w county of certificate · certificate holder. this negatively amend , policies below. this...
TRANSCRIPT
CERTIFICATE
Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living, Inc.
For the Facility Known As:
Brookdale Fountaingrove
State of SS:
County of tl\~\w...->'w.. )- '--- -----
The enclosed Annual Report for Emeritus Corporation , EmeriCare, Inc. , and Brookdale Senior Living, Inc., and any amendments thereto are correct to the best of my knowledge and belief.
The continuing care contract form in use or offered to new residents at Brookdale Fountaingrove
has been approved by the Department.
As of the date of this certification , Emeritus Corporation, EmeriCare, Inc. , and Brookdale Senior
Living, Inc., maintain the required liquid reserve for Brookdale Fountaingrove.
~~kowicz Senior Vice President
Sworn and subscribed to before me,
a Notary Public , this ,o day
of April, 2018
My commission expires: & /J-1-/J-cr-
- -
FORM 1-1 RESIDENT POPULATION
Line Conti nuing Ca re Res idents
[ I] Number at beginning of fiscal year
[2] Number at end of fiscal year
[3] Total Lines I and 2
(4) Multiply Line 3 by ".SO" and enter result on Line S.
[S) Mean number of continuing care residents
All Res idents
[6) Number at beginning of fiscal year
[7] Number at end of fiscal year
[8) Total Lines 6 and 7 [9) Multiply Line 8 by ".SO" and enter result on Line 10.
[10) Mean number of all residents
Divide the mean number of continuing care residents (Line S) by the
[ I I] mean number of all residents (Line I 0) and enter the result (round to two decimal places).
FORM 1-2 ANNUAL PROVIDER FEE
Line
[ I] Total Operating Expenses (including depreciation and debt service- interest only)
[a] Depreciation $-----[b] Debt Service (Interest Only) $---
[2] Subtotal (add Line la and I b)
[3] Subtract Line 2 from Line I and enter result.
[4] Percentage allocated to continuing care residents (Form 1-1, Line 11)
[S] Total Operating Expense for Continuing Care Residents
(multiply Line 3 by Line 4)
[6] Total Amount Due (multiply Line S by .00 1)
346,000
3,890,000
TOTAL
114
86
200
x.S0
1100
114
l 0S
219 x.S0
I109.S
EJ TOTAL
$ 12,926,000
$ 4 ,236,000
$ 8,690,000
9 1.32%
$ 7,936,000
x.00 1
$ 7,936
PROVIDER: Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living , Inc. DBA Brookdale Fountaingrove
COMMUNITY: Brookdale Fountaingrove
ITEM# 6626008·8
Vendor Number: Name
0000103714
DEPARTMENTOF SOCIAL SERVICES
Check Date: Check No.
04/23 /2018
03934823
Invoice Number Invoice Date Payment Message Voucher ID Bus. Unit Pay on Behalf of:
0420187936 .00 04/20/2018
Gross Amount
CCRC RENEWAL FEE 7,936.00
Discount Taken
0.00
Paid Amount
00011520
7,936.00
24675 BKD Fountaingrove
TO ENSURE PAYMENTS, REMIT TO ADDRESS AND THE COMMUNITY NAME AND ADDRESS ARE REQUIRED ON YOUR INVOICES .
Gross Amount Total $7 ,936 .00 Discount Taken Total $0.00 Paid Amount Total $7,936 .00
Tear Here
THE BACK OF THIS DOCUMENT CONTAINS AN ARTIFICIAL WATERMARK - HOLD AT AN ANGLE TO VIEW
Broo kdale Sen ior Living Inc. C/0 6737 West Washington Street, Suite# 2300, Milwaukee, WI 53214
Check Date: VendorNumber:
04/23/2018 0000103714
Ch«kN~ 03934823 BANK OF AMERICA, N.A. IOI South Tryon Street
1-866-434-83 12 Charlotte, NC 28255 70-2328/719 lL
Pa y Amount
P ay ***~EVEN THOUSAND NINE HUNDRED AND TH IRTY-SIX AND XX/ 100 DOLL AR************** $7,936.00 ***
Pay To The DEPARTMENT OF SOCIAL SERVICES Order Of 744 PST
MS 3-67 SACRAMENTO . CA 95814
Void After 90 Days
5 5 q O O q • 2 2 8 11•
Page 1 of 2
I DATE(MM/DDIYYYY)
12 /28/20 17ACORD ® CERTIFICATE OF LIABILITY INSURANCE~
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
AMEND , EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY
BETWEEN THE ISSUING INSURER($) , AUTHORIZEDBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT
REPRESENTATIVE OR PRODUCER , AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED , the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.
