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FORM OF COMPLIANCE CERTIFICATE
The undersigned duly authorized officer of LifeBridge Health, Inc. (the “institution”), the Obligated Group Representative under and as defined in the Master Loan Agreement dated as of January 1 2008 ( the “Loan Agreement”) among Maryland Health and Higher Educational Facilities Authority (the “Authority”), the Institution, Sinai Hospital of Baltimore, Inc., Northwest Hospital Center, Inc., Levindale Hebrew Geriatric Center and Hospital at Sinai Foundation, Inc. (collectively, the “Obligated Group”), hereby certifies as follows to demonstrate compliance with the Loan Agreement: Fiscal Year ended June 30, 2010 (the “Fiscal Year”) (Unless otherwise indicated, all calculations (1) relate to the Obligated Group as a whole and (2) shall
be determined in accordance with accounting principals generally accepted in the United States of
America.)
(a) Coverage Ratio Coverage Ratio as of the last day of Fiscal Year: Excess of revenues over expenses……………. 36,566,000 Add: Depreciation and amortization……... 50,672,000 Interest expense 14,727,000 Add(Deduct): Unrealized (gains) and losses on investments… (9,074,000) Unrealized (gains) and losses on Hedging Transactions -0- (Gains) and losses on sale or disposition of assets (other than investments) or extinguishment Of debt _ -0-__ Net Income Available for Debt Service (A)…… 92,891,000 Maximum Annual Debt Service on Outstanding Long-Term Indebtedness (B) _ 20,041,000_ Cover Ratio (A/B) ___ 4.64
(b) Dispositions of Assets Total Book Value of property disposed of during the Fiscal Year, other than property disposed of at fair market value or in the ordinary course of business (subject to limitations in Section 8.15) $__- 0-___ (c) Indebtedness
Outstanding principal amount of: Short- Term Indebtedness (may not exceed 15% of Total Operating Revenues
Or unrestricted cash and investments, whichever is less) $_ - 0 -___
Non-Recourse Indebtedness __- 0 -___ Other non-Bond debt (limited under Section 8.12) __- 0 -___ Guaranteed debt (limited under Section 8.12) __- 0 -____
(d) Liens and Encumbrances Have the Obligated Group Members granted liens: On accounts receivable (limited to 25% of net A/R) ____(Y) _X_ (N) Value of A/R subject to liens: Securing Hedging Transaction ____(Y) _X (N) Secure non-Bond debt ____(Y) _X__(N) Describe: Total Book Value of property subject to liens, other than liens securing Parity Debt (may not exceed 15% of the unrestricted net assets): $____- 0 -_____
(e) Days of Cash on Hand Days of Cash on Hand as of last day of Fiscal Year (must be at least 65):
Unrestricted cash and marketable securities……………… 334,976,000 Deduct: Short-term debt………………………………... Cash collateral securing hedges…………………. Termination payment becoming due under Hedging transactions within one year………. (subject to further limitations if ratings fall below BBB/Baa) ___________
Unrestricted Liquid Funds (A)…………………………… 334,976,000
Total expenses for Fiscal Year…………………………… 902,632,000 Less: Depreciation and amortization…………… (50,672,000) Total Operating Expenses (B)…………………………… __ 851,960,000__ Days Cash on Hand (A/B/365)…………………... _ 144____ (f) Debt to Capitalization Ratio Debt to Capitalization Ratio as of last day of Fiscal Year (may not exceed 65% as of
each June 30):
