1. I am the duly appointed President, Chief Financial Officer or Administrator of Borrower;

Transcription

1 COVENANT COMPLIANCE CERTIFICATE For the period ending June 30,2013 Pursuant to the Term Loan Agreement dated June 27, 2012 (the "Agreement") between SSM Health Care Corporation (the "Borrower") and Bank of America, N.A., (the "Bank"), the undersigned hereby certifies as follows. Unless otherwise defined herein, the terms used in this Certificate have the meaning(s) assigned to it/them in the Agreement. 1. I am the duly appointed President, Chief Financial Officer or Administrator of Borrower; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision a detailed review of the transactions and condition of the Borrower during the accounting period covered by the financial statements being furnished concurrently with this Ce1tificate; 3. The Borrower is in full compliance with all terms, conditions, covenants and provisions of the Agreement, except as follows: 4. The Borrower reports its compliance with the financial covenants contained in the Agreement as follows: Covenant: Required Measurement Actual Threshold Date Value Days Cash on Hand Ratio >75 days 6/ Each of the representations contained in the Agreement are correct as of this date. 6. The financial statements of Borrower as of June 30, 2013, and for the fiscal quarter then ended, present fairly the financial condition of Borrower and the results of its operations as of the dates of such statements and for the fiscal periods then ended, and since the date of the latest of such statements there has been no material adverse change in its financial position or its operations. 7. No Event of Default has occurred and Bon ower is not aware of any facts which might result in an Event of Default. Dated: August 26, Borrower: SSM Health Care Corporation By: Its: Treasurer

2 For the Quarter/Year ended June 30, 2013 ("Statement Date") SCHEDULE 1 to the Compliance Certificate I. Section 7.19(a) - Historical Debt Service Coverage Ratio A. Income Available for Debt Service for the twelve month period ending on the Statement Date: B. Debt Service Requirements on Funded Indebtedness for the twelve month period ending on the Statement Date: C. Debt Service Coverage Ratio (Line II.A.9/ Line II.B): $344,852 $87, to 1 Measured quarterly Minimum required: 1.1 to 1 II. Section 7.19(b) - Days Cash on Hand Ratio. A. Aggregate Cash of the Obligated Group at the Statement Date: B. Total Operating Expenses for the 12 month period ending at the Statement Date: C. Days Cash (Line II.A. * 365/ Line II.B): $1,459,839 2,903, to 1 Measured on the second fiscal quarter and fourth fiscal quarter. Minimum required: 75 to 1 8/20/2013

3 COVENANT COMPLIANCE CERTIFICATE For the period ending June 30, 2013 Pursuant to the Standby Bond Purchase Agreement dated May 1, 2008 (the" Agreement") between SSM Health Care Corporation (the "Borrower") and JPMorgan Chase Bank, N A., (the "Bank"), the undersigned hereby certifies as follows. Unless otherwise defined herein, the terms used in th is Certificate have the meaning(s) assigned to it/them in the Agreement. I. I am the duly appointed President, Chief Financial Officer or Administrator of Borrower; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision a detailed review of the transactions and condition of the Borrower during the accounting penod covered by the financial statements being furnished concurrently with this Certificate; 3. The Borrower is in full compliance with all terms, conditions, covenants and provisions of the Agreement, except as fo llows: 4 The Borrower reports its compliance with the financial covenants contained in the Agreement as follows Covenant: Required Measurement Date Actual Value Threshold Historical Maximum Annual Debt ::::!.!Ox Quarterly at 6/30/ Service Coverage Ratio (Quarterly Rolling) Maintenance ofunenhanced Rating BBB- I Baa3 At all times AA- 5. Each of the representations contained in the Agreement are correct as of this date 6. The financial statements of Borrower as of June 30, 2013, and for the fiscal year then ended, present fairly the fi nancial condition of Borrower and the results of its operations as of the dates of such statements and for the fiscal periods then ended, and since the date of the latest of such statements there has been no material adverse change in its financial position or its operations. 7. No Event o f Default has occurred and Borrower is not aware of any facts which might result in an Event of Default. Dated: _ 8/26/1 3 _ Its: Treasurer 8/20/2013

4 SSJ\1 Health Care Corporation Bond Issue Series 2005 D-4 Reimbursement Agreement as of May I, 2008, Article VI, Section 7.25 Debt Service Coverage Ratio Reconciliation of Debt Service Coverage Ratio dated June 30, 2013: Value A. Revenues (Including Non- 25 1,302,000 operating income) in excess of expenses C. Plus: Interest 41,357,000 D. Plus: Depreciation 161,886,000 E. Plus: Amortization - F. Plus: Extraordinary Expenses G. Plus/Minus Unrealized Losses (!09,685,000) (Gains) On Investments H. Any Other Items per the (8,000) Definition Divided by I. Maximum Annual Debt Service 87,808,000 (MADS) J. Historical Maximum Annual 3.9 Debt Service Coverage K. Covenant Level ~!.l Ox Compliance (Yes or No) Yes 8/20/2013

5 Historical Maximum Annual Debt Service Coverage Income available for Debt Service Annual Debt Service Pursuant to the Reimbursement Agreements between SSM Health Care Corporation and JP Morgan Chase Bank, N.A. Dated as of May 15, 2009 June 30, 2013 (Dollars in Thousands) $344,852 $87, Historical Debt Service Coverage Ratio >= to 1 Days Cash on Hand Ratio. Aggregate Cash of the Obligated Group at the Statement Date: Total Operating Expenses for the 12 month period ending at the Statement Date: $1,459,839 2,903,642 Minimum required: Days Cash (A. * 365 I Line B): 184 to 1 75 to 1 Utilization Statistics for the most recent fiscal year: Licensed Beds Staffed Beds Admissions* Patient Days* Average Length of Stay (Days) Percentage occupancy** Emergency Room visits, net Outpatient Clinic Visits 4,188 3, , , % 605,475 1,339,674 * Excludes newborns, including skilled nursing Of beds in service Percentage of Gross Revenues by payor class for most recent fiscal year: Medicare Medicaid Managed Care Other 34% 12% 44% 10% 8/20/2013

6 APPENDIX III SSM HEALTH CARE CORPORATION COMPLIANCE CERTIFICATE To: JPMorgan Chase Bank, N.A. This Compliance Certificate is furnished to JPMorgan Chase Bank, N.A. (the "Bank") pursuant to that certain Reimbursement Agreement dated as of May 1, 2010 (the "Reimbursement Agreement") between SSM Health Care Corporation (the "Corporation"), as Obligated Group Agent on behalf of itself and each Member of the Obligated Group and the Bank. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected Treasurer ofthe Corporation; 2. I have reviewed the terms of the Reimbursement Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Corporation and its Subsidiaries and the Credit Group during the accounting period covered by the attached financial statements; 3. To the best of the knowledge of the undersigned, each Member of the Obligated Group and each member of the Credit Group has kept, observed, performed and fulfilled each and every covenant, provision and condition of the Reimbursement Agreement, the Bond Indenture, the Loan Agreement and the other Transactional Documents; 4. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below; 5. The financial statements required by Section 5.1 of the Reimbursement Agreement and being furnished to you concurrently with this Compliance Certificate are true, correct and complete as of the date and for the periods covered thereby; and 6. The Schedule I hereto sets forth financial data and computations evidencing the Credit Group's compliance with certain covenants of the Reimbursement Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Reimbursement Agreement. i:\123\treasury\compliance\quarterly\2013\q2\q22013 jpmorgan 2010d certificate.docx

7 Described below are the exceptions, if any, to paragraph 4 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Corporation has taken, is taking, or proposes to take with respect to each such condition or event: The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this 26th day of August SSM H EALTH CARE CORPORATION By~z~~ Title: Sr. VP - Finance/Treasurer i:\123\treasury\compliance\quarterly\2013\q2\q22013 jpmorgan 2010d certificate.docx

8 SCHEDULE 1 TO COMPLIANCE CERTIFICATE SSM HEALTH CARE CORPORATION COMPLIANCE CALCULATIONS FOR REIMBURSEMENT AGREEMENT DATED AS OF MAY 1, 2010 CALCULATIONS AS OF JUNE 30,2013 A. Historical Debt Service Coverage Ratio ofthe Credit Group (Section 5.16(a)) 1. Income Available for Debt Service (as defined in the Master Indenture) for the Credit Group 2. Debt Service Requirements on Funded Indebtedness (as Defined in the Master Indenture) for the Credit Group 3. Ratio of Line AI to Line A2 4. Line A3 must be greater than or equal to $344,852 $ 87, : : The Credit Group is in compliance (circle yes or no) B. Days Cash on Hand Ratio of the Credit Group (Section 5.16(b)) 1. Total cash, cash equivalents and marketable securities ofthe Credit Group (the Corporation (A) may include cash, cash equivalents and marketable securities constituting Boarddesignated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Bank, for the sole or primary purpose of meeting the covenant set forth in Section 5.26(b) of the Reimbursement Agreement and (ii) cash of the Credit Group which has been Posted as collateral under any Swap Contract) Product ofline Bl and Line B2 4. Total operating expense of the Credit Group (excluding depreciation amortization, non-cash expenses relating to uncollectible accounts and expenses paid or payable from 1,459, ,841,235 2,903,642 i:\123\treasury\compliance\quarterly\2013\q2\q22013 jpmorgan 2010d certificate.docx

