Covenant Care July 2017 Consolidated Financial Statements HIGHLIGHTS

Transcription

1 Covenant Care July 2017 Consolidated Financial Statements HIGHLIGHTS SUMMARY OF JULY FINANCIAL ACTIVITY: Covenant Care, consolidated results: --July: Operating Margin of $99,633; Net Income of $252,684 --YTD: Operating Margin of $647,610; Net Income of $1,293,102 Covenant Hospice realized a July Operating Margin of $116,605; net non-operating revenue of $84,736 produced a Net Income ( Excess of Revenues over Expenses ) of $201,341. YTD Operating Margin is $571,038 and YTD Net Income is $951,719. Total July admissions: 422 end-of-life admissions; 443 homebound admissions; 865 total admissions. (June total - 819) Covenant Hospice key statistics: --Average Daily Census: (July) vs (YTD) --Average Length of Stay: 56.9 (July) vs (YTD) --Admissions: 422 (July) vs 3,055 (YTD) (Average per month 436) Peoples Home Health, achieved a positive Operating Margin of $151,036. YTD Operating Margin is $1,173,920. (Peoples has limited few non-operating revenues or expenses.) Peoples Home Health key statistics: --Medicare & Medicare-like episodes: 443 (July) vs. 2,976 (YTD) --Home health visits: 6,626 (July) vs. 49,354 (YTD) --Average Medicare episode payment: $2,388 vs. $2,347 (2017 budget) --YTD 30-day readmissions: 19% Covenant Health & Community Services had a July operating loss of ($72,197) and a YTD operating loss of ($544,454). 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 $42,499 in July. YTD Net Income is $70,485. 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 COMBINED STATEMENT OF OPERATIONS AUG SEPT OCT 77,764 73,853 99,633 Consolidated Operating Margin 4,778 17,767 47,930 Net Income 38, , ,341 Hospice 33,588 45,485 78, , , ,763 Peoples 153, , ,591 (230,385) (129,805) (101,420) Other Companies (103,449) (105,518) (107,628) 39, , ,684 Total Net income 83,199 96, ,039

3 COVENANT CARE COMBINED STATEMENT OF OPERATIONS JULY 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE NET PATIENT/FAMILY CARE/PROGRAM REVENUE 4,417,624-1,295-1,153 5,238 1,039,750 5,465,059 6,476,407 (1,011,348) -15.6% TOTAL PATIENT/FAMILY CARE EXPENSES 3,172,346 11,511-8,981 4, ,673-3,709,726 4,480,422 (770,697) -17.2% CONTRIBUTIONS FROM OPERATIONS 1,245,278 - (10,216) (7,828) 1, ,076-1,755,334 1,995,985 (240,651) -12.1% CONTRIBUTION % 28.2% 0.0% 50.7% 32.1% 30.8% 1.3% GENERAL & ADMINISTRATIVE EXPENSES Other Direct 570, ,465 11,226 70,061 16, , ,559 (1,479) 784, ,797 (161,382) -17.1% Payroll 384, , , , , ,202 (156,396) -17.6% Benefits 85, , ,559 38, , ,429 (24,949) -15.1% Allocation from CHCS 87,263 7,199 7,027 11,405 (144,362) 445 7,121 6,814 17, % TOTAL G&A EXPENSES 1,128,673 7,708 8,492 22,631 72,197 17,133 7,219 18, ,563 (1,479) 1,655,700 1,998,427 (342,727) -17.1% OPERATING MARGIN 116,605 (7,708) (18,708) (22,631) (72,197) (17,133) (15,047) (17,539) 152,513 1,479 99,633 (2,443) 102, % OPERATING MARGIN % 2.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 14.7% 1.8% 0.0% 1.9% NON-OPERATING REVENUES Contributions and fundraising - 74,607 2, ,009 63,571 13, % Other Non-Operating Revenues 107,439 31, , (1,479) 173,494 27, , % Development/Fundraising Expense (169) (52,138) - - (52,307) (74,960) 22, % Other Non-Operating Expense (22,533) (3,833) - - (18,778) (45,145) (38,152) (6,993) 18.3% Contributions to Affiliates % NET NON-OPERATING REVENUE 84,736 50,208 2, , (1,479) 153,051 (21,810) 174, % EXCESS OF REVENUE OVER EXPENSES 201,341 42,499 (16,292) (22,631) (72,197) (213) (15,047) (17,539) 152, ,684 (24,253) 276, % 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 JULY 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES ELIMINATIONS COMBINED BUDGET VARIANCE % VARIANCE NET PATIENT/FAMILY CARE/PROGRAM REVENUE 31,774,599-12, ,838 72,142 7,713,324 39,600,967 44,387,037 (4,786,070) -10.8% TOTAL PATIENT/FAMILY CARE EXPENSES 22,713,094 81,718 14,730 59,480 56,401 3,709,388-26,634,810 30,829,692 (4,194,882) -13.6% CONTRIBUTIONS FROM OPERATIONS 9,061,506 - (69,055) (14,730) (31,642) 15,741 4,003,936-12,966,157 13,557,345 (591,188) -4.4% CONTRIBUTION % 28.5% 0.0% 51.9% 32.7% 30.5% 2.2% GENERAL & ADMINISTRATIVE EXPENSES Other Direct 4,356,272 5,892 13,647 55, , ,199 5,359 15, ,991 (10,354) 5,737,341 6,219,594 (482,252) -7.8% Payroll 2,922,360-1,086,053 39,000 62,868 1,462,220-5,572,502 6,174,955 (602,454) -9.8% Benefits 594, ,032-9, ,568-1,008,704 1,143,908 (135,205) -11.8% Allocation from CHCS 616,944 51,100 50,289 80,869 (1,022,656) 3,131 50,535 48, ,756 - (0) - (0) 0.0% TOTAL G&A EXPENSES 8,490,468 56,992 63, , , ,329 55, ,725 2,677,535 (10,354) 12,318,547 13,538,457 (1,219,911) -9.0% OPERATING MARGIN 571,038 (56,992) (132,991) (150,897) (544,454) (167,329) (87,536) (119,984) 1,326,401 10, ,610 18, , % OPERATING MARGIN % 1.8% 0.0% 0.0% 0.0% 0.0% 0.0% % 17.2% 1.6% 0.0% 1.6% NON-OPERATING REVENUES Contributions and fundraising ,881 24,647 1, , , , % Other Non-Operating Revenues 478,272 37, ,292 1,168 (10,354) 750, , , % Development/Fundraising Expense (1,223) (564,500) (4,169) - (569,892) (560,711) (9,180) 1.6% Other Non-Operating Expense (96,928) (11,185) - - (120,253) - - (100) - (228,466) (200,394) (28,072) 14.0% Contributions to Affiliates % NET NON-OPERATING REVENUE 380, ,478 20,582 1, , ,068 (10,354) 645,492 3, , % EXCESS OF REVENUE OVER EXPENSES 951,719 70,485 (112,409) (148,898) (544,454) (43,291) (87,536) (119,984) 1,327,469-1,293,102 22,416 1,270, % 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 JULY 31, 2017 HOSPICE FOUNDATION CAS MEMORY CARE CHCS CHHH PALLIATIVE CAH PEOPLES COMBINED ASSETS CASH & EQUIVALENTS 1,908, , ,844 21,559 9, ,533 20,177 19,471 1,354,202 3,948,077 INVESTMENTS - FIXED 44,907 4,829,163 4,874,069 INVESTMENTS - BALANCED 16,186,235 19,315 16,205,550 TOTAL INVESTMENTS 16,231,142 4,848,477-21,079,619 TOTAL CASH & INVESTMENTS 18,139,422 5,062, ,844 21,559 9, ,533 20,177 19,471 1,354,202 25,027,697 GROSS ACCOUNTS RECEIVABLES 11,986,581 2,815 90, ,574,984 13,655,415 RECEIVABLE ALLOWANCES (1,118,839) (64,627) (124,152) (1,307,618) NET ACCOUNTS RECEIVABLES 10,867,741-2, , ,450,832 12,347,796 GRANTS / PLEDGES RECEIVABLE - 3,246 3,246 CRUT RECEIVABLE 2,481,325 2,481,325 MISCELLANEOUS RECEIVABLE 118,505 29, , ,415 DUE TO/FROM CONSOLIDATED 3,809,446 (51,663) (567,121) (156,946) 6,541,624 (10,520,019) (193,113) (185,250) 1,323,041 0 PREPAID EXPENSE 826, ,358 - (408) 831,438 INVENTORY 171, ,871 CASH VALUE ON LIFE INSURANCE 1,048,650 1,048,650 TOTAL CURRENT ASSETS 37,463,158 5,043,468 (399,146) (135,386) 6,556,912 (10,284,487) (146,672) (166,044) 4,153,635 42,085,439 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 8,985,538 2, ,641 9,281,178 CONSTRUCTION IN PROGRESS 2,234,526 2,234,526 28,023, , ,178 28,349,130 LESS ACCUMULATED DEPRECIATION (12,375,334) (293,780) (12,669,114) NET PROPERTY & EQUIPMENT 15,648, , ,398 15,680,016 INVESTMENT - PEOPLES 2,163,204 - CON COSTS MOBILE 127, ,023 CON COSTS TALLAHASSEE 264, ,029 NO COMPETE - BREWTON 61,112 61,112 GOODWILL 1,501 1,501 GOODWILL - PEOPLES 9,073,350 9,073,350 LOAN ORIGINATION FEES 8,250 8,250 TOTAL INTANGIBLE ASSETS 453, ,250 11,236, ,535,264 TOTAL ASSETS 53,565,441 5,043,468 (399,146) (133,386) 6,565, ,067 (146,672) (166,044) 4,183,033 67,300,719 LIABILITIES & FUND BALANCE CURRENT LIABILITIES CURRENT PORTION L/T DEBT 448, ,784 ACCOUNTS PAYABLE 4,959,351 2,715 (4) (10,000) 19, ,998 5,060,247 ADVANCES AGAINST ACCOUNTS RECEIVABLE 5,197,438 5,197,438 DEFERRED REVENUE - (0) 1,787 1,787 ACCRUED SALARY & WAGES 2,434,148 57, ,604 14, ,363 3,392,815 TOTAL CURRENT LIABILITIES 13,039,721 59,997 1, ,604 19,160-14, ,360 14,101,070 LONG-TERM LIABILITIES NOTES PAYABLE - - MORTGAGE PAYABLE 6,077,597 6,077,597 OTHER LONG TERM LOANS 439,423 8,900,000 9,339,423 LESS CURRENT PORTION (448,784) (448,784) LONG-TERM CHARITABLE ANNUITIES - 14,305 14,305 INTEREST RATE SWAP PAYABLE - - TOTAL LONG-TERM LIABILITIES 6,068,236 14, ,900, ,982,540 TOTAL LIABILITIES 19,107,956 74,302 1,783-9,173,604 19,160-14, ,360 29,083,611 NET ASSETS: UNRESTRICTED 31,964,959 4,125,543 (472,022) (150,498) (2,608,442) 932,908 (146,672) (180,490) 3,490,672 34,792,755 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 48,604-48,604 BOARD DESIGNATED HERO'S WISH 18,956-18,956 TEMPORARILY RESTRICTED - EVENTS 2,500 2,500 TEMPORARILY RESTRICTED - COVENANT SUPPORT FND 4,925-4,925 TEMPORARILY RESTRICTED - NATHANIEL'S LEMONADE 15,996-15,996 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 34,457,484 4,969,166 (400,928) (133,386) (2,608,442) 932,908 (146,672) (180,490) 3,490,672 38,217,109 TOTAL LIABILITIES & NET ASSETS 53,565,441 5,043,468 (399,145) (133,386) 6,565, ,067 (146,672) (166,044) 4,183,033 67,300,720

