MASONIC VILLAGES OF THE GRAND LODGE OF PENNSYLVANIA ELIZABETHTOWN, PENNSYLVANIA

Transcription

1 MASONIC VILLAGES OF THE GRAND LODGE OF PENNSYLVANIA ELIZABETHTOWN, PENNSYLVANIA FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31,2017 AND 2016

2 TABLE OF CONTENTS Financial Statements: Balance Sheets Statements of Operations Statements of Changes in Net Assets Statements of Cash Flows PAGE Supplementary Information: Schedule 1 - Cash and cash equivalents Schedule 2 - Resident accounts receivable Schedule 3 - Assets whose use is limited under indenture agreement and held by trustee Schedule 4 - Investments Schedule 5 - Property and equipment Schedule 6 - Current installments of long-term debt Schedule 7 - Accrued expenses Schedule 8 - Long-term debt Schedule 9 - Resident service revenue Schedule 10 - Amortization of entrance fees Schedule 11 - Other revenue - unrestricted Schedule 12 - Investment income- unrestricted Schedule 13 - Nonoperating gains (losses)- unrestricted Schedule 14 - Operating expenses - unrestricted by natural classification Schedule 15 - Operating expenses - unrestricted by functional classification Schedule 16 - Summary of gift planning revenues and expenses Schedule 17 - Comparison of spending policy maximum to year-to-date cash transfers from Consolidated Fund Schedule 18 - Combining balance sheet Statements of Operations and Changes in Unrestricted Net Assets by Division Schedule 19 - Masonic Villages Consolidated Schedule 20 - Masonic Villages Corporate Function Schedule 21 - Masonic Village at Elizabethtown Schedule 22 - Masonic Village at Warminster Schedule 23 - Masonic Village at Dallas Schedule 24 - Masonic Village at Sewickley Schedule 25 - Masonic Village at Lafayette Hill Schedule 26 - Pennsylvania Acacia Insurance Company, LTD Schedule 27 - Ashlar Home Health and Hospice Services, LLC Schedule 28 - Acacia Services, LLC Schedule 29 - Ashlar Creative Solutions, LLC

3 BALANCE SHEETS MARCH 31,2017 AND 2016 :I ASSETS Current Assets: Cash and cash equivalents (Schedule 1) Assets whose use is limited and that are required for current liabilities (Schedule 3) Accounts receivable Resident (Schedule 2) Masonic Charities Fund Pennsylvania Masonic Youth Foundation The Masonic Library and Museum of Pennsylvania Estimated third party settlements receivable Investment income receivable Inventory, at cost Other current assets Notes receivable Contributions receivable Total current assets 21,331,770 3,640,654 6,902,132 38, ,165 1,377,882 2,714,852 2,857,369 2,367,480 70,671 42,064,733 18,123,01 1 4,653,397 8,730,843 32,885 3, ,924 1,376,135 2,282,768 3,111,407 2,164,496 63,866 41,317,108 Contributions receivable, net of current portion 326, ,480 Assets whose use is limited, net of current portion (Schedule 3) 28,759,772 Investments at fair value (Schedule 4) 673,602, ,243,240 Property and equipment, net of accumulated depreciation of 327,414,095 and 301,689,143 (Schedule 5) 360,171, ,916,919 Other noncurrent assets, net of accumulated amortization of 752,400 and 699, , ,225 1 '1 05,233,235 1,066,207,972

4 LIABILITIES AND NET ASSETS Current Liabilities: Current installments of long-term debt (Schedule 6) Accounts payable The Masonic Library and Museum of Pennsylvania Grand Lodge Other Accrued expenses (Schedule 7) Deferred revenue from estates and trusts Residents' personal funds Deposits on unoccupied units Annuities payable 10,115,000 9,425, ,238 21,512 4,923,701 7,333,590 12,653,560 13,920,329 42,697 46, , ,975 2,985,059 1,279,740 1,111,157 3,350,013 Total current liabilities 32,695,773 36,247,145 Accrued pension costs Annuities payable, net of current portion Contributions payable Refundable fees Deferred revenue from entrance fees Interest rate swap agreements Deferred revenue from landfill settlement Long-term debt and unamortized bond premium, less current installments (Schedule 8) Total liabilities 12,947,660 13,693,715 5,435,014 15,519,312 11,799,147 83,952,767 75,487, ,684, ,824,193 20,504,995 27,298,763 25,000 35, ,350, ,063, ,595, ,968,034 Net Assets Unrestricted Temporarily restricted Permanently restricted Total net assets 357,195, ,841,079 83,391,342 69,465, ,050, ,933, ,637, ,239,938 1 '1 05,233,235 1,066,207,972 2

5 STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2017 AND 2016 Operating revenues Resident service revenue, net of third party contractual and charity care allowances (Schedule 9) Provision for bad debts Total net resident service revenue Amortization of entrance fees (Schedule 1 0) Other revenue (Schedule 11) Investment income (Schedule 12) Total operating revenues 34,354,610 (1 02,796) 34,251,814 2,937, ,503 2,948,627 41,061,202 34,109,000 (87,946) 34,021,054 2,707, ,039 3,510,990 41,226,911 Operating expenses (Schedules 14 and 15) 48,538,966 46,954,350 Loss from operations before change in fair value of derivative financial instruments (7,477,764) (5,727,439) Net unrealized appreciation (depreciation) on interest rate swap agreements 1,376,271 (2,376,896) Loss from operations (6, 101,493) (8,1 04,335) Nonoperating gains to subsidize operating deficiency and provide for future capital expenditures (Schedule 13) 13,417,527 10,007,907 Excess of revenues and gains over expenses 7,316,034 1,903,572 Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases Total net assets released from restrictions 18, , ,035 13,366 13,366 Net unrealized appreciation (depreciation) on investments 3,628,516 (12,497,641) Increase (decrease) in unrestricted net assets 11,455,585 (10,580,703) 3

