I-~ TORRANCE MEMORIAL.IJ.-. MEDICAL CENTER Officer's Certification of the Quarterly Report For the Period Ending September 30, 2017 November 2, 2017 This Officer's Certificate is being executed pursuant to Article lil Section 3(0) and Section 3(E) of the Continuing Disclosure Agreement for the Bond Series 201 OA of that certain Master Indenture of Trust dated as of September I, 2010 between Torrance Memorial Medical Center and the BNY Mellon Trust Company (the Trustee"). The undersigned officer of the Corporation hereby certifies to the Trustee that the financial information herein referred to as the "Quarterly Report" was (a) prepared in accordance with generally accepted accounting principles and (b) the financial information reflects the results of operations of only Members of the Obligated Group. IN WITNESS WHEREOF, the Corporation has caused this Officer's Certificate to be executed on its behalf by the undersigned on and as of the first date written above. 3330 Lomita Boulevard, Torrance, California 90505-5073 www.torrancememorial.org 310.325.9110
1-T TORRANCE MEMORIAL.JJ.-t MEDICAL CENTER Officer's Certification of Quarterly Financial Statements For the Period Ending September 30, 2017 November 2, 2017 This Officer's Certificate is being delivered pursuant to Article III Section 3(D) of the Continuing Disclosure Agreement and Section 6.16 of the CCA-B & C of the Master lndenture of Trust Agreement for the Bond Series 20 I OB and C, restated as of June 16, 2015, between (the "Corporation") and the Bank of New York Mellon Trust Company N.A. (the "Master Trustee"). The undersigned officer of the Corporation hereby certifies that (i) the Obligated Group Financial Statements were prepared in accordance with generally accepted accounting principles and (ii) the Obligated Group Financial Statements reflect the results of the operations of only Members of the Obligated Group. IN WITNESS WHEREOF, the Corporation has caused this Officer's Certificate to be executed on its behalf by the undersigned on and as of the first date written above. 3330 Lomita Boulevard, Torrance, California 90505-5073 www.torrancememorial.org 310.325.9110
I-~ TORRANCE MEMORIAL....,. MEDICAL CENTER Officer's Certification of the Quarterly Report City of Torrance Revenue Notes Series 2016A & 2016B For the Period Ending September 30, 2017 November 2, 2017 This Officer' s Certificate is being delivered in pursuant to disclosure requirements between (the "Obligated Group Representative") and the City of Torrance (the " Issuer") and The Bank of New York Mellon Trust Company (the "Note Trustee") and MUFG Union Bank, N.A. (the " Initial Holder"). The undersigned officer of the Obligated Group Representative hereby certifies that (a) the financial information was prepared in accordance with generally accepted accounting principles and (b) the financial information delivered reflects the results of operations of only Members of the Obligated Group. ln WJTNESS WHEREOF, the Obligated Group Representative has caused this Officer's Certificate to be executed on its behalf by the undersigned on and as of the first date written above. By?!!- Willia L;tn C_ CF 3330 Lomita Boulevard, Torrance, California 90505-5073 www.torrancememorial.org 310.325.9110
FINANCIAL STATEMENT SEPTEMBER 2017
Balance Sheet As of September 30, 2017 Sept. 30, 2017 Assets Current Assets : Cash 19,362,073 Receivables : Patient Accounts Rece ivable 589,284, 795 Less Allowances (522,863,548) Net Receivables 66,421,248 Other Receivables 7,464,626 Inventory 10,469,657 Prepaid & Other Assets 24,676,944 Current Portion Assets Limited as to Use: Managed Care Reserve Fund 76,456,023 Board Designated Funds - Current 5,000,000 CP Bond Reserve 7,555,000 Total Current Portion Assets Limited as to Use 89,011,023 Total Current Assets 217,405,571 Assets Limited as to Use, Net of Current Portion: Board Designated Funds 198,357,287 Project Funds 4,642,385 Other Restricted Funds 6,000,000 Total Assets Lim ited as to Use 208,999,672 Total Current Assets Including Assets Limited as to Use 426,405,243 Long Term Assets : Property, Plant & Equipment 1,139,311,484 Less Accumulated Depreciation (536, 704,264) Net Property, Plant & Equipment 602,607,220 Interest in Foundation Net Assets 99,400,806 Other Assets : Other Long Term Assets 9,606,658 Grants - Temp Restricted 205,711 Total Long Term Assets 711,820,394 Total Assets 1,138,225,638
