2016-09-26T16:08:07-05:00 2015-12-31 134008324 PRICEWATERHOUSECOOPERS LLP 76 S LAURA STREET SUITE 2100 JACKSONVILLE FL 32202 990 2015-01-01 203700526 SANTAFE SENIOR LIVING INC SANT 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDALL L STUART ASSISTANT TREASURER 3523378730 2016-09-26 1 MICHAEL J MULDOON P00889797 9043540671 2015 2017-02-10 21:41:12Z MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 3457273 0 X SANTAFEHEALTHCAREFL.ORG X 2005 FL SANTAFE SENIOR LIVING, INC. CREATES AND SUSTAINS PREEMINENT SENIOR LIVING COMMUNITIES. THE PRIMARY EXEMPT PURPOSE OF SANTAFE SENIOR LIVING, INC. IS TO GOVERN AND CARRY OUT THE PURPOSES OF A SYSTEM OF TAX-EXEMPT CHARITABLE ORGANIZATIONS THAT ACQUIRE, OWN, OPERATE, AND MAINTAIN FACILITIES AND SERVICES DESIGNED TO MEET THE PHYSICAL, SOCIAL, EMOTIONAL AND SPIRITUAL NEEDS OF SENIOR INDIVIDUALS. 16 15 18 0 0 0 114814 0 2221635 3116590 338708 340683 0 0 2675157 3457273 114814 0 0 0 2175451 2960835 0 0 0 1530140 1630641 3820405 4591476 -1145248 -1134203 9670108 10202445 16167019 17832951 -6496911 -7630506 X TO CREATE AND SUSTAIN PREEMINENT SENIOR LIVING COMMUNITIES THAT PROVIDE A CONTINUUM OF SERVICES IN HOUSING, HEALTH CARE AND OTHER PROGRAMS TO ENHANCE THE QUALITY AND DIGNITY OF LIFE. 0 0 1065445 0 2939934 DURING THE YEAR, SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND DEVELOPMENT PLANNING SERVICES TO BONITA SPRINGS RETIREMENT VILLAGE, INC. (DBA THE TERRACES AT BONITA SPRINGS). THE TERRACES AT BONITA SPRINGS SERVED AN AVERAGE PER DAY OF 290 SENIOR CITIZEN RESIDENTS WITH HOUSING, HEALTHCARE AND RELATED SERVICES DURING 2015.DURING THE YEAR, SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND DEVELOPMENT PLANNING SERVICES TO NORTH FLORIDA RETIREMENT VILLAGE, INC. (DBA THE VILLAGE). THE VILLAGE SERVED AN AVERAGE PER DAY OF 707 SENIOR CITIZEN RESIDENTS WITH ROUND THE CLOCK HOUSING, ASSISTED LIVING AND RELATED SERVICES DURING 2015.DURING THE YEAR, SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND REDEVELOPMENT PLANNING SERVICES TO A RELATED CONTINUOUS CARE RETIREMENT COMMUNITY, EAST RIDGE RETIREMENT VILLAGE, INC. THIS FACILITY PROVIDED AN AVERAGE PER DAY OF 314 SENIOR CITIZEN RESIDENTS WITH HOUSING, HEALTH CARE AND RELATED SERVICES DURING 2015. 211760 0 176656 DURING 2015, DESIGN AND CONSTRUCTION SERVICES COORDINATED VARIOUS PROJECTS FOR THE SANTAFE SENIOR LIVING COMMUNITIES, INCLUDING A NEW HEALTH CENTER, RENOVATED INDEPENDENT LIVING UNITS AND OTHER UPGRADES TO FACILITIES AT EAST RIDGE RETIREMENT VILLAGE; PROJECT CONSULTING FOR NORTH FLORIDA RETIREMENT VILLAGE; AND WARRANTY PROJECTS FOR BONITA SPRINGS RETIREMENT VILLAGE. DESIGN AND CONSTRUCTION SERVICES ALSO PROVIDED ASSISTANCE TO AFFILIATED ENTITIES AVMED, INC. AND NORTH CENTRAL FLORIDA HOSPICE, INC., INCLUDING THE EXPANSION OF NORTH CENTRAL FLORIDA HOSPICE, INC.'S GAINESVILLE CARE CENTER. 