to th e terms and conditions of the poli cy, certain poli cies may req uire an endorsement. A statement onIf SUBROGATION IS WAIVED , subject
in lieu of such endorsem ent(s) .this certificate does not confer rights to the certificate holder
PRODUCER ~~~i~cT Willis Tower s Watson Certifi cate Cent er
Willis of Illinois , Inc. rA~l?N,.tc .... 1-077-9 45-7378 Nol: 1-888-467-2378Ir:,~c/o 26 Century Blvd
~~nAJ~cc: certificates @willis.comP.O. Box 305191
INSURERCSIAFFORDINGCOVERAGE NAIC#Nashville, TN 372305191 USA
15792INSURER A: Underwri tars at Ll oyd's London
INSURED INSURERB : Contine nta l Casualty Company 20443
Brookdale Senior Living, Inc . PA 20427INSURERc: American Casualty Company of Reading , 111 Westwood Place
INSURER D: National Union Fire Insurance Company of P 19445Suite 400 Brentwood , TN 37027 INSURERE:
INSURER F :
COVERAGES CERTIFICATE NUMBER: W4886890 REVISION NUMBER·
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT , TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
ADDLsUBR POLICYEFFINSR LIMITS1YPE OF INSURANCE ,.,en .. n,n POLICY NUMBER fMMIDD/YYYYl ,~m-JiM-~1
LTR
X COMMERCIAL GENERAL LIABILl1Y EACHOCCURRENCE s 1,000,000
'i'E~~~~encel-~ CLAIMS-MADE� OCCUR PREMISES $ 100 ,000
-MEOEXP(Anyoneperson) $A X Professional Liability
SB-LTCA-01634 -1 7 12/3 1 /2017 12 /3 1 /20 18 PERSONAL& ADVINJURY $ 1,00 0,000
- GENERALAGGREGATE $ 3,000,000GEN'LAGGREGATELIMITAPPLIESPER:
1,000, 000PRODUCTS- COMP/OP AGG $~ POLICY� JECPRO-T 0Loc Deductible $ 100,000
OTHER: COMBINEDSINGLELIMIT $ 1 ,000,000
-AUTOMOBILE LIABILl1Y /Ea accidenll
X ANYAUTO BODILYINJURY(Perperson) $
B - OWNED - SCHEDULED 5082521525 01/01/2018 01/01/2019 BODILY INJURY(Per accidenl) $AUTOSONLY AUTOS- HIRED - NON-OWNED PROPERTYDAMAGE $
/Per accidenl\AUTOSONLY AUTOSONLY $
15 ,000,000EACHOCCURRENCE $UMBRELLALIABA f- OCCUR
- -
MEXCESSLIAB SB-LTCAX-01461 -1 7 12 /3 1/20 17 12 /31/20 18 AGGREGATE s 15,000,000
X CLAIMS-MADE $
OED I IRETENTIONs WORKERS COMPENSATION X I ~ffruT E I IOTH•
ER AND EMPLOYERS' LIABILl1Y YIN 1 ,000,000
El E.L. EACH ACCIDENT $
C ANYPROPRIETOR/PARTNER/EXECUTIVE N /A 508252144 4 01/01/2018 01/01/2019
OFFICER/M 1,000,000EMBEREXCLUDED? E.L.DISEASE- EA EMPLOYEE$(Mandatory In NH)
1,000,000E.L. DISEASE · POLICY LIMIT $~~t~~rtfi~~ ~nt~ PERATIONSbelow
A Ex. Auto Liab . & Employer Liab. SB-LTCA-01637- 17 12 /31/2017 12 /3 1 /20 18 Each Claim $2,000,000
Aggregate $10,000,000
l Remarks Schedule, may be attachedif more spaceis required) DESCRIPTIONOFOPERATIONS/L OCATIONS/ VEHICLES (ACORD 101, Additiona
SEE ATTACH ED
CANCELLATIONCERTIFICATE HOLDER
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
AUTHORIZEDREPRESENTATIVE Bro okda le Fountaingrova
300 Fountaingrove Pkwy C4u-,7)~Sant a Rosa, CA 95403
© 1988-2015 ACORD CORPORATION . All rights reserved .
The ACORD name and logo are registered marks of ACORD ACORD 25 (2016/03) SR ID: 15457948 8-'T CH: 552474
AGENCY CUSTOMER ID: __ ____ ___ _____ __ __ _
LOC #: ______ _
ADDITIONAL REMARKS SCHEDULE Page 2 of 2
AGENCY
Willis of Illinois
POLICY NUMBER
See Page 1
CARRIER
See Page 1
, Inc.
INAICCODE
See Page 1
NAMED INSURED Brookdale Senior Living,
111 Westwood Place Suite 400 Brentwood, TN 37027
EFFECTIVE DATE: See Page
Inc.
1
ADDITIONAL REMARKS
THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM,
25 FORM TITLE: Certificate of LiabilityFORM NUMBER:
Insured: Bro okdale Fountaingrove, 300 Fountaingrove Pkwy ,
Insuran ce
Santa Rosa , CA 95403
Other Named Insured: Horizon Bay Realty , LLC
INSURER AFFORDING COVERAGE: National POLICY NUMBER: 04-173-14-60 EFF
Union DATE:
Fire Insurance 12/31/2017
Company of Pittsburgh EXP DATE: 12 / 31 /2 018
NAIC#: 19445
TYPE OF INSURANCE:
Crime
LIMIT DESCRIPTION: Limit Deductible
LIMIT AMOUNT: $5 ,000,000 $50 , 000
ADDITIONAL REMARKS: Crime Coverage Includes: Inside/Outside
Coverage and Computer Coverage; Loss o f
Premises ; Money
Client Ass ets.
Orders and Counterfeit Paper Currency; Depositors Forgery
INSURER AFFORDING COVERAGE: Na t ional POLICY NUMBER: 04 -146-62 - 82 EFF
Union DATE:
Fire Insurance 12/31/2017
Company of Pitt sb urgh EXP DATE: 12/31/2018
NAIC#: 19445
TYPE OF INSURANCE: Employment Practices Liab i lity
LIMIT DESCRIPTION: Aggregate Limit Incl Retention
LIMI T AMOUNT: $10 ,0 00 , 000 Defense Costs $250,000
© 2008 ACORD CORPORATION. All rights reserved . ACORD 101 (2008/01) The ACORD name and logo are registered marks of ACORD
SR ID : 15457 948 BATCH: 552474 CERT: W4886890
Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living , Inc.
d/b/a Brookdale Fountaingrove
Reconciliation Schedule
Income Sta tement Operating Expenses 8,690,000
Debt Service 3,890,000 A
Depreciation 346,000
Total operating expense 12,926,000
All Other Brookdale Senior Living Comm unities 5,004,235,000
Brookdale Senior Living Total Opera ting Expense 5,0 17, 16 1,00 0
A The masterlease that governs these communitieswas signed in 20 14. At the beginning
of 2015, we exercised a purchase optionon nine communitiesin the lease. The capital
lease liability was reallocatedamongthe remainingcommunitiesas a resultof the purchase.
