form of compliance certificate (2012 term loan) to: bank

FORM OF COMPLIANCE CERTIFICATE (2012 Term Loan)

To: Bank of America, N.A. (the "Bank")

This Compliance Certificate is furnished pursuant to the Term Loan Agreement dated as of June 27, 2012, as modified by the First Amendment to Term Loan Agreement dated May 14, 2014 and the Second Amendment to Term Loan Agreement dated as of June 23, 2014 (as further amended, modified, renewed or extended from time to time, the "Agreement") between Bank of America, N.A. (the "Bank ") and SSM HEALTH CARE CORPORATION, a Missouri nonprofit corporation (the "Corporation") for itself as Corporation and as Obligated Group Agent on behalf of the Obligated Group. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERS IGNED HEREBY CERTIFIES THAT:

1. I am the Treasurer of the Corporation.

2. This Compliance Certificate is provided with respect to the fiscal quarter ending on June 30, 2014 (the "Relevant Period").

3. The unaudited financial statements referred to in Section 7.l(i) of the Agreement for the most recent fiscal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Bank and the quarterly financial statements previously furnished to the Bank pursuant to Section 7.1(i) of the Agreement; and (except as set forth in paragraph 4 below), no Event of Default or Default has occurred.

4. I have no knowledge of the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the Relevant Period or as of the date of this Compliance Certificate, except as set forth below:

The following Defaults exist, and with respect to each such Default I have described in detail the nature of such Default, the period of its existence, the status thereof and the action which the Borrower has taken, is taking, or proposes to take to correct or remedy such Default:

The foregoing certifications, together with any financial data and computations provided herewith, are made and delivered this 27th day of August, 2014.

1483577.02

SS1vf HEALTH CARE CORPORATION

By:Nrui/~~ Its: Treasurer

1483577.02

2

ANNEX I TO COMPLIANCE CERTIFICATE

SSM HEALTH CARE CORPORATION

COMPLIANCE CALCULATIONS FOR CONTINUING COVENANT AGREEMENT

DATED AS OF MAY 1, 2014

CALCULATIONS AS OF SEPTEMBER 30, 2014.

A. Historical Debt Service Coverage Ratio of the Credit Group (Section 7.19(a})

1 Income Available for Debt Service

2 Debt Service Requirements on Funded Indebtedness

3 Ratio of Line A 1 to Line A2

4 Line A3 must be greater than or equal to

5 The Credit Group is in compliance (circle yes or no)

B. Davs Cash on Hand Ratio of the Credit Group (Section 7 .19(b ))

$ 540,292

$ 68,668

7.87:1.0

1.10:1.0

@no

1 Total cash, cash equivalents and marketable securities of the Credit Group $ 1 ,822,129 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash, cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 7 .19(b) of the Agreement and (ii) cash of

the Credit Group which has been posted as collateral under any Swap Contract)

2 365

3 Product of Line 81 and Line 82

4 Total operating expense of the Credit Group (excluding depreciation, amortization, non cash expenses relating to uncollectible accounts and expenses paid or payable from restricted funds) incurred during the 12-month period ending on such date of calculation

5 Ratio of Line 83 to Line 84

6 Line 85 must be greater than or equal to


273

497,441 ,217

$ 2,536,762

196 days

75 days

@no

EXHIBIT A

CERTIFICATE OF COMPLIANCE

The Bank of New York Mellon Trust Company, N.A., as bond trustee (the "Bond Trustee") St Louis, Missouri

Re: Certificate of Compliance for Fiscal Quarter Ending June 30, 2014

Ladies and Gentlemen:

The undersigned is the Parent Representative as such term defined in the Bond Trust Indenture dated as of July 1, 2012 between the Authority and the Bond Trustee. This certificate is delivered pursuant to the requirements of Section 9.2 of the Loan Agreement dated as of July 1, 2012 between the Authority and SSM Health Care Corporation ("the Parent"). Certain terms used herein have the meanings assigned in the Bond Trust Indenture. The undersigned hereby certifies as follows on behalf of the Parent:

(a) He has made or caused to be made a review of the activities of the Parent for the fiscal quarter ended September 30. 2014 and of the performance of the Parent of its obligations under the Loan Agreement;

(b) He is familiar with the provisions of the Loan Agreement, the Master Indenture, the Tax Agreement and the Tax Use agreement (collectively, the "Borrowers documents") and, to the best of his knowledge, based on such review:

(i) the Parent has fulfilled all of its obligations under the Borrower Documents, and

(ii) there is no event of default, or any event which, with the passage of time or the giving of notice, would become an event of default under any Borrower Document.

Dated as of 11/25/14

SSM Health Care Corporation

By 2~· ~~ 7 Kris A Zimme(

Its: Treasurer

A-1

SSM HEALTH CARE CREDIT GROUP

Utilization Statistics for the most recent fiscal year:

Licensed Beds Staffed Beds Admissions* Patient Days* Average Length of Stay (Days) Percentage occupancy** Emergency Room visits, net Outpatient Clinic Visits

* Excludes newborns, including skilled nursing ** Of beds in service

4,173 3,486

117,077 640,589

5.5 67.3%

490,635 1,038,130

Percentage of Gross Revenues by payor class for most recent fiscal year:

Medicare Medicaid Managed Care Other

Medicare Case Mix Index for the most recent fiscal year:

33% 12% 45% 10%

1.67

11/21/201 4

ATTACHMENT A

Pursuant to Section 404 of the Master Trust Indenture (Amended and Restated) between SSM Health Care Corporation and BNY Trust Company of Missouri (as successor to State Street Bank and Trust Company, N.A.) as Master Trustee Dated May 15, 1998

For the Fiscal Year Ended September 30, 2014 (Dollars in Thousands)

Historical Debt Service Coverage Ratio of the Credit Group:

Income Available for Debt Service Debt Service Requirements on Funded Indebtedness

Conclusion:

$540,292 $68,668

= 7.87

The ratio exceeds the 1.10 minimum required by the Master Trust Indenture.

11/21/2014

FORM OF COMPLIANCE CERTIFICATE (Series 20 141)

To: JPMorgan Chase Bank, National Association (the "Purchaser")

This Compliance Certificate is furnished pursuant to the Continuing Covenant Agreement dated as of May 1, 2014, (as amended, modified, renewed or extended from time to time, the "Agreement") between JPMorgan Chase Bank, National Association (the "Purchaser ") and SSM HEA LTH CARE CORPORATION, a Missouri nonprofit corporation (the "Corporation") for itself as Corporation and as Obligated Group Agent on behalf of the Obligated Group. Unless otherwise defined herein, capitalized terms used in thi s Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:


2. This Compliance Certificate is provided with respect to the fiscal quarter ending on September 30, 2014 (the "Relevant Period").

3. The unaudited financial statements referred to in Section 6.0l(a)(i) of the Agreement for the most recent fiscal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Purchaser and the quarterly financial statements previously furnished to the Purchaser pursuant to Section 6.0l(a)(i) of the Agreement; and (except as set forth in paragraph 4 below), no Event ofDefault or Default has occurred.

4. I have no knowledge of the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the Relevant Period or as of the date of thi s Compliance Certificate, except as set forth below:

The following Defaults exist, and with respect to each such Default I have described in detai l the nature of such Default, the period of its existence, the status thereof and the action which the Borrower has taken, is taking, or proposes to take to correct or remedy such Default:

None ---------------- ----------------------------------------

The foregoing certifications, together with any financial data and computations provided herewith, are made and delivered this 25th day ofNovember, 2014.

SSJ'v1 HEALTH CARE CORPORATION

By:N~/~~ Its: Treasurer

1483577.02

2



COMPLIANCE CALCULATIONS FOR CONTINUING COVENANT AGREEMENT



A. Historical Debt SeNice Coverage Ratio of the Credit Group (Section 6.20(a))

1 Income Available for Debt SeNice

2 Debt SeNice Requirements on Funded Indebtedness




B. Days Cash on Hand Ratio of the Credit Group (Section 6.20(b))

$ 540,292

$ 68,668

7.87:1.0

1.10:1.0

@ no

1 Total cash. cash equivalents and marketable securities of the Credit Group $ 1,822,129 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash , cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 6.20(b) of the Agreement and (ii) cash of


2 365






273

497,441 ,217

$ 2,536,762

196 days

75 days

@no

Citibank N.A. 2nd Floor 399 Greenwich Street New York, NY 10013

OFFICER'S CERTIFICATE

Attn: Manager Credit and Financial Products

Re: Officer's Certificate for Fiscal Quarter Ending September 30, 2014

Ladies and Gentlemen:

This Compliance Certificate is furnished pursuant to that certain Libor Rate Loan Agreement dated July 26, 2012, (as amended, modified, renewed or extended from time to time, the "Agreement") among CITIBANK, N.A. (the "Initial Lender"), the HEALTH AND EDUCATIONAL FACILITIES AUTHORITY OF THE STATE OF MISSOURI, a body politic and corporate and public instrumentality organized and existing under the laws of the State of Missouri (the "Authority"), SSM HEALTH CARE CORPORATION, a Missouri nonprofit corporation (the "Borrower") for itself as Borrower and as Obligated Group Agent on behalf of the Obligated Group, THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. , as bond trustee (the "Trustee") and CITIBANK, N.A. , as agent for the Lenders (the "Agent"), and for itself as Initia l Lender (the "Initial Lender") and the other Lenders from time to time a party thereto. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.


