Christwood $33,080,000. ST. TAMMANY PUBLIC TRUST frnancing AUTHORITY REVENUE AND REFUNDING REVENUE BONDS (CHRISTWOOD PROJECT) SERIES 2014

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1 $33,080,000 ST. TAMMANY PUBLIC TRUST frnancing AUTHORITY REVENUE AND REFUNDING REVENUE BONDS (CHRISTWOOD PROJECT) SERIES 2014 QUARTERLY REPORT FOR THE PERIOD ENDING MARCH 31, 2016 (REVISED 8/11/2016)

2 Quarterly Report for the Period Ending: March 3 1, TABLE OF CONTENTS ITEM DESCRIPTION PACE 1 Community Description.) "' 2 Project Swnmary and Update 4 3 Management Discussion & Analysis 5 4 Occupancy Statistics Financial Information Loan Covenants

3 COMMUNITY DESCRIPTION is a not-for-profit corporation organized in 1991 under the laws of the State of Louisiana for the purpose of owning a continuing care retirement community. has been determined to be exempt from federal income tax by virtue of being an organization described in Section 501 ( c )(3) of the Internal Revenue Code of Life Care Services LLC of Des Moines, Iowa has provided management services since The community is located in Covington, Louisiana on approximately 125 acres. The community consists of 143 independent living apartments, 18 cottages, 34 assisted living apartments and 30 skilled nursing apartments. also has a Community Center which features an indoor swimming pool, aerobics room, exercise equipment room, game room, activity room, two conference rooms, spa and salon, coffee house as well as office space and common areas. The project was originally financed with Mortgage Revenue Bonds, Series 1995A and Variable Rate Mortgage Revenue Bonds, Series l 995B for a total of $15,805,000. The 1995 debt was refunded in 1998 with Revenue Refunding Bonds, Series 1998 in the amount of $22,115,000. In 2011, additional Revenue Bonds were issued, Series 2011, in the amount of $12,500,000 to acquire, construct, install and equip improvements at the Community, including a 24 unit atrium independent apartment building and a community center. In December, 2014, Series 2014 Revenue and Refunding Revenue Bonds were issued in the amount of $33,080,000 for the purpose of refunding both the Series 1998 and Series 2011 Bonds, financing certain improvements (the "Project"), funding a debt service reserve fund, and paying a portion of the costs of issuance of the Bonds. 3

4 (j LJ PROJECT SUMMARY AND UPDATE $6,705,000 in cash was generated from the bond proceeds to acquire, construct, install and equip improvements at the Community, including new buildings which will include an area for our Environmental Services and an employee dining room as well as a 28 unit memory Cognitive Care Center and adult day care. There was a guaranteed maximum price contract in the amount of $681,845 for the Environmental Services/Employee dining building. Construction began in March, 2015 and the Certificate of Occupancy was obtained on October 1, With the opening of the Employee Pavillion, the areas previously used for employee dining and laundry services have been renovated to expand the main kitchen. This phase of renovation had a guaranteed maximum price contract in the amount of $282,000. The construction was completed and the new expanded kitchen area was utilized mid February. Cognitive Care Center currently has two AIA contracts for construction. The first contract was for sitework with a guaranteed maximum price of $577,801, which has been completed. The second contract is for the buildout of the entire shell of the building and completion of Wing 1 which will include fourteen resident rooms, common areas (including a nurses station and offices), and adult daycare, with a guaranteed maximwn price of $4, 786, 154. Two thirds of the foundation has been completed with the final slab pour scheduled to be completed by Friday, May Vertical construction on the first wing is underway and anticipated to be dried in by month' s end. We are anticipating the opening of the Cognitive Care Center late in the fourth quarter of