9 restricted funds) incurred during the 12-month period ending on such date of calculation 5. Ratio of Line B3 to Line B4 6. Line B5 must be greater than or equal to 184 to 1 75 days 7. The Credit Group is in compliance (circle yes or no) i:\123\treasury\compliance\quarterly\2013\q2\q22013 jpmorgan 2010d certificate.docx

10 SSM HEALTH CARE CREDIT GROUP SERIES 2005 STANDBY BOND PURCHASE AGREEMENT OFFICER'S CERTIFICATE The attached document constitutes the form of quarterly Officer's Certificate contained in the Standby Bond Purchase Agreement. i:\ 123\treasury\compl iance\quarterly\20 13\q I \q citibank 2005sbpa certificate. doc

11 OFFICER'S CERTIFICATE Citibank N.A. 2 nd Floor 399 Greenwich Street New York, NY Attn: Manager Credit and Financial Products Re: Officer's Certificate for Fiscal Quarter Ending June 30, 2013 Ladies and Gentlemen: This certificate is delivered pursuant to the requirements of Article VI of the Standby Bond Insurance Agreement dated as of July 1, 2005 (the "Agreement") between SSM Health Care Corporation and Citibank N.A. Simultaneous to the provision of this Certificate, SSM Health Care Corporation hereby provides unaudited financial statements of the Borrower including the balance sheet as of the end of the Second Quarter and related statements of revenues, expenses and cash flows and changes in fund balances, compared to the preceding Fiscal Year's Quarter. The undersigned hereby certifies on behalf of the Borrower as follows: (a) (b) Under my supervision, the Borrower has made a review of its activities during the preceding annual period for the purpose of determining whether or not the Borrower has complied with all of the terms, provisions and conditions of this Agreement and the Related Documents, and To the best of my knowledge, the Borrower is not in Default in the performance or observance of any of the terms, covenants, provisions or conditions of this Agreement or any of the Related Documents, or if the Borrower shall be in Default, such certificate shall specify each such Default, the nature and status thereof and any remedial steps taken or proposed to correct each such Default. Dated as of August 26, 2013 SSM HEALTH CARE CORPORATION, as Obligated Group Agent By: Its: /Kris A. z?mmev Treasurer i:\123\treasury\compli ance\quarterly\20 13\q I \q citibank 2005sbpa certificate.doc

12 For the Quarter/Year ended June 30, 2013 ("Statement Date") SCHEDULE 1 to the Compliance Certificate I. Section Historical Debt Service Coverage Ratio A. Income Available for Debt Service for the twelve month period ending on the Statement Date: B. Debt Service Requirements on Funded Indebtedness for the twelve month period ending on the Statement Date: C. Debt Service Coverage Ratio (Line II.A.9 / Line II.B) : $344,852 $87, to 1 Measured quarterly Minimum required: 1.25 to 1 II. Section Days Cash on Hand Ratio. A. Aggregate Cash of the Obligated Group at the Statement Date: B. Total Operating Expenses for the 12 month period ending at the Statement Date: C. Days Cash (Line II.A. * 365/ Line II.B): $1,459,839 2,903, to 1 Measured on the second fiscal quarter and fourth fiscal quarter. Minimum required: 75 to 1 8/20/2013

13 OFFICER'S CERTIFICATE Citibank N.A. 2nd Floor 399 Greenwich Street New York, NY Attn: Manager Credit and Financial Products Re: Officer's Certificate for Fiscal Quarter Ending June 30, 2013 Ladies and Gentlemen: This Compliance Certificate is furnished pursuant to that certain Libor Rate Loan Agreement dated July 26, 2012, (as amended, modified, renewed or extended from time to time, the "Agreement") among CITIBANK, N.A. (the "Initial Lender"), the HEALTH AND EDUCATIONAL FACILITIES AUTHORITY OF THE STATE OF MISSOURI, a body politic and corporate and public instrumentality organized and existing under the laws of the State of Missouri (the "Authority"), SSM HEALTH CARE CORPORATION, a Missouri nonprofit corporation (the "Borrower") for itself as Borrower and as Obligated Group Agent on behalf of the Obligated Group, THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as bond trustee (the "Trustee") and CITIBANK, N.A., as agent for the Lenders (the "Agent"), and for itself as Initial Lender (the "Initial Lender") and the other Lenders from time to time a party thereto. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the Treasurer of the Borrower. 2. This Compliance Certificate is provided with respect to the calendar quarter ending on June 30, 2013 (the "Relevant Period"). 3. Under my supervision, the Borrower has made a review of its activities during the preceding Fiscal Year for the purpose of determining whether or not the Borrower has complied with all of the terms, provisions, covenants and conditions of this Agreement and the Related Documents, and to the best of my knowledge the Borrower and each Member has kept, observed, performed and fulfilled each term, provision, covenant and condition and (except as set forth in paragraph 4 below) is not in Default in the performance or observance of any of the terms, covenants, provisions or conditions of this Agreement or any of the other Related Documents; and 4. I have no knowledge of the existence of any condition or event which constitutes a Default during or at the end of the Relevant Period or as of the date of this Compliance Certificate, except as set forth below: I:\123\TREASURY\Compliance\Quarterlv\201 3\Q2\Q22013 Citibank- Exhibit B 2012 Compliance Certificate.docx

14 The following Defaults exist, and with respect to each such Default I have described in detail the nature of such Default, the period of its existence, the status thereof and the action which the Borrower has taken, is taking or proposes to take to correct or remedy such Default: NONE 5. In accordance with Section 5.02(c) of the Agreement, I certify on behalf of the Borrower that the Borrower is in compliance with the financial covenants in Section 5.16 of the Agreement required to be satisfied as of the end of the Relevant Period, and specifically that as of June 30, 2013, for the Relevant Period: (a) Pursuant to Section 5.16(a), the Historical Debt Service Coverage Ratio 3.93, for the 12-month period then ended June 30, Pursuant to Section 5.16(b), the Days' Cash on Hand Ratio is 184 days as of the last day of such Fiscal Quarter. (b) Annex A attached hereto sets forth financial data and computations evidencing the Borrower's compliance with the above covenants of the Agreement, all of which data and computations are true, complete and correct. The foregoing certifications, together with any financial data and computations provided herewith, are made and delivered this 26th day of August, SS~H~ L~ CARE CORPORATION By ~~~ Name KrisA. Zimmer Title Treasurer I:\123\TREASURY\Compliance\Quarterlv\2013\Q2\Q22013 Citibank- Exhibit B 2012 Compliance Certificate.docx

15 For the Quarter/Year ended June 30, 2013 ("Statement Date") Annex A to the Compliance Certificate I. Section 5.16(a) - Historical Debt Service Coverage Ratio A. Income Available for Debt Service for the twelve month period ending on the Statement Date: B. Debt Service Requirements on Funded Indebtedness for the twelve month period ending on the Statement Date: C. Debt Service Coverage Ratio (Line II.A.9 I Line II.B): $344,852 $87, to 1 Measured quarterly Minimum required: 1.1 to 1 II. Section 5.16(b)- Days Cash on Hand Ratio. A. Aggregate Cash of the Obligated Group at the Statement Date: B. Total Operating Expenses for the 12 month period ending at the Statement Date: C. Days Cash (Line II.A. * 365 I Line II. B): $1,459,839 2,903, to 1 Measured on the second fiscal quarter and fourth fiscal quarter. Minimum required: 75 to

16 SSM HEALTH CARE CREDIT GROUP SERIES 2005 C & D INSURANCE AGREEMENT OFFICER'S CERTIFICATE The attached document constitutes the form of annual Officer's Certificate contained in the Series 2005 C & D Insurance Agreement.

