### Definition of Selected Indicators

Margin Before Extraordinary Items
Total Operating Revenue
Net Income From Operations
Operating Margin
Total Markup
Markup Percent
Charity Care & Bad Debt At Cost

Margin Before Extraordinary Items
The Margin Before Extraordinary Items is calculated as the difference between total revenues and total expenses, divided by total revenues. It is a measure of the overall profitability of a hospital and reflects the inclusion of philanthropic contributions, endowment income, investment income, and other revenue and expense items not related to operations. The formula used is:

(Excess of revenues over expenses/(Total operating Revenue + Total nonoperating revenue)) * 100
Extraordinary gains and losses, as well as other nonrecurring and unusual items, are excluded in calculating the margin before extraordinary items.

Total Operating Revenue
Total Operating Revenue consists of:

• Revenues derived from activities necessary to the provision of health care and services directly related to patients.
• Revenue from nonpatient care services to patients, and sales and activities to persons other than patients. Such revenues arise from the normal day-to-day operations of the hospital, and normally include such items as revenue from educational programs, sales of medical and pharmacy supplies, proceeds from sale of cafeteria meals and guest trays to employees, medical staff and visitors, proceeds from sales at gift shops, snack bars, parking lots, and other service facilities operated by the hospital.
• Tax support and other subsidies from governmental or community agencies received for general support of the hospital.

Net Income From Operations
Net Income From Operations is the mathematical difference between Total operating revenue and Total operating expenses.

Operating Margin
The Operating Margin reflects the proportion of operating revenue (after allowances) retained as income, and is a measure of a hospital's profitability from the provision of patient care services, nonpatient care services to patients, sales and activities to persons other than patients, and other normal day-to-day activities. The operating margin is a measure of a hospital's profitability from patient care services and other hospital operations, and is calculated as follows:
(Income from operations/Total operating revenue) * 100

Total Markup
The Total Markup (also known as Total Margin) is the Net Income divided by the sum of Total Operating Revenue, Nonoperating Gains & Losses, and Extraordinary & Other Nonrecurring Items. The formula is:
(Net Income/(Total Oper Rev + Nonoper Gains & Losses + Extraord & Other NonRecrg Itms)) * 100

Markup Percent
Markup Percent is the Total Gross Patient Revenue divided by Operating Expenses, & that total minus 1 and multiplied by 100. The formula is:
((Total Gross Patient Revenue/Operating Expenses) -1) * 100

Charity Care & Bad Debt At Cost
Charity Care and Bad Debt At Cost is Charity Care plus Bad Debt times Operating Expense divided by the sum of Gross Patient Revenue & Other Revenue. The formula is:
((Charity Care + Bad Debt) x Operating Expenses)/(Gross Patient Revenue + Other Revenue)