1277205 1 0 0 1 0 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 46 0 1 18 1 0 0 0 0 0 0 0 0 0 0 X 16 15 0 0 1 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X TIMOTHY S BUIST VICE PRESIDENT OF FINANCE 3523378740 4300 NW 89TH BLVD GAINESVILLE FL 326065688 X SCOTTIE J BUTLER CHAIRMAN/DIRECTOR 0.10 2.90 X X 0 72757 0 JOE G DUNLAP VICE CHAIRMAN/DIRECTOR 0.10 1.40 X X 0 56643 0 ROBERT L EPLING TREASURER/DIRECTOR 0.10 1.40 X X 0 55991 0 ALBERT E DOTSON PHD SECRETARY/DIRECTOR 0.10 1.40 X X 0 54440 0 RICHARD M ANDERSON MD DIRECTOR 0.10 1.40 X 0 52612 0 JOSEPH W DAVIS DIRECTOR 0.10 1.40 X 0 53440 0 BENJAMIN I DOERR JR DIRECTOR 0.10 2.90 X 0 57731 0 GEORGE E FLETCHER DIRECTOR 0.10 1.40 X 0 53593 0 HUGH J FLOYD DIRECTOR - THROUGH 11/4/2015 0.10 1.40 X 0 39705 0 GLENDA E HOOD DIRECTOR 0.10 1.40 X 0 56316 0 ROBERT C HUDSON DIRECTOR 0.10 1.40 X 0 52132 0 PAMELA J MOONEY PHD DIRECTOR 0.10 1.40 X 0 52631 0 THOMAS A NATIELLO PHD DIRECTOR 0.10 1.40 X 0 55990 0 PAUL R PHILIP DIRECTOR 0.10 1.40 X 0 54440 0 JACKSON N SASSER PHD DIRECTOR 0.10 1.40 X 0 56317 0 JAMES L STRINGFELLOW SR DIRECTOR 0.10 1.40 X 0 49563 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/DIRECTOR 1.00 59.00 X X 0 2806271 46890 RANDALL L STUART ASSISTANT TREASURER 0.50 59.50 X 0 596841 134709 CATHERINE E AYERS ASSISTANT SECRETARY 1.50 58.50 X 0 540788 60570 STEVEN M ZIEGLER ASSISTANT SECRETARY 1.00 62.00 X 0 487411 126177 TROY R HART PRESIDENT 5.00 45.00 X 509782 0 86965 JIM ANTONUCCI EXECUTIVE DIRECTOR 50.00 0.00 X 228426 0 29504 ROSS DICKMANN EXECUTIVE DIRECTOR 50.00 0.00 X 205225 0 39862 TIM S BUIST VP FINANCE 5.00 45.00 X 198391 0 33639 JEFF P MERRITT EXECUTIVE DIRECTOR 50.00 0.00 X 180749 0 23010 KATHY A HARPER CONTROLLER 8.00 32.00 X 157562 0 21100 SHARON B BREITINGER DIRECTOR, DESIGN & CONSTRUCTION 0.00 40.00 X 129981 0 15107 1610116 5305612 617533 7 0 1 0 SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 MANAGEMENT & ADMINISTRATIVE 1039033 1 MANAGEMENT FEES 561000 3116590 3116590 3116590 340683 340683 3457273 3116590 0 340683 1732486 778227 954259 813774 234388 579386 81128 24785 56343 220451 53 220398 112996 39946 73050 1088008 1088008 8410 8410 31741 31741 163339 3218 160121 38969 4734 34235 2866 2866 93056 52685 40371 13645 2219 11426 14946 14946 16820 16820 CORPORATE DEVELOPMENT 138477 130136 8341 LICENSES AND FEES 15925 5381 10544 DUES AND ASSESSMENTS 4439 1433 3006 4591476 1277205 3314271 0 434337 130220 8168 8711997 9274394 101526 14946 0 86580 523774 703083 9670108 10202445 286629 586009 15880390 17246942 16167019 17832951 X -6496911 -7630506 -6496911 -7630506 9670108 10202445 -1134203 608 0 X X 0 1 X 1 0 X X X 5 SANTAFE SENIOR LIVING FOUNDATION INC 264464727 7 0 0 0 BVG ACQUISITION INC 203701186 9 0 0 0 EAST RIDGE RETIREMENT VILLAGE INC 590903331 9 0 0 0 BONITA SPRINGS RETIREMENT VILLAGE INC 262386152 9 0 0 0 NORTH FLORIDA RETIREMENT VILLAGE INC 591912330 9 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 PART I, LINE 11G, COL. (IV) AND PART IV, SECTION A, LINE 1: SANTAFE SENIOR LIVING, INC. IS A TYPE II SUPPORTING ORGANIZATION THAT IDENTIFIES ITS SUPPORTED ORGANIZATIONS BY CLASS OR PURPOSE IN ITS ARTICLES OF INCORPORATION IN ACCORDANCE WITH TREASURY REGULATION 1.509(A)-4(D)(2)(I)(B) AND (IV) (HISTORIC AND CONTINUING RELATIONSHIP BETWEEN THE SUPPORTING ORGANIZATION AND THE SUPPORTED ORGANIZATIONS BECAUSE OF WHICH AN IDENTITY OF INTERESTS HAS DEVELOPED BETWEEN OR AMONG THE ORGANIZATIONS). 0 0 0 0 0 0 0 0 1 30250 30250 0 PART II-B, LINE 1: SANTAFE SENIOR LIVING, INC. ENGAGED REPRESENTATION TO LOBBY THE FLORIDA STATE LEGISLATURE ON ITS BEHALF REGARDING GENERAL ISSUES OF IMPORTANCE TO THE SENIOR LIVING INDUSTRY. 