Annual ReportFiscal Year 2012

Like most continuing care retirement commu-nities, John Knox Village faces challenges broughton by the economy: rising operational costs, hard-to-secure financing, declining real estate values,fluctuating markets and more.

However, rather than biding its time until theeconomy rebounds, the entire Village organizationhas been examining where it’s been and where itwants to go. The new reality is that the steps the Villagetook to become a leading retirement community inthe nation won’t keep it on the path of success.

That’s why Village leaders have strategized andplotted alternate paths that will help the organizationnavigate the rocky terrain of the new economy.Guided by this new plan, the Village spent fiscalyear 2012 (April 1, 2011, to March 31, 2012) imple-menting strategies to increase revenues, decreaseexpenses and increase efficiency.

By taking steps to overcome the obstacles createdby the changing economy, as well as new healthcarelegislation, the Village is forging new paths to enrichlives and build community for years to come.

About John Knox VillageOOnnee ooff tthhee llaarrggeesstt aanndd mmoosstt ccoommpprreehheennssiivvee

ccoonnttiinnuuiinngg ccaarree rreettiirreemmeenntt ccoommmmuunniittiieess iinn tthhee nnaattiioonn,, JJoohhnn KKnnooxx VViillllaaggee hhaass bbeeeenn eennrriicchhiinnggtthhee lliivveess ooff oollddeerr aadduullttss ffoorr mmoorree tthhaann 4400 yyeeaarrss..The Village offers a variety of lifestyle opportunitiesin independent living, residential care and skillednursing, as well as an abundance of services andamenities, and long-term healthcare options on its 400-plus acre campus in Lee’s Summit, Mo.What’s more, the Village also provides home care services to patients who live throughout theKansas City metropolitan area in both Missouri andKansas.

Mission: To enrich the lives of olderadults through community living.

George Pagels, MD,Chairman, JKVBoard of Directors

The changing economyhas provided challengesfor most companies, re-gardless of the industrythat they serve. John

Knox Village is no different. But there is some-thing that does set it apart from other organi-zations – the dedicated individuals who makeup the Village community. The information included in this report is just the tip of the iceberg in terms of all that the Village has beenable to accomplish during the 12 months of fiscal year 2012. From expanding services toworking to close the budget deficit, the Villagehas worked hard to remain on the path of success. But what’s more impressive are thesteps that have been taken to help the organi-zation continue to achieve its mission well in tothe future.

Forging New PathsHow John Knox Village found its footing when faced with the challenges of a new economy

2

Letter from DanMy son, Phil, and I recently

journeyed to the summit

of Mount Kilimanjaro, the

highest freestanding moun-

tain in the world. Although

the eight-day journey was

extremely difficult – rain,

sleet, hail, bitter cold

and dangerously thin air

were a few of the obstacles we experienced –

we both made it. But our journey wasn’t all difficulties.

I had a great week with my son, and I also acquired life

lessons that can be applied to the Village’s current operations, espe-

cially as we work to overcome the challenges brought on by the changing economy.

LLeessssoonn 11.. AAllwwaayyss bbee pprreeppaarriinngg.. You must always be ready to implement Plan B, no matter how

good Plan A may be.

LLeessssoonn 22.. FFoollllooww yyoouurr gguuiiddee.. You must have the wisdom and ability to trust your guide and your compass.

LLeessssoonn 33.. PPeerrsseevveerree.. You must always keep going.

John Knox Village is a strong and solvent organization. Unfortunately, volatility in the housing and invest-

ment markets has created operational challenges that have led to financial deficits. Challenged by our board

of directors to close the gap between revenues and expenses, management took an in-depth look at the Village’s

operations. Plans focused on increasing revenues, decreasing expenses and increasing efficiency. Actions

focused on the expansion of health care services, a handful of staff reassignments, the elimination of some

services and the addition of new services that are in line with the wants and needs of our residents.

I am confident our hard work will sustain our solvency so that we can continue providing high quality care

and services to the seniors of today and tomorrow. But to remain a leading retirement community, we also

must follow the lead of our residents, clients and associates. That’s why we use satisfaction survey results, as

well as the strong relationships we have forged with many members of the Village community, to guide our

decisions. These people are our compass – without their helpful direction, we could lose our way.

