Covenant Care August 2017 Consolidated Financial Statements HIGHLIGHTS

Transcription

1 Covenant Care August 2017 Consolidated Financial Statements HIGHLIGHTS SUMMARY OF AUGUST FINANCIAL ACTIVITY: Covenant Care, consolidated results: August: Operating Margin of $45,077; Net Income of $51,294 YTD: Operating Margin of $696,633; Net Income of $1,348,282 Covenant Hospice realized an August Operating Margin of $11,340; net nonoperating revenue of ($5,218) produced a Net Income ( Excess of Revenues over Expenses ) of $6,122. YTD Operating Margin is $582,378 and YTD Net Income is $957,841. Total August admissions: 399 end of life admissions; 389 homebound admissions; 788 total admissions. (July total 865) Covenant Hospice key statistics: Average Daily Census: (Aug) vs (YTD) Average Length of Stay: 59.8 (Aug) vs (YTD) Admissions: 399 (Aug) vs 3,454 (YTD) (Average per month 432) Peoples Home Health, achieved a positive Operating Margin of $173,544. YTD Operating Margin is $1,499,715. (Peoples has limited few non operating revenues or expenses.) Peoples Home Health key statistics: Medicare & Medicare like episodes: 413 (Aug) vs. 3,389 (YTD) Home health visits: 7,708 (Aug) vs. 57,062 (YTD) Average Medicare episode payment: $2,327 vs. $2,382 (2017 budget) YTD 30 day readmissions: 20% Covenant Health & Community Services had an August operating loss of ($45,955) and a YTD operating loss of ($590,408). CHCS YTD expenses include $201,428 in compensation costs, and $339,353 in legal and consulting expenses related to the growth and diversification activities being pursued by Covenant. Covenant Hospice Foundation achieved Net Income of ($14,013) in August. YTD Net Income is $56,472. Revenues and expenses are currently being reviewed to ensure costs are appropriate for current census levels, proactively addressing a possible period during which future volumes remain flat.

2 COVENANT CARE PROJECTED PROJECTED PROJECTED MAY JUN JUL AUG COMBINED STATEMENT OF OPERATIONS SEPT OCT NOV 77,764 73,853 99,633 45,077 Consolidated Operating Margin 44,175 45,527 45,300 Net Income 38, , ,341 6,122 Hospice 177,522 38,338 38, , , , ,703 Peoples 153, , ,591 (230,385) (129,805) (101,420) (128,592) Other Companies (127,306) (128,579) (127,293) 39, , ,684 51,234 Total Net income 203,277 81,726 66,019

3 COVENANT CARE COMBINED STATEMENT OF OPERATIONS AUGUST 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE NET PATIENT/FAMILY CARE/PROGRAM REVENUE 4,589,547-2,521-1,001 12,659 1,118,819 5,724,546 6,490,546 (766,000) -11.8% TOTAL PATIENT/FAMILY CARE EXPENSES 3,443,001 11,646-9,907 10, ,955-4,020,511 4,464,918 (444,407) -10.0% CONTRIBUTIONS FROM OPERATIONS 1,146,546 - (9,125) (8,906) 2, ,864-1,704,035 2,025,628 (321,593) -15.9% CONTRIBUTION % 25.0% 0.0% 51.2% 29.8% 31.2% -1.4% GENERAL & ADMINISTRATIVE EXPENSES Other Direct 556, ,520 3,969 26,020 16, , ,796 (1,479) 734, ,372 (220,255) -23.1% Payroll 408,384-4, , , , , ,582 (121,747) -13.3% Benefits 79, , , , ,706 (34,700) -21.3% Allocation from CHCS 90,611 7,482 7,285 11,830 (149,838) 466 7,378 7,064 17, % TOTAL G&A EXPENSES 1,135,206 7,737 9,805 19,974 45,955 17,158 7,477 17, ,320 (1,479) 1,658,958 2,035,660 (376,702) -18.5% OPERATING MARGIN 11,340 (7,737) (18,930) (19,974) (45,955) (17,158) (16,382) (15,150) 173,544 1,479 45,077 (10,032) 55, % OPERATING MARGIN % 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 15.5% 0.8% -0.2% 0.9% NON-OPERATING REVENUES Contributions and fundraising - 43,761 2, ,225 63,571 (17,346) -27.3% Other Non-Operating Revenues 16,475 2, , (1,479) 53,051 27,341 25, % Development/Fundraising Expense (169) (52,435) - - (52,604) (77,434) 24, % Other Non-Operating Expense (21,524) - (47) - (18,944) (40,515) (35,809) (4,707) 13.1% Contributions to Affiliates % NET NON-OPERATING REVENUE (5,218) (6,276) 2, , (1,479) 6,157 (22,331) 28, % EXCESS OF REVENUE OVER EXPENSES 6,122 (14,013) (16,498) (19,974) (45,955) (619) (16,382) (15,150) 173,703-51,234 (32,363) 83, % Note: The above classifications may differ from those of the auditors who prepare statements in conformity with Generally Accepted Accounting Principles

4 COVENANT CARE COMBINED STATEMENT OF OPERATIONS AUGUST 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE NET PATIENT/FAMILY CARE/PROGRAM REVENUE 36,364,146-15, ,840 84,801 8,832,142 45,325,513 50,877,583 (5,552,070) -10.9% TOTAL PATIENT/FAMILY CARE EXPENSES 26,156,094 93,364 14,730 69,387 66,403 4,255,343-30,655,321 35,294,610 (4,639,289) -13.1% CONTRIBUTIONS FROM OPERATIONS 10,208,052 - (78,180) (14,730) (40,547) 18,398 4,576,800-14,670,192 15,582,973 (912,781) -5.9% CONTRIBUTION % 28.1% 0.0% 51.8% 32.4% 30.6% 1.7% GENERAL & ADMINISTRATIVE EXPENSES Other Direct 4,913,145 6,148 16,167 59, , ,890 5,457 16, ,017 (11,833) 6,471,688 7,173,966 (702,278) -9.8% Payroll 3,330,744-1,243,036 39,000 71,550 1,680,831-6,365,161 7,093,538 (728,376) -10.3% Benefits 674, ,821-9, ,759-1,136,710 1,306,614 (169,905) -13.0% Allocation from CHCS 707,555 58,582 57,574 92,699 (1,172,494) 3,597 57,914 55, , % TOTAL G&A EXPENSES 9,625,674 64,729 73, , , ,487 63, ,532 3,077,085 (11,833) 13,973,559 15,574,117 (1,600,559) -10.3% OPERATING MARGIN 582,378 (64,729) (151,921) (166,695) (590,408) (184,487) (103,918) (135,134) 1,499,715 11, ,633 8, , % OPERATING MARGIN % 1.6% 0.0% 0.0% 0.0% 0.0% 0.0% % 17.0% 1.5% 0.0% 1.5% NON-OPERATING REVENUES Contributions and fundraising ,643 27,111 1, , , , % Other Non-Operating Revenues 494,747 39, ,775 1,327 (11,833) 803, , , % Development/Fundraising Expense (1,392) (616,935) (4,169) - (622,496) (638,145) 15, % Other Non-Operating Expense (118,452) (11,185) (47) - (139,198) - - (100) - (268,981) (236,202) (32,779) 13.9% Contributions to Affiliates % NET NON-OPERATING REVENUE 375, ,202 23,015 1, , ,227 (11,833) 651,650 (18,802) 670, % EXCESS OF REVENUE OVER EXPENSES 957,841 56,472 (128,907) (164,696) (590,408) (43,910) (103,918) (135,134) 1,500,942-1,348,282 (9,947) 1,358, % Note: The above classifications may differ from those of the auditors who prepare statements in conformity with Generally Accepted Accounting Principles

