October December 2017 Quarterly Disclosure Report

Transcription

1 October December 217 Prepared and Submitted February 14, 218

2 Immanuel Lutheran Corporation Officer's Certificate To: Re: U.S. Bank National Association as Master and Bond Trustee; Interested Bondholders City of Kalispell, Montana Housing and Healthcare Facilities Revenue Bonds (Immanuel Lutheran Corporation Project) Series 217A, B & C In accordance with Sections 3(b) and 4(b) of the Continuing Disclosure Agreement executed by Immanuel Lutheran Corporation of Kalispell, Montana (the Corporation) dated May 1, 217, related to the above-referenced Bonds (the Disclosure Agreement), I hereby certify that the Corporation complied with its covenants, agreements and obligations under the Disclosure Agreement and under the Master Trust Indenture between the Corporation and U.S. Bank National Association, as Master Trustee, dated May 1, 217, (the Master Trust Indenture), as of and for the Corporation's Fiscal Quarter ended December 31, 217. Calculations of the following covenants for which compliance is required this reporting period under the Master Trust Indenture or the Loan Agreement are attached hereto: - Days Cash on Hand (Liquidity Covenant) - Debt Service Coverage (Rate Covenant) Immanuel Lutheran Communities By: Jason Cronk Its: Chief Executive Officer Date: February 14, 218 Page 2 of 1

3 Background: Campus and Project Description Immanuel Lutheran Communities (the Community) is a Continuing Care Retirement Community (CCRC) located on 13 acres in Kalispell, Montana. The Community is comprised of 16 existing apartments utilized for independent and assisted living services and a Skilled Care Center that provides both short-term and long-term nursing services. The Community is undergoing an expansion and renovation project that will include the development of 36 new independent living units (the Villas) and 24 new memory support units (the Lodge), as well as an indoor pool, auditorium, expanded dining, and other common areas. In addition, the Skilled Care Center is undergoing significant renovation that will create private rooms with private bathrooms in both the west and center wings of the existing building. The project will also include a new therapy gym and dining and living spaces for residents of the Skilled Care Center and their families. Site work and construction of the new memory support Lodge as well as renovation of the west wing of the Skilled Care Center, began in Spring 216 and has been completed. Construction of the independent living Villas and the center wing of the Skilled Care Center began Spring 217 and is ongoing. Page 3 of 1

4 1 Financial Statements BALANCE SHEET December 31, 217 ASSETS THIS YEAR LAST YEAR DIFFERENCE CURRENT ASSETS Cash and Equivalents Accounts Receivable Residents Less Estimated Uncollectibles Net Patient/Resident Accounts Receivable 2,152,227 2,768,89 (616,582) 2,612,61 1,267,688 1,344,913 (15,) (125,) (25,) 2,462,61 1,142,688 1,319,913 Other Recievable Supplies' Inventory Prepaid Expenses Total Current Assets 215, 215, 139,347 89,878 49, ,15 69,536 55,479 $ 5,94,19 $ 4,7,911 $ 1,23,279 ASSETS LIMITED AS TO USE Resident Funds and Deposits Under Indenture Agreements Total Assets Limited as to Use 1,245,984 1,14,859 15,125 28,325, ,756 27,991,655 $29,571,395 $1,474,615 $28,96,78 FIXED ASSETS Fixed Assets Owner's Rep Costs Less: Accumulated Depreciation Total Fixed Assets 58,365,882 44,348,16 14,17,776 26,439 56,491 (3,52) (18,691,327) (17,312,556) (1,378,771) $39,7,994 $27,92,41 $12,68,953 OTHER ASSETS Long-term Investments Property Held for Investment Marketing Costs Long-term Receivables Deferred Charges and Other Assets TOTAL ASSETS Total Other Assets 9,644,576 8,664,88 979,696 1,117, , ,338 37, 37, 647,654 19, ,365 $11,446,926 $9,735,527 $1,711,399 $ 85,813,55 $ 42,373,94 $ 43,44,411 Page 4 of 1

