AGENDA REGULAR MEETING OF THE FINANCE COMMITTEE A COMMITTEE OF THE BOARD OF DIRECTORS

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1 AGENDA REGULAR MEETING OF THE FINANCE COMMITTEE A COMMITTEE OF THE BOARD OF DIRECTORS Tuesday, November 27, :00 AM Administration Boardroom 600 N. Highland Springs Avenue, Banning, CA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Administration Office at (951) Notification 48 hours prior to the meeting will enable the Hospital to make reasonable arrangement to ensure accessibility to this meeting. [28 CFR ADA Title II]. TAB I. Call to Order O. Hershey II. Public Comment A five-minute limitation shall apply to each member of the public who wishes to address the Finance Committee of the Hospital Board of Directors on any matter under the subject jurisdiction of the Committee. A thirty-minute time limit is placed on this section. No member of the public shall be permitted to share his/her five minutes with any other member of the public. (Usually, any items received under this heading are referred to staff for future study, research, completion and/or future Committee Action.) (PLEASE STATE YOUR NAME AND ADDRESS FOR THE RECORD.) On behalf of the San Gorgonio Memorial Hospital Board of Directors, we want you to know that the Board/Committee acknowledges the comments or concerns that you direct to this Committee. While the Board/Committee may wish to occasionally respond immediately to questions or comments if appropriate, they often will instruct the CEO, or other Administrative Executive personnel, to do further research and report back to the Board/Committee prior to responding to any issues raised. If you have specific questions, you will receive a response either at the meeting or shortly thereafter. The Board/Committee wants to ensure that it is fully informed before responding, and so if your questions are not addressed during the meeting, this does not indicate a lack of interest on the Board/Committee s part; a response will be forthcoming. OLD BUSINESS III. *Proposed Action - Approval of Minutes O. Hershey October 30, 2018 meeting A

2 San Gorgonio Memorial Hospital Board of Directors Finance Committee Regular Meeting November 27, 2018 NEW BUSINESS IV. * Proposed Action - Accept Monthly Financial Report D. Recupero B October 2018 ROLL CALL V. Future Agenda Items VI. Next Meeting December 18, 2018 VII. Adjournment O. Hershey * Requires Action In accordance with The Brown Act, Section , all public records relating to an agenda item on this agenda are available for public inspection at the time the document is distributed to all, or a majority of all, members of the Committee. Such records shall be available at the Hospital office located at 600 N. Highland Springs Avenue, Banning, CA during regular business hours, Monday through Friday, 8:00 am - 4:30 pm. ******************************************** Certification of Posting I certify that on November 21, 2018 I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of San Gorgonio Memorial Hospital - Finance Committee, and on the San Gorgonio Memorial Hospital website said time being at least 72 hours in advance of the regular meeting of the Finance Committee (Government Code Section ). Executed at Banning, California, on November 21, 2018 Bobbi Duffy, Executive Assistant

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4 REGULAR MEETING OF THE SAN GORGONIO MEMORIAL HOSPITAL BOARD OF DIRECTORS FINANCE COMMITTEE Tuesday, October 30, 2018 The regular meeting of the San Gorgonio Memorial Hospital Board of Directors Finance Committee was held on Tuesday, October 30, 2018 in the Administration Boardroom, 600 N. Highland Springs Avenue, Banning, California. Members Present: Members Absent: Required Staff: Lynn Baldi, Susan DiBiasi, Olivia Hershey (C), Ron Rader Dennis Tankersley Steve Barron (CEO), Dave Recupero (CFO), Pat Brown (CNO), Bobbi Duffy (Executive Assistant) AGENDA ITEM DISCUSSION ION / FOLLOW-UP Call To Order Committee Chair Olivia Hershey called the meeting to order at 9:02 am. Public Comment There was no public present. OLD BUSINESS Proposed Action - Approve Minutes September 25, Regular Meeting NEW BUSINESS Proposed Action - Approve Monthly Financial Report September 2018 Chair Hershey asked for any changes or corrections to the minutes of the September 25, 2018 regular meeting. There were none. Dave Recupero noted that included on the board tablets was the 10 page summary in addition to the regular September Financial report. He also distributed copies of the 10 page summary to make it easier for committee members to follow along. Dave referred members to page 2 of the summary. He noted that as shown on line 10, Newborn Deliveries, were 28 for September, ahead of the budget of 21 and better than the previous year s 18. In addition, IP Surgeries for September were 41, ahead of the budget of 33 and better than the previous year s 31. He stated that in addition to these two items, the increased The minutes of the September 25, 2018 regular meeting will stand correct as presented. M.S.C. (Baldi/ Rader), the SGMH Finance Committee approved the August 2018 Financial Statement as presented and hereby recommends

5 Finance Committee Regular Meeting October 30, 2018 AGENDA ITEM DISCUSSION ION / FOLLOW-UP volume from ED ancillary tests have all aided in our revenue being close to budget. Dave referred committee members to page 4 of the summary. He stated that as shown in item I, the Payor Mix was $505,162, we received a one-time Medicaid expansion from prior years which helped to offset other negatives. He stated there was also a onetime negative of -$486,442 that occurred because of receiving news about delays in the IGTs and that we will probably not receive them until FY20. In discussing the cash flow, he noted that we expected to receive the rate range IGT in January, but now are being told it will probably not occur until June. Dave stated that due to this, we will see an increase in our LOC balance but, that he anticipates that the LOC will still be paid off by the end of the fiscal year. Dave was requested to prepare, for the next meeting, a summary listing of IGT and other funds we expect to receive and what years they are tied to. Dave reported that our Grand Totals exceeded Budget by $41,818, mostly due to decreased Labor expenses which were $238,328 better than budget. Dave referred committee members to page 3 Year-to-Date, noting that we are ahead of budget by $145,726, which includes the addition of the one-time Medicaid expansion funds. Dave distributed a 2-page handout which, on the second page, shows our legal expenses back to FY2015. Dave noted that the first page shows EBIDA for FY2018 at ($1,721,814), better than the -$2.6 million EBIDA loss presented in the July meeting. Discussing observation days, Dave was requested to prepare a report showing how many days were a 1-day stay, a 2-day stay, and a 3-day stay. ROLL CALL: Baldi Yes DiBiasi Yes Hershey Yes Rader Yes Tankersley absent Motion carried. approval of same by the SGMH Board of Directors. 2

6 Finance Committee Regular Meeting October 30, 2018 AGENDA ITEM DISCUSSION ION / FOLLOW-UP Future Agenda Items Dave will prepare and present reports for the next meeting for IGT funds and observation days. Next Meeting Adjournment The next Finance Committee meeting is scheduled for Tuesday, November 27, The meeting was adjourned at 10:00 am. In accordance with The Brown Act, Section , all reports and handouts discussed during this Open Session meeting are public records and are available for public inspection. These reports and/or handouts are available for review at the Hospital Administration office located at 600 N. Highland Springs Avenue, Banning, CA during regular business hours, Monday through Friday, 8:00 am - 4:30 pm. Minutes respectfully submitted by Bobbi Duffy, Executive Assistant 3

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8 SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA HANDOUTS for FOUR MONTHs ENDING OCT 31, 2018 Certification Statement: To the best of my knowledge, I certify for the hospital that the attached financial statements, except for the uncertainty of IGT revenue accruals, do not contain any untrue statement of a material fact or omit to state a material fact that would make the financial statements misleading. I further certify that the financial statements present in all material respsects the financial condition and results of operation of the hospital and all related organizations reported herein. Certified by: David D. Recupero CFO 1