6 Financial Report Month Ended 07/31/2017

7 Executive Summary Excess Revenue over Expenses was $201,901 for the month versus a $43,823 budget. YTD Excess Revenues over Expenses was $951,719 versus a budget of $322,958 and compares to a prior YTD of $512,092. Of the Excess Revenue over Expenses, $116,605 was in Operating Margin and $85,296 was in Net Non-Operating Income. Net non-operating income was $85,296 for the month, favorable to a budget of $9,161. YTD net non-operating income was $380,681, favorable to a budget of $187,653. Reflected in the Statement of Changes in Net Assets is the change in unrealized gain from investments of $144,551 for the month and $889,181 YTD. With this, we had an increase in Net Assets YTD of $1,840,339. 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 592 and admissions were 422 compared to a budget of 447, for a monthly conversion rate of 71.3%. YTD referrals and admissions were 4,265 and 3,055 respectively, a conversion rate of 71.6%. Operating Margin The operating margin of 2.6% for the month was favorable to the budget of.6%. YTD operating margin was 1.8% versus a budget of.4%. Prior year was 0.9%. Operating income for the month was $116,605, favorable to the budget of $34,662. YTD operating income was $571,038, favorable to a budget of $135,305 and compares to a prior year of $320,661. Net revenue for the month was $4,417,624, unfavorable to a budget of $5,415,632. YTD net revenue was $31,774,599, unfavorable to a budget of $36,601,780 and compares to a prior year of $34,715,897. Total patient care costs per day for the month, excluding inpatient costs and room & board expenses which are a function of patient mix, were $97.58, favorable to a budget of $ YTD patient care costs excluding inpatient costs and room and board expenses were $100.51, favorable to a budget of $ G&A expenses of 25.6% of revenue were favorable to the budget of 26.8%. YTD G&A expenses of 26.7% of revenue were unfavorable to the budget 26.6% and compares to prior year of 24.8%.