1. I am the Treasurer of the Borrower.

2. This Compliance Certificate is provided with respect to the calendar quarter ending on September 30, 2014 (the "Relevant Period").

3. Under my supervision, the Borrower has made a review of its activities during the preceding Fiscal Year for the purpose of determining whether or not the Borrower has complied with all of the terms, provisions, covenants and conditions of th is Agreement and the Related Documents, and to the best of my knowledge the Borrower and each Member has kept, observed , performed and fulfilled each term, provision , covenant and condition and (except as set forth in paragraph 4 below) is not in Default in the performance or observance of any of the terms, covenants, provisions or conditions of this Agreement or any of the other Related Documents; and

4. I have no knowledge of the existence of any condition or event which constitutes a Default during or at the end of the Relevant Period or as of the date of this Compliance Certificate, except as set forth below:

I:\123\TREASURY\Compliance\Quarterly\2014\Q3\Citi Exhibit B 2012 Cert 3Q14.docx

The following Defaults exist, and with respect to each such Default I have described in detai l the nature of such Default, the period of its existence, the status thereof and the action which the Borrower has taken, is taking or proposes to take to correct or remedy such Default:

NONE

5. In accordance with Section 5.02(c) of the Agreement, I certify on behalf of the Borrower that the Borrower is in compliance with the financial covenants in Section 5.16 of the Agreement required to be satisfied as of the end of the Relevant Period, and specifically that as of June 30, 2014, for the Relevant Period:

(a) Pursuant to Section 5.16(a), the Historical Debt Service Coverage Ratio 6.40, for the 12-month period then ended September 30, 2014. Pursuant to Section 5.16(b), the Days' Cash on Hand Ratio is 201 days as of the last day of such Fiscal Quarter.

(b) Annex A attached hereto sets forth financial data and computations evidencing the Borrower's compliance with the above covenants of the Agreement, all of which data and computations are true, complete and correct.

The foregoing certifications, together with any financial data and computations provided herewith, are made and delivered this 25th day of November, 2014.

Name Kris A. Zimmer

Title Treasurer

1:\123\TREASURY\Compliance\Quarterly\201 4\03\Cili Exhibit B 2012 Cert 3Q14 .docx

HISTORICAL DEBT SERVICE COVERAGE

Fiscal Year Ended December 31, (in thousands)

Net Income

l oss on early extinguishment of debt Depreciation and amortization lmpa~rment loss Unrealized (gams) losses MTM adjustment on interest rate swaps Interest expense

Tota11ncome available

Actual debt service Actual debt service coverage

LIQUIDITY

Current Assets: Cash and Investments Days Cash and Investments

Assets Whose Use Is Limited (excluding trustee-held funds, self insurance trust funds and donor restricted funds)

Cash and Investments Days Cash and Investments

Total Days Cash and Investments

SOURCES OF PATIENT REVENUES

Medicare Med1ca1d Managed Care Commercial, Se~-Pay and Other

UTILIZATION BY MARKET

Licensed Beds

Page 1 of 2

As of 12/31/2014

2013 2014

$202.684

171.376 6.735

(62,516) (60.512) 42,455

$300,224 $ 300,224

$60,260 5.0 X

$ 164,368 2,316

146.491

10,602 23,153 36.269

$ 405.219 $ 540.292 Annualized $ 66.668

7.9 X

Fiscal Year Ended December 31, (in thousands)

2012 2013 2014

$95.416 12

$124,995 15

$95.394 10

$1 ,397.425 $1,475.994 $1 .726,735 183 181 166 195 196 196

Gross Revenue by Payor Fiscal Year Ended December 31,

2012 2013 2013

33% 12% 46% 9%

100%

34% 12% 43% 11%

33% 12% 45% 10%

100%

Region Acute Post Acute

SSMHC -St. louis SSMHC of Wisconsin SSMHC of Oklahoma Good Samaritan St. Marys, Jefferson City St. Francis, Maryville

Total

Admissions

Region

SSMHC - St. louis SSMHC of Wisconsin SSMHC of Oklahoma Good Samaritan St. Marys, Jefferson City St. Francis, Maryville

Total

Total Patient Days

SSMHC - St. Louis SSMHC of Wisconsin SSMHC of Oklahoma St. Francis, Blue Island Good Samaritan St. Marys, Jefferson City St. Francis, Maryville

Total

1.901 590 766 247 255

!!.1 3,662

2012

82.438 26,303 22.248 13,180 8,067 1,390

153,626

2012

390.334 207.934 157,852

0 50,521 32,939

6.140 645.720

0 311

0 0 0 Q

311

2013

60.455 26 ,294 26,057 12,71 4 8.629 1,46 1

155,610

2013

386.539 206,106 173,282

0 49.461 34,250 6,376

658,016

Admission and patient day data Include acute, rehabilitation and long-term care. Page 2 of 2

2014

6 1.907 19,362 18,660 9,391 6.524 1,233

117,077

2014

293.487 154.084 126.409

0 35.759 26,008 4,842

640,569

11/21/2014

For the Quarter/Year ended September 30, 2014 ("Statement Date")

Annex A to the Compliance Certificate

I. Section 5.16(a) - Historical Debt Service Coverage Ratio

A. Income Available for Debt Service for the twelve month period ending on the Statement Date:

B. Debt Service Requirements on Funded Indebtedness for the twelve month period ending on the Statement Date:

C. Debt Service Coverage Ratio (line II .A.9 I Line II .B):

Measured quarterly

Minimum required:

II . Section 5.16(b) - Days Cash on Hand Ratio.

A. Aggregate Cash of the Obligated Group at the Statement Date:

B. Total Operating Expenses for the 12 month period ending at the Statement Date:

C. Days Cash (line II .A. • 365 I Line II.B):

Measured on the second fiscal quarter and fourth fisca l quarter.

Minimum required:

$442,544

$68,668

6.4 to 1

1.1 to 1

$1,822,129

3,304,905

201 to 1

75 to 1

1112112014

EXHIBITF

COMPLIANCE CERTIFICATE

To: Wells Fargo Bank, National Association, as Administrative Agent

This Compliance Certificate is furnished pursuant to that certain Revolving Credit Agreement dated as of February 28, 2014 (as amended, modified, renewed or extended from time to time, the "Agreement") by and among SSM Health Care Corporation, a Missouri nonprofit corporation (the "Corporation") as Obligated Group Agent on behalf of itself and each Member of the Obligated Group, The Northern Trust Company, as a Bank, and Wells Fargo Bank, National Association, as Administrative Agent and as a Bank. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT: I . I am the Treasurer of the Corporation.

2. This Compliance Certificate is provided with respect to the fiscal quarter ending on September 30,2014 (the "Relevant Period").

3. The unaudited financial statements referred to in Section 6.1 (i)(l) of the Agreement for the most recent fiscal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Administrative Agent and the quarterly financial statements previously furnished to the Administrative Agent pursuant to Section 6.1 (i)(l) of the Agreement; and except as set forth in paragraph 4 below, no Event of Default or Default has occurred.

4 . I have no knowledge of the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the Relevant Period or as of the date of this Compliance Certificate, except as set forth below:

The following Events of Default or Defaults exist, and with respect to each such Event of Default or Default I have described in detail the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and the remedial steps which the Corporation has taken, is taking, or proposes to take to correct or remedy such Default:

NONE

5. In accordance with Section 6.1 of the Agreement, I certify on behalf of the Corporation that the Corporation is in compliance with the financial covenants in Section 6.19 of the Agreement required to be satisfied as of the end of the Relevant Period, and specifically that as of September 30, 2014 for the Relevant Period:

(a) Pursuant to Section 6.19(a), the Historical Debt Service Coverage Ratio as of September 30, 2014 is 7.87, for the 12-month period then ended. Pursuant to Section 6.19(b ), the Days' Cash on Hand Ratio is 196 days as of September 30, 2014.

(b) Annex J attached hereto sets forth financial data and computations evidencing the Corporation's compliance with the above covenants of the Agreement, all of which data and computations are true, complete and correct.


