2017-11-14T13:37:56-06:00 2016-12-31 410746749 CLIFTONLARSONALLEN LLP 227 WEST TRADE STREET SUITE 800 CHARLOTTE NC 28202 990 2016-01-01 581598135 THE PINES AT DAVIDSON INC PINE 7048961100 400 AVINGER LANE DAVIDSON NC 28036 DAVID C RAINEY VICE PRESIDENT AND CFO 7048961100 2017-11-14 1 JOHN NORMAN P01506766 7049985200 2017-11-14 67.137.57.251 2017-11-14 13:48:41 ES P 32764BF4C662348CAEDF47640EEEEA7523CD21E3 29B3532BE4EE960876C422F2F602592B450521F0 2016 2021-01-29 14:40:06Z STEVEN H JEWELL 400 AVINGER LANE DAVIDSON NC 28036 20503035 0 X WWW.THEPINESATDAVIDSON.ORG X 1983 NC THE MISSION OF THE PINES AT DAVIDSON IS TO PROVIDE HIGH QUALITY HOUSING, HEALTH CARE AND OTHER SERVICES THAT EXCEED RESIDENTS' EXPECTATIONS IN PURSUING ITS MISSION. THE PINES AT DAVIDSON WILL SET ITSELF APART BY THE FOLLOWING: BEING EVER MINDFUL OF THE NEEDS OF RESIDENTS, ATTRACTING AND RETAINING A PROFESSIONAL AND CARING STAFF COMMITTED TO THE SERVICE AND WELL-BEING OF RESIDENTS, LEVERAGING COLLABORATIVE OPPORTUNITIES, EXHIBITING INNOVATION THROUGH BOLD INVESTMENTS IN TECHNOLOGIES AND FACILITIES, AND MAINTAINING ITS IDENTITY AS A NONPROFIT COMMUNITY ESTABLISHED BY MEMBERS AND FRIENDS OF DAVIDSON COLLEGE PRESBYTERIAN CHURCH AND THE TRUSTEES OF DAVIDSON COLLEGE. 24 24 358 115 0 0 332419 281937 20149036 19284493 881050 904467 33640 32138 21396145 20503035 362128 377735 0 0 8454584 8702146 0 0 83408 10825455 9897177 19642167 18977058 1753978 1525977 95344072 97029799 63368530 63544369 31975542 33485430 X PROVIDE HIGH QUALITY HOUSING, HEALTHCARE, AND OTHER SERVICES THAT EXCEED RESIDENTS' EXPECTATIONS. 0 0 6855435 10306183 PROVISION OF HOUSING AND RELATED SERVICES TO RESIDENTS 4458829 5168729 PHYSICIAN SERVICES AND NURSING CARE - PROVIDES MEDICAL CARE TO RESIDENTS INCLUDING SERVICES DESIGNED TO ENHANCE THE QUALITY OF THE ELDERLY RESIDENTS' LIVES 2919899 101199 CULINARY AND DINING SERVICES - PROVIDES MEALS TO RESIDENTS AND THEIR GUESTS 3211421 377735 3708382 ALL OTHER SERVICES TO MEET THE PHYSICAL, EMOTIONAL, INTELLECTUAL AND SPIRITUAL NEEDS OF RESIDENTS INCLUDING MAINTENANCE, SECURITY, HOUSEKEEPING AND LAUNDRY 3211421 377735 3708382 17445584 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 52 0 1 358 1 0 0 0 0 0 0 0 0 0 0 X 24 24 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X DAVID C RAINEY 7048961100 400 AVINGER LANE DAVIDSON NC 28036 BARBARA I NEIDINGER CHAIRPERSON 1.00 X X 0 0 0 ED KANIA VICE CHAIRPERSON 1.00 X X 0 0 0 HARRISON L MARSHALL JR SECRETARY 1.00 X X 0 0 0 JAMES E HARRIS JR TREASURER 1.00 X X 0 0 0 DON BARTELL DIRECTOR 1.00 X 0 0 0 SARAH P BOEHMLER DIRECTOR 1.00 X 0 0 0 STEPHEN D BRADLEY JR DIRECTOR 1.00 X 0 0 0 FRANCES GILLIAM CAMPBELL DIRECTOR 1.00 X 0 0 0 ALLEN CRAVEN DIRECTOR 1.00 X 0 0 0 JANET UHLAN CROOK DIRECTOR 1.00 X 0 0 0 LACY WOODS