8 Non-Operating Margin Net non-operating income was $85,296 for the month, favorable to budget of $9,161. YTD net non-operating income was $380,681, favorable to a budget of $187,653. Reasons are described below. Other non-operating revenue, which includes investment income, was $107,439 for the month compared to a budget of $28,923, and YTD was $478,272 compared to a budget of $273,392. Other non-operating expense for the month was $22,533 compared to a budget of $19,590. This category includes interest expense and investment expenses. YTD was $96,928 compared to a budget of $84,560. 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 $144,551 and YTD was $889,181. With the above, Net Assets for the month increased $345,892 compared to a budgeted increase of $43,823. YTD Net Assets increased $1,840,339 and compares to a budgeted increase of $322,958. Balance Sheet Cash and short-term investments was $18,139,422 at month end, a supply of 130 days of operating expenses compared to 119 days at this time last year. Days in Accounts Payable was at 54 days. Days in Accounts Receivable was 74 days. Financial Covenants for Bond Agreement (Covenant Hospice) are met: Ratio of Maximum Debt to Tangible Net Worth was.56:1 at July 31, 2017, favorable to Bond Covenant not to exceed 2.5:1. Tangible Net Worth was $34,003,820 at July 31, 2017, favorable to minimum per Bond Covenant of $6,500,000. Fixed Charge Coverage at July 31, 2017 was 2.2:1, favorable to Bond Covenant of 1.1:1.

10 COVENANT HOSPICE, INC. CONSOLIDATED MONTH % INCOME STATEMENT YEAR TO YEAR TO % PRIOR YEAR JUN JUL BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE PATIENT/FAMILY CARE REVENUE 3,160,099 3,329,365 3,468,333 (138,968) -4.01% Routine Home Care 22,593,981 23,615,548 (1,021,567) -4.33% 24,216, , ,375 1,022,092 (344,717) % Inpatient Care 5,260,708 6,671,061 (1,410,353) % 5,167,083 12,964 10, ,997 (126,442) % Continuous Care 193, ,592 (739,076) % 837,903 13,893 15,409 19,119 (3,710) % Respite Care 97, ,634 (36,822) % 78, , , ,534 (248,399) % Room & Board 5,434,788 6,429,914 (995,126) % 5,763,620 8,545 8,193 9,125 (932) % Consulting Physician 69,223 61,852 7, % 78,525 36,922 29, ,287 (74,091) % Primary Physician 236, ,726 (447,096) % 580,029 82,171 82,510 1,067 81, % Other Care 294,745 7, , % 7,522 4,770,571 4,847,738 5,703,553 (855,815) % TOTAL PATIENT/FAMILY CARE REVENUE 34,181,403 38,536,792 (4,355,390) % 36,730,020 99, , ,259 47, % Charity/Unfunded Care 1,049, , , % 814, , , ,663 94, % Contractual Adjustments 1,357,683 1,215, , % 1,200, , , , , % TOTAL DEDUCTIONS FROM REVENUE 2,406,803 1,935, , % 2,014,123 4,464,975 4,417,624 5,415,632 (998,008) % NET PATIENT/FAMILY CARE REVENUE 31,774,599 36,601,780 (4,827,181) % 34,715,897 OPERATING EXPENSES PATIENT/FAMILY CARE EXPENSES 4,304 (2,004) 1,608 (3,612) % Other Direct 23,581 25,658 (2,077) -8.10% 25,805 1,482,443 1,448,818 1,752,909 (304,091) % Payroll 10,072,889 11,954,516 (1,881,627) % 12,202, , , ,065 (57,070) % Benefits 2,339,983 2,562,912 (222,929) -8.70% 2,388, , , ,357 (83,346) % Patient Expenses 3,500,440 3,812,900 (312,459) -8.19% 3,603,648 89,793 91, ,202 (38,381) % Mileage/Fleet Car 655, ,754 (249,323) % 785,979 2,421,717 2,342,642 2,829,141 (486,499) % TOTAL CORE PATIENT/FAMILY CARE EXPENSES 16,592,325 19,260,740 (2,668,415) % 19,006,359 59,212 43, ,752 (68,198) % Inpatient Expenses 420, ,712 (340,439) % 743, , , ,283 (199,525) % Room & Board Expenses 5,617,303 6,659,432 (1,042,128) % 5,978,660 11,930 7,392 9,125 (1,734) % Consulting Physician Expenses 83,192 61,852 21, % 60, , ,704 1,099,161 (269,457) % TOTAL CONTRACTED PATIENT /FAMILY CARE EXPENSES 6,120,769 7,481,996 (1,361,227) % 6,782,852 3,259,468 3,172,346 3,928,302 (755,956) % TOTAL PATIENT/FAMILY CARE EXPENSES 22,713,094 26,742,736 (4,029,642) % 25,789,211 1,205,506 1,245,278 1,487,329 (242,052) % CONTRIBUTIONS FROM OPERATIONS 9,061,506 9,859,044 (797,538) -8.09% 8,926, % 28.19% 27.46% 0.73% CONTRIBUTION % 28.52% 26.94% 1.58% 25.71% GENERAL & ADMINISTRATIVE EXPENSES 620, , ,430 (208,821) % Other Direct 4,356,272 5,055,726 (699,455) % 5,141, , , ,782 (95,949) % Payroll 2,922,360 3,336,954 (414,594) % 2,931,518 72,533 85, ,193 (19,225) % Benefits 594, ,115 (119,222) % 533,056 86,701 87,263 87, % Alloc to/from Other Subsidiaries 616, , % 0 1,116,017 1,128,673 1,452,668 (323,995) % TOTAL G&A EXPENSES 8,490,468 9,723,739 (1,233,271) % 8,606, % 25.55% 26.82% -1.27% % OF NET PATIENT/FAMILY CARE REVENUE 26.72% 26.57% 0.15% 24.79% 4,375,485 4,301,019 5,380,970 (1,079,951) % TOTAL OPERATING EXPENSES 31,203,562 36,466,475 (5,262,913) % 34,395,235 89, ,605 34,662 81, % OPERATING MARGIN 571, , , % 320, % 2.64% 0.64% 2.00% OPERATING MARGIN % 1.80% 0.37% 1.43% 0.92% NON-OPERATING REVENUES % Contributions/Unsolicited % 106, % Planned Giving/Solicited % 121, % Foundation Support-Fund Raising/Event Income % 231, % United Way/CFC % 53, % Grants % 14, % TOTAL NON-OPERATING REVENUES % 526,963 NON-OPERATING EXPENSES (3) -1.88% Other Direct 1,223 1, % 108, % Fundraising/Event Expense % 59, % Payroll % 392, % Benefits % 86, (3) -1.88% TOTAL NON-OPERATING EXPENSES 1,223 1, % 647,988 (169) 391 (172) % NET NON-OPERATING REVENUE (LOSS) (663) (1,179) % (121,025) 101, ,439 28,923 78, % OTHER NON-OPERATING REVENUES 478, , , % 555,469 15,436 22,533 19,590 2, % OTHER NON-OPERATING EXPENSES 96,928 84,560 12, % 243,013 86,275 85,296 9,161 76, % NON OPERATING INCOME 380, , , % 191,431 4,566,854 4,525,623 5,444,555 (918,932) % TOTAL REVENUES 32,253,431 36,875,172 (4,621,741) % 35,798,328 4,391,090 4,323,722 5,400,732 (1,077,010) % TOTAL EXPENSES 31,301,712 36,552,213 (5,250,501) % 35,286, , ,901 43, , % EXCESS OF REVENUE OVER EXPENSES 951, , , % 512, % 4.46% 0.80% 3.66% MARGIN % 2.95% 0.88% 2.07% 1.43% 23,305 24,008 25,944 (1,936) -7.46% PATIENT DAYS 165, ,241 (11,158) -6.33% 183, (62) AVERAGE DAILY CENSUS (53) (1) AVERAGE LENGTH OF STAY (4.9) (25) ADMISSIONS 3,055 2, , REFERRALS 4,265 4, % 71.3% CONVERSION RATIO 71.6% 73.0% (25) FTE's - CLINICAL FTE's - G&A (5) FTE's NON-OP (29) FTE's - TOTAL 447 $ $ $99.94 $ NET INCOME PER FTE $1, ADC/FTE'S 1.93

