covenant care may 2017 consolidated financial statements ......executive summary excess revenue over...

Covenant Care

May 2017 Consolidated Financial Statements HIGHLIGHTS

SUMMARY OF MAY FINANCIAL ACTIVITY:

Covenant Care, consolidated results: ‐‐May: Operating Margin of $77,764; Net Income of 39,642 ‐‐YTD: Operating Margin of $324,467 Net Income of $693,173 Covenant Hospice realized a May Operating Margin of $40,720; net non‐operating

revenue of ($2,581) produced a Net Income (“Excess of Revenues over Expenses”) of $38,338. YTD Operating Margin is $270,212 and YTD Net Income is $479,322.

Total May admissions: 454 end‐of‐life admissions; 406 homebound admissions; 860 total admissions. (April total ‐ 791)

Covenant Hospice key statistics: ‐‐Average Daily Census: 767.0 (May) vs. 780.0 (YTD) ‐‐Average Length of Stay: 52.4 (May) vs. 53.3 (YTD) ‐‐Admissions: 454 (May) vs 2,209 (YTD) (Average per month – 442) Peoples Home Health, achieved a positive Operating Margin of $231,568. YTD

Operating Margin is $1,022,884. (Peoples has limited few non‐operating revenues or expenses.)

Peoples Home Health key statistics: ‐‐Medicare & Medicare‐like episodes: 419 (May) vs. 2,149 (YTD) ‐‐Home health visits: 7,632 (May) vs. 36,104 (YTD) ‐‐Average Medicare episode payment: $2,470 vs. $2,335 (2017 budget) ‐‐YTD 30‐day readmissions: 15%

Covenant Health & Community Services had a May operating loss of ($35,233) and a YTD operating loss of ($408,159). CHCS expenses include $175,284 in compensation costs, and $231,269 in legal and consulting expenses, related to the growth and diversification activities being pursued by Covenant.

Covenant Hospice Foundation achieved Net Income of ($60,437) in May. There were no significant fundraising events in May. YTD Net Income is $28,419.

Revenues and expenses are currently being reviewed to ensure costs are appropriate for current census levels, proactively addressing a possible period during which future volumes remain flat.

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2017 2017 2017 COVENANT CARE YTD PROJECTED PROJECTED PROJECTEDMAR APR MAY COMBINED STATEMENT OF OPERATIONS MAY 2017 JUN JUL AUG

137,588 11,181 77,764 Consolidated Operating Margin 324,467 75,256 76,510 98,309

Net Income230,731 66,361 38,338 Hospice 424,364 37,101 37,720 36,656244,636 164,453 231,688 Peoples 1,023,669 224,215 227,952 239,005

(127,788) (19,116) (230,385) Other Companies (754,860) (222,953) (226,669) (188,785)347,579 211,698 39,642 Total Net income 693,173 38,363 39,002 86,875

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COVENANT CARECOMBINED STATEMENT OF OPERATIONSMAY 31, 2017

HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE

NET PATIENT/FAMILY CARE/PROGRAM REVENUE 4,541,444 - 2,957 - 2,129 17,645 1,163,656 5,727,830 6,558,713 (830,883) -12.7%

TOTAL PATIENT/FAMILY CARE EXPENSES 3,195,823 11,538 - 9,245 14,471 549,846 - 3,780,923 4,571,103 (790,180) -17.3%

CONTRIBUTIONS FROM OPERATIONS 1,345,621 - (8,581) - - - (7,116) 3,174 613,810 - 1,946,907 1,987,610 (40,703) -2.0%

CONTRIBUTION % 29.6% 0.0% 52.7% 34.0% 30.3% 3.7%

GENERAL & ADMINISTRATIVE EXPENSES Other Direct 743,805 1,592 1,474 31,595 11,981 16,829 309 4,175 109,773 (1,479) 920,053 878,802 41,251 4.7% Payroll 395,324 - - 158,261 39,000 - 10,343 218,258 - 821,186 917,942 (96,756) -10.5% Benefits 74,804 - - 15,490 - - 1,264 36,347 - 127,904 164,472 (36,569) -22.2% Allocation from CHCS 90,969 7,472 7,358 11,868 (150,498) 466 7,422 7,079 17,864 - - - - 0.0%

TOTAL G&A EXPENSES 1,304,901 9,064 8,831 43,463 35,233 56,295 7,731 22,860 382,242 (1,479) 1,869,143 1,961,216 (92,073) -4.7%

OPERATING MARGIN 40,720 (9,064) (17,413) (43,463) (35,233) (56,295) (14,847) (19,687) 231,568 1,479 77,764 26,394 51,370 194.6%

OPERATING MARGIN % 0.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 19.9% 1.4% 0.4% 1.0%

NON-OPERATING REVENUES Contributions and fundraising - 34,575 515 - - - 35,090 69,621 (34,531) -49.6% Other Non-Operating Revenues 13,681 8,432 30 33,788 120 (1,479) 54,572 23,699 30,874 130.3% Development/Fundraising Expense (208) (94,379) - - (94,587) (56,926) (37,661) 66.2% Other Non-Operating Expense (15,855) - - (5) (17,631) - 293 - (33,198) (25,303) (7,896) 31.2% Contributions to Affiliates - - - - - - 0.0%

NET NON-OPERATING REVENUE (2,381) (51,372) 545 - (5) 16,157 - 293 120 (1,479) (38,123) 11,091 (49,214) -443.7%

EXCESS OF REVENUE OVER EXPENSES 38,338 (60,437) (16,868) (43,463) (35,238) (40,138) (14,847) (19,394) 231,688 - 39,642 37,485 2,156 5.8%

Note: The above classifications may differ from those of the auditors who prepare statements in conformity with Generally Accepted Accounting Principles

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COVENANT CARECOMBINED STATEMENT OF OPERATIONSMAY 31, 2017

HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE

NET PATIENT/FAMILY CARE/PROGRAM REVENUE 22,892,000 - 9,079 50 24,626 55,400 5,619,052 28,600,208 31,653,525 (3,053,317) -9.6%

TOTAL PATIENT/FAMILY CARE EXPENSES 16,281,028 58,454 14,730 43,216 43,392 2,683,736 - 19,124,557 22,061,741 (2,937,184) -13.3%

CONTRIBUTIONS FROM OPERATIONS 6,610,972 - (49,375) (14,730) 50 - (18,591) 12,008 2,935,316 - 9,475,650 9,591,784 (116,134) -1.2%

CONTRIBUTION % 28.9% 0.0% 52.2% 33.1% 30.3% 2.8%

GENERAL & ADMINISTRATIVE EXPENSES Other Direct 3,314,711 3,676 10,490 32,372 232,925 83,557 5,105 11,811 590,457 (7,396) 4,277,707 4,357,663 (79,956) -1.8% Payroll 2,201,637 - 802,637 39,000 45,958 1,048,555 - 4,137,787 4,405,191 (267,405) -6.1% Benefits 436,392 - 107,482 - 6,074 185,742 - 735,690 815,421 (79,731) -9.8% Allocation from CHCS 442,979 36,745 36,270 58,130 (734,835) 2,242 36,339 34,452 87,678 - - - - 0.0%

TOTAL G&A EXPENSES 6,395,719 40,421 46,759 90,503 408,209 124,799 41,443 98,294 1,912,432 (7,396) 9,151,183 9,578,275 (427,092) -4.5%

OPERATING MARGIN 215,254 (40,421) (96,134) (105,232) (408,159) (124,799) (60,034) (86,286) 1,022,884 7,396 324,467 13,509 310,958 2301.9%

OPERATING MARGIN % 0.9% 0.0% 0.0% 0.0% 0.0% 0.0% -243.8% 18.2% 1.1% 0.0% 1.1%

NON-OPERATING REVENUES Contributions and fundraising - 475,867 17,574 1,999 - - 495,440 342,104 153,336 44.8% Other Non-Operating Revenues 268,953 5,710 74 - 165,973 786 (7,396) 434,101 179,585 254,516 141.7% Development/Fundraising Expense (885) (405,386) (4,169) - (410,439) (402,653) (7,787) 1.9% Other Non-Operating Expense (58,959) (7,352) (325) (97) (83,662) - - - (150,395) (133,365) (17,031) 12.8% Contributions to Affiliates - - - - - - 0.0%

NET NON-OPERATING REVENUE 209,110 68,839 13,154 1,999 (97) 82,311 - - 786 (7,396) 368,706 (14,328) 383,034 -2673.4%

EXCESS OF REVENUE OVER EXPENSES 424,364 28,419 (82,980) (103,233) (408,256) (42,488) (60,034) (86,286) 1,023,669 - 693,173 (819) 693,992 -84776.5%

Note: The above classifications may differ from those of the auditors who prepare statements in conformity with Generally Accepted Accounting Principles

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COVENANT CARECONSOLIDATED STATEMENT OF CONDITIONMAY 31, 2017

HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES COMBINED

ASSETS

CASH & EQUIVALENTS 2,807,113 259,722 224,896 5,000 9,940 216,669 19,915 17,922 1,446,306 5,007,483

INVESTMENTS - FIXED 91,734 4,748,005 4,839,739INVESTMENTS - BALANCED 15,934,284 19,068 15,953,352TOTAL INVESTMENTS 16,026,018 4,767,073 - 20,793,091TOTAL CASH & INVESTMENTS 18,833,131 5,026,796 224,896 5,000 9,940 216,669 19,915 17,922 1,446,306 25,800,575