17 Financial Security Assurance, Inc. 125 Park Avenue New York, New York Attn: Risk Management OFFICER'S CERTIFICATE Re: Officer's Certificate for First Six Months of Fiscal Year Ending December 31, 2013 Ladies and Gentlemen: This certificate is delivered pursuant to the requirements of the Insurance Agreement dated as of July 1, 2005 (the "Insurance Agreement") between SSM Health Care Corporation and Financial Security Assurance, Inc. Certain terms used herein have the meanings assigned in the Insurance Agreement and the Master Indenture (as defined in the Insurance Agreement). The undersigned hereby certifies on behalf of the Credit Group as follows: (a) The senior long-term indebtedness of the Parent or the Obligated Group is rated AA- by Standard & Poor's, AA- by Fitch. First Six Months Of Fiscal Half (b) Based upon the most recent Unaudited Financial Statements of SSM Health Care Consolidated Financial Statements with additional information for the SSM Health Care Credit Group, Unrestricted Cash and Investments for the Credit Group were equal to $1,459,839, Operating Expenses for the Credit Group were equal to $1,484,619 and Days Cash on Hand as of the last day of the Second Fiscal Quarter was 178. (c) The Historical Debt Service Coverage Ratio of the Credit Group based upon the most recent unaudited Financial Statements of SSM Health Care Corporation Consolidated Financial Statements with additional information for the SSM Health Care Credit Group was 3.85 to 1.0. Dated as of August 26, 2013 SSM HEALTH CARE CORPORATION, as Obligated Group Agent By ~ ~/-)~ Kris A. Zimmer Its: Treasurer

18 Pursuant to the Insurance Agreements between SSM Health Care Corporation and Financial Security Assurance, Inc. Dated as of July 1, 2005 For the Fiscal Year Ended December 31,2013 (Dollars in Thousands) Unrestricted Cash & Investments, Operating Expense and Days Cash on Hand Unrestricted Cash & Investments Cash and cash equivalents Short-term investments Total Assets Whose Use Is Limited or Restricted Less: Temporarily restricted Permanently restricted Held by trustee: Project funds Debt service Self-insurance Rabbi Trust & Pension Rest Collateral held under swap agreements Collateral held under securities lending agreements Operating Expenses for calculation of FGIC/FSA Days Cash on Hand Total operating expenses per financial statements Less: Depreciation and amortization Other non-cash operating expenses Unrealized gains/losses-operating Loss on early extingu ishment of debt Impairment losses Total Days Cash on Hand Unrestricted Cash & Investments Divided by: Operating Expenses for calculation of FGIC/FSA Days Cash on Hand Days $ 5,019 91,470 1,909,214 (268} (7,722} (15,937) (167,269) (113,390) (241,278) $ 1,459,839 $ 1,568,248 (83,032) 154 (751) $ 1,484,619 $ 1,459,839 $ 1,484, $ 8,202 lzz ~~ Conclusion: The Days Cash on Hand is greater than 65, therefore no action is required by the Credit Group. Historical Debt Service Coverage Ratto of the Credit Group: Income Available for Debt Service Debt Service Requirements on Funded Indebtedness $337,774 $87, Conclusion: This ratio exceeds the 1.00 minimum required by Section 4 of the Insurance Agreement, therefore no action is required by the Credit Group. No disposrtion of Property, and no consolidation, merger, addrtion or withdrawal of a Member if it would reduce the Historical Debt Service Coverage Ratio by more than 20% Capitalization Ratio of the Credit Group: Funded Indebtedness+ Short-Term Indebtedness of the Credit Group Funded Indebtedness + Short-Term Indebtedness +Total Unrestricted Net Assets of the Credit Group $1,326,795 $2,880, Conclusion: This ratio does not exceed the 0.60 maximum required by Section 2.4 of the Insurance Agreement, therefore no action is required by the Credit Group. 8/23/2013

19 APPENDIX III SSM HEALTH CARE CORPORATION COMPLIANCE CERTIFICATE To: PNC Bank, National Association This Compliance Certificate is furnished to PNC Bank, National Association (the "Ban/C') pursuant to that certain Reimbursement Agreement dated as of May 1, 2010 (the "Reimbursement Agreement") between SSM Health Care Corporation (the "Corporation"), as Obligated Group Agent on behalf of itself and each Member of the Obligated Group and the Bank. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected Treasurer ofthe Corporation; 2. I have reviewed the terms of the Reimbursement Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Corporation and its Subsidiaries and the Credit Group during the accounting period covered by the attached financial statements; 3. To the best of the knowledge of the undersigned, each Member of the Obligated Group and each member of the Credit Group has kept, observed, performed and fulfilled each and every covenant, provision and condition of the Reimbursement Agreement, the Bond Indenture, the Loan Agreement and the other Transactional Documents; 4. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date ofthis Compliance Certificate, except as set forth below; 5. The financial statements required by Section 5.1 of the Reimbursement Agreement and being furnished to you concurrently with this Compliance Certificate are true, correct and complete as of the date and for the periods covered thereby; and 6. The Schedule I hereto sets forth financial data and computations evidencing the Credit Group's compliance with certain covenants of the Reimbursement Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Reimbursement Agreement.

20 Described below are the exceptions, if any, to paragraph 4 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Corporation has taken, is taking, or proposes to take with respect to each such condition or event: The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this 26th day of August SSM HEALTH CARE CORPORATION By]qg~:~ Title: Sr. VP - Finance/Treasurer

21 SCHEDULE 1 To COMPLIANCE CERTIFICATE SSM IlEAL TH CARE CORPORATION COMPLIANCE CALCULATIONS FOR REIMBURSEMENT AGREEMENT DATED AS OF MAY 1, 2010 CALCULATIONS AS OF JUNE 30,2013 A. Historical Debt Service Coverage Ratio ofthe Credit Group (Section 5.16(a)) 1. Income Available for Debt Service (as defined in the Master Indenture) for the Credit Group 2. Debt Service Requirements on Funded Indebtedness (as Defined in the Master Indenture) for the Credit Group 3. Ratio of Line A 1 to Line A2 4. Line A3 must be greater than or equal to $344,852 $ 87, : : The Credit Group is in compliance (circle yes or no) B. Days Cash on Hand Ratio of the Credit Group (Section 5.16(b)) I. Total cash, cash equivalents and marketable securities of the Credit Group (the Corporation (A) may include cash, cash equivalents and marketable securities constituting Boarddesignated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Bank, for the sole or primary purpose of meeting the covenant set forth in Section 5.26(b) of the Reimbursement Agreement and (ii) cash of the Credit Group which has been Posted as collateral under any Swap Contract) Product of Line Bland Line B2 4. Total operating expense of the Credit Group (excluding depreciation amortization, non-cash expenses relating to uncollectible accounts and expenses paid or payable from 1,459, ,841,235 2,903,642

22 restricted funds) incurred during the 12-month period ending on such date of calculation 5. Ratio of Line B3 to Line B4 6. Line B5 must be greater than or equal to I 84 to 1 75 days 7. The Credit Group is in compliance (circle yes or no)

23 Pursuant to the Agreements between SSM Health Care Corporation and PNC Historical Maximum Annual Debt Service Coverage Income available for Debt Service Annual Debt Service June 30, 2013 (Dollars in Thousa-nds) $344,852 $87, Historical Debt Service Coverage Ratio>= 1.10 to 1 Days Cash on Hand Ratio. Aggregate Cash of the Obligated Group at the Statement Date: Total Operating Expenses for the 12 month period ending at the Statement Date: $1,459,839 2,903,642 Minimum required: Days Cash (A. 365 I Line B): 184 to 1 75 to 1 Utilization Statistics for the most recent fiscal year: Licensed Beds Staffed Beds Admissions* Patient Days* Average Length of Stay (Days) Percentage occupancy** Emergency Room visits, net Outpatient Clinic Visits 4,188 3, , , % 605,475 1,339,674 * Excludes newborns, including skilled nursing ** Of beds in service Percentage of Gross Revenues by payor class for most recent fiscal year: Medicare Medicaid Managed Care Other 34% 12% 44% 10% 8/20/2013

24 EXHIBIT A CERTIFICATE OF COMPLIANCE The Bank of New York Mellon Trust Company, N.A., as bond trustee (the "Bond Trustee") St Louis, Missouri Ladies and Gentlemen: Re: Certificate of Compliance for Fiscal Quarter Ending June 30, 2013 The undersigned is the Parent Representative as such term defined in the Bond Trust Indenture dated as of July 1, 2012 between the Authority and the Bond Trustee. This certificate is delivered pursuant to the requirements of Section 9.2 of the Loan Agreement dated as of July 1, 2012 between the Authority and SSM Health Care Corporation ("the Parent"). Certain terms used herein have the meanings assigned in the Bond Trust Indenture. The undersigned hereby certifies as follows on behalf of the Parent: (a) He has made or caused to be made a review of the activities of the Parent for the fiscal quarter ended June 30, 2013 and of the performance of the Parent of its obligations under the Loan Agreement; (b) He is familiar with the provisions of the Loan Agreement, the Master Indenture, the Tax Agreement and the Tax Use agreement (collectively, the "Borrowers documents") and, to the best of his knowledge, based on such review: (i) (ii) the Parent has fulfilled all of its obligations under the Borrower Documents, and there is no event of default, or any event which, with the passage of time or the giving of notice, would become an event of default under any Borrower Document. Dated as of ~8~1.:.;26:::.:.1..!..13~--- SSM Health Care Corporation By 2/..-d_ 1~ 7 Kris A. Ziffini r Its: Treasurer A-1

25 Pursuant to the Agreements between SSM Health Care Corporation and PNC Historical Maximum Annual Debt Service Coverage Income available for Debt Service Annual Debt Service June 30, 2013 (Dollars in Thousands) $344,852 $87, Historical Debt Service Coverage Ratio >= 1.10 to 1 Days Cash on Hand Ratio. Aggregate Cash of the Obligated Group at the Statement Date: Total Operating Expenses for the 12 month period ending at the Statement Date: $1,459,839 2,903,642 Minimum required: Days Cash (A. * 365 I Line B): 184 to 1 75 to 1 Utilization Statistics for the most recent fiscal year: Licensed Beds Staffed Beds Admissions* Patient Days* Average Length of Stay (Days) Percentage occupancy** Emergency Room visits, net Outpatient Clinic Visits 4,188 3, , , % 605,475 1,339,674 * Excludes newborns, including skilled nursing ** Of beds in service Percentage of Gross Revenues by payor class for most recent fiscal year: Medicare Medicaid Managed Care Other 34% 12% 44% 10% 8/20/2013

26 SSM HEALTH CARE CREDIT GROUP SERIES 2005 STANDBY BOND PURCHASE AGREEMENT OFFICER'S CERTIFICATE The attached document constitutes the form of quarterly Officer's Certificate contained in the Standby Bond Purchase Agreement.