6 STATEMENTS OF CHANGES IN NET ASSETS THREE MONTHS ENDED MARCH 31, 2017 AND : :: : : :- Total Revenues and gains: Total operating revenues 41,061,202 Unrealized appreciation (depreciation) on interest rate swap agreements Nonoperating investment income Realized gains on sale of investments Gain on sa le of property and equipment Contributions, gifts and bequests Contributions from Pennsylvania Masonic Youth Foundation Contributions from Grand Lodge Permanently Restricted net assets Income from perpetual trusts held by third parties Total revenues and gains 1,376,271 28,728 20,11 1,161 3, ,778 82, ,065 63,950, Unrestricted 41,061,202 1,376,271 12, 11 3,695 3, ,308 82, ,348 55,855,000 Temporarily Restricted 28,728 7,997,466 49, ,076,512 Permanently Restricted 14,559 4,310 18,869 Expenses and losses: Unrestricted expenses (Sched ule 14) 48-'... 53_8_,_,9_6 6_ Total expenses and losses 48,538,966 48,538,966 48,538,966 Excess of revenues and gains over expenses and losses 15,411,415 7,316,034 8,076,512 18,869 Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases Total net assets released from restrictions 18, , ,035 (18,423) (492,612) (511,035) Net unrealized appreciation (depreciation) on investments 6,014,655 3,628,516 2,386,139 Increase (decrease) in net assets 21,426,070 11,455,585 9,951,616 18,869 Net assets at January 1 628,21 1, ,740,231 73,439, ,031,443 Net assets at March ,637, ,195,816 83,391, ,050,312 4

7 Total 2016 Unrestricted Temporarily Restricted Permanently Restricted 41,226,911 41,226,911 (2,376,896) 30,931 14,515,027 (2,376,896) 8,629,015 30,931 5,886,012 1,984, ,983 1 '153,726 3,620 36,000 36,000 79,149 79, ,619 55,937, ,760 48,857, ,071,233 4,295 7,915 46,954,350 46,954,350 46,954,350 46,954,350 8,982,720 1,903,572 7,071,233 7,915 13,366 (13,366) 13,366 (13,366) (20,824,032) (12,497,641 ) (8,326,391) (11,841,312) (1 0,580,703) (1,268,524) 7, ,081, ,421,782 70,733, ,925, ,239, ,841,079 69,465, ,933,426 5

8 STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31,2017 AND 2016 ',_',,.,_,_,_._,_,._,_,_,,,_.,_ ---,,,,,,,,,,.,., , o A " :-: :-:-:-:,:,:,:-:':-::::: }::, ;:-:::::: :-:-:--- :}':'::::::::;:::::::::,,..:::::.-)::::::::::::::: ::::::::::}'.-:-,,:,:,.,:,::-::::,-::,;:,_ :: ::_.,:-:.,,,.,,-,:,:,_:::::.,,-,,.:::;::::::;:::: ,::::;::;:::;::::;::::;::::::: :::;;:::,::;::;::::::: :::::::;;:::::::;':::...- _,- _::;::: ::-:-:-.. :: :::::':'::-:-:-: :-:-: :,,,.- -: _.v :_ :._:.::;::;::--- ::..; Cash flows from operating activities: Increase (decrease) in net assets Adjustments to reconcile increase (decrease) in net assets to net cash provided by operating activities: Depreciation and amortization Amortization of deferred financing costs Provision for bad debts Bond premium amortization Gain on disposal of property and equipment Amortization of entrance fees Proceeds from contributions and income restricted for investment Net realized and unrealized (gains) losses on investments Net unrealized (appreciation) depreciation on interest rate swap agreements Decrease in receivables Decrease in inventory and other current assets Decrease in accounts payable Increase (decrease) in other current and noncurrent liabilities Increase in deferred revenue from entrance fees and deposits Net cash provided by operating activities 21,426,070 6,677,778 33, ,796 (129,467) (3,000) (2,937,258) (18,869) (26,125,816) (1,376,271) 1,602,935 62,881 (4,216,721) 521,311 5,418,916 1,038,988 (11,841,312) 5,930,403 29,052 87,946 (123,709) (2,707,828) (7,915) 6,309,005 2,376, , ,302 (1,385,171) (386,856) 3,300,720 2,415,598 Cash flows from investing activities: Purchase of property and equipment Increase in assets whose use is limited Proceeds from the sale of investments Purchases of investments Decrease in other noncurrent assets Net cash used in investing activities (4,163,736) (29,932,454) 4,322,277 (3,594,363) (33,368,276) (6,269,909) (1,115,017) 2,185,173 (3,012,373) (8,212,126) Cash flows from financing activities: Proceeds from contributions and income restricted for investment Decrease in deferred revenue from landfill settlement Proceeds from 2017 Bonds Premium received from 2017 Bonds Payments for bond issue costs Principal payment on bonds Net cash provided by financing activities 18,869 (2,500) 29,000,000 2,274,247 (492,486) 30,798,130 7,915 (2,500) 5,415 Net decrease in cash and cash equivalents (1,531 '158) (5,791 '113) Beginning cash and cash equivalents 22,862,928 23,914,124 Ending cash and cash equivalents 21,331,770 18,123,011 6

9 MARCH 31, 2017 AND 2016 SCHEDULE 1 Cash and cash equivalents Unrestricted 18,400,355 14,847,765 T emporarily restricted 2,931,415 3,275,246 21,331,770 18,123,011 SCHEDULE 2 Resident accounts receivable Medicaid Private payor Medicare and other third party payors Less: Allowance for uncollectible accounts 4,752,966 5,278, ,831 1,630,275 2,188,335 2,574,366 7,669,132 9,482, , ,000 6,902,132 8,730,843 SCHEDULE 3 Assets whose use is limited under indenture agreement and held by trustee Cost Fair Value Cash and short-term investments 32,400,426 4,653,397 Less: Assets required for current pri ncipal and interest liabilities 3,640,654 4,653,397 28,759,772 32,400,426 4,653,397 3,640,654 4,653,397 28,759,772 7