9 Concluding Summary Positive takeaways for 1st Qtr: HAND-OUTS 1) Favorable outpatient revenue, GI Lab and ED ancillary 2) Expenses $148 lower vs. Budget - Month 3) Expenses $301K lower vs. Budget - Year-to-Date Negative takeaways for the month: 4) Unfavorable YTD EBIDA var ( -$77K) mostly due to IGTs 5) Average daily census remains below budget and prior years 6) Slightly higher write-off % for the month +(1.13%) FOUR MONTHs ENDING OCT 31, 2018 Prepared 11/13//2018 Dave Recupero, CFO STATISTICS Current Month Year-To-Date Line Actual Budget Prior Year Actual Budget Prior Year Average Daily Census ADC Acute Only PROJECTION July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Ref# 10/31/18 10/31/18 10/31/17 10/31/18 10/31/18 10/31/17 % BUD VAR Average Daily Census (ADC) [8] Ave Daily Census -Acute % [9] Admissions-Acute % [10] Newborn Deliveries % Patient Days [11] Patient Days Acute ,991 3,868 3, % [12] Patient Days- Newborn % [13] Average LOS -Acute % Emergency Dept. Statistics [14] ED Visits - Admitted % [15] ED Visits - Higher Acuity Ops 1,553 1,476 1,438 6,575 6,672 6, % [16] ED - Rapid Care Visits Ops 1,729 2,002 1,953 7,253 7,512 7, % Total ED Visits 3,474 3,674 3,584 14,594 15,039 14, % [17] % of ER Visits Admitted 5.53% 5.34% 5.39% 5.25% 5.68% 5.73% -7.6% [18] ER Admissions as a % of Total 82.05% 78.84% 83.55% 85.78% 87.72% 87.50% -2.2% Other Key Statistics: [19] Total Outpatients Visits 4,217 4,687 4,325 17,423 18,985 17, % [20] Observation Bed Days % [21] Obs. Bed Days as a % of Total 18.3% 12.6% 13.1% 18.3% 13.1% 12.8% 39.6% [22] Behavioral Health Visits ,314 2,602 2, % [23] IP Surgeries % [24] OP Surgeries % [25] Outpatient Scopes % [26] Productivity Statistics: [27] Paid FTE's per AOB % 2

10 VS. BUD- MO VS. BUD- YTD Current Month Month> OCT CURRENT MONTH UAL vs. BUDGET $-222,867 Unfavorable over BUDGET COL [A] P & L Catagories $$ IMP Primary Factors on EBIDA Factor # I. PT REVENUES vs BUD ($327,789) IP Volumes ($271,073) ED Revenues $177,277 Payor Mix ($278,089) COMMENTS> #1"Acute Census below Budget" #2 "incr. in ED ancillary testing " #3 "quarterly estimates" II. SUPPLEMENTAL REV vs BUD ($34,139) PT JV $66,844 TAX REVs ($19,242) IGTs ($81,741) COMMENTS> #4 "Improved PT JV Vols and Profit" #5 "Minimal" # 6 IGT Payment Delays" III EXPENSES vs BUD $148,974 Labor 81,728 Purch Serv 75,383 All Other Ex (8,137) COMMENTS> # 7 Paid Ftes lower than Budget # 8 "Legal higher " # 9 "Utilities higher" IV. Largest Factor to explain Bud variance (month): Payor Mix payment impact GRAND TOTALS vs BUD ($222,867) Year-to-Date YTD Financial Performance vs. BUDGET Month> OCT $-77,141 Unfavorable over BUDGET Financial Performance vs. BUDGET YTD UAL vs. BUDGET Line COL [A] Ref# P & L Catagories $$ IMP Primary Factors on EBIDA Factor #1 10. Factor #2 11. Factor #3 12. V. PT REVENUES vs YTD $87,691 IP Volumes ($561,694) ED Revenues $588,358 Payor Mix $78,827 COMMENTS> #10"Acute Census below Budget" #11 "Incr. in ED ancillary testing #12 "Aug offsets July Fav Var VI. SUPPLEMENTAL REV YTD ($465,956) PT JV $72,538 TAX REVs $90,670 IGTs ($629,164) COMMENTS> #13 "Improved PT JV Vols and Profit" #14 "Increased Tax Base" # 15 "IGT Payment Delays" VII. EXPENSES vs YTD BUD $301,124 Labor 322,331 Purch Serv 17,422 All Other Ex (38,630) COMMENTS> # 16 reduced overhead labor departments # 17 MD Fees # 18 "Minimal Variance" VIII. GRAND TOTALS vs YTD ($77,141) "Year-to-Date favorable Exp Bud Var partially offsets IGT unfavorable Bud variance!" 3

11 PRIOR YEAR Month> OCT $586,018 Favorable over Prior Year COL [A] YTD Financial Performance vs. PRIOR YEAR YTD UAL vs. PRIOR YEAR VS. PRIOR YEAR $$ IMP Primary Factors 20 on EBIDA Factor #1 Factor #2 Factor # PT REVENUES vs PRIOR IX. $324,225 ED Revenues 759,312 Payor Mix 565,203 IP Volumes ($982,490) COMMENTS> #19 "Incr. in ED ancillary testing #20 " Contract improvements Vs Prior"#21"Acute Census below Prior" SUPPLEMENTAL REV X. ########## Grant Revs ($100,146) TAX REVs 145,288 IGTs ($1,548,843) COMMENTS> #22 "Grant Revenues in Prior Yr" #23 "Increased Tax Base" # 24 "Delays" EXPENSES vs PRIOR XI. $1,765,495 Miscellaneous 440,583 Purch Serv 366,074 LABOR 958,837 COMMENTS> # 25 "Minimal Variance" 26"Lower legal -$279K vs Prior #27 "Rightsizing Impact" "Year-to-Date Expenses $1.76 million less than prior year is the primary factor!" XII. GRAND TOT vs PRIOR $586,018 LEGAL FEEs Trend CURR CURR BUD PRIOR YR MO YTD YTD BUD YTD PRIOR 10/31/ /31/ /31/ /31/ /31/ /31/2017 Vs Bud Legal Fees 107,926 49,318 74, , , ,567 (73,797) Vs Prior (279,410) 4

