2015-11-16T15:09:04-06:00 2014-12-31 390859910 BAKER TILLY VIRCHOW KRAUSE LLP 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2014-01-01 231353394 KIDSPEACE CORPORATION KIDS 6107998038 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 MICHAEL CALLAN CFO/ EVP FINANCE 6107998038 2015-11-16 1 JAIME L KUNTZ CPA P01272711 2159720701 2014 2016-02-25 16:41:14Z MICHAEL CALLAN 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 37664760 0 X WWW.KIDSPEACE.ORG X 1886 PA SUPPORT SERVICES TO AFFILIATED NOT FOR PROFIT SUBSIDIARIES 15 13 327 13 0 0 1179689 717243 35595755 32889033 5551471 3804218 128355 62755 42455270 37473249 0 0 0 0 98185939 15089858 0 0 421856 17098076 15735740 115284015 30825598 -72828745 6647651 170368792 52597506 152631839 50824721 17736953 1772785 X KIDSPEACE IS A 133-YEAR-OLD HEALTHCARE NONPROFIT THAT IS DEDICATED TO PROVIDING HOPE, HELP, AND HEALING TO CHILDREN, FAMILIES AND COMMUNITIES. WITH 38 CENTERS ACROSS THE COUNTRY, THIS NATIONAL ORGANIZATION HELPS THOUSANDS OF CHILDREN EACH DAY THROUGH LIFE-SAVING TREATMENT, AND REACHES MILLIONS MORE KIDS AND FAMILIES EACH YEAR WITH PREVENTION AND PUBLIC EDUCATION CAMPAIGNS DESIGNED TO HELP KIDS AVOID AND OVERCOME THE KINDS OF CRISES THAT CAN STRIKE ANY CHILD. FOUNDED IN BETHLEHEM, PA, KIDSPEACE HAS MORE THAN A CENTURY OF EXPERIENCE IN HEALING AND GUIDING CHILDREN THROUGH DISASTERS, PERSONAL TRAUMAS, FAMILY PROBLEMS, ABUSE, NEGLECT, DEPRESSION, AND, TODAY, THE MANY STRESSES OF MODERN LIFE. KIDSPEACE EXISTS TO GIVE KIDS PEACE. 0 0 32889033 KIDSPEACE RESIDENTIAL PROGRAMS: IN 2014, SOME 11,183 CHILDREN SUFFERING FROM ABUSE, NEGLECT AND EMOTIONAL TRAUMA FOUND COMFORT AND HEALING THROUGH A NETWORK OF KIDSPEACE PROGRAMS AND SERVICES. ACCREDITED BY THE JOINT COMMISSION ON ACCREDITATION OF HEALTHCARE ORGANIZATIONS, THE TOP ACCREDITING BODY IN AMERICA, THE CAMPUSES PROVIDE A WARM AND COMFORTABLE HOME AWAY FROM HOME, FOOD, CLOTHES, THERAPY, LIFE SKILLS, THERAPEUTIC RECREATION, AND EDUCATION TO RESTORE CHILDHOOD TO CHILDREN. STAFFED BY DOCTORS, NURSES, SOCIAL WORKERS, PSYCHOLOGISTS, NUTRITIONISTS, THERAPISTS, AND CARING COUNSELORS, THE PROGRAMS HELP CHILDREN HEAL WHILE BUILDING CONFIDENCE AND COMPETENCE TO MAKE HEALTHY CHOICES FOR BRIGHTER FUTURES. THESE CAMPUSES, SOME AS LARGE AS 200 ACRES, STRIVE TO GIVE THE BEST TO KIDS WHO HAVE BEEN THROUGH THE WORST, WITH WORLD-CLASS FACILITIES INCLUDING HOMES, ATHLETIC FIELDS, SWIMMING POOLS, AND STATE-OF-THE-ART LEARNING FACILITIES. THE KIDSPEACE RESIDENTIAL PROGRAMS HELP KIDS FROM ACROSS THE COUNTRY (AND EVEN FROM ACROSS THE GLOBE), AND IN 2014 WERE LOCATED IN FOUR STATES: PENNSYLVANIA, MAINE, MINNESOTA, AND