101526 14946 86580 86580 DUE FROM AFFILIATES 394452 DEFERRED COMPENSATION ASSETS 308631 703083 DUE TO AFFILIATES 16482314 BENEFITS PAYABLE 562180 SELF-FUNDED CLAIMS PASS THROUGH - SANTAFE SENIOR LIVING, INC. 202448 17246942 X 3457273 0 3457273 0 3457273 4591476 0 4591476 0 4591476 PART X, LINE 2: EXPLANATION FOR UNCERTAIN TAX POSITIONS UNDER ASC 740: SENIOR LIVING AND THE AFFILIATES ARE EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. SENIOR LIVING AND THE AFFILIATES HAVE NO UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2015. SENIOR LIVING AND THE AFFILIATES INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2015 OR 2014. TAX YEARS 2012 THROUGH 2014 ARE SUBJECT TO EXAMINATION BY FEDERAL AND STATE TAXING AUTHORITIES. THERE ARE NO INCOME TAX EXAMINATIONS IN PROCESS AS OF THE DATE OF THIS REPORT. 0 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/DIRECTOR 0 928355 0 660599 0 1217317 0 18400 0 28490 0 2853161 0 627113 RANDALL L STUART ASSISTANT TREASURER 0 386665 0 93324 0 116852 0 108243 0 26466 0 731550 0 74830 CATHERINE E AYERS ASSISTANT SECRETARY 0 324095 0 79901 0 136792 0 30100 0 30470 0 601358 0 0 STEVEN M ZIEGLER ASSISTANT SECRETARY 0 325353 0 80762 0 81296 0 92687 0 33490 0 613588 0 62554 TROY R HART PRESIDENT 346803 0 97942 0 65037 0 68603 0 18362 0 596747 0 30924 0 JIM ANTONUCCI EXECUTIVE DIRECTOR 194957 0 22971 0 10498 0 9858 0 19646 0 257930 0 9260 0 ROSS DICKMANN EXECUTIVE DIRECTOR 196196 0 7430 0 1599 0 24876 0 14986 0 245087 0 0 0 TIM S BUIST VP FINANCE 193371 0 0 0 5020 0 11131 0 22508 0 232030 0 0 0 JEFF P MERRITT EXECUTIVE DIRECTOR 178966 0 0 0 1783 0 9206 0 13804 0 203759 0 0 0 KATHY A HARPER CONTROLLER 149165 0 7105 0 1292 0 10656 0 10444 0 178662 0 0 0 PART I, LINE 3 MICHAEL P GALLAGHER IS THE CHIEF EXECUTIVE OFFICER (CEO) OF SANTAFE SENIOR LIVING, INC. (SENIOR LIVING). MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: ANNUALLY, THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE CEO'S FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. PART I, LINE 4B (RELATES TO PART I, LINE 4A): LISTED PERSONS ARE EMPLOYEES OF SANTAFE SENIOR LIVING, INC. OR RELATED ORGANIZATIONS AND ARE COVERED UNDER A SEVERANCE POLICY FOR THEIR RESPECTIVE ORGANIZATION. THE SEVERANCE POLICY INCLUDES MONTHLY PAYMENTS UP TO A MAXIMUM OF 12 - 36 MONTHS UNDER QUALIFYING CIRCUMSTANCES DEPENDING ON POSITION. NO ONE LISTED RECEIVED SEVERANCE OR CHANGE OF CONTROL PAYMENTS DURING 2015. (RELATES TO PART I, LINE 4B): LISTED PERSONS PARTICIPATING IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: SANTAFE SENIOR LIVING, INC. MAINTAINS TWO ACTIVE NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS FOR A CERTAIN GROUP OF EXECUTIVES TO INCLUDE THOSE LISTED EMPLOYEES OF SANTAFE SENIOR LIVING, INC. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401(A)(17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MR. HART VESTED AND RECEIVED $34,302 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2015. MR. ANTONUCCI VESTED AND RECEIVED $9,906 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2015. MICHAEL P GALLAGHER AND RANDALL L STUART ARE EMPLOYEES OF SANTAFE HEALTHCARE, INC., A RELATED SUPPORTING ORGANIZATION. THEY PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY SANTAFE