2019-10-28T11:06:27-05:00 2018-12-31 134008324 PRICEWATERHOUSECOOPERS LLP 76 S LAURA STREET SUITE 2100 JACKSONVILLE FL 32202 990 2018-01-01 203700526 SANTAFE SENIOR LIVING INC SANT 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDALL L STUART ASSISTANT TREASURER 3523378730 2019-10-28 1 MICHAEL J MULDOON P00889797 9043540671 4.7.38.121 2019-10-28 10:43:25 ED P D6D028B83EC7BAE48696A0FE418AC7215527A94E D33FA7F254BC09848346BBAA17B51EB9116DA51E 2018 2020-01-14 16:20:31Z MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 4426324 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. 13 12 22 0 0 0 0 0 3841522 4033678 373077 392646 0 0 4214599 4426324 1862 0 0 0 2048839 1550661 0 0 0 2237612 1567797 4288313 3118458 -73714 1307866 12098036 12554853 20034169 19178953 -7936133 -6624100 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 1 172056 4033678 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 268 SENIOR CITIZEN RESIDENTS WITH HOUSING, HEALTH CARE AND RELATED SERVICES DURING 2018.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 659 SENIOR CITIZEN RESIDENTS WITH AROUND THE CLOCK HOUSING, ASSISTED LIVING AND RELATED SERVICES DURING 2018.DURING THE YEAR, SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND DEVELOPMENT PLANNING SERVICES TO EAST RIDGE RETIREMENT VILLAGE, INC. EAST RIDGE RETIREMENT VILLAGE, INC. SERVED AN AVERAGE PER DAY OF 342 SENIOR CITIZEN RESIDENTS WITH HOUSING, HEALTH CARE AND RELATED SERVICES DURING 2018. 172056 1 0 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 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 54 0 1 22 1 0 0 0 0 0 0 0 0 0 0 0 0 X 13 12 0 0 1 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X RANDALL L STUART ASST TREASURER 3523378730 4300 NW 89TH BLVD GAINESVILLE FL 326065688 X GLENDA E HOOD CHAIRMAN/DIRECTOR 0.10 2.90 X X 0 77027 0 JACKSON N SASSER PHD VICE CHAIRMAN/DIRECTOR 0.10 1.40 X X 0 64277 0 ALBERT E DOTSON PHD SECRETARY/DIRECTOR 0.10 1.40 X X 0 61877 0 ROBERT L EPLING TREASURER/DIRECTOR 0.10 1.40 X X 0 61551 0 SCOTTIE J BUTLER DIRECTOR 0.10 1.40 X 0 57690 0 JOSEPH W DAVIS DIRECTOR 0.10 1.40 X 0 59590 0 BENJAMIN I DOERR JR DIRECTOR 0.10 2.90 X 0 62490 0 GEORGE E FLETCHER DIRECTOR 0.10 1.40 X 0 57190 0 ROBERT C HUDSON DIRECTOR 0.10 1.40 X 0 59590 0 PAMELA J MOONEY PHD DIRECTOR 0.10 1.40 X 0 57190 0 THOMAS A NATIELLO PHD DIRECTOR 0.10 1.40 X 0 57690 0 PAUL R PHILIP DIRECTOR 0.10 1.40 X 0 58284 0 RICHARD M ANDERSON MD DIRECTOR (THROUGH 2/19/18) 0.10 1.40 X 0 0 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/DIRECTOR 1.00 59.00 X X 0 2005010 44077 RANDALL L STUART ASST TREASURER 1.50 58.50 X 0 983034 203185 CATHERINE E AYERS ASST SECRETARY (THROUGH 7/31/18) 1.50 58.50 X 0 561250 40454 STEVEN M ZIEGLER ASST SECRETARY 1.00 59.00 X 0 508972 195308 TROY R HART PRESIDENT 5.00 55.00 X 0 538154 108536 REBECCA J CATALANOTTO EXECUTIVE DIRECTOR - NFRV, INC. 0.00 50.00 X 0 199442 34776 KENNETH J CORMIER EXECUTIVE DIRECTOR - ERRV, INC. 0.00 50.00 X 0 180245 31988 SAMI B GUEDOUAR EXECUTIVE DIRECTOR - BSRV, INC. 0.00 50.00 X 0 199684 32771 DAVID KREMER DIRECTOR SFSL FOUNDATION 40.00 0.00 X 138397 0 39186 EMMETT BANE III DIRECTOR STRATEGIC HR BUS. PARTNER 40.00 0.00 X 144569 0 28151 KARL F GOEDERT CONTROLLER 40.00 0.00 X 139772 0 21456 CHRISTINA L WHITE ACCOUNTING MANAGER 40.00 0.00 X 101855 0 19140 TIMOTHY S BUIST FORMER VP FINANCE 0.00 50.00 X 0 182942 1718 