November 2016 Financial Analysis Package
Financial Analysis Package Table of Contents Financial Overview of Operations
3-4
Long-Term Debt Changes and Summary of Covenant Requirements
5
Summary Income Statement
6
Statement of Financial Position
7
Statement of Cash Flow
8
Per Patient Day Margin Analysis
9
Skyline at First Hill Financial Overview of Operations For the Current Month Ending November 30, 2016 (unaudited) Actual Total Operating Revenue Total Operating Expenses Net Operating Income (Loss)
$
Current Period Budget
1,984,086 $ 1,683,285 300,801
1,996,908 $ 1,684,144 312,764
Variance (12,822) 859 (11,963)
Actual $
Year-To-Date Budget
3,948,299 $ 3,215,397 732,902
Interest Income Interest and Financing Expenses Operating Loss Before Non-Cash Items
31 (418,146) (117,314)
37,500 (357,485) (7,221)
(37,469) (60,661) (110,093)
178 (927,088) (194,008)
Non-Cash Items: Investment Income/(Losses) Earned Resident Entrance Fees Depreciation/Amortization Net Income
383,208 (576,397) (310,503) $
6,305 409,559 (577,767) (169,124) $
(6,305) (26,351) 1,370 (141,379)
816,502 (1,152,927) (530,433) $
$
$
4,004,096 $ 3,369,831 634,265
Variance (55,797) 154,434 98,637
75,000 (3,782,044) (3,072,779)
(74,822) 2,854,956 2,878,771
12,610 819,117 (1,155,532) (3,396,584) $
(12,610) (2,615) 2,605 2,866,151
Skyline Management Update: The Net Income for Skyline was favorable to budget by $2,866K for November 2016 year-to-date (YTD) largely due to the timing of a required write-off of the remaining deferred financing fee balance related to the refunding of the Series 2007A bonds totaling $$3,067K. The write-off was originally budgeted to take place in October 2016 but was deemed necessary to record instead at the company’s September year-end. Partially offsetting this favorable variance in Interest and Financing Expenses were lower than budgeted Assisted Living revenue due to a 12 unit YTD shortfall (-$84K), lower than planned interest income (-$75K), and changes in the timing of Aetna invoices resulting in two months of health benefit costs in November G&A (-$67K).
Census Overview: Independent Living (IL) Activity Independent Living occupancy for November 2016 fell short of budget by 2 occupied units, finishing the month with 193 occupied rooms out of a total capacity of 199. Actual IL occupancy reached 97.0% in November compared to a budget of 98.0%. Assisted Living (AL) and Skilled Nursing (SN) Activity Assisted Living occupancy for November (including Memory Support) fell short of budget by 4 occupied units, finishing the month with 69 occupied units out of a total capacity of 76 (90.8% vs. a budget of 96.1%). Skilled Nursing occupancy for November fell short of budget by 5 beds, finishing the month with 26 occupied beds out of a total capacity of 34 (76.5% vs. a budget of 91.2%).
3
Long-Term Debt: The Series 2007A bonds were refunded and called in full on January 1, 2017. On December 2, 2015, Skyline issued $8,565,200 in tax-exempt bonds (net of discount) and used the proceeds to refund its Series 2012 bonds, paid the remaining development fees owed to Greystone, and received nearly $1,500,000 for capital expenditure reimbursements and capital expenditures. On March 21, 2013, the remaining Series C bonds were redeemed. The Entrance Fee Fund was closed and remaining initial entrance fees collected go to operations to build up to 100 days cash on hand. On March 23, 2012, Skyline refunded the Series 2007B Bonds pursuant to the optional redemption rights in the Bond Indenture with the proceeds of the Commission’s $8,000,000 Nonprofit Refunding Revenue Bonds (Skyline at First Hill Project), Series 2012 (the “Series 2012 Bonds”) and funds provided by Skyline and its sponsor, PRCN. Summarized below are future covenant requirements and timing of Series 2012 Bond redemption as permissible by the 2012 Indenture, the First Supplemental Master Trust Indenture (MTI) and the 2012 Loan Agreement. Covenant Requirements Testing Dates for Series 2016A and 2016 B Bonds: September 30 and March 31 of each Fiscal Year
