Trust Board Finance Director’s Update: Month 10 – January 2018 Financial Performance In month I&E The Trust’s performance for January was a £4.2m deficit before Sustainability and Transformation Fund (STF), this is £2.2m worse than plan. Year to date I&E The year to date position is a £30.2m deficit (before STF) which is £2.2m worse than plan. The Trust has earned the financial element for the quarter but has not achieved the A&E element for Q1 to Q3. The foregone STF to December is £4.0m. Additional Funding The Trust has been allocated £2.4m additional income by NHSI to fund urgent and emergency care expenditure already included within the Trust position (tranche 1 funding). NHSI expect this will result in an improvement on the Trust’s submitted M7 financial forecast. Following tranche 1 income, the Trust is forecasting to deliver a £31.6m deficit, compared to the financial control total of £34m deficit (before STF). In addition £1.9m winter funding has been notified by NHSI (tranche 2 funding). It is anticipated that the full year income and expenditure for NUH will total £1.5m between December and March (£0.4m community schemes). Forecast Outturn I&E The Trust is forecasting a £12.3m deficit after STF and tranche 1 funding, compared to the control total of £10.7m deficit after STF. This forecast is subject to a number of material risks including impact of delivery of elective activity; FEP delivery risk; and the maintenance of budgetary discipline. Performance against total agency cap Year to date, the Trust has spent £15.2m against the cap of £17.0m (£1.8m below the target). Cash Closing cash balance at end of January of £5.1m, which is £9.3m lower than December, due to the catch up of payments transacted in January, after the Christmas period. The forecast cash position, and affordability of the capital programme, for the remainder of the year is dependent upon achieving the income and expenditure control total forecast. Capital In month: Total capital expenditure of £2.1m for January. Year to date: £15.4m expenditure YTD. Key projects including ICT infrastructure upgrade (£9m) and Linear accelerator replacement (£3m).

Statement of Comprehensive Income Year to Date Forecast Outturn £m Plan Actual Fav / (Adv)   I&E £'000 Patient Care Income 678.5 694.4 15.9 2% 814.0 836.4 22.4 3% Non Patient Care Income 19.3 24.1 4.8 25% 23.2 28.9 5.7 24% Other Operating Income 71.4 72.1 0.7 1% 85.7 86.5 0.8 Total Income 769.2 790.6 21.4 922.9 951.8 28.8 Pay Costs (481.4) (494.3) (12.9) (3%) (578.2) (592.4) (14.2) (2%) Pay Costs : Agency (17.0) (15.2) 1.8 11% (20.4) (18.2) 2.2 Non Pay (258.3) (277.4) (19.1) (7%) (309.7) (331.9) (22.2) Total Operating Costs (756.6) (786.8) (30.2) (4%) (908.3) (942.5) (34.2) EBITDA 12.5 3.8 (8.8) (70%) 14.6 9.2 (5.4) (37%) Non Operating Costs (39.1) (34.4) 4.7 12% (59.4) (53.8) 5.6 9% Adjust Donated Assets / Impairment (1.4) 0.4 1.9 131% 10.8 12.9 20% Control Total before STF (28.0) (2.2) (8%) (34.0) (31.6) 2.4 7% Sustainability and Transformation Fund (STF) 17.9 13.8 (4.0) (23%) 23.3 (17%) Control Total (10.1) (16.4) (6.2) (62%) (10.7) (12.3) (1.6) (15%) Ratios Agency : Total Pay 3.41% 2.97% 2.98% EBITDA : Income 1.63% 0.48% 1.58% 0.97% Net Deficit : Income (1.32%) (2.07%) (1.16%) (1.30%) Key • EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortisation Fav refers to a Favourable variance to plan (Adv) refers to an Adverse variance to plan Year to Date: Patient care income, £15.9m favourable to plan: High cost drugs and devices account for £7.9m of the variance and are matched with expenditure in non pay. Higher than planned performance in non-elective (£11.7m favourable), is offset by underperformance in other areas (£3.7m adverse). Other income, £5.5m favourable to plan: £3.7m of this variance is driven by R&I income which is matched with expenditure. Pay costs, £10.9m adverse to plan: £2.3m relates to matched R&I expenditure. The driver of the remainder of the variance is additional pay cost associated with unplanned activity; winter pressures expenditure and vacancies covered by premium pay. Non pay costs, £19.1m adverse to plan: £7.9m relates to high cost drugs and devices. The remainder of the variance is primarily driven by additional activity, including £1.7m Theatres consumables, £1.5m PET scans; £1.2 pathology and £1.0m blood usage. Non operating costs, £6.6m favourable to plan: The Trust has accounted for changes made to asset lives in the revaluation at March 2017. Efficiency savings £0.7m, adverse to plan: The Trust has delivered financial efficiency savings of £32.2m year to date, compared to a plan of £32.8m. Forecast: Following tranche 1 funding the Trust is forecast a £31.6 deficit (before STF) but delivering the pre-STF control total is high risk and requires specific management actions and no contingent events.

Statement of Financial Position: Working Capital Aged Debt (Sales Ledger) Sales ledger debt increased by £1.4m to £24.1m, largely due to invoiced charges raised to NHS England for contract performance. The over 90 day debt position increased by £1.1m, due to: the aged debt profile of delayed CQUIN related to the system risk reserve (which has now been resolved); procedures of limited clinical value (PLCV); and maternity pathway charges. Debtor and Creditor Days Debtor days increased by 3 days to 33 days, largely resulting from increased accrued activity performance and STF performance. Creditor days reduced by 3 days to 19 days, due to the catch up of payments transacted in January, after the Christmas period. Liquidity Days The Trust’s liquidity position improved by 1.8 days to minus 11.7 days, explained by the working capital loan, which is classified as a long term liability. BPPC Trust performance was 93% and 87% against the 95% performance target for value and volume of invoices processed respectively in the year to date.

Statement of Financial Position The material in month movements in the Statement of Financial Position are shown below: Non Current Assets There was no net change in the value of property, plant and equipment and intangible assets as new investments of £2.1m was offset by depreciation charges of £2.1m. Working capital Trade and Other receivables – the increase in receivables of £7.9m was mainly driven by the accrued SLA activity performance and Sustainability and Transformation Funding performance. Accrued Expenditure – The reduction of £3.5m resulted from the catch up of payments transacted in January, after the Christmas period. Cash Cash balances decreased by £9.3m due increased payments in January due to the catch up of payments paid in month, following the Christmas period. Non Current Liabilities Borrowings – increased by £5.4m due to additional revenue support loan drawn in January. Reserves SOFP Reserves - The movement in the I&E reserve reflects the January I&E trading deficit of £1.5m (including STF).