While careful planning and conservative strategic growth have built the financial reserves needed to ride

out hard times, our ability to come together as a single, unified community sets us apart. The power to perse-

vere allows us to continue to care for older adults both on our campus and throughout the Kansas City metro-

politan area. Guided by the expectations and desires of our community members, we follow an ever-flexible

strategic plan that will lead us into the future. And, like Phil and I as we trekked to the top of Kilimanjaro, the

Village perseveres.

3

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JJoohhnn KKnnooxx VViillllaaggee

An increase in demand for specialized health care servicesthat are provided by a limited number of organizations in theLee’s Summit area influenced John Knox Village’s decision toexpand its Valley View Memory Care services as well as VillageHouse inpatient hospice care.

By adding second hallways of apartments and patientrooms for each service, the Village is able to offer dedicatedcare to greater numbers of people. In turn, these ventures will contribute to the Village’s bottom line by growing existingrevenues.

As exciting as growth can be, sometimes difficult deci-sions also have to be made. In order to create space for thememory care expansion, the Village closed its on-campuschild development center. Much effort was made to find an alternate location for the center, but in the end, severalconstraints couldn’t be overcome. On the other hand, theVillage will be able to better live out its mission of servingolder adults because of the expansion.

Valley View Memory CareAddition.Located at Valley View..The first hallway has had an extensive waiting list

of individuals wanting to move in since it opened in 2006..The 17 additional apartments bring the

number of memory care residences to 39..The look and feel of the expansion is a reflectionof the original unit and its home-like amenities..Residents began moving in early in FY13..Annual revenues are projected to be about $1 million.

Village House Addition .Located at the Village Care Center..The new service offering fulfills a need for inpatienthospice-centered care for people who live east

of Kansas City..The eight additional patient suites brings the total number of rooms to 18..The second unit has a family room

and private entrance for patients and loved ones..Patients were admitted starting in late FY12..Annual revenues are projected at about $1.5 million.

Expansions to Provide SpecializedCare to More People

4

While many organizations provide memory care services,few, if any, have created an organization-wide program – untilnow. Village associates from independent living, Valley View,Village Care Center and Community Health Services, areworking together to create a memory care program that extends across the continuum of care. In addition to the Village’s current offerings at Valley View, the Village Care

TrailblazersTaking steps to expand the

memory continuum

5

Center and Village Hospice, programs are being developed forindividuals who live in independent living. What’s more, the Village Care Center Memory Care unit is unveiling a new lookin fiscal year 2013. The redesigned area will mirror the lookof Valley View Memory Care to create consistency in careand environment that is so important for individuals withmemory impairments as they move through the continuum.PPiiccttuurreedd aabboovvee ffrroomm lleefftt ttoo rriigghhtt:: JJaacckkiiee BByyeerrss,,VVaalllleeyy VViieeww MMeemmoorryy CCaarree ccoooorrddiinnaattoorr;; HHeeaatthheerr SSccootttt,, VVaalllleeyy VViieeww aaddmmiinniissttrraattoorr;; MMeeddaa HHeerrnnaannddeezz,, mmaannaaggeerr ooff cclliinniiccaall sseerrvviicceess;; aanndd DDaavviidd MMeerrcciieerr,, VViillllaaggee CCaarree CCeenntteerr aaddmmiinniissttrraattoorr..

Village Home Health staff are always on the move as they carefor patients in nine counties in Missouri and Kansas. But staffwent one step further when theymoved the office from Lansing,Kan., to its new location in Over-land Park, Kan.

The centrally-located office spaceis larger and allows Village HomeHealth room for growth. It also pro-vides the service, which cares forpatients in the Kansas counties ofWyandotte, Johnson and Leaven-worth, a more visible presence ingrowing, robust communities, saidKim Blazevic, director of the VillageHome Health Kansas office.

SSkkyyrroocckkeettiinngg mmaaiinntteennaannccee ccoossttss++ ddeecclliinniinngg uussaaggee == sseerrvviiccee aaddddiittiioonn??IItt aallll aaddddss uupp..

A restructuring of the John KnoxVillage transportation program, whichincluded the elimination of the fee-for-service (sedan) transportation program,created efficiencies that will make adifference to the entire Village community.

During the restructuring process,the decision was made to alter the grocery bus schedule so the Villagealso could provide residents with free,

twice-weekly transportation to localhealth care providers.