10 MARCH 31,2017 AND 2016 SCHEDULE 4 Investments Investments in Consolidated Fund Unrestricted Cost ,420 65,955 Fair Value 140,420 65,955 Unrestricted- Board Designated Masonic Villages Reserve Fund Masonic Temple Preservation Fund Childrens Home Fund ligen Trust C. Austin Buck Administration Fee 174,583,742 11,952,340 7,883,818 11,886,688 3,052, ,640,738 12,386,762 7,805,796 11,265,931 2,853, ,162, ,875,789 12,251,932 12,302,079 7,822,918 7,483,008 11,614,126 10,624,390 2,906,419 2,615,432 Charitable Gift A nnuity Reserve Fund Building and Improvement Funds: Masonic Eastern Star Homes Masonic Village at Warminster Masonic Eastern Star Endowment Masonic Village at Lafayette Hill Funds 11,188, ,258 3,452,176 1,505,250 24,496,851 11,615, ,937 3,234,630 1,436,783 20,631,853 11,451 '179 11,514, , ,556 3,022,048 2,709,918 1,280,991 1,171,827 24,216,609 19,635,361 Masonic Village at Dallas Fund Masonic Village at Sewickley Fund Pennsylvania Acacia Insurance Co. Total Board Designated 2,164, ,197,742 10,658, ,996,259 2,017, ,467,384 9,783, ,068,204 2,138,965 1,924, ,458, '199,575 11,060,323 9,717, ,215, ,532,579 Total unrestricted 376,136, ,134, ,356, ,598,534 Temporarily restricted 3,685,718 3,765,930 3,820,884 3,794,342 Permanently restricted 228,126, ,924, ,013, ,396,670 Total investments in Consolidated Fund 607,949, ,824, ,190, ,789,546 Investments with State Street Bank & Trust Unrestricted (b) plan assets Investments with Lincoln Financial Group Unrestricted- 457 (b) plan assets 536,803 Investments with National Financial Services, LLC Unrestricted - Designated for C. Austin Buck Charitable Gift Annuity Payments Investments with BNY Mellon Financial Temporarily restricted Investments with various financial institutions Unrestricted- Split interest agreements 520,776 Investments held by outside trusts Permanently restricted 24,023, ,667 26,703,214 60, ,589 24,044, , ,803 25,917,495 60, , ,755 39,348,204 40,539, ,030, ,576, ,602, ,243,240 8

11 MARCH 31, 2017 AND 2016 SCHEDULE 5 Property and equipment Land Land improvements Buildings Equipment T otal depreciable assets Accumulated depreciation Net depreciable asets Construction in progress and current year additions 5,175,608 21,712, ,818, ,818, ,524, ,414, ,110,284 9,061, ,171,816 5,139,578 18,057, ,724, ,743, ,664, ,689, ,975,746 24,941, ,916,919 SCHEDULE 6 Current installments of long-term debt consist of: Series of 1996 Series of 2008 A Series of 2008 B Series of 2008 D Series of 2013 Series of 2015 Series of ,000 1,345,000 1,170,000 1,230,000 1,220,000 3,925, ,000 10,115, ,000 1,285,000 1,120,000 1,175,000 1,190,000 3,810,000 9,425,000 SCHEDULE 7 Accrued Expenses Net payroll Accumulated employee vacation Employer contributions to the 403 (b) retirement plan and defined benefit pension plan administration costs Employee healthcare benefit costs Workers compensation costs Net self-insurance costs - Pennsylvania Acacia Insurance Company, L TO Swap agreement payments for 2008 Bonds, Series A - D Bond interest expense Arbitrage rebate payable to the IRS for bond issues Other, primarily withholding liabilities 2,252,691 2,574, ,003 2,544, , , ,046 1,373,766 2,029,017 12,653,560 1,955,050 2,420, ,922 2,928, ,786 1,014, ,536 1,264,440 1,191,669 1,936,528 13,920,329 9

12 MARCH 31, 2017 AND 2016 Long-term debt SCHEDULE 8 Lancaster County Hospital Authority (Series of 1996) - variable rate demand/fixed rate bonds, maturing through 2027 Lancaster County Hospital Authority (Series of 2008 A) - variable rate demand/fixed rate bonds, maturing through 2031 Lancaster County Hospital Authority (Series of 2008 B) variable rate demand/fixed rate bonds, maturing through 2032 Lancaster County Hospital Authority (Series of 2008 D) - variable rate demand/fixed rate bonds, maturing through 2034 Lancaster County Hospital Authority (Series of 2013) - variable rate demand/fixed rate bonds, maturing through 2038 Lancaster County Hospital Authority (Series of 2015) - fixed rate bonds, maturing through 2030 Lancaster County Hospital Authority (Series of 2017) fixed rate bonds, maturing through 2038 Total long-term debt 11,685,000 12,530,000 27,595,000 28,880,000 26,145,000 27,265,000 34,495,000 35,670,000 35,415,000 36,605,000 40,140,000 43,950,000 29,000, ,475, ,900,000 Add: Less: Premiums on 2017 and 2015 Bonds Deferred financing costs for various debt issues 6,556,217 4,782,564 (1,565,843) (1 '194,217) Less: Current installments of long-term debt (Schedule 6) (1 0, 115,000) (9,425,000) 199,350, ,063,347 Deferred financing costs for various debt issues consist of: Bond issuance costs Bonds Bond issuance costs Bonds Bond issuance costs Bonds Bond issuance costs Bonds Bond issuance costs Bonds 163, , , , , , , , ,544 1,565,843 1,194,

13 I: MARCH 31, 2017 AND 2016 SCHEDULE 9 Resident service revenue Nursing Care Personal Care Retirement Living Children's Home Pharmacy Medical clinics Billable medical supplies Residential Care Program Hospice Wellness Center Home Care Services Adult Daily Living Child Day Care Center Other resident service revenue: Gift and beauty shop sales Resident, employee and guest meals Laundry Transportation Parking Communications services Gross resident service revenue 95,588,000 92,610,000 17,764,000 16,641,000 42,676,000 41,690,000 2,452,000 2,543,000 13,396,000 11,154,000 11,022,707 12,024, , , , ,000 3,051,000 2,891, , ,000 1,388,000 1,313, , ,000 2,043,000 1,809, , ,000 2,631,000 2,289, , , , , , ,000 1,570,000 1,402, ,660, ,203,000 Actual March 31 23,159,942 22,606,725 4,358,945 3,931,582 10,355,580 10,163, , ,745 3,009,909 2,731,657 2,573,864 2,697,277 62,756 46,729 81,270 80, , ,921 79,650 70, , ,688 91,051 98, , , , , , , , ,080 59,965 60,049 40,815 40, , ,332 47,022,623 45,703,515 Less: Third party contractual allowances and charity care allowances 49,736,707 44,993,000 12,668,013 11,594, ,924, ,210,000 34,354,610 34,109,000 11