5 MANAGEMENT DISCUSSION & ANALYSIS Marketing Summary: ended the lst quarter of2016 with independent occupancy of 96.89%. There has been three moveins since the beginning of the year. There was one move-in for April and three scheduled for May. There are three apartments available for sale with a "Watch List" of approximately 36 prospective residents. Occupancy Summary: Independent Living Assisted Living Health Center HC by Payer Type 156 occupied out of 161 total units or 96.89% 32 double occupied units 32 occupied out of 34 total units or 94.12% 26 occupied out of 30 total units or 86.67% Private Pay 5 Lifecare 7 Medicare 14 Financial Performance: 's year to date operating revenue is $3,669,746 and is under budget by $199,846 due to a decline in companion services and occupancy in Skilled Nursing for the first quai1er of the year. Expenses for seven out ten departments ai e running under budget for the first quar1er. The largest variance is in Skilled Nursing at $62,515 due to use of outside labor. Assisted Living is over budget $22,892 due to wages, outside labor and employee insurance benefits. Companion services are only over budget by $2,808, but revenue for those service continue to cover all expenses of the department. Year-to-date operating expenses are $3,714,840 and are under budget by $91,217. has a net operating loss for the first three months of the year of $45,093 compared to a budgeted net operating income of $63,536. has a net loss year -to-date of$535,035 mainly due to loss on investments for the first two months. has received $1, 110,900 in entrance fees through March and paid out $742,608 in refunds for net entrar1ce fees received of $368,292. Net entrance fees budgeted for first quarter is $1,227, 147, leaving a variance of $858,855 under budget. For the first three months, capital expenditures are $382,078 compared to a budget of$714,147. The variance is due to the timing of the common area refurbishments. As of March 31, 2016, Clu istwood's cash has decreased by $238,739 due to less entrance fees received than ar1ticipated. 5

6 O CCUPANCY STATISTICS % Occupied by Service Type - All Care Settings % 95.00% 90.00% 85.00% 80.00% 75.00% 70.00% _._Independent _._Assisted Living _._Skilled Nursing Units Occupied vs Budget - Independent c., c., " ~" ~.,,.<o.,,.<o ~<o "':-,. ;::'(... ~... ~ ~,_,e-'i..: ~ ~ ~ '$) "-' '?-q ~'li "v "v '?-v o<.,; ~o <::)fl; "'li '<fl; ~'li ~" ~ ~" """ ~ Actual ~ Budget 6

7 Units Occupied vs Budget - Assisted Living Beds Occupied vs Budget - Skilled Nursing ~..._'> ~ <.,... " ~ ~... " ~... eo ~ lo ~- t:;: ~7>~ ~""' ~..: ~ <: t:;: ';!:)' ~-:.; '?-q "v "v '?-v '>e<:i o(; ~o 'Ve; \'l> '<e; ~'!; --Actual --Budget 7

8 FINANCIAL INFORMATION Jl Balance Sheet Three Months Ended March 31, 2016 and YE December 31, 2015 ASSETS 3/31 / /3 1/20 15 CURRENT ASSETS: Cash and cash equi valents $ 5,763,332 $ 6,188,827 Cash and cash equi valents limited to payment of debt service 880,000 Accounts receivable, net 801, , 122 Employee advances 367 1,230 Assets held by others 9,784,135 10,148,895 Prepaid insurance 37, ,134 Prepaid expenses 96,138 51,567 Total current assets 16,482,875 18,049,775 ASSETS LIMITED AS ro USE: Held by trustee: Cash and cash equivalents 5,243,763 3,190,404 Accrued interest receivable 34,938 40,192 Investments 3,506, ,127,974 Total assets limited as to use 8,784,83 1 7,358,570 PROPER1Y AND EQUIPMENT: Land 3,650,250 3,650,250 Land improvements 1,999,697 1,966,397 Buildings and improvements 44,458,261 44,477,955 Furniture and fixtures 2,474,071 2,445,837 Machinery and equipment 2,057,986 1,95 1,955 Vehicles 466, ,489 Construction in progress 1,832,400 1,1 73,1 91 Total property and equi pment 56,939,154 56,132,074 Less: acc umulated depreciation ( 16,603,692) ( 16, 179,807) Net property and equipment 40,335,462 39,952,267 OTHER ASSETS: Deposits 3,350 3,350 Debt issue costs (net of amortization of$58,l 93 in 2015 and $ 14,548 in 2016) 1,265,699 1,280,248 Total other assets 1,269,049 1,2 83,598 Total assets $ 66,872,218 $ 66,644,2 10 8

9 Balance Sheet Three Months Ended March 31, 2016 and YE December 31, 2015 LIABILITIES AND NET DEFIC IT 3/3 1/ /31/20 15 CURRENT LIABILITIES: Accounts payable $ 550,891 $ 338,303 Deposits on unoccupied units 283, ,299 Accrued interest payable 538, ,751 Accrued expenses 173, ,6 12 Contracts payable 72, ,583 Compensated absences 222, ,226 Refundable endowment 427, I,35 1 Refund liabilities 25,974,576 26,064,808 Current portion of long-term debt 880, ,000 Total curre nt liabilities 29,123,370 29,244,933 OTHER LIABILITIES: Long-term debt, less current portion 32,408,051 32,418,703 Deferred revenue from advance fees 17,646,327 17,571,64 1 Depos its 12,706 12,396 Total other liabilities 50,067,083 50,002,740 Total liabilities 79,190,453 79,247,673 NET DEFIC IT: Unrestricted ( 12,3 18,235) ( 12,603,463) Total net deficit ( 12,3 18,235) ( 12,603,463) Total liabilities and net deficit $ 66,872,218 $ 66,644,2 10 9