The changes also enable the Villageto reallocate funds to better maintainthe other vehicles in its fleet, includingbuses, ambulances and security vehicles.Additional savings of about $88,000,which would have been used to purchase new vehicles to replace thehigh mileage sedans, will be used forcapital needs in other areas of the Village.

Village HomeHealth on the Move in Kansas

Transportation ReorganizationLeads to New Service Addition

Using energy conservation, recycling,waste management and other greenmethods, John Knox Village continues toimplement earth-friendly programs thathave helped it become a more sustain-able organization as well as boost itsbottom line. The following are only afew examples of how the Village isworking to reduce its environmentalimpact today to make a difference fortomorrow.

•• EEnneerrggyy--eeffffiicciieenntt LLiigghhttiinngg:: Nearly900 light bulbs are being replaced withLED bulbs in the Village Care Center,resulting in estimated savings of185,000 kilowatt hours a year. Next, theVillage will replace the 340 street lightbulbs. Because the lifespan of the newbulbs is roughly 5 years, the number ofhours staff spends changing out bulbswill decline significantly.

•• EEnneerrggyy--eeffffiicciieenntt EEqquuiippmmeenntt:: TheVillage replaced aging equipment withenergy-efficient air source heat pumpsat the Village Care Center as well as theheating, ventilation and air conditioningunits in the Courtyard Complex and the walkway between the CourtyardComplex and The Pavilion. Using theenergy-efficient equipment both savesmoney and enables the Village to capturerebates for additional savings.

•• RReeccyycclliinngg UUppddaattee:: The Village hassaved more than $30,000 with its recy-cling program since June 2009. The savings come from taking fewer loads oftrash to the landfill and from payments theVillage received for the recyclables collected in bins around campus.

Saving the Planet One Light Bulb at a Time

6

7

In recent years, John Knox Village has been on a greenmission: to increase sustainability, decrease energy usage anddecrease its utility bills. Many of its efforts, a few of whichare summarized on the previous page, are headed up by agroup of associates from operations, including (pictured fromleft to right) Randy Thate, master electrician; Jeff Hobbs, manager of maintenance; Greg Maxon, maintenance lead;Brian Petersen, director of operations and development; LesWilkes, maintenance lead; Mike Shipps, maintenance lead; and

Mitch Billingsley (not pictured), technical lead. This past fiscal year, the Village added to its sustainability

achievements by installing 648 solar panels on the roofs ofthe Courtyard apartment buildings, Valley View and the VillageCare Center. Together, the panels, which make up one of thelargest fields of solar panels in the state of Missouri, will produce about 180,000 kilowatt hours per year. The panelswill be a sort of insurance policy for the Village: after deductingthe cost of equipment rental, the Village will gain a modestsavings of about $1,800 for the first year of usage. That savingswill only grow as electricity rates increase. Using the solarpanels is about more than just the cost savings, according toBrian Petersen, director of operations and development. “Weare doing right by the planet,” he said.

TrailblazersJKV’s sustainability efforts aided by installing state’s largest solar system

8

John Knox Village’s earliest residents dubbed them-selves “Pioneers” and for good reason – these trailblazersprovided insightful feedback that helped create a strongfoundation for the current organization. Today, Village leaderscontinue to look to residents, as well as their loved ones, forguidance and direction, most notably through resident satis-faction surveys.

The most recent surveys were conducted throughout thecontinuum in spring 2011. Independent living residents, aswell as the residents and loved ones of Valley View and Village Care Center residents, rated and gave their opinionson a number of topics. The outcomes showed an increase inthe number of “Excellent” and “Good” ratings and a declinein the amount of “Average,” “Poor” and “Really Poor” ratingswhen compared to previous assessments.

The survey results act as a guide, giving the Village a to-do list. For example, the Village is making plans to update thecommon areas of the Villager Complex based on the feedback.In addition, it has installed additional lighting outside The Pavilion, updated the 18 laundry rooms in the apartment buildingsand revamped the menu offerings and service at the LakesideGrille in the Country Club complex. These and other initiativeshave been well received by residents.

Using its satisfaction survey results as its guide, ValleyView expanded its staff, hiring additional caregivers so thatit now has a licensed nurse on duty 24 hours a day, 7 days aweek. The residential care provider also revised the way itwelcomes new residents and helps them adjust to their newhomes.