11 COVENANT HOSPICE, INC. CONSOLIDATED MONTH % STATEMENT OF CHANGES IN NET ASSETS YEAR TO YEAR TO % PRIOR YEAR JUN JUL BUDGET VARIANCE VARIANCE FY 2017 DATE DATE BUDGET VARIANCE VARIANCE TO DATE 175, ,901 43, , % EXCESS OF REVENUE OVER EXPENSES 951, , , % 512,092 OTHER CHANGES IN UNRESTRICTED NET ASSETS 0 144, , % Change in net unrealized gain on other than trading securities 889, , % 656, , ,452 43, , % INCREASE IN UNRESTRICTED NET ASSETS 1,840, ,958 1,517, % 1,168,150 CHANGES IN TEMPORARILY RESTRICTED NET ASSETS % Contributions % 3,990 0 (560) 0 (560) % Net assets released from restrictions (560) 0 (560) % (690) 0 (560) 0 (560) % INCREASE/(DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS (560) 0 (560) % 3, , ,892 43, , % INCREASE (DECREASE) IN NET ASSETS 1,840, ,958 1,517, % 1,171,450

12 COVENANT HOSPICE, INC. BALANCE SHEET FOR JULY 31, 2017 BALANCE BALANCE BALANCE NET CHANGE NET CHANGE 07/31/ /30/ /31/2016 DURING MONTH DURING YEAR ASSETS CASH & EQUIVALENTS 1,908,279 2,472,452 1,346,241 (564,173) 562,039 INVESTMENTS - FIXED 44,907 91,734 2,843,245 (46,828) (2,798,338) INVESTMENTS - BALANCED 16,186,235 16,029,284 12,872, ,952 3,314,122 TOTAL INVESTMENTS 16,231,142 16,121,018 15,715, , ,784 TOTAL CASH & INVESTMENTS 18,139,422 18,593,471 17,061,599 (454,049) 1,077,822 GROSS INSURANCE RECEIVABLES 11,986,581 11,879,304 13,352, ,277 (1,366,338) RECEIVABLE ALLOWANCES (1,118,839) (1,195,049) (1,133,589) 76,210 14,750 NET INSURANCE RECEIVABLES 10,867,741 10,684,254 12,219, ,487 (1,351,588) GRANTS / PLEDGES RECEIVABLE - - (0) - 0 CHARITABLE REMAINDER UNITRUST RECEIVABLE 2,481,325 2,481,325 2,481, MISCELLANEOUS RECEIVABLE (601,725) (658,690) (404,095) 56,964 (197,630) DUE FROM/TO FOUNDATION 26,140 36, ,255 (10,272) (83,115) DUE FROM/TO ALZHEIMER'S 516, , ,074 10,509 32,758 DUE FROM/TO HOME 137, ,712 57,816 1,506 79,401 DUE FROM/TO COVENANT HEALTH SYSTEMS 2,729,445 2,673,360 2,083,358 56, ,087 DUE FROM/TO COVENANT PALLIATIVE CARE 142, ,544 78,785 9,033 63,792 DUE FROM/TO COVENANT UNIVERSITY - - (0) - 0 DUE FROM/TO COVENANT MEMORY CARE 76,077 64,902 1,100 11,175 74,977 DUE FROM/TO COVENANT HOME HEALTH HOLDING 901, , , PREPAID EXPENSE 826,197 1,045, ,714 (218,882) 275,484 INVENTORY 171, , ,232 (996) 21,639 CASH VALUE ON LIFE INSURANCE 1,048,650 1,036, ,666 11,855 82,985 TOTAL CURRENT ASSETS 37,463,158 37,806,743 36,740,408 (343,585) 722,750 LAND 1,936,722 1,936,722 1,936, BUILDINGS & IMPROVENTS 12,627,696 12,572,987 12,572,987 54,709 54,709 LEASEHOLD IMPROVEMENTS 2,239,472 2,238,571 2,238, FURNITURE, FIXTURES & EQUIPMENT 8,985,538 9,035,799 8,961,731 (50,261) 23,807 CONSTRUCTION IN PROGRESS 2,234,526 1,547,302 61, ,224 2,172,551 28,023,953 27,331,380 25,771, ,573 2,251,967 LESS ACCUMULATED DEPRECIATION (12,375,334) (12,271,916) (11,636,997) (103,419) (738,337) NET PROPERTY & EQUIPMENT 15,648,618 15,059,464 14,134, ,154 1,513,630 CON COSTS MOBILE 127, , ,122 (2,443) (17,099) CON COSTS TALLAHASSEE 264, , ,030 (857) (6,001) NO COMPETE - BREWTON 61,112 61,506 63,872 (394) (2,760) GOODWILL - BREWTON 1,501 1,506 1,535 (5) (34) TOTAL INTANGIBLE ASSETS 453, , ,558 (3,699) (25,894) INVESTMENT IN STUDER COVENANT ALLIANCE, LLC TOTAL ASSETS 53,565,441 53,323,571 51,354, ,870 2,210,486 LIABILITIES & FUND BALANCE CURRENT LIABILITIES CURRENT PORTION L/T DEBT 448, , , ACCOUNTS PAYABLE 4,959,351 4,839,632 2,456, ,719 2,503,134 ADVANCES AGAINST ACCOUNTS RECEIVABLE 5,197,438 5,688,977 6,419,509 (491,539) (1,222,071) ACCRUED SALARY & WAGES 2,434,148 2,278,738 3,114, ,411 (680,341) TOTAL CURRENT LIABILITIES 13,039,721 13,256,130 12,438,999 (216,410) 600,722 LONG-TERM LIABILITIES NOTES PAYABLE MORTGAGE PAYABLE 6,077,597 6,108,804 6,324,816 (31,207) (247,219) OTHER LONG TERM LOANS 439, , ,786 (6,345) (56,363) LESS CURRENT PORTION (448,784) (448,784) (448,784) - - INTEREST RATE SWAP PAYABLE TOTAL LONG-TERM LIABILITIES 6,068,236 6,105,788 6,371,818 (37,552) (303,582) TOTAL LIABILITIES 19,107,956 19,361,918 18,810,817 (253,962) 297,140 NET ASSETS: UNRESTRICTED 31,964,959 31,468,567 30,051, ,392 1,913,906 TEMPORARILY RESTRICTED 2,492,525 2,493,085 2,493,085 (560) (560) TOTAL NET ASSETS 34,457,484 33,961,652 32,544, ,832 1,913,346 TOTAL LIABILITIES & NET ASSETS 53,565,441 53,323,571 51,354, ,870 2,210,486 CASH ONHAND DAYS REVENUE OUTSTANDING DAYS PAYABLE OUTSTANDING DEBT TO FUND BALANCE CURRENT ASSETS TO CURRENT LIABILITIES