27 OFFICER'S CERTIFICATE U.S. Bank, National Association Mail Location: SL-TW-11 Sl One US Bank Plaza ih & Washington St. Louis, MO Attn: Michael E. Dorn Re: Officer's Certificate for Fiscal Quarter Ending June 30, 2013 Ladies and Gentlemen: This certificate is delivered pursuant to the requirements of Article VI of the Standby Bond Insurance Agreement dated as of July 1, 2005 (the "Agreement") between SSM Health Care Corporation and U.S. Bank, NA. Simultaneous to the provision of this Certificate, SSM Health Care Corporation hereby provides unaudited financial statements of the Borrower including the balance sheet as of the end of the Second Quarter and related statements of revenues, expenses and cash flows and changes in fund balances, compared to the preceding Fiscal Year's Quarter. The undersigned hereby certifies on behalf of the Borrower as follows: (a) (b) Under my supervision, the Borrower has made a review of its activities during the preceding annual period for the purpose of determining whether or not the Borrower has complied with all of the terms, provisions and conditions of this Agreement and the Related Documents, and To the best of my knowledge, the Borrower is not in Default in the performance or observance of any of the terms, covenants, provisions or conditions of this Agreement or any of the Related Documents, or if the Borrower shall be in Default, such certificate shall specify each such Default, the nature and status thereof and any remedial steps taken or proposed to correct each such Default. Dated as of August 26, 2013 SSM HEALTH CARE CORPORATION, as Obligated Group Agent By: Its:!Sf(S A. Zimmer/ Treasurer

28 SBPA Compliance Historical Maximum Annual Debt Service Coverage Income available for Debt Service Annual Debt Service $344,852 $87,808 = 3.93!Sheet calculation based on Rolling 12 months I Minimum required: Historical Debt Service Coverage Ratio>= 1.10 to 1 Submit Annual budget for upcoming year as soon as available 8/20/2013

29 SSM HEALTH CARE ADDITIONAL BALANCE SHEET INFORMATION AS OF JUNE 30, 2013 {In thousands) CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,019 $ 11,539 $ 16,558 Short-tenn investments 91,470 32, ,800 Current portion of assets limited as to use 276,323 10, ,950 Net patient accotmts receivable 523,996 21, ,455 Other receivables 20,209 1,254 (4,729) 16,734 Inventories, prepaid expenses, and other 76,066 3, ,944 Estimated third-party payor settlements ,570 Total current assets 1,0 11,653 80,939 (4,581) 1,088,011 ASSETS LIMITED AS TO USE OR RESTRICTED - Excluding current portion 1,632, ,843 1,815,734 PROPERTY AND EQUJPMENT- Net 1,614,287 38,613 1,652,900 OTHER ASSETS: Deferred financing costs - net 6,518 6,518 Intangibles - net 44,261 3,590 47,851 Invesnnents in unconsolidated entities 325,215 II,500 (137,531) 199,184 Other 29, (22,621) 7,171 Total other assets ,409 (160,152) 260,724 TOTAL $ $ $ ( ) $ LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Revolving line of credit $ 37,000 $ 225 $ $ 37,225 Current portion of long-tenn debt 41, {534) 41,382 Accounts payable and accrued expenses 271,622 92,786 {4,266) 360,142 Payable tmder securities lending agreements 241,278 2, ,861 Estimated third-party payor settlements ,063 Total current liabilities 629,!90 96,283 (4,800) 720,673 LONG-TERM DEBT - Excluding current portion I,248,565 29,492 (22,620) 1,255,437 ESTIMATED SELF-INSURANCE OBLIGATIONS 65,334 10,698 76,032 OTHER LIABILITIES 1,110,368 13,253 1,123,621 Total liabilities 3,053, ,726 (27,420) 3,175,763 NET ASSETS Unrestricted: Noncontrolling interest in subsidiaries 16,953 2,818 19,771 SSM Health Care unrestricted net assets 1, ,670 (88,539) 1, ,554, ,488 (88,539) I,579,025 Temporarily restricted 36,846 42,394 (3 6,578) 42,662 Permanently restricted ,196 (12,196) Total net assets 1, (137,313) 1,641,606 TOTAL ~ ~ ~(j4 22a ~ ~17 ~0~ ~ (l(j~ 7J3l ~ HP J~2

30 SSM HEALTH CARE ADDITIONAL BALANCE SHEET INFORMATION AS OF JUNE 30, 2012 {In thousands~ CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL ASSETS CURRENT ASSETS Cash and cash equivalents $ (2,246) $ 23,620 $ 21,374 Short-tenn investments 58,651 19,934 78,585 Current portion of assets limited as to use 298,402 21, ,350 Net patient accounts receivable 484,331 21, ,045 Other receivables 17,884 4,235 (3,534) 18,585 Inventories, prepaid expenses, and other 67,662 7, ,103 Estimated third-party payor settlements ,864 Total current assets 939,548 98,642 (3,284) 1,034,906 ASSETS LIM1TED AS TO USE OR RESTRICTED- Excluding current portion 1,639, ,652 1,787,849 PROPERTY AND EQUIPMENT- Net 1,470, ,371 1,576,435 OTHER ASSETS: Deferred financi ng costs- net 7,582 7,582 Intangibles - net 22,532 3,623 26,155 Investments in unconsolidated entities 314,966 12,456 (133,232) 194,190 Other 29, (23,156) 6,303 Total other assets 374,278 16,340 (156,388) 234,230 TOTAL $ $ $ (]59 672) $ LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Revolving line of credit $ 37,000 $ 225 $ $ 37,225 Current portion oflong-tenn debt 35,393 1,219 (1,072) 35,540 Accounts payable and accrued expenses 262,905 86,798 (2,712) 346,991 Payable under securities lending agreements 239,294 2, ,996 Estimated third-party payor settlements 33, Total current liabilities 607,734 90,944 (3,784) 694,894 LONG-TERM DEBT- Excluding current portion 1,264,900 23,308 (22,873) 1,265,335 ESTIMATED SELF-INSURANCE OBLIGATIONS 75,724 10,434 86,158 OTHER LIABILITIES , ,923 Total liabilities 2,875, ,973 (26,657) 2,984,310 NET ASSETS: Unrestricted: Noncontrolling interest in subsidiaries 9,410 9,916 19,326 SSM Health Care unrestricted net assets I 489, ,323 (91,771) 1,575,709 1,498,567!88,239 (91,771) 1,595,035 Temporarily restricted 30,747 35,951 (30,414) 36,284 Pcnnanently restricted 17,779 10,842 (10,830) 17,791 Total net assets I (133,015) 1,649,110 TOTAL ~ ~mq~z ~ ~7Q QQ ~ ~ m22z;n ~ ~ ~~~ ~'Q

31 SSM HEALTH CARE CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL OPERATING REVENUES AND OTHER SUPPORT: Net patient service revenues 1,505,942 84,121 $ 1,590,063 Investment income (loss) 4,694 6,375 11,069 Other revenue 93, ,667 (100,288) 116,963 Net assets released from restrictions 148 1,450 1,598 Total operating revenues and other support 1,604, ,613 (100,288) 1,719,693 OPERATING EXPENSES: Salaries and benefits 821, ,929 (80,854) 934,327 Supplies 278,581 7, ,454 Professional fees and other 363,507 46,856 (16,398) 393,965 Interest 21, (445) 22,202 Depreciation and amortization 83,032 1,045 84,077 Total operating expenses 1,568, ,474 (97,697) 1,721,025 INCOME (LOSS) FROM OPERATIONS 36,120 (34,861) (2,591 ) (1,332) NONOPERATING GAINS AND (LOSSES): Investment income (Joss) 32, ,535 Other- net 558 (76) 482 Total nonoperating gains and (losses)- net 32, ,017 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 69,003 (34,727) (2,591) 31,685 CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 40,510 40,510 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES ~ lq~ ~1 ~ ~ (34 727) ~ (~ :i~1) ~ z~ l~:i