GROSS ACCOUNTS RECEIVABLES 12,307,785 4,028 78,392 5,400 1,531,275 13,926,880 RECEIVABLE ALLOWANCES (1,099,057) (54,989) (97,878) (1,251,924)NET ACCOUNTS RECEIVABLES 11,208,728 - 4,028 - - - 23,403 5,400 1,433,397 12,674,956

GRANTS / PLEDGES RECEIVABLE - 12,831 12,831CRUT RECEIVABLE 2,481,325 2,481,325MISCELLANEOUS RECEIVABLE (121,469) - - - - 24,390 (97,079)DUE TO/FROM CONSOLIDATED 3,567,916 (97,945) (598,478) (94,722) 6,876,957 (10,501,881) (162,489) (147,647) 1,158,289 0PREPAID EXPENSE 1,046,471 17,850 412 5,988 - (230) 1,070,492INVENTORY 179,200 179,200CASH VALUE ON LIFE INSURANCE 1,024,940 1,024,940TOTAL CURRENT ASSETS 38,220,242 4,959,532 (369,142) (89,722) 6,892,885 (10,285,212) (119,170) (124,555) 4,062,382 43,147,240

LAND 1,936,722 1,936,722BUILDINGS & IMPROVENTS 12,572,987 12,572,987LEASEHOLD IMPROVEMENTS 2,238,571 29,537 2,268,108FURNITURE, FIXTURES & EQUIPMENT 9,042,506 2,000 290,985 9,335,491CONSTRUCTION IN PROGRESS 911,795 911,795

26,702,581 - - 2,000 - - - 320,522 27,025,103LESS ACCUMULATED DEPRECIATION (12,168,518) (291,356) (12,459,874)NET PROPERTY & EQUIPMENT 14,534,062 - - 2,000 - - - - 29,166 14,565,228

INVESTMENT - PEOPLES 2,163,204 -CON COSTS MOBILE 131,908 131,908CON COSTS TALLAHASSEE 265,744 265,744NO COMPETE - BREWTON 61,900 61,900GOODWILL 1,510 1,510GOODWILL - PEOPLES 9,073,350 9,073,350LOAN ORIGINATION FEES 9,000 9,000TOTAL INTANGIBLE ASSETS 461,063 - - - 9,000 11,236,554 - - - 9,543,413

TOTAL ASSETS 53,215,367 4,959,532 (369,142) (87,722) 6,901,885 951,342 (119,170) (124,555) 4,091,549 67,255,881

LIABILITIES & FUND BALANCE

CURRENT LIABILITIESCURRENT PORTION L/T DEBT 448,784 448,784ACCOUNTS PAYABLE 3,721,725 8,572 - (34,219) 17,631 - 246 110,520 3,824,475ADVANCES AGAINST ACCOUNTS RECEIVABLE 6,062,545 6,062,545DEFERRED REVENUE - 13,225 787 14,012ACCRUED SALARY & WAGES 3,051,429 71,883 308,348 21,991 794,156 4,247,807TOTAL CURRENT LIABILITIES 13,284,483 93,680 787 - 274,129 17,631 - 22,237 904,675 14,597,623

LONG-TERM LIABILITIESNOTES PAYABLE - -MORTGAGE PAYABLE 6,139,924 6,139,924OTHER LONG TERM LOANS 453,606 9,100,000 9,553,606LESS CURRENT PORTION (448,784) (448,784)LONG-TERM CHARITABLE ANNUITIES - 14,926 14,926INTEREST RATE SWAP PAYABLE - -TOTAL LONG-TERM LIABILITIES 6,144,746 14,926 - - 9,100,000 - - - - 15,259,672

TOTAL LIABILITIES 19,429,229 108,606 787 - 9,374,129 17,631 - 22,237 904,675 29,857,295

NET ASSETS:UNRESTRICTED 31,293,053 4,004,409 (441,023) (104,333) (2,472,244) 933,711 (119,170) (146,792) 3,186,873 33,971,279BOARD DESIGNATED BECKER TRUST 71,094 - 71,094BOARD DESIGNATED CHILDREN'S PROGRAM 444,999 - 444,999BOARD DESIGNATED MARIANNA OFFICE 54,185 - 54,185BOARD DESIGNATED PANAMA CITY OFFICE 250,000 - 250,000BOARD DESIGNATED GOLDENBERG FUND 51,110 - 51,110BOARD DESIGNATED HERO'S WISH 21,651 - 21,651TEMPORARILY RESTRICTED - EVENTS - -TEMPORARILY RESTRICTED - COVENANT SUPPORT FND 3,840 - 3,840TEMPORARILY RESTRICTED - NATHANIEL'S LEMONADE 15,773 - 15,773TEMPORARILY RESTRICTED - SNOOK FUND 3,833 - 3,833TEMPORARILY RESTRICTED - TOP OF GAS 125 - 125TEMPORARILY RESTRICTED - MOBILE FUND 1,000 1,000TEMPORARILY RESTRICTED - HIBBARD TRUST 2,493,085 16,611 - 2,509,696 TOTAL NET ASSETS 33,786,138 4,850,926 (369,929) (87,722) (2,472,244) 933,711 (119,170) (146,792) 3,186,873 37,398,587

TOTAL LIABILITIES & NET ASSETS 53,215,367 4,959,532 (369,142) (87,722) 6,901,885 951,342 (119,170) (124,555) 4,091,549 67,255,881

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Financial ReportMonth Ended 05/31/2017

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Executive Summary Excess Revenue over Expenses was $38,338 for the month versus a $45,380 budget. YTD

Excess Revenues over Expenses was $424,364 versus a budget of $192,368 and compares to a prior YTD of $44,714.

Of the Excess Revenue over Expenses, $40,720 was in Operating Margin and ($2,381) was in Net Non-Operating Income.

Net non-operating income was ($2,381) for the month, unfavorable to a budget of $14,613. YTD net non-operating income was $209,110, favorable to a budget of $120,527.

Reflected in the Statement of Changes in Net Assets is the change in unrealized gain from investments of $183,740 for the month and $744,630 YTD. With this, we had an increase in Net Assets YTD of $1,168,994.

Census averaged 767.0 for the month versus a budget of 841.9. YTD census averaged 780.0 versus a budget of 829.8 and compares to a prior YTD census of 861.5.

Referrals for the month totaled 635 and admissions were 454 compared to a budget of 446, for a monthly conversion rate of 71.5%. YTD referrals and admissions were 3,053 and 2,209 respectively, a conversion rate of 72.4%.

Operating Margin The operating margin of .9% for the month was favorable to the budget of

.6%. YTD operating margin was .9% versus a budget of .3%. Prior year was 0.01%.

Operating income for the month was $40,720, favorable to the budget of $30,767. YTD operating income was $215,254, favorable to a budget of $71,841 and compares to a prior year of $2,249.

Net revenue for the month was $4,541,444, unfavorable to a budget of $5,432,442. YTD net revenue was $22,892,000, unfavorable to a budget of $26,018,208 and compares to a prior year of $25,099,511.

Total patient care costs per day for the month, excluding inpatient costs and room & board expenses which are a function of patient mix, were $98.36, favorable to a budget of $110.48. YTD patient care costs excluding inpatient costs and room and board expenses were $100.42, favorable to a budget of $109.93.

G&A expenses of 28.7% of revenue were unfavorable to the budget of 26.0%. YTD G&A expenses of 27.9% of revenue were unfavorable to the budget 26.3% and compares to prior year of 25.8%.

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Non-Operating Margin

Net non-operating income was ($2,381) for the month, unfavorable to budget of $14,613. YTD net non-operating income was $209,110, favorable to a budget of $120,527. Reasons are described below.

Other non-operating revenue, which includes investment income, was $13,681 for the month compared to a budget of $25,018, and YTD was $268,953 compared to a budget of $172,529.

Other non-operating expense for the month was $15,855 compared to a budget of $10,233. This category includes interest expense and investment expenses. YTD was $58,959 compared to a budget of $51,163.

For 2017, community support and fundraising revenue and expense are being recorded on the books of Covenant Hospice Foundation, Inc. In prior years, contributions and memorials, 90% or fundraising revenue and 100% of fundraising expenses were recorded on the financial statements of Covenant Hospice.

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Balance Sheet

Cash and short-term investments was $18,833,131 at month end, a supply of 133 days of operating expenses compared to 118 days at this time last year.

Days in Accounts Payable was at 48 days. Days in Accounts Receivable was 76 days.

Changes in net unrealized gains for the month were $183,740 and YTD was $744,630.

With the above, Net Assets for the month increased $277,078 compared to a budgeted increase of $45,380. YTD Net Assets increased $1,168,994 and compares to a budgeted increase of $192,368.