Across campus at the skilled nursing center, the Village Care Center launched a new in-house TV station,VCCtv – Channel 19, as a result of its survey. The channel,which is broadcast throughout the Village campus, includes photos, videos, listings of daily activities and thedaily menus to supplement communication. The new channelenables all members of the Village community to catch aglimpse of daily life at the Care Center.

Residents Set the Organization’s Direction

It’s always important to stay in touch with patients’ opin-ions and perceptions, and it’s essential also to measure thequality of the work that is performed, which is why Village Home Health and Village Hospice regularly survey their patients.

Some of the home health quality of care informationis gathered by the Centers for Medicare and MedicaidServices (CMS) as part of the requirements for partici-pating in their program. CMS uses it to measure out-comes and to report to the public via the Home HealthCompare website about the services provided by homehealth agencies across the nation. They look at factorslike how well the care providers do at reducing patientre-hospitalizations, managing patient medications,managing pain and educating patients so they can better take care of themselves.

The Village’s Community Health Services groupuses this data, in addition to surveys they conductabout Village Hospice services, as compasses toguide their decision-making and continuous qualityimprovement efforts. With major changes in theworks for how health care services are managedand regulated, the group has been examining internal processes and has made moves that willhelp them become even more efficient and effective. To facilitate this, they upgraded to newcomputer software to manage patient care and documentationand moved the Kansas office to a high-density area with agreater concentration of potential patients.

Julie Mahony, administrator of Community Health Services,said efficiency and quality of care, as well as creating newways to work closely with hospitals and other referral sources,will be the keys to continued success. “But our success can’tjust be measured by the data,” she said. “It’s also about howour patients and families perceive our services. How do theyfeel about the care we provided? It may have been clinicallycorrect, but it also needs to feel like a caring and satisfying experience to the people we serve. That’s when we knowwe’re truly providing excellent, quality care.”

Surveying the Path to Home

Care Excellence

9

Village ResidentsLead the Way

For the first time in amore than two decades,John Knox Village has a newchief financial officer.

Richard Kim Klockengahas joined the Village as thevice president of finance. Heis replacing long-time Villageleader Jim Franklin, who re-tired early in fiscal year 2013.

“Kim has a proven trackrecord for enhancing profit

and revenue growth and has an intimate understandingof the continuing care environment,” said Dan Rexroth,John Knox Village president and CEO. “We’re confidentin his ability to ensure the long-term financial strength ofJohn Knox Village.”

As chief financial officer, he oversees myriad compli-cated financial transactions, including management of theVillage’s cash flow, Medicare billing, capital needs and oversight of the accounting, risk management and materials managementdepartments.

Klockenga is a seasoned executivewith nearly 15 years of senior healthcareleadership experience. Prior to joining theVillage, he was vice president and CFO ofFriendship Senior Options of Schaumberg inSchaumberg, Ill., where he led the financialand information technology functions for theorganization’s parent facility and four sub-sidiaries. He also was with WoodstockChristian Life Services in Woodstock, Ill., andMotorola, Inc. Klockenga earned a master’sdegree in business administration at LakeForest Graduate University and a bachelor’sdegree in accounting at Kent State University.

John Knox VillageWelcomes New VP of Finance

10

John Knox Village residents are becoming more involved in the planning and organization of celebrations,clubs, special interest groups, entertainment and more. In addition to aiding the Village in fulfilling its mission of “enriching lives, building community,” these creative and enterprising individuals are creating opportunities for neigh-bors to connect and together experience laughter, enlight-enment, culture and more. The events, as well as the peopleinvolved in them, are diverse and varied.

Members of the JKV Community Theatre spend monthsplanning and rehearsing for their twice-a-year performances.A committee of residents and associates put in hundreds ofman hours to organize St. Patrick’s and Independence Dayparades and celebrations. Other examples of resident-ledactivities include weekly games, such as dominoes, bingoand bridge; weekly movies; outreach and prayer groups;music education classes; and musical performances – justto name a few. What’s more, the efforts of these special volunteers aid the staff of the Resident Life group as theywork to create special events and other activities for Villageresidents.

