The nonprofit University of Pittsburgh Medical Center earned a record $618 million in fiscal 2007, up 18 percent on record revenues of $6.8 billion.

The region's largest employer also added another 2,000 employees (170 of them physicians) during the year ending June 30, giving the 19-hospital system a total workforce of 45,000.

The results include a $403 million increase from UPMC's $3 billion-plus investment portfolio, some of that due to an accounting change made in December 2006 that tallies unrealized as well as realized gains.

About $50 million can be attributed to the change. Operating revenues -- money derived from its hospitals, its health insurance arm and other holdings -- were up $578 million, or 10 percent, due mainly to higher Medicare insurance membership. UPMC, which controls almost 48 percent of the hospital market in Allegheny County, also spent $458 million on various projects designed to improve the health system, from $185 million on a new Children's Hospital in Lawrenceville to $105 million on new systemwide technology. Hospital system officials expect to spend another $242 million on Children's during the 2008 fiscal year.

Overall, it was a "solid performance," said UPMC Chief Financial Officer Robert DeMichiei.

UPMC's profit, referred to as "excess margin" in its financial statements, is typically the figure that receives the most scrutiny and prompts the question: How can a nonprofit make that much money? This, after all, is the sixth straight year of increases for UPMC; back in fiscal 2002, its profit was just $23 million, before climbing to $61 million in 2003, $248 million in 2004, $291 million in 2005 and $525 million in 2006. But Mr. DeMichiei emphasized during an interview that UPMC's profit provides financial stability (the three major credit agencies all rate UPMC as 'AA') and the ability to continually reinvest in new projects that benefit the community at large.