32 SSM HEALTH CARE ADDITIONAL INCOME STATEMENT INFORMATION FOR THE PERIOD ENDED JUNE 30, 2012 In thousands CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL OPERATING REVENUES AND OTHER SUPPORT: Net patient service revenues $1,452,295 $ 73,863 $ $ 1,526,158 Investment income (loss) 8,905 5,229 14,134 Other revenue 85, ,637 (85,986) 109,097 Net assets released from restrictions 46 1,341 1,387 Total operating revenues and other support 1,546, ,070 (85,986) 1,650,776 OPERATING EXPENSES: Salaries and benefits 770, ,852 (69,054) 876,602 Supplies 262,936 6, ,679 Professional fees and other 336,853 39,902 (12,202) 364,553 Interest 18, (483) 18,735 Depreciation and amortization 74, ,716 Bad debts Total operating expenses 1,464, ,906 (81,739) 1,605,322 INCOME (LOSS) FROM OPERATIONS 82,537 (32,836) (4,247) 45,454 NONOPERATING GAINS AND (LOSSES): Investment income (loss) 61, ,170 Other-net 1,489 (7) 1,482 Total nonoperating gains and (losses)- net 63, ,652 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 145,949 (32,596) (4,247) 109,106 CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS (7,896) (7,896) EXCESS (DEFICIT) OF REVENUES OVER EXPENSES $ J ~~ Q:i~ ~ (J2 :i~fll ~ (4 247) ~ JQJ 2JQ

33 SSM HEALTH CARE CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 82, (5,684) 77,223 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Pension related changes Depreciation and amortization 83,442 1,045 84,487 Impairment Costs Loss - Early extinguishment debt Bad debts 86,676 3,074 89,750 Restricted contributions (941) (941) Contributions/distributions to noncontrolling owners- net 1, ,846 Realized/unrealized gains and losses on investments- net (26,347) (6,300) (32,647) Equity in earnings - unconsolidated entities Change in valuation of investments in unconsolidated entities (9,800) 1,005 5,689 (3,106) Change in market value of interest rate swaps (40,510) (40,510) Gain (Loss) on disposal of assets (287) (28) (31 5) Changes in assets and liabilities: Short-term investments (12,683) 11,270 (1,413) Patient accounts receivable (104,839) (5,615) (110,454) Other receivables, inventories. prepaid expenses, and other (6,730) 6,423 (2,397) (2,704) Accounts payable, accrued expenses, and other liabilities 3,452 (4,290) 1, Estimated self-insurance obligations 1,699 1,659 3,358 Net cash provided by (used in) operating activities 58,302 7,826 (596) 65,532 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property and equipment- net (88,751) (115) (88,866) Net change in assets limited as to use or restricted 48,220 (6, 101 ) 42,119 Net change in other assets 1,400 1,400 Net cash provided by (used in) investing activities (39,131) (6.216) (45,347) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on long-term debt Payments on long-term debt (29,786) (682) 596 (29,872) Net change in revolving line of credit (430) (430) Debt issuance cost Distribution to noncntrt owners (1,782) (64) (1,846) Contributions from noncntrl owners Restricted contributions Net cash provided by (used in) financing activities (31,998) (31,207) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (12,827) 1,805 (11,022) CASH AND CASH EQUIVALENTS - Beginning of year 17,846 9,734 27,580 CASH AND CASH EQUIVALENTS- 6/30/13 5,019 11,539 16,558

34 SSM HEALTH CARE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED JUNE 30,2012 (In thousands CREDIT OTHER QBQY.e 5.t:!.!!.!! ELIMINATIONS GRAND TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 270,659 68,187 (13,590) 325,256 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Pension related changes (213,745) (213,745) Depreciation and amortization 75, ,441 Bad debts 65,416 3,702 69,118 Restricted contributions (19) (894) (913) Distributions to noncontrolling owners - net 1, ,884 Realized/unrealized gains and losses on investments -net (57,867) (5, 370) (63,237) Change in valuation of investments in unconsolidated entities (18,832) (1,016) 13,590 (6,258) Change in market value of interest rate swaps 7,896 7,896 Gain (Loss) on disposal of assets (21) Changes in assets and liabilities: Short-term investments 62,238 (29, 185) 33,053 Patient accounts receivable (132,748) (2,785) (135,533) Other receivables, inventories, prepaid expenses, and other 1,179 2,293 (1,983) 1,489 Accounts payable, accrued expenses, and other liabilities 26,164 12, ,267 Estimated self-insurance obligations 7,650 1,407 9,057 Net cash provided by (used in) operating activities 95,306 49,797 (1,280) 143,823 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property and equipment- net (140,556) (7,645) ( 148,201) Net change in assets limited as to use or restricted (33,047) 37,646 4,599 Net change in other assets (18,671) (66,361) (85,032) Net cash provided by (used in) investing activities (192,274) (36,360) (228,634) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in long-term debt 74,457 (1,365) 1,280 74,372 Proceeds from revolving line of credit - net 37, ,225 Distributions to noncontrolling owners - net (1,773) (111 ) (1,884) Restricted contributions Net cash provided by financing activities 109,703 (357) 1, ,626 NET INCREASE IN CASH AND CASH EQUIVALENTS 12,735 13,080 25,815 CASH AND CASH EQUIVALENTS - Beginning of year (14,981) 10,540 (4,441 ) CASH AND CASH EQUIVALENTS- 6/30/12 ~2.246) 23,620 21,374

35 SSM HEALTH CARE ADDITIONAL OPERATING STATS INFORMATION AS OF JUNE 30, 2013 BEDS LICENSED BEDS- TOTAL STAFFED BEDS- TOTAL ACUTE PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY SKILLED PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY OUTPATIENT SURGERIES OUTPATIENT VISITS EMERGENCY ROOM VISITS PERCENTAGE OCCUPANCY** CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL 4,188 4,188 3,543 3,543 77,924 77, , , ,228 69, ,271 31, , , , , % 67.8% PERCENTAGE OF GROSS REVENUES BY PAYOR MIX Medicare Medicaid Managed Care Other Total 34% 29% 33% 12% 5% 12% 43% 50% 46% 11 % 16% 9% 100% 100% 100% * Excludes newborns ** Of beds in service

36 SSM HEALTH CARE ADDITIONAL OPERATING STATS INFORMATION FOR THE PERIOD ENDED JUNE 30, 2012 BEDS LICENSED BEDS - TOTAL STAFFED BEDS- TOTAL ACUTE PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY SKILLED PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY OUTPATIENT SURGERIES OUTPATIENT VISITS EMERGENCY ROOM VISITS PERCENTAGE OCCUPANCY** CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL 4,005 4,005 3,387 3,387 75,769 75, , , ,451 67, ,496 29, , , , , % 0.0% % PERCENTAGE OF GROSS REVENUES BY PAYOR MIX Medicare Medicaid Managed Care Other Total 33% 21 % 33% 12% 5% 12% 46% 61% 46% 9% 13% 9% 100% 100% 100% * Excludes newborns ** Of beds in service

37 SSM HEALTH CARE ASSETS LIMITED AS TO USE OR RESTRICTED AS OF JUNE 30, 2013 (In thousands) CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL Board designated: Property and equipment $ 1,363,350 $ 117,158 $ $ 1,480,508 Other 113, ,390 Held by trustees: Project funds Bond funds 15,937 15,937 Self-insurance 167,269 19, ,407 Collateral held under swap agreements Collateral held under securities lending agreements 241,278 2, ,861 Total assets limited as to use 1,901, ,879 2,040,103 Temporarily restricted funds ,402 42,670 Permanently restricted funds 7,722 12,189 19,911 Total assets restricted as to use 7,990 54,591 62,581 Total assets limited as to use or restricted 1,909, ,470 2,102,684 Less: current portion (276,323) (10,627) (286,950) Noncurrent portion $ 1,632,891 $ 182,843 $ $ 1,815,734

38 SSM HEALTH CARE ASSETS LIMITED AS TO USE OR RESTRICTED AS OF JUNE 30, 2012 (In thousands) UNAUDITED CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL Board designated: Property and equipment $ 1,392,012 $ 100,949 $ $ 1,492,961 Other 100, ,501 Held by trustees: Project funds Bond funds 3,169 3,169 Self-insurance 162,642 20, ,798 Collateral held under swap agreements 32,700 32,700 Collateral held under securities lending agreements 239,294 2, ,996 Total assets limited as to use 1,930, ,807 2,054,125 Temporarily restricted funds ,951 36,284 Permanently restricted funds 6,948 10,842 17,790 Total assets restricted as to use 7,281 46,793 54,074 Total assets limited as to use or restricted 1,937, ,600 2, 108,199 Less: current portion (298,402) ~21,948) ~320, 350) Noncurrent portion $ 1,639,197 $ 148,652 $ $ 1,787,849