5 COVENANT CARE CONSOLIDATED STATEMENT OF CONDITION AUGUST 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES COMBINED ASSETS CASH & EQUIVALENTS 2,326, , ,585 21,559 35, ,220 28,624 8,570 1,507,647 4,506,298 INVESTMENTS - FIXED 33,677 4,843,841 4,877,517 INVESTMENTS - BALANCED 16,240,092 19,377 16,259,469 TOTAL INVESTMENTS 16,273,768 4,863,218-21,136,986 TOTAL CASH & INVESTMENTS 18,600,031 5,046, ,585 21,559 35, ,220 28,624 8,570 1,507,647 25,643,284 GROSS ACCOUNTS RECEIVABLES 11,792,568 3,208 86,405 7,420 1,583,181 13,472,781 RECEIVABLE ALLOWANCES (1,143,331) (67,631) (136,658) (1,347,619) NET ACCOUNTS RECEIVABLES 10,649,237-3, ,774 7,420 1,446,523 12,125,162 GRANTS / PLEDGES RECEIVABLE - 1,179 1,179 CRUT RECEIVABLE 2,481,325 2,481,325 MISCELLANEOUS RECEIVABLE 39,150 50, , ,012 DUE TO/FROM CONSOLIDATED 3,909,554 (46,532) (586,297) (172,744) 6,413,971 (10,501,541) (210,451) (192,976) 1,387,017 0 PREPAID EXPENSE 755,971 1,078 2,385 5,043 - (475) 764,002 INVENTORY 174, ,348 CASH VALUE ON LIFE INSURANCE 1,060,505 1,060,505 TOTAL CURRENT ASSETS 37,670,122 5,052,325 (402,120) (151,185) 6,454,462 (10,285,321) (163,054) (177,462) 4,385,049 42,382,818 LAND 1,936,722 1,936,722 BUILDINGS & IMPROVENTS 12,627,696 12,627,696 LEASEHOLD IMPROVEMENTS 2,239,472 29,537 2,269,009 FURNITURE, FIXTURES & EQUIPMENT 9,021,204 2, ,426 9,317,630 CONSTRUCTION IN PROGRESS 2,782,744 2,782,744 28,607, , ,963 28,933,800 LESS ACCUMULATED DEPRECIATION (12,479,310) (295,110) (12,774,420) NET PROPERTY & EQUIPMENT 16,128, , ,853 16,159,380 INVESTMENT - PEOPLES 2,163,204 - CON COSTS MOBILE 124, ,580 CON COSTS TALLAHASSEE 263, ,172 NO COMPETE - BREWTON 60,718 60,718 GOODWILL 1,496 1,496 GOODWILL - PEOPLES 9,073,350 9,073,350 LOAN ORIGINATION FEES 7,875 7,875 TOTAL INTANGIBLE ASSETS 449, ,875 11,236, ,531,190 TOTAL ASSETS 54,248,615 5,052,325 (402,120) (149,185) 6,462, ,233 (163,054) (177,462) 4,413,902 68,073,388 LIABILITIES & FUND BALANCE CURRENT LIABILITIES CURRENT PORTION L/T DEBT 448, ,784 ACCOUNTS PAYABLE 5,375,203 2,394 - (8,000) 18, ,473 5,470,015 ADVANCES AGAINST ACCOUNTS RECEIVABLE 5,203,711 5,203,711 DEFERRED REVENUE - (0) 1,787 1,787 ACCRUED SALARY & WAGES 2,671,955 64, ,733 18, ,283 3,747,902 TOTAL CURRENT LIABILITIES 13,699,653 67,147 1, ,733 18,944-18, ,756 14,872,199 LONG-TERM LIABILITIES NOTES PAYABLE - - MORTGAGE PAYABLE 6,046,303 6,046,303 OTHER LONG TERM LOANS 431,530 8,800,000 9,231,530 LESS CURRENT PORTION (448,784) (448,784) LONG-TERM CHARITABLE ANNUITIES - 14,305 14,305 INTEREST RATE SWAP PAYABLE - - TOTAL LONG-TERM LIABILITIES 6,029,049 14, ,800, ,843,353 TOTAL LIABILITIES 19,728,702 81,452 1,787-9,116,733 18,944-18, ,756 29,715,552 NET ASSETS: UNRESTRICTED 32,027,389 4,128,460 (475,001) (166,296) (2,654,396) 932,289 (163,054) (195,640) 3,664,146 34,934,692 BOARD DESIGNATED BECKER TRUST 71,094-71,094 BOARD DESIGNATED CHILDREN'S PROGRAM 444, ,999 BOARD DESIGNATED MARIANNA OFFICE 54,185-54,185 BOARD DESIGNATED PANAMA CITY OFFICE 250, ,000 BOARD DESIGNATED GOLDENBERG FUND 46,477-46,477 BOARD DESIGNATED HERO'S WISH 18,956-18,956 TEMPORARILY RESTRICTED - EVENTS 2,500 2,500 TEMPORARILY RESTRICTED - COVENANT SUPPORT FND 5,836-5,836 TEMPORARILY RESTRICTED - NATHANIEL'S LEMONADE 16,001-16,001 TEMPORARILY RESTRICTED - SNOOK FUND 2,333-2,333 TEMPORARILY RESTRICTED - TOP OF GAS TEMPORARILY RESTRICTED - MOBILE FUND 1,000 1,000 TEMPORARILY RESTRICTED - HIBBARD TRUST 2,492,525 17,111-2,509,636 TOTAL NET ASSETS 34,519,914 4,970,873 (403,906) (149,185) (2,654,396) 932,289 (163,054) (195,640) 3,664,146 38,357,836 TOTAL LIABILITIES & NET ASSETS 54,248,615 5,052,325 (402,119) (149,185) 6,462, ,233 (163,054) (177,462) 4,413,902 68,073,388

6 Financial Report Month Ended 08/31/2017

7 Executive Summary Excess Revenue over Expenses was $6,122 for the month versus a $61,029 budget. YTD Excess Revenues over Expenses was $957,841 versus a budget of $383,987 and compares to a prior YTD of ($501,298). Of the Excess Revenue over Expenses, $11,340 was in Operating Margin and ($5,218) was in Net Non-Operating Income. Net non-operating income was ($5,218) for the month, unfavorable to a budget of $7,700. YTD net non-operating income was $375,463, favorable to a budget of $195,353. Reflected in the Statement of Changes in Net Assets is the change in unrealized gain from investments of $56,307 for the month and $945,488 YTD. With this, we had an increase in Net Assets YTD of $1,902,769. Census averaged for the month versus a budget of YTD census averaged versus a budget of and compares to a prior YTD census of Referrals for the month totaled 597 and admissions were 399 compared to a budget of 454, for a monthly conversion rate of 66.8%. YTD referrals and admissions were 4,862 and 3,454 respectively, a conversion rate of 71.0%. Operating Margin The operating margin of.3% for the month was unfavorable to the budget of 1.0%. YTD operating margin was 1.7% versus a budget of.5%. Prior year was (1.7)%. Operating income for the month was $11,340, unfavorable to the budget of $53,329. YTD operating income was $582,378, favorable to a budget of $188,634 and compares to a prior year of ($649,758). Net revenue for the month was $4,589,547, unfavorable to a budget of $5,471,861. YTD net revenue was $36,364,146, unfavorable to a budget of $42,073,641 and compares to a prior year of $39,197,688. Total patient care costs per day for the month, excluding inpatient costs and room & board expenses which are a function of patient mix, were $105.29, favorable to a budget of $ YTD patient care costs excluding inpatient costs and room and board expenses were $101.11, favorable to a budget of $ G&A expenses of 25.1% of revenue were favorable to the budget of 27.2%. YTD G&A expenses of 26.5% of revenue were favorable to the budget 26.6% and compares to prior year of 26.1%.

