October 30, 2017 RE: Officers Certificate for Genesis Health, Inc. d/b/a Brooks Rehabilitation Relating to the Annual Financial Filing Information I hereby certify that the Historical Utilization, Selected Financial Information and Key Financial Ratios as of September 30, 2017 constitute the quarterly financial information required by the Continuing Disclosure Agreement. I further certify that the information complies with the Continuing Disclosure Agreement and the Rule as required. DAC shall be entitled to rely on this certificate. If you have further questions about this matter please do not hesitate to contact me. Daniel R. Curran Chief Financial Officer
Selected Financial Information Combined Statement of Operations of Brooks Health System (000's) Net patient service revenue $ 129,298 $ 118,495 Contract Service Revenue 11,226 10,963 Investment Income 13,171 4,393 Other 7,785 6,968 Total Operating Revenue 161,480 140,819 Salaries, wages, and benefits 102,636 94,942 Supplies 4,183 3,417 Depreciation and amortization 7,260 6,000 Leases and rentals 3,031 2,704 Interest 7,275 6,995 Professional Fees 1,474 1,941 Bad Debt 739 510 Insurance 1,355 871 Purchased Services 13,158 12,028 Other 12,890 12,117 Total Operating Expenses 154,001 141,525 Operating Income 7,479 (706) Community programs (198) (560) Unrealized (loss) gain on investments 25,577 7,366 Gain (loss) on bond/interest swaps (1,437) (11,094) Other income (106) 500 Revenue in excess of expenses $ 31,315 $ (4,494)
Combined Balance Sheet of Brooks Health System (000's) September 30 Assets Cash and cash equivalents $ 2,847 $ 4,491 Patient Receivables 25,844 22,127 Less allowance for doubtful accounts (1,206) (1,400) Net Patient Receivables 24,638 20,727 Other current assets 8,805 8,561 Total Current Assets 36,290 33,779 Investments 303,934 275,166 Assets limited as to use: Funds held by trustee 25,341 37,153 Board designated funds 2,151 1,981 Total assets limited as to use 27,492 39,134 Property and equipment, net 134,438 134,180 Land held for development 22,146 22,042 Other investments 3,845 4,536 Other assets, net 92 4,581 Goodwill 20,247 25,515 Other intangibles, net 12,205 12,646 Liabilities and Net Assets Total Assets $ 560,689 $ 551,579 Lines of credit $ 39,188 $ 45,628 Current portion long term debt 5,876 5,731 Accounts payable & accrued expenses 21,912 29,900 Third party settlements 1,911 1,742 Other current liabilities - Total current liabilities 68,887 83,001 Long-term debt, excluding current maturities 214,310 222,004 Other liabilities 9,656 18,541 Total Liabilities 292,853 323,546 Net assets: Unrestricted 265,559 226,100 Temporarily restricted 2,277 1,933 Net Assets 267,836 228,033 Total Liabilities and Net Assets $ 560,689 $ 551,579
HISTORICAL UTILIZATION The table below sets forth certain inpatient (Hospital) and outpatient utilization statistics for the three months ended June 30, 2017 and 2015 Inpatient Patient Days 35,720 35,758 Admissions 2,355 2,246 Percentage of Occupancy 81.8% 81.6% Average Length of Stay 15.2 16.1 Average Daily Census 130.8 130.5 Outpatient Units of Service 837,928 740,723 Patient Visits 246,006 219,677 Units of Service Per Visit 3.41 3.37 Home Health Total Visits 123,401 154,005 Medicare Episodes 6,436 7,203 Skilled Nursing - Bartram Patient Days 24,331 24,711 Average Daily Census 89.10 90.50 Percentage of Occupancy 89% 91% Skilled Nursing - University Crossing Patient Days 17,013 Average Daily Census 62.30 Percentage of Occupancy 72% Note: University crossing began operations September 2016. Occupancy is calculated on available beds.
KEY FINANCIAL RATIOS DEBT SERVICE COVERAGE Revenue in excess of expenses $31,315,320 ($4,494,456) Depreciation and amortization 6,827,431 5,943,984 Interest 7,274,949 6,867,021 Net Unrealized gain/loss on Investments (25,577,217) (7,366,037) Bond Swap Valuation gain/loss 1,436,890 11,093,753 Income available for debt service $ 21,277,373 $ 12,044,265 Historical Actual annual debt service* $ 14,262,630 $ 14,303,760 Historical Actual annual debt service coverage 1.99 1.12 Maximum annual debt service** $ 15,217,708 $ 15,217,708 Maximum annual debt service coverage 1.86 1.06 MADS debt service based on recalculation with the October refunding of the Series 2007 bonds LIQUIDITY Unrestricted Cash, Cash equivalents, and Investments $ 308,933,327 $ 281,638,297 Operating expense Per Day (excluding depreciation and amortization) $ 543,278 $ 500,934 Days Cash on Hand 569 562 CAPITALIZATION Total Debt* $ 222,004,674 $ 229,683,875 Unrestricted Net Assets 265,559,185 230,972,812 Total Capitalization 487,563,859 460,656,687 Debt to total capitalization 45.5% 49.9% *Total debt for purposes of this table includes long-term debt, excluding notes payables. Total long-term debt excludes other longterm liabilities Source: Brooks Management