39 SSM HEALTH CARE ADDITIONAL INCOME STATEMENT INFORMATION PLAN FOR THE PERIOD ENDED JUNE 30, 2013!In thousands) PLAN PLAN PLAN PLAN CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL OPERATING REVENUES AND OTHER SUPPORT: Net patient service revenues $1,579,765 $ 84,420 $ (478) $ 1,663,707 Investment income (loss) 4,630 3,957 8,587 Other revenue 77, ,866 (91,755) 101,393 Net assets released from restrictions 41 1,160 1,201 Total operating revenues and other support 1,661, ,403 (92,233) 1,774,888 OPERATING EXPENSES: Salaries and benefits 832, ,274 (74,568) 944,257 Supplies 282,960 6, ,329 Professional fees and other 360,583 45,926 (16,245) 390,264 Interest 23, (438) 23,297 Depreciation and amortization 82, ,896 Bad debts Total operating expenses 1,581, ,846 (91,251) 1,730,090 INCOME (LOSS) FROM OPERATIONS 80,223 (34,443) (982) 44,798 NONOPERATING GAINS AND (LOSSES): Investment income (loss) 39, ,091 Other-net 516 (6) 510 Total nonoperating gains and (losses)- net 40, ,601 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 120,587 (34,206) (982) 85,399 CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS EXCESS (DEFICIT) OF REVENUES OVER EXPENSES ~ l 2Q,Qaz ~ ~~ 2Q!ll ~!;!~2l ~!l:i ~~~

40 SSM HEALTH CARE ADDITIONAL OPERATING STATS INFORMATION PLAN FOR THE PERIOD ENDED JUNE 30, 2013 BEDS LICENSED BEDS - TOTAL STAFFED BEDS - TOTAL PLAN CREDIT GROUP 4,099 3,497 PLAN OTHER ENTITIES PLAN PLAN ELIMINATIONS GRAND TOTAL 4,099 3,497 ACUTE PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY 80, , , , SKILLED PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY , , OUTPATIENT SURGERIES OUTPATIENT VISITS EMERGENCY ROOM VISITS 29, , ,047 29, , ,047 PERCENTAGE OCCUPANCY** 69.4% 69.4% * Excludes newborns ** Of beds in service

41 SSM HEALTH CARE ADDITIONAL INCOME STATEMENT INFORMATION FOR THE QUARTER ENDED JUNE 30, 2013 In thousands CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL OPERATING REVENUES AND OTHER SUPPORT: Net patient service revenues 760,449 42,778 $ 803,227 Investment income (loss) (1,135) 1, Other revenue 48,444 64,170 (50,534) 62,080 Net assets released from restrictions Total operating revenues and other support 807, ,509 (50,534) 866,837 OPERATING EXPENSES: Salaries and benefits 416,562 98,095 (40,474) 474,183 Supplies 141 '134 4, ,909 Professional fees and other 187,198 24,370 (8,892) 202,676 Interest 10, (222) 11,041 Depreciation and amortization 42, ,671 Bad debts Total operating expenses 797, ,109 (49,588) 876,480 INCOME (LOSS) FROM OPERATIONS 9,903 (18,600) (946) (9,643) NONOPERATING GAINS AND (LOSSES): Investment income (loss) (10,921) (252) (11 ' 173) Other- net 79 (43) 36 Total nonoperating gains and (losses)- net (10,842) (295) (1 1 '137) EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS (939) (18,895) (946) (20,780) CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 28,902 28,902 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES ~ G,Z f.l2~ ~ (18 8~:2) ~ (~ 4 fl) ~ a 122

42 SSM HEALTH CARE A DDITIONAL INCOME STATEMENT INFORMATION FOR THE QUARTER ENDED JUNE 30, 2012 CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL OPERATING REVENUES AND OTHER SUPPORT: Net patient service revenues 728,713 36,948 $ 765,661 Investment income (loss) (2,512) (2,299) (4,811) Other revenue 45,819 55,729 (39,396) 62,152 Net assets released from restrictions $ 29 $ 665 $ 694 Total operating revenues and other support 772,049 91,043 (39,396) 823,696 OPERATING EXPENSES: Salaries and benefits 385,807 87,522 (35,652) 437,677 Supplies 132,278 3, ,710 Professional fees and other 170,874 20,973 (7,657) 184,190 Interest 9, (237) 9,495 Depreciation and amortization 37, ,078 Bad debts $ 15 $ 15 Total operating expenses 736, ,645 (43,546) 805,165 INCOME (LOSS) FROM OPERATIONS 35,983 (21,602) 4,150 18,531 NONOPERATING GAINS AND (LOSSES): Investment income (loss) $ (17,690) $ (245) $ (17,935) Other - net $ 1,254 (1) $ 1,253 Total nonoperating gains and (losses)- net (16,436) (246) (16,682) EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS 19,547 (21,848) 4,150 1,849 CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS $ (26,022) $ $ (26,022) EXCESS (DEFICIT) OF REVENUES OVER EXPENSES ~!!;lm2l ~!2l!.l!l~l :R ~ l:iq :R!Z~ l Z~l

43 SSM HEALTH CARE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTER ENDED JUNE 30, 2013 CREDIT OTHER GROUP S!:ill.I!!i~ I MINATIQN~ GRAND TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 14,976 (1,191) (2,404) 11,381 Adjustments to reconcile change in net assets to net cash provided by operating activities: Pension related changes Depreciation and amortization 42, ,898 Impairment Costs Loss on early extinguishment of debt Bad debts 42,128 1,343 43,471 Restricted contribution s (395) (395) Distributions to noncontrolling owners - net Realized/unrealized gains and losses on investments- net 18,834 (944) 17,890 Equity in earnings- unconsolidated entities Change in valuation of investments in unconsolidated entities (4,935) (270) 2,407 (2,798) Change in market value of interest rate swaps (28,902) (28,902) Gain (Loss) on disposal of assets 44 (15) 29 Changes in assets and liabilities: Short-term investments (21,587) 2,585 (19,002) Patient accounts receivable (13,176) (1,713) (14,889) Other receivables, inventories, prepaid expenses, and other 4,057 2,115 (2,115) 4,057 Accounts payable, accrued expenses, and other liabilities (5,682) 1,202 1,516 (2,964) Estimated self-insurance obligations 2, ,857 Net cash provided by (used in) operating activities 50, (596) 54,383 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property and equipment- net (43,575) (85) (43,660) Net change in assets limited as to use or restricted 5,633 (4,365) 1,268 Net change in other assets 1,400 1,400 Net cash provided by (used in) investing activities (36,542) (4,450) (40,992) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in long-term debt Payments on revolving line of credit- net (23,952) (639) 596 (23,995) Debt issuance cost (430) (430) Debt issuance costs Distributions to noncontrolling owners - net (724) (26) (750) Distributions from noncontrolling owners - net Restricted contributions Net cash provided by (used in) financing activities (25,106) (270) 596 (24,780) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 10,697) (692) (11,389) CASH AND CASH EQUIVALENTS- Beginning of quarter 15,716 12,231 27,947 CASH AND CASH EQUIVALENTS- 06/30/13 5,019 11,539 16,558

44 SSM HEALTH CARE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTER ENDED JUNE 30, 2012 CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRANO TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 136,311 65,101 (4,290) 197,122 Adjustments to reconcile change in net assets to net cash provided by operating activities: Pension-related changes other than net periodic pension cost (213,745) (213,745) Depreciation and amortization 38, ,575 Loss on early extinguishment of debt Bad debts 26,359 1,500 29,859 Restricted contributions (19) (342) (361) Distributions to noncontrolling owners- net Realized/unrealized gains and losses on investments - net 26,340 2,766 31,106 Change in valuation of investments in unconsolidated entities (7,271) (295) 4,290 (3,276) Change in market value of interest rate swaps 26,022 26,022 Gain (Loss) on disposal of assets Changes in assets and liabilities: Short-term investments 4 9,020 (5,699) 43,321 Patient accounts receivable (34,549) 4,415 (30,134) Other receivables, inventories, prepa id expenses, and other (4,100) 301 (665) (4,464) Accounts payable, accrued expenses, and other liabilities 13,334 6,597 (476) 19,455 Estimated self-insurance obligations 3, ,515 Net cash provided by (used in) operating activities 64,456 75,621 (1,141) 136,936 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property and equipment- net (60,157) (7,636) (67,793) Net change in assets limited as to use or restricted (97,065) 10,029 (67,056) Net change in other assets (6,171) (66,361) (72,532) Net cash provided by (used in) investing activities (163,413) (63,968) (227,381) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in long-term debt 78,756 (1,184) 1,141 78,713 Payments on revolving line of credit- net Debt issuance costs Distributions to noncontrolling owners - net (734) (71 ) (805) Restricted contributions Net cash provided by (used in) financing activities 78,041 (666) 1,141 78,494 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (20,916) 10,965 (9,951 ) CASH AND CASH EQUIVALENTS- Beginning of quarter 18,670 12,655 31,325 CASH AND CASH EQUIVALENTS- 06/30/12 ~2. 246) 23,620 21,374