Hence the difference between the amortized scheduleandthe IS.
The following is a copy o f the selected financial information from Brookdale Senior Living Inc's Form 10-K which is availab le at
https ://www sec.gov / Archives/cdgar /data/1332349 /000 I 3323 4918000033/bkd I Ok 12312017.htm
For the Yt-:1.rs Endtd De ce-mber 3 1, fa'ol!anin zhou=and;, e:ccc.:u per :r.are and out2r opere11.ingd!tta}
Z017 20 16 201 :'
s J ,747,116 s 4,9 76,9$0 s J,960,60$ Total re\'e.nue
1.602, 155 2,i99,J02 2.7S8,S62Fz.cil~· open:tin! e~en.se
255.-IJ6 313,~09 370,579 Gener..! cd zcb:ni.cistrati\·ee.~e
221573 3,990 S,252 Transactioncosts 373,635 367,57-l339,721 F:::ility 'Jease e.~rue i33, 165JS2 ,0;7 520A02Deprecizticn ~d :.mc-rtiuticn
J09 ,7S2 2JS,S15 57,9J Iandas.setimpa.in:nentC'"O\..~will i6, IJ3IJ,2 76 11,113
Lo" on U.::.ilityleise ten::ii.o.ation 723,29SS91, 131 737,597Com incurredon behclf of m.2llZgedco::imunities
5,00S ,063 5,125,SIJ5,017,161 To:al opuatin~ expe..::s.!
(270,0-15) (31,083) (165,.206)Jnco::,< (loss) from operations
1,933 1,603 J ,623 lnttre.sti::lcome
(3S5,61 7) (38S,76-l) (326,154)Intere.st~~e
(12,J09) (9,1 i 0) ( i. 020)Debt codi:ic:.ttfonandextinguishme.nt:cm (SOJ)( IJ ,S27) 1,660Equity in <arnings (loss) ea.'llin.'!•of u::consolidat<d ,·entures
19,273 7,21S 1,270 Ga.ino::i.sale of i!ssds , ntt
IJ ,S01 S,55711,J IS OihertO:?•opentingin~=~
(5SS,121) (399,25S) (550,36-l)Loss before mc:cmetl.."<e3
16,515 (S,37S) 92,209Benefit (pro\i.sion)for inco:ne l3.."te.s
(JOJ,636) (J5S,155)(571,606) ~et incoce (l~.ss) 67S1S7 239~et (income) loss attributableto nonc.cntrollinginterest
(5i l ,Jl 9) (JOJ,397) s (457,Jii);\et income Oos~)attribut2.bleto Brookdale Se:llorLidng be:. coC'l!llcnstockholder.s s s Basic:and dilutedcet income Ooss) per :hz.rezttn"buta.bleto BrookchleSeniorLh-iDg:Inc. co::nmcnstocl:bolden s (3.07) s (2. IS) s (2.JS)
!SS,653 18-S,333 1S6,155\\"eighteda\·e....-.?!eshuH of c:o:::imon nod:~ i:i compurin,!t-as1cand diluttd ::etinco:nt (loss) fff sha:e
O1btr Op <nti.D g Dato: 1,055 1,1~3 1,023
To~ nu.t:lberof co:imunities (at end of pericd) Tot2.lunits opuz:ed ,~,
100,5S2 I 0~.76S 107,7S6 P<riod md 109,342101.779 106,122\\'•ight<d a,·•:-:i!e 3,SJ5 s 3,7-42 s 3.S90 s
Re\·P.u r:, ss.o~ S6.~~ S6.S~". -.
Ow:i<d !used eo:nmwuti•• occupancy r.st<(m<igbt•d a,·.ng<) s J,5 7S s J ,46S s J,j!0
Re,·POR <' '
UNITED STATES SECURITIES AND EXCHANG E COMMISSION
Wa shing ton, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTIO N 13 OR 15(d) OF THE SECURITIE S EXCHANGE ACT OF 1934
For th e fiscal year ended December 31, 201 7
or
[) TRANSffiO N REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIE S EXCHANGE ACT OF 1934
Commi ssion File Numb er ooi-32641
BROOKDALE SENIOR LIVING INC . (Exact name of registrant as specified in its cha1te1)
Delaware 20-30 68069 (State or-Other Jurisdiction of (J.R.S. Employer
Incorporat ion or Organization) Identifi cation No)
111 Wes twood Pla ce, Suite 400 Brentwood, Tennessee 37 027
(Address of Principal Executive Offices)
(Registrant's telephone number including area code) (615) 22 1-2250
SECURITIE S REGI STERED PURSUANT TO SECTIO N 12(b) OF THE ACT :
Titl e of Each Class Nam e of Each Exchan ge on Which Registered Common Stock, $0 .01 Par Value Per Share New York Stock Exchang e
SE CURITIES REGI STERED PURSUANT TO SECTIO N 12(g) OF THE ACT: None
Indicate by chec k mark if the registrant is a well-known seasoned issue r, as defined in Rule 405 of the Securities Act. Yes [X)No []
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X)
Indicate by check mark whether the registrant: (1) has filed all reports requ ired to be filed by Section 13 or 15(d) of the Securities Exchang e Act of 1934 during the preced ing 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subj ect to such filing requirements for the past 90 days . Yes [X)No [ ]
Indicate by check mark whether the registrant has submitted electroni cally and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the p receding 12 months (or for such shorte r period that the registrant was required to submit and post such files). Yes [X)No []
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein , and will not be contained, to the best ofreg istrant's knowl edge, in definitive proxy or in formation statements incorporat ed by reference in Part ill of th is Form I0-Kor any amendment to this Form I 0-K. []
BLCGlenwood-Gardens AL-LH, LLC
S-H OpCo Camarillo, LLC
S-H OpCo Carlsbad, LLC
S-H OpCo Carmel Valley, LLC
S-H OpCo Rancho Mirage, LLC
S-H OpCo San Juan Capistrano, LLC
Emeritus Corporation d/b/a Brookdale
Northridge, Brookdale Fountaingrove,
Brookdale Yorba Linda and Brookdale
San Dimas
2017 Client Service Communication
The Members and Board of Directors BLCGlenwood-Gardens AL-LH, LLC;S-H OpCo Camarillo, LLC;S-H OpCo Carlsbad, LLC;S-HOpCo Carmel Valley, LLC;
S-H OpCo Rancho Mirage, LLC;S-HOpCo SanJuan Capistrano, LLC;and Emeritus Corporation d/b/a Brookdale
Northridge, Brookdale Fountaingrove, Brookdale Yorba Linda and Brookdale San Dimas (collectively the "Companies")
Dear Members and Board of Directors:
We have audited the continuing care reports Forms 5-1 through 5-S ("the Reports"), prepared pursuant to the
requirements of t he report preparation provisions of California Health and Safety Code Section 1792, of the
Companies for the year ended December 31, 2017, and have issued our report thereon dated April 25, 2018.