524593 6093179 800746 4 1 1 0 SANTAFE MANAGEMENT SERVICES LLC PO BOX 749 GAINESVILLE FL 326270749 MANAGEMENT & ADMINISTRATIVE 1152577 SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 MANAGEMENT & ADMINISTRATIVE 383025 MOORE STEPHENS LOVELACE PA 255 S ORANGE AVE STE 600 ORLANDO FL 32801 AUDIT SERVICES 113247 3 MANAGEMENT FEES 561000 4033678 4033678 4033678 392646 392646 4426324 4033678 0 392646 1322824 125445 1197379 59870 9593 50277 71344 12014 59330 96623 10142 86481 1313775 1313775 7175 7175 15498 15498 4173 4173 109435 109435 13362 480 12882 30187 11457 18730 3843 3843 29221 2238 26983 5631 5631 DUES AND ASSESSMENTS 34705 34705 LICENSES AND FEES 792 687 105 3118458 172056 2946402 0 468285 701242 7196 13724 10726549 11507295 862255 39474 135356 130826 33751 4530 0 288588 12098036 12554853 302059 190646 19732110 18988307 20034169 19178953 X -7936133 -6628267 0 4167 -7936133 -6624100 12098036 12554853 X 1307866 4167 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 10 0 0 0 EAST RIDGE RETIREMENT VILLAGE INC 590903331 10 0 0 0 BONITA SPRINGS RETIREMENT VILLAGE INC 262386152 10 0 0 0 NORTH FLORIDA RETIREMENT VILLAGE INC 591912330 10 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 12G, 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 30225 30225 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. 135356 130826 4530 4530 DUE TO AFFILIATES 18958301 BENEFITS PAYABLE 20397 SELF-FUNDED CLAIMS PAYABLE 9609 18988307 X 4426324 0 4426324 0 4426324 3118458 0 3118458 0 3118458 PART X, LINE 2: EXPLANATION FOR UNCERTAIN TAX POSITIONS UNDER ASC 740: SANTAFE SENIOR LIVING, INC. DID NOT OBTAIN SEPARATE, INDEPENDENT AUDITED FINANCIAL STATEMENTS FOR 2018, BUT WAS INCLUDED IN THE COMBINED AUDITED FINANCIAL STATEMENTS OF THE SANTAFE SENIOR LIVING, INC. REPORTING GROUP. THE TEXT OF THE ASC 740 FOOTNOTE IN THE COMBINED FINANCIAL STATEMENTS IS AS FOLLOWS: 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, 2018. SENIOR LIVING AND THE AFFILIATES INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2018 OR 2017. TAX YEARS 2015 THROUGH 2017 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. 1 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/DIRECTOR 0 983886 0 552964 0 468160 0 16500 0 27577 0 2049087 0 0 RANDALL L STUART ASST TREASURER 0 455743 0 147318 0 379973 0 177595 0 25590 0 1186219 0 181009 CATHERINE E AYERS ASST SECRETARY (THROUGH 7/31/18) 0 285925 0 123811 0 151514 0 24750 0 15704 0 601704 0 0 STEVEN M ZIEGLER ASST SECRETARY 0 370945 0 122526 0 15501 0 162864 0 32444 0 704280 0 0 TROY R HART PRESIDENT 0 353032 0 14403 0 170719 0 81016 0 27520 0 646690 0 102509 REBECCA J CATALANOTTO EXECUTIVE DIRECTOR - NFRV, INC. 0 185082 0 14000 0 360 0 21502 0 13274 0 234218 0 0 KENNETH J CORMIER EXECUTIVE DIRECTOR - ERRV, INC. 0 177869 0 0 0 2376 0 14133 0 17855 0 212233 0 0 SAMI B GUEDOUAR EXECUTIVE DIRECTOR - BSRV, INC. 0 167205 0 0 0 32479 0 9750 0 23021 0 232455 0 0 DAVID KREMER DIRECTOR SFSL FOUNDATION 135770 0 1954 0 673 0 9199 0 29987 0 177583 0 0 0 EMMETT BANE III DIRECTOR STRATEGIC HR BUS. PARTNER 121105 0 1899 0 21565 0 5311 0 22840 0 172720 0 0 0 KARL F GOEDERT CONTROLLER 136116 0 1823 0 1833 0 8267 0 13189 0 161228 0 0 0 TIMOTHY S BUIST FORMER VP FINANCE 0 6302 0 5261 0 171379 0 0 0 1718 0 184660 0 0 PART I, LINE 3 MICHAEL P GALLAGHER IS THE CHIEF EXECUTIVE OFFICER (CEO) OF SANTAFE SENIOR LIVING, INC. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC., A RELATED SUPPORTING ORGANIZATION. SANTAFE HEALTHCARE, INC. UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM (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 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 FIRM. THE 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, LINES 4A-B (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. LISTED PERSONS WHO RECEIVED A SEVERANCE PAYMENT OR CHANGE OF CONTROL PAYMENT IN 2018 ARE AS FOLLOWS: TIMOTHY S BUIST RECEIVED $122,227 IN COMPENSATION PAYMENTS DUE TO A SEVERANCE AGREEMENT. (RELATES TO PART I, LINE 4B): LISTED PERSONS PARTICIPATING IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: MICHAEL P GALLAGHER, RANDALL L STUART, CATHERINE E AYERS (THROUGH 7/31/2018), STEVEN M ZIEGLER AND TROY R HART 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 $368,019 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2018. MR. STUART VESTED AND RECEIVED $437,642 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2018. MS. AYERS VESTED AND RECEIVED $67,558 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2018. MR. ZIEGLER VESTED AND RECEIVED $54,394 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2018. MR. HART VESTED AND RECEIVED $180,304 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2018. MR. BUIST VESTED AND RECEIVED $34,529 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2018. SCHEDULE J, PART II: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE, INC. AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH OVER $2 BILLION IN GROSS RECEIPTS AND MORE THAN 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY SANTAFE HEALTHCARE, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATES BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2018, EXECUTIVE COMPENSATION AND BENEFITS WERE APPORTIONED AND CHARGED TO SANTAFE SENIOR LIVING, INC. AS FOLLOWS: 10% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 100% - TROY R HART, PRESIDENT 5% - RANDALL L STUART, ASSISTANT TREASURER 7.5% - CATHERINE E AYERS, ASSISTANT SECRETARY 5% - STEVEN M ZIEGLER, ASSISTANT SECRETARY FORM 990, PART III, LINE 3 IN AN EFFORT TO FOCUS ON GROWING INDEPENDENT LIVING AND HEALTH CARE OCCUPANCY, REALIGNING COMMUNITY LEADERSHIP, AND STANDARDIZING FUNCTIONS SUPPORTING HEALTHCARE COMPLIANCE, QUALITY PRACTICES, AND OPERATING RESULTS, MANAGEMENT DECIDED TO MOVE AWAY FROM THE NEAR-TERM DEVELOPMENT AND EXPANSION PLANS AND ELIMINATE THE DESIGN AND CONSTRUCTION PROGRAM SERVICE. FORM 990, PART VI, SECTION A, LINE 4 THE AMENDED BYLAWS CLARIFY THAT THE BOARD OFFICERS OF SANTAFE HEALTHCARE, INC. ARE ALSO THE BOARD OFFICERS OF SANTAFE SENIOR LIVING, INC., WITH THE SAME TERMS IN OFFICE. THE AMENDED BYLAWS CLARIFY THE CEO'S AUTHORITY TO APPOINT AND ASSIGN DUTIES TO VICE PRESIDENTS AND TO DESIGNATE EXECUTIVE VICE PRESIDENTS AND SENIOR VICE PRESIDENTS. THE PRESIDENT AND EXECUTIVE AND SENIOR VICE PRESIDENTS ARE DESIGNATED AS EXECUTIVE OFFICERS. VICE PRESIDENTS, OTHER THAN EXECUTIVE AND SENIOR VICE PRESIDENTS, ARE DESIGNATED AS CORPORATE OFFICERS. THE AMENDED BYLAWS CLARIFY THE CEO'S AUTHORITY TO REMOVE, AND TO SET COMPENSATION OF, EXECUTIVE OFFICERS AND CORPORATE OFFICERS. THE AMENDED BYLAWS AUTHORIZE THE BOARD OF DIRECTORS TO APPOINT, REMOVE, REPLACE, AND SPECIFY THE DUTIES OF THE ASSISTANT SECRETARY AND ASSISTANT TREASURER. IF THE BOARD OF DIRECTORS APPOINTS AN ASSISTANT SECRETARY OR ASSISTANT TREASURER, THE SECRETARY AND TREASURER ARE AUTHORIZED TO DELEGATE DUTIES TO ASSISTANT SECRETARY AND ASSISTANT TREASURER, RESPECTIVELY. 