45 SSM HEALTH CARE ADDITIONAL OPERATING STATS INFORMATION FOR THE QUARTER ENDED JUNE 30,2013 BEDS LICENSED BEDS- TOTAL STAFFED BEDS -TOTAL ACUTE PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY SKILLED PATIENT SERVICES ADMISSIONS* PATIENT DAYS* AVERAGE LENGTH OF STAY OUTPATIENT SURGERIES OUTPATIENT VISITS EMERGENCY ROOM VISITS PERCENTAGE OCCUPANCY** CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL 4,366 4,366 3,641 3,641 39,151 39, , , ,912 34, ,957 15, , , , , % 64.9% PERCENTAGE OF GROSS REVENUES BY PAYOR MIX Medicare Medicaid Managed Care Other Total 34% 33% 33% 12% 5% 12% 42% 43% 46% 11% 19% 9% 100% 100% 100% * Excludes newborns ** Of beds in service

46 SSM HEALTH CARE ADDITIONAL OPERATING STATS INFORMATION FOR THE QUARTER ENDED JUNE 30, 2012 (In thousands) CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL BEDS LICENSED BEDS- TOTAL 4,005 4,005 STAFFED BEDS - TOTAL 3,387 3,387 ACUTE PATIENT SERVICES ADMISSIONS* 36,903 36,903 PATIENT DAYS* 173, ,313 AVERAGE LENGTH OF STAY 5 5 SKILLED PATIENT SERVICES ADMISSIONS* PATIENT DAYS* 33,710 33,710 AVERAGE LENGTH OF STAY OUTPATIENT SURGERIES 15,078 15,078 OUTPATIENT VISITS 322, ,352 EMERGENCY ROOM VISITS 141, ,276 PERCENTAGE OCCUPANCY** 67.2% 0.0% 0.0% 67.2% PERCENTAGE OF GROSS REVENUES BY PAYOR MIX Medicare 33% 23% 33% Medicaid 12% 5% 12% Managed Ca re 45% 58% 46% Other 10% 14% 9% Total 100% 100% 0% 100% * Excludes newborns ** Of beds in service

47 This document is dated August 20, SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS. Certain of the discussions included in the following Management Discussion and Analysis ("Analysis") may include certain forwardlooking statements which involve known and unknown risks and uncertainties inherent in the operation of health care operations. Actual actions or results may differ materially from those discussed in the Analysis. Specific factors that might cause such differences include, but are not limited to: competition from other health care providers, economic conditions in the communities SSM Health Care serves, state and federal regulation and the policies and practices of private insurers regarding payment for medical services. In particular, statements preceded by, followed by or that include the words "believes", "estimates", "expects", "anticipates", "plans", "intends", "scheduled", "projects" or other similar expressions constitute forwardlooking statements. SSM HEALTH CARE (SSMHC) Management Discussion and Analysis (M D&A) concerning the Consolidated Financial Statements for the Six Months ended June 30, 2013 HEALTH ~ \atiij~al Qua lit~ \\\a rd.\\\;tl"d.,...(1112,~~: cipil" ll l

48 SSMHC MD&A for the Period Ended June 30, 2013 Page 2 of 12 Table of Contents Report for the Period Ended June 30, 2013 Page I. Organization II. Mission Ill. Current Year Acquisitions IV. Overview v Operating Results VI Financial Position Tables: & 2012 Operating Results 2. Uninsured Patient Summary 3. Non-Operating Gains and (Losses) 4. Summary of Key Liquidity Ratios 5. Summary of Investment Income 6. Summary of Long Term Debt 7. Summary of Fair Value (Level 2) of Derivatives Append ices: 1. Key Operational Statistics 2. EBITDA Information 3. Investments & Liabilities Fair Value Summary

49 SSMHC MD&A for the Period Ended June 30, 2013 Page 3 of 12 I. Organization SSM Health Care is a centrally managed, multi-institutional health care system with its headquarters in St. Louis, Missouri. SSM Health Care is sponsored by the Franciscan Sisters of Mary. The health care activities of the congregation's sponsors date back to 1872 when the founder and four other sisters arrived in St. Louis from Germany, committed to serve the sick that were poor and to provide health care for all. SSM Health Care owns and operates 18 hospital locations and two long-term care centers in Missouri, Illinois, Oklahoma and Wisconsin. With over 7,000 affiliated physicians, 25,800 employees and 4,200 licensed beds, SSM Health Care provides a wide range of inpatient and outpatient services, including general acute, trauma, emergency, pediatrics, home health, hospice, residential and skilled nursing care. In addition, SSM Health Care manages one hospital and has affiliation agreements with 40 hospitals including minority ownership in five hospitals. Other minority interests include various forms of physician joint ventures, such as ambulatory surgery, imaging, rehab, and other diagnostic services, and co-management companies. SSM Health Care also owns an interest in Dean Health Insurance, Inc., which, through a wholly-owned subsidiary, operates a group model health maintenance organization throughout southern Wisconsin. II. Mission "Through our exceptional health care services, we reveal the healing presence of God." This thirteen-word statement was developed in 1999 with involvement and input from over 3,000 employees. The mission statement is intended to guide SSM Health Care's decisions and actions, and the achievement of "exceptional health care services" is measured by the top decile results in the areas of quality, safety, patient satisfaction, employee and physician commitment, operating margin and growth. For financial goals, "exceptional" is set based on goals established through the strategic, financial, and human resources planning process. Ill. Current Year Acquisitions Audrain Medical Center. SSMHC became the sole member of Audrain Medical Center (AMC) on April 1, AMC includes an 88 bed acute care hospital located in Mexico, Missouri, and 10 physician clinic locations in the service area. AMC and SSMHC's St. Mary's Hospital in Jefferson City, along with other activities under development, were restructured into the Mid-Missouri region to recognize the growing importance of that region. Dean Health System. On April 16, 2013, SSMHC and Dean Health System (DHS) announced a merger agreement whereby DHS will become part of SSMHC. The agreement was approved by DHS shareholders on May 21, 2013; it remains subject to regulatory approval. Regulatory approvals include but are not limited to the Wisconsin

50 SSMHC MD&A for the Period Ended June 30, 2013 Page 4 of 12 Office of the Commissioner of Insurance ("OCI"). As such the transaction is expected to close in early fall If completed as expected during the early fall of 2013, the integrated delivery network will allow for even better service to the health of people in south central Wisconsin. This acquisition is very significant and will increase the size and scope of SSMHC to nearly $5.0 billion in annual revenues, a 50% increase. DHS has been the long-time physician organization partner to SSMHC of Wisconsin, a relationship that dates back over 100 years. DHS is also the majority owner of Dean Health Plan (DHP) that serves approximately 300,000 covered lives as an HMO in South Central Wisconsin. Additionally, DHP owns Navitus, Inc. which is a pharmacy benefits management company that has nearly 3 million covered lives. SSMHC believes this acquisition will position the entire SSMHC organization to be able to provide integrated and aligned care delivery in terms of physician, hospital, and insured products in the future. IV. Overview This MD&A report is provided to give management's view of key factors underlying SSM Health Care's financial performance and position for the period ended June 30, Additionally, the report includes an update on capital and debt activities that have occurred in Unless otherwise stated, financial results are described in $000s and relate to the periods January 1- June 30, 2013 and The financial results related to the period January 1 - June 30, 2012 do not include the addition of new hospitals in Shawnee, Oklahoma, acquired 6/30/2012, and Mexico, Missouri, acquired 4/1/2013. For the period ending June 30, 2013, operating loss and excess revenue (before the change in market value of interest rate swaps) were $1.3 and $31.7 million, respectively. The amounts were lower than the same period in 2012 by $46.8 and $77.4 million, respectively. V Operating Results A. Operating Income: Overall, the System's operating loss of $1.3 million was $46.8 million below 2012 results. The key factors contributing to the decline were expenditures related to the opening of a replacement hospital in Mount Vernon, Illinois, reduced operating investment income, EPIC go-lives and non-recurring revenue recorded in Operating EBIDA totaled $104.9 million for the period ending 6/30/13. As reflected in Table 1, net patient service revenue (NPSR) was $63.9 million (4.2%) higher than the same period results in New hospital acquisitions (accounting for 3.2% of the increase in NPSR) combined with an increase in other operating revenue led to a 4.2% increase in total operating revenues over the same period in Operating expenses (including depreciation and amortization) increased by 7.2% over the same period in This increase is primarily attributed to the opening of a replacement hospital in Mount Vernon, Illinois, in January, 2013, and the acquisition of two new hospitals.