GEORGIA.QUALITY OUTCOMES: KIDSPEACE PROGRAMS AND SERVICES ARE RESEARCH-BASED AND ANNUAL OUTCOMES STUDIES ARE CONDUCTED TO ENSURE OUR PROGRAMS ARE OF THE HIGHEST CALIBER. IN 2014, KIDSPEACE KIDS WERE ASKED TO RATE HOW WELL KIDSPEACE EMBODIES THE PRINCIPLES OF OUR MODEL OF CARE. CHILDREN RESPONDED POSITIVELY ABOUT THEIR:SENSE OF DIGNITY: 91%FEELING OF SAFETY: 84%SENSE OF BELONGING: 79%FEELINGS OF EMPOWERMENT: 88%DEVELOPMENT OF CHARACTER: 91%TRANSFORMATION AND GROWTH: 96%KIDSPEACE PSYCHIATRIC HOSPITAL: THIS NATIONAL RESOURCE, LOCATED IN PENNSYLVANIA, MINUTES BY AIR FROM NEW YORK, WASHINGTON, D.C. AND PHILADELPHIA, HELPED 2,077 KIDS IN 2014. THE HOSPITAL IS A PRIVATE, NOT-FOR-PROFIT FACILITY CARING FOR CHILDREN IN SERIOUS EMOTIONAL DISTRESS. IT SPECIALIZES IN CARING FOR CHILDREN, PRE ADOLESCENTS, ADOLESCENTS AND YOUNG ADULTS THROUGH CUSTOM-DESIGNED PROGRAMS TO MEET EACH PATIENT'S SPECIFIC NEEDS, FROM SEVERE TRAUMA AND DEPRESSION TO EMOTIONAL CHALLENGES PROMPTED BY AUTISM OR LOWER INTELLECTUAL FUNCTIONING. PATIENTS IN THE HOSPITAL BENEFIT FROM AN ON-SITE SCHOOL SYSTEM, WHICH ENSURES CHILDREN'S ACADEMIC PROGRESS WHILE THEY WORK TO OVERCOME CRISES.KIDSPEACE FOSTER CARE & ADOPTION PROGRAMS: MORE THAN 879 CHILDREN FOUND HELP IN 2014 THROUGH KIDSPEACE'S 26 FOSTER CARE AND ADOPTION CENTERS. OUR FOSTER-CARE PROGRAM IS SPECIFICALLY DESIGNED FOR CHILDREN WHO HAVE ENDURED OR FACE CRISES IN THEIR BIRTH HOMES. UNLIKE TRADITIONAL FOSTER CARE, OUR PROGRAMS RECRUIT, INTENSIVELY TRAIN AND SUPPORT FOSTER FAMILIES TO RESPOND TO THE SPECIAL NEEDS OF OUR CHILDREN. FOSTER FAMILIES RECEIVE 24-HOUR, SEVEN-DAY-A-WEEK ASSISTANCE FROM ON-CALL PROFESSIONALS AND KIDSPEACE FOSTER FAMILIES USUALLY CARE FOR NO MORE THAN TWO CHILDREN IN A HOME - FEWER THAN IS COMMON IN MOST FOSTER HOMES - TO BETTER FOCUS ON THE INDIVIDUAL NEEDS OF EACH CHILD.KIDSPEACE FOSTER CARE AND FAMILY SERVICES SITES PROVIDED ADOPTION SERVICES TO MANY CHILDREN IN 2014, HELPING FIND PERMANENT HOMES FOR MANY WONDERFUL CHILDREN WHO WERE LABELED "UNADOPTABLE" BY OTHER PROVIDERS. WE OWE OUR SUCCESS TO THE UNIQUE COMPONENTS OF OUR PROGRAM, INCLUDING REACHING OUT TO FAMILIES AND WRITING HIGH QUALITY FAMILY PROFILES (COMMONLY KNOWN AS HOME STUDIES), WHICH EXPAND THE POOL OF ADOPTIVE FAMILIES FOR KIDS IN THE FOSTER CARE SYSTEM AS A WHOLE. THROUGH THE CHILD SPECIFIC RECRUITMENT SERVICE, KIDSPEACE FINDS ADOPTIVE FAMILIES FOR THE MOST CHALLENGING KIDS, INCLUDING OLDER CHILDREN WITH SIGNIFICANT SPECIAL NEEDS. KIDSPEACE IS ALSO A LEADER IN THE NEW SERVICE OF CHILD PREPARATION, WHICH CONSISTS OF TEN SESSIONS DESIGNED TO EMOTIONALLY PREPARE CHILDREN TO BECOME A PERMANENT PART OF A NEW