Total principal amount of outstanding Indebtedness (A).. 330,763,000 Add: Total unrestricted net assets and equity accounts 361,274,000 Total capitalization (B) 692,037,000 Debt to Capitalization (A/B)……………………………… 0.48 (g) Hedge Agreements Has the Obligated Group entered into any Hedge Agreements During the Fiscal Year ___(Y) __X__(N) Notional amount of outstanding Hedge Agreements: $__- 0 -____ Market value of outstanding Hedge Agreements: $__- 0 -_____ (h) Gifts, Grants and Fundraising The Obligated Group currently has on hand funds restricted to the payment of the Project or to the payment of debt service on any Bonds in the amount of: $_9,394,000___ (i) Notices and Reports The Obligated Group has provided to the Authority: Notice of all Indebtedness incurred during the Fiscal Year _X__(Y) _____(N) Report of the Insurance Consultant/self-insurance plan _X___(Y) _____(N)
Notice of major repairs and dispositions (repairs and Dispositions costing more than 2 % of Total Operating Revenues) __X__(Y) _____(N) All notices and other items provided to the Bond Insurer or other credit facility providers __X__(Y) _____(N) (j) Continuing Disclosure The Obligated Group has filed the Continuing Disclosure with the NRMSIRs, the Authority and the Trustee __X _(Y) _____(N) (k) Financing Statements The Obligated Group has filed or caused to be filed all financing statements and renewals thereof in the places required to perfect the security interests granted by the Obligated Group in the Loan Agreement __X___(Y) _____(N) Terms used herein and not otherwise defied shall have the meanings assigned to them in the Loan Agreement. IN WITNESS WHEREOF, I have hereunto set my and, this 11th day of November, 2010.
For the Twelve Months Ended June 30, 2010
LifeBridge Health Inc.
Obligated Group
Consolidating Financial Statements
MHHEFA Revenue Bonds
LifeBridge Health Issue - Series 2008
Obligated Group
Balance Sheet
June 30, 2010
Audited
LifeBridge Health Northwest
Sinai Hospital
& Foundations * Levindale Elims Combined
Assets
Current Assets
Cash and Cash Equivalents 6,171,000$ 36,045,000 52,899,000 10,786,000 105,901,000$
Restricted Investments 429,000 15,104,000 1,055,000 16,588,000
Construction fund 353,000 2,557,000 - 2,910,000
Assets whose use is limited 2,387,000 6,928,000 79,000 9,394,000
Patient service receivables, net of allowance 20,566,000 73,087,000 9,828,000 103,481,000
Other Receivables 3,515,000 800,000 12,248,000 306,000 (9,537,000) 7,332,000
Inventory 2,241,000 17,551,000 73,000 19,865,000
Prepaid expenses 7,200,000 425,000 2,837,000 110,000 10,572,000
Pledges receivable, current 604,000 2,204,000 222,000 3,030,000
Total current assets 16,886,000 63,850,000 185,415,000 22,459,000 (9,537,000) 279,073,000
Long-term investments 44,702,000 61,759,000 92,686,000 23,037,000 222,184,000
Pledges receivable, net of current portion 946,000 6,735,000 167,000 7,848,000
Operating property, net 25,154,000 96,293,000 240,879,000 21,353,000 383,679,000
Other assets
Deferred financing costs and other assets 2,191,000 462,000 1,337,000 265,000 2,064,000
Pension Asset -
Beneficial Interest 3,379,000
Other Assets 49,006,000 532,000 4,224,000 (45,020,000) 8,742,000
51,197,000 994,000 8,940,000 265,000 (45,020,000) 16,376,000
Total assets 137,939,000$ 223,842,000 534,655,000 67,281,000 (54,557,000) 909,160,000$
909,160,000
* Excludes Sinai Clinical Professionals, LLC
MHHEFA Revenue Bonds
LifeBridge Health Issue - Series 2008
Obligated Group
Balance Sheet
June 30, 2010
Audited
LifeBridge Health Northwest
Sinai Hospital
& Foundations * Levindale Elims Combined