SSM I-IEALTH CARE CORPORATION

By 72~;~ Name Kris A. Zimmer

Title Treasurer



COMPLIANCE CALCULATIONS FOR REVOLVING CREDIT AGREEMENT

DATED FEBRUARY 28,2014


A. Historical Debt Service Coverage Ratio of the Credit Group (Section 6.19(a))






B. Davs Cash on Hand Ratio of the Credit Group (Section 6.19(b))

$ 540,292

$ 68,668

7.87:1.0

1.10:1.0

@no

1 Total cash, cash equivalents and marketable securities of the Credit Group $ 1 ,822,129 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash, cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 6.20(b) of the Agreement and (ii) cash of


2 365






273

497,441 ,217

$ 2,536,762

196 days

75 days

@no

FORM OF COMPLIANCE CERTIFICATE (Series 2014K)

To: PNC Bank, National Association (the "Purchaser ")

This Compliance Certificate is furnished pursuant to the Continuing Covenant Agreement dated as of May 1, 2014, (as amended, modified, renewed or extended from time to time, the "Agreement") between PNC Bank, National Association (the "Purchaser ") and SSM HEALTH CARE CORPORATION, a Missouri nonprofit corporation (the "Corporation ") for itself as Corporation and as Obligated Group Agent on behalf of the Obligated Group. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTI FIES THAT:


2. This Compliance Certificate is provided with respect to the fiscal quarter ending on September 30, 20 14 (the "Relevant Period").

3. The unaudited financial statements referred to in Section 6.01 (a)(i) of the Agreement for the most recent fi scal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Purchaser and the quarterly financial statements previously furnished to the Purchaser pursuant to Section 6.01 (a)(i) of the Agreement; and except as set forth in paragraph 4 below, no Event of Default or Default has occurred.



NONE



By /~ 4#-· ~ 7

Name Kris A. Zimmer

Title Treasurer

2



COMPLIANCE CALCULA TJONS FOR CONTINUING COVENANT AGREEMENT










$ 540,292

$ 68,668

7.87:1.0

1.10:1.0

@no

1 Total cash, cash equivalents and marketable securities of the Credit Group $ 1,822,129 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash, cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 6.20(b) of the Agreement and (ii) cash of


2 365






273

497,441 ,217

$ 2,536,762

196 days

75 days

@no

FORM OF COMPLIANCE CERTI FICATE

To: Union Bank, N.A. (the "Agent ")

This Compliance Certificate is furnished pursuant to that certain Libor Rate Loan Agreement dated as of May 1, 2014, (as amended, modified, renewed or extended from time to time, the "Agreement") among the Health and Educational Facilities Authority of the State of Missouri, a body politic and corporate and public instrumentality organized and existing under the laws of the State of Missouri (the "Authority"), SSM Health Care Corporation, a Missouri nonprofit corporation (the "Borrower") for itself as Borrower and as Obligated Group Agent on behalf of the Obligated Group, The Bank of New York Mellon Trust Company, N.A., as bond trustee (the "Trustee") and Union Bank, N.A., as Agent for the Lenders (the "Agent"), and for itself as Initial Lenders, and the other Lenders from time to time a party thereto. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.




3. The unaudited financial statements referred to in Section 5.01 (a)(i) of the Agreement for the most recent fiscal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Purchaser and the quarterly financial statements preYiously furnished to the Purchaser pursuant to Section 5.0l(a)(i) of the Agreement; and except as set forth in paragraph 4 below, no Event of Default or Default has occurred.



NONE



Name Kris A. Zimmer

Title Treasurer

2

The forego ing certifications, together with any financial data and computations provided herewith, are made and delivered this 25th day of November, 2014.


By 2~ 4#· ., 7

Name .Kris A. Zimmer

Title Treasurer

2



COMPLIANCE CALCULATIONS FOR LIBOR RATE LOAN AGREEMENT


CALCULATIONS AS OF SEPTEMBER 30, 2014


Income Available for Debt Service






$ 540,292

$ 68,668

7.87:1.0

1.10:1.0

@no

Total cash, cash equivalents and marketable securities of the Credit Group $ 1 ,822,129 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash, cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan, line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 6.20(b) of the Agreement and (ii) cash of


2 365






273

497,441 ,21 7

$ 2,536,762

196 days

75 days

@no

FORM OF COMPLIANCE CERTIFICATE (Series 20141)

To : U.S. Bank National Association (the "Purchaser ")

This Compliance Certificate is furnished pursuant to the Continuing Covenant Agreement dated as of May 1, 2014, (as amended, modified, renewed or extended from time to time, the "Agreement") between U.S. Bank National Association (the "Purchaser ") and SSM HEALTH CARE CORPORATION, a Missouri nonprofit corporation (the "Corporation ") for itself as Corporation and as Obligated Group Agent on behalf of the Obligated Group. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.




3. The unaudited financial statements referred to in Section 6.0 I (a)(i) of the Agreement for the most recent fiscal quarter have been prepared on substantially the same basis as the most recent annual financial statements delivered to the Purchaser and the quarterly financial statements previously furnished to the Purchaser pursuant to Section 6.01 (a)(i) of the Agreement; an·d (except as set forth in paragraph 4 below), no Event of Default or Default has occurred.


The following Defaults exist, and with respect to each such Default I have described in detail the nature of such Default, the period of its existence, the status thereof and the action which the Borrower has taken, is taking, or proposes to take to correct or remedy such Default:

None ------- -----------------------------------------------


SS1vf HEALTH CARE CORPORATION

By: ;i__,~ Nan?e: Kris A. i.j(;r Its: Treasurer

1483577.02 2



COMPL~NCECALCULATIONS

FOR CONTINUING COVENANT AGREEMENT DATED AS OF MAY 1, 2014









$ 540,292

$ 68,668

7.87:1 .0

1.10:1.0

CiiiJ no

1 Tota l cash, cash equiva lents and marketable securities of the Credit Group $ 1,822,1 29 (not restricted as to use and not subject to any Lien other than a Lien of the Master Indenture). The Corporation (A) may include cash, cash equivalents and marketable securities constituting Board-designated funds of the Credit Group which are not restricted by the donor, by contract, by court order or by governmental restrictions as to use, and (B) may not include (i) any portion of cash, cash equivalents or marketable securities which have been derived from the proceeds of any loan , line of credit, or other similar loan facilities that have been drawn by the Credit Group, in the reasonable opinion of the Banks, for the sole or primary purpose of meeting the covenant set forth in Section 6.20(b) of the Agreement and (ii) cash of


2 365






273

497,441 ,217

$ 2,536,762

196 days

75 days

@no

This document is dated November 20, 2014.

SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS. Certain of the discussions included in the following Management Discussion and Analysis ("Analysis") may include certain forwardlooking statements which involve known and unknown risks and uncertainties inherent in the operation of health care operations. Actual actions or results may differ materially from those discussed in the Analysis. Specific factors that might cause such differences include, but are not limited to : competition from other health care providers, economic conditions in the communities SSM Health Care serves, state and federal regulation and the policies and practices of private insurers regarding payment for medical services. In particular, statements preceded by, followed by or that include the words "believes", "estimates", "expects", "anticipates", "plans", "intends", "scheduled", "projects" or other similar expressions constitute forwardlooking statements.

SSM HEALTH CARE (SSMHC)

Management Discussion and Analysis (MD&A)

concerning the

Consolidated Financial Statements for the Nine Months ended September 30, 2014

SSM H E A L T H · C A R E"'

SSMHC MD&A for the Period Ended September 30, 2014 Page 2 of 12

Table of Contents

Report for the Period Ended September 30, 2014

I. Organization

II. Mission

Ill. Recent Acquisitions

IV. Overview

v. 2014 Operating Results

VI. 2014 Financial Position

Tables:

1. Summary of Key Liquidity Ratios 2. Summary of Investment Income 3. Summary of Long Term Debt 4. Summary of Fair Value of Derivatives 5. Liquidation Period of Unrestricted Cash 6. Pro Forma Self Liquidity Indebtedness

Appendices:

1. Key Operational Statistics 2. EBIDA Information

Page

3

3

4

4

4

5

5 6 8 9

10 10

12 12


I. Organization

SSM Health Care (SSMHC) is a centrally managed, multi-institutional health care system with its headquarters in St. Louis, Missouri. Prior to November 15, 2013, SSMHC was sponsored by the Franciscan Sisters of Mary (FSM). As of November 15, 2013, with Vatican approval, FSM transitioned sponsorship of SSMHC to SSM Health Ministries. SSM Health Ministries is an independent 6-member body comprised of three Franciscan Sisters of Mary and three lay people who collectively hold certain powers over SSMHC. The health care activities of FSM date back to 1872 when the founder and four other sisters arrived in St. Louis from Germany, committed to serve the sick that were poor and to provide health care for all.