13 COVENANT HOSPICE, INC. PER PATIENT DAY MONTH INCOME STATEMENT YEAR TO YEAR TO PRIOR % JUN JUL BUDGET VARIANCE FY 2017 DATE DATE BUDGET VARIANCE YEAR CHANGE PATIENT/FAMILY CARE REVENUE Routine Home Care % (11.18) Inpatient Care (5.98) % (4.84) Continuous Care (4.12) % (0.10) Respite Care (0.17) % (7.41) Room & Board (3.56) % (0.01) Consulting Physician % (2.77) Primary Physician (2.45) % Other Care % (17.92) TOTAL PATIENT/FAMILY CARE REVENUE (11.60) % Charity/Unfunded Care % Contractual Adjustments % TOTAL DEDUCTIONS FROM REVENUE % (24.74) NET PATIENT/FAMILY CARE REVENUE (15.20) % OPERATING EXPENSES PATIENT/FAMILY CARE EXPENSES 0.18 (0.08) 0.06 (0.15) Other Direct (0.00) % (7.22) Payroll (6.81) % (1.19) Benefits (0.37) % (1.72) Patient Expenses (0.43) % (1.19) Mileage (1.16) % (11.47) TOTAL CORE PATIENT/FAMILY CARE EXPENSES (8.78) % (2.49) Inpatient Expenses (1.77) % (5.27) Room & Board Expenses (3.76) % (0.04) Consulting Physician Expenses % (7.81) TOTAL PASS THROUGH PATIENT /FAMILY CARE EXPENSES (5.38) % (19.28) TOTAL PATIENT/FAMILY CARE EXPENSES (14.15) % (5.46) CONTRIBUTIONS FROM OPERATIONS (1.05) % GENERAL & ADMINISTRATIVE EXPENSES (6.28) Other Direct (2.30) % (2.50) Payroll (1.23) % (0.47) Benefits (0.45) % Alloc to Other Subsidiaries % (8.98) TOTAL G&A EXPENSES (3.74) % 25.5% 26.8% -1.3% % OF NET PATIENT/FAMILY CARE REVENUE 26.7% 26.6% 0.2% 24.8% 7.8% (28.26) TOTAL OPERATING EXPENSES (17.90) % OPERATING MARGIN % 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 % (0.01) 0.02 (0.01) 0.02 NET NON-OPERATING REVENUE (LOSS) (0.00) (0.01) 0.00 (0.66) 99.4% OTHER NON-OPERATING REVENUES % OTHER NON-OPERATING EXPENSES % NON OPERATING INCOME % (21.35) TOTAL REVENUES (13.85) % (28.07) TOTAL EXPENSES (17.79) % EXCESS OF REVENUE OVER EXPENSES % 3.85% 4.46% 0.80% 3.66% MARGIN % 2.95% 0.88% 2.07% 1.43%

14 COVENANT HOSPICE, INC. STATEMENT OF CASH FLOWS July 31, 2017 MONTH YEAR TO DATE CASH FLOWS FROM OPERATING ACTIVITIES: Increase (decrease) in net assets 495,832 1,913,346 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation expense 103, ,395 Amortization expense 3,699 25,894 Provision for bad debts - - Prior period adjustments Change in operating assets and liabilities - Accounts receivable (107,277) 1,366,338 Pledges receivable - (0) Allowance for Doubtful Accounts 33,869 (16,131) Allowance for Doubtful Accounts Audit (107,000) 30,000 Allowance for Doubtful Accounts Sequestration (3,079) (28,619) Miscellaneous receivables (54,358) (94,293) Prepaid expenses 218,882 (275,484) SCA Investment - - Inventory 996 (21,639) Line of Credit 520,000 2,209,650 Accounts payable (132,901) (263,782) Accrued expenses (111,969) (464,526) Net cash provided (required) by operating activities 860,112 5,119,149 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (692,573) (2,251,967) Retirement of Capital Assets - (58) No Compete Agreement - Brewton - - Certificate of Need - Mobile - - Cash Value of Insurance Investment (11,855) (82,985) Net cash used in investing activities (704,428) (2,335,010) CASH FLOWS FROM FINANCING ACTIVITIES Accrued PIP liability (491,539) (880,620) Receivable from CHF 10,272 83,115 Receivable from CHP (9,033) (63,792) Receivable from CHCS (56,085) (646,087) Receivable from CAS (10,509) (32,758) Receivable from C@Home (1,506) (79,401) Receivable from Hospice University - (0) Receivable from Peoples Home Health (2,606) 291,923 Receivable from Memory Care (11,175) (74,977) Receivable from CH3 - (139) Payments on obligations under capital leases (6,345) (56,363) Payments on obligations under debt (31,207) (247,219) Due to Alzheimer's - - Due to Foundation - - Net cash used by financing activities (609,734) (1,706,317) NET INCREASE (DECREASE) IN CASH (454,049) 1,077,822 CASH, BEGINNING OF PERIOD 18,593,471 17,061,599 CASH, END OF PERIOD 18,139,422 18,139,422

15 Peoples Home Health, LLC. Income Statement & Balance Sheet July 31, 2017

16

17 PEOPLES HOME HEALTH INCOME STATEMENT JULY 2017 JULY YTD JUL Ordinary Income/Expense Income 4000 Medicare Revenue 712,928 5,532, Non Medicare Revenue 118, , Medicare Like 23,409 94, Medicare Like Discounted 184,446 1,233,967 Total Income 1,039,750 7,713,324 Cost of Goods Sold 5000 Salaries & Wages Clinical Staff 5005 Skilled Nursing 166,416 1,171, Occup Therapy 39, , Physical Therapy 148,889 1,124, Speech Therapy 12,691 97, Social Work 10,078 74, Home Health Aide 1,945 20,214 Total 5000 Salaries & Wages Clinical Staff 379,760 2,781, Bonuses 5051 Bonus Skilled Nursing 754 6, Bonus Occup Therapy Bonus Physical Therapy Incentive Skilled Nursing Incentive Occup Therapy Incentive Physical Therapy Total 5050 Bonuses 1,565 8, Benefits Payroll Taxes 5105 Skilled Nursing 12,149 87, Occup Therapy 2,735 20, Physical Therapy 10,958 81, Speech Therapy 967 7, Social Work 757 5, Home Health Aide 154 1,261 Total 5100 Benefits Payroll Taxes 27, , Benefits Group/Supplemental Ins 5205 Skilled Nursing 14, , Occup Therapy 2,275 21, Physical Therapy 15,807 99, Speech Therapy 479 3, Social Work 998 5, Home Health Aide 1,049 6,591 Total 5200 Benefits Group/Supplemental Ins 35, , Benefits Workers' Comp/Malprac 5305 Skilled Nursing 4,531 32, Occup Therapy 1,216 8,840

