,120
178,944
93
Total noncurrent cash and investments
Other Receivables
Capital Assets, Net
303,812
825,570
303,918
782,282
$
$
Total assets
See Notes to Financial Statements

 
Liabilities and Net Assets
2012
2011
Current Liabilities
Accounts payable
$
54,119
$
32,847
Accrued expenses
33,020
3,547
5,552
2,265
28,171
150
5,501
2,180
Due to third-party payers
Current portion of self-insurance costs
Current maturities of long-term debt
Total current liabilities
Estimated Self-insurance Costs
Long-term Debt
98,503
1,411
54,024
996
68,849
1,674
56,352
1,279
Other Long-term Liabilities
Total liabilities
154,934
128,154
Net Assets
Invested in capital assets, net of related debt
Restricted expendable
Restricted nonexpendable
Unrestricted
250,529
4,425
250
248,344
2,308
250
415,432
403,226
Total net assets
670,636
825,570
654,128
782,282
$
$
Total liabilities and net assets
9

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Statements of Revenues, Expenses and Changes in Net Assets
Years Ended September 30, 2012 and 2011
(In Thousands)
2012
2011
Operating Revenues
Net patient service revenue, net of provision for 
uncollectible accounts; 2012 – $337,838; 2011 – $282,434
Supplemental Medicaid funding
$
271,604
121,596
502
$
264,448
103,309
819
Contributions
Other operating revenue
47,871
51,631
Total operating revenues
441,573
420,207
Operating Expenses
Salaries and related expenses
Professional fees and purchased services
Supplies
Depreciation and amortization
Other
356,588
180,248
117,048
43,396
354,123
158,739
131,964
40,454
35,673
37,094
Total operating expenses
732,953
722,374
Operating Loss
(291,380)
(302,167)
Nonoperating Revenues (Expenses)
Property tax revenue
Contributed services
Interest expense
Investment return and other
279,403
23,676
(1,764)
4,073
275,345
26,509
(2,009)
5,487
Total nonoperating revenues (expenses)
Excess of Revenues Over Expenses Before Capital Grants
Capital Grants
305,388
14,008
2,500
305,332
3,165
-
Increase in Net Assets
16,508
654,128
670,636
3,165
650,963
654,128
Net Assets, Beginning of Year
Net Assets, End of Year
$
$
See Notes to Financial Statements
10

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Statements of Cash Flows
Years Ended September 30, 2012 and 2011
(In Thousands)
2012
2011
Operating Activities
Receipts from and on behalf of patients
Receipts from Texas Medicaid supplemental
funding programs
Payments to suppliers and contractors
Payments to employees
$
268,296
$
264,714
100,265
(287,152)
(351,728)
46,639
110,293
(309,600)
(350,756)
53,008
Other receipts, net
Net cash used in operating activities
(223,680)
(232,341)
Noncapital Financing Activities
Property taxes supporting operations
278,241
278,241
272,449
272,449
Net cash provided by noncapital financing activities
Capital and Related Financing Activities
Principal paid on long-term debt
Interest paid on long-term debt
Property taxes supporting debt service
Purchase of capital assets
(2,180)
(2,826)
2,118
(2,095)
(2,910)
1,906
(41,605)
(53,627)
Net cash used in capital and related financing activities
(44,493)
(56,726)
Investing Activities
Purchase of investments
(186,510)
(218,326)
Proceeds from the sale and maturities of
  short-term investments
Interest income and other
233,320
4,073
246,690
5,487
Net cash provided by investing activities
Increase in Cash and Cash Equivalents
50,883
60,951
93,687
154,638
33,851
17,233
76,454
93,687
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
$
$
See Notes to Financial Statements
11

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Statements of Cash Flows (Continued)
Years Ended September 30, 2012 and 2011
(In Thousands)
2012
2011
Reconciliation of Cash and Cash Equivalents to the Balance Sheets
Cash and cash equivalents in current assets
Cash and cash equivalents in noncurrent cash and investments
$
$
151,366
3,272
$
$
90,030
3,657
154,638
93,687
   Net Cash Used in Operating Activities
Operating loss
Depreciation and amortization
$
(291,380)
43,396
1,451
$
(302,167)
40,454
1,245
Loss on disposal of assets
Contributed services expense
23,676
26,509
Changes in operating assets and liabilities
Patient accounts receivable
Texas Medicaid supplemental funding receivable
Estimated amounts due from and to third-party payers
Accounts payable and accrued expenses
Other assets and liabilities
(8,905)
(21,331)
5,597
23,984
(168)
1,805
6,984
(1,539)
(8,158)
2,526
Net cash used in operating activities
$
(223,680)
$
(232,341)
Supplemental Cash Flows Information
Capital asset acquisitions included in accounts payable
Contributed services revenue (Note 13  )
$
$
282
23,676
$
$
708
26,509
See Notes to Financial Statements
12

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Note 1:     Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Reporting Entity 
Tarrant County Hospital District d/b/a JPS Health Network (the District) is a political subdivision 
of the state of Texas and operates a hospital, a psychiatric inpatient facility, a skilled nursing unit, 
24 ambulatory health centers, a psychiatric emergency center, an emergency department and a 
designated Level 1 trauma center, three health centers for women, 19 school-based clinics and 
dental services at six locations.  Additionally, it manages medical care services at the Tarrant 
County correctional system’s three locations.  The District is under the supervision of the Tarrant 
County Commissioners Court (the Court) and is governed by an 11 member Board of Managers 
(the Board) appointed by the Court.  For this reason, the District is considered to be a component 
unit of Tarrant County, Texas (the County) and is included as a discretely presented component 
unit in the basic financial statements of the County. 
JPS Physician Group (JPSPG) began operations in July 2003, primarily for the purpose of 
providing physician services to District patients.  The District is the sole corporate member of 
JPSPG and has the authority to exercise significant control over the financial operations of JPSPG.  
As such, JPSPG is presented as a blended component unit of the District. 
JPS Foundation (the Foundation) was formed on August 4, 1997, solely to support and benefit 
scientific, educational and charitable activities conducted by the District.  The Foundation is a non-
profit organization whose purpose is to perform services on behalf of the District, including 
organizing fundraising activities, providing patient assistance programs, participating in recruiting 
functions and conducting administrative services.  The Foundation is also presented as a blended 
component unit of the District. 
The District’s financial statements include the activities as set forth above.  All material 
intercompany accounts and transactions have been eliminated in the financial statements.
Basis of Accounting and Presentation 
The accompanying financial statements of the District have been prepared on the accrual basis of 
accounting using the economic resources measurement focus.  Revenues, expenses, gains, losses, 
assets and liabilities from exchange and exchange-like transactions are recognized when the 
exchange transaction takes place, while those from government-mandated nonexchange 
transactions (principally federal and state grants) are recognized when all applicable eligibility 
requirements are met.  Operating revenues and expenses include exchange transactions and 
program-specific, government-mandated nonexchange transactions.
13

