See for the list of current NRMSIRs and SIDs.

Transcription

1 Municipal Secondary Market Disclosure Information Cover Sheet This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange rule 15c2-12 or any analogous state statute. See for the list of current NRMSIRs and SIDs. If this filing relates to a Single Bond Issue: Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of state where the Issuer is located). Provide 9-digit CUSIP* numbers to which the information relates: If this filing relates to all securities issued by the Issuer or all securities of a specific credit or issued under a single indenture: Issuer s Name (please include name of state where issuer is located): Abilene Health Facilities Development Corporation Other Obligated Person s Name (if any): Sears Methodist Retirement System Obligated Group Project (exactly as it appears on the Official Statement Cover) Provide six-digit CUSIP* number(s) of Issuer: See Attached *(Contact CUSIP s Municipal Disclosure Assistance Line at for assistance with obtaining the proper CUSIP numbers). Type of Filing: (X) Electronic (number of pages attached) 23 ( ) Paper (number of pages attached) If information is also available on the Internet, give URL:

2 What type of information are you providing? (Check all that apply) A. ( ) Annual Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB) Fiscal Year Covered: B. ( ) Audited Financial Statements of CAFR pursuant to Rule 15c2-12 Fiscal Year Covered: C. ( ) Notice of Material Event pursuant to Rule 15c2-12 (Check as appropriate) 1. ( ) Principal and interest payment delinquencies 2. ( ) Non-payment related defaults 3. ( ) Unscheduled draws on debt service reserves reflecting financial difficulties 4. ( ) Unscheduled draws on credit enhancements reflecting financial difficulties 5. ( ) Substitution of credit or liquidity providers, or their failure to perform 6. ( ) Adverse tax opinions or events affecting the tax-exempt status of the security 7. ( ) Modifications to the rights of security holders 8. ( ) Bond calls 9. ( ) Defeasances 10. ( ) Release, substitution, or sale of property securing repayment of the securities 11. ( ) Rating changes D. ( ) Notice of Failure to Provide Annual Financial Information as Required E. (x ) Other Secondary Market Information (specify): Obligated Group Financial Statements August 31, 2012 I hereby represent that I am authorized by the issuer of obligor or its agent to distribute this information publicly: Issuer Contact: Name Title Employer City State Zip Code Telephone Fax Address Issuer Web Site Dissemination Agent Contact, if any: Name Title Employer City State Zip Code Telephone Fax Address Relationship to Issuer Obligor Contact, if any: Name Terry Myers Title CFO Employer Sears Methodist Retirement System, Inc. City Austin, TX State TX Zip Code Telephone Fax Address tmyers@sears-methodist.com Obligor Web Site Investor Relations Contact, if any: Name Title Telephone Address

3 CUSIPS Series 1998A AJ AK AL AM AN AP2 Series 1998B AA AU1 Series AW AX AY3 Series BB BC BD BE BF BG BH BJ BK BL BM BP BN6

4 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group ASSETS 2,497,125 CURRENT ASSETS: Cash and cash equivalents 2,929,578 5,315,215 (1,796,741) (277,822) (5,215,059) (2,322) 952, ,849 Accounts receivable 22, , , ,106 97,386 2,447,613-2,447,613 Accrued interest receivable 71, , , ,655 Due from other campuses 9,232,424-11,415,403-79,439 79,296 20,806,562 11,063,715 9,742,847 Pledges receivable Notes receivable - current , , ,000 Inventories ,295 52,024 12,850-84,168-84,168 Other current assets 288,088-19,462 12,890 11, , ,861 AWUIL - required for current liabilities 7,676, ,676,102-7,676,102 Total Current Assets 20,220,280 5,315,215 10,230,957 1,154,242 (4,127,244) 174,360 32,967,811 11,063,715 21,904,095 FIXED ASSETS: Buildings and improvements 148,386-31,945,841 36,375,229 13,701,114-82,170,571-82,170,571 Building equipment ,328 2,489, ,545-3,647,135-3,647,135 Department equipment 1,751,068-1,265,062 1,684, ,177-5,536,640-5,536,640 Vehicles , ,969 83, , ,519 Construction in progress 833,503-2,046, , ,048 (0) 4,035,217-4,035,217 2,732,957-35,825,717 41,040,943 16,417,464 (0) 96,017,082-96,017,082 Less accumulated depreciation 1,645,018-7,189,005 16,466,769 6,217,467-31,518,259-31,518,259 1,087,939-28,636,712 24,574,174 10,199,997 (0) 64,498,823-64,498,823 Land 830, ,358 1,393, ,897-3,789,367-3,789,367 Net Fixed Assets 1,918,089-29,586,070 25,968,137 10,815,894 (0) 68,288,190-68,288,190

