Financial Highlights for the Three and Six Months Ended December 31, 2017 I. Introduction In accordance with the provisions of the Master Indenture relating to the 2011 and 2007 Guthrie Health Bonds, enclosed are the required quarterly operating and financial data for The Guthrie Clinic. The enclosed information has been prepared by management and has not been audited by an independent accounting firm. In addition, this information does not include all of the financial statements and footnote disclosures necessary for the information to be in accordance with generally accepted accounting principles. This report may contain forward-looking statements based upon management s expectations. The actual results may materially differ from management s expectations due to business risks and other uncertainties. Readers should not rely on these statements as an indication of future results. This report is issued as of February 28, 2018. Management assumes no responsibility to update any information contained in this document and has made no commitment in providing these financial highlights in subsequent quarters. II. Management's Discussion of Recent Financial Performance Unaudited Consolidated Balance Sheet At December 31, 2017 total assets were in excess of $1.3 billion. Cash and unrestricted investments available for operations and capital expenditures were approximately $696 million. Days cash on hand were 376, which represents an increase of 2.8 days (0.7%) compared to prior year. Days in accounts receivable were 40 at December 31, 2017. Unaudited Consolidated Statement of Revenues and Expenses For the three months ended December 31, 2017, The Guthrie Clinic had net income of approximately $16.6 million. This results from a net loss from operations of approximately $3.5 million and a non-operating gain of $20.1 million. Non-operating income included interest and dividends of $4.4 million, realized investment gains of $1.6 million and unrealized gains of $12.0 million, a loss due to the difference in interest rates and unrealized gains on the interest rate swap agreements of $.9 million and $1.4 million respectively. For the six months ended December 2017, The Guthrie Clinic had net income of approximately $35.8 million. This results from a net loss from operations of $2.3 million and a non-operating gain of $38.0 million. Non-operating income included interest and dividends of $7.2 million, realized investment gains of $3.3 million and
unrealized gains of $25.6 million, a loss due to the difference in interest rates and unrealized gains on the interest rate swap agreements of $1.8 million and approximately $2.1 million respectively. Operating revenues increased $11.4 million (6.8%) for the current quarter and $23.9 million (7.1%) for the six month period. Hospital admissions were up 4.9% and 3.4% for the three and six month period. Hospital outpatient services and gross charges increased 5.5% and 4.9% for the three and six month period. Operating expenses increased approximately $11.3 million (6.6%) and approximately $16.7 million (4.9%) for the three and six month period. Salary and benefit expense increased $4.5 million (13.9%) and approximately $7.9 million (12.3%) for the three and six month periods, primarily related to an increase in the number of providers, annual compensation increases and health insurance. Purchased service expense increased $5.1 million and $7.7 million for the three and six month period, primarily related to an increase in temporary staffing. Supply expense increased approximately $.5 million for the current quarter and $1.8 million for the six month period, primarily related to higher orthopedic surgical volume. Pharmaceutical expense decreased $.5 million and approximately $1.0 million for the three and six month period. Insurance expense decreased $.6 million for the three and six month period. Other expenses decreased approximately $2.5 million for the current quarter and approximately $1.3 million for the six month period. III. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates. IV. Additional Information Contact Phil Ryan, CPA, Chief Financial Officer, at (570) 887-6061 or Julie A. Godfrey, Vice President of Finance, at (570) 887-4945 with any questions.