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Government-mandated nonexchange transactions that are not program specific, property taxes, 
investment income and interest on capital assets-related debt are included in nonoperating revenues 
and expenses.  The District first applies restricted net assets when an expense or outlay is incurred 
for purposes for which both restricted and unrestricted net assets are available. 
The District prepares its financial statements as a business-type activity in conformity with 
applicable pronouncements of the Governmental Accounting Standards Board (GASB).  Pursuant 
to GASB Statement No. 20, the District has elected to apply the provisions of all relevant 
pronouncements of the Financial Accounting Standards Board (FASB) that were issued on or 
before November 30, 1989, and do not conflict with or contradict GASB pronouncements. 
Use of Estimates 
The preparation of financial statements in conformity with accounting principles generally 
accepted in the United States of America 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. 
Cash and Cash Equivalents 
The District considers all liquid investments with original maturities of three months or less to be 
cash equivalents.  At September 30, 2012 and 2011, cash equivalents consisted primarily of money 
market accounts with brokers. 
Risk Management 
The District is exposed to various risks of loss from torts; theft of, damage to and destruction of 
assets; business interruption; errors and omissions; employee injuries and illnesses; natural 
disasters; medical malpractice; and employee health, dental and accident benefits.  Commercial 
insurance coverage is purchased for claims arising from such matters other than medical 
malpractice, employee health and workers’ compensation claims.  Settled claims have not 
exceeded this commercial coverage in any of the three preceding years. 
The District is self-insured for a portion of its exposure to risk of loss from medical malpractice, 
employee health and workers’ compensation claims.  Annual estimated provisions are accrued for 
the self-insured portion of these risks and include an estimate of the ultimate costs for both reported 
claims and claims incurred but not yet reported.
14

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Investments and Investment Income 
Investments in U.S. Treasury, agency and instrumentality obligations with a remaining maturity of 
one-year or less at time of acquisition and in nonnegotiable certificates of deposit are carried at 
amortized cost.  All other investments are carried at fair value.  Fair value is determined using 
quoted market prices. 
Investment income includes dividend and interest income, realized gains and losses on investments 
carried at other than fair value and the net change for the year in the fair value of investments 
carried at fair value. 
Patient Accounts Receivable 
The District reports patient accounts receivable for services rendered at net realizable amounts 
from third-party payers, patients and others.  The District provides an allowance for uncollectible 
accounts based upon a review of outstanding receivables, historical collection information and 
existing economic conditions.  
Supplies 
Supply inventories are stated at the lower of cost, determined using the first-in, first-out method or 
market. 
Capital Assets 
Capital assets are recorded at cost at the date of acquisition, or fair value at the date of donation if 
acquired by gift.  Depreciation is computed using the straight-line method over the estimated useful 
life of each asset.  Assets under capital lease obligations and leasehold improvements are 
depreciated over the shorter of the lease term or their respective estimated useful lives.  The 
following estimated useful lives are being used by the District: 
Land improvements
Buildings and improvements
Equipment
10 – 20 years
10 – 40 years
3 – 20 years
3 – 10 years
Computer software
15

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
The District capitalizes interest costs as a component of construction in progress, based on the 
weighted-average rates paid for long-term borrowing.  Total interest incurred was: 
2012
2011
Interest costs capitalized
Interest costs charged to expense
$
$
988
1,764
$
$
830
2,009
Total interest incurred
2,752
2,839
Deferred Financing Costs 
Deferred financing costs represent costs incurred in connection with the issuance of long-term debt.  
Such costs are being amortized over the term of the respective debt using the effective interest 
method. 
Compensated Absences 
District policies permit most employees to accumulate vacation and sick leave benefits that may be 
realized as paid time off or, in limited circumstances, as a cash payment.  Expense and the related 
liability are recognized as vacation benefits are earned whether the employee is expected to realize 
the benefit as time off or in cash.  Expense and the related liability for sick leave benefits are 
recognized when earned to the extent the employee is expected to realize the benefit in cash 
determined using the termination payment method.  Sick leave benefits expected to be realized as 
paid time off are recognized as expense when the time off occurs and no liability is accrued for 
such benefits employees have earned but not yet realized.  Compensated absence liabilities are 
computed using the regular pay and termination pay rates in effect at the balance sheet date, plus an 
additional amount for compensation-related payments such as social security and Medicare taxes 
computed using rates in effect at that date. 
Net Assets 
Net assets of the District are classified in four components.  Net assets invested in capital assets, 
net of related debt, consist of capital assets net of accumulated depreciation and reduced by the 
outstanding balances of borrowings used to finance the purchase or construction of those assets.  
Restricted expendable net assets are noncapital assets that must be used for a particular purpose, as 
specified by creditors, grantors or donors external to the District, including amounts deposited with 
trustees as required by bond indentures, reduced by the outstanding balances of any related 
borrowings.  Restricted nonexpendable net assets are noncapital assets that are required to be 
maintained in perpetuity as specified by parties external to the Hospital, such as permanent 
endowments.  Unrestricted net assets are remaining assets less remaining liabilities that do not meet 
the definition of invested in capital assets, net of related debt or restricted.
16