5 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group ASSETS WHOSE USE IS LIMITED: By board for benevolent care needs - 4,067, ,067,438 2,889,196 1,178,242 By donor for specific purposes - 1,767, ,767,735-1,767,735 By board for other needs - 4,858, ,858,802-4,858,802 By board for depreciation reserve By board for expansion projects - 303, , ,132 Under indenture - held by trustee 11,934, ,934,218-11,934,218 By board for deferred compensation 806, , ,946 By board for accelerated debt retirement Reserve for replacements Residual receipts reserve Resident trust fund deposits ,576 7,987 8, , ,636 Less AWUIL- required for current liabilities (7,676,102) (7,676,102) - (7,676,102) Total Assets Whose Use is Limited 5,065,062 10,997, ,576 7,987 8,073-16,471,804 2,889,196 13,582,608 OTHER ASSETS: Bond issue costs, net of amortization 1,813, ,813,057-1,813,057 Notes Receivable 4,031, , ,955,012-4,955,012 Notes Receivable, net of current maturities Investment in SMF 10,620, ,292 1,438,182 2,357, ,971,899 14,971,899 - Investment in CCIC 681, , ,937 Investment in SS@H Investment in SWAC 300, , ,000 Pledges receivable, net of current maturities Other assets 145, , , ,395 Total Other Assets 17,592, , ,292 1,438,182 2,407, ,917,299 14,971,899 7,945,400 TOTAL ASSETS 44,796,071 17,235,839 40,765,895 28,568,547 9,104, , ,645,105 28,924, ,720,294

6 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 LIABILITIES AND NET ASSETS Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group CURRENT LIABILITIES: Current maturities of long-term debt 76,375, , ,726,623-76,726,623 Current maturities of annuities payable - 55, ,851-55,851 Current maturies of capital lease 33, ,556-33,556 Note payable 16,657, ,657,401 2,288,640 14,368,761 Accounts payable 146, , , , , ,154 Due to other campuses 11,091, , ,193,222 11,063, ,507 Accrued payroll and related taxes 380, , , , , ,212 Accrued interest payable 2,268, ,268, ,556 1,667,590 Construction and retainage payable Medical claims payable 1,171, ,171,459-1,171,459 Deferred revenue 158, , , ,909 Other current liabilities 289,179-19,238 47,941 (29,610) - 326, ,748 Resident security deposits - - 1,328,548 84,878 31,084-1,444,510-1,444,510 Total Current Liabilities 108,571,332 55,851 2,612, , , ,344,791 13,952,911 98,391,880 LONG-TERM LIABILITIES: Bonds payable, less current maturities Bond discount, net of accum. amort. (742,590) (742,590) - (742,590) Notes/Leases Payable, net of current portion 4,492, ,492,220-4,492,220 Due to other campus Deferred revenue - nonrefundable , , , , ,291 Deferred revenue - refundable - - 8,204,139 5,708,920 2,611,982-16,525,042-16,525,042 Deferred compensation plan 916, , ,304 Annuities and trust payable - 130, , ,950 Total Long-Term Liabilities 4,665, ,950 8,640,794 6,044,027 2,820,512-22,302,216-22,302,216 Total Liabilities 113,237, ,801 11,253,007 6,804,054 3,165, ,647,007 13,952, ,694,096

7 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF FINANCIAL POSITION - UNAUDITED August 31, 2012 Sears Sears Sears Parks Wesley Methodist Sears Methodist Panhandle Methodist Woods Subtotal Total Retirement Methodist Centers, Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Inc. Corporation Village Care Center Group Entries Group NET ASSETS: Unrestricted (68,441,194) 14,612,842 29,512,888 21,764,494 5,938, ,460 3,561,901 14,971,899 (11,409,998) Temporarily restricted - 668, , ,762 Permanently restricted - 1,767, ,767,435-1,767,435 Total Net Assets (68,441,194) 17,049,039 29,512,888 21,764,494 5,938, ,460 5,998,098 14,971,899 (8,973,801) TOTAL LIABILITIES AND NET ASSETS 44,796,071 17,235,839 40,765,895 28,568,547 9,104, , ,645,105 28,924, ,720,294