12 UAL PERFORMANCE vs. BUDGET - Current Month $41,818 Favorable over BUDGET Current Month> OCT Line COL [A] COL [B] COL [C] COL [D] COL [E] Ref# Main Factors $$ IMP Comment [1] VOLUME RELATED 1. Stat-Actual Stat-Budget % VAR Cur Month [2] -INPATIENT Vol IMP (271,073) Days % IP Var ######## [3] Adm % ED VAR -2.20% [4] ALOS % IP Surg VAR % SUPL. REVS Pt. Revenues EXPENSES [5] -OUTPATIENT Vol IMP $221,372 Stat-Actual Stat-Budget % VAR OP Gross Charges 985,447 [6] - OP (Observation) $2,818 Obs Patients % Minimal Revenue Impact [7] - OP (ED) 2. $177,277 ED Visits 3,474 3, % [8] - OP (OR) $48,648 SDS Cases % Minimal Revenue Impact [9] - OP (Behavioral Health) ($9,157) Beh Health Visits % Minimal Revenue Impact [10] - OP (ALL OTHER) $1,787 Minimal Revenue Impact [11] SUBTOT IP & OP Vol IMP ($49,700) Fav OP partially offsets Unfavorable IP budget varian PAYOR MIX RELATED Act Payment % Bud Payment % % VAR [12] -(Payor Mix) ($246,006) % 16.28% -1.1% Less Medicare and PPO vs Bud [13] -Reimb (rates vs Budget) ($32,083) 3 SUBTOT PAYOR MIX/RATES ($278,089) 2+3 PAYOR MIX [14] Net Patient Revenues ($327,789) % Net Pt. Revenues 8% less than Budget 6. [15] Supplemental IGTs (81,741) IGT Estimates soft and subject to Fluctuations 5. [16] Supplemental Taxes (19,242) Minimal # [17] Supplemental Non-pt Revenues 66, FAVORABLE due Rebates [18] SUBTOT SUPPLEMENTAL ($34,139) Minimal SUBTOT ALL REVENUES ($361,928) -6.5% ALL Rev Var. impacted by Payor mix for month # EXPENSES VAR % VAR Exp Var Vs Bud Expense Variance Explanations 7. [19] LABOR 81, % FAVORABLE Paid FTEs down -6.76% [20] SUPPLIES 8 76, % FAVORABLE Less Volume less supply costs # [21] PURCH SERV/PRO FEES 75, % FAVORABLE [22] UTILITIES (58,467) -74.7% UNFAV [23] REPAIRS (491) -1.2% UNFAV [24] ALL OTHER EXPS (25,762) -5.8% UNFAV [25] SUBTOTALS EXPENSES $148, % FAVORABLE Legal higher in Oct Timing of invoices Favorable due to Higher Ancillary e Ramp up Third party payor contract improvements Timing of invoices Timing of invoices ALL Expenses 2.6% below Oct Budget [26] EBIDA VAR -Act versus BUD (222,867) FAVORABLE 5

13 UAL PERFORMANCE vs. BUDGET YTD $145,726 Favorable over BUDGET YTD SEP Line COL [A] COL [B] COL [C] COL [D] COL [E] Ref# Main Factors 10. [1] VOLUME RELATED $$ IMP Stat-YTD- Bud % VAR Comment # [2] -INPATIENT Pt. Volume IMP ($561,694) Days 2,991 3, % Gross YTD charges down (-8.7%) vs. B ######## [3] Adm % ED YTD Admits % VAR % [4] ALOS % IP SURGs % VAR % # [5] -OUTPATIENT Pt Volume IMP $570,559 Stat-Actual Stat-Budget % VAR P Gross YTD charges up (+5.9%) vs. B 2,729,200 [6] - OP (OBSERVATION) $27,039 OBS % Minimal Revenue Impact # [7] - OP (ED) 11. $588,358 ED 14,594 15, % Favorable due to Higher Ancillary exams in ED [8] - OP (OR) ($32,319) OP OR % UnFavorable due to less OP OR cases vs. YTD Budget [9] - OP (BEHAVIORAL HEALTH) ($11,757) BH 2,314 2, % Minimal Revenue Impact [10] - OP (ALL OTHER) ($763) Minimal Revenue Impact Pt. Revenues SUPL. REVS EXPENSES [11] SUBTOTALS IP & OP Pt Vol IMPAC $8,864 1 PAYOR MIX RELATED YTD Act Pay % YTD Bud Pay % % VAR [12] -(Payor Mix) $142, % 16.28% 0.1% [13] -Reimb (improved rates vs Budge ($64,167) 3 12 Medicare and IEHP contract changes not in effect yet SUBTOTALS PAYOR MIX/RATES $78, % UNFAVORABLE PAYOR MIX IMP vs YTD Bud [14] Net Patient Revenues V. $87, Net Pt. Revenues Within 0.6% of YTD Budget [15] Supplemental IGTs 15. (629,164) 14 IGT Estimates soft and subject to Fluctuations [16] Supplemental Taxes 90,670 Growth in Tax Base 13. [17] Supplemental Non-pt Revenues 72,538 Supply rebates [18] SUBTOTALS SUPPLEMENTAL VI. ($465,956) IGT delays SUBTOTALS ALL REVENUES ($378,265) -1.8% ALL Revenues 1.8% below YTD Budget EXPENSES % Var Exp Var Vs Bud Expense Variance Explanations [19] LABOR , % FAVORABLE 2.1% favorable YTD Budget Var [20] SUPPLIES 154, % FAVORABLE 5.8% favorable YTD Budget Var 17. [21] PURCHASED SERV/PRO FEES 17, % FAVORABLE Within 1% of YTD Budget [22] UTILITIES (37,531) -0.7% UNFAV Within 1% of YTD Budget 18. [23] REPAIRS (16,855) -0.4% UNFAV Within 1% of YTD Budget [24] ALL OTHER EXPS (138,496) -4.4% UNFAV Timing of invoices [25] SUBTOTALS EXPENSES VII. $301, % FAVORABLE 1.3% favorable YTD Budget Var [26] EBIDA VARIANCE -Act vs BUD VIII. (77,141) UNFAVORABLE 6

14 YTD UAL PERFORMANCE vs. YTD PRIOR YEAR $586,019 Favorable over Prior Year Current Month> OCT COL [A] COL [B] COL [C] COL [D] COL [E] Main Factors $$ IMP Comment h VOLUME RELATED Stat-Act YTD Stat-Prior Yr. % VAR Vs YTD Prior -INPATIENT Pt. Volume IMP 21. ($982,490) Days 2,991 3, % IP Gross charges Var vs Prior Yr ($4,678,525) Adm % ED Admits vs Prior Yr % ALOS % IP SURGs vs Prior Yr % -OUTPATIENT Pt Volume IMP $741,513 Stat-Actual Stat-Prior Yr. % VAR OP Gross charges Var vs Prior Yr $5,149,395 - OP (OBSERVATION) $27,039 OBS % Minimal Revenue Impact - OP (ED) 19. $759,312 ED Vists 14,594 14, % Favorable due to Higher Ancillary exams in ED - OP (OR) ($32,319) OP OR Cases % UnFavorable due to less OP OR cases vs. Prior - OP (BEHAVIORAL HEALTH) ($11,757) BH Visits 2,314 2, % - OP (ALL OTHER) ($763) Minimal Revenue Impact Minimal Revenue Impact ces SUBTOTALS IP & OP Pt Vol IMP ($240,977) 1 PAYOR MIX RELATED YTD Act Pay % YTD Prior Pay % % VAR -(Payor Mix) 20. $169, % 16.10% 0.2% -Reimb (improved rates vs Prior) $395, SUBTOTALS PAYOR MIX/RATES $565, IX. Net Patient Revenues $324, % FAVORABLE PAYOR MIX IMP Net Pt. Revenues Within 0.1% of Prior year Supplemental IGTs 24. ($1,548,843) IGT Estimates soft and subject to Fluctuations Supplemental Taxes 23. $145,288 Growth in Tax Base 22. Supplemental Non-pt Revenues ($100,146) Prior year had OB Grant Revenues SUBTOTALS SUPPLEMENTAL X. ($1,503,702) FAVORABLE due to IGT estimates SUBTOTALS ALL REVENUES ($1,179,476) -5.3% FAVORABLE due to PAYOR MIX IMP EXPENSES 27 % Var Exp Var Vs Bud Expense Variance Explanations LABOR 958, % FAVORABLE SUPPLIES 26 67, % FAVORABLE PURCHASED SERV/PRO FEES 366, % FAVORABLE UTILITIES 25. 4, % FAVORABLE REPAIRS (10,925) -0.2% UNFAV ALL OTHER EXPS 379, % FAVORABLE SUBTOTALS EXPENSES XI. $1,765, % FAVORABLE 6.1% less expenses vs. Prior Year 2.6% less expenses vs. Prior Year 13.0% less expenses vs. Prior Year Within 1% of prior year Within 1% of prior year 12.3% less expenses vs. Prior Year 7.4% less expenses vs. Prior Year EBIDA VARIANCE -Act vs BUD XII. $586,018 FAVORABLE 7