14 MARCH 31, 2017 AND :-:-:-. -:- ::::..:::: : : :-: March 31 SCHEDULE10 Amortization of entrance fees Retirement Living 11,527,000 11,075,000 2,937,258 2,707,828 Personal Care 8,000 28,000 11,535,000 11,103,000 2,937,258 2,707,828 SCHEDULE11 Other revenue - unrestricted Sale of farm products Rental income Professional services provided to non-affiliated organizations Professional services provided to affiliated organizations Retirement Living Clinical provider support Child day care center grant Other government grants Miscellaneous income 1,400, ,000 1,375,000 83, , , ,000 1,550, ,000 1,505,000 89,000 62,000 87,000 84, , , , , , ,508 6,855 9,210 48,387 17,237 32,320 23,085 69, ,468 35,780 3,992,000 3,973, , ,039 12

15 MARCH 31, 2017 AND 2016 SCHEDULE 12 Investment income- unrestricted March 31 Investment income from: Unrestricted assets 78,000 78,000 17,726 24,033 Masonic Villages Reserve Fund 3,265,000 3,345, ,676 1,007,042 Masonic Villages Charitable Gift Annuities Fund 173, ,000 49,929 62,961 Masonic Temple Preservation Fund 193, ,000 58,167 64,987 C. Austin Buck Charitable Gift Annuity investments 950, , ,403 C. Austin Buck Administration Fee Fund 49,000 31,000 14,320 14,644 Children's Home Fund 139, ,000 37,612 42,272 ligen Trust 200,000 55,756 60,291 Masonic Eastern Star Home Building and Improvement Funds 14,000 13,000 3,982 4,284 Masonic Eastern Star Home Unrestricted Endowment Fund 22,000 21,000 6, 150 6,620 Masonic Village at Sewickley Fund 1,876,000 1,765, , ,559 Masonic Village at Dallas Fund 36,000 34,000 10,219 10,776 Masonic Village at Lafayette Hi ll Funds 371, , , ,292 Pennsylvania Acacia Insurance Co. 173, ,000 31,689 29,146 Temporarily and Permanently Restricted assets required by donor restriction to be used for operations 4,040,000 3,932,000 1 '154,977 1,271,680 11,579,000 11,136,000 2,948,627 3,510,990 13

16 MARCH 31, 2017 AND 2016 SCHEDULE13 Nonoperating gains (losses)- unrestricted Bequests Realized gains on sale of investments Gain on sale of property and equipment Contributions Contri butions under split-interest agreements Contributions from Pennsylvania Masonic Youth Foundation Contributions from Grand Lodge Permanently Restricted net assets Income from perpetual trusts held by third parties 4,407,000 4,468,000 15,134,000 12,975, , , , ,000 1 '162,000 1,205,000 1,752,000 1,728,000 Actual March , ,232 12,113,695 8,629,015 3, , , ,808 20,602 36,000 82,176 79, , ,760 23,838,000 21,870,000 13,417,527 10,007,907 14

17 MARCH 31, 2017 AND 2016 SCHEDULE14 Operating expenses - unrestricted by natural classification Actual March 31 Wages, salaries and benefits 109,429, ,380,777 Supplies 19,451,301 18,938,272 Purchased services 19,869,149 20,736,492 Energy and utilities 7,996,178 8,296,276 Depreciation and amortization 26,750,480 24,367,905 Interest 6,257,402 6,553,740 Other operating expenses 8,542,617 9,809,738 26,923,485 26,290,047 4,458,572 4,309,228 5,208,574 4,816,924 1,837,360 1,923,783 6,677,778 5,930,403 1,575,397 1,606,742 1,857,800 2,077,223 Allocated administrative costs 198,296, ,083,200 48,538,966 46,954,350 15

18 MARCH 31,2017 AND 2016 SCHEDULE15 Operating expenses - unrestricted by functional classification Program services: Nursing Care 62,684,712 59,163,020 Medical ancillary clinics 6,959,875 6,669,562 Pharmacy 5,791,157 5,087,701 Personal Care 9,890,255 9,156,712 Retirement Living 42,857,811 42,006,603 Children's Home 2,144,366 2,154,058 Adult Daily Living Center 346, ,025 Residential Care Program 289, ,173 Hospice 2,524,172 2,659,812 Wellness Center 1,141,238 1,049,049 Home Health Care Services Home Care Services 1,044, ,059 Community Services 233, ,624 Child Day Care Center 2,395,290 2,222,903 Conference Facilities 2,362,705 2,513,332 Contributions to Affiliates 2,907,634 4,063,462 Member Services 1,333,333 Employee Housing and Rental Property 943,220 1,004,301 Farm 2,005,063 2,155,202 Communications Services 653, ,906 Admissions and Resident Services 2,742,477 2,681,879 Support Services 4,659,360 4,595,039 Maintenance 8,733,400 8, 751,808 Food Services 5,736,206 5,612,275 Total program services expense 170,379, ,022,505 Actual March 31 15,659,692 15,280,617 1,603,41 4 1,717,174 1,344,135 1,415,716 2,548,329 2,213,902 10,529,281 10,173, , ,389 71,348 81,459 65,816 69, , , , ,536 24, , ,039 98,687 60, , , , , , , , , , , , , , , ,200 1,071,52 1 1,093,854 2,183,914 1,980,365 1,373,568 1,328, ,752,587 40,149,722 Management and general - Administration 26,276,884 26,428,989 6,422,641 6,479,545 Fundraising - Gift Planning 1,640,034 1,631, ,296, ,083, , ,083 48,538,966 46,954,350 16