SSMHC is an integrated delivery network organized into three business units - Hospital Operations, Physician and Ambulatory Services, and Health Care Delivery, Finance and Integration Services.

The Hospital Operations division owns and operates 19 hospital locations and two longterm care centers in Missouri, Illinois, Oklahoma and Wisconsin. With over 7,000 affiliated physicians, 30,000 employees and 4,200 licensed beds, SSMHC facilities provide a wide range of inpatient and outpatient services, including general acute, trauma, emergency and urgent care, pediatrics, residential and skilled nursing care. In addition to its owned sites, SSMHC manages one hospital, has minority ownership interests in four hospitals, and has affiliations with more than 40 rural hospitals.

The Physician and Ambulatory Services division includes professional clinical services of 1 ,300 employed and contracted physicians, and related services including ambulatory surgery, imaging and other diagnostic services. The division also includes the post-acute group, which includes home health, hospice and rehabilitation services.

The Health Care Delivery, Finance and Integration Services division includes Dean Health Plan, which serves approximately 405,000 members in South Central Wisconsin, and Navitus, Inc., a pharmacy benefit management company that has approximately 2.8 million covered lives in approximately 30 states (increasing to 4.3 million covered lives as of January 1, 2015). Additionally, the division is leading population health expansion across SSMHC's markets through a variety of service offerings that include health improvement, bundled payment, shared savings, and risk transfer mechanisms.

II. Mission

"Through our exceptional health care services, we reveal the healing presence of God."

This thirteen-word statement was developed in 1999 with involvement and input from over 3,000 employees. The mission statement is intended to guide SSMHC's decisions and actions, and the achievement of "exceptional health care services" is measured by the top decile results in the areas of quality, safety, patient satisfaction , and employee and physician commitment. For financial goals, "exceptional" is set based on goals established through the strategic and financial planning process.


Ill. Recent Acquisitions

Audrain Medical Center. SSMHC became the sole member of Audrain Medical Center (AMC) on April 1, 2013. AMC includes an 88-bed acute care hospital located in Mexico, Missouri, and ten physician clinic locations in the service area. AMC and SSMHC's St. Mary's Hospital in Jefferson City, along with other activities under development, were restructured into the Mid-Missouri region.

Dean Health System. On April 16, 2013, SSMHC and Dean Health System (DHS) announced a merger agreement whereby DHS would become fully owned by SSMHC. The agreement was approved by DHS shareholders on May 21, 20 13; the merger was finalized on September 1 after all regulatory approvals were received. The integrated delivery network will allow for even better service to the health of people in south central Wisconsin and accomplish key strategic objectives for SSMHC. This acquisition was very significant and increased the size and scope of SSMHC to nearly $5.0 billion in annual revenues, a 50% increase in revenues prior to the merger. DHS has been the long-time physician organization partner to SSMHC of Wisconsin, a relationship that dates back over 100 years. DHS includes a large multi-specialty physician group, Dean Health Plan (DHP) and Navitus, Inc. SSMHC believes this acquisition will position the entire SSMHC organization to be able to provide integrated and aligned care delivery in terms of physician, hospital, and insured products in the future.

IV. Overview

This MD&A report is provided to give management's view of key factors underlying SSMHC's financial performance and position for the period ended September 30, 2014. The report also includes an update on capital and debt as of September 30, 2014. Unless otherwise stated, financial results are described in $ thousands and relate to the periods January 1 - September 30, 2014 and 2013. The financial results related to the period January 1 -September 30, 2013 do not include first quarter operations from AMC, acquired 4/1/2013, or operations prior to 9/1/2013 from DHS, which was acquired 9/1/2013. In addition, the 2013 results and balance sheet positions reported do not reflect purchase price allocation adjustments related to the acquisitions of Audrain Medical Center and DHS. See SSMHC's 2013 audited financial statements for further discussion of these transactions.

For the period ending September 30, 2014, operating income and excess revenue (before the change in market value of interest rate swaps and income tax) were $145.8 and $182.3 million, respectively. For detailed financial results please refer to the financial statements included with the September 30 compliance posting.

V. 2014 Operating Results

A. Operating Income: The System's operating income of $145.8 million was $131.6 million above 2013 results. The key factors contributing to the increase were significant cost savings resulting from a financial improvement plan implemented in the 41

h quarter of 2013 as well as revenue cycle improvements. 2014 income was also bolstered by the sale of SSMHC's minority interest in HPI, LLC in Oklahoma for a gain


of $20.6 million. Operating EBIDA totaled $356.9 million for the period ending September 30, 2014 as compared to $179.4 million for the period ending September 30, 2013. Net patient service revenue (NPSR) was $137.4 million (5.8%) higher than the same period results in 2013. Premiums earned through DHP and Navitus accounted for an increase in revenues of $789.7 million. Other operating revenues increased by $39.4 million. Operating expenses (including depreciation and amortization) increased by 31 .3% over the same period in 2013 due primarily to the acquisitions of AMC and DHS.

Management will continue cost reduction programs and revenue cycle improvements as well as integration and optimization of acquisitions to further strengthen the operating margin.

B. Non-Operating Gains and (Losses): For the period ended September 30, 2014, net non-operating gains were $36.4 million, which was $51 .6 million below 2013 results for the same period. This decrease is attributed to lower investment returns. The investment returns, negative SWAP mark-to-mark adjustments of $23.9 million, plus operating income results led to excess revenue before taxes of $158.3 million, an increase of $10.5 million from the same period in 2013.

VI. 2014 Financial Position

A. Key Balance Sheet Ratios: With the addition of DHS, SSMHC's unrestricted cash position has grown significantly and remains strong. Days Cash on Hand was 190 days at 9/30/2014, down one day from the prior year. The overall balance sheet strength of SSMHC has increased since 9/30/201 3. Total unrestricted net assets grew to $2.1 billion at 9/30/2014 from $1 .6 billion at 9/30/201 3. Contributing factors include strong earnings from operations, the reduction in the unfunded pension liability due largely to the higher discount rate at 12/31/201 3 (an annual measurement) as well as favorable investment returns.

Table 1 - SummC!"}' of Key Liquidity Ratios

Unrestricted Cash ($ millions) PJ

Net Patient Accounts Receivable($ millions) Unrestricted Net Assets Days Cash on Hand llJ

Accounts Receivable {days) Debt SeNice Coverage121

Cushion Ratio (X) Current Ratio

111 Exclusive of DHP

September 30, 2014

$2,036.8 474.8

2,064.2 190 52 5.5

24.5 0.7

September 30, 2013

$1,751.8 555.5

1,623.1 191 69

4.1 22.0

1.1

'21 Debt SeNice Coverage Calculation does not include unrealized gain/( loss) on investments

Variance

16.3% {1 4.5%) 27.2% {0.5%)

(-24 .6%) 34.1% 11 .4%

(-36.4%)


B. Investments:

Through September 30, 2014, investment income of $75.3 million (operating and nonoperating) was $43.9 million lower than the same period in 2013. The decrease in investment income is attributed to the investment portfolio composite return (excluding pension investments) of 2.4% for nine months compared to 6.5% for the same period in 2013.

A comparison of the period results for 2014 and 2013 is listed in Table 2. This table also includes a breakout of 2014 investment earnings by income recognition (realized and unrealized), income segment (operating and non-operating), and the amounts attributed to interest and dividend earnings.

Table 2 - Summary of Investment Income

($ in millions)

a. 2014-2013 Comparisons

Interest, dividends and realized gains (losses), net Change in unrestricted unrealized gains, net from prior year end Total investment income

b. 2014 Sources

Investment Gain Classification Operating Non-operating Total

Interest & Dividends

$ 6.4 -.1.§2 $..2.4.I

Realized Gain $29.5

29.5 i...5M

2014 $83.7 ~ $75.3

Unrealized Gain $ 1.0 ~

.4

2013 $58.3

60.9 $119.2

Total $36.9

38.4 lli...3.