FAMILY. KIDSPEACE ALSO PROVIDES ADOPTIVE FAMILIES WITH ONGOING SUPPORT FOR MONTHS AFTER AN ADOPTION IS FINALIZED, THROUGH CASE ASSESSMENT, CASE MANAGEMENT, AND RESPITE CARE.EDUCATIONAL SERVICES: CHILDREN IN EMOTIONAL CRISIS, WHETHER CAUSED BY TRAUMA, PROBLEMS IN THE FAMILY, OR A PERSONAL ISSUE, FIND IT DIFFICULT TO CONCENTRATE ON LEARNING. KIDSPEACE OPERATES SEVEN LICENSED SCHOOLS IN FOUR STATES TO HELP KEEP YOUNGSTERS ON TRACK IN THE SINGLE MOST IMPORTANT SOCIAL AND DEVELOPMENTAL AREA IN THEIR LIVES. THE KIDSPEACE SCHOOL SYSTEM PROVIDES A COMPLETE EDUCATION FOR CHILDREN IN OUR RESIDENTIAL AND HOSPITAL PROGRAMS, FROM 1ST THROUGH 12TH GRADE. IT GUARANTEES ALL CREDITS THEY WOULD EARN IN A PUBLIC OR PRIVATE SCHOOL. OUR SCHOOL SYSTEM PROFESSIONALS WORK CLOSELY WITH RESIDENTIAL STAFF, PARENTS, REFERRAL SOURCES, AND THE CHILD TO ENSURE THE MOST EFFECTIVE EDUCATION AND TREATMENT POSSIBLE. OUR STUDENTS ARE VERY SUCCESSFUL AT KIDSPEACE SCHOOLS, GAINING A FULL YEAR OF ACADEMIC GROWTH DURING A STAY SHORTER THAN AN ACADEMIC YEAR. KIDSPEACE SETS THEM ON A COURSE TO ACHIEVE SCHOLASTICALLY AND PURSUE HIGHER LEVELS OF EDUCATION. THEY NOT ONLY CATCH UP, THEY EXCEL. DURING 2014, WE NOTED AN INCREASED NUMBER OF YOUTH CONTINUING THEIR EDUCATION. CHILDREN ENROLLED IN SCHOOL OR COMPLETED THEIR GEDS.COMMUNITY PROGRAMS: WHEREVER POSSIBLE, KIDSPEACE SEEKS TO KEEP CHILDREN CLOSE TO HOME AND THE PEOPLE WHO LOVE THEM. IN 2014, KIDSPEACE COMMUNITY-BASED PROGRAMS OFFERED A WIDE RANGE OF SERVICES TO 3,640 CHILDREN AND THEIR FAMILIES, INCLUDING OUTPATIENT, FAMILY-BASED, AND IN-HOME THERAPIES AS WELL AS PARTIAL-HOSPITALIZATION PROGRAMS TO REBUILD LIVES WEAKENED BY CRISES. THE GOAL IS TO KEEP CHILDREN AND FAMILIES HEALTHY AND SAFE IN THEIR HOMES, SCHOOLS AND COMMUNITIES. HOUSE CALLS: KIDSPEACE PROFESSIONALS BRING SERVICES TO CHILDREN AND FAMILIES IN THEIR OWN HOMES IN AN EFFORT TO HELP THEM LEARN, GROW AND STAY TOGETHER. SERVICES INCLUDE THERAPY, LIFE- AND PARENTING-SKILLS TRAINING, PROBLEM SOLVING, EDUCATION AND SELF-ESTEEM BUILDING.IN AND OUT OF SCHOOL: AT TIMES, KIDSPEACE CONSULTANTS ARE PROVIDED TO ASSIST PUBLIC SCHOOL STAFF. EACH DAY AFTER SCHOOL, KIDSPEACE VANS PICK UP CHILDREN AND BRING THEM TO OUR COMMUNITY PROGRAMS FOR THERAPY, ADULT SUPERVISION, THERAPEUTIC RECREATION, EDUCATIONAL SUPPORT AND EVEN A NUTRITIOUS MEAL. CHILDREN ARE THEN RETURNED SAFELY HOME. PARENTS ARE ENCOURAGED TO PARTICIPATE IN THE PROGRAMMING.COMMUNITY LINKS: KIDSPEACE PARTNERS WITH MANY COMMUNITY ORGANIZATIONS LIKE YOUTH AND FAMILY CENTERS AND GOVERNMENT AGENCIES TO PROVIDE PARENTING AND LIFE-SKILLS TRAINING AND FAMILY EDUCATION. WE ALSO HELP LINK FAMILIES TO COMMUNITY