DICK DIRECTOR 1.00 X 0 0 0 JOHN FRANK FESPERMAN II DIRECTOR 1.00 X 0 0 0 JOHN N GILBERT III DIRECTOR 1.00 X 0 0 0 JAMES A HALLOCK DIRECTOR 1.00 X 0 0 0 KATHY L PILKINGTON DIRECTOR 1.00 X 0 0 0 CARRANZA M PRYOR DIRECTOR 1.00 X 0 0 0 GEORGE RAFTELIS DIRECTOR 1.00 X 0 0 0 JAMES LEWIS SIGMON JR DIRECTOR 1.00 X 0 0 0 NEWTON ALEX SMITH III DIRECTOR 1.00 X 0 0 0 EDWIN H WADSWORTH DIRECTOR 1.00 X 0 0 0 MAYLENG S WATSON DIRECTOR 1.00 X 0 0 0 WILLIAMS T WILLIAMS JR DIRECTOR 1.00 X 0 0 0 CAROL QUILLEN DIRECTOR (EX OFFICIO) 1.00 X 0 0 0 LIB MCGREGOR SIMMONS DIRECTOR (EX OFFICIO) 1.00 X 0 0 0 DAVID C RAINEY VICE PRESIDENT/CFO 50.00 X 180482 0 17433 STEVEN H JEWELL EXECUTIVE DIRECTOR 50.00 X 179919 0 17789 SCOTT S CHINERY DIRECTOR OF PLANT SERVICES 50.00 X 136273 0 24598 CAROLYN R PICTON DIRECTOR OF MARKETING 50.00 X 131018 0 30270 JUDY L GREEN DIRECTOR OF NURSING 50.00 X 116120 0 14003 CHAD D LAUDERBAUGH DIRECTOR OF CULINARY SERVC 50.00 X 108197 0 5181 852009 0 109274 6 0 1 0 SFCS INC 305 S JEFFERSON ST ROANOKE VA 24011 ENGINEERING SERVICES 146110 CHAMBERS 1800 WASHINGTON BLVD SUITE 111 BALTIMORE MD 21230 ARCHITECTURE & DESIGN 133474 DAVIDSON CLINIC 705 GRIFFITH ST SUITE 100 DAVIDSON NC 28036 PHYSICIAN SERVICES 131500 NUCENTRIC SOLUTIONS 130-A SOUTH VILLAGE LANE DAVIDSON NC 28036 IT SERVICES 106925 CLIFTONLARSONALLEN LLP 227 WEST TRADE STREET SUITE 800 CHARLOTTE NC 28202 ACCOUNTING & FORECAST SERVICES 104603 5 281937 281937 HOUSING & RELATED 721310 10306183 10306183 PHYSICIAN & NURSING 713990 5168729 5168729 CULINARY & DINING 722100 101199 101199 3708382 3708382 19284493 869659 869659 32138 0 32138 32138 32138 34808 0 34808 34808 34808 20503035 19284493 0 936605 277000 277000 100735 100735 426759 250678 133749 42332 6383487 5858478 513314 11695 240566 193263 47303 1131645 1000470 131175 519689 446003 69680 4006 224105 164419 59686 143279 105405 37874 654457 304452 329440 20565 30939 5377 25562 223482 170732 47940 4810 26473 26473 2439779 2439779 25209 13164 12045 11723 8232 3491 719562 713782 5780 3578963 3550211 28752 169529 168167 1362 UNIFORMS, LINEN & LAUND 162075 162075 PHYSICIAN SERVICES 127000 127000 CABLE TV, BEAUTY PARLOR 123384 123384 MINOR EQUIP 26864 25951 913 1210354 1210354 18977058 17445584 1448066 83408 -1 6494859 4475198 796582 816056 73497 739148 1277018 197863 73329312 30793735 44816787 42535577 38675817 45596613 2644188 2421612 565324 247733 95344072 97029799 3078963 2927907 29756686 29909945 25870000 24984799 4662881 5721718 63368530 63544369 X 16272506 16941348 15703036 16544082 31975542 33485430 95344072 97029799 X 1525977 306477 -322566 X X 0 1 X 1 0 X 188654 181409 280370 332419 281937 1264789 15867677 16416247 17538871 20149036 19284493 89256324 16056331 16597656 17819241 20481455 19566430 90521113 6525 5025 6150 6445 