8 Non-Operating Margin Net non-operating income was ($5,218) for the month, unfavorable to budget of $7,700. YTD net non-operating income was $375,463, favorable to a budget of $195,353. Reasons are described below. Other non-operating revenue, which includes investment income, was $16,475 for the month compared to a budget of $28,611, and YTD was $494,747 compared to a budget of $302,002. Other non-operating expense for the month was $21,524 compared to a budget of $20,739. This category includes interest expense and investment expenses. YTD was $118,452 compared to a budget of $105,298. For 2017, community support and fundraising revenue and expense are being recorded on the books of Covenant Hospice Foundation, Inc. In prior years, contributions and memorials, 90% or fundraising revenue and 100% of fundraising expenses were recorded on the financial statements of Covenant Hospice.

9 Other Changes in Net Assets Changes in unrealized gain for the month was $56,307 and YTD was $945,488. With the above, Net Assets for the month increased $62,429 compared to a budgeted increase of $61,029. YTD Net Assets increased $1,902,769 and compares to a budgeted increase of $383,987. Balance Sheet Cash and short-term investments was $18,600,031 at month end, a supply of 132 days of operating expenses compared to 118 days at this time last year. Days in Accounts Payable was at 58 days. Days in Accounts Receivable was 73 days. Financial Covenants for Bond Agreement (Covenant Hospice) are met: Ratio of Maximum Debt to Tangible Net Worth was.58:1 at August 31, 2017, favorable to Bond Covenant not to exceed 2.5:1. Tangible Net Worth was $34,069,948 at August 31, 2017, favorable to minimum per Bond Covenant of $6,500,000. Fixed Charge Coverage at August 31, 2017 was 2.1:1, favorable to Bond Covenant of 1.1:1.

10 COVENANT HOSPICE, INC. CONSOLIDATED MONTH % INCOME STATEMENT YEAR TO YEAR TO % PRIOR YEAR JUL AUG BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE PATIENT/FAMILY CARE REVENUE 3,329,365 3,242,529 3,481,912 (239,384) -6.88% Routine Home Care 25,836,510 27,097,460 (1,260,950) -4.65% 27,627, , ,199 1,061,440 (323,241) % Inpatient Care 5,998,907 7,732,500 (1,733,594) % 5,741,294 10,555 7, ,522 (129,734) % Continuous Care 201,304 1,070,114 (868,810) % 940,956 15,409 11,134 19,172 (8,038) % Respite Care 108, ,806 (44,860) % 98, , , ,064 (88,365) -9.33% Room & Board 6,293,487 7,376,978 (1,083,491) % 6,567,004 8,193 12,892 9,171 3, % Consulting Physician 82,116 71,023 11, % 84,689 29,195 26, ,676 (79,804) % Primary Physician 263, ,402 (526,901) % 618,435 82,510 82,040 1,067 80, % Other Care 376,785 8, , % 7,882 4,847,738 4,980,153 5,764,023 (783,870) % TOTAL PATIENT/FAMILY CARE REVENUE 39,161,556 44,300,816 (5,139,260) % 41,686, , , ,103 1, % Charity/Unfunded Care 1,160, , , % 880, , , ,060 96, % Contractual Adjustments 1,637,350 1,398, , % 1,608, , , ,163 98, % TOTAL DEDUCTIONS FROM REVENUE 2,797,410 2,227, , % 2,488,802 4,417,624 4,589,547 5,471,861 (882,314) % NET PATIENT/FAMILY CARE REVENUE 36,364,146 42,073,641 (5,709,495) % 39,197,688 OPERATING EXPENSES PATIENT/FAMILY CARE EXPENSES (2,004) 4,490 1,608 2, % Other Direct 28,070 27, % 29,758 1,448,818 1,546,582 1,753,286 (206,704) % Payroll 11,619,471 13,707,802 (2,088,330) % 13,980, , , ,028 (59,259) % Benefits 2,658,753 2,940,941 (282,188) -9.60% 2,743, , , ,971 (17,397) -3.07% Patient Expenses 4,049,013 4,378,870 (329,857) -7.53% 4,169,685 91,821 93, ,364 (37,220) % Mileage/Fleet Car 748,575 1,035,118 (286,543) % 908,445 2,342,642 2,511,558 2,829,257 (317,699) % TOTAL CORE PATIENT/FAMILY CARE EXPENSES 19,103,883 22,089,997 (2,986,114) % 21,832,136 43,554 35, ,179 (76,248) % Inpatient Expenses 456, ,891 (416,687) % 823, , , ,999 (94,254) -9.60% Room & Board Expenses 6,505,048 7,641,431 (1,136,382) % 6,886,037 7,392 7,767 9,171 (1,404) % Consulting Physician Expenses 90,959 71,023 19, % 66, , ,443 1,103,348 (171,906) % TOTAL CONTRACTED PATIENT /FAMILY CARE EXPENSES 7,052,212 8,585,344 (1,533,133) % 7,775,787 3,172,346 3,443,001 3,932,605 (489,605) % TOTAL PATIENT/FAMILY CARE EXPENSES 26,156,094 30,675,341 (4,519,247) % 29,607,924 1,245,278 1,146,546 1,539,255 (392,710) % CONTRIBUTIONS FROM OPERATIONS 10,208,052 11,398,300 (1,190,248) % 9,589, % 24.98% 28.13% -3.15% CONTRIBUTION % 28.07% 27.09% 0.98% 24.47% GENERAL & ADMINISTRATIVE EXPENSES 570, , ,770 (229,896) % Other Direct 4,913,145 5,842,496 (929,351) % 6,257, , , ,339 (96,956) % Payroll 3,330,744 3,842,294 (511,550) % 3,376,266 85,968 79, ,206 (23,869) % Benefits 674, ,321 (143,091) % 605,740 87,263 90,611 90, % Alloc to/from Other Subsidiaries 707, , % 0 1,128,673 1,135,206 1,485,927 (350,721) % TOTAL G&A EXPENSES 9,625,674 11,209,666 (1,583,992) % 10,239, % 24.73% 27.16% -2.42% % OF NET PATIENT/FAMILY CARE REVENUE 26.47% 26.64% -0.17% 26.12% 4,301,019 4,578,207 5,418,532 (840,325) % TOTAL OPERATING EXPENSES 35,781,768 41,885,007 (6,103,238) % 39,847, ,605 11,340 53,329 (41,989) % OPERATING MARGIN 582, , , % (649,758) 2.64% 0.25% 0.97% -0.73% OPERATING MARGIN % 1.60% 0.45% 1.15% -1.66% NON-OPERATING REVENUES % Contributions/Unsolicited % 125, % Planned Giving/Solicited % 121, % Foundation Support-Fund Raising/Event Income % 232, % United Way/CFC % 62, % Grants % 29, % TOTAL NON-OPERATING REVENUES % 570,021 NON-OPERATING EXPENSES (3) -1.89% Other Direct 1,392 1, % 115, % Fundraising/Event Expense % 59, % Payroll % 435, % Benefits % 93, (3) -1.89% TOTAL NON-OPERATING EXPENSES 1,392 1, % 704, (169) (172) % NET NON-OPERATING REVENUE (LOSS) (832) (1,351) % (134,451) 107,439 16,475 28,611 (12,136) % OTHER NON-OPERATING REVENUES 494, , , % 546,712 22,533 21,524 20, % OTHER NON-OPERATING EXPENSES 118, ,298 13, % 263,802 85,296 (5,218) 7,700 (12,918) % NON OPERATING INCOME 375, , , % 148,460 4,525,623 4,606,022 5,500,472 (894,450) % TOTAL REVENUES 36,859,453 42,375,643 (5,516,190) % 40,314,421 4,323,722 4,599,900 5,439,443 (839,543) % TOTAL EXPENSES 35,901,612 41,991,656 (6,090,044) % 40,815, ,901 6,122 61,029 (54,907) % EXCESS OF REVENUE OVER EXPENSES 957, , , % (501,298) 4.46% 0.13% 1.11% -0.98% MARGIN % 2.60% 0.91% 1.69% -1.24% 24,008 23,854 26,099 (2,245) -8.60% PATIENT DAYS 188, ,340 (13,403) -6.62% 209, (72) AVERAGE DAILY CENSUS (55) AVERAGE LENGTH OF STAY (4.0) (55) ADMISSIONS 3,454 3, , REFERRALS 4,862 4, % 66.8% CONVERSION RATIO 71.0% 72.6% (11) FTE's - CLINICAL (2) FTE's - G&A (3) FTE's NON-OP (16) FTE's - TOTAL 442 $ $15.81 $ $ NET INCOME PER FTE -$1, ADC/FTE'S 1.94