RESOURCES SUCH AS FOOD BANKS AND LIBRARIES.PREVENTION & PUBLIC EDUCATION: IN ADDITION TO THE DIRECT HELP KIDSPEACE PROVIDES TO THOUSANDS OF YOUNGSTERS EACH DAY, THE NONPROFIT HAS INVESTED CONSIDERABLE ENERGY INTO HELPING THE WORLD'S CHILDREN AVOID AND OVERCOME THE COMMON CRISES OF GROWING UP. WE OFFER A HELPING HAND TO KIDS IN ALL 50 STATES AND IN DOZENS OF COUNTRIES AROUND THE GLOBE, GIVING THEM HOPE AND POWERFUL TOOLS TO AVOID AND OVERCOME THE GREATEST DANGERS OF MODERN LIFE. THESE INCLUDE:-PREVENTION MEDIA REACH WITH INFORMATION AND CHILD CRISIS TIPS -TEENCENTRAL.NET, A UNIQUE PROBLEM-SOLVING WEBSITE -KIDSPEACE.ORG, A RESOURCE FOR PARENTS AND PROFESSIONALS -KIDSDAY.NET, ENCOURAGING MEANINGFUL TIME BETWEEN ADULTS AND KIDS -KIDSPEACE INSTITUTE, TRAINING PROFESSIONALS IN THE FIELD-PARENTCENTRAL.NET, A UNIQUE PROBLEM-SOLVING WEBSITE FOR PARENTS 1 1 0 1 0 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 155 0 1 327 1 0 0 0 0 0 1 1 0 0 0 0 X 15 13 0 0 0 0 0 0 0 1 1 0 1 1 1 1 1 1 1 1 1 1 0 PA FL GA IN ME MD MN NV NJ NY NC VA DC X GERARD GLEESON 6107998038 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 GAYLE NORRIS SECRETARY 30.00 10.00 X X 56147 0 10029 L RICHARD PLUNKETT BOARD CHAIR 1.00 X X 0 0 0 DR LARRY BELL FIRST VICE CHAIR 1.00 X X 0 0 0 DR SCOTT REINES SECOND VICE CHAIR 1.00 X X 0 0 0 DR IRA BLAKE DIRECTOR 1.00 X 0 0 0 MARY JANE WILLIS DIRECTOR 1.00 X 0 0 0 RICHARD TISINGER SR DIRECTOR 1.00 X 0 0 0 JOHN MOSES DIRECTOR 1.00 X 0 0 0 JOHN W MARSLAND DIRECTOR 1.00 X 0 0 0 DR CONSTANCE PORTER DIRECTOR 1.00 X 0 0 0 DAVID SMALL DIRECTOR 1.00 X 0 0 0 CHRISTIAN M BAUER ESQ DIRECTOR 1.00 X 0 0 0 ANDREW WERNER DIRECTOR 1.00 X 0 0 0 J JACKSON EATON DIRECTOR 1.00 X 0 0 0 ANDREW BURKE DIRECTOR/VP LEGAL SERVICES 40.00 5.00 X 99562 0 12319 WILLIAM ISEMANN PRESIDENT & CEO 15.00 35.00 X 585880 208100 21129 JAMES HORAN EVP/ CFO (UNTIL JUNE 2014) 15.00 35.00 X 29875 69708 11347 MICHAEL SLACK EVP BUSINESS DEVELOPMENT 10.00 40.00 X 41529 132038 0 SUSAN MULLEN EVP PROGRAMS 10.00 40.00 X 31397 125587 9481 RAY CULP EXECUTIVE DIRECTOR 5.00 40.00 X 107447 0 11346 SUSAN LEYBURN EXECUTIVE VICE PRESIDENT PROGRAMS 10.00 40.00 X 28747 114988 4899 GERARD GLEESON TREASURER 15.00 35.00 X 45595 106387 12319 ANDREW CLARK PSYCHIATRIST 40.00 X 354560 0 12319 MADHAV MUPPA PSYCHIATRIST 40.00 X 341963 0 12100 WELDA DUQUE PSYCHIATRIST 40.00 X 315677 0 8826 MAHMOUD ELFATAH PSYCHIATRIST 40.00 X 310300 0 11983 THOMAS NEILL FAMILY PRACTICE DOCTOR 40.00 X 208623 0 8732 2557302 756808 146829 21 0 1 0 SCHIFF HARDIN LLP 666 FIFTH AVE SUITE 1700 NEW YORK NY 10103 LEGAL SERVICES 940007 NORRIS MCLAUGHLIN & MARCUS 515 HAMILTON ST ALLENTOWN PA 