Saint Louis United States

SAINT LOUIS UNIVERSITY

Consolidated Financial Statements

June 30, 2022 and 2021

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The Board of Trustees

Saint Louis University:

Report on the Audit of the Consolidated Financial Statements Opinion

We have audited the consolidated financial statements of Saint Louis University (the University), which comprise the consolidated statements of financial position as of June 30, 2022 and 2021, and the related consolidated statements of activities, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the University as of June 30, 2022 and 2021, and the changes in their net assets and their cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the University and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for 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. In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the University’s ability to continue as a going concern for one year after the date the consolidated financial statements are issued. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements. KPMG LLP

Suite 900

10 South Broadway

St. Louis, MO 63102-1761

KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. 2

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

• Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the University’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplementary schedule of financial responsibility data is presented for purposes of additional analysis as required by the US Department of Education, and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information 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, the supplementary schedule of financial responsibility data is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 21, 2022, on our consideration of the University’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the University’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University’s internal control over financial reporting and compliance.

St. Louis, Missouri

October 21, 2022

3

SAINT LOUIS UNIVERSITY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30,

(000's Omitted)

2022 2021

Assets:

Cash and cash equivalents $ 131,286 $ 68,936

Accounts receivable, net 158,118 162,320

Prepaid expenses 6,197 9,480

Assets held for sale 168,064 -

Investments 1,351,238 1,530,107

Notes receivable 25,374 27,888

Unexpended bond proceeds 18,575 18,881

Funds held by trustees 76,305 84,579

Land, buildings, and equipment, net 712,701 779,425 Right of use assets - operating leases 2,796 18,585 Right of use assets - financing leases - 30,236

Other assets, net 20,755 86,808

Total assets $ 2,671,409 $ 2,817,245

Liabilities and Net Assets:

Liabilities:

Accounts payable $ 36,375 $ 35,238

Accrued payroll and benefits 52,600 65,050

Deposits and deferred revenues 39,492 51,247

Liabilities held for sale 51,223 -

Line of credit payable - 20,000

Other accrued liabilities 70,957 86,329

Lease liabilities - operating 734 16,686

Lease liabilities - financing - 31,626

Notes and bonds payable 493,083 506,800

U.S. government refundable grants 14,005 16,128

Total liabilities 758,469 829,104

Net assets:

Without donor restrictions 1,244,902 1,353,628

With donor restrictions 668,038 634,513

Total net assets 1,912,940 1,988,141

Total liabilities and net assets $ 2,671,409 $ 2,817,245 See Accompanying Notes to the Consolidated Financial Statements. 4

SAINT LOUIS UNIVERSITY

CONSOLIDATED STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2022

(000’s omitted)

Without Donor With Donor 2022

Restrictions Restrictions Total

Operating revenues and other support:

Education and related activities:

Tuition and fees $ 269,660 $ 269,660

Government grants and contracts 52,545 52,545

Contributions and private grants 36,549 $ 95,320 131,869 Investment return designated for operations 64,983 64,983 Auxiliary enterprises 60,933 60,933

Other 30,982 30,982

Total education and related activities 515,652 95,320 610,972 Patient care 427,628 427,628

Net assets released from restrictions 3,941 (3,941) — Total operating revenues and other support 947,221 91,379 1,038,600 Operating expenses:

Salaries and benefits 618,797 618,797

Supplies, repairs, utilities, and other expenses 251,745 251,745 Depreciation and amortization 48,633 48,633

Interest expense 22,137 22,137

Total operating expenses 941,312 — 941,312

Net operating results 5,909 91,379 97,288

Nonoperating activities:

Investment return net of amounts designated for operations (110,480) (67,130) (177,610) Donor restricted contributions and private grants — 13,267 13,267 Other, net (4,155) (3,991) (8,146)

Total nonoperating activities, net (114,635) (57,854) (172,489) Change in net assets (108,726) 33,525 (75,201)

Net assets at beginning of year 1,353,628 634,513 1,988,141 Net assets at end of year $ 1,244,902 $ 668,038 $ 1,912,940 See Accompanying Notes to the Consolidated Financial Statements. 5

SAINT LOUIS UNIVERSITY

CONSOLIDATED STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2021

(000’s omitted)

Without Donor With Donor 2021

Restrictions Restrictions Total

Operating revenues and other support:

Education and related activities:

Tuition and fees $ 261,673 $ 261,673

Government grants and contracts 48,250 48,250

Contributions and private grants 25,084 $ 3,836 28,920 Investment return designated for operations 63,840 63,840 Auxiliary enterprises 48,497 48,497

Other 19,760 19,760

Total education and related activities 467,104 3,836 470,940 Patient care 395,111 395,111

Net assets released from restrictions 3,471 (3,471) — Total operating revenues and other support 865,686 365 866,051 Operating expenses:

Salaries and benefits 559,861 559,861

Supplies, repairs, utilities, and other expenses 219,341 219,341 Depreciation and amortization 49,378 49,378

Interest expense 23,840 23,840

Total operating expenses 852,420 — 852,420

Net operating results 13,266 365 13,631

Nonoperating activities:

Investment return net of amounts designated for operations 212,007 110,145 322,152 Donor restricted contributions and private grants — 3,669 3,669 Other, net 539 8,373 8,912

Total nonoperating activities, net 212,546 122,187 334,733 Change in net assets 225,812 122,552 348,364

Net assets at beginning of year 1,127,816 511,961 1,639,777 Net assets at end of year $ 1,353,628 $ 634,513 $ 1,988,141 See Accompanying Notes to the Consolidated Financial Statements. 6

SAINT LOUIS UNIVERSITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30,

(000's Omitted)

2022 2021

Net cash flows from operating activities:

(Decrease) / increase in net assets $ (75,201) $ 348,364 Adjustments to reconcile change in net assets:

Net (gains) / losses on disposition of property and equipment (3,509) 255 Depreciation and amortization 48,633 49,378

Decrease / (increase) in accounts receivable, net 17,348 (56,958) Increase in accounts payable 3,872 8,183

(Decrease) / increase in accrued payroll and benefits (10,408) 13,058

(Decrease) / increase in deposits and deferred revenues (11,235) 24,211 Increase in other accrued liabilities 1,275 13,134 Decrease / (increase) in other assets 545 (9,375)

Other changes in assets and liabilities 3,439 (4,848) Contributions restricted for permanent endowment (13,267) (3,669) Contributions restricted for acquisitions of property and equipment (18,390) (3,675) Investment income restricted for long-term investment (179) (439) Net losses / (gains) on long-term investments 134,056 (362,240) Net losses / (gains) on assets held by trustees 7,365 (8,932) Net cash provided by operating activities 84,344 6,447 Net cash flows from investing activities:

Proceeds from sales and maturities of investments 697,530 405,710 Purchase of investments (674,118) (376,276)

Proceeds from disposition of property and equipment 5,068 4,779 Decrease in unexpended bond procceds 306 17,316

Purchase of property and equipment (37,187) (30,710) Net cash provided by / (used in) investing activities (8,401) 20,819 Net cash flows from financing activities:

Issuance of notes receivable (682) (1,318)

Payments on notes receivable 2,723 3,334

Payment on lines of credit (20,000) (59,250)

Payments on notes and bonds payable (13,555) (10,140) Payments on long-term finance leases (303) (126)

Decrease in cash overdrafts (3,896) (3,360)

Contributions restricted for permanent endowment 12,964 5,930 Contributions restricted for acquisitions of property and equipment 5,152 4,074 Investment income restricted for long-term investment 179 439 Net cash used in financing activities (17,418) (60,417) Net increase / (decrease) in cash, cash equivalents and restricted cash 58,525 (33,151) Cash, cash equivalents and restricted cash, beginning of year 74,291 107,442 Cash, cash equivalents and restricted cash, end of year $ 132,816 $ 74,291 See Accompanying Notes to the Consolidated Financial Statements. 7

SAINT LOUIS UNIVERSITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30,

(000's Omitted)

Supplemental data: 2022 2021

Interest paid $ 22,214 $ 23,861

Capital assets acquired through accounts payable 1,932 772 Operating cash flows from operating leases (4,380) (5,053) Operating cash flows from financing leases (1,535) (1,453) Gifts received in the form of stock 71,682 3,811

Cash and cash equivalents balance per Statement of Financial Position 131,286 68,936 Restricted cash included in Investments 1,530 5,355 Cash, cash equivalents and restricted cash, end of year $ 132,816 $ 74,291 See Accompanying Notes to the Consolidated Financial Statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Saint Louis University 8