5 BALANCE SHEET (Continued) December 31, 217 LIABILITIES THIS YEAR LAST YEAR DIFFERENCE CURRENT LIABILITIES Current Maturities of LTD Accounts Payable: Trade 2,32,44 1,578,31 453,734 Accounts Payable: Construction Estimated Third Party Payor Settlements Accrued Expenses Salaries and Wages Vacation Interest Employee Benefits Plans Payroll Taxes and Other Deferred Revenue Rental Deposits Estimated Liability to Beneficiaries Total Current Liabilities 225, 225, 26,384 34,528 (44,144) 273,9 247,283 25,87 1,535,892 4,146 1,495,746 94,94 167,583 (72,643) 118,9 26,379 91,63 142,155 11,986 4, , 384, (139,) $4,926,514 $2,85,215 $2,76,299 OTHER LIABILITIES INTEREST RATE SWAP AGREEMENT $1,224,45 $1,125,497 $98,548 $ $1,297,413 ($1,297,413) LONG-TERM LIABILITIES Bonds Payable 66,25,63 23,184,14 42,841,589 Bond Premium Less: Current Portion of LTD Lease Payable 1,533 2,138 (65) Total Long-Term Liabilities $66,27,136 $23,186,152 $42,84,984 TOTAL LIABILITIES $72,177,695 $28,459,277 $43,718,418 NET ASSETS Current Earnings Fund Balance: Unrestricted Fund Balance: Temp/Perm Restricted Total Net Assets (293,321) 253,65 (546,386) 13,18,65 12,794, ,16 91, ,253 44,273 $13,635,81 $13,913,817 ($278,7) TOTAL LIABILITIES AND NET ASSETS $85,813,55 $42,373,94 $43,44,411 Page 5 of 1

6 Income Statement For the Six Month Period Ending December 31, 217 This Year Last Year Variance Actual Budget Actual Act v. Bud Act v. LY REVENUES Room and Bed Revenue 4,75,756 4,942,66 4,346,566 (191,94) 44,19 Ancillary Service Revenue 1,712,935 2,152,446 1,489,873 (439,511) 223,62 Apartment Revenues 3,338,584 3,35,24 2,57,42 33,56 831,182 Total Service Revenues $9,82,275 $1,13,13 $8,343,841 (327,855) 1,458,434 Contractual Allowances 1,576,84 1,973,46 1,43,691 (396,62) 173,149 Net Service Revenues $8,225,435 $8,156,67 $6,94,15 68,765 1,285,285 Other Operating Revenues 4,36 38,816 44,688 1,22 (4,652) Total Net Revenues $8,265,471 $8,195,486 $6,984,838 69,985 1,28,633 OPERATING EXPENSES Salaries and Benefits 5,26,699 5,68,969 4,17, ,73 1,9,13 Supplies 862, , ,465 73, ,413 Travel and Education 46,626 47,92 56,95 (466) (9,469) Repairs and Maintenance 148,11 12,34 116,446 27,761 31,655 Administrative Expenses 486,63 237, , , ,65 Other Expenses 345, ,52 324,85 (3,156) 21,261 Utilities 196,61 194, ,262 2,177 23,339 Subtotal $7,346,854 $6,86,932 $5,793, ,922 1,553,367 Net Revenue Less Controllable Expenses 918,617 1,388,554 1,191,351 (469,937) (272,734) Insurance 1,96 96,654 94,789 3,442 5,37 Taxes 212, ,39 157,521 (6,98) 54,771 Depreciation 932,644 94, ,28 27, ,364 Bad Debt 4,365 4,365 Interest 93,457 73, , , ,34 Amortization 25,2 3,263 (25,2) (3,263) Total Operating Expenses $2,152,854 $1,975,742 $1,28,6 177, ,848 NET REVENUE FROM OPERATIONS ($1,234,237) ($587,188) ($88,655) (647,49) (1,145,582) Other Non Operating Revenue 698, , ,72 562,26 356,998 NET INCOME (LOSS) ($535,519) ($45,496) $253,65 (85,23) (788,584) Page 6 of 1

7 Statement of Cash Flows of the General Fund For the Six Month Period Ending December 31, 217 OPERATING ACTIVITIES & NON OPERATING GAINS AND LOSSES: Excess of Revenues & Gains Over Expenses and Losses Adjustments to Reconcile to Ne Cash Provided by Operating Activities: Depreciation Amortization (Gains) Losses on Disposal of Assets Increase/(Decrease) in Cash from Changes in Current Assets & Liabilities: Resident Accounts Receivable, Net Other Receivable Supplies Inventory, at Cost Prepaid Expenses and Other Current Maturities of LT Debt Accounts Payable Accrued Salaries and Wages Accrued Vacation Payable Accrued Interest Payable Accrued Employee Benefits Plans Accrued Payroll Taxes and Other Rental Deposits Estimated Liability to Beneficiaries Net Cash Provided by Operation Activities and Non-Operating Gains and Losses INVESTING ACTIVITIES Additions of Property, Plant & Equipment Additions to Construction in Progress (Increase)/Decrease in Assets Whose Use is Limited (Increase)/Decrease in Investment in Caring Communities (Increase)/Decrease in Investments and Other (Increase)/Decrease in Sales/Marketing Costs for Pre-Sales Net Cash Provided by Investing Activities (535,519) 932,978 (5,284) (1,12,88) (25,431) 39,173 (1,191,1) 76,378 88,658 82,33 21,17 (5,27) ($1,533,699) (164,572) (5,855,997) 7,326,64 (31,211) (696,89) (148,424) $43,347 FINANCING ACTIVITIES Long Term Debt Increases (Decreases) Other Investments Other Liabilities Restricted Donations & Grants, Net Equity Transfers, Intracompany Net Cash Provided in Financing Activities (15,73) 17,848 $2,145 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($1,11,27) Rounding (1) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF PERIOD $2,415,966 $1,314,758 Page 7 of 1