19 MARCH 31, AND 2016 SCHEDULE16 Summary of gift planning revenues and expenses Actual March 31 Revenues generated from gift planning activities: Bequests 4,407,000 4,468, , ,232 Contributions 983, , , ,149 Contributions under split-interest agreements 400, , ,808 20,602 I nco me from perpetual trusts held by third parties 1,752,000 1,728, , ,760 Total revenues generated from gift planning activities 7,542,000 7,690,000 1,218,656 1,263,743 Expenses incurred by gift planning activities 1,640,034 1,631, , ,083 Excess of revenues over expenses 5,901,966 6,058, , ,660 Excess of revenues over expenses expenses as a percentage of total gift planning revenues 78.25% 78.78% 70.15% 74.28% Ratio of gift planning revenues to gift planning expenses

20 MARCH 31, 2017 AND 2016 SCHEDULE 17 Comparison of Spending Policy Maximum to -to-date Cash Transfers from Consolidated Fund Unrestricted Permanently Restricted Total Fair value of Masonic Villages' share of the Consolidated Fund at December 31, ,895, ,300, ,241, ,491, ,730, ,540, ,386, ,030, ,782,477 Three-year total 1,092,437, ,762,987 1,812,200,187 Three-year average 364,145, ,920, ,066,729 Spending policy percentage approved by the Consolidated Fund Trustees 5.00% 5.00% 5.00% Spending policy maximum for ,207,287 11,996,050 30,203,336 -to-date cash transfers from the Consolidated Fund 3,000,000 1,322,277 4,322,277 -to-date excess (deficiency) of spending policy maximum over year-to-date cash transfers 15,207,287 10,673,773 25,881,059 NOTE: The source of the fair values of Masonic Villages' share of Consolidated Fund investments is the "Investments" footnote to the internal financial statements for the applicable year. The three years to be used are the most recent completed statements available as of the annual December meeting of the Trustees of the Consolidated Fund. The annual December meeting is when the Trustees of the Consolidated Fund select the spending percentage to be used for the coming year. The Consolidated Fund's investment policy permits the use of unrestricted assets in excess of the spending maximum to the extent that unrestricted assets are available. The use of unrestricted assets is partially affected by Masonic Villages' practice of initially placing unrestricted bequests of 1 million or more into the Masonic Villages Reserve Fund. 18

21 MARCH 31, 2017 AND 2016 SCHEDULE18 Combining balance sheet as of March 31, 2017 Unrestricted Donor Restricted Total Current Assets: Cash and cash equivalents (Schedule 1) Assets whose use is limited and that are required for current liabilities (Schedule 3) Accounts receivable Resident (Schedule 2) Masonic Charities Fund Pennsylvania Masonic Youth Foundation Estimated third party settlements receivable Investment income receivable Inventory, at cost Other current assets Notes receivable Contributions receivable 18,400,355 2,931,415 3,640,654 6,902,132 38, , , ,734 2,714,852 2,857,369 2,367,480 70,671 21,331,770 3,640,654 6,902,132 38, ,165 1,377,882 2,714,852 2,857,369 2,367,480 70,671 Total current assets 38,089,913 3,974,820 42,064,733 Contributions receivable, net of current portion 326, ,918 Assets whose use is limited, net of current portion (Schedule 3) 28,759,772 28,759,772 Investments at fair value (Schedule 4) 385,419, ,182, ,602,423 Property and equipment, net of accumulated depreciation of 327,414,095 (Schedule 5) 360,171, ,171,816 Other noncurrent assets, net of accumulated amortization of 752, , ,573 Total Assets 812,748, ,484,351 1 '1 05,233,235 19

22 :::: :::.:::::::::::_:-:::. :::-::. : :-: : -.. Unrestricted Donor Restricted Total Current Liabilities: Current installments of long-term debt (Schedule 6) Accounts payable Masonic Library and Museum of Pennsylvania Grand Lodge of Pennsylvania Other Accrued expenses (Schedule 7) Deferred revenue from estates and trusts Residents' personal funds Deposits on unoccupied units Annuities payable 10,115, ,238 4,923,701 12,653, ,625 2,985,059 1 '111 '157 42,697 10,115, ,238 4,923,701 12,653,560 42, ,625 2,985,059 1 '111 '157 Total current liabilities 32,653,076 42,697 32,695,773 Accrued pension costs Annuities payable, net of current portion Refundable fees Deferred revenue from entrance fees Interest rate swap agreements Deferred revenue from landfi ll settlement Long-term debt and unamortized bond premium, less current installments (Schedule 8) 12,947,660 5,435,014 83,952, ,684,182 20,504,995 25, ,350,374 12,947,660 5,435,014 83,952, ,684,182 20,504,995 25, ,350,374 Total liabilities 455,553,068 42, ,595,765 Net Assets Unrestricted Temporarily restricted Permanently restricted Total net assets 357,195, ,195,816 83,391, ,050, ,441, ,195,816 83,391, ,050, ,637,470 Total Liabilities and Net Assets 812,748, ,484,351 1 '1 05,233,235 20