18104 LEGAL SERVICES 823698 EISNERAMPER LLP 111 WOOD AVE SOUTH ISELIN NJ 08830 FINANCIAL REPRESENTATIVE SERVICES 812938 GRANT THORNTON LLP 2001 MARKET ST PHILADELPHIA PA 19103 AUDITING SERVICES 439630 LOWENSTEAIN SANDLER LLP 65 LIVINGSTON AVE ROSELAND NJ 07068 LEGAL SERVICES 427524 24 79088 394969 243186 8867 717243 MANAGEMENT FEES 561000 21956595 21956595 RENT INCOME FROM AFFILIATES 623990 6660304 6660304 CONTRACTUAL PHYSICIAN 623990 3820919 3820919 E-RATE REVENUE 623990 288489 288489 OTHER INCOME 623990 162726 162726 32889033 3800208 3800208 44728 832 43896 43896 43896 138673 134663 4010 4010 4010 74875 79088 56016 18859 18859 37473249 32889033 0 3866973 12507587 12343667 163920 154602 154602 1610460 1588847 21613 817209 805191 12018 65404 65404 450473 450473 30300 30300 1198192 1183647 14545 293604 293604 541371 366953 174418 200430 197979 2451 388050 386598 1452 23065 23065 2397796 2397796 2791259 2791259 1158291 1158291 REORGANIZATION EXPENSES 4426749 4426749 REPAIRS & MAINTENANCE 1192005 1189569 2436 BANK FEES 241358 241358 EQUIPMENT RENTALS 119907 118854 1053 217486 189536 27950 30825598 0 30403742 421856 0 2602 8366935 6148672 0 133708 275272 33729 27252 1362652 1208728 106233046 76875820 31394492 29357226 129077276 15577754 170368792 52597506 8271953 5181276 52506976 25117670 5808336 91852910 14717439 152631839 50824721 X 17736713 1771924 240 861 17736953 1772785 170368792 52597506 X 6647651 -22611819 X 0 1 X 1 1 1 X 408976 587601 789144 1305282 708438 3799441 27007433 26234415 27593075 32964617 32889033 146688573 27416409 26822016 28382219 34269899 33597471 150488014 0 0 0 150488014 4035307 4420783 4912480 5551471 3844930 22764971 4035307 4420783 4912480 5551471 3844930 22764971 31451716 31242799 33294699 39821370 37442401 173252985 0.86860 0.86290 0.13140 0.13710 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 0 1 30300 0 0 30300 0 4203523 4203523 182550 66108864 42439426 23851988 4917300 4746007 171293 26458899 25553495 905404 4361910 4136892 225018 29357226 BOND ISSUANCE COSTS 466763 DUE FROM AFFILIATES 12262949 INSURANCE PROCEEDS REC 26549 RESTRICTED CASH 2821493 15577754 ACCRUED INTEREST PAYABLE 789927 ACCRUED RETIREMENT BENEFITS 13050000 CAPITAL LEASE OBLIGATION 38617 OTHER LONG TERM LIABILITIES 18271 INSURANCE SETTLEMENTS PAYABLE 120624 IBNR LIABILITY 700000 14717439 X 133088493 283650 95331594 95615244 37473249 0 37473249 31109248 283650 283650 30825598 0 30825598 PART X, LINE 2: THE INTERNAL REVENUE SERVICE RECOGNIZES KIDSPEACE AND ITS SOLE CORPORATE MEMBERS AS AN EXEMPT ORGANIZATION FOR FEDERAL INCOME TAX PURPOSES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. KIDSPEACE IS