Professional standards require that we provide you certain informat ion related to the planned scope and timing of our
audits. We have communicated such informat ion in our engagement letter dated September 12, 2017. Professional
standards also require that we communicate to you certain other matters related to our audits.
This information is intended solely for the use of the Members and Board of Directors, management and others within
the aforementioned companies and is not intended to be, and should not be used by anyone other than these
specified parties.
We appreciate the confidence you place in LBMC as your business advisor. We strive to help you stay compliant,
manage risk, and improve performance in every way as you grow your business.
'PLl13.M.C..,
Brentwood, Tennessee April 25, 2018
2CONFIDENTIALI LBMC,PC
3
.............................................. 4
Inte ract ion w ith management, independence, and other matters ................. 5
Internal control related matters ......................................
Qualitative assessments...........................................
..................................... 6
Client service is a priority .......................................................................................7
CONFIDENTIALI LBMC, PC
Detail
Qualitative Aspectsof Management is responsible for the selection and use of appropriate accounting policies. In
AccountingPractices- accordance with the terms of our engagement letter , we will advise management about the
AccountingPolicies appropriateness of account ing policies and their application. No new accounting policies
were adopted and the application of exist ing policies was not changed during 2017. We are
not aware of any transactions entered into by the Companies during the year for which there
is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the Reports in the proper period.
Qualitat ive Aspectsof Accounting estimates are an integral part of the Reports prepared by management and are
AccountingPractices- based on management 's knowledge and experience about past and current events and
ons about future events. Certain account ing estimates are particu larly sensitive dueEstimates assumptito: (i) their significance to the Reports; and (ii) possibility that future events affecting them
may differ significantly from those expected . The most sensitive estimates affecting the
Reports relate to:
• Calculation of revenueapplicableto residents without a continuingcare contract
• Depreciablelivesof propertyand equipment • Amortizationperiod of residentleaseholdintangibles
We have reviewed and evaluated all areas where management 's estimates significantly
impact the Reports and have concluded that they are reasonable in the context of the
Reports taken as a whole.
4CONFIDENTIAL I LBMC, PC
Area Detail
Difficultie s For purposes of this report, "difficulties" may include matters such as:
Encountered in • the unavailability of, or significant delays in management's prov iding information,
Performing the Audit • an unreasonable time frame within which to complete the audit,
• extensive unexpected effort required to obtain audit evidence, or
• restrict ions imposed on the auditor by management.
We encountered no significant difficulties in performing and completing our audits.
Disagreement s wi th For purposes of this report, professional standards define "disagreements with management" as
Mana gemen t a financial accounting, reporting, or auditing matter, whether or not resolved to our
satisfaction , that could be significant to the reports or the auditors' reports. We are pleased to
report that no such disagreements arose during the course of our audits.
Mana gement In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If consultation Consultations with
involves application of an accounting principle to the Companies' Reports or a determination ofOther Independent the type of auditors' opinion that may be expressed on those Reports, our professional
Accountants standards require the consulting accountant to check with us to determine that the consultant
has all the relevant facts. To our know ledge, there were no such consultat ions with other
accountants.
Manag ement We have requested certain representations from management that are included in the
Representation s management representation lette r dated April 25, 2018.
Independence We are not aware of any relationships between our firm and the Companies that, in our
professional judgment, may reasonably be though t to bear on our independence that have
occurred during the period from January 1, 2017 through the date of this report.
Corrected and Professional standards require us to accumulate all misstatements identified during the audit ,
Uncorrecte d other than those that are trivial, and communicate them to the appropriate level of
management. No misstatements were detected as a result of our audit procedures. Misstatement s
5CONFIDENTIALI LBMC,PC
In planning and performing our audit of the Reports, we considered the Companies' internal control over accounting
and financial report ing ("internal control") as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the Reports, but not for the purpose of expressing an
opinion on the effectiveness of the Companies' internal control. Accordingly, we do not express an opinion on the
effectivene ss of the Companies' internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions , to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal
control, such that there is a reasonable possibility that a material misstatement of the Companies' Reports will not be
prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not
designed to identify all deficienc ies in internal control that might be material weaknesses or significant deficiencie s
and, therefore, material weaknesses or significant deficiencies may exist that were not identified. Given the se
limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknessesmay exist that have not been identified .