11 COVENANT HOSPICE, INC. CONSOLIDATED MONTH % STATEMENT OF CHANGES IN NET ASSETS YEAR TO YEAR TO % PRIOR YEAR JUL AUG BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE 201,901 6,122 61,029 (54,907) % EXCESS OF REVENUE OVER EXPENSES 957, , , % (501,298) OTHER CHANGES IN UNRESTRICTED NET ASSETS 144,551 56, , % Change in net unrealized gain on other than trading securities 945, , % 755, ,452 62,429 61,029 1, % INCREASE IN UNRESTRICTED NET ASSETS 1,903, ,987 1,519, % 254,464 CHANGES IN TEMPORARILY RESTRICTED NET ASSETS % Contributions % 3,990 (560) % Net assets released from restrictions (560) 0 (560) % (690) (560) % INCREASE/(DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS (560) 0 (560) % 3, ,892 62,429 61,029 1, % INCREASE (DECREASE) IN NET ASSETS 1,902, ,987 1,518, % 257,764

12 COVENANT HOSPICE, INC. PER PATIENT DAY MONTH INCOME STATEMENT YEAR TO YEAR TO PRIOR % JUL AUG BUDGET VARIANCE FY 2017 DATE DATE BUDGET VARIANCE YEAR CHANGE PATIENT/FAMILY CARE REVENUE Routine Home Care % (9.72) Inpatient Care (6.46) % (4.94) Continuous Care (4.22) % (0.27) Respite Care (0.18) % (0.29) Room & Board (3.15) % Consulting Physician % (2.96) Primary Physician (2.51) % Other Care % (12.08) TOTAL PATIENT/FAMILY CARE REVENUE (11.67) % Charity/Unfunded Care % Contractual Adjustments % TOTAL DEDUCTIONS FROM REVENUE % (17.26) NET PATIENT/FAMILY CARE REVENUE (15.47) % OPERATING EXPENSES PATIENT/FAMILY CARE EXPENSES (0.08) Other Direct % (2.34) Payroll (6.25) % (1.12) Benefits (0.46) % Patient Expenses (0.21) % (1.09) Mileage (1.15) % (3.12) TOTAL CORE PATIENT/FAMILY CARE EXPENSES (8.06) % (2.79) Inpatient Expenses (1.90) % (0.41) Room & Board Expenses (3.34) % (0.03) Consulting Physician Expenses % (3.23) TOTAL PASS THROUGH PATIENT /FAMILY CARE EXPENSES (5.10) % (6.34) TOTAL PATIENT/FAMILY CARE EXPENSES (13.16) % (10.91) CONTRIBUTIONS FROM OPERATIONS (2.30) % GENERAL & ADMINISTRATIVE EXPENSES (6.80) Other Direct (2.87) % (2.24) Payroll (1.36) % (0.63) Benefits (0.47) % Alloc to Other Subsidiaries % (9.34) TOTAL G&A EXPENSES (4.45) % 24.7% 27.2% -2.4% % OF NET PATIENT/FAMILY CARE REVENUE 26.5% 26.6% -0.2% 26.1% 1.3% (15.69) TOTAL OPERATING EXPENSES (17.62) % (1.57) OPERATING MARGIN (3.10) 199.3% NON-OPERATING REVENUES Contributions/Unsolicited % Planned Giving/Solicited % Foundation Support-Fund Raising/Event Income % United Way/CFC % Grants % TOTAL NON-OPERATING REVENUES % NON-OPERATING EXPENSES Other Direct % Fundraising/Event Expense % Payroll % Benefits % TOTAL NON-OPERATING EXPENSES % 0.02 (0.01) (0.01) (0.00) NET NON-OPERATING REVENUE (LOSS) (0.00) (0.01) 0.00 (0.64) 99.3% (0.41) OTHER NON-OPERATING REVENUES % OTHER NON-OPERATING EXPENSES % 3.55 (0.22) 0.30 (0.51) NON OPERATING INCOME % (17.66) TOTAL REVENUES (14.34) % (15.58) TOTAL EXPENSES (17.51) % (2.08) EXCESS OF REVENUE OVER EXPENSES (2.39) 311.8% 4.46% 0.13% 1.11% -0.98% MARGIN % 2.60% 0.91% 1.69% -1.24%