NO LONGER SUBJECT TO U.S. FEDERAL AND STATE TAX EXAMINATIONS FOR THE YEARS PRIOR TO 2011. KIDSPEACE FOLLOWS THE ACCOUNTING GUIDANCE FOR UNCERTAINTIES IN INCOME TAX POSITIONS, WHICH REQUIRES THAT A TAX POSITION BE RECOGNIZED OR DERECOGNIZED BASED ON A "MORE LIKELY THAN NOT" THRESHOLD. THIS APPLIES TO POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN. KIDSPEACE DOES NOT BELIEVE ITS CONSOLIDATED FINANCIAL STATEMENTS INCLUDE ANY MATERIAL UNCERTAIN TAX POSITIONS. PART XI, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN BENEFIT OBLIGATIONS 142,009. NET GAIN ON EXTINGUISHMENT OF LIABILITIES 95,189,585. MUD RUN 21345 21345 1145 10555 GOLF OUTING 91161 48938 42223 500 130 16095 1654 4604 1 41457 8805 32652 1373 880 5148 13932 153963 79088 74875 500 1503 18120 6802 29091 56016 18859 X X X X 0 0 0 0 0 0 0 0 0 WILLIAM ISEMANN PRESIDENT & CEO 89186 208100 0 0 496694 0 0 0 21129 0 607009 208100 0 0 MICHAEL SLACK EVP BUSINESS DEVELOPMENT 33009 132038 0 0 8520 0 0 0 0 0 41529 132038 0 0 SUSAN MULLEN EVP PROGRAMS 31397 125587 0 0 0 0 0 0 9481 0 40878 125587 0 0 GERARD GLEESON TREASURER 45595 106387 0 0 0 0 0 0 12319 0 57914 106387 0 0 ANDREW CLARK PSYCHIATRIST 354560 0 0 0 0 0 0 0 12319 0 366879 0 0 0 MADHAV MUPPA PSYCHIATRIST 341963 0 0 0 0 0 0 0 12100 0 354063 0 0 0 WELDA DUQUE PSYCHIATRIST 315677 0 0 0 0 0 0 0 8826 0 324503 0 0 0 MAHMOUD ELFATAH PSYCHIATRIST 310300 0 0 0 0 0 0 0 11983 0 322283 0 0 0 THOMAS NEILL FAMILY PRACTICE DOCTOR 208623 0 0 0 0 0 0 0 8732 0 217355 0 0 0 A LEHIGH COUNTY GENERAL PURPOSE AUTHORITY 911886539 52480RCF5 2014-07-31 25117670 REFINANCE 1998 AND 1999 DEBT 0 0 0 A 25117670 474570 24643100 2014 1 0 1 1 A 0 0 1 0 0 0 0 0 1 A 1 FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 WAS REVIEWED IN DETAIL BY MANAGEMENT OF KIDSPEACE. THE BOARD OF DIRECTORS ELECTED TO DELEGATE THE REVIEW OF THE FORM 990 TO THE FINANCE COMMITTEE, WHICH CONTAINS MEMBERS OF THE BOARD OF DIRECTORS. COPIES OF THE FORM 990 ALONG WITH ALL OF THE SCHEDULES ARE SENT TO THE FINANCE COMMITTEE STAFF PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C MEMBERS OF THE BOARD OF DIRECTORS AND THE SENIOR LEADERSHIP TEAM ARE REQUIRED TO SIGN AN ANNUAL CONFLICT OF INTEREST STATEMENT. AFTER COMPLETION BY THE MEMBER, THE FORM IS SENT TO THE VICE PRESIDENT OF COMPLIANCE FOR REVIEW. DEPENDING ON THE FINDINGS OF THE VICE PRESIDENT, THE POTENTIAL CONFLICT MAY BE TAKEN TO THE COMPLIANCE COMMITTEE FOR REVIEW AND FINAL DECISION. FORM 990, PART VI, SECTION B, LINE 15 THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE OF THE KPC BOARD OF DIRECTORS (MDCC) CONSISTS OF INDEPENDENT DIRECTORS, AND HAS RESPONSIBILITY TO REVIEW AND