Liabilities and Net Assets
Current Liabilities
Accounts payable and accrued liabilities 10,700,000$ 21,086,000 79,675,000 8,083,000 (9,537,000) 110,007,000$
Advances from third party payors 4,732,000 21,835,000 3,194,000 29,761,000
Current portion of long-term debt and
capital lease obligations 1,451,000 652,000 2,578,000 22,000 4,703,000
Other current liabilities 222,000 226,000 650,000 13,000 1,111,000
Total current libilities 12,373,000 26,696,000 104,738,000 11,312,000 (9,537,000) 145,582,000
Other Long-term liabilities 2,323,000 1,186,000 42,341,000 11,203,000 57,053,000
Long-term debt and capital lease obligations, 6,638,000 71,456,000 209,021,000 2,375,000 289,490,000
net of current portion
Net assets
Unrestricted 116,486,000 120,894,000 127,966,000 40,948,000 (45,020,000) 361,274,000
Temporarily restricted 119,000 3,610,000 40,892,000 1,443,000 46,064,000
Permanently restricted 9,697,000 - 9,697,000
-
116,605,000 124,504,000 178,555,000 42,391,000 (45,020,000) 417,035,000
Total liabilities and net assets 137,939,000$ 223,842,000 534,655,000 67,281,000 (54,557,000) 909,160,000$
909,160,000
-
* Excludes Sinai Clinical Professionals, LLC
MHHEFA Revenue Bonds
LifeBridge Health Issue - Series 2008
Obligated Group
Operations
June 30, 2010
Audited
LifeBridge Health Northwest
Sinai Hospital
& Foundations * Sinai Hospital & FoundationsLevindale Elims Combined
Unrestricted revenues, gains and other support
Net patient service revenue -$ 203,817,000 604,713,000 76,291,000 884,821,000$
Net assets released from restrictions used for operations 227,000 2,815,000 19,000 3,061,000
Other operating revenue 4,806,000 2,314,000 23,491,000 1,467,000 (496,000) 31,582,000
-
Total operating revenues 5,033,000 206,131,000 631,019,000 77,777,000 (496,000) 914,431,000
Expenses
Salaries and employee benefits 140,000 103,251,000 320,709,000 46,236,000 3,000 470,339,000
Supplies 2,000 29,438,000 122,120,000 14,401,000 165,961,000
Purchased Services (6,428,000) 31,965,000 102,914,000 14,086,000 (499,000) 142,038,000
Depreciation and amortization 10,474,000 9,307,000 28,670,000 2,221,000 50,672,000
Repairs and maintenance - 3,350,000 10,860,000 994,000 15,204,000
Provision for bad debts 23,000 15,712,000 26,160,000 1,796,000 43,691,000
Interest 1,001,000 3,464,000 10,147,000 115,000 14,727,000
Total expenses 5,212,000 196,487,000 621,580,000 79,849,000 (496,000) 902,632,000
Operating income (loss) (179,000) 9,644,000 9,439,000 (2,072,000) 16,832,000
Other income
Investment income and other 202,000 7,258,000 9,624,000 2,650,000 19,734,000
Revenues over expenses 23,000$ 16,902,000 19,063,000 578,000 - 36,566,000$
* Excludes Sinai Clinical Professionals, LLC
MHHEFA Revenue Bonds
LifeBridge Health Issue - Series 2008
Obligated Group
Covenants
June 30, 2010
YTD
6/30/10 Covenant
Long-term Indebtedness to Capitalization Ratio
Long-term indebtedness 330,763,000
LT Indebtedness + unrestr fb + capital 692,037,000
Long-term Indebtedness to Capitalization Ratio 0.48 <0.65
Rate Covenant (Coverage Ratio)
Net Income Available for Debt Service (annualized) 92,891,000
Maximum Annual Debt Service 20,041,000
Coverage Ratio 4.64 >1.10
Liquidity Ratio (Days Cash on Hand)
Cash 334,976,000
Operating Expenses - Net of Depr & Amort 851,960,000
Days in Fiscal year 365
Days Cash on Hand Ratio 144 > 65
11/11/2010 LifeBridgeHealth 06_30_10 Financial data.xls Covenants
Investment Allocation
Payor Mix
For the Twelve Months Ended June 30, 2010
LifeBridge Health, Inc.