C. Debt Structure

At September 30, 2014, SSMHC's total debt (Table 3) increased by $29.4 million from December 31, 2013. On May 14, 2014, SSMHC restructured approximately $1.1 billion of outstanding debt. The issue consisted of 11 series of bonds including Direct Placements. Please see: http:/ /emma. msrb .org/1 ssue View/1 ssueDetails.aspx?id =ER361 096, http://emma.msrb.org/lssueView/lssueDetails.aspx?id=ER361342, http://emma.msrb.org/ER767039-ER596986-ER999076.pdf,

As part of the 2014 debt restructuring SSMHC filed a registration to issue up to $200.0 million in taxable Commercial Paper (CP) supported by self-liquidity. On May 14, 2014, SSMHC issued approximately $180.0 million of CP under this registration. The proceeds of the issuance were used to refinance existing loans and to replace an existing CP program at DHS. The DHS Commercial Paper program was cancelled on May 14, 2014. No new net debt was issued as a result of the CP program . In accordance with generally accepted accounting principles, at September 30, 2014, SSMHC began classifying all of its self-liquidity backed variable rate debt as Short Term Debt and moved $300.0 million in variable rate demand bonds from Long Term Debt to Short Term Debt. As a result of the move the current ratio declined from 1 .1 at September 30, 2013, to 0.7 at September 30, 2014. It is SSMHC's intent to continue to remarket both the variable rate demand bonds as well as the commercial paper.

SSMHC utilizes lines of credit for general corporate purposes. As of September 30, 2014, SSMHC had a syndicated revolving line of credit with a maximum borrowing limit of $150.0 million. The credit agreements for each of the banks participating in the line of credit have identical terms and conditions and all of the reporting requirements are consistent with the existing Master Trust Indenture.


Table 3- Summary of Total Debt ($ In millions)

Secured Under the Master Trust Indenture:

Fixed rate revenue bonds Variable rate demand bonds Variable rate direct loans Auction rate bonds Term loan Short-term notes payable

Total under Master Indenture

Other: Term loan Construction loan Equipment bank loan Various notes payable and other debt Revolving lines of credit I Commercial paper

Capitalized lease obligations Not Secured Under Master Indenture

Total Debt

Balance Sheet Classification:

Total Long-Term Debt (including current portion)

Total Short-Term Debt

Total Debt

September 30, 2014

$ 639.2 513.3

101.5 93.8

300.0 1,647.8

50.9

180.1 23.9

254.9

$1 902.7

$1,422.6

480.1

$1,902.7

December 31,2013

$384.8 430.5 181 .3 121 .3

97.0

1,214.9

46.9 42 .5

1.7

452.9

85.2 29.2

658.4

$1 873.3

$1,388.1

485.2

$1.873.3


Derivative Instruments. As of September 30, 2014, SSMHC had 9 interest rate swaps. SSMHC uses 8 floating-to-fixed interest rate swaps to synthetically convert the majority of variable rate debt to a fixed rate. On July 29, 2014, SSMHC entered into a fixed spread basis swap with a notional value of $65.0 million. Under its fixed payer swaps, SSMHC receives LIBOR or a percentage of LIBOR plus a spread of 0.12% and pays a fixed rate. For the fixed spread basis swap SSMHC pays SIFMA and receives a percentage of LIBOR plus a spread. Swaps had a total notional amount of $717.4 million with a total mark-to-market value of $109.9 million as of September 30, 2014. In the event that the mark-to-market valuation reaches a certain negative value SSMHC may be required to post collateral for the benefit of the swap counterparty. Based on the mark-to-market valuation as of September 30, 2014, SSMHC was not required to post collateral for the benefit of the counterparties. SSMHC terminated two outstanding swaps for consideration of $2.2 mill ion on March 28, 2014.

Table 4- Summary of Fair Value of Derivatives

Derivatives not designated as hedges

Interest rate swaps

Maturity Date of

Derivatives Fixed Rate

2015 - 2035 2.90% - 5.98%

September 30, 2014 ($ in thousands)

Notional Amount

Outstanding Fair Value

$717,398 $109,935

The estimated fair values of the interest rate swap instruments have been determined using available market information and valuation methodologies, primarily discounted cash flows.


D. Liquidity

The following table describes the liquidation period of the unrestricted cash and investments of SSMHC as of September 30, 2014.

Table 5- Liquidation Period of Unrestricted Cash

Liquidation Period

T+O

T+3

Monthly or Less

Quarterly or Less

Ill iquid

Total

Amount ($in millions)

$ 516.0

1,065.0

130.0

76.0

249.0

$2,036.0

The following table describes the self-liquidity indebtedness of SSMHC following the issuance of the Series 2014 Bonds and completion of the debt restructuring plan described under the caption "FINANCING PLAN" in the forepart of the Official Statement dated May 13, 2014. For purposes of this table, "self-liquidity indebtedness" means indebtedness that is subject to mandatory tender or maturity within one year or less, excluding the current portion of long-term indebtedness and lines of credit. ·

Table 6- Pro Forma Self Liquidity Indebtedness

Windows VRDBs

CP Mode VRDBs

Weekly VRDBs

Taxable CP

Total Self-Liquidity Debt

Principal Amount

($in mill ions)

$ 100.0

100.0

100.0

180.0

$ 480.0


E. Capital Planning

SSMHC's capital plan reflects the strategic initiatives of SSMHC. As part of the ongoing strategic and community needs planning process, management regularly assesses near-term and long-term capital requirements for each of its markets including both growth opportunities and replacement needs. Management also assesses strategic opportunities beyond the existing facilities for growth and to improve access to care in the communities SSMHC serves.

The approved capital expenditure investment for SSMHC, including physician alignment, outpatient expansion, routine equipment replacement, significant infrastructure replacement, and adoption of new technologies, is currently projected to be $412 million for fiscal year 2014. This includes the 2014 completion of a new 167-bed hospital in Jefferson City, Missouri to replace an existing facility located in that community, which is completed and opened to patients on November 16. Currently, SSMHC has approved capital expenditures totaling $102 million for fiscal year 2015 and $24 million for fiscal year 2016. To date SSMHC has spent approximately $300 million on the acquisition and implementation of the EPIC Electronic Health Records (EHR) system. Going forward SSMHC anticipates a much lower level of EHR spending.


APPENDIX 1

KEY OPERATIONAL STATISTICS

Period Period Ended Ended 2014 vs 2013 2014 vs 2013

Statistics 9/30/2014 9/30/2013 Variance %Change

Acute Admissions 116,195 116,306 ( 111 ) -0.1%

CM I* Adjusted Admissions 367,595 338 ,567 29,028 8.6%

Adjusted Patient Days 1,202 ,166 1,118,162 84,004 7.5%

Inpatient Surgeries 24,267 25 ,830 (1,563) -6.1%

Outpatient Surgeries 46,376 46 ,990 (614) -1.3%

Outpatient Visits 1,038,130 1,005,239 32 ,891 3.3%

Emergency Visits 490 ,635 470,031 20,604 4.4%

* CMI- Case Mix Index

Risk Based Capital. In addition to the above, SSMHC uses Risk Based Capital (RBC) to monitor the adequacy of liquidity and capitalization of Dean Health Plan. RBC is a method of measuring the minimum amount of capital appropriate for a reporting entity to support its overall business operations in consideration of its size and risk profile. For health insurance companies, regulatory action is activated when RBC capital reaches 200%. The RBC statistics for DHP stood at 434.2% and 458.9% at December 31, 2013 and December 31, 2012, respectively (RBC is reported on an annual basis).

APPENDIX 2

EARNINGS BEFORE INTEREST, DEPRECIATION & AMORTIZATION (EBIDA) INFORMATION

2014 vs. 2013 9 Months Ended 9 Months Ended Variance in

9/30/2014 9/30/2013 Dollars Operating EBIDA $356,938 $179,430 $177,508

Excess EBIDA $392,974 $267,315 $125,659

Operating EBIDA % 9.8% 6.7% Excess EBIDA % 10.7% 9.6%

2014 vs. 2013 Variance by Percentage

98.9% 47.0%

SSM HEALTH CARE

ADDITIONAL INCOME STATEMENT INFORMATION FOR THE QUARTER ENDED SEPTEMBER 30, 2014 (In thousands)

OPERATING REVENUES ANO OTHER SUPPORT:

Net patient service revenues

Premiums earned

Investment income

Other revenue

Net assets released from restrictions

Total operating revenues and other support

OPERATING EXPENSES:

Salaries and benefi ts

Medical

Supplies

Professional fees and other

Interest

Depreciation and amortization

Impairment loss

Total operating expenses

INCOME (LOSS) FROM OPERATIONS

NONOPERATING GAINS AND (LOSSES):

Investment income

Loss from earty extinguishment of debt

Other-net

Total nonoperating gains and (losses) -net

EXCESS OF REVENUES OVER EXPENSES BEFORE CHANGE IN

FAIR VALUE OF INTEREST RATE SWAPS AND INCOME TAXES

CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS

EXCESS OF OF REVENUES OVER EXPENSES BEFORE INCOME TAXE

INCOME TAXES (BENEFITS)

Current

Deferred

Total mcome taxes (benefi ts)

EXCESS OF REVENUES OVER EXPENSES

CREDIT GROUP

$ 941 ,143 $

29,574

(1.445)