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 11B THE ORGANIZATION'S PROCESS FOR ENSURING THE ACCURATE PREPARATION, REVIEW AND APPROVAL OF THE 2018 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2018 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 2018 FORM 990, PRICEWATERHOUSECOOPERS, LLP REVIEWED THE 2018 FORM 990. A COPY OF THE 2018 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 2018 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. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC., A RELATED SUPPORTING ORGANIZATION. SANTAFE HEALTHCARE, INC. UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM (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 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 FIRM. THE 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 SANTAFE SENIOR LIVING, INC. IS AS FOLLOWS: THE SANTAFE HEALTHCARE, INC. 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 HEALTHCARE, INC. BOARD OF DIRECTORS. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF TOTAL DIRECT COMPENSATION AND EXECUTIVE BENEFITS. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. THE SANTAFE HEALTHCARE, INC. BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY CONSULTANT TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE BOARD OF DIRECTORS' (INCLUDING OFFICER POSITIONS) COMPENSATION. 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 HEALTHCARE, INC. BOARD OF DIRECTORS BASED ON THE MARKET COMPETITIVENESS STUDY. 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, INC. AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH OVER $2 BILLION IN GROSS RECEIPTS AND MORE THAN 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY SANTAFE HEALTHCARE, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATES BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2018, EXECUTIVE COMPENSATION AND BENEFITS WERE APPORTIONED AND CHARGED TO SANTAFE SENIOR LIVING, INC. AS FOLLOWS: 10% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 100% - TROY R HART, PRESIDENT 5% - RANDALL L STUART, ASSISTANT TREASURER 7.5% - CATHERINE E AYERS, ASSISTANT SECRETARY 5% - STEVEN M ZIEGLER, ASSISTANT SECRETARY FORM 990, PART XI, LINE 9: INCREASE IN TEMPORARILY RESTRICTED NET ASSETS 4,167. 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) 12B TYPE II N/A 0 NORTH FLORIDA RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 591912330 RETIREMENT COMMUNITY FL 501(C)(3) 10 SANTAFE HEALTHCARE INC 0 NORTH CENTRAL FLORIDA HOSPICE INC PO BOX 749 GAINESVILLE FL 326270749 592490893 HOSPICE CARE FL 501(C)(3) 10 SANTAFE HEALTHCARE INC 0 BVG ACQUISITION INC PO BOX 749 GAINESVILLE FL 326270749 203701186 RETIREMENT COMMUNITY FL 501(C)(3) 10 SANTAFE HEALTHCARE INC 0 EAST RIDGE RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 590903331 RETIREMENT COMMUNITY FL 501(C)(3) 10 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) 10 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 326270749 592386289 HOSPICE CARE & HOME HEALTH CARE FL 501(C)(3) 7 SANTAFE HEALTHCARE INC 0 SF HOLDING CORPINC PO BOX 749 GAINESVILLE FL 326270749 592903901 HOLDING COMPANY FL N/A C 0 0 0 0 1 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0