Other Changes in Net Assets

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COVENANT HOSPICE, INC.CONSOLIDATED

2017 2017 MONTH % INCOME STATEMENT YEAR TO YEAR TO % PRIOR YEARAPRIL MAY BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE

PATIENT/FAMILY CARE REVENUE3,145,320 3,216,444 3,491,766 (275,322) -7.88% Routine Home Care 16,104,517 16,790,764 (686,247) -4.09% 17,318,347

769,949 806,633 1,011,621 (204,987) -20.26% Inpatient Care 3,857,901 4,730,759 (872,859) -18.45% 3,776,61314,231 12,155 137,874 (125,719) -91.18% Continuous Care 169,997 663,011 (493,013) -74.36% 633,95314,874 19,555 20,016 (461) -2.30% Respite Care 68,510 96,620 (28,110) -29.09% 56,366

753,583 825,327 945,544 (120,218) -12.71% Room & Board 4,009,108 4,576,699 (567,591) -12.40% 4,094,313(1,486) 15,456 9,143 6,313 69.04% Consulting Physician 52,485 43,935 8,551 19.46% 57,73626,559 37,011 103,319 (66,309) -64.18% Primary Physician 170,512 486,123 (315,612) -64.92% 467,19120,000 83,063 1,067 81,996 7687.01% Other Care 130,064 5,333 124,731 2338.69% 4,060

4,743,030 5,015,644 5,720,351 (704,706) -12.32% TOTAL PATIENT/FAMILY CARE REVENUE 24,563,094 27,393,244 (2,830,150) -10.33% 26,408,578

121,290 197,286 107,225 90,062 83.99% Charity/Unfunded Care 794,416 511,328 283,088 55.36% 423,989211,283 276,915 180,684 96,230 53.26% Contractual Adjustments 876,678 863,708 12,970 1.50% 885,079332,573 474,201 287,909 186,292 64.71% TOTAL DEDUCTIONS FROM REVENUE 1,671,094 1,375,036 296,058 21.53% 1,309,067

4,410,456 4,541,444 5,432,442 (890,998) -16.40% NET PATIENT/FAMILY CARE REVENUE 22,892,000 26,018,208 (3,126,208) -12.02% 25,099,511

OPERATING EXPENSES

PATIENT/FAMILY CARE EXPENSES4,725 3,690 4,008 (318) -7.94% Other Direct 21,280 20,042 1,239 6.18% 18,035

1,410,238 1,429,265 1,821,277 (392,012) -21.52% Payroll 7,141,628 8,591,481 (1,449,853) -16.88% 8,825,617334,403 327,983 368,826 (40,843) -11.07% Benefits 1,686,184 1,803,815 (117,631) -6.52% 1,739,765473,687 487,892 558,748 (70,855) -12.68% Patient Expenses 2,504,767 2,712,403 (207,637) -7.66% 2,583,54984,221 90,064 130,508 (40,444) -30.99% Mileage/Fleet Car 473,855 645,657 (171,802) -26.61% 563,716

2,307,274 2,338,894 2,883,366 (544,473) -18.88% TOTAL CORE PATIENT/FAMILY CARE EXPENSES 11,827,715 13,773,398 (1,945,684) -14.13% 13,730,683

69,288 48,429 112,463 (64,034) -56.94% Inpatient Expenses 317,507 540,813 (223,305) -41.29% 575,335713,713 785,651 984,476 (198,825) -20.20% Room & Board Expenses 4,071,936 4,734,422 (662,487) -13.99% 4,264,435

7,293 22,848 9,143 13,705 149.89% Consulting Physician Expenses 63,871 43,935 19,936 45.38% 48,826790,294 856,929 1,106,082 (249,154) -22.53% TOTAL CONTRACTED PATIENT /FAMILY CARE EXPENSES 4,453,313 5,319,170 (865,856) -16.28% 4,888,596

3,097,567 3,195,823 3,989,449 (793,626) -19.89% TOTAL PATIENT/FAMILY CARE EXPENSES 16,281,028 19,092,568 (2,811,540) -14.73% 18,619,278

1,312,889 1,345,621 1,442,993 (97,372) -6.75% CONTRIBUTIONS FROM OPERATIONS 6,610,972 6,925,640 (314,668) -4.54% 6,480,232

29.77% 29.63% 26.56% 3.07% CONTRIBUTION % 28.88% 26.62% 2.26% 25.82%

GENERAL & ADMINISTRATIVE EXPENSES634,367 743,805 712,435 31,371 4.40% Other Direct 3,314,711 3,526,489 (211,778) -6.01% 4,005,076452,949 395,324 504,838 (109,515) -21.69% Payroll 2,201,637 2,378,727 (177,090) -7.44% 2,082,885

85,282 74,804 103,984 (29,180) -28.06% Benefits 436,392 505,604 (69,212) -13.69% 390,02188,268 90,969 90,969 0 0.00% Alloc to/from Other Subsidiaries 442,979 442,979 0 0.00% 0

1,260,864 1,304,901 1,412,225 (107,324) -7.60% TOTAL G&A EXPENSES 6,395,719 6,853,799 (458,081) -6.68% 6,477,983

28.59% 28.73% 26.00% 2.74% % OF NET PATIENT/FAMILY CARE REVENUE 27.94% 26.34% 1.60% 25.81%

4,358,432 4,500,724 5,401,674 (900,950) -16.68% TOTAL OPERATING EXPENSES 22,676,747 25,946,367 (3,269,621) -12.60% 25,097,261

52,025 40,720 30,767 9,952 32.35% OPERATING MARGIN 215,254 71,841 143,413 199.63% 2,249

1.18% 0.90% 0.57% 0.33% OPERATING MARGIN % 0.94% 0.28% 0.66% 0.01%

NON-OPERATING REVENUES0 0 0 0 100.00% Contributions/Unsolicited 0 0 0 100.00% 74,1080 0 0 0 100.00% Planned Giving/Solicited - 0 0 100.00% 87,4010 0 0 0 100.00% Foundation Support-Fund Raising/Event Income 0 0 0 100.00% 175,1440 0 0 0 100.00% United Way/CFC 0 0 0 100.00% 36,8420 0 0 0 100.00% Grants 0 0 0 100.00% 3,9900 0 0 0 100.00% TOTAL NON-OPERATING REVENUES 0 0 0 100.00% 377,486

NON-OPERATING EXPENSES169 208 172 36 20.72% Other Direct 885 840 45 5.35% 92,083

0 0 0 0 100.00% Fundraising/Event Expense 0 0 0 100.00% 35,6530 0 0 0 100.00% Payroll 0 0 0 100.00% 306,3180 0 0 0 100.00% Benefits - 0 0 100.00% 67,570

169 208 172 36 20.72% TOTAL NON-OPERATING EXPENSES 885 840 45 5.35% 501,624

(169) (208) (172) (36) 20.72% NET NON-OPERATING REVENUE (LOSS) (885) (840) (45) 5.35% (124,138)

23,975 13,681 25,018 (11,337) -45.31% OTHER NON-OPERATING REVENUES 268,953 172,529 96,424 55.89% 361,241

9,469 15,855 10,233 5,622 54.94% OTHER NON-OPERATING EXPENSES 58,959 51,163 7,796 15.24% 194,639

14,336 (2,381) 14,613 (16,994) -116.30% NON OPERATING INCOME 209,110 120,527 88,583 73.50% 42,465

4,434,431 4,555,125 5,457,460 (902,335) -16.53% TOTAL REVENUES 23,160,954 26,190,738 (3,029,784) -11.57% 25,838,238

4,368,070 4,516,787 5,412,079 (895,293) -16.54% TOTAL EXPENSES 22,736,590 25,998,370 (3,261,780) -12.55% 25,793,524

66,361 38,338 45,380 (7,042) -15.52% EXCESS OF REVENUE OVER EXPENSES 424,364 192,368 231,996 120.60% 44,714

1.50% 0.84% 0.83% 0.01% MARGIN % 1.83% 0.73% 1.10% 0.17%

23,040 23,778 26,098 (2,320) -8.89% PATIENT DAYS 117,778 125,295 (7,517) -6.00% 130,945768.0 767.0 841.9 (75) AVERAGE DAILY CENSUS 780.0 829.8 (50) 861.559.8 52.4 58.5 (6) AVERAGE LENGTH OF STAY 53.3 58.8 (5.5) 58.2385 454 446 8 ADMISSIONS 2,209 2,129 80 2,233544 635 REFERRALS 3,053 3,059

70.8% 71.5% CONVERSION RATIO 72.4% 73.0%340 332 363 (31) FTE's - CLINICAL 39367 67 70 (3) FTE's - G&A 64

5 6 9 (3) FTE's NON-OP 10412 405 442 (37) FTE's - TOTAL 467

$161.23 $94.62 $102.72 -$8.10 NET INCOME PER FTE $95.761.87 1.89 1.91 -0.01 ADC/FTE'S 1.84

10

COVENANT HOSPICE, INC.CONSOLIDATED

2017 2017 MONTH % STATEMENT OF CHANGES IN NET ASSETS YEAR TO YEAR TO % PRIOR YEARAPRIL MAY BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE

66,361 38,338 45,380 (7,042) -15.52% EXCESS OF REVENUE OVER EXPENSES 424,364 192,368 231,996 120.60% 44,714

OTHER CHANGES IN UNRESTRICTED NET ASSETS159,335 183,740 0 183,740 100.00% Change in net unrealized gain on other than trading securities 744,630 0 744,630 100.00% 330,693

225,696 222,078 45,380 176,698 389.37% INCREASE IN UNRESTRICTED NET ASSETS 1,168,994 192,368 976,626 507.69% 375,407

CHANGES IN TEMPORARILY RESTRICTED NET ASSETS0 0 0 0 100.00% Contributions 0 0 0 100.00% 3,7400 0 0 0 100.00% Net assets released from restrictions 0 0 0 100.00% 00 0 0 0 100.00% INCREASE/(DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS 0 0 0 100.00% 3,740

225,696 222,078 45,380 176,698 389.37% INCREASE (DECREASE) IN NET ASSETS 1,168,994 192,368 976,626 507.69% 379,147

11

COVENANT HOSPICE, INC.PER PATIENT DAY

2017 2017 MONTH INCOME STATEMENT YEAR TO YEAR TO PRIOR %APRIL MAY BUDGET VARIANCE FY 2017 DATE DATE BUDGET VARIANCE YEAR CHANGE

PATIENT/FAMILY CARE REVENUE136.52 135.27 133.80 1.47 Routine Home Care 136.74 134.01 2.73 132.26 3.4%

33.42 33.92 38.76 (4.84) Inpatient Care 32.76 37.76 (5.00) 28.84 13.6%0.62 0.51 5.28 (4.77) Continuous Care 1.44 5.29 (3.85) 4.84 -70.2%0.65 0.82 0.77 0.06 Respite Care 0.58 0.77 (0.19) 0.43 35.1%

32.71 34.71 36.23 (1.52) Room & Board 34.04 36.53 (2.49) 31.27 8.9%(0.06) 0.65 0.35 0.30 Consulting Physician 0.45 0.35 0.09 0.44 1.1%1.15 1.56 3.96 (2.40) Primary Physician 1.45 3.88 (2.43) 3.57 -59.4%0.87 3.49 0.04 3.45 Other Care 1.10 0.04 1.06 0.03 3461.7%

205.86 210.94 219.19 (8.25) TOTAL PATIENT/FAMILY CARE REVENUE 208.55 218.63 (10.08) 201.68 3.4%

5.26 8.30 4.11 4.19 Charity/Unfunded Care 6.75 4.08 2.66 3.24 108.3%9.17 11.65 6.92 4.72 Contractual Adjustments 7.44 6.89 0.55 6.76 10.1%

14.43 19.94 11.03 8.91 TOTAL DEDUCTIONS FROM REVENUE 14.19 10.97 3.21 10.00 41.9%

191.43 190.99 208.16 (17.16) NET PATIENT/FAMILY CARE REVENUE 194.37 207.66 (13.29) 191.68 1.4%

OPERATING EXPENSES

PATIENT/FAMILY CARE EXPENSES0.21 0.16 0.15 0.00 Other Direct 0.18 0.16 0.02 0.14 31.2%

61.21 60.11 69.79 (9.68) Payroll 60.64 68.57 (7.93) 67.40 -10.0%14.51 13.79 14.13 (0.34) Benefits 14.32 14.40 (0.08) 13.29 7.8%20.56 20.52 21.41 (0.89) Patient Expenses 21.27 21.65 (0.38) 19.73 7.8%3.66 3.79 5.00 (1.21) Mileage 4.02 5.15 (1.13) 4.30 -6.5%

100.14 98.36 110.48 (12.12) TOTAL CORE PATIENT/FAMILY CARE EXPENSES 100.42 109.93 (9.50) 104.86 -4.2%

3.01 2.04 4.31 (2.27) Inpatient Expenses 2.70 4.32 (1.62) 4.39 -38.6%30.98 33.04 37.72 (4.68) Room & Board Expenses 34.57 37.79 (3.21) 32.57 6.2%0.32 0.96 0.35 0.61 Consulting Physician Expenses 0.54 0.35 0.19 0.37 45.4%

34.30 36.04 42.38 (6.34) TOTAL PASS THROUGH PATIENT /FAMILY CARE EXPENSES 37.81 42.45 (4.64) 37.33 1.3%

134.44 134.40 152.87 (18.46) TOTAL PATIENT/FAMILY CARE EXPENSES 138.23 152.38 (14.15) 142.19 -2.8%

56.98 56.59 55.29 1.30 CONTRIBUTIONS FROM OPERATIONS 56.13 55.27 0.86 49.49 13.4%

GENERAL & ADMINISTRATIVE EXPENSES27.53 31.28 27.30 3.98 Other Direct 28.14 28.15 (0.00) 30.59 -8.0%19.66 16.63 19.34 (2.72) Payroll 18.69 18.99 (0.29) 15.91 17.5%3.70 3.15 3.98 (0.84) Benefits 3.71 4.04 (0.33) 2.98 24.4%3.83 3.83 3.49 0.34 Alloc to Other Subsidiaries 3.76 3.54 0.23 - 0.0%

54.73 54.88 54.11 0.77 TOTAL G&A EXPENSES 54.30 54.70 (0.40) 49.47 0.34

28.6% 28.7% 26.0% 2.7% % OF NET PATIENT/FAMILY CARE REVENUE 27.9% 26.3% 1.6% 25.8% 8.3%

189.17 189.28 206.98 (17.70) TOTAL OPERATING EXPENSES 192.54 207.08 (14.54) 191.66 0.5%

2.26 1.71 1.18 0.53 OPERATING MARGIN 1.83 0.57 1.25 0.02 10539.7%

NON-OPERATING REVENUES- - - - Contributions/Unsolicited - - - 0.57 -100.0%- - - - Planned Giving/Solicited - - - 0.67 -100.0%- - - - Foundation Support-Fund Raising/Event Income - - - 1.34 -100.0%- - - - United Way/CFC - - - 0.28 -100.0%- - - - Grants - - - 0.03 -100.0%- - - - TOTAL NON-OPERATING REVENUES - - - 2.88 -100.0%

NON-OPERATING EXPENSES0.01 0.01 0.01 0.00 Other Direct 0.01 0.01 0.00 0.70 -98.9%- - - - Fundraising/Event Expense - - - 0.27 -100.0%- - - - Payroll - - - 2.34 -100.0%- - - - Benefits - - - 0.52 -100.0%

0.01 0.01 0.01 0.00 TOTAL NON-OPERATING EXPENSES 0.01 0.01 0.00 3.83 -99.8%

(0.01) (0.01) (0.01) (0.00) NET NON-OPERATING REVENUE (LOSS) (0.01) (0.01) (0.00) (0.95) 99.2%

1.04 0.58 0.96 (0.38) OTHER NON-OPERATING REVENUES 2.28 1.38 0.91 2.76 -17.2%

0.41 0.67 0.39 0.27 OTHER NON-OPERATING EXPENSES 0.50 0.41 0.09 1.49 -66.3%

0.62 (0.10) 0.56 (0.66) NON OPERATING INCOME 1.78 0.96 0.81 0.32 447.5%

192.47 191.57 209.12 (17.55) TOTAL REVENUES 196.65 209.03 (12.38) 197.32 -0.3%

189.59 189.96 207.38 (17.42) TOTAL EXPENSES 193.05 207.50 (14.45) 196.98 -2.0%

2.88 1.61 1.74 (0.13) EXCESS OF REVENUE OVER EXPENSES 3.60 1.54 2.07 0.34 955.2%

1.50% 0.84% 0.83% 0.01% MARGIN % 1.83% 0.73% 1.10% 0.17%

12

COVENANT HOSPICE, INC.BALANCE SHEET FOR MAY 31, 2017

BALANCE BALANCE BALANCE NET CHANGE NET CHANGE05/31/2017 04/30/2017 12/31/2016 DURING MONTH DURING YEAR

ASSETS

CASH & EQUIVALENTS 2,807,113 2,902,696 1,346,241 (95,583) 1,460,872

INVESTMENTS - FIXED 91,734 90,978 2,843,245 756 (2,751,510)INVESTMENTS - BALANCED 15,934,284 15,706,820 12,872,114 227,464 3,062,170TOTAL INVESTMENTS 16,026,018 15,797,799 15,715,358 228,220 310,660TOTAL CASH & INVESTMENTS 18,833,131 18,700,495 17,061,599 132,637 1,771,532

GROSS INSURANCE RECEIVABLES 12,307,785 12,442,023 13,352,919 (134,238) (1,045,133) RECEIVABLE ALLOWANCES (1,099,057) (1,106,403) (1,133,589) 7,346 34,532NET INSURANCE RECEIVABLES 11,208,728 11,335,620 12,219,330 (126,892) (1,010,601)