10 Statement of Operations Three Months Ended March 31, 2016 and YE December 31, /31/ /31/2015 CHANGES IN UNRESTRICTED NET DEFICIT: Revenues: Resident services $ 3,666, 105 $ 14,255,927 Earned advance fees 617,899 2,500,906 Contributions 215,1 09 5,331 Investment income (308,289) (57,903) (Loss) on disposition of assets 179,328 Total revenues 4,190,825 16,883,589 Expenses: Operating expenses 3,894,467 14,756,526 Depreciation and amortization 438,432 1,692,547 Interest expense 392,961 1,645,322 Extraordinary loss on refunding of debt 1,503,693 Total expenses 4,725,860 19,598,088 (Increase) decrease in unrestricted net deficit (535,035) (2,714,499) Net deficit at beginning of year (11,783,200) (9,888,964) Net deficit at end of year $ (12,318,235) $ (12,603,463) 10

11 Statement of Cash Flows As of March 31, 2016 YEAR-TO-DATE ACTUAL BUDGET VARIANCE OPERATING ACTIVITIES Excess (deficit) revenues over expenses Add items not requiring the expenditures of cash: Depreciation Amortization Less items not resulting in the receipt of cash: Earned entrance fees Change in working capital NET CASH PROVIDED (USED) BY OPERATIONS INVESTING ACTIVITIES Capital Additions Purchase of Land Loss/(Gain) from Disposal of Assets NET CASH USED BY INVESTING ACTIVITIES Fl NANCI NG ACTIVITIES Changes in Entrance Fee and Carport Deposits Net Entrance Fees Received NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES INCR(DECR) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at Beginning of Period CASH & CASH EQUIVALENTS AT END OF PERIOD (535,035) (76,248) (458,787) 423, ,000 (1,116) 14,548 12,500 2,048 (610,295) (600,000) (10,295) 102, ,071 (463,807) (604,633) 327,323 (931,956) (154,823) (714, 149) 559, (154,823) (714, 149) 559, , , ,292 1,227, 147 (858,855) 520, 717 1,227, 147 (706,430) (238,739) 840,321 (1,079,060) 24,536, ,536, ,297,361 25,376,421 (1,079,060) 11

12 Loan Covenants DEBT SERVICE COVERAGE RATIO: Funds Available for Debt Service received during the twelve months ended March 3 1, 2016 ENlRANCE FEES Decrease in net assets $ (3,086,104) $ (3,086,104) Add: Deduct: Entrance fees received in cash (excluding entrance fees paid by the initial residents other than entrance fees paid in respect of the last six independent living units occupied) $ Unrealized (gains) or losses on marketable securities (Gains) and losses from disposition of capital assets lnterest expense Depreciation and amortization Entrance fees accrued as revenues Refunds paid Total Funds Avai lable for Debt Service $ Debt Service Requirements for the year ended December Interest, Principal & Sinking fund requirements for bonds or long-term indebtedness $ 7,654, ,776 ( 179,328) 1,545,516 1,704,656 1,645,322 13,259,020 2,573,609 2,675,133 5,248,742 4,924,174 -=--=---"'"=-- 2,494, ~-~-- Total Debt Service Requirements =$========== 2,494,450 Debt Service Coverage Ratio 1.97 Required Debt Service Coverage Ratio 1.20 DAYS CASH ON HAN D ASOF MARCH 3 1,2016: Unrestricted cash and investments Total cash operating expenses fo r the nine months ended Septembe r 30, 2015 Days Cash on Hand Required Days Cash o n Hand $ $ $ $ $ 888,776 (179,328) 1,545,5 16 1,704,656 1,645,322 5,604,941 2,573,609 2,573,609 (54,772) 2,494, ,494, (0.02} ,547,467 4,288,

13 H I STORICAL COVENANT RESULT S Debt Service Coverage Ratio a.so I I 1.30 I ~<;:) "'<;:) ~~,,<:> Days Cash on Hand "6' ~"' ~ ~ ~ ~,,~ "'<;:) "'<;:) ')."6' ~"'.,; ~,,, 'b-"" fl;~ ~<J - ChristWood'sDays Cash on Hand - Bond Requirement=