TrailblazersResident Council guides the Village

toward the right pathThe purpose of the John Knox Village Resident Council

is multifaceted, yet straightforward. It provides a channel ofcommunication between Village residents, staff and theboard of directors; provides for the protection and preservationof the interests of Village residents; and supports an

effective and fair means of determining the desires of residents with regard to the operation of the Village. Thededicated individuals who serve as officers, committeechairs and neighborhood representatives provide feedbackon a variety of issues that affect residents. They provide direction to Village associates as they work to create an evenbetter community for all residents. RReessiiddeenntt CCoouunncciill LLeeaadd--eerrsshhiipp –– BBeettttyy JJoohhnnssoonn,, vviiccee pprreessiiddeenntt;; JJuunnee DDeewwssbbeerrrryy,,sseeccrreettaarryy;; aanndd JJoo AAnnnn WWrriigghhtt,, pprreessiiddeenntt..

11

Less than 24 months after launchingan innovative and comprehensive asso-ciate health and wellness program,John Knox Village, with assistancefrom WINS (Wellness Innovations andNursing Services), can boast improve-ments to both associate health and thebottom line.

Discouraged by associate healthcare’s declining coverage and increas-ing costs (insurance carriers proposed a 40-percent premium increase), JohnKnox Village took the bull by the horns.It decided to become self-insured, openan on-site health and wellness clinicand be more proactive with wellnessprogramming. The decision to go self-insured was a huge gamble that wouldonly work if associates worked to improve their health. The risk has paidoff. Under the new plan, medical claimsand costs are down, clinic usage is high and the wellness programs haveexperienced high participation.

• GGrreeaatteerr ffiinnaanncciiaall fflleexxiibbiilliittyy.. Theannual impact of the wellness programis about $150,000, or more than $600per participant, according to calcula-tions by WINS. These figures are basedon improved risk factors as well asavoided health claims, increased pro-ductivity and decreased absenteeismfor just the 245 associates who enrolled in both 2011 and 2012. In addi-tion, the cost avoidance through allfacets of the program, which includesworkers compensation and post-offerscreenings, as well as savings on medical and prescription claims, is estimated to be more than $1 million.

What’s even better: Health insur-ance rates for 2012 remained the samefor associates who participated in thewellness program.

•HHeeaalltthhiieerr,, mmoorree aaccttiivvee aassssoocciiaatteess..Associates who participate in the wellness program decreased their visits to both the emergency depart-ments and specialists, according to program reports. What’s even better: 87of the repeat participants lowered theirblood sugar levels, 89 reduced theirweight, 46 maintained their weight, andthe number of people with zero riskfactors grew from 33 to 48.

Taking Steps Toward EvenBetter Financial Flexibility

12

In Other Insurance NewsFiscal year 2012 proved to be

a banner year for the Village’s general and professional liability insurance program. As of this year,dividends have exceeded $1 millionsince 2002, not to mention the vastamount of premium savings createdby participating in the program versuspurchasing insurance through thecommercial insurance market. Theprogram is overseen by the ContinuingCare Insurance Corporation (CCIC),an organization the Village helpedto found in 2002.

13

TrailblazersJohn Knox Village honoredfor wellness initiatives

Employers award, taking first placeamong companies with 500-999 full-time employees. What’s even better: theVillage continues to offer ffrreeee health insurance, a ffrreeee medical clinic and ffrreeeewellness programs, health screeningsand coaching for associates whoparticipate in managing their health.

The Village was recognized by theKansas City Business Journal as a 2012winner of the Kansas City’s Healthiest

The Foundation makes gifts and grants for facilities operated and managed by John Knox Village, contributes to activities that support olderadults, and aids in the implementation of the Village’s strategic and long-range plans. • The Foundation oversaw the VillageHouse Capital Campaign, raising more than$350,000 to transform two hallways of theVillage Care Center into a home-like facilityfor hospice patients and their families. • It also funded a variety of projects and programs for various areas of the Village.Examples include a new ambulance; nine com-puters and software for the resident computer center; educational materials for Village Hospice; purchases for the John Knox Village Chapel; equip-ment for the Hobby Hut; and new software for Village Hospice and Village Home Health.The Auxiliary promotes volunteerism andcontributes funds in support of residents of JohnKnox Village and the surrounding community. • The John Knox Village Auxiliary was namedthe Volunteer Program of the Year by the advocacy group LeadingAge Missouri. • Through operation of its Thrift Shop andfour on-campus convenience/gift stores, the Auxiliary earned $345,000 in operating revenue,and boasted a profit of $73,316.• The Auxiliary opened the Crafty Corner. Theshop is located in the General Store and featuresa variety of handcrafted items created by Villageresidents. About $5,000 worth of merchandisewas sold during fiscal year 2012.