63.570

20

1.032.862

508,322

182,371

21 9,306

12.473

54,513

976,985

55,877

(15,067)

166

(1 4,901)

40,976

(2,085)

38,891

61

(73)

( 12)

$ 38,903 $

OTHER ENTITIES ELI M I NATIONS GRAND TOTAL

38,470 $ (127,24 1) $ 852.372

295,073 (18,467) 306,180

22,383 20,938

61,159 (62.297) 62,432

1,503 1,523

418,588 (208,005) 1,243,445

95,374 (55,018) 548,678

259,055 (1 35,194) 123,861

3,959 186,330

48,067 (16,223) 251 ,150

371 (208) 12.636

2,761 57,274

409,587 (206,643) 1,179,929

9,001 (1 ,362) 63,516

164 (14,903)

(5) 161

159 (14,742)

9,160 (1,362) 48,774

(2,085)

9,160 ( 1,362) 46,689

61

73

(12)

9,160 $ (1.362) $ 46,701

SSM HEALTH CARE

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTER ENDED SEPTEMBER 30, 2014 (In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets

Adjustments lo reconcile change in net assets to net cash

provided by (used in) operating activities :

Pension related changes


Impairment Loss

Loss - Early extinguishment debt

Bad debts

Restricted contributions

Contributions/distributions to noncontrolling owners- net

Realized/unrealized gains and losses on investments- net

Equny in earnings - unconsolidated entnies

Change in valuation of investments in unconsolidated entnies

Change in market value of interest rate swaps

Gain (Loss) on disposal of assets

Deferred Income Taxes

Changes in assets and liabilities:

Short-term investments

Patient accounts receivable

Other receivables, inventories, prepaid expenses. and other

Accounts payable. accrued expenses. and other liabilities

Estimated se~-insurance obligations

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Increase in property and equipment - net

Net change in assets limited as to use or restricted

Acquisition of hospitals and health care entities

Net change in other assets

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings on long-term debt

Payments on long-term debt

Net change in revolving line of credn

Notes Payable - net

Debt issuance cost

Distribution to noncntrl owners

Contributions from noncntrl owners

Equny Transfers

Restricted contributions

Net cash provided by (used in) financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS- Beginning of quarter

CASH AND CASH EQUIVALENTS- 9/30/14

CREDIT

GROUP

$ (234) $

55,361

452

43,714

24,116

29,960

2,085

570

48,813

(38,198)

(8,629)

27,951

1,845

187,806

(62,629)

(106,447)

(466)

(169,542)

(4,552)

(4,552)

13,712

27,771

$ 41 ,483 $

OTHER

E!illi!.E.§ ELIMINATIONS GRAND TOTAL

13,580 34.629 $ 47,975

1,347 56,708

452

1,387 45,101

(63) (63)

87 (87)

(20,822) 3,294

11 ,1 47 (34,61 1) 6,496

2,085

(371) 199

19,654 68,467

1,300 2,816 (34,082)

8,917 1,054 1,342

(15,239) (3,889) 8,823

(2,467) (622)

18,457 (88) 206,175

(1.430) (64,059)

(5,222) (111 ,669)

(466)

(6,652) (176,194)

(24) (4,575)

(36) (36)

(87) 87

63 63

(84) 88 (4,548)

11.721 25.433

30,597 58,368

42.318 $ $ 83,801

SSM HEALTH CARE

ADDITIONAL OPERATING STATS INFORMATION FOR THE QUARTER ENDED SEPTEMBER 30, 2014

BEDS

LICENSED BEDS - TOTAL

STAFFED BEDS - TOTAL

ACUTE PATIENT SERVICES

ADMISSIONS"

PATIENT DAYS"

AVERAGE LENGTH OF STAY

SKILLED PATIENT SERVICES

ADMISSIONS"

PATIENT DAYS"


OUTPATIENT SURGERIES

OUTPATIENT VISITS

EMERGENCY ROOM VISITS

PERCENTAGE OCCUPANCY""

PERCENTAGE OF GROSS REVENUES BY PAYOR MIX Medicare

Medicaid

Managed Care

Other

• Excludes newborns

•• Of beds in service

Total

CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL

4,173 4,173

3,486 3,486

39,314 39,314

179,192 179,192

4.6 4.6

301 301

33,537 33,537

111.4 111.4

16,075 16,075

362,695 362,695

169,728 169,728

67.1% 67.1%

34% 21% 33%

17% 6% 17%

41 % 68% 42%

8% 5% 8%

100% 100% 100%

SSM HEALTH CARE

ADDITIONAL BALANCE SHEET INFORMATION AS OF SEPTEMBER 30, 2014 (In thousands)

CREDIT OTHER

GROUP ENTITIES ELIMINATIONS GRAND TOTAL

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 41.483 $ 42,318 $ $ 83,801

Short·term Investments 53,91 1 29,618 83,529

Current portion of assets limited as to use 162,098 31 ,029 193,127

Pat1ents accounts receivable, less allowance for uncolleCtible accounts 493,638 22,751 (41,562) 474,827

Premtum receivable 6,339 6 ,339

Other rece1vables 130,626 18,650 (14,660) 134,616

Inventories. prepaid expenses. and other 218,313 (95,701) (2,819) 119,793

Est1mated third-party payor settlements 16,461 16,468

Total current assets 1,116,530 55,011 (59,041) 1,112,500

ASSETS LIMITED AS TO USE OR RESTRICTED- Excluding current pcrt ion 2,063,251 421 ,473 2.484.724

PROPERlY AND EQUIPMENT- Net 1.840,519 68,876 1,909,395

OTHER ASSETS

Deferred financing costs- net 8 ,030 8,030

Goodw1ll 109,852 20,082 129,934

Intangibles- net 249,402 43,577 292,979

Investments 1n unconsolidated ent1t1es 227,079 3,212 (150,781) 79,510

Other 29,840 293 (22,1 42) 7 991

Total other assets 624,203 67,164 (172,923) 518,444

TOTAL $ 5 644 503 s 612 524 $ 1231 9641 $ 6 025 063

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Revolving line of credit $ 189 $ 189

Current port1on of long-term debt 40,328 592 (478) 40,442

Accounts payable and accrued expenses 498,181 260,803 (58,781) 700,203

Notes payable 300,000 300,000

Unearned premiums 21,642 21 ,642

Payable under securitieS lend1ng agreements 137,833 725 138,558

Estimated lhird-party payor seltlements 124,553 23 124,576

Commercial Paper 179,937 179,937

Defer income taxes current 2 ,1 91 2,191

Total current liabilit ies 1.283,023 283,974 (59,259) 1,507,738

LONG-TERM DEBT - Excluding current pcrtion 1,368,711 35,556 (22,142) 1,382,125

ESTIMATED SELF-INSURANCE OBLIGATIONS 72,251 6 ,892 79,143

OTHER LONG-TERM LIABILITIES 988,760 (63,473) 925,287

Total liabilities 3,712.745 262,949 (81.401 ) 3,894,293

NET ASSETS

Unreslrlcted.

Nonconlrolling interest in subsidiaries 17,961 2,683 20,644

SSM Health Care unrestricted net assets 1,853,513 289 479 (99,409) 2 043 583

Total unrestncted net assets 1,871,474 292,162 (99,409) 2,064,227

T empcranly restricted 37,085 42,947 (36,688) 43,344

Permanently restricted 23,199 14 466 (14,466) 23,199

Total net assets 1,93 1,758 349,575 (150,563) 2,130,770

TOTAL $ ~ ~4 :ill~ :t 2l2 ~2~ :t (2~] 924} :t 2 Q2~ Q§~

SSM HEALTH CARE

ADDITIONAL INCOME STATEMENT INFORMATION AS OF SEPTEMBER 30, 2014 (In thousands)

CREDIT OTH ER GROUP ENTITIES ELIM INATIONS GRAND TOTAL

OPERATING REVENUES AND OTHER SUPPORT:

Net patient service revenues $ 2,607,366 $ 194,329 $ (293,763) $ 2,507,932

Premiums earned 53.110 875,029 (42,891 ) 885,248

Investment 1ncome 6.294 30,595 36,889

Other revenue 186,581 199,571 (169,999) 216,153

Net assets released from restnchons 63 3,692 3,755

Total operat1ng revenues and other support 2,853,414 1 303,216 (506,653) 3,649,977

OPERATING EXPENSES.