Operating Data
Statistics
Licensed Beds
Month-to-Date Year-to-Date
Actual Budget Variance % Variance Actual Budget Variance % Variance
SINAI HOSPITAL
Admissions
Adult 2,174 2,209 (35) -1.6% 25,845 26,342 (497) -1.9%
Newborn 183 196 (13) -6.7% 2,183 2,500 (317) -12.7%
Total 2,357 2,405 (48) -2.0% 28,028 28,842 (814) -2.8%
ER Visits 6,781 6,520 261 4.0% 74,541 74,850 (309) -0.4%
ER Admissions 1,308 1,145 163 14.2% 15,008 13,730 1,278 9.3%
Observation Cases(via ER)
Inpatient 1 0 1 100.0% 20 0 20 100.0%
Outpatient 33 0 33 100.0% 163 0 163 100.0%
Surgical Cases
Inpatient 704 738 (34) -4.6% 8,821 8,850 (29) -0.3%
Outpatient 1,017 925 92 10.0% 10,665 10,670 (5) 0.0%
OR Minutes - Inpatient 110,270 109,259 1,011 0.9% 1,281,146 1,310,182 (29,036) -2.2%
OR Minutes - Outpatient 58,831 57,757 1,074 1.9% 652,715 666,417 (13,702) -2.1%
Length of Stay - Adult 4.3 4.6 0.2 5.2% 4.7 4.7 (0.1) -1.2%
APR Case Mix Index vs. Budget- 1.206 1.246 (0.040) -3.2% 1.223 1.224 (0.001) -0.1%
APR Case Mix Index vs. Prior Year Actual - 1.206 1.229 (0.023) -1.8% 1.223 1.229 (0.006) -0.5%
Note - CMI includes Hosp & Oncology, excludes Ilizarov.
NORTHWEST HOSPITAL
Admissions - Acute, excl. Psych 1,037 1,000 37 3.7% 12,498 11,913 585 4.9%
Admissions - Psych 65 67 (2) -3.0% 792 775 17 2.2%
Admissions - Subacute 85 82 3 3.7% 952 1,015 (63) -6.2%
ER Visits 5,163 4,766 397 8.3% 61,456 57,683 3,773 6.5%
ER Admissions 961 974 (13) -1.3% 12,000 11,585 415 3.6%
Observation Cases(via ER)
Inpatient 0 0 0 100.0% 0 0 0 100.0%
Outpatient 16 0 16 100.0% 107 0 107 100.0%
Surgical Cases
Inpatient 205 201 4 2.0% 2,477 2,407 70 2.9%
Outpatient 626 618 8 1.3% 6,456 6,982 (526) -7.5%
OR Minutes - Inpatient 21,120 19,593 1,527 7.8% 233,507 232,993 514 0.2%
OR Minutes - Outpatient 58,684 51,262 7,422 14.5% 597,835 580,259 17,576 3.0%
Length of Stay, incl. Psych 4.2 4.0 (0.3) -6.6% 4.2 4.2 0.02 0.5%
APR Case Mix Index vs. Budget- 0.911 0.940 (0.029) -3.1% 0.944 0.983 (0.040) -4.1%
APR Case Mix Index vs. Prior Year Actual - 0.911 0.980 (0.069) -7.1% 0.944 0.980 (0.037) -3.7%
LEVINDALE HOSPITAL
Speciality Hospital
Admissions 87 46 41 88.4% 950 562 388 69.2%
Patient days 2,624 3,301 (677) -20.5% 34,471 40,151 (5,680) -14.1%
ADC 87 110 (23) -20.5% 94 110 (16) -14.1%
Sub-Acute
Admissions 24 18 6 32.5% 279 220 59 26.5%
Patient days 1,025 720 305 42.4% 11,145 8,760 2,385 27.2%
ADC 34 24 10 42.4% 31 24 7 27.2%
Nursing Home
Admissions 0 5 (5) -100.0% 46 57 (11) -20.0%
Patient days 4,019 4,290 (271) -6.3% 49,229 52,195 (2,966) -5.7%
ADC 134 143 (9) -6.3% 135 143 (8) -5.7%
CGNRC
Patient days 4,252 4,200 52 1.2% 51,124 51,100 24 0.0%
ADC 142 140 2 1.4% 140 140 0 0.0%
Actual vs. Budget as of June 30, 2010
LifeBridge Health, Inc.