6CONFIDENTIALI LBMC, PC
For additional information or if you have questions please contact the Audit Service Team Leaders.
Andrew S. Bissonnette 615-309-2209 Direct [email protected]
Laura L. McGregor 615-309-2289 Direct lmcgre gor@lbm c.com
CONFIDENTIALI LBMC, PC 7
CONTINUING CARE
RESERVE REPORT
PART 5
INDEPENDENT AUDITORS' REPORT
Emeritus Corporation , EmeriCare, Inc., Brookdale Senior Living, Inc. d/b/a Brookdale Fountaingrove:
We have audited the accompanying cont inuing care reserve report Forms 5-1 t hrough 5-5 (the "Reports") of Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living, Inc. d/b/a Brookdale Fountaingrove (the "Company"), as of December 31, 2017. The Reports have been prepared by management using the report preparation provisions of California Health and Safety Code Section 1792.
Management's Responsibility
Management is responsible for the preparation and fair presentation of the Reports in accordance with the requirements of California Health and Safety Code Section 1792; this includes the design, implementation and maintenance of internal contro l relevant to the preparation and fair presentation of Reports that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an op inion on the Reports based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Reports
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Reports. The procedures selected depend on the auditors' judgment , including the assessment of the risks of materi al misstatement of the Reports, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the Reports in order to design audit procedures that are appropriate in the circumstance s, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control. Accordingly, we express no such opin ion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Reports.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the Reports present fairly, in all material respects, the liquid reserve requirements of the Company as of December 31, 2017, in conformity with the repor t preparation provi sions of California
Health and Safety Code Section 1792.
Basis of Accounting
The accompanying Reports were prepared in accordance with the repo rt preparation provisions of California Health and Safety Code Section 1792, wh ich is a basis of accounting other than accounting principles generally accepted in the United States of America. The Reports are not intended to be a complete presentation of the Company's assets, liabilitie s, revenues and expenses. Our opinion is not
modified with respect to this matter.
Restriction on Use
Our report is intend ed solely for the information and use of th e Company and for f iling with the California Department of Social Services and should not be used by anyone other than these specified parties . However, this report is a matter of public record and its distribution is not limited.
Brentwood, Tennessee April 25, 2018
FORMS- I
LONG -TE RM DE BT INCU RRED IN A PRIOR FISCAL YEA R
(Including Balloon Debt) (d) (e)
(a) (b) (c)
Long-Term Debt Date Principa l Paid Interest Paid Credit Enh anceme nt Total Paid
Obligat ion Incurred During Fiscal Year During Fiscal Year Premiums Paid in Fiscal Year (columns (b)+ (c)+ (d))
I
2
3
4
5
6
7
8
$0.00 $0.00 $0.00TOTA L:
(Trans]er this 0111011111to
Form 5-3. line I)
NOTE : For column (b), do not include voluntary payments made to pay down princ ipal.
PROVIDER: Emeritu s Corporatio n EmeriCare Inc. Brookdal e Senior Living. Inc. DBA Brookdale Fountaingrove
FORM5-2
LONG-TERMDEBT INCURREDDURINGFISCAL YEAR (Including Balloo n Debt)
(e)(a) (b) (c) (d)
Tota l Interest Paid During Amount of Most Recent Number of Payments Reserve Requirement (see instruction 5) (columnsDateLong-Tenn
Payment on the Debt over next 12 months (c) x (d))Incurred Fiscal Year
Debt Obligation
I
2
3
4
5
6
7
8
$0.00 $0.00 $0.00TOTAL: $0.00
(Transfer this amoum to
Form 5-3, line 2)
NOTE: For column (b), do not include voluntary payments made to pay down principal.
Emeritus Corporat ion. EmeriCare. Inc .. Brookdale Senio r Living. Inc. DBA Brookdale FountaingrovePROVIDER:
FORMS-3
CALCULATION OF LONG -TERM DEBT RESERVE AMOUNT TOTAL
Line
$Total from Form 5- 1 bottom of Column (e)
$2 Total from Form 5-2 bottom of Column (e)
3 Fac ility leasehold or rental payment paid by provider dur ing fisca l year. $ 3,890,000
(includin g related payments such as lease insurance)
$ 3,890,0004 TOTAL AMOUNT REQUIRED FOR LONG-TERM DEBT RESERVE:
PROVIDER: Emeritus Corporat ion, EmeriCare, Inc., Brookdale Senior Living, Inc. DBA Brookdale Founta ingrove
FORM 5-4
CALCULATION OF NET OPERATING EXPENSES Amounts TotalLine
$ 12,926,000 I Total operat ing expenses from financ ial statements
2 Deductions $ 3,890,000
a lnterest paid on long-term debt (see instructions)
b Credit enhanceme nt premium s paid for long-term debt (see instructio ns) $
$ 346,000c Deprec iation d Amort ization --
$
e Revenues rece ived during the fisca l yea r for services to persons who did not have a $ 855,000
cont inuing care contract $
f Extraord inary expenses approved by the Department $ 5,09 1,000
3 Total Deductions $ 7,835,000
4 Net Operating Expenses $ 21,466
5 Divide Line 4 by 365 and enter the resu lt. $ 1,6 10,000
6 Multiply Line S by 75 and enter the result. This is the provider's opera ting expense reserve amount.
Emeritus Corporatio n, EmeriCare, Inc., Brookda le Senior Living, Inc. DBA Brookda le Fountaingrove PROVIDE R: COMMUNITY: Brookdale Fountaingrove
FORM 5-4 CALCULATION OF NET OPERATING EXPENSES RECONCILIATION OF LINE 2E
Revenues received during the fiscal year for services to persons who did not have a continuing care contract (Line 2E)
Revenues received from continuing care residents
Cash received for "Resident Revenue"*
$
Brookdale
Fountaingrove
91.32% 855,000
8,992,000
$ 9,847,000
Cash received for Resident Revenue is allocated between revenues received from residents and revenues received from persons who did not have a continuing care contract based on the weighted average determined on line I 1 of Form 1-1.