Salaries and benefits 1,41 3,848 411.456 (1 54,040) 1,671 ,264

Medical 675,025 (309,332) 365,693

Supplies 478,1 91 43,175 521,366

Professional fees and other 604,268 179,907 (46,894) 737,281

Interest 36.289 3, 106 (637) 38.758

Depreciation and amortization 148.449 21 ,357 169.806

lmpa~rment loss

Total operating expenses 2,681 ,045 1,334,026 (510,903) 3,504,168

INCOME (LOSS) FROM OPERATIONS 172,369 (30.810) 4,250 145,809


Investment income 37,421 960 36,381

Loss from early ext inguishment of debt (2,316) (2,316)

Other-net 452 (66) 386

Total nonoperating ga1ns and (losses) - net 35,557 894 36,451

EXCESS OF REVENUES OVER EXPENSES BEFORE CHANGE IN

FAIR VALUE OF INTEREST RATE SWAPS AND INCOME TAXES 207,926 (29,916) 4.250 182,260

CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS (23,154) (764) (23,91 8)

EXCESS (DEFICIT) OF OF REVENUES OVER EXPENSES 184,772 (30,680) 4,250 158,342

Current 215 9 224

Deferred 189 189

Total Taxes 404 9 413

NET INCOME $ 184,368 $ (30,689) $ 4,250 $ 157,929

SSM HEALTH CARE

CONSOLIDATED STATEMENTS OF CASH FLOWS AS OF SEPTEMBER 30, 2014 {In thousands}

CREDIT OTHER

GROUP ENTITIES ELIMINATIONS GRANO TOTAL

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets 105,888 41 ,589 15,809 163,286

Adjustments to reconcile change in net assets to net cash

provided by (used in) operating activities:

Pension related changes

Depreciation and amortization 149,723 19,938 169,661

Impairment Loss 452 452

Loss - Early extinguishment debt 2,316 2,316

Bad debts 130,684 8,393 139,077

Restricted contributions (814) (814)

Contributions/distributions to noncontrolling owners - net 2,257 320 (87) 2,490

Realized/unrealized gains and losses on investments- net (23,605) (28,184) (51,789)

Equity in earnings - unconsolidated entities

Change in valuation of investments in unconsolidated entities 22,268 (7,849) (15,803) (1,384)

Change in market value of interest rate swaps 23,154 764 23,918

Gain (Loss) on disposal of assets (936) (27) (963)

Changes in assets and liabilities:

Short-term investments 57,734 14,381 72,115

Patient accounts receivable (76,135) (29,01 1) 19,474 (85,672)

Other receivables, inventories, prepaid expenses, and other (29,753) (17,765) 8,364 (39,154)

Accounts payable, accrued expenses. and other liabilities 48,913 (22,599) (29,171) (2,857)

Estimated self- insurance obligations 12,504 (1,431) 11 ,073

Net cash provided by (used in) operating activities 425,464 (22,295) (1,414) 401 ,755

CASH FLOWS FROM INVESTING ACTIVITIES:

Increase in property and equipment- net (179,408) (19,408) (198,816)

Net change in assets limited as to use or restricted (196,168) (13,635) (209,803)

Acquisition of hospitals and health care entities (466) (466)

Net change in other assets

Net cash provided by (used in) investing activities (376,042) (33,043) (409,085)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings on long-term debt 1,069,928 1,069,928

Payments on long-term debt (463,081) (94,032) 1,327 (555,786)

Net change in revolving line of credit (85,036) (85,036)

Notes Payable- net (400,000} (400,000}

Debt issuance cost (4,474} (4,474)

Distribution to noncntrl owners (2,257) (320) 87 (2,490}

Contributions from noncntrl owners

Equity Transfers (221,605) 221 ,605

Restricted contributions 814 814

Net cash provided by (used in} financing activities (21 ,489} 43,031 1,414 22,956

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 27,933 (12,307} 15,626

CASH AND CASH EQUIVALENTS- Beginning of year 13 550 54,625 68,175

CASH AND CASH EQUIVALENTS- 9/30/14 41 483 42,318 83,801

41,483 42,318 83,801

SSM HEALTH CARE

ADDITIONAL OPERATING STATS INFORMATION AS OF SEPTEMBER 30, 2014

BEDS

LICENSED BEDS- TOTAL

STAFFED BEDS- TOTAL


ADMISSIONS*

PATIENT DAYS*



ADMISS IONS*

PATIENT DAYS*



OUTPATIENT VISITS


PERCENTAGE OCCUPANCY**

PERCENTAGE OF GROSS REVENUES BY PAYOR MIX

Medicare

Medicaid

Managed Care

Other

* Excludes newborns


Total

CREDIT

GROUP

4,173

3,486

116,195

539,250

4.6

882

101 ,339

114.9

46,376

1,038,130

490,635

67.3%

33%

12%

45%

10%

100%

OTHER

ENTITIES

23%

8%

57%

12%

100%

ELIMINATIONS GRAND TOTAL

4,173

3,486

11 6,195

539,250

4.6

882

101,339

114.9

46,376

1 ,038,130

490,635

67.3%

32%

12%

46%

10%

100%

SSM HEALTH CARE

ASSETS LIMITED AS TO USE OR RESTRICTED AS OF SEPTEMBER 30, 2014 (In thousands)

CREDIT OTHER

GROUP ENTITIES ELIMINATIONS GRAND TOTAL

Board designated:

Property and equipment $ 1,726,735 $ 355,402 $ $ 2,082,137

Other 139,615 139,615

Reserves in regulated insurance company 7,130 12,060 19,190

Held by trustees:

Project Funds 42,719 42,719

Funds held in escrow 15,001 15,001

Bond funds 7,195 7,195

Self-insurance 154,992 11,900 166,892

Collateral held under swap agreements

Collateral held under securities lending agreements 137,834 725 138,559

Total assets limited as to use 2,216,220 395,088 2,611,308

Temporarily restricted funds 396 42,948 43,344

Permanently restricted funds 8,733 14,466 23,199

Total assets restricted as to use 9,1 29 57,414 66,543

Total assets limited as to use or restricted 2,225,349 452,502 2,677,851

Less: current portion (162,098) (31 ,029) (193,127)

Noncurrent portion $ 2,063,251 $ 421,473 $ $ 2,484,724

SSM HEALTH CARE

ADDITIONAL BALANCE SHEET INFORMATION AS OF SEPTEMBER 30, 2013

CREDIT OTHER

GROUP ~ ELIMINATIONS GRAND TOTA L

ASSETS

CURRENT ASSETS: Cash and cash equi\ alents $ 14,853 $ 91,299 106,152 Shon~term im estments 80,739 152,120 232,859

Current portion of assets limited as to use 247,332 10,492 257,824

Net patient accounts receh able 511,538 65,017 (21,096) 555,459

Premium receivable

Other receivables 37,055 94,759 (8,133) 123,681 Inventories. prepaid e'(penses, and othe r 78,715 42,375 (3,1 95) 117,895

Estimated third-pany payor senlements 16,453 16453

Total current assets 986,685 456,062 (32.424) 1,410,323

ASSETS LIMITED AS TO USE OR RESTRJCTED- Excluding current ponion 1,630,004 304,347 1,934,35 1

PROPERTY AND EQUIPMENT - Net 1,628,437 301,664 1,930, 101

OTHER ASSETS: Deferred finftncing costs - net 6,388 61 6,449

Goodwill

Intangibles - net 43,856 19,611 63,467

Investments in unconsolidated entities 199,483 236, 160 (141 ,889) 293,751

Other 29 463 3 488 (22,621) 10 JJO

Total other assets 279190 259,320 (164,510) 374 000

TOTAL $ 4 524 316 $ 1 321 393 $ (196 934 ) $ 5648 775

LIABILITIES AND NET ASSETS

CURRENT LIABJLITIES Revolving line of credit 37,000 35,225 $ 72,225

Current portion of long-term deb t 41,254 2,501 (534) 43,221

Notes payable 275,000 275,000

Unearned premiums Accounts payable and accrued expenses 284,374 446,652 (40,223) 690,803

Payable: under securities lending agreements 222,339 2,687 225,026

Estimated third-part) payor settlements 47,504 47,507

Defer income taxes current

Total current liabilities 907,471 487,068 (40,757) 1,353,782

LONG· TERM DEBT- Excluding current ponion 1,244,297 132,760 (22,621) I ,354,436

ESTIMATED SELF·INSURANCE OBLIGATIONS 52,198 10,592 62,790

OTHER LIABILJTIES 1,114 71 1 76 064 1,190 775

Total liabilities 3,318,677 706,484 (63,378) 3,961,783

NET ASSETS

Unrestricted Noncontrolling interest in subsidiaries 17,163 2,816 19,979

SSM Health Care unrestricted net assets I 130 655 556 13 I (83,687) I 603 099

Total unrestricted net assets 1,147,818 558,947 (83,687) 1,623,078

Temporarily restricted 36,354 42, 164 (36,071) 42,447

Permanently restricted 21 467 13 798 (13,798) 21 467

Total net assets 1 205,639 614,909 (133,556) 1,686,992

TOTAL ~ ~:i2!1 ~HI ~ l ~~l ~~ ~ (l22li!~) ~ :i 2!!!! 7Z~

SSM HEALTH CARE

ADDITIONAL INCOME STATEMENT INFORMATION AS OF SEPTEMBER 30, 2013 (In thousands)