• The Auxiliary’s notable donations to the Village included purchasing the naming rights forthe second hallway of Village House; a pledge tocover one-third of the cost of a new ambulance; andabout $15,000 in healthcare scholarships.

Gifts and Giving

14

The John Knox VillageFoundation

The John Knox Village Auxiliary

John Knox Village is dedicated to achievingits mission to enrich the lives of older adultsthrough community living – regardless of wherethey live. One notable example of how the Village fulfills this pledge is its association withPalestine Commons, a not-for-profit organiza-tion that serves low-income seniors who live inthe urban core of Kansas City, Mo.

The organization has created a campus complete with a senior activity center and threeapartment buildings, including a building that provides enhanced support services that sets itapart from a typical apartment complex. Most ofthe money for construction of the buildings wasraised through private donations and governmentsources.

Community Outreach

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The Village first became involved withPalestine Commons when the organizationasked John Knox Village President Dan Rexrothto serve on its board of directors five years ago.In addition to Dan’s service, the Village commu-nity also has come together several times tohelp enrich the lives of the people who live andcongregate at Palestine Commons. During thelast fiscal year, associates donated money thathelped purchase technology products for thecommunity as part of the John Knox VillageFoundation’s annual Special Project fundraisingcampaign. What’s more, a group of associateshosted a holiday party at the Palestine CommonsSenior Center, complete with a festive sing-along, games, food and an appearance by Santa,who handed out gifts to each resident.

John Knox Village benefits from the talents of more than 400 dedicated individualswho give their time to serve the Villagecommunity. About 75 percent of the volun-teers are Village residents; the others are individuals who live in surrounding communities.

The Village’s volunteer opportu-nities are as diverse and varied as thevolunteers who commit their time, talent and passion for the bettermentof the Village. Volunteers as young as13 and older than 100 help out in a varietyof ways: for example, handcrafting furniture for various areas of the Village;escorting Village Care Center residentsto doctor appointments; knitting prayershawls that are distributed all over theworld; offering companionship to hospicepatients and their families; and much more.

Throughout fiscal year 2012, volunteersrecorded 70,216 hours of their time to support

Volunteer Services all areas of the Village community – both onand off campus. Every hour contributed bythese dedicated individuals only strengthensthe Village’s pledge of enriching lives andbuilding community.

Sunday, May 22, 2011, started off as abeautiful day. Unfortunately, the day turneddark and tragic as storm clouds formed adeadly tornado that struck the city of Joplin, Mo.

Within hours, emergency crews from acrossthe region, including a three-person team fromJohn Knox Village, began making their way toJoplin. Upon their arrival, the JKV crew jumped in,transporting injured patients to a hospital inArkansas, assisting with various search and rescueefforts and, finally, relieving the Joplin-based emer-gency services personnel who continued to work inspite of the turmoil. In all, five Village associatesassisted in the tornado recovery efforts,including Craig Faith, director of publicsafety; Brian Opoka, manager of publicsafety; April Eads, lead paramedic; DennyThurmon, transportation lead; and JeffReynolds, emergency medical technician.

Meanwhile, back in Lee’s Summit, Vil-lage residents and associates mobilized to aidthe victims from the tornado. More than$800 in cash and goods were collectedand donated to the Salvation Army’s Dis-aster Relief Fund. The John Knox VillageAuxiliary Thrift Shop also opened its doorsto people who moved to Lee’s Summitafter their homes were lost during thestorm. The Auxiliary donated clothes,furniture and other goods to help themrebuild their lives.

A Jefferson Healthcare employee(pictured right) picks out items fordisplaced Joplin residents who moved toLee’s Summit. Neighbors helping neigh-bors – isn’t that what enriching lives andbuilding community is all about?16

BuildingCommunityThe Village unites to aidJoplin tornado victims

• Begin the much-anticipatedrenovation of the Villager apart-ment complex. Work on the corridors and common areas willinclude new paint, carpet, lighting,artwork and furniture. Also, a numberof smaller units will be combined to createlarger apartments.

