NANTICOKE HEALTH SERVICES, INC. OBLIGATED GROUP BALANCE SHEET DECEMBER 31, 2008 NMH LCLP DUAL ELIMINATIONS OBLIGATED GROUP Current Assets: Cash & Cash Equivalents 1,685,947 325,869 165,154 2,176,970 Patient Accounts Receivable Net 13,337,108 1,093,790 14,430,898 Other Receivables 1,203,255 7,087 1,210,341 Pledges Receivable Prepaid Expenses & Other A/R 749,627 749,627 Inventory of Supplies 1,397,336 990 1,398,326 Total Current Assets 18,373,272 1,420,650 172,240 19,966,162 Assets Limited Use : Board Designated 20,147,564 20,147,564 Other Investments Board Designated Principal & Interest 1,037,334 246,019 1,283,353 Externally Restricted 4,040,063 4,040,063 Total Assets Limited Use 25,224,960 246,019 25,470,979 Property, Plant & Equipment Net 44,088,407 286,621 17,308,763 61,683,791 Other Assets: Deposits 20,348 20,348 Intercompany Recv / (Payable) 3,800,293 (634,954) (634,954) 2,530,385 Unamortized Loan Costs 1,209,875 289,916 1,499,791 Other Assets 2,695,349 2,695,349 Total Other Assets 7,705,517 (634,954) 310,264 (634,954) 6,745,873 Total Assets 95,392,156 1,072,317 18,037,286 (634,954) 113,866,806 TOTAL Current Liabilities: Accounts Payable 4,657,507 134,454 784 (634,954) 4,157,791 Accrued Payroll & Taxes 1,311,566 192,197 1,503,763 Accrued Vacation 1,946,243 295,733 2,241,976 Accrued Interest 379,602 90,028 469,630 Due to Third Parties Other Payables and Accrued Expenses 1,080,000 1,080,000 Current Portion of Notes and Bonds Payab 5,080,851 5,080,851 Total Current Liabilities 14,455,768 622,384 90,812 (634,954) 14,534,011 Long Term Debt & Cap Lease 43,073,495 9,989,540 53,063,035 Self Insurance Reserves 200,000 200,000 Accrued Post Retirement Liabilities 7,300,349 7,300,349 Total Liabilities 65,029,613 622,384 10,080,353 (634,954) 75,097,396 Unrestricted Fund Balance 30,362,543 449,933 7,956,934 38,769,410 Temporarily Restricted Permanently Restricted Donor Funds Total Net Assets 30,362,543 449,933 7,956,934 38,769,410 Total Liabilities & Net Assets 95,392,156 1,072,317 18,037,286 (634,954) 113,866,806
NANTICOKE HEALTH SERVICES, INC. OBLIGATED GROUP INCOME STATEMENT SIX MONTHS ENDED 12/31/08 NMH LCLP DUAL ELIMINATIONS OBLIGATED GROUP Revenues: Inpatient Revenues 44,409,529 6,431,886 50,841,415 Outpatient Revenues 59,718,361 59,718,361 Total Revenues 104,127,891 6,431,886 110,559,776 Contractual Adjustments 53,928,865 1,171,297 55,100,162 Uncompensated Care 6,769,152 45,622 6,814,774 Net Patient Service Revenues 43,429,874 5,214,967 48,644,841 Interest Income 34,141 34,141 Other Operating Income 1,057,084 17,819 961,416 (923,857) 1,112,462 Total Other Operating Revenues 1,091,225 17,819 961,416 (923,857) 1,146,603 Assets Released from Restriction Net Revenues 44,521,099 5,232,786 961,416 (923,857) 49,791,444 Expenses Salaries and Wages 16,805,599 2,963,230 19,768,829 Benefits 6,201,776 1,235,345 7,437,121 Contract Labor 1,459,118 261,467 1,720,585 Physician Fees 741,250 10,750 752,000 Professional Fees 971,821 48,978 3,600 1,024,399 Purchased Services 4,677,195 178,530 181,851 (101,791) 4,935,785 Medical Supplies 4,515,315 418,368 4,933,683 Drugs 2,250,946 220,321 2,471,267 Repairs/Maintenance 463,943 7,650 79,519 551,112 Rental/Leases 917,462 301,244 228,112 (822,066) 624,752 Utilities 1,445,310 163,205 51,268 1,659,783 Taxes Licenses and Permits Insurance 237,954 100,338 2,250 340,542 Other Expenses 1,418,256 54,494 52,135 1,524,885 Total Expenses 42,105,945 5,963,920 598,735 (923,857) 47,744,743 EBIDA 2,415,154 (731,134) 362,681 2,046,701 Interest Expense 1,198,744 270,084 1,468,828 Depreciation 3,600,000 27,192 433,379 4,060,571 Operating Income/(Loss) (2,383,590) (758,326) (340,781) (3,482,697) Contributions Investment Income Other Non Oper Income/(Expense) (3,446,288) (3,446,288) Total Income / (Loss) (5,829,878) (758,326) (340,781) (6,928,986) TOTAL