Consolidated Balance Sheet Unaudited (In Thousands) Dec 31, 2017 Dec 31, 2016 Current Assets Cash and Cash Equivalents 23,836 24,723 Accounts Receivable, Net 75,873 72,933 Inventories 12,654 11,658 Prepaid Expenses and Other Assets 20,627 17,856 Total Current Assets 132,990 127,170 Assets limited as to use Investment - Trustee Held 1,327 1,390 Board Designated Funds 157,952 142,474 Temporarily and Permanently Restricted Funds 148,450 139,424 Noncurrent assets limited as to use 307,729 283,288 Other Assets Investment 513,979 488,703 Property, Plant & Equipment 343,417 352,965 Prepaid Pension, Cost 15,585 6,255 Other assets, net 6,220 7,256 Total other assets 879,201 855,179 Total Assets 1,319,920 1,265,637 Current Liabilities Current maturities of long-term obligations 9,422 9,148 Accrued Expenses and Accounts Payable 54,753 53,888 Accrued Payroll, Taxes and Vacation 42,977 40,769 Other 8,683 10,248 Total current liabilities 115,835 114,053 Other Liabilities Long Term Debt 247,606 256,988 Accrued Pension Cost 1,614 9,118 Asset Retirement Obligations 8,648 9,349 Other 96,735 104,899 Total other liabilities 354,603 380,354 Total Liabilities 470,438 494,407 Net Assets Unrestricted 785,352 712,595 Temporarily restricted 60,153 54,751 Permanently restricted 3,977 3,884 Total net assets 849,482 771,230 Total Liabilities and Net Assets 1,319,920 1,265,637 2/28/2018 2:05 PM
Consolidated Statement of Revenue & Expense For the Quarter Ended December 31, 2017 and December 31, 2016 Unaudited (In Thousands) QTD QTD YTD YTD Dec 17 Dec 16 Dec 17 Dec 16 Patient Service Revenue Net of Allowances 185,948 174,549 373,755 347,735 Provision for Bad Debts 11,368 11,058 24,138 22,337 Net Patient Service Revenue 174,580 163,491 349,617 325,398 Other Operating Revenue 4,547 4,206 8,714 9,030 Total Operating Revenues 179,127 167,698 358,331 334,429 Salaries and Wages 86,901 83,951 173,673 168,601 Employee Benefits 16,354 14,819 33,525 30,669 Purchased Services 15,435 10,341 28,705 20,984 Supplies 17,744 17,243 34,836 33,041 Pharmaceuticals 15,376 15,906 30,949 31,942 Insurance 2,783 3,386 5,567 6,199 Other Expenses 15,459 12,992 27,969 26,623 Depreciation and Amortization 10,524 10,497 21,246 21,063 Interest Expense 2,066 1,994 4,117 4,478 Early Extinguishment of Debt 0 201 0 269 Operating Expenses 182,642 171,331 360,587 343,868 Income From Operations (3,515) (3,633) (2,256) (9,439) Other Income, net 20,114 13,521 38,033 32,674 Excess Margin 16,599 9,887 35,777 23,235 2/28/2018 2:05 PM
Hospital Utilization Statistics Unaudited Quarter Ended Quarter Ended YTD Ended YTD Ended Dec 17 Dec 16 Dec 17 Dec 16 Acute Care Licensed Acute Beds 379 379 379 379 Available Acute Beds 372 379 372 379 Percent Occupancy 59.3% 60.7% 59.4% 60.3% Acute Admissions * 5,171 4,929 10,328 9,992 Observations 948 1,018 1,903 1,914 Acute Patient Days * 19,816 20,066 39,471 39,961 Acute Average Length of Stay * 3.8 4.1 3.8 4.0 Outpatient Charges (000's) 246,683 233,763 497,138 473,961 ER Visits 19,888 19,654 40,867 40,517 * Excludes Troy Community Hospital Swing & Ventilator Beds and Towanda Memorial Hospital Swing, SNF, PCH & Hospice Beds 2/28/2018 2:05 PM
Sources of Patient Revenue and Third Party Reimbursement Fiscal Years 2015-2018 Payor 2015 2016 2017 YTD 12/17 Medicare 50.2% 49.8% 50.1% 50.8% Medicaid 12.1% 13.4% 13.9% 12.8% Blue Cross 22.2% 21.6% 21.3% 21.6% Self Pay 2.2% 1.8% 1.9% 1.8% Other 13.3% 13.4% 12.8% 13.0% TOTAL 100.0% 100.0% 100.0% 100.0% Source: The Guthrie Clinic records Based on Gross Charges