(1) Summary of Significant Accounting Policies

(a) Organization

Saint Louis University (the University) was founded in 1818. The University is a coeducational institution offering undergraduate and graduate programs in a variety of curricula. Professional degree programs include medicine, law, business, social work, allied health, nursing, and advanced dentistry. In addition to its higher education mission, the University devotes substantial resources, facilities, and personnel to providing health care services in conjunction with the academic programs offered by the University at the Medical Center. The University operates medical practices staffed by the faculty of the University’s School of Medicine. The members of the faculty of the School of Medicine who provide medical services are referred to as SLUCare. As described in note 16, the University entered into an agreement with SSM Health Care Corporation, SSM Health Care St. Louis, SSM Health Care Group (SSM) for SSM to assume ownership of SLUCare effective July 1, 2022. See additional background in the subsequent event note 20.

(b) Presentation of Consolidated Financial Statements The University’s consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The consolidated financial statements include, after elimination of all significant intercompany transactions, the accounts of Saint Louis University, SLUCare, Saint Louis University in Spain, and SLU Blocker.

(c) Tax Exempt Status

The University is generally exempt from Federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code

(the Code).

The University recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The University has no uncertain tax positions that result in material unrecognized tax benefits as of June 30, 2022 and 2021.

(d) Measure of Operations

Net operating results (change in net assets without donor restrictions from operating activity) in the Consolidated Statements of Activities reflect all transactions that change net assets without donor restrictions, except for activity associated with consolidated endowment investments, gain or loss on swap agreements and certain other nonrecurring items. In accordance with the University’s endowment spending policy, as described in note 4, only the portion of total investment return distributed under this policy to meet operating needs is included in operating revenue. Operating investment return consists of dividends, interest, and realized/unrealized gains and losses on nonendowed investments.

(e) Use of Estimates

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

(f) Tuition and Fee Revenue

The University recognizes revenue from student tuition and fees within the fiscal year in which the academic term is predominantly conducted. Tuition and fees are reported net of scholarship allowances as these are considered a reduction of the tuition transaction price. A scholarship allowance represents the difference between the stated charge for tuition and fees and the amount that is billed to the student and/or third parties making payments on behalf of the student. Scholarship allowances were $232.8 million and $212.2 million for the years ended June 30, 2022 and 2021, respectively. Students who withdraw from a course or from the University within the first two weeks receive a full refund which is deducted from tuition revenue. Deposits and deferred revenues include advance tuition deposits and amounts billed to students for future years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Saint Louis University 9

Net tuition and fees revenue consisted of the following at June 30: 2022 2021

Undergraduate $ 157,871 $ 153,848

Graduate 105,032 101,279

Other 6,757 6,546

Total $ 269,660 $ 261,673

(000's omitted)

(g) Contributions

Contributions, including unconditional promises to give, are reported at fair value at the date the promise or gift is received. A promise to give is conditional based on whether the agreement includes a barrier that must be overcome and either a right of return of assets transferred or a right of release of a promisor’s obligation to transfer assets must be determinable. A conditional promise to give becomes an unconditional promise to give when the barriers in the agreement are overcome and is then reported at fair value. The gifts are reported as increases in net assets without donor restrictions, unless there are donor-imposed purposes, or time restrictions. When a donor restriction expires, net assets are released to net assets without donor restrictions. Donor-restricted contributions whose restrictions are met within the same year as received are reflected as contributions without donor restrictions in the accompanying consolidated financial statements. The University reports expirations of donor restrictions on donated, acquired, or constructed long lived assets when the assets are placed in service.

Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at present value of their estimated future cash flows. The discounts on those amounts are computed using risk-free interest rates applicable to the years in which the promises are received. Amortization of the discounts, as well as changes in the allowance for doubtful accounts for the gifts are included in contributions and private grants revenue. The University does not recognize conditional promises with right of return until the condition is met. During 2022 and 2021, the University received non-financial contributions of $0.6 million and $1.0 million, respectively. In 2022, the gifts consisted of supplies and equipment for the School of Medicine and a used plane for the Aeronautics program at Parks College. 2021 also included supplies and equipment for the School of Medicine as well as Parks College along with a rare newspaper collection and books at Pius Library. Gifts are recorded at appraised value or market price for supplies and are utilized or consumed as received. These gifts are included in contributions and private grants revenue.

