Leading Through Generous t h e Way Gifts and Growth Corporate Annual Report Fiscal Year 2011 Our mission is to provide older adults with caring and quality services toward the enhancement of physical, mental and spiritual well-being consistent with the Christian Gospel. OHIO PRESBYTERIAN RETIREMENT SERVICES OPRS COMMUNITIES OPRS FOUNDATION SENIOR INDEPENDENCE Leading the Way David J. Kaasa President/CEO Board Chair Donald L. Malone Ohio Presbyterian Retirement Services (OPRS) has seen another successful year thanks to the generosity, time and talent of our donors, our volunteers and our staff. It is this sort of commitment that allows us to continually lead the way, enhancing the lives of our residents and clients while positioning ourselves for the future. Though another year has gone by where the economy has once again struggled, one thing is clear – OPRS remains a stable organization that consistently demonstrates its strength and commitment. In fiscal year 2011, OPRS Communities maintained a high occupancy rate and finished six major building projects. The completion of these projects was due in large part to the donations received by the OPRS Foundation, which raised nearly $7 million this fiscal year. Senior Independence continued to grow as well, serving more than 90,000 people and increasing its average daily census for its hospice program. With the OPRS mission as our guide, we will keep on leading the way in our industry. Through the ongoing devotion of our staff and volunteers, along with the generosity of our donors, OPRS will provide a greater quality of life for those we serve now, and Commitment to Community those we will be privileged to serve in the future. Another way OPRS lives out its mission is through its ardent dedication to social accountability – the community benefit that is provided above and beyond the services that are paid for. Over the course of this fiscal year, $15,799,751 was given back in total community benefit. The highlights and stories of OPRS’ social accountability can be found in a separate report, which is a companion piece to the OPRS annual report. Community Benefit Report Fiscal Year 2011 Culture Leadership Awareness Work The Value of an Ethics & Compliance Program Since its founding in 1922, OPRS has worked hard to provide older adults with the best services, and its employees with the finest in employment opportunities. As a company, we hold ourselves, and all those affiliated, accountable for our actions. That’s why OPRS has made it a priority to create an ethics and compliance structure long before its peers. The organization also promotes a culture of respect where detection, resolution and improvement are key behaviors to quality. The core belief is that if employees behave ethically while openly discussing ethical behaviors and expectations, shared beliefs will soon become shared practices. Through ethics and compliance efforts, OPRS is doing its part to remain a business with exceptional morals and outstanding compliance, and therefore expanding its high standards of care. 2 • 2011 OPRS Annual Report Everything we do sends a message about who we are and what we value. 2011 OPRS Annual Report • 3 Ohio Presbyterian Retirement Services has defined the highest standards of quality of life for older adults. OPRS Communities offers options centered on quality of life, freedom of choice and spiritual growth for friends and neighbors. Senior Independence gives seniors compassionate care and services so they may remain safe and independent at home. Through the OPRS Foundation, every resident and client has benefited from private gifts. Many of our donors in the 21st century are carrying on a tradition of giving started by family members generations ago. 4 • 2011 OPRS Annual Report OHIO PRESBYTERIAN RETIREMENT SERVICES OPRS COMMUNITIES OPRS FOUNDATION SENIOR INDEPENDENCE OPRS Communities, with an eye toward future generations, continued to enhance its campuses across the state through renovations, building projects and program development. These enhancements included the completion of The Veale Wellness and Aquatic Center at Breckenridge Village, the expansion of the Chalet Assisted Living building at The Vineyard on Catawba and the remodel of the Dorothy Love Health Care Center. Senior Independence continued to expand by serving more than 90,000 clients, and the hospice program received perfect Ohio Department of Health surveys in each of its seven regions. In August 2010, The McGregor Group became Senior Independence’s third iPartner, and in January 2011 Redstone Highlands became the fourth iPartner. Also, the Southwest and Central Ohio Regions were named to the HomeCare Elite list, which recognizes the top 25 percent of the nation’s home health agencies. The OPRS Foundation raised nearly $7 million in total giving, while total assets, total endowment and number of donors each increased. One groundbreaking and three building dedications were held in fiscal year 2011, made possible by The Mission, The Vision, The Promise Capital Campaign. Also, an internal case for support was developed for overall fundraising operations, and a new OPRS Foundation mission statement, tag line and belief statements were launched on July 1, 2011. 