13 COVENANT HOSPICE, INC. BALANCE SHEET FOR AUGUST 31, 2017 BALANCE BALANCE BALANCE NET CHANGE NET CHANGE 08/31/ /31/ /31/2016 DURING MONTH DURING YEAR ASSETS CASH & EQUIVALENTS 2,326,263 1,908,279 1,346, , ,022 INVESTMENTS - FIXED 33,677 44,907 2,843,245 (11,230) (2,809,568) INVESTMENTS - BALANCED 16,240,092 16,186,235 12,872,114 53,856 3,367,978 TOTAL INVESTMENTS 16,273,768 16,231,142 15,715,358 42, ,410 TOTAL CASH & INVESTMENTS 18,600,031 18,139,422 17,061, ,610 1,538,432 GROSS INSURANCE RECEIVABLES 11,792,568 11,986,581 13,352,919 (194,013) (1,560,351) RECEIVABLE ALLOWANCES (1,143,331) (1,118,839) (1,133,589) (24,491) (9,741) NET INSURANCE RECEIVABLES 10,649,237 10,867,741 12,219,330 (218,504) (1,570,092) GRANTS / PLEDGES RECEIVABLE - - (0) - 0 CHARITABLE REMAINDER UNITRUST RECEIVABLE 2,481,325 2,481,325 2,481, MISCELLANEOUS RECEIVABLE (681,722) (601,725) (404,095) (79,997) (277,627) DUE FROM/TO FOUNDATION 21,061 26, ,255 (5,079) (88,194) DUE FROM/TO ALZHEIMER'S 528, , ,074 11,892 44,650 DUE FROM/TO HOME 137, ,217 57, ,063 DUE FROM/TO COVENANT HEALTH SYSTEMS 2,808,792 2,729,445 2,083,358 79, ,434 DUE FROM/TO COVENANT PALLIATIVE CARE 152, ,577 78,785 9,960 73,752 DUE FROM/TO COVENANT UNIVERSITY - - (0) - 0 DUE FROM/TO COVENANT MEMORY CARE 80,045 76,077 1,100 3,969 78,945 DUE FROM/TO COVENANT HOME HEALTH HOLDING 901, , , PREPAID EXPENSE 755, , ,714 (70,226) 205,258 INVENTORY 174, , ,232 2,476 24,116 CASH VALUE ON LIFE INSURANCE 1,060,505 1,048, ,666 11,855 94,840 TOTAL CURRENT ASSETS 37,670,122 37,463,158 36,740, , ,715 LAND 1,936,722 1,936,722 1,936, BUILDINGS & IMPROVENTS 12,627,696 12,627,696 12,572,987-54,709 LEASEHOLD IMPROVEMENTS 2,239,472 2,239,472 2,238, FURNITURE, FIXTURES & EQUIPMENT 9,021,204 8,985,538 8,961,731 35,667 59,473 CONSTRUCTION IN PROGRESS 2,782,744 2,234,526 61, ,218 2,720,769 28,607,837 28,023,953 25,771, ,885 2,835,852 LESS ACCUMULATED DEPRECIATION (12,479,310) (12,375,334) (11,636,997) (103,976) (842,313) NET PROPERTY & EQUIPMENT 16,128,527 15,648,618 14,134, ,909 1,993,539 CON COSTS MOBILE 124, , ,122 (2,443) (19,542) CON COSTS TALLAHASSEE 263, , ,030 (857) (6,858) NO COMPETE - BREWTON 60,718 61,112 63,872 (394) (3,154) GOODWILL - BREWTON 1,496 1,501 1,535 (5) (39) TOTAL INTANGIBLE ASSETS 449, , ,558 (3,699) (29,593) INVESTMENT IN STUDER COVENANT ALLIANCE, LLC TOTAL ASSETS 54,248,615 53,565,441 51,354, ,174 2,893,661 LIABILITIES & FUND BALANCE CURRENT LIABILITIES CURRENT PORTION L/T DEBT 448, , , ACCOUNTS PAYABLE 5,375,203 4,959,351 2,456, ,852 2,918,987 ADVANCES AGAINST ACCOUNTS RECEIVABLE 5,203,711 5,197,438 6,419,509 6,273 (1,215,798) ACCRUED SALARY & WAGES 2,671,955 2,434,148 3,114, ,807 (442,535) TOTAL CURRENT LIABILITIES 13,699,653 13,039,721 12,438, ,932 1,260,654 LONG-TERM LIABILITIES NOTES PAYABLE MORTGAGE PAYABLE 6,046,303 6,077,597 6,324,816 (31,294) (278,513) OTHER LONG TERM LOANS 431, , ,786 (7,893) (64,256) LESS CURRENT PORTION (448,784) (448,784) (448,784) - - INTEREST RATE SWAP PAYABLE TOTAL LONG-TERM LIABILITIES 6,029,049 6,068,236 6,371,818 (39,187) (342,769) TOTAL LIABILITIES 19,728,702 19,107,956 18,810, , ,885 NET ASSETS: UNRESTRICTED 32,027,389 31,964,959 30,051,053 62,429 1,976,336 TEMPORARILY RESTRICTED 2,492,525 2,492,525 2,493,085 - (560) TOTAL NET ASSETS 34,519,914 34,457,484 32,544,138 62,429 1,975,776 TOTAL LIABILITIES & NET ASSETS 54,248,615 53,565,441 51,354, ,174 2,893,661 CASH ONHAND DAYS REVENUE OUTSTANDING DAYS PAYABLE OUTSTANDING DEBT TO FUND BALANCE CURRENT ASSETS TO CURRENT LIABILITIES

14 COVENANT HOSPICE, INC. STATEMENT OF CASH FLOWS August 31, 2017 MONTH YEAR TO DATE CASH FLOWS FROM OPERATING ACTIVITIES: Increase (decrease) in net assets 62,429 1,975,776 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation expense 103, ,370 Amortization expense 3,699 29,593 Provision for bad debts - - Prior period adjustments Change in operating assets and liabilities - Accounts receivable 194,013 1,560,351 Pledges receivable - (0) Allowance for Doubtful Accounts 25,000 8,869 Allowance for Doubtful Accounts Audit - 30,000 Allowance for Doubtful Accounts Sequestration (509) (29,127) Miscellaneous receivables 79,355 (14,939) Prepaid expenses 70,226 (205,258) SCA Investment - - Inventory (2,476) (24,116) Line of Credit 675,000 2,884,650 Accounts payable (180,182) (443,964) Accrued expenses 158,841 (305,685) Net cash provided (required) by operating activities 1,189,371 6,308,520 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (583,885) (2,835,852) Retirement of Capital Assets - (58) No Compete Agreement - Brewton - - Certificate of Need - Mobile - - Cash Value of Insurance Investment (11,855) (94,840) Net cash used in investing activities (595,740) (2,930,749) CASH FLOWS FROM FINANCING ACTIVITIES Accrued PIP liability 6,273 (874,347) Receivable from CHF 5,079 88,194 Receivable from CHP (9,960) (73,752) Receivable from CHCS (79,347) (725,434) Receivable from CAS (11,892) (44,650) Receivable from C@Home (662) (80,063) Receivable from Hospice University - (0) Receivable from Peoples Home Health ,566 Receivable from Memory Care (3,969) (78,945) Receivable from CH3 - (139) Payments on obligations under capital leases (7,893) (64,256) Payments on obligations under debt (31,294) (278,513) Due to Alzheimer's - - Due to Foundation - - Net cash used by financing activities (133,022) (1,839,339) NET INCREASE (DECREASE) IN CASH 460,610 1,538,432 CASH, BEGINNING OF PERIOD 18,139,422 17,061,599 CASH, END OF PERIOD 18,600,031 18,600,031