23 MASONIC VILLAGES OF THE GRAND LODGE OF PENNSYLVAN IA MARCH 31, 2017 AND r::.. SCHEDULE19 Masonic Villages Consolidated Statements of Operations and Changes in Unrestricted Net Assets Operating revenue Resident service revenue Provision for bad debts Net resident service revenue ,924,000 (270,000) 146,654, ,210,000 ( 2 1 0, 000~ 144,000,000 Actual March 31 34,354,610 34,109,000 (102,796) (87,946) 34,251,814 34,021,054 Amortization of entrance fees Other operating revenue Investment income Total operating revenue 11,535,000 3,992,000 11,579, ,760,000 11,103,000 3,973,000 11,1 36, ,212,000 2,937,258 2,707, , ,039 2,948,627 3,510, ,061,202 41,226,91 1 Operating expenses Wages, salaries and benefits Supplies Purchased services Energy and utilities Depreciation and amortization Interest Other operating expenses Allocated administrative costs 109,429,338 19,451,301 19,869,149 7,996,178 26,750,480 6,257,402 8,542, ,380,777 18,938,272 20,736,492 8,296,276 24,367,905 6,553,740 9,809,738 26,923,485 26,290,047 4,458,572 4,309,228 5,208,574 4,816,924 1,837,360 1,923,783 6,677,778 5,930,403 1,575,397 1,606,742 1,857,800 2,077,223 T otal operating expenses 198,296, ,083,200 48,538,966 46,954,350 Loss from operations before change in fair value of derivative financial instruments (24,536,465) (21,871,200) (7,477,764) (5,727,439) Net unrealized appreciation (depreciation) on interest rate swap agreements 1,746,000 1,370,000 1,376,271 (2,376,896) Loss from operations (22' 790,465) (20,501,200) (6,101,493) (8, 1 04,335) Nonoperating gains 23,838,000 21,870,000 13,417,527 10,007,907 Excess of revenues & gains over expenses 1,047,535 1,368,800 7,316,034 1,903,572 Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases Total net assets released from restrictions 18,423 13, , ,035 13,366 Net unrealized appreciation (depreciation) on investments Increase (decrease) in net assets Net assets at January 1 Net assets at March 3 1 3,628,516 (12,497,641) 11,455,585 (10,580,703) 345,740, ,421, ,195, ,841,079 21

24 MARCH 31, 2017 AND 2016 SCHEDULE 20 Masonic Villages Corporate Function Statements of Operations and Changes in Unrestricted Net Assets Operating revenue Resident service revenue Provision for bad debts Net resident service revenue Actual March Amortization of entrance fees Other operating revenue Investment income Total operating revenue 84,000 1,389,000 1,473,000 89,000 1,287,000 1,376,000 7, , ,362 10, , ,945 Operating expenses Wages, salaries and benefits Supplies Purchased services Energy and utilities Depreciation Interest Other operating expenses Allocated administrative costs Total operating expenses 12,331, ,806 5,065, ,700 2,963,149 (241,523) 3,631,198 (17,490,091) 6,777,873 11,234, ,533 6,312, ,710 1,637,752 (207,394) 5,006,827 (17,870,439) 6,601,206 3,080,579 16,529 1,190,216 96, , ,800 (4,372,523) 1,367,858 2,791,100 27,633 1,276,570 98, , ,332 (4,467,610) 921,404 Loss from operations before change in fair value of derivative financial instruments (5,304,873) (5,225,206) (1,231,496) (532,459) Net unrealized appreciation (depreciation) on interest rate swap agreements 1,746,000 1,370,000 1,376,271 (2,376,896) Income (loss) from operations (3,558,873) (3,855,206) 144,775 (2,909,355) Nonoperating gains (losses) 1,355,000 1,330,000 1,039, ,017 Excess (deficiency) of revenue and gains over expenses (2,203,873) (2,525,206) 1,184,686 (2,494,338) Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases Total net assets released from restrictions 1,452 1,452 1,138 1,138 Net unrealized appreciation (depreciation) on investments Increase (decrease) in net assets 272,784 1,458,922 (590,504) (3,083,704) Net assets at January 1 Add: Dividend payment from Ashlar Creative Solutions, LLC Less: Equity transfer to Ashlar Home Health and Hospice Services, LLC Net assets at March 31 (28,587,656) (28,057,556) (1 53,000) (27,281,734) (31,141,260) 22

25 MARCH 31, 2017 AND 2016 SCHEDULE 21 Masonic Village at Elizabethtown Statements of Operations and Changes in Unrestricted Net Assets Operating revenue Resident service revenue Provision for bad debts Net resident service revenue 99,487,000 96,816,000 (150,000) (140,000) 99,337,000 96,676,000 Actual March 31 23,263,697 23,063,786 (31,786) (81,457) 23,231,911 22,982,329 Amortization of entrance fees Other operating revenue Investment income Total operating revenue 7,370,000 6,910,000 2,113,000 2,122,000 7,636,000 7,403, ,456, ,1 11,000 1,738,868 1,782, , ,340 2,099,571 2,379,930 27,531,634 27,532,807 Operating expenses Wages, salaries and benefits Supplies Purchased services Energ y and utilities Depreciation and amortization Interest Other operating expenses Allocated administrative costs Total operating expenses 66,510,680 63,900,655 14,296,029 13,673,148 7,592,851 7,221,882 4,672,236 4,766,513 15,755,058 14,903,358 2,908,216 3,055,948 2,967,476 2,875,682 12,128,971 12,471, ,831, ,869,181 16,418,695 16,437,109 3,236,946 3,099,459 2,170,358 1,826,532 1,015,401 1,021,572 3,864,224 3,531, , , , ,163 3,032,243 3,117,999 31,287,300 30,549,945 Loss from operations (1 0,375,517) (9,758,181) (3,755,666) (3,017,138) Nonoperating gains 16,053,000 15,206,000 7,360,479 6,175,445 Excess of revenues and gains over expenses 5,677,483 5,447,819 3,604,813 3,158,307 Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases Total net assets released from restrictions Net unrealized appreciation (depreciation) on investments Increase (decrease) in net assets Net assets at January 1 Net assets at March 31 16,534 12, , ,950 12,228 1,895,571 (7,017,708) 5,948,334 (3,847,173) 405,015, ,623, ,964, ,775,941 23

26 MARCH 31, 2017 AND _._._:_:_:_:_._.~:::.. _._::.. -.:?=::::::::::::: SCHEDULE 22 Masonic Village at Warminster Statements of Operations and Changes in Unrestricted Net Assets Actual March Operating revenue Resident service revenue 5,788,000 5,483,000 1 '188, 186 1,334,303 Provision for bad debts (40,000) (10,000) (63,078) (1,580) Net resident service revenue 5,748,000 5,473,000 1,125,108 1,332,723 Other operating revenue 13,000 14,000 8,675 9,711 Investment income 72,000 68,000 20,744 21,840 Total operating revenue 5,833,000 5,555,000 1,154,527 1,364,274 Operating expenses Wages, salaries and benefits 4,184,521 3,720,915 1,092, ,973 Supplies 580, , , ,854 Purchased services 631, , , ,553 Energy and utilities 192, ,626 42,893 44,708 Depreciation 400, ,124 90,305 86,220 Interest Other operating expenses 141,477 99,240 33,416 39,858 Allocated administrative costs 551, , , ,200 Total operating expenses 6,682,046 5,958,096 1,693,310 1,575,366 Loss from operations (849,046) (403,096) (538,783) (211,092) Nonoperating gains 276, , ,891 71,386 Deficiency of revenues and gains over expenses (573,046} (155,096) (434,892) (139,706) Net assets released from restrictions - Satisfaction of program restrictions For use in operations For capital purchases 1,400 Total net assets released from restrictions 1,400 Net unrealized appreciation (depreciation) on investments 28,898 (96,058) Decrease in net assets (404,594) (235,764) Net assets at January 1 (6,328,183) (5,137,364) Net assets at March 31 (6, 732, 777) (5,373, 128) 24