• Remodel the Village Care Center Memory Care Unitto mirror the look of Valley View Memory Care. The renovation will help to create consistency in care and environment that is so important for individuals with memory impairments as they move to a higher level of care.

• Associate pay adjustments have not been budgetedfor fiscal year 2013. However, if the Village ends the fiscalyear with budget expectations of at least $300,000, a year-end bonus will be given to full and part-time associates whowere employed the entire fiscal year and meet other eligibility requirements.

17

There’s no doubt about it: fiscal year 2012(April 1, 2011, to March 31, 2012) was challenging.Many of the same issues that beset John Knox Village will continue to do so throughout the next12 months and possibly beyond. In order to remainsuccessful, the Village must continue to benimble and adapt quickly to change, especially

with increasing competition, changing healthcareregulations, a stubborn recession and other operating chal-lenges.

Adopting an organization-wide declaration of “Know YourNumbers” – a campaign that encourages all associates to beaware how their department’s goals affect the bottom line –the Village is focused on taking steps that will help its forwardmomentum toward a sustainable future. For example:

• Increase the number of residents and patientsthroughout the continuum, including full occupancy of Valley View Memory Care and the Village House.

• Increase awareness of healthcare services in surrounding communities. Working with a new marketingfirm, Community Health Services (LifeStyle Services, Village Home Health, Village Hospice and Home For LifeSolutions) will implement plans that create greaterawareness of the health services that the Villageoffers throughout the Kansas City metropolitanarea. What’s more, the division will roll out pro-gram enhancements in areas such as woundcare, ostomy and fall prevention, as well as increase consumer education that will result inmore admissions to these health services.

Forging Ahead

$3,454,7805,654,672

2,243,616241,142474,987 671,890

$12,741,087

30,861,5254,818,8932,399,218

$38,079,636

1,246,217

18,812,795 146,144,75329,988,2784,108,127

199,053,953113,660,921

85,393,032

1,838,113607,378

$139,905,463

$5,123,280 5,517,043

2,039,599235,286587,308 717,824

$14,220,340

29,222,9064,828,0942,176,999

$36,227,999

989,144

18,685,951144,654,11529,425,3063,095,395

195,860,767107,400,571

88,460,196

828,084662,808

$141,388,571

ASSETS

Current AssetsCash and cash equivalentsAccounts receivable, netCurrent portion of assets limitedas to useBoard designatedHeld by bond trustee

InventoriesPrepaid expenses and other

Total Current Assets

Assets limited as to use, net of current portionBoard designatedHeld by bond trusteeRestricted by donors

Total Assets Limited as to Use

Other Investments

Property and EquipmentLand and land improvementsBuilding and lease improvementsFurniture and equipmentConstruction in progress

Less accumulated depreciation

Total Property and Equipment, net

Forward Delivery AgreementDeferred Financing Costs, net

TOTAL ASSETS

$2,140,000

5,626,144

1,722,476

137,141344,758

$9,970,519

7,844,599

41,801,278

$49,645,877

3,881,909

58,859,311

$122,357,616

15,462,804 687,791

1,397,252

$17,547,847

$139,905,463

$2,023,940

4,745,881

3,027,976

87,085350,945

$10,235,827

6,408,271

41,039,064

$47,447,335

3,692,046

59,178,461

$120,553,669

18,946,029 493,046

1,395,827

$20,834,902

$141,388,571

Current LiabilitiesCurrent maturities of long-term debtAccounts payable and accrued expensesAccrued payroll and vacation payAccounts payable for construction and propertyAccrued interest payable

Total Current Liabilities

Deferred Revenuesand DepositsDeposits received in advanceon entrance fees and refundable feesDeferred revenue, entrancefees and monthly service fees

Total Deferred Revenues and Deposits

Asset Retirement Obligation, net of current portion

Long-Term Debt, net of current portion

Total Liabilities and Deferred Revenue

Net AssetsUnrestrictedTemporarily restrictedPermanently restricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