15 FINANCIAL COVENANTS 08/31/17 Ratio of Maximum Debt to Tangible Net Worth of not more than 2.5:1 COVENANT Total debt 19,728, Tangible Net Worth 34,069, Ratio of above 0.58 Minimum Tangible Net Worth of $6,500,000 Tangible Net Worth (net assets) 34,069, Minimum Fixed Charge Coverage of 1.10:1.0 EBITDA + Lease and Rent Expense 4,380, CMLTD + Interest + Lease and Rent Expense 2,086, Ratio of above 2.10 EBITDA 1,919, Lease and Rent Expense 1,000, ,920, CMLTD 448, Interest Expense 91, Lease and Rent Expense 1,000, Depreciation & Amortization Expenses 870, Liquidity of $5,000,000 or more Cash and Investments 18,139, Less: Restricted for BB&T Line of Credit (12,768,000.00) Less: Current Portion L/T Debt (448,784.00) Unrestricted Cash and Investments 4,922, Cash Value of Corporate Insurance Policy 1,048, Unrestricted Line of Credit with Coastal Bank 1,560, Total Liquidity 7,531, WITH CHANGES IN NET ASSETS Minimum Fixed Charge Coverage of 1.10:1.0 EBITDA + Lease and Rent Expense + Changes in Net Assets 5,326, CMLTD + Interest + Lease and Rent Expense 2,086, Ratio of above 2.55 CHANGES IN UNRESTRICTED/TEMPORARILY RESTRICTED NET ASSETS 945,487.74

16 Peoples Home Health, LLC. Income Statement & Balance Sheet August 31, 2017

17

18 PEOPLES HOME HEALTH INCOME STATEMENT AS OF AUGUST 31, 2017 Ordinary Income/Expense Income MTD YTD 4000 Medicare Revenue 779, ,311, Non Medicare Revenue 134, , Medicare Like 13, , Medicare Like Discounted 190, ,424, Total Income 1,118, ,832, Cost of Goods Sold 5000 Salaries & Wages Clinical Staff 5005 Skilled Nursing 176, ,347, Occup Therapy 45, , Physical Therapy 161, ,286, Speech Therapy 15, , Social Work 14, , Home Health Aide 2, , Total 5000 Salaries & Wages Clinical Staff 416, ,197, Bonuses 5051 Bonus Skilled Nursing , Bonus Occup Therapy Bonus Physical Therapy Incentive Skilled Nursing Incentive Occup Therapy Incentive Physical Therapy Total 5050 Bonuses 1, , Benefits Payroll Taxes 5105 Skilled Nursing 13, , Occup Therapy 3, , Physical Therapy 12, , Speech Therapy 1, , Social Work , Home Health Aide , Total 5100 Benefits Payroll Taxes 30, , Benefits Group/Supplemental Ins 5205 Skilled Nursing 14, , Occup Therapy 2, , Physical Therapy 11, , Speech Therapy , Social Work , Home Health Aide , Total 5200 Benefits Group/Supplemental Ins 30, , Benefits Workers' Comp/Malprac 5305 Skilled Nursing 4, ,556.43

19 PEOPLES HOME HEALTH INCOME STATEMENT AS OF AUGUST 31, 2017 Ordinary Income/Expense Income MTD YTD 5310 Occup Therapy 1, , Physical Therapy 4, , Speech Therapy , Social Work , Home Health Aide Total 5300 Benefits Workers' Comp/Malprac 11, , Benefits 401(k) Match 5405 Skilled Nursing , Occup Therapy , Physical Therapy 1, , Speech Therapy , Total 5400 Benefits 401(k) Match 2, , Mileage 5505 Skilled Nursing 15, , Occup Therapy 2, , Physical Therapy 7, , Speech Therapy , Social Work 1, , Home Health Aide 1, , Total 5500 Mileage 28, , Medical Supplies 5604 Routine Medical Supplies 4, , Billable Medical Supplies 16, , Medical Monitoring 1, TCP Monitoring 4, , Medical Waste Removal , Total 5600 Medical Supplies 25, , Total COGS 545, ,255, Gross Profit 572, ,576, Expense 8500 Answering Service 2, , Bank Services Charges , Billing Service Fees , Computer Supplies & Repairs , Continuing Education Staff , Contracted Services 8530 Alarm & Security Janitorial 1, , Pest Control Shredding ,039.25

20 PEOPLES HOME HEALTH INCOME STATEMENT AS OF AUGUST 31, 2017 Ordinary Income/Expense Income MTD YTD Total 8525 Contracted Services 1, , Depreciation Expense 1, , Dues & Subscriptions , Equipment Leases 8575 Copiers 1, , Postage Machine Total 8570 Equipment Leases 1, , Insurance 8585 Business Liability 9, , Workers' Comp , Total 8580 Insurance 9, , Interest Expense Licenses and Permits Marketing 5630 Printing Brochures , Sponsorships Mktg Promotionals (Non Allow) , General Marketing (Non Allow) 1, , General Marketing (Allowable) , BD/Mktg Dues & Subscriptions , BD/Mktg Meals & Entertainment 2, , Internet/Web Hosting , Social Media , BD/Mktg Telephone , BD/Mktg Staff Training BD/Mktg Supplies , BD/Mktg Special Events 1, BD/Mktg Staff Meetings/Parties Total 8610 Marketing 8, , Meals & Entertainment 50% 8646 Meals & Ent Office Staff , Meals & Ent BD/Mktg Staff Total 8645 Meals & Entertainment 50% , Office Expense 8655 Copier Supplies 2, , Internet Service , Office Supplies 1, , Break Room Supplies , Office Equipment (Non Capital) 4, Operation Supplies 1, ,364.81

21 PEOPLES HOME HEALTH INCOME STATEMENT AS OF AUGUST 31, 2017 Ordinary Income/Expense Income MTD YTD Total 8650 Office Expense 7, , Payroll Expense BusDev/Mktg 8666 BD/Mktg Staff Salaries 56, , BD/Mktg Staff Bonuses 8668 BD/Mktg Staff Payroll Tax 4, , BD/Mktg EE Benefits 5, , BD/Mktg Mileage & Car Allowance 3, , BD/Mktg Incentive Bonus 7, , BD/Mktg 401(k) Match , Total 8665 Payroll Expense BusDev/Mktg 77, , Payroll Expenses Admin Staff 8501 Auto Exp/Car Allowance Admin , Staff Salaries 79, , Admin Staff Bonuses 2, , Payroll Taxes 5, , Employee Benefits 7, , Mileage Admin , Admin 401(k) Match , Total 8675 Payroll Expenses Admin Staff 96, , Payroll Expenses Clinical Staff 8682 Clinical Staff Gross 66, , Clinical Staff Bonuses 2, , Clinical Staff Payroll Taxes 4, , Clinical Staff EE Benefits 7, , Clin Admin Auto Allowance , Clin Admin 401(k) Match , Clinical Staff Mileage Total 8681 Payroll Expenses Clinical Staff 80, , Parent Salary Allocation 17, , Parent MSA 35, , Postage & Delivery , Professional Fees 8725 Accounting/Bookkeeping , Payroll Services 2, , Consulting , HR Services , Legal 4, , Total 8720 Professional Fees 8, , Rent 8755 Building 14, ,340.73