GRANTS / PLEDGES RECEIVABLE - - (0) - 0CHARITABLE REMAINDER UNITRUST RECEIVABLE 2,481,325 2,481,325 2,481,325 - -MISCELLANEOUS RECEIVABLE (860,120) (717,806) (404,095) (142,314) (456,024)DUE FROM/TO FOUNDATION 74,004 42,338 109,255 31,666 (35,251)DUE FROM/TO ALZHEIMER'S 545,598 535,957 484,074 9,641 61,525DUE FROM/TO COVENANT @ HOME 113,195 109,724 57,816 3,472 55,379DUE FROM/TO COVENANT HEALTH SYSTEMS 2,493,028 2,382,744 2,083,358 110,284 409,670DUE FROM/TO COVENANT PALLIATIVE CARE 126,150 116,757 78,785 9,393 47,364DUE FROM/TO COVENANT UNIVERSITY - - (0) - 0DUE FROM/TO COVENANT MEMORY CARE 53,202 16,607 1,100 36,595 52,102DUE FROM/TO COVENANT HOME HEALTH HOLDING 901,389 901,250 901,250 139 139PREPAID EXPENSE 1,046,471 974,474 550,714 71,997 495,758INVENTORY 179,200 164,842 150,232 14,357 28,968CASH VALUE ON LIFE INSURANCE 1,024,940 1,013,085 965,666 11,855 59,275TOTAL CURRENT ASSETS 38,220,242 38,057,413 36,740,408 162,830 1,479,835

LAND 1,936,722 1,936,722 1,936,722 - -BUILDINGS & IMPROVENTS 12,572,987 12,572,987 12,572,987 - -LEASEHOLD IMPROVEMENTS 2,238,571 2,238,571 2,238,571 - -FURNITURE, FIXTURES & EQUIPMENT 9,042,506 9,018,313 8,961,731 24,193 80,775CONSTRUCTION IN PROGRESS 911,795 568,324 61,975 343,471 849,820

26,702,581 26,334,917 25,771,986 367,664 930,595LESS ACCUMULATED DEPRECIATION (12,168,518) (12,063,742) (11,636,997) (104,777) (531,521)NET PROPERTY & EQUIPMENT 14,534,062 14,271,175 14,134,988 262,887 399,074

CON COSTS MOBILE 131,908 134,351 144,122 (2,443) (12,214)CON COSTS TALLAHASSEE 265,744 266,601 270,030 (857) (4,286)NO COMPETE - BREWTON 61,900 62,295 63,872 (394) (1,971)GOODWILL - BREWTON 1,510 1,515 1,535 (5) (24)TOTAL INTANGIBLE ASSETS 461,063 464,762 479,558 (3,699) (18,496)

INVESTMENT IN STUDER COVENANT ALLIANCE, LLC - - - - -

TOTAL ASSETS 53,215,367 52,793,349 51,354,954 422,018 1,860,413

LIABILITIES & FUND BALANCE

CURRENT LIABILITIESCURRENT PORTION L/T DEBT 448,784 448,784 448,784 - -ACCOUNTS PAYABLE 3,721,725 3,310,888 2,456,216 410,837 1,265,509ADVANCES AGAINST ACCOUNTS RECEIVABLE 6,062,545 6,360,182 6,419,509 (297,637) (356,964)ACCRUED SALARY & WAGES 3,051,429 2,894,857 3,114,490 156,572 (63,061)TOTAL CURRENT LIABILITIES 13,284,483 13,014,711 12,438,999 269,772 845,484

LONG-TERM LIABILITIESNOTES PAYABLE - - - - -MORTGAGE PAYABLE 6,139,924 6,201,901 6,324,816 (61,977) (184,892)OTHER LONG TERM LOANS 453,606 461,461 495,786 (7,855) (42,180)LESS CURRENT PORTION (448,784) (448,784) (448,784) - -INTEREST RATE SWAP PAYABLE - - - - -TOTAL LONG-TERM LIABILITIES 6,144,746 6,214,578 6,371,818 (69,832) (227,072)

TOTAL LIABILITIES 19,429,229 19,229,289 18,810,817 199,939 618,412

NET ASSETS:UNRESTRICTED 31,293,053 31,070,975 30,051,053 222,078 1,242,001TEMPORARILY RESTRICTED 2,493,085 2,493,085 2,493,085 - - TOTAL NET ASSETS 33,786,138 33,564,060 32,544,138 222,078 1,242,001

TOTAL LIABILITIES & NET ASSETS 53,215,367 52,793,349 51,354,954 422,018 1,860,413

CASH ONHAND 133 129 107DAYS REVENUE OUTSTANDING 76 75 79DAYS PAYABLE OUTSTANDING 48 43 36DEBT TO FUND BALANCE 0.6 0.6 0.6CURRENT ASSETS TO CURRENT LIABILITIES 2.9 2.9 3.0

13

COVENANT HOSPICE, INC.STATEMENT OF CASH FLOWSMay 31, 2017

MONTH YEAR TO DATECASH FLOWS FROM OPERATING ACTIVITIES:Increase (decrease) in net assets 222,078 1,242,001Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation expense 105,295 531,579 Amortization expense 3,699 18,496 Provision for bad debts - - Prior period adjustments Change in operating assets and liabilities - Accounts receivable 134,238 1,045,133 Pledges receivable - (0) Allowance for Doubtful Accounts - (50,000) Allowance for Doubtful Accounts Audit - 30,000 Allowance for Doubtful Accounts Sequestration (7,346) (14,532) Miscellaneous receivables 127,665 145,681 Prepaid expenses (71,997) (495,758) SCA Investment - - Inventory (14,357) (28,968) Line of Credit 22,650 409,650 Accounts payable 296,859 (69,179) Accrued expenses 247,900 520,526 Net cash provided (required) by operating activities 1,066,684 3,284,629

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (367,664) (930,595) Retirement of Capital Assets (518) (58) No Compete Agreement - Brewton - - Certificate of Need - Mobile - - Cash Value of Insurance Investment (11,855) (59,275) Net cash used in investing activities (380,037) (989,928)

CASH FLOWS FROM FINANCING ACTIVITIES Accrued PIP liability (297,637) (15,513) Receivable from CHF (31,666) 35,251 Receivable from CHP (9,393) (47,364) Receivable from CHCS (110,284) (409,670) Receivable from CAS (9,641) (61,525) Receivable from C@Home (3,472) (55,379) Receivable from Hospice University - (0) Receivable from Peoples Home Health 14,649 310,343 Receivable from Memory Care (36,595) (52,102) Receivable from CH3 (139) (139) Payments on obligations under capital leases (7,855) (42,180) Payments on obligations under debt (61,977) (184,892) Due to Alzheimer's - - Due to Foundation - - Net cash used by financing activities (554,010) (523,170)

NET INCREASE (DECREASE) IN CASH 132,637 1,771,532

CASH, BEGINNING OF PERIOD 18,700,495 17,061,599

CASH, END OF PERIOD 18,833,131 18,833,131

14

Peoples Home Health, LLC.