7050 31195 579567 1132683 1712250 586092 1137708 6150 6445 7050 1743445 88777668 1162285 905296 813072 810928 901797 4593378 1162285 905296 813072 810928 901797 4593378 17218616 17502952 18632313 21292383 20468227 95114491 0.93340 0.92700 0.04830 0.05420 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 300 300 0 PART II-B, LINE 1: THE PINES IS A MEMBER OF AND PAYS DUES TO LEADING AGE NORTH CAROLINA. A PORTION OF ITS DUES PAID ARE ATTRIBUTABLE TO LOBBYING EXPENDITURES. 6452610 6452610 49571533 22475045 27096488 6162672 2120374 4042298 10354273 6198316 4155957 788224 788224 42535577 INTEREST PAYABLE 359781 REFUNDABLE ENTRANCE FEES AND DEPOSITS 5361937 5721718 X PART X, LINE 2: THE PINES IS EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. THE PINES QUALIFIES FOR THE CHARITABLE CONTRIBUTION DEDUCTION UNDER SECTION 170 AND HAS BEEN CLASSIFIED AS AN ORGANIZATION THAT IS NOT A PRIVATE FOUNDATION UNDER SECTION 509(A)(2). THE PINES FILES AS A TAX-EXEMPT ORGANIZATION. MANAGEMENT IS NOT AWARE OF ANY ACTIVITIES THAT WOULD JEOPARDIZE TAX-EXEMPT STATUS OF THE ORGANIZATION. MANAGEMENT IS NOT AWARE OF ANY SIGNIFICANT ACTIVITIES THAT ARE SUBJECT TO TAX ON UNRELATED BUSINESS INCOME OR EXCISE OR OTHER TAXES FOR THE ORGANIZATION. THE PINES FOLLOWS GUIDANCE ON THE INCOME TAX STANDARD REGARDING THE RECOGNITION AND MEASUREMENT OF UNCERTAIN TAX POSITIONS. THE IMPLEMENTATION HAS HAD NO IMPACT ON THE PINES' CONSOLIDATED FINANCIAL STATEMENTS. 1 TOWN OF DAVIDSON PO BOX 579 DAVIDSON NC 28036 566001212 117000 VOLUNTARY CONTRIBUTION MECKLENBURG COUNTY PO BOX 34486 CHARLOTTE NC 28234 566000319 160000 VOLUNTARY CONTRIBUTION RESIDENT SUPPORT 3 100735 BOOK DISCOUNTED MONTHLY FEE PART I, LINE 2: NOTWITHSTANDING THE FACT THAT THE PINES IS EXEMPT FROM PROPERTY TAXES, THE PINES MAKES VOLUNTARY CONTRIBUTIONS TO THE TOWN OF DAVIDSON AND MECKLENBURG COUNTY TO HELP OFFSET THE COST OF SERVICES PROVIDED TO THE PINES BY SUCH GOVERNMENTAL ENTITIES. AS A GENERAL RULE SUCH CONTRIBUTIONS ARE UNRESTRICTED AND REQUIRE NO MONITORING. IN THE EVENT SUCH CONTRIBUTIONS ARE RESTRICTED FOR A SPECIFIC PURPOSE OR USE, SUCH AS BY THE FIRE DEPARTMENT, THE ORGANIZATION RELIES UPON COMMUNICATIONS WITH APPROPRIATE GOVERNMENT OFFICIALS TO VERIFY SUCH CONTRIBUTIONS ARE USED FOR THE RESTRICTED PURPOSE. A RESIDENT MAY MAKE APPLICATION FOR ASSISTANCE WITH MONTHLY FEES. THE PINES RECONCILES A RESIDENT'S NET WORTH AS REPORTED AT THE TIME OF ADMISSION TO THE PINES TO CONFIDENTIAL FINANCIAL STATEMENT SUBMITTED AT THE TIME OF APPLICATION FOR ASSISTANCE TO THE PINES TO DETERMINE IF THE DEPLETION OF THE RESIDENT'S FINANCIAL RESOURCES HAS BEEN FOR REASONABLE AND JUSTIFIABLE REASONS. DOCUMENTATION REQUIRED MAY INCLUDE BUT IS NOT LIMITED TO PAST AND PRESENT TAX RETURNS, STATEMENTS FROM BROKERAGE/INVESTMENT ACCOUNTS, BANK ACCOUNT STATEMENTS, SETTLEMENT STATEMENT FOR SALE OF RESIDENCE. ALL APPLICANTS GO THROUGH THIS PROCESS AND ARE TREATED CONSISTENTLY. 