* Conversion of GAAP Resident Revenue to Cash Basis Resident Revenue
Revenue from Resident Services and Ancillary Services, per Statement of Operations
Less: Accounts Receivab le at 12/31 /17
Plus: Accounts Receivable at 12/31/ 16
Revenue from Resident Services , cash basis
$ 9,756,000
531,000
622,000
$ 9,847,000
FORM5-5 ANNUALRESERVECERTLFICATION
Provider Name: Emeritus Corporation. EmeriCarc, Inc., Brookdale Senior Living, Inc. DBA Brookdale
Fountaingrove
Fisca l Y car Ended: December 31 2017
We have reviewed our debt serv ice reserve and operating expense reserve requirements as of, and for the period
ended 12/31/17 and are in compliance with those requirements.
Onr liquid resenre requirements. comp uted using the audited financial statements for the fiscal year are
as follows: Amount
3,890,000[I] Debi Service Reserve Amount 1,6 10,000[2] Operating Expense Reserve Amount
5,500.000Pl Total Liquid Reserve Amount: 1
Qualifying ass ets sufficient 10 fulfill the above requirements are held as follows: Amount
(market vnlue nl end orquarter )
DebiService Rtserve Qp crnting ReserveQm, lirying Asset Descr iption
s 3,890,000 S 1,610,000 [4] Cas h ond Cash Equivalents
[5] Investment Securities
[6] Equity Securities
[7] Unused/Available Lines of Credit
[8] Unused/Available Letters of Credit (not applicable)
(9] Debt Service Reserve
(IO] Other :
(describe qualifying ass et)
See attached statement
Totn l Amount or Qunlifying Assets
Listed for Liquid Reserve: [II] s 3,890,000 [12] s 1,610,000
[13] s 3,890,000 [14] s 1,610,000Totn l Amount Required:
S11rplus/(Deficiency): [15] s [16] $
Signature :
'-ff3v[tiDate:
(Authorized Repre sentative )
JoanneLeskowicz. SeniorVicePresident
(Title)
ii
Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living, Inc. d/b/a
Brookdale Fountaingrove Disclosures Form 5-5 per H&SC section 1790(a)
December 31, 2017
The per capita costs of operation for Emeritus Corporation d/b/a Brookdale Fountaingrove
continuing care retirement community:
Form 1-2 1. Total Operat ing Expense $10,648,000
Form 1-1 7. Number at end of year 105
Total costs per resident $101,410
The construction in progress was funded through for Emeritus Corporation d/b/a Brookdale Fountaingrove own funds, no new financing were made in FY 2017 for construction. In addition, there were no funds set aside for future projects nor for any contingency amounts for Emeritus
Corporation d/b/a Brookdale Fountaingrove .
In accordance with the Code, Emeritus Corporation d/b/a Brookdale Fountaingrove has computed its liquid reserve requi rement as of December 31, 2017, its most recent fiscal year end, and the reserve is based on Brookdale Senior Living, lnc.'s conso lidated audited financial
statements for that period.
The restricted cash consists of reserve funds requir ed by regulatory agencies for licensed continuing care retirement communities. As of December 31, 2017, the minimum liqu id reserve ("MLR") funded by restricted cash was $5.5 million. Of the $5.5 million, $3.9 million was for Debt Service Reserve, to service debt and $1.6 million was for Operating Reserve, to cover
operating expenses.
Note 1 to the Continuing Care Reserve Report (Part 5)
The continuing care reserve report included in Part 5 has been prepared in accordance with the report preparation provisions of the California Health and Welfare Code {the Code), Section
1792.
Section 1792 of the Code indicates that the Company should maintain at all times qualifying assets as a liquid reserve in an amount that equals or exceeds the sum of the following :
• The amount the provider is required to hold as a debt service reserve under Section
1792.3.
• The amount the provider must hold as an operating expense reserve under Section
1792.4.
In accordance with the Code, the Company has computed its liquid reserve requirement as of December 31, 2017, its most recent fiscal year end, and the reserve is based on Brookdale Senior Living, lnc.'s consolidated audited financial statements for that period.
REPORT FORM 7-1
ON CCRC MONTHLY SERVICE FEES
RESIDENTIAL LIVING
ASSISTED LIVING
SKILL ED NURSING
f11 Monthly Service Fees at beginning of reporting period:
(indicate range, if applicable) NIA $ 4,680 $ 8,283
121 Indicate percentage of increase in fees imposed during reporting period:
(indicate range, if applicable) NIA 2.9%
� Check here if monthly service fees at tltis community were not increased during the reporting period. (If you checked tltis box, please skip down to the bottom of this form and specify the names of the provider and community.)
131Indicate the date the fee increase was implemented: 1/112017 (lfmore than I increase was implemented, indicate the dates for each increase.)
141 Check each of the appropriate boxes:
X Each fee increase is based on the provider's projected costs, prior year per capita costs,
and economic indicators.
X All affected residents were given written notice of this fee increase at least 30 days
X
X
X
X
prior to its implementation.
At least 30 days prior to the increase in monthly service fees, the designated representative of the provider convened a meeting that all residents were invited to attend.
