Delbert L. and Margaret J. Baker - Page 50

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               The following chart prepared by Mr. Powell reflects his                
          calculations for 1997:                                                      
          Operating Expenses                  Source for Amount                       
               $16,069,104         Total operating expenses for AFVW,                 
                                   including depreciation and interest                
                                   expense                                            
               (93,395)            Issuance costs associated with debt                
                                   financing                                          
               (1,207,747)         SNF room and board revenues for                    
                                   noncontract patients                               
               (448,462)           SNF ancillary services, Medicare, and              
                                   HMO billings for noncontract patients              
               14,319,500          Total for denominator                              
          Medical Expenses                    Source for Amount                       
               $3,044,014          Operating expenses allocated to SNF                
               929,275             Operating expenses allocated to ALU                
               479,734             10 percent of interest expenses to SNF             
               319,823             6.67 percent of interest expenses to ALU           
               (1,207,747)         SNF room and board revenues for                    
                                   noncontract patients                               
               (448,462)           SNF ancillary services, Medicare, and              
                                   HMO billings for noncontract patients              
               (0)                 Ancillary services, Medicare, and HMO              
                                   billings for residents; not included               
              13,116,664           Total for numerator                                
               For 1997, the percentage is 21.8 percent ($3,116,664 �                 
               $14,319,500).2                                                         
               1We note that the total of the medical expenses is $3,116,637,         
          not $3,116,664 as listed in Mr. Powell’s report.                            
               2We note that application of the corrected medical expense             
          figure still produces a percentage of 21.8 percent.                         











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