1 X X X X X 0 0 0 0 0 0 0 1 0 DAVID C RAINEY VICE PRESIDENT/CFO 136736 0 42143 0 1603 0 0 0 17433 0 197915 0 0 0 STEVEN H JEWELL EXECUTIVE DIRECTOR 157307 0 22612 0 0 0 0 0 17789 0 197708 0 0 0 SCOTT S CHINERY DIRECTOR OF PLANT SERVICES 99971 0 36302 0 0 0 0 0 24598 0 160871 0 0 0 CAROLYN R PICTON DIRECTOR OF MARKETING 63112 0 67906 0 0 0 0 0 30270 0 161288 0 0 0 PART I, LINE 7 ALL BONUSES ARE DISCRETIONARY AND BASED ON INDIVIDUAL AND OVERALL COMPANY PERFORMANCE. FOR FURTHER INFORMATION ABOUT HOW THE PINES SETS COMPENSATION, SEE PAGE 2 OF SCHEDULE O UNDER THE HEADING "FORM 990, PART VI, SECTION B, LINE 15". A NC MEDICAL CARE COMMISSION 521309402 2013-09-17 14645000 FACILITY EXPANSION 0 0 0 B NC MEDICAL CARE COMMISSION 521309402 2015-10-07 11125000 REFUNDING 0 0 0 A 14645000 512324 292900 13839776 2014 0 0 0 1 B 11125000 171586 10953414 1 0 1 1 A 0 0 1 1 0 0 0 1 B 0 0 1 1 0 0 0 1 A 0 1 0 0 1 0 0 0 1 B 0 0 1 0 1 0 0 0 1 A 1 B 1 FORM 990, PART VI, SECTION A, LINE 1 EX OFFICIO MEMBERS DO NOT HAVE VOTING RIGHTS FORM 990, PART VI, SECTION B, LINE 11B THE BOARD OF DIRECTORS OF THE PINES AT DAVIDSON MAINTAINS AN AUDIT COMMITTEE AS ONE OF ITS STANDING COMMITTEES. ALL MEMBERS OF THE AUDIT COMMITTEE ARE VOLUNTEER DIRECTORS WHO ARE INDEPENDENT OF MANAGEMENT. ALL MEMBERS OF THE AUDIT COMMITTEE ARE EXPERIENCED BUSINESS PEOPLE OR CPAS AND THE CHAIRPERSON IS A CPA. THE CHAIRPERSON ALSO SERVES AS A MEMBER OF THE EXECUTIVE COMMITTEE OF THE ORGANIZATION'S BOARD OF DIRECTORS AND REPORTS AS NEEDED DIRECTLY TO THE BOARD OF DIRECTORS. THE AUDIT COMMITTEE MEETS AT LEAST ANNUALLY IN EXECUTIVE SESSION WITH THE AUDITORS WITHOUT MANAGEMENT PRESENT. CLIFTON LARSON ALLEN AUDITS THE ORGANIZATION AND ALSO PREPARES ITS FORM 990 BASED ON INFORMATION PROVIDED BY THE PINES' MANAGEMENT. PRIOR TO FILING THE 990 TAX RETURN THE FORM 990 IS REVIEWED BY THE AUDIT COMMITTEE. A COPY OF THE FORM 990 IS ALSO PROVIDED TO ALL DIRECTORS PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION MONITORS THE CONFLICT OF INTEREST POLICY BY SENDING A QUESTIONNAIRE PREPARED BY THE ORGANIZATION'S ATTORNEY AT LEAST ANNUALLY TO ALL DIRECTORS. THE DIRECTORS RETURN THE SIGNED QUESTIONNAIRES. MANAGEMENT OF THE PINES WORKS CLOSELY WITH ITS LEGAL AND TAX ADVISORS IN THE EVENT ANY DIRECTORS INDICATE POTENTIAL CONFLICTS AND PROVIDE ASSISTANCE IN DETERMINING PROPER TREATMENT AND DISCLOSURE. THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS AND/OR THE BOARD OF DIRECTORS IS ALSO APPRISED OF ANY POTENTIAL CONFLICTS OF INTEREST. FORM 990, PART VI, SECTION B, LINE 15 THE EXECUTIVE COMMITTEE OF THE PINES' BOARD OF DIRECTORS ("BOARD") SERVES