18 5315 Physical Therapy 4,356 31, Speech Therapy 458 3, Social Work 273 1, Home Health Aide Total 5300 Benefits Workers' Comp/Malprac 10,955 79, Benefits 401(k) Match 5405 Skilled Nursing 258 2, Occup Therapy 372 3, Physical Therapy 1,364 12, Speech Therapy 160 1,303 Total 5400 Benefits 401(k) Match 2,154 18, Mileage 5505 Skilled Nursing 14,530 98, Occup Therapy 2,357 17, Physical Therapy 7,531 55, Speech Therapy 823 5, Social Work 671 5, Home Health Aide 1,290 9,258 Total 5500 Mileage 27, , Medical Supplies 5604 Routine Medical Supplies 4,446 28, Billable Medical Supplies 18, , Medical Monitoring 313 1, TCP Monitoring 4,244 32, Medical Waste Removal 291 2,035 Total 5600 Medical Supplies 27, ,863 Total COGS 512,673 3,709,388 Gross Profit 527,076 4,003,936 Expense 8500 Answering Service 1,032 7, Bank Services Charges 498 2, Billing Service Fees 715 6, Computer Supplies & Repairs 2,077 6, Continuing Education Staff 500 8, Contracted Services 8530 Alarm & Security Janitorial 1,239 7, Pest Control Shredding Total 8525 Contracted Services 1,509 9, Depreciation Expense 1,295 7, Dues & Subscriptions 6, Equipment Leases 8575 Copiers 1,133 8, Postage Machine 358 Total 8570 Equipment Leases 1,133 8, Insurance

19 8585 Business Liability 5, Workers' Comp 529 3,826 Total 8580 Insurance 529 8, Licenses and Permits Marketing 5630 Printing Brochures 458 1, Mktg Promotionals (Non Allow) 582 5, General Marketing (Non Allow) 1,532 13, General Marketing (Allowable) 1, BD/Mktg Dues & Subscriptions 32 1, BD/Mktg Meals & Entertainment 1,598 9, Internet/Web Hosting 199 1, Social Media 379 2, BD/Mktg Telephone 1,041 6, BD/Mktg Staff Training BD/Mktg Supplies BD/Mktg Special Events 628 1, BD/Mktg Staff Meetings/Parties 464 Total 8610 Marketing 6,717 46, Meals & Entertainment 50% 8646 Meals & Ent Office Staff 389 2, Meals & Ent BD/Mktg Staff 210 Total 8645 Meals & Entertainment 50% 389 2, Office Expense 8655 Copier Supplies 1,043 10, Internet Service 579 4, Office Supplies 988 9, Break Room Supplies 172 1, Office Equipment (Non Capital) 1,298 4, Operation Supplies 1,664 13,702 Total 8650 Office Expense 5,744 43, Payroll Expense BusDev/Mktg 8666 BD/Mktg Staff Salaries 53, , BD/Mktg Staff Payroll Tax 4,483 33, BD/Mktg EE Benefits 5,867 36, BD/Mktg Mileage & Car Allowance 3,309 25, BD/Mktg Incentive Bonus 6,535 60, BD/Mktg 401(k) Match 411 3,567 Total 8665 Payroll Expense BusDev/Mktg 73, , Payroll Expenses Admin Staff 8501 Auto Exp/Car Allowance Admin 600 5, Staff Salaries 74, , Admin Staff Bonuses 1,706 15, Payroll Taxes 5,974 43, Employee Benefits 8,853 61, Mileage Admin 399 2, Admin 401(k) Match 488 5,428

20 Total 8675 Payroll Expenses Admin Staff 92, , Payroll Expenses Clinical Staff 8682 Clinical Staff Gross 62, , Clinical Staff Bonuses 2,326 17, Clinical Staff Payroll Taxes 4,091 33, Clinical Staff EE Benefits 8,535 47, Clin Admin Auto Allowance 400 2, Clin Admin 401(k) Match 129 2, Clinical Staff Mileage 335 Total 8681 Payroll Expenses Clinical Staff 77, , Parent Salary Allocation 17, , Parent MSA 35, , Postage & Delivery 1, Professional Fees 8725 Accounting/Bookkeeping 135 1, Payroll Services 2,281 17, Consulting 1,352 11, HR Services 798 6, Legal 2,672 19,294 Total 8720 Professional Fees 7,238 55, Rent 8755 Building 14,699 91, Conference Room/Facility Storage Unit Total 8750 Rent 14,934 93, Repairs and Maintenance 8785 Equipment 680 Total 8775 Repairs and Maintenance Software Support (EMR) 11,721 78, Staff Recruitment 49 1, Staff Retention Telephone 8815 Cellular/Pagers Office Staff 620 4, Cellular/Pagers Clinical Staff 3,962 26, Office/Cable/LD 1,027 7,359 Total 8810 Telephone 5,610 38, Travel 8832 Hotel 148 Total 8830 Travel Uniforms 696 1, Utilities 2,368 12, Employee Gifts & Goodwill Staff Meetings/ Parties 1, Bad Debt Expense 12, ,541 Total Expense 374,563 2,677,535 Net Ordinary Income 152,513 1,326,401 Other Income/Expense

21 Other Income 4150 Miscellaneous Income Interest Income Total Other Income 250 1,168 Other Expense 8807 Legal Settlements 100 Total Other Expense 100 Net Other Income 250 1,068 Net Income 152,763 1,327,469

22 PEOPLES HOME HEALTH BALANCE SHEET JULY 2017 July ASSETS Current Assets Checking/Savings 1110 Servis 1st Ops # , BB&T Ops Acct # , BB&T Reserve Acct # ,385 Total Checking/Savings 1,353,802 Other Current Assets 1199 Petty Cash Accounts Receivable PMS 1301 Allowance for Bad Debt (84,152) 1302 Allowance for Pre Claim Review (40,000) 1300 Accounts Receivable PMS Other 1,574,984 Total 1300 Accounts Receivable PMS 1,450, Security Deposit 3,050 Total Other Current Assets 1,454,282 Total Current Assets 2,808,084 Fixed Assets 1500 Furniture & Equipment 293, Leasehold Improvements 29, Accumulated Depreciation (293,780) Total Fixed Assets 29,398 Other Assets 1925 Intercompany Loan to CH3 739, Intercompany Cov Hospice 606,551 Total Other Assets 1,345,551 TOTAL ASSETS 4,183,033 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 Accounts Payable 79,639 Total Accounts Payable 79,639 Credit Cards 2016 Servis1st Credit Card 9,358 Total Credit Cards 9,358 Other Current Liabilities K Deferrals Payable (k) Match Liability 3, EE 125 MFS 6, Wages Payable 336, Bonus Payable 37, PTO Accrual 218,487 Total Other Current Liabilities 603,363

23 Total Current Liabilities 692,360 Total Liabilities 692,360 Equity 3200 Partners' Equity 2,163,204 Net Income 1,327,469 Total Equity 3,490,672 TOTAL LIABILITIES & EQUITY 4,183,033