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Net Patient Service Revenue 
The District has agreements with third-party payers that provide for payments to the District at 
amounts different from its established rates.  Net patient service revenue is reported at the 
estimated net realizable amounts from patients, third-party payers and others for services rendered 
and includes estimated retroactive revenue adjustments and a provision for uncollectible accounts.  
Retroactive adjustments are considered in the recognition of revenue on an estimated basis in the 
period the related services are rendered and such estimated amounts are revised in future periods as 
adjustments become known. 
Tobacco Settlement Revenue 
The District receives revenue that is the result of a settlement between various counties and 
hospital districts in Texas and the tobacco industry for tobacco-related health care costs.  The 
District received approximately $5,285 and $5,664 in revenue from this settlement for the years 
ended September 30, 2012 and 2011, respectively.  This revenue is recognized as a component of 
other operating revenue in the accompanying statements of revenues, expenses and changes in net 
assets. 
Charity Care 
The District provides care without charge or at amounts less than its established rates to patients 
meeting certain criteria under its charity care policy.  Because the District does not pursue 
collection of amounts determined to qualify as charity care, these amounts are not reported as net 
patient service revenue. 
Income Taxes 
As an essential government function of the County, the District is generally exempt from federal 
and state income taxes under Section 115 of the Internal Revenue Code (IRC) and a similar 
provision of state law.  The District and the Foundation also carry an exemption from income taxes 
under IRC Section 501(c)(3).  JPSPG is exempt from income taxes under Section 501(a) of the 
IRC.  The District, the Foundation and JPSPG are all subject to federal income tax on any unrelated 
business taxable income. 
17

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Electronic Health Records Incentive Program 
The Electronic Health Records Incentive Program, enacted as part of the American Recovery and 
Reinvestment Act of 2009, provides for one time incentive payments under both the Medicare and 
Medicaid programs to eligible hospitals that demonstrate meaningful use of certified electronic 
health records technology (EHR).  Payments under the Medicare program are generally made for 
up to four years based on a statutory formula.  Payments under the Medicaid program are generally 
made for up to four years based upon a statutory formula, as determined by the state, which is 
approved by the Centers for Medicare and Medicaid Services.  Payments under both programs are 
contingent on the District continuing to meet escalating meaningful use criteria and any other 
specific requirements that are applicable for the reporting period.  The final amount for any 
payment year is determined based upon an audit by the administrative contractor.  Events could 
occur that would cause the final amounts to differ materially from the initial payments under the 
program. 
The District recognizes revenue under the grant accounting model using the cliff recognition 
approach.  Under this approach, revenue is recognized once meaningful use status has been met for 
the full reporting period. 
In 2012, the District completed the first year requirements under the Medicaid program and has 
recorded revenue of approximately $4,760, which is included as a component of other operating 
revenue in the accompanying statements of revenue, expenses and changes in net assets. 
Reclassifications 
Certain reclassifications have been made to the 2011 financial statements to conform to the 
2012 financial statement presentation.  The reclassifications had no effect on the changes in 
financial position. 
Note 2:     Net Patient Service Revenue
The District has agreements with third-party payers that provide for payments to the District at 
amounts different from its established rates.  These payment arrangements include: 
•   Medicare – Inpatient acute care services and substantially all outpatient services rendered to 
Medicare program beneficiaries are paid at prospectively determined rates.  These rates vary 
according to a patient classification system that is based on clinical, diagnostic and other 
factors.  Certain inpatient nonacute services and defined medical education costs are paid based 
on a cost reimbursement methodology.  The District is reimbursed for certain services at 
tentative rates with final settlement determined after submission of annual cost reports by the 
District and audits thereof by the Medicare administrative contractor.  
18

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
The District’s Medicare cost reports have been audited by the Medicare administrative 
contractor through September 30, 2007. 
•   Medicaid – Inpatient services rendered to Medicaid program beneficiaries are reimbursed 
under a prospective payment system.  Inpatient reimbursement is inclusive of an add-on for 
trauma care that is based on the Medicaid Standards Dollar Amount.  Outpatient and physician 
services are reimbursed under a mixture of fee schedules and cost reimbursement.  The District 
is reimbursed for cost reimbursable services at tentative rates with final settlement determined 
after submission of annual cost reports by the District and audits thereof by the Medicaid 
administrative contractor.  The District’s Medicaid cost reports have been audited by the 
Medicaid administrative contractor through September 30, 2007. 
On December 12, 2011, the United States Department of Health & Human Services approved a 
new Medicaid section 1115(a) demonstration entitled “Texas Health Transformation and Quality 
Improvement Program”.  This demonstration will expand existing Medicaid managed care 
programs and established two funding pools that will assist providers with uncompensated care 
costs and promote health system transformation.  The demonstration is effective from December 
12, 2011 to September 30, 2016, and will likely have a material impact on the District’s future 
Medicaid funding.  The funding received through this demonstration could impact the funding the 
District has historically received under the Texas Medicaid Disproportionate Share (DSH) program 
and will replace the funding historically received through the Upper Payment Limit (UPL) 
program, both designed to assist those facilities serving the majority of the indigent patients by 
providing funds supporting increased access to health care within the community.  Total funding 
received through the Texas Medicaid supplemental funding programs was $121,596 and $103,309 
for the years ended September 30, 2012 and 2011, respectively.   
Approximately 38% and 50% of net patient service revenue is from participation in the Medicare 
and state-sponsored Medicaid programs for the years ended September 30, 2012 and 2011, 
respectively.  Laws and regulations governing the Medicare and Medicaid programs are complex 
and subject to interpretation and change.  As a result, it is reasonably possible that recorded 
estimates will change materially in the near term. 
The District has also entered into payment agreements with certain commercial insurance carriers, 
HMOs and preferred provider organizations.  The basis for payment to the District under these 
agreements includes prospectively determined rates per discharge, discounts from established 
charges and prospectively determined daily rates. 
19