22 PEOPLES HOME HEALTH INCOME STATEMENT AS OF AUGUST 31, 2017 Ordinary Income/Expense Income MTD YTD 8756 Conference Room/Facility Storage Unit , Total 8750 Rent 14, , Repairs and Maintenance 8785 Equipment Total 8775 Repairs and Maintenance Software Support (EMR) 11, , Staff Recruitment , Staff Retention 1, , Telephone 8815 Cellular/Pagers Office Staff , Cellular/Pagers Clinical Staff 3, , Office/Cable/LD 1, , Total 8810 Telephone 5, , Travel 8832 Hotel Total 8830 Travel Uniforms (10.00) 1, Utilities 2, , Employee Gifts & Goodwill Staff Meetings/ Parties 1, Bad Debt Expense 12, , Total Expense 399, ,077, Net Ordinary Income 173, ,499, Other Income/Expense Other Income 4150 Miscellaneous Income Interest Income Total Other Income , Other Expense 8807 Legal Settlements Total Other Expense Net Other Income , Net Income 173, ,500,942.15

23 PEOPLES HOME HEALTH BALANCE SHEET AS OF AUGUST 31, 2017 Aug 2017 ASSETS Current Assets Checking/Savings 1110 Servis 1st Ops # , BB&T Ops Acct # , BB&T Reserve Acct # ,510 Total Checking/Savings 1,507,247 Other Current Assets 1199 Petty Cash Accounts Receivable PMS 1301 Allowance for Bad Debt (96,658) 1302 Allowance for Pre Claim Review (40,000) 1300 Accounts Receivable PMS Other 1,583,181 Total 1300 Accounts Receivable PMS 1,446, Security Deposit 3,050 Total Other Current Assets 1,449,973 Total Current Assets 2,957,221 Fixed Assets 1500 Furniture & Equipment 294, Leasehold Improvements 29, Accumulated Depreciation (295,110) Total Fixed Assets 28,853 Other Assets 1925 Intercompany Loan to CH3 839, Intercompany Cov Hospice 588,829 Total Other Assets 1,427,829 TOTAL ASSETS 4,413,902 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 Accounts Payable 82,383 Total Accounts Payable 82,383 Credit Cards 2016 Servis1st Credit Card (909) Total Credit Cards (909) Other Current Liabilities K Deferrals Payable (k) Match Liability 6, EE 125 MFS (3,090) 2210 Wages Payable 400, Bonus Payable 41, PTO Accrual 223,734 Total Other Current Liabilities 668,283 Total Current Liabilities 749,756 Total Liabilities 749,756 Equity 3200 Partners' Equity 2,163,204 Net Income 1,500,942 Total Equity 3,664,146 TOTAL LIABILITIES & EQUITY 4,413,902

24 Covenant Health & Community Services, Inc. Income Statement & Balance Sheet August 31, 2017

25

26 Covenant Health & Community Services, Inc. Income Statement Fiscal Year JAN FEB MAR APR MAY JUN JUL AUG AUG BUD VARIANCE YTD AUG YTD AUG BUD VARIANCE Revenues Other Revenues Total Revenues Expenses: Salaries 157, , , , , , , , ,460 7,523 1,243,036 1,151,965 91,071 Benefits 22,206 18,915 21,822 29,049 15,490 16,427 14,123 12,790 18,551 (5,761) 150, ,802 (12,981) Other Expenses (19) - (121) (107) (219) - (219) Bank Service Fees Office Supplies Marketing Printing Exp Amortization Loan Orig Fees ,000-3,000 Legal 32,946 30,055 32,827 (19,581) 13,790 25,443 32,647 25,325 21,478 3, , ,821 1,631 Consulting 34,815 10,204 12,812 85,614 (2,213) 14,459 35, ,903 (28,587) 191, ,221 (39,680) Start Up Costs Operating License & Fees Promotional Itmes Subscriptions , ,500-1,500 Allocation from Parent (145,387) (139,218) (153,490) (146,242) (150,498) (143,459) (144,362) (149,838) (149,838) - (1,172,494) (1,172,494) (0) Total Expenses 101,936 66,151 83, ,338 35,233 64,447 72,197 45,955 68,553 (22,598) 590, ,314 44,494 Operating Margin (101,936) (66,101) (83,551) (121,338) (35,233) (64,097) (72,197) (45,955) (68,553) 22,598 (590,408) (546,314) (44,094) Other Non-Operating Revenues Other Non-Operating Expenses (97) Total Non-Operating Income/(Expense) (5) (5) (77) (5) (5) Total Revenues Total Expenses 101,941 66,156 83, ,343 35,238 64,350 72,197 45,955 68,553 (22,598) 590, ,314 44,494 Excess of Revenue over Expenses (101,941) (66,106) (83,628) (121,343) (35,238) (64,000) (72,197) (45,955) (68,553) 22,598 (590,408) (546,314) (44,094) Turnkey Visits

27 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Assets Current Assets Operating Cash 9,966 9,966 23,025 3, ,533 BB&T Analyzed Checking 9,960 9,955 9,950 9,945 9,940 9,935 9,930 9,915 Operating PayPal Total Cash & Equivalents 19,926 19,921 32,975 13,845 9,940 9,935 9,930 35,448 Misc Receivable Prepaid Other 7,249 6,934 6,619 6,304 5,988 5,673 5,358 5,043 Prepaid Supplies Total Current Assets 27,175 26,854 39,594 20,148 15,928 15,608 15,288 40,491 Fixed Assets: Furniture, Fixtures & Equipment (Less accumulated depreciation) Total Fixed Assets Other Assets Loan Origination Fees 10,500 10,125 9,750 9,375 9,000 8,625 8,250 7,875 Total Assets 37,675 36,979 49,344 29,523 24,928 24,233 23,538 48,366 Liabilities & Net Assets Covenant Health & Community Services, Inc. Balance Sheet Fiscal Year 2017 Current Liabilities Current portion of LT debt Accounts Payable Accrued Expenses 25,000 25,000 (34,500) 13,175 (34,219) (47,219) (10,000) (8,000) Accrued Payroll 110, , , , , , , ,733 Total Current Liabilities 135, , , , , , , ,733 Long-Term Liabilities Loan payable - BB&T 9,550,000 9,550,000 9,300,000 9,200,000 9,100,000 9,000,000 8,900,000 8,800,000 Due to/from: Covenant Hospice 2,102,814 2,191,505 2,312,636 2,382,744 2,493,028 2,673,360 2,729,445 2,808,792 Loan payable to Covenant Hospice Due to/from: Covenant Home Health Holding (9,526,938) (9,527,359) (9,277,827) (9,178,276) (9,078,742) (8,979,185) (8,879,631) (8,780,097) Due to/from: Foundation (7,338) (14,376) (30,100) (22,532) (23,941) (40,436) (25,523) (25,471) Due to/from: Home (6,817) (13,337) (20,532) (27,372) (34,452) (41,219) (48,032) (55,096) Due to/from: CAS (7,202) (14,120) (21,691) (28,912) (36,270) (43,262) (50,289) (57,574) Due to/from: Palliative (7,204) (14,102) (21,689) (28,916) (36,339) (43,414) (50,535) (57,914) Due to/from: Memory Care (11,544) (22,600) (34,733) (46,262) (58,130) (69,463) (80,869) (92,699) Due to/from: Peoples (17,372) (34,028) (52,337) (84,248) (102,112) (119,101) (136,189) (153,912) Less Short-term portion Total Long-Term Liabilities 2,068,399 2,101,584 2,153,726 2,166,225 2,223,043 2,337,279 2,358,376 2,386,029 Total Liabilities 2,203,604 2,269,015 2,365,007 2,466,529 2,497,173 2,560,478 2,631,980 2,702,762 Net Assets: Unrestricted Net Assets: (2,063,988) (2,063,988) (2,063,988) (2,063,988) (2,063,988) (2,063,988) (2,063,988) (2,063,988) Current Year Net Income/(Loss) (101,941) (168,047) (251,675) (373,018) (408,256) (472,257) (544,454) (590,408) Total Unrestricted Net Assets (2,165,929) (2,232,036) (2,315,663) (2,437,006) (2,472,244) (2,536,245) (2,608,442) (2,654,396) Total Liabilities & Net Assets 37,675 36,979 49,344 29,523 24,928 24,233 23,538 48,366