AS THE COMPENSATION COMMITTEE, EVALUATING PERFORMANCE AND SETTING COMPENSATION FOR THE PRESIDENT/EXECUTIVE DIRECTOR AND VICE PRESIDENT/CFO OF THE PINES. THE EXECUTIVE COMMITTEE IS COMPRISED OF THOSE DIRECTORS OF THE CORPORATION WHO ARE THE CHAIRMAN, VICE CHAIRMAN, TREASURER, AND SECRETARY OF THE CORPORATION AND THE CHAIRPERSONS OF THE COMMITTEES OF THE BOARD OF DIRECTORS. THE COMPENSATION COMMITTEE MEETS AT LEAST ANNUALLY. THE COMMITTEE ASSESSES JOB PERFORMANCE AGAINST OBJECTIVES ESTABLISHED BY THE BOARD AS PART OF THE CORPORATION'S STRATEGIC PLAN, WHICH FOR 2016 INCLUDED EIGHT KEY STRATEGIC GOALS: (1) DELIGHTED RESIDENTS; (2) HIGH QUALITY HEALTHCARE AND OTHER SERVICES; (3) A CARING, TALENTED AND LOYAL STAFF; (4) STATE-OF-THE-ART FACILITIES; (5) STRONG COMMUNITY RELATIONS; (6) AN INNOVATIVE CULTURE AND A SPIRIT OF INQUIRY; (7) EFFECTIVE BOARD GOVERANCE; AND (8) FINANCIAL STRENGTH. THE BOARD ALSO ADOPTED QUANTIFIABLE, MEASUREABLE OBJECTIVES FOR EACH OF THESE EIGHT KEY GOALS TO HELP MEASURE PERFORMANCE OF THE PINES' MANAGEMENT TEAM. SOME EXAMPLES OF SUCH OBJECTIVES INCLUDE (NUMBERS IN PARENTHESES REFER TO THE RELATED STRATEGIC GOAL): MAINTAINING A PASSING HEALTH DEPARTMENT RATING ON THE POOLS (1); ACHIEVING A COUNTY HEALTH DEPARTMENT RESTAURANT SANITATION SCORE OF 93 OR BETTER (2); HAVING NO INCIDENTS OF RESIDENT ABUSE OR NEGLECT (2); MEETING EMPLOYEE TURNOVER AND SATISFACTION OBJECTIVES (3); MEETING RESIDENT SATISFACTION OBJECTIVES (4); ANSWERING NURSING CALL BELLS WITHIN THREE MINUTES 95% OF THE TIME (4); STRIVING TO RESPOND TO ALL LIFE SAFETY RELATED AND HIGH PRIORITY WORK ORDERS IN A TIMELY MANNER (4); RAISING GIFTS TO GROW THE ENTRY ASSISTANCE FUND (5); SCORING AT THE MEDIAN OR BETTER ON 17 KEY FINANCIAL RATIOS CALCULATED ANNUALLY ON APPROXIMATELY 139 SINGLE-SITE, NONPROFIT, ACCREDITED CONTINUING CARE RETIREMENT COMMUNITIES (6); STRIVING TO MAINTAIN AN 'A-' FITCH RATING OR BETTER (6); OPERATING THE FACILITY AT AN OPERATING MARGIN OF 3% TO 5% OR BETTER (6); MAINTAINING POSITIVE CASH FLOW EACH YEAR AS MEASURED BY CASH USED OR PROVIDED FROM OPERATIONS (6); AND MAINTAINING 95% OCCUPANCY OR BETTER IN INDEPENDENT LIVING (7). THE COMPENSATION COMMITTEE CONSIDERS COMPENSATION FOR SIMILAR POSITIONS AT OTHER NONPROFIT ORGANIZATIONS IN THE SAME INDUSTRY WITH COMPARABLE TOTAL REVENUES. THE PINES' INDEPENDENT COMPENSATION CONSULTANT GATHERS SUCH INFORMATION ON APPROXIMATELY 77 OTHER NONPROFIT CONTINUING CARE RETIREMENT COMMUNITIES (MAINLY IN NC, SC, VA & MD). SIMILAR INFORMATION IS GATHERED ON 21 NONPROFIT CCRCS (PRIMARILY ON THE EAST COAST). THE COMPENSATION COMMITTEE ALSO CONSIDERS A NATIONAL COMPENSATION SURVEY DONE FOR LEADING AGE THAT PROVIDES REGIONAL AND NATIONAL COMPENSATION DATA FOR SIMILAR POSITIONS AT APPROXIMATELY 536 NONPROFIT