8 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group UNRESTRICTED NET ASSETS: OPERATING REVENUE: Resident fees - - 6,065,948 5,679,371 2,536,983-14,282, ,962 13,485,340 Resident fees - charitable discounts - - (209,627) (182,985) (33,383) - (425,994) - (425,994) Resident fees - amort of deferred revenue , ,137 55, , ,003 Medicaid ,662,262 2,381,173-4,043,435-4,043,435 Medicaid - contractual allowance (619,451) (1,535,472) - (2,154,924) - (2,154,924) Medicare - - 1,207,554 2,246,086 2,656,921 (0) 6,110,561-6,110,561 Medicare - contractual allowance - - (421,382) (1,077,633) (1,118,854) - (2,617,869) - (2,617,869) HUD Fees 3,216, ,216,000 1,232,000 1,984,000 Other revenue - 2,000 38, ,379 75, ,725 65, ,458 Total Operating Revenue 3,216,000 2,000 6,784,264 8,217,166 5,018,809 (0) 23,238,238 2,094,229 21,144,010 OPERATING EXPENSES: Nursing - - 2,545,969 2,273,681 2,101,104-6,920,754 (796,962) 6,123,792 Activities ,329 92,547 35, , ,101 Environmental services , , ,650-1,503,170-1,503,170 Utilities 46,520 1, , , , , ,403 Consultants ,339 68,094 50, , ,359 Specialty services Pharmacy Dietary , , ,030-1,960,051-1,960,051 Social services ,421 26,046 30, , ,163 General and administrative 2,783, ,137 1,025, , ,517-5,307,657 (1,232,000) 4,075,657 Development 162, , ,868 Risk management and training 2,727-42,078 40,988 12,996-98,790-98,790 Marketing and admissions 279,436-92, , , , ,854 Depreciation and amortization 271, , , ,129-2,106,186-2,106,186 Employee benefits and insurance 460, , , ,915-2,139,933-2,139,933 Total Operating Expenses 4,007, ,537 6,483,139 6,809,237 4,708,615-22,218,288 (2,028,962) 20,189,326 Excess (Deficiency) of Operating Revenue Over Expenses (791,760) (207,537) 301,125 1,407, ,193 (0) 1,019,950 65, ,683

9 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group Other Revenue (Expenses): Contributions, net of fund raising exp 1, , , ,248 Contributions, nonrefundable amort - 175, , ,334 Grant revenue - net of expenses 117, , ,433 Interest income 191,504 95,089 (594) 28,522 2, ,418 60, ,522 Change in SMF Investment 587,818 - (615,541) 27,032 (43,525) (56,488) (100,705) (100,705) - Realized gains/(losses) on investments (15,648) (15,648) - (15,648) Unrealized gains/(losses) on investments 14,892 7, ,831-22,831 Gain/(Loss) on Sale of Asset - - (81,315) - - (74,744) (156,059) - (156,059) Gain/(Loss) on Early Extinguishment of Debt Debt Service 5,600,000 - (2,000,000) (2,880,000) (720,000) Distribution to facilities - (450,213) (450,213) (450,213) - Interest expense (3,701,861) (78,641) (16,942) (610) (972) - (3,799,025) (60,896) (3,738,129) Transfers from Foundation 19, ,003 61,900 29, , ,328 - Other revenue (expenses) (164,680) - 496,793 (37,604) (31,475) - 263, ,034 Total Other Revenue (Expenses) 2,650, ,065 (1,936,595) (2,800,760) (763,785) (131,172) (2,716,023) (159,589) (2,556,434) CHANGE IN UNRESTRICTED NET ASSETS 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) CHANGE IN TEMP RESTRICTED NET ASSETS CHANGE IN PERM RESTRICTED NET ASSETS CHANGE IN NET ASSETS BEFORE TAX 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) INCOME TAX (EXPENSE)/BENEFIT CHANGE IN NET ASSETS AFTER TAX 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) (94,323) (1,601,750) NET ASSETS AT BEGINNING OF YEAR (70,299,659) 16,990,510 31,148,358 23,157,325 6,392, ,632 7,694,171 15,066,221 (7,372,050) TRANSFERS (0) - - (0) - (0) NET ASSETS AT MONTH END (68,441,194) 17,049,039 29,512,888 21,764,494 5,938, ,460 5,998,098 14,971,898 (8,973,801)