(h) Sponsored Awards

The University receives sponsored program awards from various governmental and other sponsors. These agreements generally are considered non exchange transactions restricted by sponsors for certain purposes and are recognized as revenue when qualifying expenses are incurred and conditions under the agreements are met. Such revenues are recorded as either government grants and contracts or contributions and private grants. Conditional awards from governmental and other sponsors outstanding was $63.8 million for 2022.

(i) Auxiliary Enterprises Revenue

Room and board revenue included in this category was $44.2 million and $39.9 million for 2022 and 2021, respectively, and is recognized when performance obligations are met. Auxiliary enterprises consist of revenues of the University’s residence halls, meal services, parking services, arena events and miscellaneous. The remaining revenue is recognized when the service is provided or the event occurs. Discounts given to target upper classmen to live on campus of $1.6 million and $1.3 million for 2022 and 2021, respectively, are included as a reduction to the transaction price for auxiliary enterprises.

(j) Patient Care Revenue

Patient care revenue includes clinical as well as contract revenue for patient services related to clinical, administrative and graduate medical education with various partners. SLUCare represents the primary source of this revenue. Patient care revenue is reported at the amount that reflects the consideration to which SLUCare expects to be entitled in exchange for providing patient care. These amounts are due from patients, third-party payors (managed care and government programs), and others and includes variable consideration for retroactive revenue adjustments due to settlement of audits, reviews, and investigations. Revenue is recognized as performance obligations are satisfied. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Saint Louis University 10

Performance obligations are determined based on the nature of the services provided. Revenue for performance obligations satisfied over time is recognized based on actual charges incurred in relation to total charges. Performance obligations satisfied over time relate to inpatient acute care services. Revenue for performance obligations satisfied at a point in time is recognized when goods or services are provided and SLUCare does not believe it is required to provide additional goods or services to the patient.

Because all of its performance obligations relate to contracts with a duration of less than one year, SLUCare has elected to apply the optional exemption provided in FASB ASC 606-10-50-14(a) and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Such unsatisfied or partially unsatisfied performance obligations are primarily related to inpatient acute care services at the end of the reporting period. The performance obligations for these contracts are generally completed when the patients are discharged, which generally occurs within days or weeks at the end of a reporting period. As provided for under the guidance, SLUCare does not adjust the promised amount of consideration from patients and third-party payors for the effects of a significant financing component due to the expectation that the period between the time the service is provided to a patient and the time the patient or a third-party payor pays for that service will be one year or less. SLUCare uses a portfolio approach to apply the revenue recognition model to classes of payors with similar characteristics and analyzes cash collection trends over an appropriate collection look-back period depending on the payor.

SLUCare determines the transaction price based on standard charges for goods and services provided, reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients in accordance with SLUCare’s policy, and/or implicit price concessions provided to uninsured patients. Estimates of contractual adjustments and discounts are based on contractual agreements, its discount policy (or policies), and historical experience. SLUCare determines its estimate of implicit price concessions are based on its historical collection experience with this class of patients.

Agreements with third-party payors typically provide for payments at amounts less than established charges. Physician services are paid based upon established fee schedules. Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to interpretation. Compliance with such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties, and potential exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge SLUCare’s compliance with these laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties would have upon SLUCare. In addition, contracts with commercial payors also provide for retroactive audit and review of claims. Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known

(that is, new information becomes available) or as years are settled and are no longer subject to such audits, reviews, and investigations. During 2022 and 2021, changes to prior year variable consideration resulted in an immaterial change in net patient service revenue from successful appeals, cost report settlements, and other adjustments to prior year. Generally, patients who are covered by third-party payors are responsible for related deductibles and coinsurance, which vary in amount. SLUCare estimates the transaction price for patients with deductibles and coinsurance and from those who are uninsured based on historical experience and current market conditions. The initial estimate of the transaction price is determined by reducing the standard charge by any contractual adjustments, discounts, and implicit price concessions. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to patient service revenue in the period of the change.

SLUCare provides care to patients regardless of their ability to pay. Therefore, SLUCare has determined it has provided implicit price concessions to uninsured patients and patients with other uninsured balances (for example, copays and deductibles). The implicit price concessions included in estimating the transaction price represents the difference between amounts billed to patients and the amounts SLUCare expects to collect based on its collection history with those patients. Patients who meet SLUCare criteria for charity care are provided care without charge or at amounts less than established rates. Such amounts determined to qualify as charity care are not reported as revenue. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Saint Louis

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