15 Gross Charges Current Month Year-To-Date Inpatient CUR MO UAL CUR MO BUD CUR MO PR Yr YTD UAL YTD BUD YTD PRIOR Yr YTD Variance Prior Yr Var [1] Med/Surg 1,090,916 1,524,402 1,198,603 4,467,602 5,243,617 5,445,161 (776,015) (977,559) [2] ICU/DOU 810, ,324 1,000,503 2,757,401 3,334,266 3,762,768 (576,865) (1,005,368) [3] OB 561, , ,153 1,545,156 1,262,183 1,487, ,973 57,732 [4] Subtotals 2,462,433 2,860,662 2,652,260 8,770,159 9,840,066 10,695,353 (1,069,907) (1,925,194) Other IP Acute Ancillary [5] Emergency 832, , ,413 3,001,793 2,820,549 3,299, ,244 (297,910) [6] Surgery 831, , ,379 3,321,161 3,093,378 3,691, ,783 (370,436) [7] Diagnostic Imaging 512, , ,711 1,843,481 2,117,601 2,085,061 (274,120) (241,580) [8] Lab/Blood 999,979 1,136, ,996 3,633,259 3,909,029 3,850,911 (275,770) (217,652) [9] Respiratory/Pulm 684,134 1,034, ,688 2,546,219 3,560,152 3,469,324 (1,013,933) (923,105) [10] Pharmacy/IV Sol. 616, , ,682 2,222,124 2,680,100 2,800,753 (457,976) (578,629) [11] EKG/Echos 246, , , , , ,415 (9,174) 4,102 [12] PT/OT/Speech 185, , , , , ,768 4,578 (53,511) [13] Dialysis 56,360 59,804 36, , , ,348 32,915 (3,720) [14] Misc Supplies 55,007 80,651 85, , , ,938 (20,375) (70,890) [15] Subtotals- Other 5,021,240 5,913,833 5,105,198 18,737,488 20,342,315 21,490,819 (1,604,827) (2,753,331) Total INPATIENT 7,483,673 8,774,495 7,757,458 27,507,647 30,182,381 32,186,172 (2,674,734) (4,678,525) Outpatient YTD Variance Prior Yr Var Nursing Routine (Observ) [16] Med/Surg 156, , , , , ,624 (17,771) 147,690 [17] OB 76,683 59,792 49, , , ,009 37,439 41,011 OBS related Subtotals 232, , , , , ,633 19, ,702 ED & Ancillary ED OP Depts [18] Emergency 6,353,329 6,025,063 5,874,289 25,182,526 23,940,531 23,669,299 1,241,995 1,513,228 [19] Diagnostic Imaging 5,342,439 5,204,795 4,566,105 20,990,525 20,561,901 18,680, ,624 2,310,093 [20] Lab/Blood 2,231,605 2,090,094 1,788,779 8,778,030 8,304,969 7,883, , ,464 [21] Respiratory/Pulmonary 135, , , , , ,268 (111,698) (16,514) [22] Pharmacy/IV Solutions 452, , ,774 1,849,823 1,807,936 1,732,350 41, ,473 [23] EKG/Echos 597, , ,372 2,244,386 1,896,789 1,789, , ,872 ED related Subtotals 15,112,766 14,418,276 13,241,041 59,593,043 57,171,578 54,319,427 2,421,465 5,273,616 OR related Surgery 1,294,002 1,016,319 1,257,576 4,377,841 4,038,334 4,603, ,507 (225,550) BH related Behavioral Health 398, , ,450 1,501,181 1,565,090 1,583,230 (63,909) (82,049) ALL OTHER OP Depts 96,927 94, , , , ,407 12,469 (5,324) [24] PT/OT/Speech 34,026 27,777 21, , ,274 90,469 21,480 41,285 [25] Dialysis - 1,821 1,678 4,227 7,236 3,895 (3,009) 332 [26] Misc Supplies 62,901 64,705 90, , , ,043 (6,002) (46,941) Total OUTPATIENT 17,135,149 16,149,702 15,213,025 66,780,483 64,051,283 61,631,088 2,729,200 5,149,395 Grand Total All Revenue 24,618,822 24,924,197 22,970,482 94,288,130 94,233,664 93,817,260 54, ,262 8

16 Statement of Revenue and Expense Current Month Year-To-Date CUR MO UAL CUR MO BUD CUR MO PR Yr YTD UAL YTD BUD YTD PRIOR Yr BUD VAR PRIOR VAR Gross Patient Revenue 10/31/ /31/ /31/ /31/ /31/ /31/2017 [8] Inpatient Revenue $7,483,673 $8,774,495 $7,757,458 (1,290,822) $27,507,647 $30,182,381 $32,186,172 ($2,674,734) ($4,678,525) [9] Outpatient Revenue $17,135,149 $16,149,702 $15,213, ,447 $66,780,483 $64,051,283 $61,631,088 $2,729,200 $5,149,395 [10] Total Gross Patient Revenue 24,618,822 24,924,197 22,970,482 94,288,130 94,233,664 93,817,260 54, ,870 Deductions From Revenue 84.85% 83.72% 84.75% -1.13% 83.64% 83.72% 83.90% 0.08% -0.31% [11] Total Deductions From Revenue (20,890,162) (20,867,748) (19,467,966) (78,863,777) (78,897,002) (78,717,132) 33,225 (146,645) [12] Net Patient Revenue 3,728,660 4,056,449 3,502,516 (327,789) 15,424,353 15,336,662 15,100,128 87, ,225 Non Patient Operating Revenues [13] IGT/DSH Revenues $832,039 $913,779 $2,071,722 $3,475,954 $4,105,118 $5,024,798 ($629,164) ($1,548,843) [14] Tax Subsidies $280,000 $299,242 $242,530 $1,120,000 $1,029,330 $974,712 $90,670 $145,288 [15] Other Operating Revenue $276,307 $209,463 $383,714 $966,307 $798,447 $1,167,147 $167,861 ($200,840) [16] Clinic Net Revenues $41,754 $51,667 $10,652 $111,346 $206,668 $10,652 ($95,322) $100,694 [17] Total Operating Revenue 5,158,759 5,530,600 6,211,133 (371,841) 21,097,960 21,476,225 22,277,436 (378,265) (1,179,476) Operating Expenses [18] Salaries and Wages $2,856,584 $2,944,788 $3,030,922 ########## ########## ########## ($247,165) ($773,440) [19] Fringe Benefits $768,557 $764,650 $721,029 $2,968,243 $3,058,504 $3,148,759 ($90,261) ($180,516) [20] Contract Labor $95,291 $92,722 $111,027 $385,983 $370,888 $390,865 $15,095 ($4,882) [21] Physicians Fees $196,000 $176,426 $185,078 $770,585 $705,704 $789,495 $64,881 ($18,910) [22] Purchased Services $280,920 $375,877 $447,058 $1,680,813 $1,763,116 $2,027,977 ($82,303) ($347,165) [23] Supply Expense $641,655 $718,237 $596,316 $2,485,011 $2,639,264 $2,552,357 ($154,253) ($67,345) [24] Utilities $136,786 $78,319 $71,434 $350,807 $313,276 $354,985 $37,531 ($4,178) [25] Repairs and Maintenance $42,524 $42,033 $35,624 $184,987 $168,132 $174,062 $16,855 $10,925 [26] Insurance Expense $115,594 $67,651 $61,267 $505,483 $406,028 $280,411 $99,456 $225,073 [27] All Other Operating Expenses $144,285 $131,297 $128,269 $483,096 $525,188 $619,322 ($42,092) ($136,226) [28] Leases and Rentals & IGT Exp $94,086 $134,886 $909,460 $613,181 $539,544 $1,264,953 $73,637 ($651,772) [29] Clinic Expense $113,574 $107,942 $213,308 $439,263 $431,768 $256,324 $7,495 $182,939 [30] Total Operating Expenses 5,485,854 5,634,828 6,510,792 (148,974) 22,194,761 22,495,885 23,960,256 (301,124) (1,765,495) [31] EBIDA (327,095) (104,228) (299,659) (222,867) (1,096,801) (1,019,660) (1,682,820) (77,141) 586,018 9