Income Statement & Balance Sheet

May 31, 2017

15

PEOPLES HOME HEALTH INCOME STATEMENT

MAY YTD MAY

Ordinary Income/Expense

Income

4000 · Medicare Revenue 820,769 4,064,195

4100 · NonMedicare Revenue 130,018 618,950

4200 · Medicare Like 9,211 54,580

4201 · Medicare LikeDiscounted 203,659 881,327

Total Income 1,163,656 5,619,052

Cost of Goods Sold

5000 · Salaries & WagesClinical Staff

5005 · Skilled Nursing 165,273 838,118

5010 · Occup Therapy 43,714 217,473

5015 · Physical Therapy 168,386 819,066

5020 · Speech Therapy 16,172 69,841

5025 · Social Work 13,144 54,348

5030 · Home Health Aide 3,330 15,651

Total 5000 · Salaries & WagesClinical Staff 410,018 2,014,496

5050 · Bonuses

5051 · Bonus Skilled Nursing 2,077 5,602

5052 · Bonus Occup Therapy 271 271

5053 · Bonus Physical Therapy 108 108

5063 · Incentive Skilled Nursing 70 70

5064 · Incentive Occup Therapy 5

5065 · Incentive Physical Therapy 150 405

Total 5050 · Bonuses 2,676 6,461

5100 · BenefitsPayroll Taxes

5105 · Skilled Nursing 12,211 63,597

5110 · Occup Therapy 3,161 15,508


5120 · Speech Therapy 1,114 5,458

5125 · Social Work 883 4,016

5130 · Home Health Aide 203 914

Total 5100 · BenefitsPayroll Taxes 29,519 149,104

5200 · BenefitsGroup/Supplemental Ins

5205 · Skilled Nursing 17,541 82,103

5210 · Occup Therapy 3,476 16,887


5220 · Speech Therapy 470 2,351

5225 · Social Work 2,039 4,096

5230 · Home Health Aide 1,039 4,741

Total 5200 · BenefitsGroup/Supplemental Ins 40,512 184,379

5300 · BenefitsWorkers' Comp/Malprac

5305 · Skilled Nursing 4,841 21,101

5310 · Occup Therapy 1,299 5,731


5320 · Speech Therapy 489 2,172

16


MAY YTD MAY

5325 · Social Work 291 1,268

5330 · Home Health Aide 129 557

Total 5300 · BenefitsWorkers' Comp/Malprac 11,703 51,319

5400 · Benefits401(k) Match

5405 · Skilled Nursing 277 1,626

5410 · Occup Therapy 419 2,104


5420 · Speech Therapy 178 865

Total 5400 · Benefits401(k) Match 2,378 13,091

5500 · Mileage

5505 · Skilled Nursing 14,397 71,035

5510 · Occup Therapy 2,504 12,767


5520 · Speech Therapy 1,030 4,419

5525 · Social Work 801 3,914

5530 · Home Health Aide 1,571 7,158

Total 5500 · Mileage 28,817 139,321

5600 · Medical Supplies

5604 · Routine Medical Supplies 3,972 18,995

5605 · Billable Medical Supplies 15,022 80,439

5606 · Medical Monitoring 209 781

5607 · TCP Monitoring 4,728 23,896

5610 · Medical Waste Removal 291 1,454

Total 5600 · Medical Supplies 24,222 125,565

Total COGS 549,846 2,683,736

Gross Profit 613,810 2,935,316

Expense

8500 · Answering Service 1,089 4,878

8505 · Bank Services Charges 366 1,482

8510 · Billing Service Fees 792 4,212

8515 · Computer Supplies & Repairs 1,381 4,038

8520 · Continuing Education Staff 580 3,372

8525 · Contracted Services

8530 · Alarm & Security 218 540

8535 · Janitorial 1,053 5,030

8545 · Pest Control 64

8550 · Shredding 168 632

Total 8525 · Contracted Services 1,439 6,265

8560 · Depreciation Expense 1,129 4,903

8565 · Dues & Subscriptions 640 5,301

8570 · Equipment Leases

8575 · Copiers 6,264

8577 · Postage Machine 179 358

Total 8570 · Equipment Leases 179 6,622

8580 · Insurance

17


MAY YTD MAY

8585 · Business Liability 5,066

8597 · Workers' Comp 645 2,499

Total 8580 · Insurance 645 7,564

8605 · Licenses and Permits 35 35

8610 · Marketing

5630 · Printing Brochures 1,235

8613 · Mktg Promotionals (NonAllow) 151 4,085

8614 · General Marketing (NonAllow) 1,825 10,001

8615 · General Marketing (Allowable) 1,085

8616 · BD/Mktg Dues & Subscriptions 1,004

8619 · BD/Mktg Meals & Entertainment 1,259 6,474

8620 · Internet/Web Hosting 399 598

8621 · Social Media 481 1,763

8817 · BD/Mktg Telephone 558 4,898

9050 · BD/Mktg Staff Training 113

9051 · BD/Mktg Supplies 237 570

9052 · BD/Mktg Special Events 668

9055 · BD/Mktg Staff Meetings/Parties 333

Total 8610 · Marketing 4,910 32,826

8645 · Meals & Entertainment 50%

8646 · Meals & Ent Office Staff 321 1,586

8647 · Meals & Ent BD/Mktg Staff 47

Total 8645 · Meals & Entertainment 50% 321 1,633

8650 · Office Expense

8655 · Copier Supplies 2,677 8,008

8656 · Internet Service 648 2,964

8657 · Office Supplies 1,704 7,131

8658 · Break Room Supplies 174 1,114

8659 · Office Equipment (NonCapital) 458 2,042

8660 · Operation Supplies 2,907 10,567

Total 8650 · Office Expense 8,568 31,826

8665 · Payroll Expense BusDev/Mktg

8666 · BD/Mktg Staff Salaries 60,032 267,384

8667 · BD/Mktg Staff Bonuses

8668 · BD/Mktg Staff Payroll Tax 5,686 24,286

8669 · BD/Mktg EE Benefits 4,696 26,024

8670 · BD/Mktg Mileage & Car Allowance 3,631 18,156

8672 · BD/Mktg Incentive Bonus 8,780 45,595

8673 · BD/Mktg 401(k) Match 422 2,524

Total 8665 · Payroll Expense BusDev/Mktg 83,247 383,969

8675 · Payroll ExpensesAdmin Staff

8501 · Auto Exp/Car AllowanceAdmin 769 3,863

8680 · Staff Salaries 77,474 354,617

8684 · Admin Staff Bonuses 2,898 10,819

8685 · Payroll Taxes 6,729 30,670

18


MAY YTD MAY

8690 · Employee Benefits 9,896 45,222

8692 · Mileage Admin 274 1,700

8694 · Admin 401(k) Match 565 4,078

Total 8675 · Payroll ExpensesAdmin Staff 98,604 450,968

8681 · Payroll ExpensesClinical Staff

8682 · Clinical Staff Gross 60,747 325,087

8683 · Clinical Staff Bonuses 2,326 12,446

8686 · Clinical Staff Payroll Taxes 4,836 24,750

8691 · Clinical Staff EE Benefits 4,504 34,790

8693 · Clin Admin Auto Allowance 400 2,000

8695 · Clin Admin 401(k) Match 215 1,986

8696 · Clinical Staff Mileage 32 335

Total 8681 · Payroll ExpensesClinical Staff 73,061 401,394

8698 · Parent Salary Allocation 17,864 87,678

8699 · Parent MSA 34,170 166,355

8700 · Postage & Delivery 234 1,246

8720 · Professional Fees

8725 · Accounting/Bookkeeping 675

8726 · Payroll Services 2,365 12,016

8730 · Consulting 892 8,825

8731 · HR Services 917 5,391

8735 · Legal 15,292

Total 8720 · Professional Fees 4,174 42,199

8750 · Rent

8755 · Building 14,699 62,243

8756 · Conference Room/Facility 100 425

8758 · Storage Unit 134 672

Total 8750 · Rent 14,934 63,339

8775 · Repairs and Maintenance

8785 · Equipment 319 580

Total 8775 · Repairs and Maintenance 319 580

8800 · Software Support (EMR) 11,006 56,371

8802 · Staff Recruitment 379 1,743

8804 · Staff Retention 432 707

8810 · Telephone

8815 · Cellular/PagersOffice Staff 850 3,196

8816 · Cellular/PagersClinical Staff 3,884 19,187

8820 · Office/Cable/LD 1,216 5,245

Total 8810 · Telephone 5,951 27,628

8830 · Travel

8832 · Hotel 148

Total 8830 · Travel 148

8840 · Uniforms 244 351

8850 · Utilities 1,970 7,783

8870 · Employee Gifts & Goodwill 118 719

19


MAY YTD MAY

8875 · Staff Meetings/ Parties 956 1,768

9900 · Bad Debt Expense 12,506 102,529

Total Expense 382,242 1,912,432

Net Ordinary Income 231,568 1,022,884

Other Income/Expense

Other Income

4150 · Miscellaneous Income 53 423

4400 · Interest Income 67 363

Total Other Income 120 786

Net Other Income 120 786

Net Income 231,688 1,023,669

20

PEOPLES HOME HEALTH BALANCE SHEET May 2017

ASSETS

Current Assets

Checking/Savings

1110 · Servis 1st Ops #1454 3,350

1115 · Servis 1st Pay #1462 100

1120 · Servis 1st Cafeteria #6018 100

1125 · BB&T Ops Acct #0652 932,167

1128 · BB&T Reserve Acct #9832 510,190

Total Checking/Savings 1,445,906

Other Current Assets

1199 · Petty Cash 400

1300 · Accounts Receivable PMS

1301 · Allowance for Bad Debt (57,878)

1302 · Allowance for PreClaim Review (40,000)

1300 · Accounts Receivable PMS Other 1,531,275

Total 1300 · Accounts Receivable PMS 1,433,397

8757 · Security Deposit 3,050

Total Other Current Assets 1,436,847

Total Current Assets 2,882,753

Fixed Assets

1500 · Furniture & Equipment 290,985

1520 · Leasehold Improvements 29,537

1550 · Accumulated Depreciation (291,356)

Total Fixed Assets 29,166

Other Assets

1925 · Intercompany Loan to CH3 539,000

1950 · Intercompany Cov Hospice 640,629

Total Other Assets 1,179,629

TOTAL ASSETS 4,091,549

LIABILITIES & EQUITY

Liabilities

Current Liabilities

Accounts Payable

2000 · Accounts Payable 103,226

Total Accounts Payable 103,226

Credit Cards

2016 · Servis1st Credit Card 7,294

Total Credit Cards 7,294

Other Current Liabilities

2105 · 401(k) Match Liability 7,160

2110 · 125 EE 125 MFS 10,791

2210 · Wages Payable 526,502

2211 · Bonus Payable 30,911

2213 · PTO Accrual 218,791

Total Other Current Liabilities 794,156

Total Current Liabilities 904,675

21

Total Liabilities 904,675

Equity

3200 · Partners' Equity 2,163,204

Net Income 1,023,669

Total Equity 3,186,873

TOTAL LIABILITIES & EQUITY 4,091,549

22

Covenant Health & Community Services, Inc.