At the meeting with residents, the provider discussed and explained the reasons for the increase, the basis for detennining the amo1mt of the increase, and the data used for calculating the increase.
The provider provided residents with at least 14days advance notice of each meeting
held to discuss the fee increases.
The governing body of the provider, or the designated representative of the provider
posted the notice of, and the agenda for, the meeting in a conspicuous place in the
community at least 14 days prior to the meeting.
fSI On an attached page, provide a concise explanation for the increase in monthly service fees including the amonnt of the increase.
PROVIDER : Emerit us Co rporation , EmeriCare , Inc., Brookdale Sen ior Livin g, Inc. OBA Brookda le Founta ingrovc
COMMUNITY : Brookdal e Fountaingrove
Form 7-1 Note
[S] Monthly service fees for Skilled Nursing decreased by -6.6% due to residents with higher rates and
less discounts moving out. Residents were replaced w ith what appears to be resident s with higher rates
but more discounts. Assisted Living rates increased by 2.9% due to market adjustments.
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ContinuingCare Retirement Community Dote Prepared: 4/27/18
Disclosure Statement General Information
FACILITYNAME:Brookdale Fountaingrove ZIP CODE95403 707-566-8600: PHONE:
ILITY TOR: ADDRESS300 Fountaingrove Pkwy, Santa Rosa, CA : PROVIDERNAME: Emeritus Corporation, EmeriCare, Inc., Brookdale Senior Living, Inc. FAC OPERA eme,;1u,Co,poration.EmeriCa,e,Inc .• a,0o1<dalesen1orUv;ng. 1nc.
RELATEDFACILITIES: Please see below for other CCRCs AFFILIATION:RELIGIOUS None
# OF D SINGLE MULTI MI TO SHOPP __0 LES ING CTR: _1YEAR 2000 STORYD OTHER: _ TO HOSPITAL: ________ MILES _1OPENED: ACRES:~ STORY
*********** *** **** *** ******* ***** ******* **************** *** * ********** NUMBER : LIVING HEALTHCAREOF UNITS RESIDENTIAL
STUDIO: ASSISTED 92
APARTMENTS-l BDRM: o SKILLED 45
APARTMENTS- o LIVING: NURSING:
APARTMENTS-2BDRM:o CARESPECIAL : 24
COTTAGES/HOUSES: o > Dementia care DESCRIPTION:
R LU OCCUPANCY(YEAR o - - --- ---%) AT END: > ---,-....,......,..--,----- -- ---
* * * * * * * * • • • • • • • • • • • • • • • * * * * * ····································••**** ACCREDITED?:D YES D NO BY: ____ __ __ _D NOT-FOR-PROFIT -TYPEOF OWNERSHIP: 0 FORPROFIT
0 CONTINUING D LIFE D ENTRANCE D FEE SERVICE
([heck u/1 that apply} OF ASSETS D EQUITY D MEMBERSHIP D RENTAL FORMOF CONTRACT: CARE CARE FEE FOR
D ASSIGNMENT
REFUND ([heckullthutupply}� 90% 050 % AMORTIZED : ____ _PROVISIONS: 075 % � FULLY � OTHER ___
RANGEOF ENTRANCE $_0 - 0 _ _ LONG-TERM INSURANCE DYESIii NOFEES: _____ $__ __ _ CARE REQUIRED?
HEALTHCAREBENEFITS IN CONTRACT: INCLUDED None
ENTRY MIN PRIOR NIA NIA REQUIREMENTS:. AGE:~ PROFESSION: OTHER:
RESIDENTREPRESENTATIVE(S)TO, AND RESIDENT ON, THE (brieflydesuibe provider'scomp and residentsMEMBER(S) BOARD lionce ' role): >
> A resident representative meets with a representative of the governing body periodically to discuss budgeting and other resident matters.
*******************************************************••············· FACILITY AND AMENITIES SERVICES
INCLUDED FOR CHARGEFEE SERVICE SERVICES INFEE EXTRA
0 HOUSEKEEPING{_ /MONTH) �COMMONAREAAMENITIESAVAILABLEFOR AVAILABLE
BEAUTY/BARBER SHOP � TIMES 0 BILLIARD � MEALS /DAY 0 �ROOM � {_ )
SPECIAL AVAILABLE DIETSBOWLINGGREEN � � 0 � CARD 0 �ROOMS CHAPEL EMERGENCY 0 �24-HOUR RESPONSE� � COFFEE � ACTIVITIES 0 �SHOP � PROGRAM
ALLUTILITIES PHONEEXCEPTCRAFTROOMS 0 � 0 � EXERCISE APARTMENT 0 �MAINTENANCEROOM � �
CABLE 0GOLFCOURSE � � TV �ACCESS LIBRARY 0 � LINENS � 0FURNISHED
LAUNDERED 0PUTTINGGREEN � � LINENS � MEDICATION 0SHUFFLEBOARD � � MANAGEMENT �
SPA � � NURSING CLINIC �/WELLNESS 0 PERSONAL CAREHOMESWIMMINGPOOL-INDOOR � � � �
SWIMMING TRANSPORTATION-PERSONAL 0 �POOL-OUTDOOR � � TRANSPORTON-PREARRANGED 0ATITENNIS � � �COURT OTHER
OTHER WORKSHOP � � � �
� � All providers ore required and Safety section 1789 this report to prospective a deposit agreement or by Health Code .1 to provide residents before executing continuingcore contract, or receiv . Man ore port of multi-facility which financial Consumering any payment y communities operations may influence reporting. s ore encouraged to ask questions of the continuing core retirement y that they are considering and to seek advice from profcommunit essional advisors.