HEALTHCARE, INC. FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401(A)(17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MR. GALLAGHER VESTED AND RECEIVED $1,081,328 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2015. MR. STUART VESTED AND RECEIVED $92,722 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2015. CATHERINE E AYERS AND STEVEN M ZIEGLER ARE EMPLOYEES OF AVMED, INC., A RELATED TAX-EXEMPT ORGANIZATION. THEY PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY AVMED, INC. FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401(A)(17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MS. AYERS VESTED AND RECEIVED $108,699 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2015. MR. ZIEGLER VESTED AND RECEIVED $69,233 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2015. SCHEDULE J, PART II: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,200 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2015, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) ARE APPORTIONED AND CHARGED TO SENIOR LIVING AS FOLLOWS: 10% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 3% - RANDALL L STUART, ASSISTANT TREASURER 7% - CATHERINE E AYERS, ASSISTANT SECRETARY 12% - STEVEN M ZIEGLER, ASSISTANT SECRETARY TROY HART IS PAID DIRECTLY BY SANTAFE SENIOR LIVING, INC. NONE OF HIS COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO OTHER AFFILIATES. FORM 990, PART VI, SECTION A, LINE 4 IN 2015, THE BOARD OF DIRECTORS FOR SANTAFE SENIOR LIVING, INC. AMENDED AND RESTATED THE ARTICLES OF INCORPORATION AND BYLAWS. THE CHANGE WAS MADE TO REFLECT SANTAFE SENIOR LIVING, INC. AS A TYPE II SUPPORTING ORGANIZATION THAT SUPPORTS THE CHARITABLE ACTIVITIES AND FUNCTIONS OF NONPROFIT SECTION 501(C)(3) ORGANIZATIONS AFFILIATED WITH SANTAFE HEALTHCARE, INC., WHICH ARE ENGAGED IN THE OPERATION OF SENIOR LIVING FACILITIES AND SERVICES. FORM 990, PART VI, SECTION A, LINE 7A SANTAFE SENIOR LIVING, INC.'S ARTICLES OF INCORPORATION AND BYLAWS STATE THAT THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS SHALL CONSTITUTE THE ORGANIZATION'S BOARD OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7B THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS CONSTITUTES THE ORGANIZATION'S BOARD OF DIRECTORS, WHICH MAKES ALL GOVERNANCE DECISIONS OF THE ORGANIZATION. THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS HAS THE POWER AND AUTHORITY TO ESTABLISH COMMITTEES, TO ELECT AND REMOVE OFFICERS, TO APPROVE AMENDMENTS OF THE ORGANIZATION'S GOVERNING DOCUMENTS, AND TO MODIFY, AMEND, RESCIND, OR REPEAL ANY ACTION TAKEN BY THE ORGANIZATION'S BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION'S PROCESS FOR ENSURING THE ACCURATE PREPARATION, REVIEW AND APPROVAL OF THE 2015 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2015 FORM 990. IN ADDITION TO STAFF DEVELOPMENT, WHICH INCLUDED ATTENDING TAX SEMINARS AND CLASSES, MANAGEMENT ALSO CONSULTED WITH INDEPENDENT ACCOUNTING FIRMS AND TAX LEGAL COUNSEL REGARDING THE IRS FORM 990 CODE AND FILING REQUIREMENTS. THE ORGANIZATION ALSO PREVIOUSLY EDUCATED ITS MANAGEMENT TEAM, OFFICERS AND DIRECTORS, WITH THE ASSISTANCE OF PRICEWATERHOUSECOOPERS LLP, REGARDING THE FORM 990 AND THEIR INVOLVEMENT IN REVIEWING THE RETURN. FOLLOWING MANAGEMENT'S PREPARATION OF THE 2015 FORM 990, PRICEWATERHOUSECOOPERS, LLP