8 2a Liquidity Covenant: Days Cash on Hand For the Fiscal Quarter Ending December 31, 217 Reporting Requirement Tested semi-annually on December 31th (based on interim, unaudited and internally prepared financial statements) and June 3th (based on audited financial statements) commencing June 3, 217. Covenant Definition "Days Cash on Hand" shall mean the amount determined by dividing (1) the Cash and Liquid Investments of the Obligated Group as of a particular date by (2) the quotient derived by dividing (a) the Obligated Group's total operating expenses (less depreciation and amortization and other noncash items, including, without limitation, losses on refinancing of debt) for the most recent preceding Fiscal Year for which audited financial statements have been delivered under the Master Indenture by (b) the number of days in such Fiscal Year. Covenant Requirement Each Obligated Group Member is required to conduct its business so that on each Testing Date the Obligated Group will have not less than 15 Days Cash on Hand. Calculation Unrestricted Cash and Investments, including: Cash and Cash Equivalents $ 1,314,758 Liquid Investment Balances (includes Board Restricted Funds) 9,91,586 Less: Unrealized (Gain)/Loss on Investment (429,17) Less: Temp/Perm Restricted Total Unrestricted Cash and Investments (1) (91,526) 9,885,81 Annual Operating Expenses (including interest and fees) $ 16,264,835 Excluding: Depreciation (1,531,663) Amortization (612,596) Quarterly Cash Operating Expenses (a) 14,12,576 Number of Days (b) 365 Daily Operating Expenses (2) 38,687 Liquidity Covenant: Days Cash on Hand 256 Covenant 15 Difference 16 Page 8 of 1

9 2b Rate Covenant: Debt Service Coverage Ratio Reporting Requirement For the Fiscal Quarter Ending December 31, 217 Tested annually within 135 days of the end of the fiscal year (June 3) as well as reported quarterly for each fiscal quarter of each year. Covenant Definition Income Available for Debt Service divided by Annual Debt Service; with "Income Available for Debt Service" defined as, the excess of revenues over expenses for any such period, to which will be added depreciation, amortization and interest, provided that no such determination will include any gain or loss resulting from: (i) the extinguishment of Indebtedness; (ii) any disposition of capital assets no made in the ordinary course of business; (iii) any gain/loss resulting from changes in the valuation of indebtedness or investment securities; (iv) changes in accounting principles; (v) any other extraordinary gains or losses; (vi) Initial Entrance Fees; or (vii) any other non-cash revenue or expense item. Revenues will include: resident service revenues, other operating revenues, nonoperating revenues or contributions, entrance fees received less entrance fees amortized and less entrance fees refunded to residents. "Annual Debt Services" is defined as for each fiscal year, the aggregate amount of principal and interest scheduled to become due and sinking fund paymens required to be paid in the fascal year on all long-term indebtedness, less any amounts on irrevocable deposit in escrow to be applied during that fiscal year to pay principal or interest. Calculation Income Available for Debt Service Change in Net Assets (Deficit) $ (535,519) Deduct (input amounts as negatives): Amortization of deferred revenue from entrance fees $ - Unrealized Gains $ (429,17) Gain on Swap termination $ - Gain on sale of assets $ - Add (input amounts as positives): Depreciation $ 932,644 Amortization $ - Interest Expense $ 93,457 Turnover Entrance Fees received, net of refunds $ - Unrealized Losses $ - Income Available for Debt Service $ 871,565 Debt Service $ 359,591 Debt Service Coverage Ratio 2.4 Covenant 1.2 Difference 1.2 Page 9 of 1

10 3 Occupancy Levels for the Project The table below provides occupancy by level of care for both the existing and proposed units at Immanuel Lutheran Communities. For the quarter October 1-December 31, 217 Beg. of quarter occupied units Move-ins Move-outs & transfers End of quarter occupied units Available units Occupancy percentage Budget Existing: Existing Independent/ Assisted Living % 12 Skilled Nursing * 81% 95 New: Independent Living (The Villas) Memory Care (The Lodge) n/a n/a n/a n/a n/a n/a % 2 Total Occupied Units % 217 * Number of available beds reduced from 117 due to Phase 3B construction. Page 1 of 1