28 Covenant Hospice Foundation, Inc. Income Statement & Balance Sheet August 31, 2017

29

30 Covenant Hospice Foundation, Inc. Financial Analysis August 31, 2017 For the month, the foundation had an increase in total net assets of $1,707 bringing total net assets of the foundation to $4,970,873 and total assets to $5,098,856 at 8/31/17. For the year, the foundation has a increase in total net assets of $449,720. Operating Activities: For the month, operating expenses totaled $7,737 and consisted of: $ 255 Bank and Credit Card Service fees $ 7,482 Salary alloc of from CHCS The Foundation recognized total revenues of $46,159 which consisted of the following: $ 13,424 Memorials & Contributions/Unsolicited $ 25,000 Major Gifts $ 867 Fund Raising/Event Income $ 1,386 Direct Mail $ 3,024 United Way/CFC $ 60 Released from Restriction $ 2,398 Investment Earnings Childrens, Panama City, General, Marianna For the year, the Foundation has recognized total revenues of $758,196. Non-Operating Expenses totaled $52,435 and consisted of the following $ 7,672 Other Direct Costs $ -13 Fundraising expense $ 35,457 Payroll $ 6,583 Benefits $ 2,377 Goldenberg fund usage $ 60 Nathaniel's Lemonade Stand usage $ 300 Other Program Expense - Children's For the year, Foundation Non-Operating expenses are $636,994. Composition of investment portfolio: Foundation portfolio, per balance sheet 4,843,841 Charity Annuity Reserve required in FL, per balance sheet 19,377 Total 4,863,218 Note: Unrealized Gain/(Losses) are the fluctuations in market values of securities from month to month. Realized (Gain)/Losses are the true recorded gains or losses due to the sale of a security.

31 COVENANT HOSPICE FOUNDATION, INC. INCOME STATEMENT FOR AUGUST 31, % YTD AUG JAN FEB MAR APR MAY JUN JUL AUG AUG BUDGET VARIANCE VARIANCE YTD AUG BUDGET VARIANCE VARIANCE OPERATING REVENUES % % GENERAL & ADMINISTRATIVE EXPENSES Salary Alloc From CHCS 7,338 7,038 7,665 7,232 7,472 7,157 7,199 7,482 7, % 58,582 58, % Bank/Credit Card Service Fees 2,084 1,592 1, % 6,148-6, % TOTAL GENERAL & ADMINISTRATIVE EXPENSES 7,338 7,038 7,665 9,316 9,064 8,863 7,708 7,737 7, % 64,729 58,582 6, % OPERATING MARGIN (7,338) (7,038) (7,665) (9,316) (9,064) (8,863) (7,708) (7,737) (7,482) (255) 3.41% (64,729) (58,582) (6,148) 10.5% NON-OPERATING REVENUES Memorials/Contributions/Unsolicited 11,287 18,656 13,080 15,590 13,130 16,016 14,991 13,424 14,850 (1,426) 9.6% 116, ,050 (7,876) -6.3% Major Gifts 1, (2,245) 5, ,163 25,000 40,000 (15,000) 37.5% 75, ,000 (94,837) -55.8% Planned Giving - 45,784 50, % 97,199-97, % Fund Raising/Event Income 5,344 1,100 13,929 ####### # 15,824 83,292 8, % 350, , , % United Way/CFC 5,167 5,167 6,474 3,024 3,024 10,024 3,024 3,024 5,167 (2,143) -41.5% 38,926 53,834 (14,907) -27.7% Grants (95) % % Direct Mail , ,848 4,574 2,076 1,386-1, % 13,728-13, % Released from Restriction 1,506 1,297-12, , % 18,063-18, % Investment Earnings 3,215 2,370 15,378 2,532 2,425-20,235 2,398 2,556 (158) -6.2% 48,554 46,343 2, % TOTAL NON-OPERATING REVENUES 28,127 29,822 94, ,010 37, ,406 94,842 46,159 62,572 (16,413) % 758, , , % NON-OPERATING EXPENSES Other Direct 2,456 4,143 3,757 4,860 18,186 7,195 5,625 7,672 11,159 (3,487) -31.3% 53,894 93,922 (40,028) -42.6% Program Expenses 1,300 6, ,890 5,549 1,557 2,737-2, % 24,746-24, % Realized Gains/(Losses) 14,017-12,200 - (6,006) - (11,336) % 8,874-8, % Investment & Advisory Services 3, , , % 11,185 10, % Fundraising Expense/Cost of Direct Benefit ,254 12,200 62,796 3,091 (13) - (13) 100.0% 155,328 98,500 56, % Payroll 41,687 33,958 51,568 51,414 48,454 27,091 35,241 35,457 55,992 (20,535) -36.7% 324, ,285 (107,415) -24.8% Benefits 7,157 6,540 8,341 8,859 9,649 4,345 6,623 6,583 9,174 (2,591) -28.2% 58,096 79,568 (21,472) -27.0% TOTAL EXPENSES: 70,225 51,156 76, ,736 88, ,976 44,635 52,435 76,325 (23,890) -31.3% 636, ,620 (77,625) -10.9% NET NON-OPERATING REVENUE (LOSS) (42,098) (21,335) 18, ,274 (51,372) 8,430 50,208 (6,276) (13,752) 7, % 121,202 (83,893) 205, % EXCESS OF REVENUE OVER EXPENSES (49,436) (28,372) 10, ,959 (60,437) (433) 42,499 (14,013) (21,234) 7, % 56,472 (142,475) 198, % MARGIN % % -95.1% 11.3% 50.0% % -0.4% 44.8% -30.4% -33.9% 3.6% 7.4% -22.6% 30.0% OTHER CHANGES IN UNRESTRICTED NET ASSETS Unrealized gain (loss) on investments 83, ,056 18,930 49,591 50,901-73,866 14,803-14, % 395, , % INCREASE IN UNRESTRICTED NET ASSETS 34,209 75,684 29, ,549 (9,536) (433) 116, (21,234) 22, % 452,264 (142,475) 594, % Changes in Temporarily Restricted Net Assets Contributions 343 8,014 1, , % 15,519-15, % 14