May 31, 2017

23

2017 2017 2017 2017 2017 2017 2017 2017JAN FEB MAR APR MAY MAY BUD VARIANCE YTD MAY YTD MAY BUD VARIANCE

RevenuesOther Revenues - 50 - - - - - 50 - 50

Total Revenues - 50 - - - - - 50 - 50

Expenses:Salaries 157,000 145,820 169,325 172,230 158,261 149,321 8,940 802,637 717,797 84,840Benefits 22,206 18,915 21,822 29,049 15,490 19,540 (4,050) 107,482 107,113 368Other Expenses (19) - (121) (107) 29 - 29 (219) - (219)Office Supplies - - - - - - - - - -Marketing - - - - - - - - - -Printing Exp - - - - - - - - - -Amortization Loan Orig Fees 375 375 375 375 375 - 375 1,875 - 1,875Legal 32,946 30,055 32,827 (19,581) 13,790 21,478 (7,688) 90,037 107,388 (17,351)Consulting 34,815 10,204 12,812 85,614 (2,213) 28,903 (31,115) 141,232 144,513 (3,281)Start Up Costs - - - - - - - - - -Operating License & Fees - - - - - - - - - -Promotional Itmes - - - - - - - - - -Allocation from Parent (145,387) (139,218) (153,490) (146,242) (150,498) (150,498) - (734,835) (734,835) (0)

Total Expenses 101,936 66,151 83,551 121,338 35,233 68,743 (33,509) 408,209 341,977 66,232

Operating Margin (101,936) (66,101) (83,551) (121,338) (35,233) (68,743) 33,509 (408,159) (341,977) (66,182)

Other Non-Operating Revenues - - - - - - - - - -Other Non-Operating Expenses 5 5 77 5 5 - 5 97 - 97Total Non-Operating Income/(Expense) (5) (5) (77) (5) (5) - (5) (97) - (97)

Total Revenues - 50 - - - - - 50 - 50Total Expenses 101,941 66,156 83,628 121,343 35,238 68,743 (33,504) 408,306 341,977 66,329

Excess of Revenue over Expenses (101,941) (66,106) (83,628) (121,343) (35,238) (68,743) 33,504 (408,256) (341,977) (66,279)

Covenant Health & Community Services, Inc.Income Statement

Fiscal Year 2017

24

2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

AssetsCurrent Assets

Operating Cash 9,966 9,966 23,025 3,900 0BB&T Analyzed Checking 9,960 9,955 9,950 9,945 9,940Operating PayPal - - - - -Total Cash & Equivalents 19,926 19,921 32,975 13,845 9,940

Misc Receivable - - - - -Prepaid Other 7,249 6,934 6,619 6,304 5,988Prepaid Supplies - - - - -

Total Current Assets 27,175 26,854 39,594 20,148 15,928

Fixed Assets:Furniture, Fixtures & Equipment - - - - -(Less accumulated depreciation) - - - - -Total Fixed Assets - - - - -

Other AssetsLoan Origination Fees 10,500 10,125 9,750 9,375 9,000

Total Assets 37,675 36,979 49,344 29,523 24,928

Liabilities & Net Assets

Current LiabilitiesCurrent portion of LT debt - - - - -Accounts Payable - - - - -Accrued Expenses 25,000 25,000 (34,500) 13,175 (34,219)Accrued Payroll 110,205 142,431 245,781 287,129 308,348

Total Current Liabilities 135,205 167,431 211,281 300,304 274,129

Long-Term LiabilitiesLoan payable - BB&T 9,550,000 9,550,000 9,300,000 9,200,000 9,100,000Due to/From: Covenant Hospice 2,102,814 2,191,505 2,312,636 2,382,744 2,493,028Loan payable to Covenant Hospice - - - - -Due to/From: Covenant Home Health Holding (9,526,938) (9,527,359) (9,277,827) (9,178,276) (9,078,742)Due to/From: Foundation (7,338) (14,376) (30,100) (22,532) (23,941)Due to/From: Covenant @ Home (6,817) (13,337) (20,532) (27,372) (34,452)Due to/From: CAS (7,202) (14,120) (21,691) (28,912) (36,270)Due to/From: Palliative (7,204) (14,102) (21,689) (28,916) (36,339)Due to/From: Memory Care (11,544) (22,600) (34,733) (46,262) (58,130)Due to/From: Peoples (17,372) (34,028) (52,337) (84,248) (102,112)Less Short-term portion - - - - -

Total Long-Term Liabilities 2,068,399 2,101,584 2,153,726 2,166,225 2,223,043

Total Liabilities 2,203,604 2,269,015 2,365,007 2,466,529 2,497,173

Net Assets:Unrestricted Net Assets: (2,063,988) (2,063,988) (2,063,988) (2,063,988) (2,063,988)Current Year Net Income/(Loss) (101,941) (168,047) (251,675) (373,018) (408,256)Total Unrestricted Net Assets (2,165,929) (2,232,036) (2,315,663) (2,437,006) (2,472,244)

Total Liabilities & Net Assets 37,675 36,979 49,344 29,523 24,928

Covenant Health & Community Services, Inc.Balance Sheet

Fiscal Year 2016

25

Covenant Hospice Foundation, Inc.


May 31, 2017

26

For the month, the foundation had a decrease in total net assets of ($8,391) bringing total

net assets of the foundation to $4,852,392 and total assets to $5,057,477 at 5/31/17.

For the year, the foundation has a increase in total net assets of $331,239.

Operating Activities:

For the month, operating expenses totaled $9,064 and consisted of: $ 5,514 -1,592 Bank and Credit Card Service fees

$ 7,472 Salary alloc of from CHCS

The Foundation recognized total revenues of $37,000 which consisted of the following:

$ 913 - 13,130 Memorials & Contributions/Unsolicited

$ 15,824 Fund Raising/Event Income

$ 1,848 Direct Mail

$ 3,024 United Way/CFC

$ 750 Released from Restriction (Employee Support Fund)

$ 2,507 - 2,425 Investment Earnings Childrens, Panama City, General, Marianna

For the year, the Foundation has recognized total revenues of $501,788.

Non-Operating Expenses totaled $86,907 and consisted of the following

$ 18,186 Other Direct Costs

$ 8,250 Fundraising expense

$ 3,950 Cost of Direct Benefit to Donor$ 111 - Misc and monthly service fee46,989 Payroll

$ 111 - Misc and monthly service fee9,649 Benefits

$ 4,440 Goldenberg fund usage

$ 700 Hero's Wish fund usage

$ 750 Employee Support fund usage

$ -6,006 Realized gains/losses

For the year, Foundation Non-Operating expenses are $431,483.

For the month of May, we had an unrealized gain of $50,901.

Composition of investment portfolio:

Foundation portfolio, per balance sheet 4,748,005

Charity Annuity Reserve required in FL, per balance sheet 19,068

Total 4,767,073

Note:

Unrealized Gain/(Losses) are the fluctuations in market values of securities from month to month.

Realized (Gain)/Losses are the true recorded gains or losses due to the sale of a security.

Covenant Hospice Foundation, Inc.

Financial Analysis

May 31, 2017

27

COVENANT HOSPICE FOUNDATION, INC.

INCOME STATEMENT FOR MAY 31, 2017

2017 2017 2017 2017 2017 2017 % YTD MAY

JAN FEB MAR APR MAY MAY BUDGET VARIANCE VARIANCE YTD MAY BUDGET VARIANCE VARIANCE

OPERATING REVENUES - - - - 0.0% - - - 0.0%

GENERAL & ADMINISTRATIVE EXPENSES

Salary Alloc From CHCS 7,338 7,038 7,665 7,232 7,472 7,472 - 0.0% 36,745 36,745 - 0.0%

Bank/Credit Card Service Fees 2,084 1,592 - 1,592 0.0% 3,676 - 3,676 0.0%

TOTAL GENERAL & ADMINISTRATIVE EXPENSES 7,338 7,038 7,665 9,316 9,064 7,472 1,592 21.31% 40,421 36,745 3,676 10.0%

OPERATING MARGIN (7,338) (7,038) (7,665) (9,316) (9,064) (7,472) (1,592) 21.31% (40,421) (36,745) (3,676) 10.0%

NON-OPERATING REVENUES

Memorials/Contributions/Unsolicited 11,287 18,656 13,080 15,590 13,130 15,900 (2,770) 17.4% 71,743 79,500 (7,757) -9.8%

Major Gifts 1,359 886 (2,245) 5,000 - 15,000 (15,000) 100.0% 5,000 75,000 (70,000) -93.3%

Planned Giving - 45,784 50,940 - - - -100.0% 96,723 - 96,723 100.0%

Fund Raising/Event Income 5,344 1,100 13,929 221,154 15,824 - 15,824 -100.0% 257,351 212,750 44,601 21.0%

United Way/CFC 5,167 5,167 6,474 3,024 3,024 5,167 (2,143) -41.5% 22,855 32,083 (9,228) -28.8%

Grants 30 65 (95) - - - - 0.0% - - - 0.0%

Direct Mail 220 280 2,524 821 1,848 - 1,848 0.0% 5,692 - 5,692 0.0%

Released from Restriction 1,506 1,297 - 12,950 750 - 750 100.0% 16,503 - 16,503 0.0%

Investment Earnings 3,215 2,370 15,378 2,532 2,425 2,507 (81) -3.2% 25,921 26,195 (274) -1.0%

TOTAL NON-OPERATING REVENUES 28,127 29,822 94,828 312,010 37,000 38,573 (1,573) -4.08% 501,788 425,528 76,260 17.9%

NON-OPERATING EXPENSES

Other Direct 2,456 4,143 3,757 4,860 18,186 11,159 7,027 63.0% 33,402 60,445 (27,043) -44.7%