27 MASONIC VI LLAGES OF THE GRAND LODGE OF PENNSYLVANIA =:.. =.=.=.=.=.=.=.=.==.. =.=.=.=.=.=.=.=.=.=.=.=.=.=. =.. ==.. ==...=.==.. =.=..=.=.. =.=... : : : : :=:= = = = :.-.:.. :;:;:_:_:;:;:;:;:;:;:::.._-;:;:;:::;:;:;:;:::;:::;: MARCH 31, 2017 AND SCHEDULE 23 Masonic Village at Dallas Statements of Operations and Changes in Unrestricted Net Assets Yea r Operating revenue Resident service revenue 1,376,000 1,349,000 Provision for bad debts Net resident service revenue 1,376,000 1,349,000 Amortization of entrance fees 147, ,000 Other operating revenue 195,000 28,000 Investment income 36,000 34,000 Total operating revenue 1,754,000 1,576,000 Operating expenses Wages, salaries and benefits 473, ,954 Supplies 82,850 81,200 Purchased services 423, ,622 Energy and utilities 285, ,250 Depreciation 898, ,524 Interest 224, ,844 Other operating expenses 104, ,186 Allocated administrative costs 175, ,003 Total operating expenses 2,669,280 2,795,583 Loss from operations (915,280) (1,219,583) Nonoperating gains 87,000 73,000 Deficiency of revenues and gains over expenses (828,280) (1'146,583) Actual Ma rch , , 5~3 341, ,503 53,572 39,503 79,233 64,202 10,313 10, , , , ,798 34,522 15, ,310 71,437 66,165 59, , ,105 57,219 60,728 25,409 46,227 43,928 56, , ,921 (209,190) (189,91 0) 69,657 48,655 (139,533) (141,255) Net assets released from restrictions - Satisfaction of prog ram restrictions For use in operations For capital purchases Total net assets released from restrictions Net unrealized appreciation (depreciation) on investments Decrease in net assets Net assets at January 1 Net assets at March 31 20,472 (68,412) (1 19,061) (209,667) (14,334,439) (13,694,691) (14,453,500) (13,904,358) 25

28 MARCH 31, 2017 AND 2016 SCHEDULE 24 Masonic Village at Sewickley Statements of Operations and Changes in Unrestricted Net Assets Actual March 31 Operating revenue Resident service revenue 24,847,000 25,275,000 5,996,559 5,923,510 Provision for bad debts (60,000) (50,000) (1,880) (2,335) Net resident service revenue 24,787,000 25,225,000 5,994,679 5,921,175 Amortization of entrance fees 2,520,000 2,590, , ,103 Other operating revenue 143, ,000 40,815 37,091 Investment income 1,898,000 1,786, , ,946 Total operating revenue 29,348,000 29,760,000 7,206,620 7,079,315 Operating expenses Wages, salaries and benefits 15,780,119 14,377,633 3,818,314 3,649,139 Supplies 2,290,805 2,515, , ,498 Purchased services 4,073,433 4,105,986 1,038, ,128 Energy and utilities 1,750,414 1,836, , ,207 Depreciation 4,454,496 4,381,902 1,078,375 1,072,252 Interest 2,614,307 2,730, , ,113 Other operating expenses 1,400,881 1,335, , ,362 Allocated administrative costs 2,053,321 2,363, , ,979 Total operating expenses 34,417,776 33,648,132 8,575,605 8,461,678 Loss from operations (5,069,776) (3,888, 132) (1,368,985) (1,382,363) Nonoperating gains 4,616,000 3,945,000 3,630,387 2,560,424 Excess (deficiency) of revenues and gains over expenses {453,776) 56,868 2,261,402 1,178,061 Net assets released from restrictions - Satisfaction of program restrictions For use in operations 126 For capital purchases Total net assets released from restrictions 126 Net unrealized appreciation (depreciation) on investments 1,076,356 (3,354,529) Increase (decrease) in net assets 3,337,884 (2, 176,468) Net assets at January 1 (4,405,587) (5,791,884) Net assets at March 31 {1,067,703) (7,968,352) 26

29 MARCH 31, AND SCHEDULE 25 Masonic Village at Lafayette Hill Statements of Operations and Changes in Unrestricted Net Assets Actual March 31 Operating revenue Resident service revenue 14,032,000 14,123,000 3,376,936 3,257,378 Provision for bad debts (20,000) (1 0,000) (6,052) (2,574) Net resident service revenue 14,012,000 14,113,000 3,370,884 3,254,804 Amortization of entrance fees 1,498,000 1,438, , ,014 Other operating revenue 64,000 54,000 14,555 14,151 Investment income 371, , , ,556 Total operating revenue 15,945,000 16,002,000 4,016,287 3,724,525 Operating expenses Wages, salaries and benefits 9,355,160 8,908,929 2,214,875 2,165,136 Supplies 1,407,567 1,413, , ,499 Purchased services 1,564,301 1,587, , ,454 Energy and utilities 71 1, , , ,878 Depreciation 2,278,250 2,138, , ,392 Interest 510, , , ,054 Other operating expenses 284, ,988 49, ,006 Allocated administrative costs 1,126,879 1,310, , ,567 Total operating expenses 17,238,363 17,075,765 4,119,488 4,174,986 Loss from operations (1,293,363} (1,073, 765) (1 03,201) (450,461) Nonoperating gains 1,266, , , ,549 Excess (deficiency) of revenues and gains over expenses (27,363) p98,765) 764,106 45,088 Net assets released from restrictions - Satisfaction of program restrictions For use in operations 31 1 For capital purchases 59,796 Total net assets released from restrictions 60,107 Net unrealized appreciation (depreciation) on investments 231,419 (916,538) Increase (decrease) in net assets 1,055,632 (871,450) Net assets at January 1 (6,192,402) (6,363,892) Net assets at March 31 (5,136,770) (7,235,342) 27