10 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF CASH FLOWS - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets 1,858,465 58,528 (1,635,471) (1,392,832) (453,592) (131,172) (1,696,073) 94,323 (1,601,750) Adjustments: Depreciation and amortization 271, , , ,129-2,106,186-2,106,186 Amortization of deferred revenue - - (130,559) (233,558) (75,181) - (439,298) - (439,298) Non-Cash Gain from term. of interest rate swap Non-Cash Loss from Early Extinguish. of Debt Temporarily restricted net assets Permanently restricted net assets Gain or Loss on Sale or Disposal of Assets 15,648 (7,940) ,708-7,708 (Increase) decrease in: Accounts receivable 19, ,278 (167,191) 117, , , ,694 Due from other campuses (1,803,424) - (11,095,277) 2,280 3,620 (79,296) (12,972,096) 12,577,399 (394,697) Accrued interest receivable (21,996) (21,996) - (21,996) Estimated third party settlements Inventories ,813 (14,646) Other current assets 123,600-13,530 16,549 4, , ,282 Pledges receivable Other assets Increase (decrease) in: Accounts payable (265,460) (22,315) (150,716) 75,216 (97,327) (19,630) (480,232) - (480,232) Due to other campuses 11,061,640 (501) 41,075 (139) ,102,306 (11,092,581) 9,725 Estimated third party settlements Accrued payroll and related taxes 25,218 - (89,308) 28,002 (35,514) - (71,601) - (71,601) Increase(Decrease) in accrued int payable 1,104, ,104,973-1,104,973 Other accrued expenses 241,076 - (66,242) 34,900 (43,959) 5 165, ,780 Annuities Payable - (51,088) (51,088) - (51,088) Medical claims payable 310, , ,466 Deferred revenue (33,333) - (22,798) (56,132) - (56,132) Resident security deposits ,906 (16,300) 2, , ,906 Net Cash Flows From Operating Activities 12,908,242 (23,315) (10,976,420) (843,975) (210,483) (75,965) 778,083 1,579,140 2,357,223

11 SEARS METHODIST RETIREMENT SYSTEM, INC-OBLIGATED GROUP COMBINING STATEMENT OF CASH FLOWS - UNAUDITED For the Period Ending August 31, 2012 Sears Sears Parks Wesley Methodist Sears Sears Panhandle Methodist Woods Subtotal Total Retirement Methodist Methodist Retirement Retirement Alzheimer's Obligated Eliminating Obligated System, Inc. Foundation Centers, Inc. Corporation Village Care Center Group Entries Group CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of fixed assets (6,421) - (1,682,295) (434,717) (483,763) 14,440 (2,592,757) - (2,592,757) (Increase) decrease in construction (257,147) - - (257,147) - (257,147) Issuance of notes receivable (Increase) decrease in SMF Investment (587,818) - 615,541 (27,032) 43,525 56, ,705 (100,705) - Increase (decrease) in Construction Pay Collections of notes receivable (Increase) decrease in CCIC Investment (Increase) decrease in SWAC Investment Proceeds from sale of fixed assets (Increase) decrease in AWUIL (4,013,062) 4,851, , ,012-1,009,831 (1,478,435) (468,605) Net Cash Flows From Investing Activities (4,607,301) 4,851,086 (899,341) (718,515) (436,226) 70,928 (1,739,368) (1,579,140) (3,318,508) CASH FLOWS FROM FINANCING ACTIVITIES: Cottage deposit proceeds - new unit , , ,986 Cottage deposit proceeds - remarketed units ,395 1,259, ,553-3,138,498-3,138,498 Cottage deposit refunds - - (624,336) (825,480) (614,616) - (2,064,432) - (2,064,432) Increase (Decrease) in bonds payable (731,615) (731,615) - (731,615) Increase(Decrease) In bond issuance cost Proceeds from notes payable Payments on notes payable (1,045,364) - (26,229) (1,071,593) - (1,071,593) Increase(Decrease) in Bond Discount Increase (Decrease) in leases payable 33, ,707-33,707 Net Cash Flows From Financing Activities (1,743,272) - 954, , ,937 - (66,449) - (66,449) Net Increase (Decrease) in Cash and Cash Equivalents 6,557,669 4,827,771 (10,920,944) (1,128,420) (358,772) (5,037) (1,027,733) (0) (1,027,733) Cash and Cash Equivalents at December 31, 2011 (3,628,091) 487,444 9,124, ,598 (4,856,287) 2,714 1,980,582-1,980,582 Transfers (0) - - (0) - (0) Cash and Cash Equivalents at August 31, ,929,578 5,315,215 (1,796,741) (277,823) (5,215,059) (2,323) 952,849 (0) 952,849