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Note 3:     Property Tax Revenue
The District received approximately 39% and 40% of its support from property taxes in the years 
ended September 30, 2012 and 2011, respectively.  Property taxes are levied by the District on 
October 1 of each year based on the preceding January 1 assessed property values.  To secure 
payment, an enforceable lien attaches to the property on January 1, when the value is assessed.  
Property taxes become due and payable when levied on October 1.  This is the date on which an 
enforceable legal claim arises and the District records a receivable for the property tax assessment, 
less an allowance for uncollectible taxes.  Property taxes are considered delinquent after January 31 
of the following year.  The District recorded an allowance for uncollectible property taxes of 
approximately $8,745 and $7,891 at September 30, 2012 and 2011, respectively. 
The District’s property tax rate was $0.226175 and $0.226200 per $100 valuation for 2012 and 
2011, respectively, for the maintenance and operation fund and property tax revenue for this fund 
was approximately $277,292 and $273,432 for 2012 and 2011, respectively.  The District’s 
property tax rate was $0.001722 and $0.001697 per $100 valuation for 2012 and 2011, 
respectively, for the interest and sinking fund and property tax revenue for this fund was 
approximately $2,111 and $1,913 for 2012 and 2011, respectively. 
Note 4:     Deposits, Investments and Investment Income
Deposits 
Custodial credit risk is the risk that in the event of a bank failure, a government’s deposits may not 
be returned to it.  The District’s deposit policy for custodial credit risk requires compliance with the 
provisions of state law.  
State law requires collateralization of all deposits with federal depository insurance or other 
qualified investments.  At September 30, 2012 and 2011, the District’s deposits were either insured 
or collateralized in accordance with state law. 
Investments 
The District may legally invest in direct obligations of and other obligations guaranteed as to 
principal by the U.S. Treasury and U.S. agencies and instrumentalities and in bank repurchase 
agreements.  It may also invest to a limited extent in corporate bonds and equity securities. 
20

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
At September 30, 2012 and 2011, the District had the following investments and maturities as: 
September 30, 2012
Maturities in Years
Less
More
Type
Fair Value
Than 1
1-5
6-10
Than 10
Money market mutual funds
Investment pools
U.S. Treasury obligations
U.S. agencies obligations
Municipal bonds
$
3,224
$
$
3,224
94,361
-
2,447
203
$
-
-
1,263
31,721
371
$
-
-
-
6,422
-
$
$
-
-
-
-
-
94,361
1,263
40,590
574
100,235
$
33,355
$
6,422
-
Mutual funds
199
$
$
140,211
September 30, 2011
Maturities in Years
Less
Than 1
More
Than 10
Type
Fair Value
1-5
6-10
Money market mutual funds
Investment pools
U.S. Treasury obligations
U.S. agencies obligations
Municipal bonds
3,244
45,298
1,248
60,154
683
$
$
3,244
45,298
-
21,548
101
$
$
-
-
521
20,777
582
$
$
-
-
727
$
$
-
-
-
-
-
17,829
-
70,191
21,880
18,556
-
Mutual funds
199
$
110,826
21

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
•   Interest Rate Risk – As a means of limiting its exposure to fair value losses arising from rising 
interest rates, the District investment policy requires that total investments have a weighted-
average maturity of five years or less.  The District’s investments in U.S. Treasury and agency 
obligations include fixed-rate notes and bonds with a weighted-average maturity of three years.  
The longer the maturity of a fixed-rate obligation, the greater the impact a change in interest 
rates will have on its fair value.  As interest rates increase, the fair value of the obligations 
decrease.  Likewise, when interest rates decrease, the fair value of the obligations increase.  The 
money market mutual funds are presented as an investment with a maturity of less than one-
year because they are redeemable in full immediately. 
•   Credit Risk – Credit risk is the risk that the issuer or other counterparty to an investment will 
not fulfill its obligations.  It is the District’s policy to limit its investments to U.S. Treasury and 
agency obligations or otherwise follow the restriction of the Texas Public Funds Investment 
Act.  The District’s investment in U.S. Treasury obligations carry the explicit guarantee of the 
U.S. government.  The debt securities of the U.S. agencies are rated AA+ by Standard & Poor’s 
rating agency.  The District also invests in State Investment Pools (the Pools), which are 
considered investments for financial reporting.  The District has an undivided beneficial interest 
in the pool of assets held by the Pools.  Authorized investments include obligations of the 
United States or its agencies, direct obligation of the state of Texas or its agencies, certificates 
of deposit, and repurchase agreements.  The fair value of the position in these pools is the same 
as the value of the shares in each pool.  The Pools, as well as the money market mutual funds 
invested in by the District, are rated as AAAm by Standard & Poor’s. 
The District also invests in certificates of deposit, which are classified as deposits for financial 
reporting purposes.  These certificates of deposit are fully collateralized by the various financial 
institutions. 
•   Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of 
the failure of the counterparty, the District will not be able to recover the value of its investment 
or collateral securities that are in the possession of an outside party.  All of the District’s 
investments are held in safekeeping or trust accounts.
22

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
•   Concentration of Credit Risk – The District places no limit on the amount that may be 
invested in any one issuer as long as the restrictions of the Texas Public Funds Investment Act 
are followed.  The following table reflects the District’s investments in single issuers that 
represent more than 5% of total investments: 
2012
2011
Federal Home Loan Bank
8.1%
19.2%
Federal National Mortgage Association
Federal Farm Credit Bank
Federal Home Loan Mortgage Association
Federal Agricultural Mortgage Corporation
5.2%
8.9%
2.3%
4.2%
8.8%
11.7%
9.3%
5.3%
Summary of Carrying Values 
The carrying values of deposits and investments shown above are included in the balance sheets as 
follows: 
2012
2011
Carrying value
Deposits
Investments
$
$
258,681
140,211
$
$
273,925
110,826
398,892
384,751
Included in the following balance sheets captions
Cash and cash equivalents
Short-term investments
Held by trustee for self-insurance, current portion
Noncurrent cash and investments
$
$
151,366
60,145
285
$
$
90,030
110,276
5,501
187,096
178,944
398,892
384,751
23