LIABILITIES, DEFERRED REVENUE ANDNET ASSETS

March 31, 2012 March 31, 2011

March 31, 2012 March 31, 2011

JKV Consolidated Balance Sheets

18

JKV ConsolidatedStatement of Operations

$9,957,3844,329,765 42,633,223

2,771,1761,488,284

5,380

478,6404,436,869

$66,100,721

31,833,809 5,893,583

6,108,2175,882,6305,621,189 560,339

3,014,669

135,1082,825,5228,348,382

$70,223,448

(4,122,727)

(370,527)

1,010,029

(3,483,225)

$9,443,9155,730,983 41,286,022

3,060,8201,292,381

800

385,3724,965,278

$66,165,571

31,511,559 6,114,264

5,104,1975,757,314 5,688,430683,626

3,095,864

(16,804)2,874,2898,276,326

$69,089,065

(2,923,494)

1,713,114

254,448

(955,932)

FOR YEARS ENDEDOperating RevenuesResident service feesAnnual agreement feesHealth service fees, netAmortization of deferred revenue including attritionand move-outsInvestment incomeManagement feesNet assets released fromrestrictions used for operationsOther

Total Operating Revenues

Operating ExpensesSalaries and WagesEmployee benefitsProfessional fees and contract servicesSuppliesUtilities, insurance and taxesBad dept expenseOther operating expenses(Gain) Loss on disposal of propertyand equipmentInterestDepreciation

Total Operating Expenses

Revenue Under ExpensesBefore Gain (Loss) on TradingSecurities

Change in net unrealized gain(loss) on trading securitiesChange in value of forward delivery agreement

Decrease in Unrestricted Net Assets

March 31, 2012 March 31, 2011

John Knox Village Foundation Balance Sheets

$109,9832,142,624

85,000192,936

_

340,750

$2,871,293

$150,595

_

189,6602,531,038

$2,871,293

$85,2922,025,202

_

63,636110,715319,102

$2,603,947

$105,683

31,275

174,8802,292,109

$2,603,947

ASSETSCash and cash equivalentsInvestmentsEstates receivablePledges receivableCharitable remainder trustsCharitable gift annuities

TOTAL ASSETS

LIABILITIESAND NET ASSETS

Due to John Knox VillageAnnuity payments due oncharitable remainder trustsAnnuity payments due on charitable gift annuitiesNet assets

TOTAL LIABILITIESAND NET ASSETS

March 31, 2012 March 31, 2011

19

Fiscal Year 2012 John Knox Village Board of DirectorsGeorge Pagels, MD (Chair): President and CEO, Saint Luke’s East-Lee’s Summit

Robert Piepho, Ph.D. (Vice Chair): Retired, University of Missouri-Kansas City School of PharmacyRobert Ellis (Secretary): Retired, John Knox Village Resident

Damond Boatwright: President and CEO, Lee’s Summit Medical CenterDenise McNerney*: President and CEO, iBossWell Inc.Stephen Chinn: Attorney, Stinson Morrison Hecker LLP

Larry Crozier: Retired, Truman Medical CenterThomas Jackson: President, Metcalf Bank - Lee’s Summit

George Russell: Retired, John Knox Village Resident*Succeeded Damond Boatwright mid-fiscal year

John Knox Village Corporate StaffDaniel Rexroth: President and CEO

James Franklin, RHP: Vice President, Finance, and Corporate TreasurerBetty Freeman-Boots, SPHR: Vice President, Human ResourcesRodney McBride: Vice President, Health and Community Services

Maria Timberlake: Vice President, Senior Living

John Knox Village Foundation Board of TrusteeClifford M. Seger (Chair): Retired, John Knox Village ResidentGloria Romey (Vice Chair): Retired, John Knox Village ResidentJames L. Ham (Secretary): Retired, John Knox Village Resident

Nancy Blackwell: Attorney, Chinnery Evans & Nail, P.C.Phil Brummel: Retired, BKD LLP

Gene Gamber: Retired, General MotorsMelvin Gross: Retired, Modern Alpha Plastics, Inc.

Sandy Langsford-Cox: President, Langsford Funeral HomeEugene R. Wilson: Retired, Kauffman Foundation

Foundation StaffWilliam C. Bergosh, CFRE, President

© 2012 The John Knox Village Annual Report is published once per fiscal year. It can be found online at www.johnknoxvillage.org.

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