CONTINUING CARE RETIREMENT COMMUNITIES. THE PRESIDENT AND VICE PRESIDENT RANK BELOW THE 75TH PERCENTILE WHEN THEIR ANNUAL COMPENSATION IS COMPARED TO THE COMPENSATION SURVEY INFORMATION REFERRED TO ABOVE. FORM 990, PART VI, SECTION C, LINE 19 FORM 990 AS WELL AS THE CONFLICT OF INTEREST POLICY AND THE CORPORATE BYLAWS ARE AVAILABLE ON REQUEST AT THE BUSINESS OFFICE OF THE PINES. THE AUDITED FINANCIAL STATEMENTS ARE ALSO AVAILABLE ON REQUEST AND A COPY IS KEPT IN THE LIBRARY OF THE PINES AT DAVIDSON. THE ORGANIZATION FILES A DISCLOSURE STATEMENT ANNUALLY WITH THE NORTH CAROLINA DEPARTMENT OF INSURANCE AND IS AVAILABLE ON THE NCDOI WEBSITE. SUCH DISCLOSURE STATEMENT CONTAINS SIGNIFICANT INFORMATION ABOUT THE STATUS AND OPERATIONS OF THE PINES. SUCH DISCLOSURE STATEMENT IS ALSO AVAILABLE IN THE LIBRARY OF THE PINES AND IS DISTRIBUTED TO ALL APPLICANTS FOR RESIDENCE. FORM 990, PART XI, LINE 9: NET ASSET RELEASED FROM RESTRICTION FOR OPERATIONS 18,693. CHANGE IN VALUE OF TEMP RESTRICTED PLEDGES 14,366. NET ASSETS RELEASED FROM DONOR RESTRICTIONS -360,931. CHANGE IN VALUE OF UNRESTRICTED PLEDGES 5,306. FORM 990, PART XII, LINE 2C: NO CHANGE IN METHOD SINCE THE PRIOR YEAR. FORM 990, PART I, LINE 19 RECONCILIATION THE REVENUE LESS EXPENSES FOR THE FISCAL YEAR 2016, AS REPORTED ON PART I, LINE 19 OF THE FORM 990, RECONCILES TO THE ORGANIZATION'S AUDITED FINANCIAL STATEMENTS IN THE FOLLOWING MANNER: TOTAL OPERATING REVENUE AND SUPPORT 19,935,986 TOTAL OPERATING EXPENSES 18,977,058 INCREASE IN UNRESTRICTED NET ASSETS 958,928 FORM 990, PART I, LINE 19 -- REVENUE LESS EXPENSES 1,525,977 RESTRICTED CONTRIBUTIONS (274,687) UNRESTRICTED CONTRIBUTIONS (7,250) RESTRICTED INTEREST INCOME (325,783) REALIZED GAIN FROM SALE OF INVESTMENTS (34,808) INVESTMENT INCOME 75,479 PER AUDITED FINANCAL STATEMENTS 958,928 THE INCREASE IN UNRESTRICTED NET ASSETS OF $958,928 FOR FISCAL YEAR 2016 REPRESENTS 4.8% OF TOTAL OPERATING REVENUE OF $19,935,986 FOR SUCH YEAR. THIS RATIO IS REFERRED TO AS THE OPERATING MARGIN RATIO. AN OPERATING RATIO OF 4.8% MEANS THAT $4.80 OUT OF EVERY $100 IN OPERATING REVENUES REMAINED AFTER ACCOUNTING FOR OPERATING EXPENSES. BY WAY OF COMPARISON, THE 75TH PERCENTILE OPERATING MARGIN RATIO FOR A GROUP OF APPROXIMATELY 130 SINGLE SITE ACCREDITED CONTINUING CARE RETIREMENT COMMUNITIES WAS 5.02% FOR 2016 (SOURCE: 2017 FINANCIAL RATIOS TREND ANALYSIS OF CARF-CCAC ACCREDITED ORGANIZATIONS). A POSITIVE OPERATING MARGIN OVER TIME IS AN INDICATION THAT THE PINES CAN PRUDENTLY MANAGE ITS COSTS AND EXPENSES FROM YEAR TO YEAR, AND THAT THE PINES IS FINANCIALLY STABLE ENOUGH TO SUPPORT ITS SERVICES. MECKLENBURG REAL ESTATE HOLDINGS LLC 2132 LOMBARDY CIRCLE CHARLOTTE NC 28203 471154878 REAL ESTATE INVESTMENTS NC 183806 THE PINES AT DAVIDSON INC