12 SEARS METHODIST RETIREMENT SYSTEM, INC. - OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the period ending August 31, 2012 Two Months Ending Inc/(Dec) Inc/(Dec) Eight Months Ending Inc/(Dec) Inc/(Dec) 8/31/2012 8/31/2011 $ % 8/31/2012 8/31/2011 $ % UNRESTRICTED NET ASSETS: OPERATING REVENUE: Resident fees 3,457,083 4,713,102 (1,256,019) -26.6% 13,485,340 18,157,018 (4,671,678) -25.7% Resident fees - charitable discounts (86,973) (133,656) 46, % (425,994) (414,950) (11,044) -2.7% Resident fees - amortization of entrance fees 87,220 82,650 4, % 340, ,441 24, % Medicaid 1,020,976 1,988,145 (967,169) -48.6% 4,043,435 7,751,936 (3,708,501) -47.8% Medicaid - contractual allowance (542,468) (818,539) 276, % (2,154,924) (3,183,157) 1,028, % Medicare 1,547,723 2,048,754 (501,031) -24.5% 6,110,561 8,302,371 (2,191,810) -26.4% Medicare - contractual allowance (696,983) (636,514) (60,469) -9.5% (2,617,869) (2,679,467) 61, % Fees 446, ,000 (20,000) -4.3% 1,984,000 2,284,000 (300,000) -13.1% Other revenue 110, ,580 (220,491) -66.7% 379,458 1,257,753 (878,295) -69.8% Total Operating Revenue 5,342,667 8,040,522 (2,697,854) -33.6% 21,144,010 31,790,944 (10,646,935) -33.5% OPERATING EXPENSES: Nursing 1,564,550 2,724,104 (1,159,555) -42.6% 6,123,792 10,263,530 (4,139,738) -40.3% Activities 41,844 66,236 (24,392) -36.8% 163, ,564 (92,463) -36.2% Environmental services 377, ,879 (135,438) -26.4% 1,503,170 1,918,460 (415,290) -21.6% Utilities 258, ,237 (102,326) -28.3% 942,403 1,183,602 (241,198) -20.4% Consultants 34,044 70,436 (36,392) -51.7% 164, ,061 (103,702) -38.7% Specialty services - 32,054 (32,054) % - 191,339 (191,339) % Pharmacy % % Dietary 507, ,321 (172,279) -25.4% 1,960,051 2,561,275 (601,224) -23.5% Social services 19,779 57,214 (37,435) -65.4% 101, ,939 (107,776) -51.6% General and administrative 979,510 1,402,353 (422,843) -30.2% 4,075,657 5,391,121 (1,315,464) -24.4% Development 40,935 50,283 (9,348) -18.6% 162, ,768 (29,900) -15.5% Risk management and training 19,405 52,560 (33,155) -63.1% 98, ,378 (105,589) -51.7% Marketing and admissions 163, ,963 (39,524) -19.5% 647, ,066 (157,212) -19.5% Interest expense 961,429 1,098,246 (136,817) -12.5% 3,738,129 4,348,377 (610,248) -14.0% Depreciation and amortization 528, ,710 (76,440) -12.6% 2,106,186 2,401,122 (294,936) -12.3% Employee benefits and insurance 515, ,571 (310,000) -37.5% 2,139,933 3,210,087 (1,070,154) -33.3% Total Operating Expenses 6,012,169 8,740,167 (2,727,998) -31.2% 23,927,455 33,403,688 (9,476,233) -28.4% Operating Income (Loss) (669,502) (699,645) 30, % (2,783,446) (1,612,744) (1,170,702) -72.6%