Statistical Summary
Month-to-Date Year-to-Date
Curr Yr Act Pr Yr Act Variance % Variance Curr Yr Act Pr Yr Act Variance % Variance
SINAI HOSPITAL
Admissions
Adult 2,174 2,222 (48) -2.2% 25,845 25,952 (107) -0.4%
Newborn 183 184 (1) -0.5% 2,183 2,458 (275) -11.2%
Total 2,357 2,406 (49) -2.0% 28,028 28,410 (382) -1.3%
ER Visits 6,781 6,344 437 6.9% 74,541 73,847 694 0.9%
ER Admissions 1,308 1,277 31 2.4% 15,008 14,182 826 5.8%
Observation Cases(via ER)
Inpatient 1 0 1 100% 20 0 20 100%
Outpatient 33 0 33 100% 163 0 163 100%
Surgical Cases
Inpatient 704 771 (67) -8.7% 8,821 8,683 138 1.6%
Outpatient 1,017 966 51 5.3% 10,665 10,552 113 1.1%
OR Minutes - Inpatient 110,270 120,525 (10,255) -8.5% 1,281,146 1,296,322 (15,176) -1.2%
OR Minutes - Outpatient 58,831 58,098 733 1.3% 652,715 653,433 (718) -0.1%
Length of Stay - Adult 4.3 4.5 0.1 3.2% 4.7 4.6 (0.1) -1.7%
APR Case Mix Index - 1.206 1.229 (0.023) -1.8% 1.223 1.229 (0.006) -0.5%
Note - CMI includes Hosp & Oncology, excludes Ilizarov.
NORTHWEST HOSPITAL
Admissions - Acute, excl. Psych 1,037 1,027 10 1.0% 12,498 12,038 460 3.8%
Admissions - Psych 65 60 5 8.3% 792 755 37 4.9%
Admissions - Subacute 85 76 9 11.8% 952 992 (40) -4.0%
ER Visits 5,163 5,178 (15) -0.3% 61,456 58,495 2,961 5.1%
ER Admissions 961 1,000 (39) -3.9% 12,000 11,926 74 0.6%
Observation Cases(via ER)
Inpatient 0 0 0 100.0% 0 0 0 100.0%
Outpatient 16 0 16 100.0% 107 0 107 100.0%
Surgical Cases
Inpatient 205 200 5 2.5% 2,477 2,489 (12) -0.5%
Outpatient 626 560 66 11.8% 6,456 6,570 (114) -1.7%
OR Minutes - Inpatient 21,120 18,459 2,661 14.4% 233,507 234,719 (1,212) -0.5%
OR Minutes - Outpatient 58,684 53,140 5,544 10.4% 597,835 554,240 43,595 7.9%
Length of Stay, incl. Psych 4.2 4.1 (0.1) -2.2% 4.2 4.5 0.3 6.3%
APR Case Mix Index - 0.911 0.980 (0.069) -7.1% 0.944 0.980 (0.037) -3.7%
LEVINDALE HOSPITAL
Speciality Hospital
Admissions 87 76 11 14.5% 950 749 201 26.8%
Patient days 2,624 3,202 (578) -18.1% 34,471 40,510 (6,039) -14.9%
ADC 87 107 (19) -18.1% 94 111 (17) -14.9%
Sub-Acute
Admissions 24 24 0 0.0% 279 270 9 3.3%
Patient days 1,025 681 344 50.5% 11,145 8,790 2,355 26.8%
ADC 34 23 11 50.5% 31 24 6 26.8%
Nursing Home
Admissions 0 0 0 0.0% 46 32 14 43.8%
Patient days 4,019 4,324 (305) -7.1% 49,229 51,756 (2,527) -4.9%
ADC 134 144 (10) -7.1% 135 142 (7) -4.9%
CGNRC
Patient days 4,252 4,270 (18) -0.4% 51,124 50,307 817 1.6%
ADC 142 142 (0) -0.2% 140 138 2 1.6%
LifeBridge Health, Inc.