OPERATING REVENUES AND OTHER SUPPORT:

Net patient service revenues

Premiums earned

Investment income

Other revenue

Net assets released from restrictions

Total operating revenues and other support

OPERATING EXPENSES:

Salaries and benefits

Medical

Supplies

Professional fees and other

Interest


Impairment loss

Total operating expenses

INCOME (LOSS) FROM OPERATIONS


Investment income

Loss from early ext of debt

Other - net

Total nonoperating gains and (losses)- net

EXCESS (DEFICIT) OF REVENUES OVER EXPENSES BEFORE

CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS

CHANGE IN MARKET VALUE OF INTEREST RATE SWAPS

EXCESS (DEFICIT) OF REVENUES OVER EXPENSES

Current

Deferred

Total income taxes (benefits)

NET INCOME

CREDIT GROUP

$ 2,259,159

22,949

143,629

179

2,425,916

1,234,035

417,699

542,463

32,703

126,046

2,352,946

72,970

86,299

591

86,890

159,860

45,444

205,304

~ 'll~ ilQ~

OTHER ENTITIES ELIMINATIONS GRAND TOTAL

$ 148,480 $ (28,622) $ 2,379,017

8,583 31,532

278,990 (152,735) 269,884

2,923 3,102

438,976 (181,357) 2,683,535

329,333 (123,489) 1,439,879

22,690 440,389

135,845 (54,471 ) 623,837

1,812 (660) 33,855

5,278 131 ,324

494,958 (178,620) 2,669,284

(55,982) (2,737) 14,251

1,366 87,665

(370) 221

996 87,886

(54,986) (2,737) 102,137

45,444

(54,986) (2,737) 147,581

~ (~~ 1!~§l ~ "ml ~ HZ:i!!l

SSM HEALTH CARE SSM HEALTH CARE

CONSOLIDATED STATEMENTS OF CASH FlOWS AS OF SEPTEMBER 30, 2013 In thousands;

CREDIT OTHER

I!!IQIIf ~ ~ .liW&llli&

CASH FlOWS FROM OPERATING ACTIVITIES: CASH !'lOINS F~OM OPERATING ACTN ITIES

Change '" net assets ~~"'"--*' Adjustments to reconcile chanoe in net assets to net cash ~tmeri4tto~~'"P.ciU~\Io'*~

provided by (used in) operating activitles: ~md boy (UIH 11'1) Opffltinog l t:IMI,.I.

Pension related changes ~ ... llted~·

Depreciation and amorhzerion O.pr.c•tJon ...., emomr•ll"" Impairment Costs lmplin'ne r!ICot ls

Lots • Earty eX1ingushment debt Lou · El~ •~llngultm.nl ct.bl

Bad debts BHWbU

Restricted contributions Rlllriclldeontribut!Ofll

Contributions/disttibi.Jtjons to noncontrolltng owners - net ContttbulloM-'ditl4w-tononc::Oi'IIJOI!in;_,.1'5-MI

Realizedluntealized gains and k>sse5 on inve1tments - net R"lndMneliud gN'II aM IHMS on ...... .,.m-11M Equity In earnings - unconsolidated en!Jties Equtyll'lellnlf'lgS·WI'Iton""""'"'ntlt,., Change in valuation of Investments in unconsolidated entities CNn;. on Vlktallon of ..,.,.,tmel'lts '"unc:orosowated ent~"'

Change in market value of interest rate swap~> ~in IN"'et q,jw ~ .......... nQ SMpJ

Gain (Loss) on dlsposal of assets Gan (Lon) on cil.poMI ol uHts

Changes in aasets and liabilities : Ctw.ngeslrltnets andllebl!Mos·

Shor1·term investments Sh011-Qnnlftotulmell&lo

Patient accounts receivable Ptbtnl' I«Ovl'lh NQII¥1MI

Other receiva~es, Inventories, prepaid expenses. and othe r Ol;hlrrec.lvtbtll. lfWintOIIII,pr.~idt•PII'Itel.ll1dOihlr

Acc:OI..Wlts payable. accrued expenses, and other liabilities Accounls ,..,.,.,... KetUed e(pefW.el. aNI~ lllbkles

Eshmated self-insurance obligations Esiii"MtedMII-~n~-~K~nct~l-

Net cash provided by (used in) operating actMtles Netc;~~st~~~rvsec~li'IJ~no~&s - ---CASH FLOWS FROM INVESTING ACTIVITIES: CASH flOWS f ROM INVESTING ACT!V!TifS

Increase in property and equipment - net lnc:tltse .. pr0f*1Yand ~-net

Net chan ge in assets limited as to use or restricted JMtCP\engelriiSI-fll ..... dn»uttO/I .. WIM

Acquits ilion of hospitals and health care entities At~~.., of hospMh triO n.tlth U/lenl~lll

Net change ., other assets ,.. .. cfte~9 1ft G4her II WII

Net cash provided by (used In) investing activities Ne l o:;l$1\ l)l~~ed by (uUd Ill) M'IVISIII\Q lt;hV~IIS

CASH FlOWS FROM FINANCING ACTIVIT IES: CASH FLONS FROM FIHAHCIHG ACTMnU

8orJowings on long--term debt 8omw.~ on IO/l'il·le lm 6ebt

Payments on lono--term debt Peri'NI'Ii1 IN' tMg-tetm ctebC

Nel chan~ in revolving line of creclt Htlt;henge i"'~IIMofA"edl

Notes Payable · net NotuPey~bl• ·""l

Debt issuance C:0$1 O.bC in~o~~nc.eosl

Distribution to noncntrl owners ~ .. '*"'*'-.en Contributions fl'om noncntrl owners Col'llrlbutl0f'llll'1>f'nnonc.n111owroers

Equity Transfers fquotyTrans.le"

Restricted contribution• RasltiCied~

Net cash provided by (used in) financing activities Hel ~;~.n jR~d by (usN Ill) fNnar.g KIMIIes

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS NET INC~ EASE IOECREA$E) IN CASH AHO CASH EOUIVALfNU

CASH AND CASH EQUIVALENTS- Beg.nning of yea~ CASH AND CASH EQUIVAlENTS- leonw.JCII J'"' , ... .,,. ~7.5&0

CASH AND CASH EQUIVALENTS - 9/30113 CASH MD CASH EOUI\IALENTS - 81'30il3 17.&48 .,,. ",.,

SSM HEALTH CARE

ADDITIONAL OPERATING STATS INFORMATION AS OF SEPTEMBER 30, 2013

BEDS

LICENSED BEDS - TOTAL

STAFFED BEDS- TOTAL


ADMISSIONS'

PATIENT DAYS•



ADMISSIONS'

PATIENT DAYS'



OUTPATIENT VISITS


PERCENTAGE OCCUPANCY ..

PERCENTAGE OF GROSS REVENUES BY PAYOR MIX

Medicare

Medicaid

Managed Care

Other

• Excludes newborns


CREDIT GROUP

4 ,176

3,531

116,306

542,299

4.7

891

104,055

116.8

46,990

1,005,239

470,031

67.1%

34%

12%

42%

12%

OTHER ENTITIES

28%

6%

47%

19%

ELIMINATIONS GRAND TOTAL

4 ,176

3,531

116,306

542,299

4.7

891

104,055

116.8

46,990

1,005,239

470,031

101.1%

34%

12%

43%

11%

100% 100% 100% Total ================================~

SSM HEALTH CARE

ASSETS LIMITED AS TO USE OR RESTRICTED AS OF SEPTEMBER 30,2013 {In thousands~

CREDIT OTHER GROUP ENTITIES ELIMINATIONS GRAND TOTAL

Board designated:

Property and equipment $ 1,365,444 $ 233,987 $ $ 1,599,431

Other 117,266 117,266

Held by trustees:

Project funds 1,581 1,581

Bond funds 6,239 6,239

Self-insurance 158,082 20,621 178,703

Collateral held under swap agreements

Collateral held under securities lending agreements 222,339 2,687 225,026

Total assets limited as to use 1,869,370 258,876 2,128,246

Temporarily restricted funds 298 42,150 42.448

Permanently restricted funds 7,669 13,811 21.480

Total assets restricted as to use 7,967 55 ,961 63,928

Total assets limited as to use or restricted 1,877,336 314,839 2,192,175

Less: current portion (247,332) (1 0.492) (257,824)

Noncurrent portion $ 1,630,004 $ 304,347 $ $ 1,934,351