NANTICOKE HEALTH SERVICES OBLIGATED GROUP Comparative Income Statement Fiscal Year June 2009 2008 2007 Change % Change FY 09 Budget Gross Patient Revenue 110,559,776 111,389,502 (829,726) 0.7% 116,200,182 Contractual Allowances 61,914,936 58,961,202 2,953,734 5.0% 62,981,541 Net Patient Revenue 48,644,840 52,428,300 (3,783,460) 7.2% 53,218,641 Other Operating Revenue 1,146,603 903,275 243,328 26.9% 703,047 Total Operating Revenue 49,791,443 53,331,575 (3,540,132) 6.6% 53,921,688 NonCapital Expenses 47,744,743 52,581,903 (4,837,160) 9.2% 49,431,060 Operating EBIDA 2,046,700 749,672 1,297,028 173.0% 4,490,628 Operating EBIDA % 4.11% 1.41% 2.70% 192.4% 8.33% Capital Related Expenses: Depreciation Expense 4,060,571 4,339,982 (279,411) 6.4% 4,051,200 Interest Expense 1,468,828 1,485,065 (16,237) 1.1% 1,424,994 Operating Income (3,482,699) (5,075,375) 1,592,676 31.4% (985,566) Net NonOperating Rev & Exp (3,446,288) 450,172 (3,896,460) 865.5% 450,000 Excess(Deficit)Revenue over Exp (6,928,987) (4,625,203) (2,303,784) 49.8% (535,566) Operating Margin (%) 7.2% 9.7% 1.9% Financial Ratios: Debt Service Coverage (Required: 1.2) 0.50 1.05 (0.55) 52.4% Days Cash on Hand (Required: 60) 40.31 108.65 (68.34) 62.9% Current Ratio 1.37 1.64 (0.27) 16.2%
NANTICOKE HEALTH SERVICES OBLIGATED GROUP Statement of Cash Flow Cash and Cash Equivalents at 06/30/08 770,662 Operating Activities 259,523 Investing Activities (2,952,688) Financing Activities 4,099,472 Cash and Cash Equivalents at 12/31/08 2,176,969
NANTICOKE HEALTH SERVICES, INC. Parent Company of Obligated Group OPERATING INCOME(LOSS) 2008 2007 Change % Change FY 09 Budget The Nanticoke Group: Nanticoke Memorial Hospital (2,383,591) (4,594,957) 2,211,366 48.1% (750,198) Nanticoke Alternative Care (LifeCare Lofland) (758,326) (274,617) (483,709) 176.1% (120,640) Dual Development Corp. (340,782) (205,801) (134,981) 65.6% (114,728) Nanticoke Group Total (3,482,699) (5,075,375) 1,592,676 31.4% (985,566) Other Entities: MidSussex Medical Center (871,150) (960,105) 88,955 9.3% (729,257) Proprietary Enterprises (26,078) 26,078 100.0% Nanticoke Health Services (36,565) 29,960 (66,525) 222.0% 89,046 Nanticoke Insurance Co, LTD 83,034 (93,705) 176,739 100.0% (36,565) Other Entities Total (824,681) (1,049,928) 225,247 21.5% (640,211) Total Nanticoke Health Services (4,307,380) (6,125,303) 1,817,923 29.7% (1,625,777)
NANTICOKE MEMORIAL HOSPITAL An Acute Care Hospital Utilization Statistics 2008 2007 Change % Change FY 09 Budget Births 507 523 (16) 3.1% 515 Admissions 2,490 2,723 (233) 8.6% 2,910 Average Length of Stay 4.1 4.5 (0.4) 8.9% 5.4 Patient Days 10,274 12,191 (1,917) 15.7% 15,618 ER Visits 15,546 15,420 126 0.8% 17,097 Outpatient Visits 28,229 28,229 0.0% 29,358 Inpatient Surgeries 608 596 12 2.0% 596 Outpatient Surgeries 1,199 1,348 (149) 11.1% 1,348 Total Surgeries 1,807 1,944 (137) 7.0% 1,944 Percent of Gross Revenue Medicare 42% 43% Medicaid 21% 20% Blue Cross 13% 12% Commercial 14% 17% Self Pay & Other 10% 8% Total 100% 100% Admissions and Patient Days exclude Newborn & Nursery days. Operating Results Overview Gross Patient Revenue per Adj Patient Day 4,323 3,929 394 10.0% 3,316 Deductible Ratio 58.3% 