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

25

26 Covenant Health & Community Services, Inc. Income Statement Fiscal Year JAN FEB MAR APR MAY JUN JUL JUL BUD VARIANCE YTD JUL YTD JUL BUD VARIANCE Revenues Other Revenues Total Revenues Expenses: Salaries 157, , , , , , , ,637 (10,261) 1,086,053 1,002,505 83,548 Benefits 22,206 18,915 21,822 29,049 15,490 16,427 14,123 19,287 (5,165) 138, ,251 (7,220) Other Expenses (19) - (121) (107) (219) - (219) Bank Service Fees Office Supplies Marketing Printing Exp Amortization Loan Orig Fees ,625-2,625 Legal 32,946 30,055 32,827 (19,581) 13,790 25,443 32,647 21,478 11, , ,343 (2,217) Consulting 34,815 10,204 12,812 85,614 (2,213) 14,459 35,534 28,903 6, , ,318 (11,092) Start Up Costs Operating License & Fees Promotional Itmes Subscriptions ,500-1,500 1,500-1,500 Allocation from Parent (145,387) (139,218) (153,490) (146,242) (150,498) (143,459) (144,362) (144,362) 0 (1,022,656) (1,022,656) (0) Total Expenses 101,936 66,151 83, ,338 35,233 64,447 72,197 67,942 4, , ,762 67,092 Operating Margin (101,936) (66,101) (83,551) (121,338) (35,233) (64,097) (72,197) (67,942) (4,255) (544,454) (477,762) (66,692) 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 67,942 4, , ,762 67,092 Excess of Revenue over Expenses (101,941) (66,106) (83,628) (121,343) (35,238) (64,000) (72,197) (67,942) (4,255) (544,454) (477,762) (66,692) 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, BB&T Analyzed Checking 9,960 9,955 9,950 9,945 9,940 9,935 9,930 Operating PayPal Total Cash & Equivalents 19,926 19,921 32,975 13,845 9,940 9,935 9,930 Misc Receivable Prepaid Other 7,249 6,934 6,619 6,304 5,988 5,673 5,358 Prepaid Supplies Total Current Assets 27,175 26,854 39,594 20,148 15,928 15,608 15,288 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 Total Assets 37,675 36,979 49,344 29,523 24,928 24,233 23,538 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) Accrued Payroll 110, , , , , , ,604 Total Current Liabilities 135, , , , , , ,604 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 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 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) Due to/from: Foundation (7,338) (14,376) (30,100) (22,532) (23,941) (40,436) (25,523) Due to/from: Home (6,817) (13,337) (20,532) (27,372) (34,452) (41,219) (48,032) Due to/from: CAS (7,202) (14,120) (21,691) (28,912) (36,270) (43,262) (50,289) Due to/from: Palliative (7,204) (14,102) (21,689) (28,916) (36,339) (43,414) (50,535) Due to/from: Memory Care (11,544) (22,600) (34,733) (46,262) (58,130) (69,463) (80,869) Due to/from: Peoples (17,372) (34,028) (52,337) (84,248) (102,112) (119,101) (136,189) 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 Total Liabilities 2,203,604 2,269,015 2,365,007 2,466,529 2,497,173 2,560,478 2,631,980 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) Current Year Net Income/(Loss) (101,941) (168,047) (251,675) (373,018) (408,256) (472,257) (544,454) 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) Total Liabilities & Net Assets 37,675 36,979 49,344 29,523 24,928 24,233 23,538

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

29

30 Covenant Hospice Foundation, Inc. Financial Analysis July 31, 2017 For the month, the foundation had an increase in total net assets of $115,511 bringing total net assets of the foundation to $4,969,166 and total assets to $5,095,131 at 7/31/17. For the year, the foundation has a increase in total net assets of $484,014. Operating Activities: For the month, operating expenses totaled $7,708 and consisted of: $ 510 Bank and Credit Card Service fees $ 7,199 Salary alloc of from CHCS The Foundation recognized total revenues of $94,842 which consisted of the following: $ 14,991 Memorials & Contributions/Unsolicited $ 45,163 Major Gifts $ 476 Planned Giving $ 8,878 Fund Raising/Event Income (mainly from LAD) $ 2,076 Direct Mail $ 3,024 United Way/CFC $ 20,235 Investment Earnings Childrens, Panama City, General, Marianna For the year, the Foundation has recognized total revenues of $712,037. Non-Operating Expenses totaled $46,135 and consisted of the following $ 5,625 Other Direct Costs $ 491 Fundraising expense $ 2,600 Cost of Direct Benefit to Donor $ 3,833 Investment & Advisory Services $ 35,241 Payroll $ 6,623 Benefits $ 1,557 Goldenberg fund usage $ 1,500 Snook fund usage $ (11,336) Realized (gains)/losses For the year, Foundation Non-Operating expenses are $ For the months of June & July, we had an unrealized gain of $73,866. Composition of investment portfolio: Foundation portfolio, per balance sheet 4,829,163 Charity Annuity Reserve required in FL, per balance sheet 19,315 Total 4,848,477 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 JUNE 30, % YTD JUL JAN FEB MAR APR MAY JUN JUL JUL BUDGET VARIANCE VARIANCE YTD JUL 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, % 51,100 51, % Bank/Credit Card Service Fees 2,084 1,592 1, % 5,892-5, % TOTAL GENERAL & ADMINISTRATIVE EXPENSES 7,338 7,038 7,665 9,316 9,064 8,863 7,708 7, % 56,992 51,100 5, % OPERATING MARGIN (7,338) (7,038) (7,665) (9,316) (9,064) (8,863) (7,708) (7,199) (510) 7.08% (56,992) (51,100) (5,892) 11.5% NON-OPERATING REVENUES Memorials/Contributions/Unsolicited 11,287 18,656 13,080 15,590 13,130 16,016 14,991 14, % 102, ,200 (6,450) -5.9% Major Gifts 1, (2,245) 5, ,163 40,000 5, % 50, ,000 (79,837) -61.4% Planned Giving - 45,784 50, % 97,199-97, % Fund Raising/Event Income 5,344 1,100 13, ,154 15,824 83,292 8,878-8, % 349, , , % United Way/CFC 5,167 5,167 6,474 3,024 3,024 10,024 3,024 5,167 (2,143) -41.5% 35,903 48,667 (12,764) -26.2% Grants (95) % % Direct Mail , ,848 4,574 2,076-2, % 12,342-12, % Released from Restriction 1,506 1,297-12, , % 18,003-18, % Investment Earnings 3,215 2,370 15,378 2,532 2,425-20,235 2,634 17, % 46,156 43,787 2, % TOTAL NON-OPERATING REVENUES 28,127 29,822 94, ,010 37, ,406 94,842 62,650 32, % 712, , , % NON-OPERATING EXPENSES Other Direct 2,456 4,143 3,757 4,860 18,186 7,195 5,625 11,159 (5,534) -49.6% 46,222 82,763 (36,541) -44.2% Program Expenses 1,300 6, ,890 5,549 3,057-3, % 22,009-22, % Realized Gains/(Losses) 14,017-12,200 - (6,006) - (11,336) - (11,336) 100.0% 8,874-8, % Investment & Advisory Services 3, , ,833 3, % 11,185 10, % Fundraising Expense/Cost of Direct Benefit ,254 12,200 62,796 3,091-3, % 155,341 98,500 56, % Payroll 41,687 33,958 51,568 51,414 48,454 27,091 35,241 53,397 (18,156) -34.0% 289, ,293 (86,879) -23.1% Benefits 7,157 6,540 8,341 8,859 9,649 4,345 6,623 9,294 (2,671) -28.7% 51,514 70,394 (18,881) -26.8% TOTAL EXPENSES: 70,225 51,156 76, ,736 88, ,976 46,135 77,343 (31,209) -40.4% 584, ,295 (53,735) -8.4% NET NON-OPERATING REVENUE (LOSS) (42,098) (21,335) 18, ,274 (51,372) 8,430 48,708 (14,693) 63, % 127,478 (70,141) 197, % EXCESS OF REVENUE OVER EXPENSES (49,436) (28,372) 10, ,959 (60,437) (433) 40,999 (21,891) 62, % 70,485 (121,241) 191, % MARGIN % % -95.1% 11.3% 50.0% % -0.4% 43.2% -34.9% 78.2% 9.9% -21.3% 31.2% OTHER CHANGES IN UNRESTRICTED NET ASSETS Unrealized gain (loss) on investments 83, ,056 18,930 49,591 50,901-73,866-73, % 380, , % INCREASE IN UNRESTRICTED NET ASSETS 34,209 75,684 29, ,549 (9,536) (433) 114,865 (21,891) 136, % 451,474 (121,241) 572, % Changes in Temporarily Restricted Net Assets Contributions 343 8,014 1, , % 14,543-14, %