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PROVIDERNAME:Emeritus Corporation , EmeriCare, Inc., Brookda le Senior Living, Inc., d/b/a Brookdale Fountaingrove
OTHERCCRCs
Brookdale Carlsbad Brookdale Carmel Valley Brookdale Rancho Mirage Brookdale San Juan Capistrano
Brookdale Camarillo Brookdale Riverwalk Brookdale Northridge Brookdale San Dimas Brookdale Fountaingrove Brookdale Yorba Linda
MULTI-LEVEL COMMUNITIESRETIREMENT
N/A
FREE-STANDING NURSINGSKILLED
N/A
SUBSIDIZED HOUSINGSENIOR
N/A
LOCATION(City, State)
Carlsbad, CA San Diego, CA Rancho Mirage, CA
San Juan Capistrano, CA
Camarillo, CA Bakersfield, CA Northridge, CA San Dimas, CA Santa Rosa, CA
Yorba Linda , CA
LOCATION(City, State)
LOCATION{City, State)
LOCATION{City, State)
PHONE(with area code)
(760) 720-9898
(858) 259-2222
(760) 340-5999 (949) 248-8855
(805) 388-8086
(661) 587-0182
(818) 886-1616
(909) 394-0304 (707) 566-8600
(714)-777-9666
PHONE{with area code) ..
i PHONE{with area code)
I
l
PHONE(with area code)
NOTE: PLEASE IFTHE ISA LIFE FACILITYINDICATE FACILITY CARE . Page 2 of 4
PROVIDER Emeritus Corporation , EmeriCare, Inc., Brookdale Senior Living, Inc. d/b/a Brookdale Fountaingrove NAME:
2014 201S 2016 2017 INCOMEFROMONGOINGOPERATIONS OPERATINGINCOME (Excludingamortizationof entrance fee income) 14,322,000 13,243 ,000 11,881,000 9,756,000
LESSOPERATINGEXPENSES (Excluding , amorti , and interest) 8,557,000 8,909,000 8,670,000 8,690,000depreciation zation
NET INCOME OPERATIONS 5,763,000 4,334,000 3,211,000 1,066 ,000 FROM
LESSINTEREST 3,485 ,000 3,588,000 4,700 ,000 3,890,000EXPENSE
PLUSCONTRIBUTIONS
PLUSNON-OPERATING (EXPENSES)INCOME (excluding extraordinaryitems)
NET INCOME (LOSS)BEFOREENTRANCE FEES,DEPRECIATION 2,278,000 746,000 (1,489 ,000) (2,824,000) AND AMORTIZATION
NET CASH FLOW ENTRANCEFROM FEES (Total Deposits Less )Refunds
* • • • • * • • • • • • • • * * * • • * * • • • • • * * • * • • * * * * • * • * * * * * • • * • * • * * * • • • • • • * • * * • • * • • * *
DESCRIPTION DEBT / yeor end) OF SECURED (us of most recent fiscoOUTSTANDING INTEREST DATEOF DATEOF AMORTIZATION
LENDER BALANCE RATE ORIGINATION MATUR PERIODITY
• • • • * * • • • • • * • * • • • * * * • • • • * • * • * • * * * • • * * * * • • • • * * • * • • • * • * • • • • * * * • • * • • • • * • •
FINANCIAL (see next page for ratio formulas) RATIOS 2015 CCAC
Medians 50'h Percentile 2015 2016 2017 (optiono/} .34 1.15 DEBTTO ASSET RATIO
.85 1.13 1.26 OPERATINGRATIO DEBTSERVICE RATIO 1.20 1.92 1.40COVERAGE DAYSCASHON HAND RATIO 9
······································••*****••· ······················HISTORICALMONTHLYSERVICE (Average ge PercentageFEES Fee and Chan )
2014 % 201S % 2016 % 2017
STUDIO2,605
ONEBEDROOM3,670
TWOBEDROOM6,070
COTTAGE 7,665 /HOUSE 4,226 7.6% 4,549 2 .9% 4,680 ASSISTED -LIVING
SKILLEDNURSING8,339 1.1% 8 ,433 5.2% 8 ,868 (6.6%) 8,283
5.1% 5,611 - 5,629SPECIALCARE- 5,339
* • * • • * • • • • * • * • • • * * * * • • • * * • • • • * * • • • * * * * * • * • * • • • • * * * • * * * * * • • • * * * * • * * * * * •
COMMENTSFROMPROVIDER:> -- - --- - --- - --- -- - -- --- - --- ----> -- -- ---- -- - - -- ----- -- - -- -- - -- - ---- -- - - -->
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PROVIDERNAME:Emeritus Corporat ion , EmeriCare, Inc., Brookdale Senior Living , Inc. , d/b/a Brookdale Fountaingrove
FINANCIALRATIOFORMULAS
LONG-TERMDEBTTO TOTAL ASSETSRATIO
Long-Term Debt, less Current Portion Total Assets
OPERATINGRATIO
TotalOperatingExpenses - DepreciationExpense - AmortizationExpense
TotalOperatingRevenues- Amortizationof Deferred Revenue
DEBTSERVICECOVERAGERATIO
TotalExcessof Revenues over Expenses + Interest, Depreciation, and Amortization Expenses
Amortizationof-BeferredRevenue+ Net Proceeds from Entrance Fees AnnualDebt Service
DAYSCASHON HAND RATIO
UnrestrictedCurrentCash& Investments· + Unrestricted Non-Current Cash& Investments
(OperatingExpenses-Depreciation- Amortization)/365
NOTE:These formulas ore also used bythe Continuing Care Accreditation Commission.For each formula, that organization also publishes annual medianfigures for certain continuing care retirement communities.
Page 4 of 4
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