30 MARCH 31, 2017 AND 2016 SCHEDULE 26 Pennsylvania Acacia Insurance Company, L TO Statements of Operations and Changes in Unrestricted Net Assets Actual March Operating revenue Net resident service revenue Amortization of entrance fees Other operating revenue Investment income 173, ,000 31,689 Total operating revenue 173, ,000 31,689 29,146 29,146 Operating expenses Wages, salaries and benefits Supplies Purchased services 126, ,348 (8,265) Energy and utilities Depreciation Interest Other operating expenses 2,100 2,000 Total operating expenses 128, ,348 (8,265) Income from operations 44,442 33,652 39,954 Nonoperating gains 185, , ,895 Excess of revenues and gains over expenses 229, , , (27,025) (26,424) 55, , ,001 Net unrealized appreciation (depreciation) on investments 103,016 Increase (decrease) in net assets 488,865 Net assets at January 1 7,247,800 Net assets at March 31 7,736,665 (453,892) (156,891) 6,375,897 6,219,006 NOTE: For purposes of consolidation, the premium revenue charged by the Pennsylvania Acacia Insurance Company, L TO to the individual locations of Masonic Villages has been "netted" against the premium expense recorded by the individual Masonic Villages as "Purchased Services" on these schedules. Premium revenue reported in the "Purchased Services" line on this schedule totaled 0 and 0 for the three months ended March 31, 2017 and 2016, respectively. 28

31 MARCH 31,2017 AND 2016 SCHEDULE 27 Ashlar Home Health and Hospice Services, LLC Statements of Operations and Changes in Unrestricted Net Assets Actual March 31 Operating revenue Net resident service revenue Amortization of entrance fees Other operating revenue Investment income 23 Total operating revenue 23 Operating expenses Wages, salaries and benefits 15,895 Supplies 1,937 Purchased services 8,545 Energy and utilities 400 Depreciation Interest Other operating expenses Total operating expenses 26,777 Loss from operations (26,754) Nonoperating gains Deficiency of revenues and gains over expenses (26,754) Net assets at January 1 Add: Equity transfer from Corporate Division 153,000 Net assets at March ,246 NOTE: Ashlar Home Health and Hospice Services, LLC (AHHH) was formed in October Separate financial reporting for this entity began on January 1, 2017 in anticipation of commencing operating activities during the second quarter of AHHH incurred start-up costs totaling 79,322 for the period October 1, 2016 through December 31, These costs were recogn ized as expenses of the Masonic Village at Elizabethtown during the year ended December 31,

32 MARCH 31, 2017 AND : I SCHEDULE 28 Acacia Services, LLC Statements of Operations and Changes in Unrestricted Net Assets Actual March Operating revenue Resident service revenue 1,394,000 1,164, , ,520 Provision for bad debts Net resident service revenue 1,394,000 1,164, , ,520 Amortization of entrance fees Other operating revenue 5,000 2,000 1,535 Investment income 3,000 3, Total operating revenue 1,402,000 1 '169, ,521 Operating expenses Wages, salaries and benefits 793, , ,282 Supplies 641, , ,749 Purchased services 384, , ,151 Energ y and utilities 19,620 15,960 5,065 Depreciation Interest 241, ,394 Other operating expenses 10,000 20,000 Allocated administrative costs 185, ,934 46,357 Total operating expenses 2,275,948 2,1 61, ,770 Loss from operations (873,948) (992,870) (264,249) , , , ,079 4, , ,257 (241,271) Nonoperating gains Deficiency of revenues and gains over expenses (873,948) (992,870) (264,249) (241,271) Net assets at January 1 (7,374,033) Net assets at March 31 (7,638,282) (6,382, 154) {6,623,425) NOTE: Masonic Villages of the Grand Lodge of Pennsylvania (MV) has entered a revolving promissory note with Acacia to provide funds that will enable Acacia to conduct operations. Acacia pays interest to MV at the prime rate of interest in effect at the beginning of each year for advances made that yea r. For purposes of consolidation, interest received by MV from Acacia has been reported as a reduction in interest expense in the Statement of Operations and Changes in Unrestricted Net Assets. 30

33 MARCH 31, 2017 AND 2016 SCHEDULE 29 Ashlar Creative Solutions, LLC Statements of Operations and Changes in Unrestricted Net Assets Actual March Operating revenue Net resident service revenue Amortization of entrance fees Other operating revenue 1,375,000 1,505, ,581 Investment income 1,000 1, Total operating revenue 1,376,000 1,506, , , ,902 Operating expenses Wages, salaries and benefits 1,061 Supplies Purchased services 6,000 6,500 10,910 Energy and utilities 340 Depreciation Interest Other operating expenses 1,000 1,000 Allocated administrative costs 1,268, , ,026 Total operating expenses 1,275, , ,337 Income (loss) from operations 100, ,981 (1 9,394) 1,160 9, , , ,685 Nonoperating gains Excess (deficiency) of revenues and gains over expenses 100, ,981 (19,394) Net assets at January 1 698, , , ,312 1,091,997 Less: Dividend paid to Masonic Villages Net assets at March ,520 1,091,997 NOTE: Masonic Villages of the Grand Lodge of Pennsylvania (MV) has entered a revolving promissory note with Ashlar to provide funds that will enable Ashlar to conduct operations. Ashlar pays interest to MV at the prime rate of interest in effect at the beginning of each year for advances made that year. For purposes of consolidation, interest received by MV from Ashlar has been reported as a reduction in interest expense in the Statement of Operations and Changes in Unrestricted Net Assets. 31