GIVE APPROVAL OF THE COMPENSATION FOR THE CEO AND OTHER TOP MANAGEMENT POSITIONS. PERIODICALLY THE MDCC ENGAGES AN OUTSIDE COMPENSATION CONSULTANT TO CONDUCT AN INDEPENDENT ANALYSIS OF BASE COMPENSATION AND TOTAL CASH COMPENSATION FOR THE KEY MANAGEMENT POSITIONS. THIS ANALYSIS MAY INCLUDE A COMPETITIVE MARKET ASSESSMENT FOR EACH POSITION COMPARED TO ORGANIZATIONS OF SIMILAR SIZE IN HEALTHCARE AND OTHER NOT-FOR-PROFIT SECTORS TO ENSURE COMPENSATION DOES NOT EXCEED FAIR MARKET VALUE. NATIONALLY PUBLISHED SURVEYS AND FORM 990'S FROM OTHER NOT-FOR-PROFITS ORGANIZATIONS MAY BE INCLUDED IN THE STUDY. THE REVIEW AND APPROVAL OF COMPENSATION IS DOCUMENTED IN THE MINUTES OF THE COMPENSATION COMMITTEE MEETINGS. FORM 990, PART VI, SECTION C, LINE 19 THE FORM 990 IS AVAILABLE TO THE PUBLIC UPON REQUEST. OTHER ORGANIZATIONAL DOCUMENTS, FINANCIAL STATEMENTS AND THE CONFLICT OF INTEREST POLICY ARE AVAILABLE TO THE PUBLIC UPON WRITTEN REQUEST DEMONSTRATING A SUFFICIENT BUSINESS PURPOSE. FORM 990, PART XI, LINE 9: DEBT FORGIVENESS TO AFFILIATES -117,943,413. CHANGE IN BENEFIT OBLIGATION 142,009. NET GAIN ON EXTINGUISHMENT OF LIABILITIES 95,189,585. FORM 990, PART XI, LINE 9: UPON THE EXIT FROM CHAPTER 11, KIDSPEACE'S DEBT OBLIGATIONS WERE SUBSTANTIALLY REDUCED DUE TO THE AGREEMENT ON LOWER BONDHOLDER DEBT; A SUBSTANTIAL REDUCTION IN DEFINED PENSION PLAN LIABILITIES; A REDUCTION IN TRADE VENDOR BALANCES; THE RESCHEDULING OF MORTGAGE OBLIGATIONS; AND WITH KIDSPEACE'S ACCESS TO SIGNIFICANT POST CHAPTER 11 FINANCING THROUGH A REVOLVING LINE OF CREDIT TO SUPPLEMENT INTERNALLY GENERATED WORKING CAPITAL. THE PURPOSE OF THE ENTRY INTO AND THE SUCCESSFUL EXIT FROM CHAPTER 11 WAS TO SUBSTANTIALLY INCREASE THE PROBABILITY OF KIDSPEACE BEING ABLE TO CONTINUE ITS PURPOSE AND IS DEPENDENT UPON FUTURE BUSINESS PERFORMANCE AND COMPLIANCE WITH AGREED-UPON COVENANTS BETWEEN KIDSPEACE, THE BONDHOLDERS AND FUNDING SOURCES. THE FOLLOWING TABLE PROVIDES A SUMMARY OF THE FINANCIAL IMPACT OF THE CHAPTER 11 EXIT ACROSS KIDSPEACE CORPORATION AND ITS AFFILIATES: NET GAIN ON EXTINGUISHMENT OF LIABILITIES ($95,775,249): 1998 AND 1999 PENNSYLVANIA BONDS PRINCIPAL - GAIN ($21,064,242) 1998 AND 1999 PENNSYLVANIA BONDS INTEREST - GAIN ($4,612,948) DEFINED BENEFIT PLAN OBLIGATION ASSUMED BY THE PBGC - GAIN ($68,751,252) EXCESS BENEFIT PENSION PLAN TERMINATION - GAIN ($723,566) REDUCTION IN LIABILITIES RELATED TO UNSECURED CREDITORS AND OTHER PRE-BANKRUPTCY BALANCES - NET GAIN ($623,241). THE ABOVE GAIN INCREASED KIDSPEACE CORPORATION'S NET ASSETS DIRECTLY AND THEN WAS PASSED ON TO AFFILIATES VIA FORGIVENESS OF DUE TO KIDSPEACE CORPORATION LIABILITIES. KIDSPEACE