17 BALANCE SHEET FOUR MONTHs ENDING OCT 31, 2018 Current Assets 10/31/2018 PRIOR MO. Current Liabilities 10/31/2018 PRIOR MO. [1] Cash and Cash Equivalents 2,903,689 3,986,796 [18] Accounts Payable 4,061,939 4,124,937 [2] Gross Patient Accounts Receivable 43,390,711 41,835,291 [19] Line of Credit 2,000,000 2,000,000 [3] Less: Bad Debt and Allowance Reserves (36,178,629) (34,820,569) [20] Accrued Payroll Taxes 3,144,752 2,516,482 [4] Net Patient Accounts Receivable 7,212,083 7,014,721 [21] Accrued Benefits 83,544 78,726 [5] Taxes Receivable 3,003,966 2,191,295 [22] Accrued GO Bond Intr Payb 1,227, ,216 [6] Other Receivables 980, ,912 [23] Current Portion of LTD (Bonds) 2,095,000 2,095,000 [7] Inventories 1,614,979 1,603,405 [24] Current Portion of LTD (Leases) 307, ,769 [8] Prepaid Expenses 820, ,856 [25] Other Current Liabilities 11,611 11,703 [9] Due From Third Party Payers 758, ,391 Total Current Liabilities 12,931,498 12,084,833 [10] Malpractice Receivable 0 0 [11] IGT Receivables 8,560,620 7,883,259 Long Term Debt Total Current Assets 25,854,635 25,210,635 [26] Bonds/Mortgages Payable (net) 110,887, ,903,321 Assets Whose Use is Limited Leases Payable (net of current) 0 0 [12] Bond Reserve/Debt Retirement Fund 3,887,957 3,807,901 Assets Whose Use is Limited 3,887,957 3,807,901 [27] Total Long Term Debt (Net ) 110,887, ,903,321 Property, Plant, and Equipment [13] Gross Property, Plant, and Equipment 167,749, ,699,471 TOTAL LIABILITIES $123,819,067 $122,988,154 [14] Less: Accumulated Depreciation (67,158,648) (66,664,135) Net Property, Plant, and Equipment 100,591, ,035,336 Net Assets: Other Assets [28] Unrestricted Fund Balance 10,416,645 10,416,645 [15] Unamortized Loan Costs 1,546,873 1,633,383 [29] Temporarily Restricted Fund Bal Other Assets 1,546,873 1,633,383 [30] Restricted Fund Balance [31] Net Revenue/(Expenses) (2,355,004) (1,717,543) [16] TOTAL UNRESTRICTED ASSETS 131,880, ,687,255 [32] TOTAL NET ASSETS 8,061,640 8,699,101 Restricted Assets 0 0 TOTAL LIABILITIES [17] TOTAL ASSETS $131,880,707 $131,687,255 [33] AND NET ASSETS $131,880,707 $131,687,255 0 $0 ## Other Relevant Financial Data FAVORABLE PROJ 10/31/2018 FY 15 FY 16 FY 17 FY 18 FY 19 Days of Cash on Hand HIGH Days in Accounts Payable LOW Gross Days in Accounts Receivable LOW Paid FTEs per AOB 5.41 LOW

18 1 SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA Unaudited Financial Statements for FOUR MONTHs ENDING OCT 31, 2018 Certification Statement: To the best of my knowledge, I certify for the hospital that the attached financial statements, except for the uncertainty of IGT revenue accruals, do not contain any untrue statement of a material fact or omit to state a material fact that would make the financial statements misleading. I further certify that the financial statements present in all material respsects the financial condition and results of operation of the hospital and all related organizations reported herein. Certified by: David D. Recupero CFO

19 San Gorgonio Memorial Hospital Financial Report As of 10/31/18 FINANCIAL STRENGTH INDEX - (2.07) Excellent - Greater than 3.0 Good to 0.0 Fair to (2.0) Poor - Less than (2.0) Custom Financial Strength Index (1.07) Current Rating = the high side of "Fair" 8,000,000 6,000,000 4,000,000 2,000,000 0 (2,000,000) San Gorgonio Memorial Hospital Earnings Before Interest,Depr, and Amortization EBIDA 5,489,134 6,659,786 5,949,131 4,279,651 FY 14 FY 15 FY 16 FY 17 Note: Audited 18 EBIDA 534,285 (1,721,814) FY 18 FY 19 PROJ 4,000 3,000 2,000 1,000 0 San Gorgonio Memorial Hospital Acute Discharges 3,720 3,818 3,797 3,312 2,934 3,139 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 PROJ San Gorgonio Memorial Hospital Newborn Deliveries 481 FY FY FY 15 FY FY 17 FY 18 Average Daily Census ADC Acute Only PROJECTION FY 19 PROJ July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 60,000 40,000 20, San Gorgonio Memorial Hospital ER Visits 37,580 42,748 43,66144,152 44,562 45,243 FY FY 14 FY FY 15 FY FY 16 FY FY 17 FY FY 18 FY 19 PROJ San Gorgonio Memorial Hospital Acute Average Daily Census (ADC) FY 19 PROJ ED VISITS YTD %Var (BUDGET) = 0.8% % Var (PRIOR YEAR)=3.3% ER visits Cur Mo Year-to-Date Actual 3,474 14,594 Budget 3,674 15,039 Prior year 3,584 14,670 ADC YTD %Var (BUDGET) = -8.1% % Var (PRIOR YEAR)=-5.3% ADC Cur Mo Year-to-Date Actual Budget Prior year San Gorgonio Memorial Hospital Behavioral Health Visits San Gorgonio Memorial Hospital Total Surgeries (incl GI Lab) 7,500 7,000 6,500 6,000 5,500 6,390 6,299 FY 14 FY 15 7,103 7,010 7,011 FY 16 FY 17 FY 18 7,396 FY 19 PROJ 4,000 3,000 2,000 1, ,918 FY 14 3,085 FY 15 3,225 FY 16 3,016 FY 17 2,383 2,409 FY 18 FY 19 PROJ SURGERIES YTD %Var (BUDGET) = -18.5% % Var (PRIOR YEAR)=-13.4% Surgeries Cur Mo Year-to-Date Actual Budget Prior year Concluding Summary Positive takeaways for the month: 1) Favorable outpatient revenue, GI Lab and ED ancillary 2) Expenses $148 lower vs. Budget - Month 3) Expenses $301K lower vs. Budget - Year-to-Date Negative takeaways for the month: 4) Unfavorable YTD EBIDA var ( -$77K) mostly due to IGTs 5) Average daily census remains below budget and prior years 6) Slightly higher write-off % for the month +(1.13%) OCT 2018 Prepared 11/13//2018 Dave Recupero, CFO