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Investment Income 
Investment income for the years ended September 30 consisted of: 
2012
2011
Interest and dividend income
Net decrease in fair value of investments
$
$
4,703
(504)
$
$
6,112
(713)
4,199
5,399
Note 5:     Patient Accounts Receivable
The District grants credit without collateral to its patients, many of whom are area residents and are 
insured under third-party payer agreements.  Patient accounts receivable at September 30 consisted 
of: 
2012
2011
Medicare
Medicaid
Other third-party payers
Patients
$
$
9,913
18,832
16,412
201,287
246,444
183,718
$
$
10,803
25,813
6,746
151,805
195,167
141,346
Less allowance for uncollectible accounts
62,726
53,821
24

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Note 6:     Capital Assets
Capital assets activity for the years ended September 30 was: 
2012
Beginning
Ending
Balance
Additions
Disposals
Transfers
Balance
Land and improvements
Buildings and improvements
Equipment
$
47,900
$
3,272
$
-
$
27
333
53,403
$
51,199
231,792
338,074
28,405
609
10,940
30,177
(547)
(48,375)
(417)
232,187
354,042
4,402
Construction in progress
(53,763)
646,171
342,253
303,918
44,998
43,567
1,431
(49,339)
(47,802)
(1,537)
-
-
-
641,830
338,018
303,812
Less accumulated 
  depreciation
Capital assets, net
$
$
$
$
$
$
$
$
2011
Beginning
Balance
Ending
Balance
Additions
Disposals
Transfers
Land and improvements
Buildings and improvements
Equipment
46,898
230,176
328,873
5,029
176
349
15,287
36,270
$
-
-
(16,887)
-
$
826
1,267
10,801
(12,894)
47,900
231,792
338,074
28,405
Construction in progress
610,976
317,421
293,555
52,082
40,565
11,517
(16,887)
(15,733)
(1,154)
-
-
-
646,171
342,253
303,918
Less accumulated 
  depreciation
Capital assets, net
$
$
$
$
$
25

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Note 7:     Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses included in current liabilities at September 30 consisted of: 
2012
2011
Payable to suppliers and contractors
Payable to employees (including payroll taxes 
and benefits)
Payable to TCICC (Note 13)
Pollution remediation liability
Patient credit balances
$
23,733
$
26,019
32,670
20,953
5,600
3,832
351
27,818
1,998
2,837
1,968
378
Other accrued liabilities
$
87,139
$
61,018
Note 8:     Risk Management
Medical Malpractice and General Liability Risks 
The District is self-insured for medical malpractice and general liability claims.  The District’s 
maximum liability for professional and general liability claims as a governmental unit under the 
Tort Claims Act is generally $100,000 per individual and $300,000 per occurrence. 
Losses from asserted and unasserted claims identified under the District’s incident reporting system 
are accrued based on estimates that incorporate the District’s past experience, as well as other 
considerations, including the nature of each claim or incident and relevant trend factors.  It is 
reasonably possible that the District’s estimate of losses will change by a material amount in the 
near term.
26

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Activity in the District’s accrued medical malpractice claims liability during 2012 and 2011 is 
summarized as follows: 
2012
2011
Balance, beginning of year
$
$
1,106
$
$
1,211
Current year claims incurred and changes in 
estimates for claims incurred in prior years
Claims and expenses paid
(312)
(9)
(54)
(51)
Balance, end of year
785
1,106
Employee Health Claims 
Substantially all of the District’s employees and their dependents are eligible to participate in the 
District’s employee health insurance plan.  Commercial stop-loss insurance coverage is purchased 
for claims in excess of $500,000.  A provision is accrued for self-insured employee health claims 
including both claims reported and claims incurred but not yet reported.  The accrual is estimated 
based on consideration of prior claims experience, recently settled claims, frequency of claims and 
other economic and social factors.  It is reasonably possible that the District’s estimate will change 
by a material amount in the near term. 
Activity in the District’s accrued employee health claims liability during 2012 and 2011 is 
summarized as follows: 
2012
2011
Balance, beginning of year
$
$
4,300
$
$
4,250
Current year claims incurred and changes in 
estimates for claims incurred in prior years
Claims and expenses paid
30,392
(30,242)
35,273
(35,223)
Balance, end of year
4,450
4,300
Workers’ Compensation Claims 
The District is self-insured for workers’ compensation claims.  A provision is accrued for 
self-insured employee health claims including both claims reported and claims incurred but not yet 
reported.  The accrual is estimated based on consideration of prior claims experience, recently 
settled claims, frequency of claims and other economic and social factors.  It is reasonably possible 
that the District’s estimate will change by a material amount in the near term.
27

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Activity in the District’s accrued workers’ compensation claims liability during 2012 and 2011 is 
summarized as follows: 
2012
2011
Balance, beginning of year
$
$
1,769
$
$
2,101
Current year claims incurred and changes in 
estimates for claims incurred in prior years
Claims and expenses paid
1,037
(1,078)
537
(869)
Balance, end of year
1,728
1,769
Note 9:     Long-term Debt
A summary of long-term debt is as follows: 
2012
2011
Revenue bonds, Series 2002
Certificates of obligation, Series 2006
$
30,100
26,285
56,385
(96)
$
31,405
27,160
58,565
(33)
Bond discount, net
$           56,289 
 $           58,532 
Revenue Bonds – Series 2002 
The Series 2002 revenue bonds consist of Tarrant County Hospital District Revenue Bonds, Series 
2002 (the Series 2002 Bonds) in the original amount of $40,940 dated June 1, 2002, which bear 
interest at 2.0% to 5.5%.  The Series 2002 Bonds are payable in remaining annual installments of 
$1,355 to $2,790 through August 15, 2027.  All of the Series 2002 Bonds still outstanding may be 
redeemed at the District’s option on or after August 15, 2012, at par value plus accrued interest.  
The Series 2002 Bonds are secured by the net revenues of the District, excluding property tax 
revenue.   
Subsequent to September 30, 2012, the District issued the Tarrant County Hospital District Senior 
Lien Revenue Refunding Bond, Series 2012 (the Series 2012 Bonds) in the original amount of 
$25,890,000.  The Series 2012 Bonds are secured by revenues of the District exclusive of ad 
valorem tax revenue.  The proceeds from the Series 2012 Bonds, along with funds held in a debt 
service reserve account, were used to advance refund the Series 2002 Bonds.  The loss on the 
advance refunding was approximately $327,000. 
28