CHILDREN'S HOSPITAL INC 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 232654910 INPATIENT, OUTPATIENT & PARTIAL HOSPITALIZATION PA 501 (C)(3) LINE 3 KIDSPEACE CORPORATION 0 MESABI ACADEMY OF KIDSPEACE INC 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 411904179 ADOLESCENT JUVENILE FACILITY PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 KIDSPEACE NATL CTRS OF NEW ENGLAND 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 342021326 TREATMENT CENTER FOR CHILDREN FACING CRISIS PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 IRON RANGE SCHOOL INC 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 522360561 CONTRACT SCHOOL PA 501 (C)(3) LINE 2 KIDSPEACE CORPORATION 0 KIDSPEACE SERVICES INC 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 760832623 OUTPATIENT & FOSTER CARE FOR CHILDREN FACING CRISIS PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 KIDSPEACE NATIONAL CENTERS INC 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 232654908 TREATMENT CENTER FOR CHILDREN FACING CRISIS PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 KIDSPEACE NATL CENTERS OF NORTH AMERICA 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 232744765 FOSTER CARE FOR CHILDREN FACING CRISIS PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 KIDSPEACE NATIONAL CENTERS OF GEORGIA 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 200017440 TREATMENT CENTER FOR CHILDREN FACING CRISIS PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 KIDSPEACE NATIONAL CENTERS- NEW YORK 4085 INDEPENDENCE DR SCHNECKSVILLE PA 18078 161571888 PA 501 (C)(3) LINE 9 KIDSPEACE CORPORATION 0 0 0 0 1 1 0 0 0 0 1 0 1 0 0 0 0 0 0 0 KIDSPEACE NATIONAL CENTERS D 853005 CALCULATION KIDSPEACE NATIONAL CENTERS J 4730116 CALCULATION KIDSPEACE NATIONAL CENTERS L 9969508 CALCULATION KIDSPEACE CHILDRENS HOSPITAL D 1253155 CALCULATION KIDSPEACE CHILDRENS HOSPITAL J 1727637 CALCULATION KIDSPEACE CHILDRENS HOSPITAL L 5497981 CALCULATION KIDSPEACE NATIONAL CENTERS OF NEW ENGLAND E 505905 CALCULATION KIDSPEACE NATIONAL CENTERS OF NEW ENGLAND J 65980 CALCULATION KIDSPEACE NATIONAL CENTERS OF NEW ENGLAND L 2125481 CALCULATION KIDSPEACE OF NORTH AMERICA D 1604730 CALCULATION KIDSPEACE OF NORTH AMERICA J 73959 CALCULATION KIDSPEACE OF NORTH AMERICA L 2375784 CALCULATION KIDSPEACE OF GEORGIA D 8908505 CALCULATION KIDSPEACE OF GEORGIA J 24792 CALCULATION KIDSPEACE OF GEORGIA L 797074 CALCULATION MESABI ACADEMY D 172299 CALCULATION MESABI ACADEMY J 35496 CALCULATION MESABI ACADEMY L 1142317 CALCULATION IRON RANGE SCHOOL E 22840 CALCULATION IRON RANGE SCHOOL J 1492 CALCULATION IRON RANGE SCHOOL L 48450 CALCULATION