20 Patient Statistics SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, Year-To-Date Prior Prior YTD YTD Actual Budget Year Actual Budget Year % VAR % VAR Line Ref # 10/31/18 10/31/18 10/31/17 STATISTICS 10/31/18 10/31/18 10/31/17 Vs Bud Vs Prior Yr Discharges [1] Acute % -6.98% [2] O/P Adjustment Factor % 17.60% [3] Adjusted Acute Discharges 3,061 3,041 2, % 9.39% [4] Newborn % 12.64% [5] Total Discharges 991 1,074 1, % -5.35% Patient Days: [6] Acute 2,991 3,868 3, % % [7] Newborn % 7.10% [8] 864 1, Total Patient Days 3,187 4,068 3, % % Average Length of Stay (ALOS) [9] Acute % % [10] Newborn ALOS % -4.92% Average Daily Census (ADC) [11] Acute % % [12] Newborn % 7.10% Emergency Dept. Statistics [13] ED Visits - Admitted % -8.81% [14] 1,553 1,476 1,438 ED Visits - Higher Acuity Ops 6,575 6,672 6, % 1.12% [15] 1,729 2,002 1,953 ED - Rapid Care Visits Ops 7,253 7,512 7, % -1.02% [16] 3,474 3,674 3,584 Total ED Visits 14,594 15,039 14, % -0.52% [17] 5.53% 5.34% 5.39% % of ER Visits Admitted 5.25% 5.68% 5.73% -7.62% -8.33% [18] 82.05% 78.84% 83.55% ER Admissions as a % of Total 85.78% 87.72% 87.50% -2.22% -1.97% Other Key Statistics: [19] 4,217 4,687 4,325 Total Outpatients Visits 17,423 18,985 17, % -0.29% [20] Observation Bed Days % 22.04% [21] 17.9% 12.6% 13.1% Obs. Bed Days as a % of Total 18.3% 13.1% 12.8% 39.60% 42.81% [22] Behavioral Health Visits 2,314 2,602 2, % -2.53% [23] IP Surgeries % % [24] OP Surgeries % % [25] Outpatient Scopes % 1.32% Productivity Statistics: [26] FTE's - Worked % -9.71% [27] FTE's - Paid % -9.09% [28] Worked FTE's per AOB % -4.12% [29] Paid FTE's per AOB % -3.46% [30] Case Mix Index -Medicare % 5.99% [31] Case Mix Index - All payers % 3.34%

21 SAN GORGONIO MEMORIAL HOSPITAL EXECUTIVE FINANCIAL SUMMARY FOUR MONTHs ENDING OCT 31, 2018 BALANCE SHEET Line YTD Prior FYE Ref # 10/31/ /30/2018 ASSETS [1] Current Assets $25,854,635 $24,405,743 [2] Assets Whose Use is Limited 3,887,957 7,510,888 [3] Property, Plant & Equipment (Net) 100,591, ,497,060 [4] Other Assets 1,546,873 1,562,257 Total Unrestricted Assets 131,880, ,975,948 [5] Restricted Assets 0 0 Total Assets $131,880,707 $135,975,948 LIABILITIES AND NET ASSETS [6] Current Liabilities $12,931,498 $12,717,984 [7] Long-Term Debt 110,887, ,841,320 [8] Other Long-Term Liabilities 0 0 Total Liabilities 123,819, ,559,303 Net Assets 8,061,640 10,416,645 [9] Total Liabilities and Net Assets $131,880,708 $135,975,948 Revenue: STATEMENT OF REVENUE AND EXPENSES - CURR & YTD 10/31/18 10/31/18 YTD YTD UAL BUDGET UAL BUDGET [10] Gross Patient Revenues $24,618,822 $24,924,197 $94,288,130 $94,233,664 [11] Deductions From Revenue (20,890,162) (20,867,748) (78,863,777) (78,897,002) [12] Net Patient Revenues 3,728,660 4,056,449 15,424,353 15,336,662 [13] Other Operating Revenue 1,388,346 1,422,484 5,562,261 5,932,895 [14] Total Operating Revenues 5,117,005 5,478,933 20,986,614 21,269,557 Expenses: [15] Salaries, Benefits & Contract Labor 3,720,432 3,802,160 14,681,534 15,003,865 [16] Purchased Serv. & Physician Fees 476, ,303 2,451,398 2,468,820 [17] Supply Expenses 641, ,237 2,485,011 2,639,264 [18] Other Operating Expenses 533, ,186 2,137,556 1,952,168 [19] Intergovernmental Transfer Expense [20] Depreciation & Interest Expense 895, ,781 3,651,178 3,923,124 [21] Total Expenses 6,268,259 6,507,667 25,406,676 25,987,241 [22] NET OPERATING SURPLUS (1,151,253) (1,028,734) (4,420,062) (4,717,684) [23] Non-Operating Revenue/(Exp.) 585, ,448 2,392,974 2,489,792 [24] TOTAL NET SURPLUS ($565,641) ($406,286) ($2,027,087) ($2,227,893) KEY STATISTICS AND RATIOS 10/31/18 10/31/18 YTD YTD UAL BUDGET UAL BUDGET [25] Total Acute Patient Days ,991 3,868 [26] Average Acute Length of Stay [27] Total Emergency Room Visits 3,474 3,674 14,594 15,039 [28] Outpatient Visits 4,217 4,687 17,423 18,985 SAN GORGONIO MEMORIAL HOSPITAL [29] Total Surgeries Budget 10/31/18 [30] Total Worked FTE's (w/o JV) Prior Fiscal Year End 06/30/18 [31] Total Paid FTE's (w/o JV) CALIFORNIA All Hospitals % 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% NET DAYS IN ACCOUNTS RECEIVABLE $25-60M Net Rev % % EBIDA MARGINS -2.39% % DAYS CASH ON HAND % % 63.53% 45.29% 46.59% Urban SALARY AND BENEFIT EXPENSE AS A PERCENTAGE OF NET REVENUE FINANCIAL STRENGTH INDEX - (2.07) [32] Days of Cash on Hand Excellent - Greater than 3Good to 0.0 [33] AP Days Fair to (2.0) Poor - Less than (2.0)