REVIEWED THE 2015 FORM 990. A COPY OF THE 2015 FORM 990 AND ATTACHMENTS WERE PROVIDED TO THE ORGANIZATION'S CURRENT BOARD OF DIRECTORS FOR THEIR REVIEW AND COMMENT. EXECUTIVE MANAGEMENT ADDRESSED ANY QUESTIONS RAISED BY THE BOARD MEMBERS PRIOR TO FILING THE 2015 FORM 990 AND ATTACHMENTS WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C SANTAFE SENIOR LIVING, INC. HAS A PROCEDURE FOR MONITORING AND ENFORCING COMPLIANCE WITH ITS CORPORATE CONFLICT OF INTEREST POLICY (POLICY). EACH COVERED PERSON SHALL RECEIVE A COPY OF THE POLICY FOR REVIEW, SUBMIT AN AFFIRMATION, AND COMPLETE A QUESTIONNAIRE WHICH IS ATTACHED TO THE CODE OF ETHICAL BUSINESS CONDUCT. THE PROCEDURE DETAILS THAT THE CORPORATE SECRETARY HAS RESPONSIBILITY FOR DELIVERY OF THE POLICY TO DIRECTORS AND OFFICERS AND RECEIPT OF THEIR AFFIRMATIONS AND QUESTIONNAIRES. THE HUMAN RESOURCES DEPARTMENT SHALL OBTAIN THE AFFIRMATION AND QUESTIONNAIRE FROM EVERY NEW EMPLOYEE AT ORIENTATION AND FROM ALL EMPLOYEES ANNUALLY. MEMBERS OF CORPORATE ADVISORY BOARDS SUBMIT THE AFFIRMATION AND QUESTIONNAIRE TO THE CHIEF COMPLIANCE OFFICER. ANNUAL CONFLICT OF INTEREST STATEMENTS ARE REVIEWED BY INTERNAL STAFF TO ENSURE RECORDS ARE COMPLETE. AS PART OF THE CORPORATE CONTRACT REVIEW PROCESS, CONSIDERATION IS GIVEN TO ANY POTENTIAL CONFLICTS OF INTEREST INVOLVING OPERATIONAL OR FINANCIAL TRANSACTIONS. ALL EMPLOYEES ARE EXPECTED TO DISCLOSE ANY POTENTIAL OR ACTUAL CONFLICT. INITIAL REVIEW OF EMPLOYEE QUESTIONNAIRES WILL BE PERFORMED BY THE HUMAN RESOURCES DEPARTMENT WITH REVIEW OF ANY DISCLOSURES BY THE CHIEF COMPLIANCE OFFICER WHO WILL EVALUATE, MAKE NECESSARY INQUIRIES, AND INVESTIGATE ALTERNATIVES. BOARD MEMBERS SHALL DISCLOSE ANY POTENTIAL OR ACTUAL CONFLICT TO THE CHAIRMAN OF THE SANTAFE HEALTHCARE, INC. BOARD, AND THE CHAIRMAN OR CHIEF COMPLIANCE OFFICER SHALL EVALUATE CONFLICT DISCLOSURES AND, IF APPROPRIATE, INVESTIGATE ALTERNATIVES AND REPORT TO DISINTERESTED BOARD MEMBERS FOR RESOLUTION. THE MINUTES OF THE BOARD OR ANY COMMITTEE MEETING AT WHICH A POTENTIAL OR ACTUAL CONFLICT OF INTEREST IS DISCLOSED OR DISCUSSED SHALL REFLECT THE NAME OF THE INTERESTED PARTY, THE NATURE OF THE CONFLICT, THE DELIBERATIONS AND THE RESOLUTION OF THE CONFLICT. IF IT IS DETERMINED THAT A COVERED PERSON HAS FAILED TO COMPLY WITH THE POLICY, THE CHIEF COMPLIANCE OFFICER OR THE CHAIRMAN SHALL TAKE APPROPRIATE ACTION, WHICH MAY INCLUDE REMOVAL FROM OFFICE OR TERMINATION OF EMPLOYMENT. FORM 990, PART VI, SECTION B, LINE 15 LINE 15A: MICHAEL P GALLAGHER IS THE CHIEF EXECUTIVE OFFICER (CEO) OF SANTAFE SENIOR LIVING, INC. (SENIOR LIVING). MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. FORM 990, PART VI, SECTION B, LINE 15B: PROCESS FOR DETERMINING COMPENSATION FOR OTHER LISTED PERSONS OF SENIOR LIVING IS AS FOLLOWS: THE SANTAFE HEALTHCARE, INC. (SANTAFE) BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF ALL NON-DIRECTOR OFFICERS AND KEY EMPLOYEES' TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISONS TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW, THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF CASH COMPENSATION AND EXECUTIVE BENEFITS. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY CONSULTANT TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE BOARD OF DIRECTORS' (INCLUDING OFFICER POSITIONS) COMPENSATION EVERY TWO TO THREE YEARS. THE COMPETITIVENESS ANALYSIS INCLUDES COMPARISONS TO BOTH NOT-FOR-PROFIT AND PUBLIC COMPANY (EXCLUDING EQUITY COMPONENT) DATA FOR COMPANIES WITHIN THE SAME OR SIMILAR INDUSTRY. ANY COMPENSATION CHANGES ARE APPROVED BY THE SANTAFE BOARD OF DIRECTORS BASED ON THE MARKET COMPETITIVENESS STUDY. A MARKET COMPETITIVENESS STUDY WAS CONDUCTED IN NOVEMBER 2014 FOR CHANGES MADE EFFECTIVE JANUARY 1, 2015. FORM 990, PART VI, SECTION C, LINE 19 SANTAFE SENIOR LIVING, INC.'S PROCEDURE FOR MAKING VARIOUS DOCUMENTS AVAILABLE TO THE PUBLIC: SANTAFE SENIOR LIVING, INC. MAKES ITS GOVERNING DOCUMENTS AVAILABLE TO THE PUBLIC ON A CASE BY CASE BASIS IF REQUESTED DIRECTLY FROM THE ORGANIZATION. THE ARTICLES OF INCORPORATION CAN BE ACCESSED DIRECTLY THROUGH THE FLORIDA DEPARTMENT OF STATE, DIVISION OF CORPORATIONS WEBSITE AT WWW.SUNBIZ.ORG. THE CORPORATE BYLAWS, CONFLICT OF INTEREST POLICY AND AUDITED COMBINED FINANCIAL STATEMENTS, WHICH INCLUDE SANTAFE SENIOR LIVING,INC., CAN BE OBTAINED DIRECTLY FROM THE ORGANIZATION UPON WRITTEN REQUEST. FORM 990, PART VII, SECTION A, LINE 1A: COMPENSATION PAID BY RELATED ORGANIZATIONS: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,200 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2015, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) ARE APPORTIONED AND CHARGED TO SENIOR LIVING AS FOLLOWS: 10% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 3% - RANDALL L STUART, ASSISTANT TREASURER 7% - CATHERINE E AYERS, ASSISTANT SECRETARY 12% - STEVEN M ZIEGLER, ASSISTANT SECRETARY TROY HART IS PAID DIRECTLY BY SANTAFE SENIOR LIVING, INC. NONE OF HIS COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO OTHER AFFILIATES. FORM 990, PART XII, LINE 2C: THE COMPANY'S AUDIT COMMITTEE HAS NOT CHANGED ITS PROCESS FOR SELECTION OF THE INDEPENDENT ACCOUNTANT OR ITS PROCESS FOR MANAGING THE AUDIT. SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 592317607 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11B TYPE II N/A 0 NORTH FLORIDA RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 591912330 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 NORTH CENTRAL FLORIDA HOSPICE INC PO BOX 749 GAINESVILLE FL 326270749 592490893 HOSPICE CARE FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 BVG ACQUISITION INC PO BOX 749 GAINESVILLE FL 326270749 203701186 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 EAST RIDGE RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 590903331 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 AVMED INC PO BOX 749 GAINESVILLE FL 326270749 592742907 HEALTH CARE FL 501(C)(4) N/A SANTAFE HEALTHCARE INC 0 BONITA SPRINGS RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 262386152 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 SANTAFE SENIOR LIVING FOUNDATION INC PO BOX 749 GAINESVILLE FL 326270749 264464727 CHARITABLE AND EDUCATIONAL PURPOSES FL 501(C)(3) 7 SANTAFE HEALTHCARE INC 0 HOSPICE OF THE FLORIDA KEYS INC PO BOX 749 GAINESVILLE FL 326020749 592386289 HOSPICE CARE FL 501(C)(3) 7 SANTAFE HEALTHCARE INC 0 SF HOLDING CORPINC PO BOX 749 GAINESVILLE FL 326270749 592903901 HOLDING COMPANY FL SANTAFE HEALTHCARE INC C 0 0 0 0 1 0 0 0 0 0 0 0 1 1 1 0 1 1 1 1