Days Cash on Hand Debt Service Coverage Ratio
Covenant Requirement 150 1.20
4
Skyline at First Hill Summary Income Statement For the Current Month Ending November 30, 2016 (Unaudited)
Actual
Current Budget
Variance
Actual
YTD Budget
Variance
Operating Revenue Independent Living Healthcare Assisted Living Interest Income Other
Subtotal Lifecare Credits Resident Subsidies
Net Resident Services Revenue Entrance Fee Earned
Total Operating Revenue
$
973,303 $ 992,055 $ (18,752) 496,264 525,374 (29,110) 551,051 613,161 (62,110) 31 37,500 (37,469) 134,222 98,044 36,178 2,154,871 2,266,134 (111,263)
$ 1,947,765 $ 1,979,670 $ 990,817 1,065,529 1,142,728 1,226,321 178 75,000 215,990 196,028 4,297,478 4,542,548
(31,905) (74,712) (83,593) (74,822) 19,962 (245,070)
(135,471) (35,283) 1,984,117
(180,339) (51,387) 2,034,408
44,868 16,104 (50,291)
(269,168) (79,833) 3,948,477
(360,678) (102,774) 4,079,096
91,510 22,941 (130,619)
383,208 2,367,325
409,559 2,443,967
(26,351) (76,642)
816,502 4,764,979
819,117 4,898,213
(2,615) (133,234)
346,016 307,896 285,596 29,373 180,236 223,804 241,057 31,669 37,698 418,146 (60) 2,101,431
384,623 327,466 219,718 48,292 122,518 240,605 259,147 30,371 44,072 357,485 7,332 2,041,629
38,607 19,570 (65,878) 18,919 (57,718) 16,801 18,090 (1,298) 6,374 (60,661) 7,392 (59,802)
714,051 604,745 509,838 69,119 243,070 451,320 502,333 42,383 82,885 927,088 (4,347) 4,142,485
771,333 646,183 446,259 98,048 245,550 481,301 518,536 59,375 88,551 3,782,044 14,695 7,151,875
57,282 41,438 (63,579) 28,929 2,480 29,981 16,203 16,992 5,666 2,854,956 19,042 3,009,390
576,397 2,677,828
577,767 2,619,396
1,370 (58,432)
1,152,927 5,295,412
1,155,532 8,307,407
2,605 3,011,995
(3,409,194)
2,878,761
Cost of Service Provided Healthcare Dining Services General and Administrative Marketing Management and Rental Fees Maintenance and Housekeeping Assisted Living Residential Transportation Services Resident Activities Interest and Financing Expenses Provision for Doubtful Accounts
Cost of Services Provided Before Depreciation Depreciation
Total Cost of Services Provided Operating Loss before Non-Operating Activities
(310,503)
(175,429)
(135,074)
(530,433)
Non-Operating Activities: Investment Income
Total Non-Operating Activities Net Loss
-
6,305 6,305
(6,305) (6,305)
$ (310,503) $ (169,124) $ (141,379)
-
12,610 12,610
(12,610) (12,610)
$ (530,433) $ (3,396,584) $ 2,866,151
5
Skyline at First Hill Statement of Financial Position - November 30, 2016 and November 30, 2015 (unaudited) November 30, 2016
November 30, 2015
Assets Current Assets: Cash and cash equivalents
$
Receivables Other Asssts Inventory Prepaid expenses Total Current Assets Refundable Deposit
$
10,995,589
564,465
1,373,723
(2,863)
2,863
18,432
18,107
304,623
310,677
$
16,209,774
$
12,700,959
$
251,660
$
232,788
Limited use assets - Waiting list deposits
170,357
Limited use assets - Refundable Deposits
100,357
-
Limited use assets - bond funds held by trustee Deferred financing fees Capitalized markering fees Property and Equipment Total Assets
15,325,117
-
914,825
12,862,762
2,218,814
4,098,143
1,022,704
2,182,703
161,821,902
166,078,301
$
182,610,036
$
198,256,013
$
657,000
$
1,051,505
Liabilities and Net Assets Current Liabilities Accounts payable Accrued expenses
5,306,792
Current portion of Capital Lease Obligations Current portion of long-term debt
39,102
-
Current portion of Sewer Capacity Intercompany Total Current Liabilities
8,037,568
46,065
1,990,000
56,242
52,943
(5,604,525)
3,126,332
$
461,574
$
14,297,450
$
107,630,016
$
104,498,250
Other Liabilities Long-term debt (net of bond premium) Long-term capital lease obligation, less current portion
26,023
72,088
505,286
562,483
133,838,110
130,859,254
Waitlist deposits
170,357
100,357
Refundable deposit
251,660
232,788
Long-term sewer capacity Deferred revenue from entrance fees