22 5 Key Financial Ratios SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, DESIRED POSITION IN RELATION TO BENCHMARKS AND BUDGET Prior Fiscal National Year to Date Year End CALIFORNIA Urban 10/31/ /30/18 All Hospitals $25-60M Net Rev. (See Note 1) (See Note 2) Profitability: [1] EBIDA Margin -5.20% -2.39% 4.15% 3.00% [2] Total Profit Margin % 0.00% 5.16% 3.34% [3] Deductable Ratio % 79.83% 80.29% 74.38% 53.43% [4] Inpatient Gross Revenue Percentage 29.17% 35.49% 68.61% 39.69% [5] Outpatient Gross Revenue Percentage 70.83% 64.51% 31.39% 60.31% Liquidity: [6] Days of Cash on Hand, Short Term [7] Days Cash, All Sources [8] Net Days in Accounts Receivable [9] AP Days NA NA [10] Current Ratio Productivity and Efficiency: [11] Paid FTE's per Adjusted Occupied Bed [12] Total Net Revenue per FTE $135,613 $141,498 $177,747 $129,708 [13] Salary Expense per Paid FTE $74,232 $71,409 $73,944 $41,018 [14] Salary and Benefits as a % of Net Revenue 69.59% 63.53% 45.29% 46.59% [15] Employee Benefits % 26.20% 24.02% 17.36% 20.27% [16] Supply Expense Per Adj. Discharge - CMI Adj. $803 $993 $891 $1,222 [17] Inventory Ratio YTD - Actual Prior Fiscal YTD - Budget 10/31/ /30/ /31/2018 Other Ratios: [18] Gross Days in Accounts Receivable [19] Net Revenue per Adjusted Discharge $6,866 $8,668 $7,040 [20] Operating Expenses per Adj. Discharge $7,251 $8,341 $7,398 Note Cleverly report (2010 median data), for all hospitals within the state regardless of size. Note Cleverly report (2010 median data), for all U. S. hospitals that match this type and size.

23 6 Balance Sheet - Assets SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, 2018 Percent of Net AR to Gross AR> 16.62% 16.77% ASSETS 17.02% Curr vs Prior YE Current Prior Positive/ Prior Positive/ Month Month (Negative) Year End (Negative) 10/31/ /30/2018 Variance 06/30/2018 Variance Current Assets [1] Cash and Cash Equivalents $2,903,689 $3,986,796 ($1,083,107) $6,308,962 ($3,405,273) [2] Gross Patient Accounts Receivable 43,390,711 41,835,291 1,555,421 43,879,925 (489,213) [3] Less: Bad Debt and Allowance Reserves (36,178,629) (34,820,569) (1,358,059) (36,409,590) 230,961 [4] Net Patient Accounts Receivable 7,212,083 7,014, ,362 7,470,335 (258,252) [5] Taxes Receivable 3,003,966 2,191, , ,606 2,667,360 [6] Other Receivables 980, ,912 70, , ,479 [7] Inventories 1,614,979 1,603,405 11,574 1,603,696 11,283 [8] Prepaid Expenses 820, ,856 (20,208) 836,752 (16,105) [9] Due From Third Party Payers 758, ,391 (21,885) 1,007,500 (248,994) [10] Malpractice Receivable [11] IGT Receivables 8,560,620 7,883, ,361 5,968,226 2,592,394 Total Current Assets 25,854,635 25,210, ,000 24,405,743 1,448,892 Assets Whose Use is Limited [12] Cash [13] Investments [14] Bond Reserve/Debt Retirement Fund 3,887,957 3,807,901 80,055 7,510,888 (3,622,931) [15] Trustee Held Funds [16] Funded Depreciation [17] Board Designated Funds [18] Other Limited Use Assets Total Limited Use Assets 3,887,957 3,807,901 80,055 7,510,888 (3,622,931) Property, Plant, and Equipment [19] Land and Land Improvements 4,820,671 4,820, ,820,671 0 [20] Building and Building Improvements 129,283, ,283, ,283,884 0 [21] Equipment 25,255,087 25,222,377 32,709 25,129, ,958 [22] Construction In Progress 8,390,249 8,372,539 17,710 8,370,897 19,352 [23] Capitalized Interest [24] Gross Property, Plant, and Equipment 167,749, ,699,471 50, ,604, ,309 [25] Less: Accumulated Depreciation (67,158,648) (66,664,135) (494,513) (65,107,521) (2,051,127) [26] Net Property, Plant, and Equipment 100,591, ,035,336 (444,094) 102,497,060 (1,905,818) Other Assets [27] Unamortized Loan Costs 1,546,873 1,633,383 (86,510) 1,562,257 (15,384) [28] Assets Held for Future Use [29] Investments in Subsidiary/Affiliated Org [30] Other [31] Total Other Assets 1,546,873 1,633,383 (86,510) 1,562,257 (15,384) [32] TOTAL UNRESTRICTED ASSETS 131,880, ,687, , ,975,948 ($4,095,241) Restricted Assets [33] TOTAL ASSETS $131,880,707 $131,687,255 $193,451 $135,975,948 ($4,095,241)

24 7 Balance Sheet - Liabilities and Net Assets SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, 2018 LIABILITIES AND FUND BALANCE Curr vs Prior YE Current Prior Positive/ Prior Positive/ Month Month (Negative) Year End (Negative) 10/31/ /30/2018 Variance 06/30/2018 Variance Current Liabilities [1] Accounts Payable $4,061,939 $4,124,937 ($62,998) $4,575,763 ($513,824) [2] Notes and Loans Payable (Line of Credit) 2,000,000 2,000,000 0 $0 2,000,000 [3] Accounts Payable- Construction $0 0 [4] Accrued Payroll Taxes 3,144,752 2,516, ,271 $3,284,184 (139,431) [5] Accrued Benefits 83,544 78,726 4,819 $88,734 (5,190) [6] Accrued Benefits Current Portion $0 0 [7] Other Accrued Expenses $0 0 [8] Accrued GO Bond Interest Payable 1,227, , ,029 $2,084,354 (857,108) [9] Malpractice Payable $0 0 [10] Due to Third Party Payers (Settlements) $0 0 [11] Advances From Third Party Payers $0 0 [12] Current Portion of LTD (Bonds/Mortgages) 2,095,000 2,095,000 0 $2,095,000 0 [13] Current Portion of LTD (Leases) 307, ,769 (134,363) $577,709 (270,303) [14] Other Current Liabilities 11,611 11,703 (92) 12,240 (629) Total Current Liabilities 12,931,498 12,084, ,665 12,717,984 (846,665) Long Term Debt [15] Bonds/Mortgages Payable (net of Cur Portion) 110,887, ,903,321 (15,753) 112,830,579 (1,943,011) [16] Leases Payable (net of current portion) ,740 (10,740) [17] Total Long Term Debt (Net of Current) 110,887, ,903,321 (15,753) 112,841,320 15,753 Other Long Term Liabilities [18] Deferred Revenue [19] Accrued Pension Expense (Net of Current) [20] Other [21] Total Other Long Term Liabilities TOTAL LIABILITIES 123,819, ,988, , ,559,303 (1,740,237) Net Assets: [22] Unrestricted Fund Balance 10,416,645 10,416, ,553,701 (5,137,057) [23] Temporarily Restricted Fund Balance [24] Restricted Fund Balance [25] Net Revenue/(Expenses) (2,355,004) (1,717,543) (637,461) (5,137,057) 2,782,052 [26] TOTAL NET ASSETS 8,061,640 8,699,101 (637,461) 10,416,645 (2,355,004) TOTAL LIABILITIES [27] AND NET ASSETS $131,880,707 $131,687, ,451 $135,975,948 ($4,095,241) $0 $0 $0