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Certificates of Obligation – Series 2006 
The Series 2006 certificates of obligation consist of Tarrant County Hospital District Certificates of 
Obligation, Series 2006 (the Certificates) in the original amount of $30,330 dated March 1, 2006, 
which bear interest at 4.0% to 5.0%.  The Certificates are payable in remaining annual installments 
of $910 to $2,025 through February 15, 2031.  All of the Certificates still outstanding may be 
redeemed at the District’s option on or after February 15, 2016, at par value plus accrued interest.  
The Bonds are secured by the net revenues of the District, including property tax revenue.  
The indenture agreements require that certain funds be established with the trustee.  Accordingly, 
these funds are included as assets held by trustee for debt service in the balance sheets.  The 
indenture agreements also require the District to comply with certain restrictive covenants 
including minimum insurance coverage and days cash on hand. 
The following is a summary of long-term debt transactions for the District for the years ended 
September 30: 
2012
Beginning
Balance
Ending
Balance
Current
Portion
Additions
Deductions
Long-term debt
Revenue bonds,  Series 2002
Certificates of  obligation, Series  2006
$
$
31,405
27,160
$
$
-
-
$
1,305
875
$
$
30,100
26,285
$
$
1,355
910
Total long-term  debt
58,565
-
$
2,180
56,385
2,265
2011
Beginning
Ending
Current
Balance
Additions
Deductions
Balance
Portion
Long-term debt
Revenue bonds, Series 2002
Certificates of obligation, Series 2006
$
$
32,660
28,000
$
$
-
-
$
1,255
840
$
$
31,405
27,160
$
$
1,305
875
Total long-term debt
60,660
-
$
2,095
58,565
2,180
29

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
The debt service requirements as of September 30, 2012, are as follows: 
Year Ending
September 30,
Principal
Interest
Total
2013
2014
2015
2016
2017
2018 – 2022
2023 – 2027
2028 – 2031
$
2,265
$
2,737
$
5,002
2,385
2,500
2,620
2,750
15,950
20,345
7,570
2,625
2,507
2,384
2,254
9,066
4,672
724
5,010
5,007
5,004
5,004
25,016
25,017
8,294
$
56,385
$
26,969
$
83,354
The debt service requirements as result of the issuance of the Series 2012 Bonds subsequent to 
September 30, 3012 are as follows: 
Year Ending
September 30,
Principal
Interest
Total
2013
2014
2015
2016
2017
2018 – 2022
2023 – 2027
2028 – 2031
$
2,395
$
1,953
$
4,348
2,340
2,405
2,470
2,555
14,410
18,030
7,570
2,012
1,946
1,877
1,792
7,320
3,700
724
4,352
4,351
4,347
4,347
21,730
21,730
8,294
$
52,175
$
21,324
$
73,499
Note 10:   Restricted and Designated Net Assets
At September 30, 2012 and 2011, $4,425 and $2,308, respectively, of net assets were restricted by 
donors for capital and operating activities. 
30

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
At September 30, 2012 and 2011, $170,723 and $160,120, respectively, of unrestricted net assets 
has been designated by the Board for future operating needs and capital acquisitions.  Designated 
net assets remain under the control of the Board, which may, at its discretion, later use these net 
assets for other purposes. 
At September 30, 2012 and 2011, the District had $250 of restricted nonexpendable net assets 
which is a general endowment for the Foundation. 
Note 11:   Uncompensated Care
In support of its mission, the District voluntarily provides free care to patients who lack financial 
resources and are deemed to be medically indigent.  The costs of charity care provided under the 
District’s charity care policy were $152,132 and $173,127 for 2012 and 2011, respectively.  The 
cost of charity care is estimated by applying the ratio of cost to gross charges to the gross charity 
care charges. 
The District also provides care to patients who do not pay all or a portion of the charges billed.  
These charges are adjusted through the provision for uncollectible accounts in net patient service 
revenue.  The costs of providing care to these patients, estimated using the same ratio used in 
estimating charity care costs, was $89,354 and $74,700 for 2012 and 2011, respectively. 
Note 12:   Pension Plan
Plan Description 
The District sponsors a defined benefit pension plan for eligible employees within a multiemployer 
retirement program sponsored for member hospitals by the Texas Hospital Association (THA).  
HealthShare/THA, a wholly owned subsidiary of THA, is the plan administrator of the pension 
plan.  The plan’s assets are invested as a portion of the THA’s master pension trust fund.  The plan 
provides retirement, death and disability benefits.  Amendments to the plan are made only with the 
authority of the District’s Board.   
The plan does not issue a stand-alone financial report.  However, an annual actuarial valuation 
report is available from the District or HealthShare/THA.  That report may be obtained by writing 
HealthShare/THA at 1108 Lavaca, Suite 700, Austin, Texas  78701. 
Funding Policy 
The Board has the sole authority to establish or amend the obligations to contribute to the plan by 
participants or the employer.  The District is not subject to any explicit legal or contractual 
contribution rate.  Plan members are required to annually contribute 1% of their compensation.  
31