13 SEARS METHODIST RETIREMENT SYSTEM, INC. - OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the period ending August 31, 2012 Two Months Ending Inc/(Dec) Inc/(Dec) Eight Months Ending Inc/(Dec) Inc/(Dec) 8/31/2012 8/31/2011 $ % 8/31/2012 8/31/2011 $ % Other Revenue (Expenses): Contributions, net of fund raising expenses 100, ,366 (249,438) -71.2% 518,248 1,023,042 (504,794) -49.3% Contributions, nonrefundable amortization 28,213 24,122 4, % 175,334 69, , % Grant revenue - net of expenses 26,926 34,190 (7,264) -21.2% 117, , % Interest income 69,315 95,323 (26,007) -27.3% 256, ,971 (62,449) -19.6% Realized gains (losses) on investments (3,377) - (3,377) 0.0% (171,707) - (171,707) 0% Unrealized gains (losses) on investments 2,270 (17,101) 19, % 22,831 (1,802) 24, % Other revenue (expense) 7,697 38,719 (31,022) -80.1% 263,034 (104,600) 367, % Total Other Revenue (Expenses) 231, ,619 (293,648) -55.9% 1,181,695 1,422,378 (240,683) -16.9% CHANGE IN UNRESTRICTED NET ASSETS (437,531) (174,026) (263,504) % (1,601,750) (190,366) (1,411,384) % CHANGE IN TEMPORARILY RESTRICTED NET ASSET % % CHANGE IN PERMANENTLY RESTRICTED NET ASSET % % CHANGE IN NET ASSETS (437,531) (174,026) (263,504) % (1,601,750) (190,366) (1,411,384) % NET ASSETS AT BEGINNING OF PERIOD (8,536,270) 6,540,897 (7,372,050) 6,541,931 TRANSFERS (0) 2,554 (0) 17,859 NET ASSETS AT END OF PERIOD (8,973,801) 6,369,424 (8,973,801) 6,369,424

14 SEARS METHODIST RETIREMENT SYSTEM, INC. - OBLIGATED GROUP COMBINING STATEMENT OF ACTIVITIES - UNAUDITED For the period ending August 31, 2012 Two Months Ending Inc/(Dec) Inc/(Dec) Eight Months Ending Inc/(Dec) Inc/(Dec) 8/31/2012 8/31/2011 $ % 8/31/2012 8/31/2011 $ % FINANCIAL DATA: Total Resident Days - Apartments 11,532 11,718 (186) 45,384 40,068 5,316 Resident Days Rented - Apartments 10,630 10,976 (346) 42,382 36,828 5,554 Resident Days Vacant - Apartments ,002 3,240 (238) Occupancy % - Apartments 92.2% 93.7% -1.49% 93.4% 91.9% 1.47% Total Resident Days - Assisted Living 5,084 5,084-20,008 17,384 2,624 Resident Days Rented - Assisted Living 4,331 4,681 (350) 17,677 16,345 1,332 Resident Days Vacant - Assisted Living ,331 1,039 1,292 Occupancy % - Assisted Living 85.2% 92.1% -6.88% 88.3% 94.0% -5.67% Total Resident Days - All Homes 10,354 9, ,202 32,860 7,342 Resident Days Rented - All Homes 9,881 9, ,044 30,374 7,670 Resident Days Vacant - All Homes (202) 2,158 2,486 (328) Occupancy % - All Homes 95.4% 93.1% 2.32% 94.6% 92.4% 2.20% Total Resident Days - Nursing Center 13,020 29,760 (16,740) 55, ,760 (45,960) Resident Days Rented - Nursing Center 11,731 25,793 (14,062) 46,961 86,422 (39,461) Resident Days Vacant - Nursing Center 1,289 3,967 (2,678) 8,839 15,338 (6,499) Occupancy % - Nursing Center 90.1% 86.7% 3.43% 84.2% 84.9% -0.77% Total Resident Days 39,990 56,358 (16,368) 161, ,072 (30,678) Total Resident Days Rented 36,573 50,571 (13,998) 145, ,969 (24,905) Total Resident Days Vacant 3,417 5,787 (2,370) 16,330 22,103 (5,773) Total Occupancy % 91.5% 89.7% 1.72% 89.9% 88.5% 1.4% Note: Craig has taken 30 SNF beds out of service since May 31, which is reflect in 30 less beds. Wesley Court Executive Homes are also increasing over 2012 due to new openings.

15 SEARS METHODIST RETIREMENT SYSTEM, INC. OBLIGATED GROUP DEBT SERVICE COVERAGE RATIO CALCULATION As of August 31, 2012 Changes in net assets (1,601,750) Add: Depreciation and amortization 2,106,186 Interest expense 3,738,129 Net Turnover Entry Fees Received 1,074,066 (Gains)/losses and Property Retirement Cost 133,228 Deduct: Amortization of deferred revenue (515,337) Available Revenues 4,934,521 Annualized Available Revenues 7,401,782 Maximum Annual Debt Service 94,675,000 Debt Service Coverage Ratio 0.08

16 SEARS METHODIST RETIREMENT SYSTEM, INC. OBLIGATED GROUP DAYS CASH ON HAND As of August 31, 2012 Operating Expenses 23,927,455 Less: Deprecation and Amortization (2,106,186) 21,821,269 Number of Days in Period 244 Daily Operating Expenses 89,431 Cash and Unrestricted Investments 3,048,294 Days Cash on Hand 34