51 SSMHC MD&A for the Period Ended June 30, 2013 Page 5 of 12 Table & 2012 Operating Results 6 Months Ended 06/30/2013 Net Patient Service Revenues* $ 1,590,063 Operating Investment Income 11,069 Other Operating Revenues 118,561 Total Operating Revenues $ 1,719,693 Salaries & Employee Benefits $ 934,327 Supplies, Pro Fees, & Other 680,419 Depreciation, Amortization, & Interest 106,279 Total Operating Expenses $1,721,025 Operating Income ($1,332) Operating Margin (-0.1 %) 6 Months 2013 vs Ended Variance 06/30/2012 in Dollars $1,526,158 $63,905 14,134 (3,065) 110,483 8,078 $1,650,775 $68,918 $ 876,600 $57, ,270 46, ,828 $1,605,321 $115,704 $45,454 ($46,786) 2.8% 2013 vs Variance by Percentage 4.2% (21.7%) 7.3% 4.2% 6.6% 7.3% 12.5% 7.2% {102.9%) * NPSR includes bad debt expense in accordance with FASB Revenue Recognition Change. Table 2 reflects the total discounts provided for charity care and self-pay patients, and provision for bad debts (all stated in gross charges) for the periods ended June 30, 2013 and The figures do not include underpayment for Medicare and Medicaid services. The total discounts for charity and self-pay patients increased by $18.6 million (9.6%) over the same period in Additionally, SSMHC experienced a $20.5 million (29. 7%) increase in bad debt. The estimated costs for providing these services (using fully allocated costs) are $111.8 million and $97.7 million for the six months ending June 30, 2013 and The 2013 amount represents a 14.4% increase in charity care, self-pay and bad debt costs. The change in cost is attributed to the increased number of patients qualifying for charity care (uninsured and qualifying underinsured) and those choosing not to pay (bad debt). Table 2 - Uninsured Patient Summary $Change %Change Charity $110,550 $92,920 $17, % Self Pay Discount 101, ,455 1, % Bad Debt 89,611 69,081 20, % Total ~301,619 ~262,456 ~39, % % of Gross Revenue 6.2% 5.8% B. Non-Operating Gains and (Losses): For the period ended June 30, 2013, net nonoperating gains were $33.0 million, which was $30.6 million below 2012 results for the same period. This decrease is attributed to lower investment returns. The investment returns, including positive SWAPS mark-to-mark adjustments of $40.5 million, plus operating income results led to excess revenue of $72.2 million, a decrease of $29.0 million from the same period in 2012.

52 SSMHC MD&A for the Period Ended June 30, 2013 Page 6 of 12 Table 3- Non-Operating Gains and (Losses) Investment Income Other Non-operating Activities (Loss on debt extinguishment, discontinued operations, etc.) Total Non-operating gains and (losses) Excess of Revenues over Expenses before change in market value of interest rate SWAPs Excess Margin before SWAP adjustment SWAP Adjustments Excess of Revenues over Expenses Excess Margin 6 Months Ended 06/30/2013. $32, ,017 31, % $ Z % 6 Months 2013 vs vs Ended Variance in Variance by 06/30/2012 Dollars Percentage $62,170 ($29,635) (47.7%) (998) (67.4%) 63,650 (30,633) (48.1%) 109,104 (77,419) (71.0%) 6.4% (7.896) 48, % $ ($29 013\ (28.7%) 5.9% VI Financial Position A. Key Balance Sheet Ratios: While SSMHC's cash position grew by $28.0 million (1.8%) and remains strong, days cash on hand declined by 11 days (-5.8%) to 179 days at 6/30/13 due to the increase in average daily expenses of 7.6%. Major contributing factors include: + Continued strong operating EBIDA and investment income. + Incremental borrowing (described below) during the second half of Addition of new hospitals in Shawnee, Oklahoma, and Mexico, Missouri as well as physician practice acquisitions, a replacement hospital opening in Mount Vernon, Illinois, and two stand-alone emergency departments opening led to an increase in expenses which impacted the days cash on hand calculation. - Working capital contributions for acquired entities and funding new start-up operations including healthplexes contributed to the use of cash and lower Days Cash on Hand. - Increase in net accounts receivable at June 30, 2013 was $39.5 million (equivalent to 4.4 days cash on hand based on 2013 average daily expense). Activities that contributed to the increase are: NPSR was $63.9 million (4.2%) higher than previous year Continued implementations of EPIC clinical and billing modules throughout System locations. Consolidation of most patient billing service functions to St. Louis and Wisconsin. Other external factors such as RAC pre-payment review and Illinois Medicaid delays

53 SSMHC MD&A for the Period Ended June 30, 2013 Page 7 of 12 Table 4- Summary of Key Liquidity Ratios June 30, June 30, Unrestricted Cash ($ millions) $1,620.9 $1,592.9 Net Accounts Receivable($ millions) $545.5 $506.0 Days Cash on Hand (days) Accounts Receivable (days) Debt Service Coverage Cushion Ratio (X) Current Ratio l'j Debt Service Coverage Calculation does not include unrealized gain/(loss) on investments Variance 1.8% 7.8% (5.8%) 1.5% (44.2%) (14.3%) 0.0% B. Investments: At June 30, 2013, investment income was $32.7 million lower than the same period in The reduction in investment income is attributed to the investment portfolio composite return (excluding pension investments) of 2.7% for six months compared to 4.8% for the same period in A comparison of the period results for 2013 and 2012 is listed in Table 5. Additionally, Table 5 includes a breakout of 2013 investment earnings by income recognition (realized or unrealized), income segment (operating or non-operating), and the amounts attributed to interest and dividends earnings. Table 5- Summary of Investment Income $in millions a Comparisons Interest, dividends and realized gains (losses), net Change in unrestricted unrealized gains, net from prior year end Total investment income 2013 $ ~ 2012 $ i.th.3 b Sources Investment Gain Classification Operating Non-operating Total Interest & Dividends $ $ Realized Gain $ i2u Unrealized Gain $ $_L.9 Total $ i Q C. Debt Structure At June 30, 2013, SSMHC's long term debt (Table 6) decreased by $3.9 million over the same period in In July 2012, SSMHC defeased $183.3 million of variable rate bonds through the issuance of direct tax-exempt loans. SSMHC's current debt structure is as follows:

54 SSMHC MD&A for the Period Ended June 30, 2013 Page 8 of 12 Table 6- Summary of Long Term Debt (In millions) Secured Under the Master Trust Indenture: Fixed rate revenue bonds Variable rate demand bonds Variable rate direct loans Auction rate bonds Fixed rate direct loan- taxable Installment Note Payable Total bond and loan debt secured under MTI Other: Various notes payable and other debt Capitalized lease obligations Total debt June 30, 2013 $ , $1,296.8 June 30, 2012 $ , $1,300.7 With $616.9 million in variable rate bonds and $121.3 million in auction rate bonds outstanding, SSMHC utilizes derivative instruments to manage interest rate volatility. SSMHC uses floating-to-fixed interest rate SWAPS to synthetically convert variable rate debt to a fixed rate. Under these SWAPS, SSMHC receives 65% of LIBOR plus a spread of 0.12% and pays a fixed rate. In August, 2012, SSMHC completed a SWAP novation with UBS and three new counterparties. While the financial terms of SWAP contracts remain the same, SSMHC cash collateral posting requirements decreased. The immediate impact was the release of $30.0 million of posted collateral in August, Fair value of these SWAPS is included in other liabilities and is as follows: Table 7 -Summary of Fair Value (Level 2) of Derivatives Notional Fair Value Maturity Fixed Pay Amount Adjustment Dates Rates $146,100 ($ 23,761) % 64,600 ( 9,904) % 155,795 ( 23,113) % 244,205 ( 37,866) % $610,700 ($ 94,644) The change in market value of interest rate SWAPS resulted in an unrealized gain of $31.7 million for the period ending June 30, 2013, decreasing the total fair value adjustment to $94.6 million. The estimated fair values have been determined using available market information and valuation methodologies, primarily discounted cash flows. SSMHC utilizes an independent financial advisor for determining market values. SSMHC utilizes lines of credit for general corporate purposes. As of June 30, 2013, SSMHC had one line of credit with a maximum amount of $50 million maturing in July 2013 with a $37 million outstanding balance and three lines of credit with a maximum amount of $130 million maturing in February 2014 with $0 outstanding balance.

55 SSMHC MD&A for the Period Ended June 30, 2013 Page 9 of 12 D. Capital Spending Through June 30, 2013, capital expenditures totaled $102.3 million, a $114.8 million (or 52.9%) decrease over Major capital projects include: 1. St. Mary's Health Center, Jefferson City, Missouri began construction on a replacement hospital in The hospital is scheduled to open in The projected cost of this campus is $220.6 million. The 2013 amount spent on this project through June was $15.2 million. 2. St Mary's Good Samaritan opened a replacement hospital on a new campus in Mount Vernon, Illinois in January, The cost of this campus was $201.0 million. The 2013 amount spent on this project through June was $19.8 million. 3. Project Beacon. Project Beacon is a multi-phase clinical and revenue cycle transformation initiative that together with cultural and process changes will assist in providing safer, higher quality patient care delivered in a more efficient manner. The project consists of two phases. The first involves implementation of an extensive electronic health record (EHR) which provides patient health information at the point-of-care, reducing the opportunity for medical errors and increasing patient safety. Additionally, the scope includes revenue cycle applications and will improve the scheduling and patient financial services functions. EHRs are scheduled to be operational at all SSMHC facilities by The 2013 amount spent on this project through June was $15.3 million.