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Effective October 1, 2006, participation in the pension plan became mandatory for full-time 
employees completing one-year of service on or after October 1, 2006.  An amendment effective 
October 1, 2011, made plan participation voluntary for employees hired after that date. 
The District makes annual contributions, which are actuarially determined as a level percentage of 
total participant compensation less projected employee contributions in accordance with the Entry 
Age Normal (EAN) actuarial funding method.  Under the EAN method, the District contribution 
rate is set equal to 6.5% of total participant compensation beginning with the current fiscal year 
until a future actuarial valuation shows that:  (a) actuarial value of assets equals or exceeds the 
EAN accrued liability, which will cause a reduction to the employer contribution rate or (b) the 
implicit amortization period of the unfunded EAN accrued liability at the current contribution rate 
exceeds 25 years, which would be remediated by an increase in the employer contribution rate.  
The employer contributions were 6.5% of estimated participant compensation for both the years 
ended September 30, 2012 and 2011.  The costs of administering the plan are paid by the plan and 
are considered in the determination of the employer contribution rate. 
Annual Pension Cost 
The District’s annual pension cost was $12,051 and $12,652 for the years ended September 30, 
2012 and 2011, respectively.  These costs were equal to the annual required contributions as 
determined in the actuarial valuations dated October 1, 2011 and 2010, respectively.  There is no 
existing net pension obligation. 
The required contributions for the plan year ended September 30, 2012, were based on the results 
of the actuarial valuation as of October 1, 2011, using the EAN actuarial funding method and were 
in compliance with the GASB Statement No. 27, Accounting for Pensions by State and Local 
Governmental Employers, parameters.  The actuarial assumptions included:  (a) an 8% investment 
rate of return (net of administrative expenses) and (b) projected salary increases of 4.5% to 8.0%, 
per year, varying by attained age.  Both (a) and (b) included an inflation component of 4.0%.  The 
assumptions did not include any postretirement benefit increases.  The actuarial value of plan assets 
was determined using a five-year smoothed market value method. 
Three-Year Trend Information 
Annual
Pension Cost
(APC)
Percentage
of APC
Contributed
Net Pension
Obligation
Fiscal Year Ended
2010
2011
2012
$
11,205,667
12,652,413
12,051,401
100%
100%
100%
$
-
-
-
32

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Schedule of Funding Progress 
Plan Assets
Less Than
AAL as a
Acturial
Acturial
Acturial
Plan Assets
Percent of
Valuation
Date
Value of Plan
Assets
Accrued
Liability (AAL)
Less
than AAL
Funded
Ratio
Covered
Payroll
Covered
Payroll
10/1/2009
10/1/2010
10/1/2011
$
89,497
101,345
113,033
$
113,781
134,597
144,579
$
(24,284)
(33,252)
(31,546)
78.7%
75.3%
78.2%
$
172,395
194,653
185,406
(14.1%)
(17.1%)
(17.0%)
Other Benefit Plans 
The District has an IRC Section 401(a) plan that includes an employer match calculated as 50% of 
an employee’s contribution up to 4% of pay.  The contributions for the employer match on the plan 
were approximately $3,641 and $3,831 for the years ended September 30, 2012 and 2011, 
respectively.  Employee contributions were $8,300 and $8,509 for the years ended September 30, 
2012 and 2011, respectively. 
In addition, the District offers its employees a tax-deferred annuity plan created in accordance with 
IRC Section 457.  The plan, available to all District employees, permits them to defer a portion of 
their salary until future years.  All amounts of compensation deferred under the plan and income 
attributable to those amounts are solely the property of the employee.  Thus, the plan amounts are 
not reported in the accompanying financial statements. 
The District also offers its employees a tax-deferred annuity plan created in accordance with IRC 
Section 403(b).  The plan, available to all District employees, permits them to defer a portion of 
their salary until future years.  All amounts of compensation deferred under the plan and income 
attributable to those amounts are solely the property of the employee.  Thus, the plan amounts are 
not reported in the financial statements. 
The District has a Governmental Excess Benefit Arrangement Plan for executives approved by the 
Board.  This plan is to provide participants in the defined benefit plan that portion of the 
participant’s benefits that would otherwise be payable under the terms of the defined benefit plan, 
except for the limitations on benefits imposed by Section 415(b) of the IRS.  As of September 30, 
2012 and 2011, there were no benefits due under this plan. 
33

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
Note 13:   Related Party Transactions
During 2010, the District entered an indigent care affiliation agreement with the Tarrant County 
Indigent Care Corporation (TCICC), a non-profit corporation comprised of affiliated Tarrant 
County hospitals.  This agreement was intended to increase funding for the Medicaid population 
and to access federal funding for the indigent population of Tarrant County through the Texas 
Medicaid Supplemental Payment Program also known as the Private Upper Payment Limit 
Program (UPL).  During 2012, funding through the UPL program was replaced with funding from 
the Medicaid section 1115(a) Demonstration program, titled “Texas Healthcare Transformation and 
Quality Improvement Program” that was approved on December 12, 2011, by the Department of 
Health & Human Services.  This program allows for continued funding under the current TCICC 
agreement for the initial transition year. 
Under this program, the District contributes certain government funds to the state of Texas, limited 
to the amount allowed based on aggregate state-wide funding caps.  TCICC uses the funds received 
for medical direction and indigent care for services to the Tarrant County indigent care population 
provided at the District’s facilities.  Prior to this agreement, the medical direction and indigent care 
services were funded by the District. 
Services provided by TCICC were valued at approximately $94,471 and $83,100 for the years 
ended September 30, 2012 and 2011, respectively.  As part of the affiliation agreement, the District 
provided $70,795 and $56,591 in funding to the program for the years ended September 30, 2012 
and 2011, respectively.  The District recognizes revenue from contributed services equal to the 
difference in the value of the services provided by TCICC and the program funding provided by 
the District.  Contributed services revenue was $23,676 and $26,509 for 2012 and 2011, 
respectively. 
Should TCICC cease providing these services, the District has entered a stand-by agreement with 
physicians participating in this program under which the District would assume the payment 
obligations of TCICC.  
Note 14:   Pollution Remediation Obligations
The District owns a building containing asbestos and other potential environmental issues that meet 
the criteria for “obligating events” and disclosure under GASB Statement No. 49, Accounting and 
Financial Reporting for Pollution Remediation Obligations.  This vacant property was acquired by 
the District for the purpose of eventually constructing new facility space and changes in the 
District’s pollution remediation obligation (PRO) liability are capitalized as a component of capital 
assets.  
34