Program Expenses 1,300 6,516 592 605 5,890 - 5,890 0.0% 14,903 - 14,903 0.0%

Realized Gains/(Losses) 14,017 - 12,200 - (6,006) - (6,006) 100.0% 20,211 - 20,211 0.0%

Investment & Advisory Services 3,608 - - 3,744 - - - 100.0% 7,352 6,852 500 7.3%

Fundraising Expense/Cost of Direct Benefit - - - 77,254 12,200 - 12,200 100.0% 89,454 90,250 (796) -0.9%

Payroll 41,687 33,958 51,568 51,414 48,454 55,939 (7,485) -13.4% 227,081 269,755 (42,674) -15.8%

Benefits 7,157 6,540 8,341 8,859 9,649 10,428 (779) -7.5% 40,546 51,659 (11,113) -21.5%

TOTAL EXPENSES: 70,225 51,156 76,458 146,736 88,372 77,527 10,846 14.0% 432,949 478,961 (46,012) -9.6%

NET NON-OPERATING REVENUE (LOSS) (42,098) (21,335) 18,370 165,274 (51,372) (38,953) (12,419) 31.9% 68,840 (53,432) 122,272 -228.8%

EXCESS OF REVENUE OVER EXPENSES (49,436) (28,372) 10,705 155,959 (60,437) (46,425) (14,011) 30.2% 28,419 (90,177) 118,596 131.5%

MARGIN % -175.8% -95.1% 11.3% 50.0% -163.3% -120.4% -43.0% 5.7% -21.2% 26.9%

OTHER CHANGES IN UNRESTRICTED NET ASSETS

Unrealized gain (loss) on investments 83,645 104,056 18,930 49,591 50,901 - 50,901 100.0% 307,123 - 307,123 100.0%

INCREASE IN UNRESTRICTED NET ASSETS 34,209 75,684 29,635 205,549 (9,536) (46,425) 36,890 -79.5% 335,542 (90,177) 425,719 -472.1%

Changes in Temporarily Restricted Net Assets

Contributions 343 8,014 1,505 445 430 - 430 100.0% 10,735 - 10,735 100.0%

Net assets released from restrictions (1,506) (1,297) - (12,950) (750) - (750) 100.0% (16,503) - (16,503) 100.0%

INCREASE/(DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS(1,164) 6,717 1,505 (12,505) (320) - (320) 100.0% (5,768) - (5,768) 100.0%

INCREASE/(DECREASE) IN NET ASSETS 33,045 82,401 31,140 193,044 (9,856) (46,425) 36,569 -78.8% 329,774 (90,177) 419,951 -465.7%

28

COVENANT HOSPICE FOUNDATION, INC.

BALANCE SHEET MAY 31, 2017

BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE

06/30/2016 07/31/2016 08/31/2016 09/30/2016 10/31/2016 11/30/2016 12/31/2016 01/31/2017 02/28/2017 03/31/2017 04/30/2017 05/31/2017

ASSETS

OPERATING - COASTAL BANK & TRUST 45,996 37,872 69,798 75,001 65,701 102,984 121,895 69,761 79,750 171,115 205,063 227,186

REGIONS BANK - CHECKING ACCOUNT 4,302 16,073 25,211 36,399 58,916 6,865 10,106 35,911 39,893 16,584 29,676 32,536

SYNPREPAID OTHER 118 178 216 216 1,331 23,707 2,200 17,850

SYNOVUS - TRUST (Hospice Foundation) 4,376,591 4,487,381 4,463,623 4,468,658 4,389,834 4,446,001 4,492,222 4,535,953 4,638,825 4,660,863 4,709,069 4,748,005

SYNOVUS - INVEST (Charitable Annuity Reserve) 18,142 18,793 18,250 18,264 17,980 18,078 18,230 18,369 18,709 18,779 18,953 19,068

GRANTS RECEIVABLE - - - - - - - (2,688) (454) 1,862 (1,958) (3,418)

RECEIVABLE FROM HOSPICE - - - - - - - - - - - -

RECEIVABLE - GIFT ANNUITY REINSURANCE 3,825 3,343 3,343 3,343 2,861 2,861 2,861 2,379 2,379 2,379 1,897 1,897

OTHER ASSETS - - - - - - - - - - - -

PLEDGES RECEIVABLE 40,875 12,544 8,650 3,530 3,530 3,430 400 400 300 300 21,980 14,353

MISCELLANEOUS RECEIVABLES - - - - - - 25 - 7,338 - 70,363 -

TOTAL ASSETS 4,489,730 4,576,006 4,588,876 4,605,195 4,538,940 4,580,397 4,645,954 4,660,301 4,788,071 4,895,590 5,057,242 5,057,477

LIABILITIES & NET ASSETS

DEFFERED REVENUE - - - - - - - 23,342 47,737 77,617 (0) 13,225

ACCRUED EXPENSES - - - - - - - 313 282 242 54,000 8,572

ACCRUED PAYROLL & BONUSES - - - - - - - 27,077 31,499 55,027 62,664 71,883

DUE TO HOSPICE, INC. 22,839 14,950 8,181 25,082 25,732 6,962 109,255 32,486 42,031 49,939 42,338 74,004

DUE TO CHCS 22,839 14,950 8,181 25,082 25,732 6,962 109,255 7,338 14,376 30,100 22,532 23,941

CURRENT PORTION OF LONG-TERM DEBT - - - - - - - - - - - -

TOTAL CURRENT LIABILITIES 22,839 14,950 8,181 25,082 25,732 6,962 109,255 90,556 135,925 212,925 181,534 191,624

LONG TERM INVESTMENT - CHARITABLE ANNUITIES 14,284 14,284 14,284 13,663 13,663 13,663 15,547 15,547 15,547 14,926 14,926 14,926

TOTAL LONG-TERM LIABILITIES 14,284 14,284 14,284 13,663 13,663 13,663 15,547 15,547 15,547 14,926 14,926 14,926

TOTAL LIABILITIES 37,123 29,234 22,465 38,745 39,394 20,625 124,802 106,104 151,472 227,851 196,460 206,550

UNDESIGNATED NET ASSETS 3,557,832 3,649,197 3,668,836 3,668,875 3,597,611 3,653,547 3,656,899 3,692,024 3,772,862 3,803,031 4,008,868 4,004,409

DESIGNATED NET ASSETS

TOP OFF THE GAS 100 125 125 125 125

CHILDREN'S PROGRAM DESIGNATED NET ASSETS 444,999 444,999 444,999 444,999 444,999 444,999 444,999 444,999 444,999 444,999 444,999 444,999

MARIANNA DESIGNATED NET ASSET 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185

BOARD DESIGNATED RESTRICTED ASSETS - HERO'S WISH 41,305 41,305 41,305 41,305 41,305 41,305 25,127 25,127 22,953 22,351 22,351 21,651

BOARD DESIGNATED RESTRICTED ASSETS - GOLDENBERG 74,471 74,471 74,471 74,471 74,471 74,471 59,603 58,687 55,706 55,774 55,487 51,110

PANAMA CITY DESIGNATED NET ASSETS 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000

TOTAL DESIGNATED NET ASSETS 864,961 864,961 864,961 864,961 864,961 864,961 833,914 833,098 827,969 827,435 827,148 822,070

TEMPORARILY RESTRICTED ASSETS 16,472 19,272 19,272 19,272 23,632 27,922 (0) - - - - -

TEMPORARILY RESTRICTED ASSETS - SNOOK 10,589 10,589 10,589 10,589 10,589 10,589 3,833 3,833 3,833 3,833 3,833 3,833

TEMPORARILY RESTRICTED ASSETS - NATHANIEL'S LEMONADE 2,753 2,753 2,753 2,753 2,753 2,753 8,111 9,245 15,723 15,823 15,673 15,773

TEMPORARILY RESTRICTED ASSETS - PC MASK 2017 12,700 12,700 12,700 12,700 - -

TEMPORARILY RESTRICTED ASSETS - COVENANT CARES 5,695 - - - - -

TEMPORARILY RESTRICTED ASSETS - COVENANT EMPLOYEE SUPP 3,298 3,512 3,916 4,261 3,840

TEMPORARILY RESTRICTED ASSETS - MOBILE /PROVIDENCE 1,000 1,000 1,000

TOTAL NET ASSETS 4,452,607 4,546,772 4,566,411 4,566,450 4,499,545 4,559,772 4,521,152 4,554,198 4,636,599 4,667,738 4,860,782 4,850,926

TOTAL LIABILITIES AND NET ASSETS 4,489,730 4,576,006 4,588,876 4,605,195 4,538,940 4,580,397 4,645,954 4,660,301 4,788,071 4,895,590 5,057,242 5,057,477

29

1 Financial statement highlights May 20172 Consolidated May 20173 Karen Financial Report May4 Covenant Hospice FS May 20176 PEOPLES LEAD May7 PHH PL May8 PHH BalSht May9 CHCS LEAD May10 CHCS May 201711 COV FOUNDATION LEAD May12 Foundation FS 2017 May

covenant care may 2017 consolidated financial statements ......executive summary excess revenue over...

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