Balance Sheet As of September 30, 2017 Sept. 30, 2017 Liabilities & Net Assets Current Liabilities: Current Installments of Long Term Debt s 7,555,000 Accounts Payable - Trade 22,817,783 Accounts Payable - Medical Fees 3,537,714 Estimated Third Party Settlements 3,364,385 Accrued Wages & Payroll 6,517,574 Accrued Combined Time Off 19,930,503 Other Current Liabilities 8,279,121 Non Conduit Risk Pool 30,229,604 Conduit Risk Pool 86,549,797 Self Insurance Health/Dental 2,228,019 Self Insurance Workers Comp -Current 2,134,000 Self Insurance Malpractice -Current 2,688,000 Total Current Liabilities s 195,831,498 Long Term Liabilities : Minimum Pension Liability s 44,863,078 Self Insurance Workers Comp-net of current portion 8,074,018 Self Insurance Malpractice-net of current portion 3,746,949 2010 Bonds Payable - 2010A s 129,070,000 2010 Bonds Payable - 2010B 63,510,000 2010 Bonds Payable - 2010C 34,395,000 2016 Notes Payable - 2016A 32,775,000 2016 Notes Payable - 2016B 27,250,000 Deferred Loan Costs (3,855,806) Total Long Term Liabilities s 339,828,238 Net Assets : Unrestricted Net Assets s 501,209,385 Temporarily Restricted Funds 98,043,362 Permanently Restricted Funds 3,313,154 Total Net Assets s 602,565,901 Total Liabilities & Net Assets 1,138,225,638
Statement of Revenue & Expense For September 2017 Fiscal Year-to-Date Actual Budget Total Inpatient Revenue Total Outpatient Revenue 1,583,681,717 1,079,521,341 1,593,377,658 1,070, 760,817 Total Patient Revenue 2,663,203,058 2,664,138,475 Deductions From Revenue (2,211,283,598) (2,204,445,579) Net Patient Revenue 451,919,460 459,692,896 Provision for Bad Debt (9,768,264) (9,000,000) Collectible Net Pt. Revenue 442,151,196 450,692,896 Other Operating Income 10,915,196 10,787,871 Total Operating Revenue 453,066,392 461,480, 767 Operating Expenses - BIDA: Productive Pay Employee Benefits Supplies and Other Costs Insurance Total Operating Expenses - BIDA 180,416,172 67,988,107 155,108,596 3,377,672 406,890,547 184,013,498 67,687,362 158,361,932 3,409,393 413,472,185 Operating Gain (Loss) - EBIDA 46,175,845 48,008,582 Depreciation Interest Expense 35,150,162 7,659,558 36,768,750 7,563,751 Operating Gain (Loss) 3,366,125 3,676,081 Non-Operating Income: Investment Income Non-Operating lncome(expense) Excess Revenue Over Expense 4,426,997 (1,750,835) 6,042,287 7,209,000 (2,100,494) 8,784,587 Holding Gains/Losses 17,495,132 0 Net Additions to Equity 23,537,419 8,784,587
Statement of Changes in Cash Position For September 2017 Fiscal Year-to-Date Net Cash Flow from Operating Activities 2017 Excess of Revenue over Expense (Excluding Holding Gain/Loss) 6,042,288 Non-Cash Items in Income Depreciation Changes in Accounts Receivable, Inventory, Prepaids and Other Assets Changes in Current Liabilities (Excluding Bonds, Conduit Liab. And Capital Year-End Accruals) Changes in Long-Term Selflnsurance Net Cash Flow from Operating Activities 35,150,162 (2,902,426) (11,302,462) (212,513) 26,775,049 Cash Flows from Financing Activities Changes in Long-Term Bonds/Notes Change in Conduit Liability Transfers to Torrance Health Association Minimum Pension Liability (2,685,000) 10,606,074 (7,500,000) (33,600,000) Net Cash Provided by Financing Activities (33,178,926) Cash Used in Investing Activities Change in Capital Equipment Change in Board Approved Projects Disposals of Equipment Holding Gain/Loss Amortization of Goodwill Year-End CIP Accrual Net Cash Used in Investing Activities Net Increase (Decrease) in Cash (2,911,815) (17, 102,925) (589,233) 17,495,132 (18,214) (1,860,759) (4,987,814) ~11, 391, 6912 NOTE: Total Cash Includes Cash plus Assets Limited as to Use
Statement of Changes in Net Assets For September 2017 Fiscal Year-to-Date 2017 Unrestricted net assets: Beginning Balance 485,171,965 Net additions to Equity 23,537,420 Change in Foundation Capital Support 0 Transfers to Torrance Health Association (7,500,000) Total unrestricted net assets 501,209,385 Restricted net assets: Beginning Balance 77,909,172 Change in Funds - Temp Restricted 23,324,541 Change in Foundation - Temp Restricted 122,803 Change in Foundation - Perm Restricted 0 Change in Foundation Capital Support 0 Total Restricted Net Assets 101,356,516
The Corporation's utilization statistics for its three fiscal years ended December 31, 2016 and for the fiscal quarters ended September 30, 2017 and September 30, 2016 are presented below. Historic Utilization Inpatient Statistics: Licensed beds Beds in use Discharges* Patient Days Inpatient surgeries Newborn discharges Average length of stay (acute days)* Percent occupancy (beds in use)* Fiscal Years Ended December 31, 2016 2015 649 649 412 407 26,331 25,238 110,575 109,273 6,891 6,979 3,014 3,126 3.9 4.0 73% 74% 2014 446 378 23,964 97,210 6,409 3,150 3.8 73% Fiscal Quarter Ended September 30, 2017 2016 649 649 412 415 6,618 6,487 27,458 26,652 1,696 1,667 737 784 3.9 3.9 73% 71% Outpatient Statistics: Emergency visits Outpatient visits Outpatient surgeries 81,783 328, 144 9,544 77,618 293,612 9,825 70,478 271,234 10,787 21,023 82,693 2,227 20,180 83,793 2,320 *Excludes newborns. Source: Corporation HistorUtiliz2017 AC (3).xlsx