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Notes to Financial Statements
September 30, 2012 and 2011
(In Thousands)
During 2012, the District commenced demolition of the building and related pollution remediation 
activities and increased the liability to the current estimated cost of demolition and remediation 
activities.  The demolition and remediation is expected to be completed in 2013. 
The following table summarizes the change in the District’s PRO during the years ended 
September 30, 2012 and 2011: 
2012
2011
PRO, beginning of year
Changes in estimated remediation costs
$
$
2,837
2,763
$
$
3,464
(627)
PRO, end of year
5,600
2,837
35

 
Supplementary Information

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Balance Sheet Information
September 30, 2012
(In Thousands)
Assets
Hospital
JPSPG
Partners
Eliminations
Total
Current Assets
Cash and cash equivalents
Short-term investments
$
134,478
$
16,703
-
6,614
-
-
-
-
-
1,570
$
185
-
-
-
-
43
-
-
$
-
-
-
-
-
-
-
-
-
$
151,366
60,145
62,726
4,253
33,272
43
285
9,472
11,320
60,145
56,112
4,253
33,272
-
285
9,472
9,724
Patient accounts receivable, net
Property taxes receivable, net
Texas disproportionate share program receivable
Restricted pledges receivable, net
Held by trustee for self insurance, current portion
Supplies inventory
Prepaid expenses and other assets
26
Total current assets
307,741
791
24,887
323
254
6
-
332,882
-
Due from Affiliates
(1,120)
Noncurrent Cash and Investments
Held by trustee for debt service
Held by trustee for self insurance
Restricted by donors for capital acquisitions and
specific operating activities
3,006
11,297
-
-
-
-
-
-
3,006
11,297
-
170,723
185,026
1,667
-
2,070
-
-
2,070
170,723
187,096
1,780
Internally designated for capital acquisitions and 
operating activities
-
-
Total noncurrent cash and investments
Other Receivables
-
2,070
113
4
-
-
-
-
-
Capital Assets , Net
303,808
799,033
303,812
825,570
Total assets
$
$
25,210
$
2,447
$
(1,120)
$

 
Liabilities and  Net Assets
Hospital
JPSPG
Partners
Eliminations
Total
Current Liabilities
Accounts payable
Accrued expenses
Due to third-party payers
Current portion of self-insurance costs
Current maturities of long-term debt
$
53,481
$
572
5,608
-
-
-
$
66
5
-
-
-
$
-
-
-
-
-
$
54,119
27,407
3,547
5,552
2,265
33,020
3,547
5,552
2,265
Total current liabilities
Due to Affiliates
92,252
329
6,180
782
-
71
9
-
98,503
-
(1,120)
Estimated Self-insurance Costs
Long-term Debt
1,411
54,024
-
-
-
-
-
1,411
54,024
996
-
-
Other Long-term Liabilities
986
10
Total liabilities
148,016
7,948
90
(1,120)
154,934
Net Assets
Invested in capital assets, net of related debt
Restricted expendable
Restricted nonexpendable
Unrestricted
250,525
2,500
-
-
-
-
4
1,925
250
-
-
-
-
250,529
4,425
250
397,992
17,262
178
415,432
Total net assets
651,017
799,033
17,262
25,210
2,357
2,447
-
670,636
825,570
Total liabilities and net assets
$
$
$
$
(1,120)
$
36

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Statement of Revenues, Expenses and
Changes in Net Assets Information
Year Ended September 30, 2012
(In Thousands)
Hospital
JPSPG
Partners
Eliminations
Total
Operating Revenues
Net patient service revenue
Supplemental Medicaid funding
Contributions
$
235,947
117,504
140
$
35,682
4,092
-
$
-
-
441
-
$
(25)
-
(79)
$
271,604
121,596
502
Other operating revenue
42,118
8,115
(2,362)
47,871
Total operating revenues
395,709
47,889
441
(2,466)
441,573
Operating Expenses
Salaries and related expenses
Professional fees and purchased services
Supplies
Depreciation and amortization
Other
313,899
180,865
116,742
43,522
42,665
1,735
127
-
140
24
523
179
2
-
(2,875)
-
(128)
(89)
356,588
180,248
117,048
43,396
34,961
661
35,673
Total operating expenses
689,989
44,667
3,222
1,389
(948)
(3,092)
626
732,953
Operating Income (Loss)
(294,280)
(291,380)
Nonoperating Revenues (Expenses)
Property tax revenue
Contributed services
Interest expense
Investment return and other
279,403
23,676
(1,764)
4,288
-
-
-
-
-
-
-
-
-
279,403
23,676
(1,764)
4,073
49
362
(626)
Total nonoperating revenues (expenses)
305,603
49
362
(626)
305,388
Excess of Revenues Over Expenses Before Capital
Grants and Gifts
11,323
2,500
3,271
-
(586)
-
-
-
14,008
2,500
Capital Grants and Gifts
Increase (Decrease) in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
13,823
637,194
651,017
3,271
13,991
17,262
(586)
2,943
2,357
-
-
-
16,508
654,128
670,636
$
$
$
$
$
37

 
Required Supplementary Information

 
Tarrant County Hospital District
d/b/a JPS Health Network
A Component Unit of Tarrant County, Texas
Schedule of Funding Progress – Pension Plan
September 30, 2012
Plan Assets
Less Than
AAL as a
Acturial
Acturial
Acturial
Plan Assets
Percent of
Valuation
Date
Value of Plan
Assets
Accrued
Liability (AAL)
Less
than AAL
Funded
Ratio
Covered
Payroll
Covered
Payroll
10/1/2009
10/1/2010
10/1/2011
$   89,497,413         $ 113,780,607
$
(24,283,194)
(33,251,628)
(31,545,605)
78.7%
75.3%
78.2%
$ 172,394,878
194,652,507
185,406,171
(14.1%)
(17.1%)
(17.0%)
101,344,894
113,033,130
134,596,522
144,578,735
38