55.0% 3.3% 6.0% 56.3% Net Patient Revenue per Adj Patient Day 1,803 1,768 35 2.0% 1,448 NonCapital Expense per Adj Patient Day 1,748 1,770 (22) 1.2% 1,346 Gross Patient Revenue 104,127,890 105,729,231 (1,601,341) 1.5% 109,482,238 Contractuals & Charity 60,698,017 58,139,674 2,558,343 4.4% 61,674,903 Net Patient Revenue 43,429,873 47,589,557 (4,159,684) 8.7% 47,807,335 Other Operating Revenue 1,091,225 591,545 499,680 84.5% 622,396 Operating Revenue 44,521,098 48,181,102 (3,660,004) 7.6% 48,429,731 NonCapital Expenses 42,105,945 47,643,958 (5,538,013) 11.6% 44,432,531 Operating EBIDA 2,415,153 537,144 1,878,009 349.6% 3,997,200 Operating EBIDA % 5.56% 1.13% 4.43% 392.7% 8.36% Capital Related Expenses: Depreciation Expense 3,600,000 3,891,498 (291,498) 7.5% 3,600,000 Interest Expense 1,198,744 1,240,603 (41,859) 3.4% 1,147,398 Operating Income (2,383,591) (4,594,957) 2,211,366 48.1% (750,198) Operating Margin (%) 5.5% 9.7% 1.6% NonCapital Expense Detail Salary & Benefits 24,466,493 27,820,383 (3,353,890) 12.1% 26,079,145 Supplies & Purchased Services 11,443,456 12,939,322 (1,495,866) 11.6% 11,963,585 Professional Fees 1,713,071 2,307,325 (594,254) 25.8% 1,700,848 Other 4,482,925 4,576,928 (94,003) 2.1% 4,688,953 Total noncapital expense 42,105,945 47,643,958 (5,538,013) 11.6% 44,432,531
NANTICOKE ALTERNATIVE CARE A Long Term Care Facility T/A Lifecare at Lofland Park Utilization Statistics 2008 2007 Change % Change FY 09 Budget Patient Days Medicare 3,105 3,704 (599) 16.2% 3,580 Medicaid 12,073 11,555 518 4.5% 12,014 Commercial 315 390 (75) 19.2% 378 Private 4,243 4,137 106 2.6% 3,818 Total Patient Days 19,736 19,786 50 0.3% 19,790 % Occupancy 97.5% 97.8% 0.3% 0.3% 97.8% Operating Results Overview Gross Patient Revenue 6,431,886 5,793,185 638,701 11.0% 6,717,944 Contractuals & Charity 1,216,919 821,528 395,391 48.1% 1,306,638 Net Patient Revenue 5,214,967 4,971,657 243,310 4.9% 5,411,306 Other Operating Revenue 17,819 17,150 669 3.9% 16,170 Operating Revenue 5,232,786 4,988,807 243,979 4.9% 5,427,476 NonCapital Expenses 5,963,920 5,229,454 734,466 14.0% 5,507,934 Operating EBIDA (731,134) (240,647) (490,487) 203.8% (80,458) Operating EBIDA % 14.02% 4.84% 9.2% 189.6% 1.49% Capital Related Expenses: Depreciation Expense 27,192 33,970 (6,778) 20.0% 40,182 Interest Expense 0.0% Operating Income (758,326) (274,617) (483,709) 176.1% (120,640) NonCapital Expense Detail Salary & Benefits 4,460,042 3,514,737 945,305 26.9% 3,810,312 Supplies & Purchased Services 817,219 1,024,448 (207,229) 20.2% 674,070 Professional Fees 59,728 24,270 35,458 146.1% 59,550 Other 626,931 665,999 (39,068) 5.9% 964,002 Total noncapital expense 5,963,920 5,229,454 734,466 14.0% 5,507,934
DUAL DEVELOPMENT CORPORATION Property Development & Management Company Operating Results Overview 2008 2007 Change % Change FY 09 Budget Operating Revenue 961,416 1,041,184 (79,768) 7.7% 988,338 NonCapital Expenses 598,735 588,009 10,726 1.8% 414,452 Operating EBIDA 362,681 453,175 (90,494) 20.0% 573,886 Operating EBIDA % 37.72% 43.52% 5.80% 13.3% 58.07% Capital Related Expenses: Depreciation Expense 433,379 414,514 18,865 4.6% 411,018 Interest Expense 270,084 244,462 25,622 10.5% 277,596 Operating Income (340,782) (205,801) (134,981) 65.6% (114,728) Operating Margin (%) 35.4% 19.8% 15.7% 79.3% 11.6% NonCapital Expense Detail Supplies & Purchased Services 181,851 215,820 (33,969) 15.7% 135,074 Other 416,884 372,189 44,695 12.0% 279,378 Total noncapital expense 598,735 588,009 10,726 1.8% 414,452