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• � � Proof No. 4-9-27-8�(4246) La Salle St.Press-527-3080—(Pat. No.3,136,2�8) I
<br /> � upon certain assumptions, any of which may not occur. These assumptions included bonds in the ag-
<br /> � gregate principal amount of $17,370,000 to be issued in 1983 at an assumed average annual interest
<br /> � rate of 10.3%. The maximum annual debt service on the Series 1983 Bonds was assumed for purposes
<br /> ( of these projections to be $2,287,000. The following table summarizes information with respect to the
<br /> I projections by Hospital management of the debt service coverage for the four yeazs ending September
<br /> ( 30, 1987:
<br /> Yesrs Ending September 30
<br /> 1984 1985 1986 1987
<br /> Excess of operating revenues over expenses before �d°II�"n thousands)
<br /> � depreciation, interest and amortization . . . . . . . . . $4,898 $5,255 $5,650 $6,100
<br /> ( Nonoperating revenues(1) . . . . . . . . . . . . . . . . . . . . . . 350 350 350 350
<br /> � Income available for debt service . . . . . . . . . . . . . . . $5,248 $5,605 $6,000 $6,450
<br /> Estimated ma�dmum annual debt service on Series
<br /> � 1983 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,287 $2,287 $2,287 $2,287
<br /> ( Debt service coverage . . . . . . . . . . . . . . . . . . . . . . . . . 2.29x 2.45x 2.62x 2.82x
<br /> � (1) Does not include revenues which may be generated by assets of the Corporation which con-
<br /> stitute "Excluded Property" as defined in the Master Indenture. Excluded Property may be
<br /> � sold, leased or otherwise disposed of by the Corporation without regard to the restrictions on
<br /> � transfers of assets imposed by the Master Indenture. Excluded Property does not include the
<br /> � Corporation's existing patient services facilities. Corporation management is of the opinion
<br /> � that any sale, lease or other disposition of Excluded Properiy which may be effected will not
<br /> I have a materially adverse effect on its ability to provide for the payment of the principal of,
<br /> f premium, if any, and interest on the Series 1983 Bonds. If not sold, leased or otherwise dis-
<br /> I posed of, the income and gains from Excluded Property would, at the discretion of the
<br /> � Corporation's Board of Directors, be available to pay the principal of, premium, if any, and
<br /> � interest on the Series 1983 Bonds. (See the subheadings "Transfers of Assets; Affiliate Trans-
<br /> I actions" and "A�liate Leases" under "Summary of Principal Instruments—Master Indenture"
<br /> ifor a description of certain limitations and restrictions on the Corporation's ability to sell,
<br /> ( lease or otherwise dispose of its assets and property which do not constitute Excluded Prop-
<br /> � erh')•
<br /> Membership in Voluntary Hospitals of America, Inc.: The Corporation is a charter member of
<br /> I Voluntary Hospitals of America, Inc. ("VHA"). VHA is an organization of 56 not for profit hospitals
<br /> I (and their a�liates) in 31 states which have annual aggregate revenues in excess of $4.5 billion, a total
<br /> of approximately 50,000 beds and more than 150,000 employees with a total payroll of over $2 billion.
<br /> These hospitals have joined together as cooperative shazeholders in VHA to secure the benefits and
<br /> effectiveness of a large organization while maintaining local management and independence for each
<br /> institution. See "Accreditations, Licenses and Memberships".
<br /> Status of 1981 Project: The project financed from the proceeds of the Series 1981 Bonds (the
<br /> "1981 Project") consisted of the construction of replacement facilities for general surgical rooms,post-
<br /> F anesthesia recovery sectioq emergency department treatment rooms, medical records, storage and
<br /> ` materials handling, along with remodeling of the then existing facilities to expand the surgery support
<br /> = areas, emergency, medical records and purchasing departments, accounting/data processing section
<br /> _ and certain food service facilities. This construction and remodeling did not result in any change in
<br /> the Hospital's bed capacity. Hospital management has advised that the 1981 Project is substantially
<br /> complete and the costs associated with the 1981 Project have not exceeded original estimates.
<br /> Bondholder Risks: There are risks associated with the purchase of the Series 1983 Bonds. See
<br /> � "Bondholder Risks" for a discussion of some of these risks.
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