32 COVENANT HOSPICE FOUNDATION, INC. BALANCE SHEET MAY 31, 2017 BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE 07/31/ /31/ /30/ /31/ /30/ /31/ /31/ /28/ /31/ /30/ /31/ /30/ /31/2017 ASSETS OPERATING - COASTAL BANK & TRUST 37,872 69,798 75,001 65, , ,895 69,761 79, , , , , ,356 REGIONS BANK - CHECKING ACCOUNT 16,073 25,211 36,399 58,916 6,865 10,106 35,911 39,893 16,584 29,676 32,536 16,839 25,727 SYNPREPAID OTHER ,331 23,707 2,200 17, SYNOVUS - TRUST (Hospice Foundation) 4,487,381 4,463,623 4,468,658 4,389,834 4,446,001 4,492,222 4,535,953 4,638,825 4,660,863 4,709,069 4,748,005 4,745,593 4,829,163 SYNOVUS - INVEST (Charitable Annuity Reserve) 18,793 18,250 18,264 17,980 18,078 18,230 18,369 18,709 18,779 18,953 19,068 19,055 19,315 GRANTS RECEIVABLE (2,688) (454) 1,862 (1,958) (3,418) 1,173 (4,469) RECEIVABLE FROM HOSPICE RECEIVABLE - GIFT ANNUITY REINSURANCE 3,343 3,343 3,343 2,861 2,861 2,861 2,379 2,379 2,379 1,897 1,897 1,897 1,415 OTHER ASSETS PLEDGES RECEIVABLE 12,544 8,650 3,530 3,530 3, ,980 14,353 8,461 6,300 MISCELLANEOUS RECEIVABLES ,338-70,363-32,428 29,325 TOTAL ASSETS 4,576,006 4,588,876 4,605,195 4,538,940 4,580,397 4,645,954 4,660,301 4,788,071 4,895,590 5,057,242 5,057,477 5,007,111 5,095,131 LIABILITIES & NET ASSETS DEFFERED REVENUE ,342 47,737 77,617 (0) 13,225 (0) (0) ACCRUED EXPENSES ,000 8,572 13,680 2,715 ACCRUED PAYROLL & BONUSES ,077 31,499 55,027 62,664 71,883 50,123 57,282 DUE TO HOSPICE, INC. 14,950 8,181 25,082 25,732 6, ,255 32,486 42,031 49,939 42,338 74,004 36,412 26,140 DUE TO CHCS 14,950 8,181 25,082 25,732 6, ,255 7,338 14,376 30,100 22,532 23,941 40,436 25,523 CURRENT PORTION OF LONG-TERM DEBT TOTAL CURRENT LIABILITIES 14,950 8,181 25,082 25,732 6, ,255 90, , , , , , ,660 LONG TERM INVESTMENT - CHARITABLE ANNUITIES 14,284 14,284 13,663 13,663 13,663 15,547 15,547 15,547 14,926 14,926 14,926 14,305 14,305 TOTAL LONG-TERM LIABILITIES 14,284 14,284 13,663 13,663 13,663 15,547 15,547 15,547 14,926 14,926 14,926 14,305 14,305 TOTAL LIABILITIES 29,234 22,465 38,745 39,394 20, , , , , , , , ,965 UNDESIGNATED NET ASSETS 3,649,197 3,668,836 3,668,875 3,597,611 3,653,547 3,656,899 3,692,024 3,772,862 3,803,031 4,008,868 4,004,409 4,007,946 4,125,543 DESIGNATED NET ASSETS TOP OFF THE GAS CHILDREN'S PROGRAM DESIGNATED NET ASSETS 444, , , , , , , , , , , , ,999 MARIANNA DESIGNATED NET ASSET 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 54,185 BOARD DESIGNATED RESTRICTED ASSETS - HERO'S WISH 41,305 41,305 41,305 41,305 41,305 25,127 25,127 22,953 22,351 22,351 21,651 18,956 18,956 BOARD DESIGNATED RESTRICTED ASSETS - GOLDENBERG 74,471 74,471 74,471 74,471 74,471 59,603 58,687 55,706 55,774 55,487 51,110 49,836 48,604 PANAMA CITY DESIGNATED NET ASSETS 250, , , , , , , , , , , , ,000 TOTAL DESIGNATED NET ASSETS 864, , , , , , , , , , , , ,869 TEMPORARILY RESTRICTED ASSETS 19,272 19,272 19,272 23,632 27,922 (0) TEMPORARILY RESTRICTED ASSETS - SNOOK 10,589 10,589 10,589 10,589 10,589 3,833 3,833 3,833 3,833 3,833 3,833 2,333 2,333 TEMPORARILY RESTRICTED ASSETS - NATHANIEL'S LEMONADE 2,753 2,753 2,753 2,753 2,753 8,111 9,245 15,723 15,823 15,673 15,773 15,911 15,996 TEMPORARILY RESTRICTED ASSETS - PC MASK NEXT YEAR 12,700 12,700 12,700 12, ,500 2,500 TEMPORARILY RESTRICTED ASSETS - COVENANT CARES 5, TEMPORARILY RESTRICTED ASSETS - COVENANT EMPLOYEE SUPP 3,298 3,512 3,916 4,261 3,840 4,364 4,925 TEMPORARILY RESTRICTED ASSETS - MOBILE /PROVIDENCE 1,000 1,000 1,000 1,000 1,000 TOTAL NET ASSETS 4,546,772 4,566,411 4,566,450 4,499,545 4,559,772 4,521,152 4,554,198 4,636,599 4,667,738 4,860,782 4,850,926 4,852,155 4,969,166