2011 OPRS Annual Report • 5 CONSOLIDATED BALANCE SHEETS (000s omitted) Assets 2011 2010 Current Assets $ 114,857 $103,541 Property and Equipment Net 255,922 242,069 Assets (Use Limited) 15,238 23,435 OPRS Financial Performance Assets (Held by Third-Party Trustees) 9,516 8,190 (in thousands) Year Ending June 30, 2011 Other Assets 42,563 36,669 Total Assets $438,096 $ 413,904 Please refer to the chart to the right, which summarizes the OPRS operating results. Liabilities and Net Assets The following are comments specific to each operational component for fiscal year 2011: Current Liabilities $ 37,720 $ 34,663 Long-Term Debt 213,411 206,082 Retirement Community Operations – The CCRCs had an actual operating Refundable Entrance Fees 1,762 2,138 gain of $1,064,000 on net revenues of $139.7 million, which varied favorably from Deferred Entrance Fee Revenues 58,621 58,097 budget by $480,000. Although the CCRC corporate-wide census was below Other Liabilities 15,626 20,312 budget by 80.8 units (91.63% occupancy) as a result of the recessionary economy, Net Assets 110,956 92,612 the CCRCs were able to offset the majority of the revenue shortfall as a result of Total Liabilities and Net Assets $438,096 $ 413,904 positive expense controls. Community Based Services Operations – Senior Independence had an Consolidated StateMents OF OPERATIONS actual operating gain of $2,695,000 on net revenues of $43.1 million, and a AND CHANGES IN NET Assets 2011 2010 favorable budget variance of $2,033,000. The favorable budget variances were in Net Operating Revenue $ 182,826) $ 171,186) the hospice program statewide and operating expense savings. Please refer to the Operating Expenses 179,067) 166,500) Senior Independence section of this issue for more information on community Gain from Operations $ 3,759) $ 4,686) based services. Non-Operating Revenues and Expenses, Net 358) 1,939) Excess of revenues and gains over expenses Non-Operating Gains (Losses) – In a difficult fundraising year, the OPRS and losses before unrealized gains (losses) Foundation achieved $6,696,348 in total giving. In addition, actual investment on investments and interest rate swaps 4,117) 6,625) portfolio performance, which includes investment income, realized and unrealized Unrealized gains (losses) on investments 5,812) 5,492) capital gains, varied favorably to budget by $7,626,421. Please refer to the OPRS Unrealized change in value of interest rate swaps 4,995) (4,855) Foundation section of this issue for more information on the Foundation and its (Deficit) excess of revenues and gains fundraising programs. over expenses and losses 14,924) 7,262) Temporarily and permanently restricted contributions and income 2,855) 2,839) Assets released from restrictions and other 565) (1,523) Increase (Decrease) in Net Assets $ 18,344) $ 8,578) 6 • 2011 OPRS Annual Report Employees 2011 Revenue Breakdown 3,056 3,033 2,957 3,058 3,013 Community Based Full-time Services 24% Resident Care Part-time Medicare 11% Resident Care Private 51% Resident Care 2007 2008 2009 2010 2011 Medicaid 10% Entrance Fees 4% 2011 Expense Breakdown Consolidated StateMents OF OPERATIONS AND CHANGES IN NET Assets 2011 2010 Net Operating Revenue $ 182,826) $ 171,186) Community Based Services 23% Operating Expenses 179,067) 166,500) OPRS 10-Year History The figures shown below reflect the Net Operating Gain (Loss), Depreciation 9% Gain from Operations $ 3,759) $ 4,686) Excess (Deficit) of Revenues over Expenses and the Total Assets of OPRS for the last 10 fiscal years. Non-Operating Revenues and Expenses, Net 358) 1,939) Net Operating Excess (Deficit) of Culinary Services 9% Excess of revenues and gains over expenses Fiscal Year Ended Gain (Loss) Revenues Over Expenses Total Assets and losses before unrealized gains (losses) June 30, 2011 ................$3,759* ...................................$14,924 ............$438,096 on investments and interest rate swaps 4,117) 6,625) June 30, 2010 ...............$4,686* ....................................$7,262) .............$413,904 Unrealized gains (losses) on investments 5,812) 5,492) Community Operations Nursing 26% June 30, 2009 .................3,665* .....................................(9,095) ............... 377,96 4 & Administration 8% Unrealized change in value of interest rate swaps 4,995)