Accrued marketing fees
-
Note payable Total Liabilities
Member's Deficit Total Liabilities and Member's Deficit
830,357
3,950,000
3,950,000
$
246,833,026
$
255,403,027
$
(64,222,990)
$
(57,147,014)
$
182,610,036
$
198,256,013
6
Skyline at First Hill Statement of Cash Flows For the Period of October 1, 2016 through November 30, 2016 (unaudited)
Operating Activities: Change in Net Assets
$
(530,433)
Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation Cash Donations Entrance fee additions Amortization of entrance fees Amortization of deferred financing fees Amortization of capitalized marketing costs Bad Debt
959,593 50,000 1,835,574 (816,502) (18,320) 193,333 (4,347)
Cash provided by (used in) changes in operating assets and liabilities: Resident, third-party, int & other rec Inventory Prepaid expenses Accounts payable Other accrued expenses Waitlist deposits Due to member
212,116 24,029 10,320 116,756 440,407 5,000 48,711
Net Cash Provided from Operating Activities
2,526,237
Investing Activities Purchase of property and equipment Change in investments for refundable deposits Purchase of limited use assets Sale of limited use assets
(48,183) 202,769 (27,767,155) 26,912,064
Net Cash Used in Investing Activities
(700,505)
Financing Activities Sewer Capacity Payments Payments on capital lease obligations Refund of entrance fees
(9,263) (6,970) (337,079)
Net Cash Used in Financing Activities
(353,312)
Net Change in Cash and Cash Equivalents
1,472,420
Cash balance, beginning of fiscal year
Cash Balance @ November 30, 2016
13,852,697
$
15,325,117
7
Skyline at First Hill Skilled Nursing Per Patient Day Margin Analysis (unaudited) For the Month of November 2016
Payor Type Private Pay - Non-Lifecare Private Pay - Lifecare/Free HCC Medicare A Medicare B Medicaid/Hospice Manage Care
184,543 $
$
Payor Type Private Pay - Non-Lifecare Private Pay - Lifecare/Free HCC Medicare A Medicare B Medicaid/Hospice Manage Care
Therapy Revenue
Room & Board
169,218 31,176 384,937 $
Room & Board Expenses $
$
(354) $ 102,173 42,635 22,359 166,812 $
Therapy Expenses
101,281 $ 26,118 107,375 17,122 251,897 $
Ancillary Revenue
11,320 $
Net Revenue Per Pat. Day Net Revenue % of Total
$ (48,930) (15,978) (15,154) (80,062) $
11,875 1,382 24,577 $
Ancillary Expenses
23,751 $ 44,192 1,467 2,847 72,257 $
Contractual Adjustment
Total Oper. Expenses
19,978 $ 1,883 21,861 $
195,509 234,335 26,657 39,763 496,264
NOI Margin
145,011 $ 26,118 153,451 1,467 19,969 346,016 $
50,498 (26,118) 80,884 25,189 19,794 150,248
39.40% $ 0.00% 47.22% 5.37% 0.00% 8.01% 100.00% $
% of Total Margin
560 633 674 572
Total Bed Days 349 90 370 59 868
Per Patient Day (PPD) Operating Exp. Margin
33.61% $ -17.38% 53.83% 16.77% 0.00% 13.17% 100.00% $
416 $ 290 415 338 399 $
145 (290) 219 335 173
November 2016 YTD
Payor Type Private Pay - Non-Lifecare Private Pay - Lifecare/Free HCC Medicare A Medicare B Medicaid/Hospice Manage Care
$
$
Payor Type Private Pay - Non-Lifecare Private Pay - Lifecare/Free HCC Medicare A Medicare B Medicaid/Hospice Manage Care
Therapy Revenue
Room & Board 373,641 $ 340,809 64,921 779,371 $
Room & Board Expenses $
$
(354) $ 210,892 77,307 61,941 349,785 $
Therapy Expenses
206,569 $ 53,270 218,999 34,921 513,760 $
Ancillary Revenue
20,751 $ 27,118 2,432 50,301 $
Ancillary Expenses
37,609 $ 92,941 8,961 8,592 148,104 $
Contractual Adjustment
$ (132,425) (27,367) (28,848) (188,641) $
Total Oper. Expenses
48,899 $ 3,289 52,187 $
Net Revenue Per Pat. Day Net Revenue % of Total 394,038 446,393 49,939 100,446 990,817
NOI Margin
293,077 $ 53,270 315,229 8,961 43,513 714,051 $
100,961 (53,270) 131,164 40,978 56,933 276,765
39.77% $ 0.00% 45.05% 5.04% 0.00% 10.14% 100.00% $
% of Total Margin
565 603 851 571
Total Bed Days 698 180 740 118 1,736
Per Patient Day (PPD) Operating Exp. Margin
36.48% $ -19.25% 47.39% 14.81% 0.00% 20.57% 100.00% $
420 $ 296 426 369 411 $
145 (296) 177 482 159
8