25 Statement of Revenue and Expense SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, CURRENT MONTH Positive Prior Actual Budget (Negative) Percentage Year 10/31/18 10/31/18 Variance Variance 10/31/17 Gross Patient Revenue [1] Inpatient Revenue $7,483,673 $8,774,495 ($1,290,822) % $7,757,458 [2] Inpatient Psych/Rehab Revenue % 0 [3] Outpatient Revenue 17,135,149 16,149, , % 15,213,025 [4] Long Term Care Revenue % 0 [5] Home Health Revenue % 0 [6] Total Gross Patient Revenue 24,618,822 24,924,197 (305,375) -1.23% 22,970,482 Deductions From Revenue [7] Discounts and Allowances (19,757,886) (20,099,922) 342, % (18,606,768) [8] Bad Debt Expense (1,094,583) (701,238) (393,345) % (800,947) [9] Prior Year Settlements % 0 [10] Charity Care (37,692) (66,588) 28, % (60,251) [11] Total Deductions From Revenue (20,890,162) (20,867,748) (22,414) -0.11% (19,467,966) [12] 84.85% 83.72% 84.75% [13] Net Patient Revenue 3,728,660 4,056,449 (327,789) -8.08% 3,502,516 Non Patient Operating Revenues [14] IGT/DSH Revenues 832, ,779 (81,741) -8.95% 2,071,722 [15] Tax Subsidies Measure D 175, ,055 (1,055) -0.60% 168,540 [16] Tax Subsidies Prop , ,762 (762) -0.72% 73,990 [17] Tax Subsidies County Supplemental Funds 0 17,425 (17,425) % 0 [18] Other Operating Revenue 276, ,463 66, % 383,714 [19] Clinic Net Revenues 41,754 51,667 (9,913) % 10,652 Total Operating Revenue 5,158,759 5,530,600 (371,841) -6.72% 6,211,133 Operating Expenses [20] Salaries and Wages 2,856,584 2,944,788 88, % 3,030,922 [21] Fringe Benefits 768, ,650 (3,907) -0.51% 721,029 [22] Contract Labor 95,291 92,722 (2,569) -2.77% 111,027 [23] Physicians Fees 196, ,426 (19,574) % 185,078 [24] Purchased Services 280, ,877 94, % 447,058 [25] Supply Expense 641, ,237 76, % 596,316 [26] Utilities 136,786 78,319 (58,467) % 71,434 [27] Repairs and Maintenance 42,524 42,033 (491) -1.17% 35,624 [28] Insurance Expense 115,594 67,651 (47,943) % 61,267 [29] All Other Operating Expenses 144, ,297 (12,988) -9.89% 128,269 [30] IGT Expense % 861,096 [31] Leases and Rentals 94, ,886 40, % 48,364 [32] Clinic Expense 113, ,942 (5,632) -5.22% 213,308 [33] Total Operating Expenses 5,485,854 5,634, , % 6,510,792 [34] EBIDA (327,095) (104,228) (222,867) % (299,659) Interest Expense and Depreciation [35] Depreciation 494, ,333 63, % 567,588 [36] Interest Expense and Amortization 401, ,448 20, % 405,451 [37] Total Interest & depreciation 895, ,781 84, % 973,039 Non-Operating Revenue: [38] Contributions & Other 0 16,667 (16,667) % 0 [39] Tax Subsidies for GO Bonds - M-A 585, ,781 (20,168) -3.33% 601,335 [40] Total Non Operating Revenue/(Expense) 585, ,448 (36,835) -5.92% 601,335 [41] Total Net Surplus/(Loss) ($637,461) ($462,561) ($174,900) 37.81% ($671,363) [42] Extra-ordinary loss on FInancing % 0 [43] Increase/(Decrease in Unrestricted Net Assets ($637,461) ($462,561) ($174,900) 37.81% ($671,363) [44] Total Profit Margin % -8.36% % [45] EBIDA % -6.34% -1.88% -4.82%

26 9 Statement of Revenue and Expense SAN GORGONIO MEMORIAL HOSPITAL BANNING, CALIFORNIA FOUR MONTHs ENDING OCT 31, 2018 YEAR-TO-DATE Positive Prior Actual Budget (Negative) Percentage Year 10/31/18 10/31/18 Variance Variance 10/31/17 Gross Patient Revenue [1] Inpatient Revenue $27,507,647 $30,182,381 ($2,674,734) -8.86% $32,186,172 [2] Inpatient Psych/Rehab Revenue % 0 [3] Outpatient Revenue 66,780,483 64,051,283 2,729, % 61,631,088 [4] Long Term Care Revenue % 0 [5] Home Health Revenue % 0 [6] Total Gross Patient Revenue 94,288,130 94,233,664 54, % 93,817,260 Deductions From Revenue [7] Discounts and Allowances (75,272,307) (75,993,995) 721, % (75,429,026) [8] Bad Debt Expense (3,368,048) (2,651,249) (716,799) % (3,008,503) [9] Prior Year Settlements % 0 [10] Charity Care (223,422) (251,758) 28, % (279,604) [11] Total Deductions From Revenue (78,863,777) (78,897,002) 33, % (78,717,132) [12] 83.6% 83.7% -0.1% 83.9% [13] Net Patient Revenue 15,424,353 15,336,662 87, % 15,100,128 Non Patient Operating Revenues [14] IGT/DSH Revenues 3,475,954 4,105,118 (629,164) % 5,024,798 [15] Tax Subsidies Measure D 700, ,592 94, % 674,160 [16] Tax Subsidies Prop , ,800 56, % 295,959 [17] Tax Subsidies County Supplemental Funds 0 59,938 (59,938) % 4,594 [18] Other Operating Revenue 966, , , % 1,167,147 [19] Clinic Net Revenues 111, ,668 (95,322) % 10,652 Total Operating Revenue 21,097,960 21,476,225 (378,265) -1.76% 22,277,436 Operating Expenses [20] Salaries and Wages 11,327,308 11,574, , % 12,100,748 [21] Fringe Benefits 2,968,243 3,058,504 90, % 3,148,759 [22] Contract Labor 385, ,888 (15,095) -4.07% 390,865 [23] Physicians Fees 770, ,704 (64,881) -9.19% 789,495 [24] Purchased Services 1,680,813 1,763,116 82, % 2,027,977 [25] Supply Expense 2,485,011 2,639, , % 2,552,357 [26] Utilities 350, ,276 (37,531) % 354,985 [27] Repairs and Maintenance 184, ,132 (16,855) % 174,062 [28] Insurance Expense 505, ,028 (99,456) % 280,411 [29] All Other Operating Expenses 483, ,188 42, % 619,322 [30] IGT Expense % 861,096 [31] Leases and Rentals 613, ,544 (73,637) % 403,857 [32] Clinic Expense 439, ,768 (7,495) -1.74% 256,324 [33] Total Operating Expenses 22,194,761 22,495, , % 23,960,256 [34] EBIDA (1,096,801) (1,019,660) (77,141) 7.57% (1,682,820) Interest Expense and Depreciation [35] Depreciation 2,051,127 2,233, , % 2,210,665 [36] Interest Expense and Amortization 1,600,051 1,689,792 89, % 1,630,573 [37] Total Interest & depreciation 3,651,178 3,923, , % 3,841,238 Non-Operating Revenue: [38] Contributions & Other 50,524 66,668 (16,144) % 0 [39] Tax Subsidies for GO Bonds - M-A 2,342,450 2,423,124 (80,674) -3.33% 2,405,341 [40] Total Non Operating Revenue/(Expense) 2,392,974 2,489,792 (96,817) -3.89% 2,405,341 [41] Total Net Surplus/(Loss) ($2,355,004) ($2,452,993) $97, % ($3,118,717) [42] Extra-ordinary loss on FInancing % [43] Increase/(Decrease in Unrestricted Net Assets ($2,355,004) ($2,452,993) $97, % ($3,118,717) [44] Total Profit Margin % % % [45] EBIDA % -5.20% -4.75% -7.55%