Statistical Summary
Current Year vs Prior Year Actual as of June 30, 2010
Category Service Sinai Northwest Levindale
Total Obligated
Group
Courtland
Gardens
Total
LifeBridge
Hospital*
Med/Surg 335 207 542 542
OB 23 23 23
Peds 31 31 31
Psych 24 14 38 38
Acute Rehab 57 57 57
Chronic Medicine 100 100 100
Chronic Rehab 20 20 20
Total Hospital 470 221 120 811 - 811
Nursing Home**
Subacute 29 26 55 55
General Nursing Home 146 146 151 297
Total Nursing Home 29 172 201 151 352
Total Beds 470 250 292 1,012 151 1,163
* Sinai also operates a 21-bed neonatal intensive care unit and a 35-bassinet normal newborn nursery
** Maryland's licensure law does not distinguish between subacute and general nursing home beds. All nursing home beds throughout the
LifeBridge system are certified to serve as subacute beds.
LifeBridge Health, Inc.
Licensed Beds
June 30, 2010
Payor Amount % Payor Amount % Payor Amount % Payor Amount % Payor Amount %
(1) Blue Cross 115,272,152 14.93% Blue Cross 123,687,744 14.64% Blue Cross 133,373,337 14.93% Blue Cross 138,047,085 14.77% Blue Cross 138,551,777 14.95%
(2) Commercial 79,784,101 10.33% Commercial 92,386,629 10.94% Commercial 103,364,831 11.57% Commercial 108,303,067 11.59% Commercial 100,642,330 10.86%
(3) HMO 82,082,427 10.63% HMO 89,406,918 10.58% HMO 91,388,630 10.23% HMO 93,689,188 10.03% HMO 90,672,914 9.79%
(4) Medicare 314,603,405 40.74% Medicare 342,848,045 40.58% Medicare 355,930,819 39.85% Medicare 374,057,694 40.03% Medicare 374,259,229 40.39%
(5) Medicaid 54,615,257 7.07% Medicaid 55,682,202 6.59% Medicaid 59,288,444 6.64% Medicaid 57,833,662 6.19% Medicaid 48,676,463 5.25%
(6) Selfpay 55,301,032 7.16% Selfpay 64,660,653 7.65% Selfpay 65,606,165 7.35% Selfpay 66,114,077 7.08% Selfpay 62,955,155 6.79%
(7) Other 70,558,427 9.14% Other 76,136,422 9.01% Other 84,209,606 9.43% Other 96,410,328 10.32% Other 110,829,108 11.96%
772,216,801 100.00% 844,808,613 100.00% 893,161,831 100.00% 934,455,100 100.00% 926,586,976 100.00%
FY 2010
July 1, 2005 - June 30, 2006
FY 2006
Consolidated LifeBridge Health, Inc. - Obligated Group
Revenue by Financial Class-Payor Mix
FY 2006, FY 2007, FY 2008, FY 2009 and the Twelve Months Ended June 30, 2010
July 1, 2009 - June 30, 2010
FY 2009
July 1, 2008 - June 30, 2009
FY 2007
July 1, 2006 - June 30, 2007 July 1, 2007 - June 30, 2008
FY 2008
LifeBridge Health, Inc. and Subsidiaries
Investments
June 30, 2010
Long-term
Investments
Equities 28.8%
Mutual funds 46.9%
Alternative Investments 14.2%
Bonds 7.7%
Money market 1.2%
Cash and Cash equiv 0.6%
Real Estate 0.9%
100.0%