Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 1d · Related organizations

  $35,246

• 1f · All other contributions, gifts and grants

  $488

• 2a · Program service revenue: RESIDENT SERVICES

  total $18,347,933 · related or exempt $18,347,933

• 2b · Program service revenue: RESIDENT RENTAL INCOME

  total $11,015,878 · related or exempt $11,015,878

• 3 · Investment income

  total $135,689 · excluded $135,689

• 10a · Gross sales of inventory

  $53,543

• 10b · Cost of goods sold

  $0

• 10c · Net income from sales of inventory

  total $53,543 · excluded $53,543

• 11a · Other revenue: RESTAURANT SALES

  total $574,496 · excluded $574,496

• 11b · Other revenue: MISCELLANEOUS REVENUE

  total $236,995 · excluded $236,995

• 11c · Other revenue: COMMUNITY FEE

  total $159,500 · excluded $159,500

• 11d · All other revenue

  total $155,351 · excluded $155,351

• 11e · Other revenue, total

  $1,126,342

Functional expenses

Part IX, the statement of functional expenses.

• 7 · Other salaries and wages

  total $13,770,499 · program services $12,622,516 · management and general $1,147,983

• 8 · Pension plan contributions

  total $193,410 · program services $177,396 · management and general $16,014

• 9 · Other employee benefits

  total $998,028 · program services $911,081 · management and general $86,947

• 10 · Payroll taxes

  total $1,039,493 · program services $952,629 · management and general $86,864

• 11a · Fees: management

  total $1,388,071 · management and general $1,388,071

• 11b · Fees: legal

  total $6,940 · management and general $6,940

• 11f · Fees: investment management

  total $50,374 · program services $47,657 · management and general $2,717

• 11g · Fees: other

  total $1,693,097 · program services $1,578,724 · management and general $114,373

• 12 · Advertising and promotion

  total $9,281 · program services $3,218 · management and general $6,063

• 13 · Office expenses

  total $663,642 · program services $436,502 · management and general $227,140

• 16 · Occupancy

  total $1,637,965 · program services $1,457,784 · management and general $180,181

• 17 · Travel

  total $10,073 · program services $1,776 · management and general $8,297

• 19 · Conferences, conventions and meetings

  total $7,082 · program services $1,002 · management and general $6,080

• 20 · Interest

  total $2,165,042 · program services $2,130,290 · management and general $34,752

• 22 · Depreciation, depletion and amortization

  total $3,006,098 · program services $2,979,807 · management and general $26,291

• 23 · Insurance

  total $946,113 · program services $852,096 · management and general $94,017

• 24a · Other expenses: FOOD

  total $1,202,845 · program services $1,200,808 · management and general $2,037

• 24b · Other expenses: ANCILLARY EXPENSES

  total $310,290 · program services $310,290

• 24c · Other expenses: MEDICAL SUPPLIES

  total $188,744 · program services $188,744

• 24d · Other expenses: BAD DEBT

  total $156,230 · management and general $156,230

• 24e · All other expenses

  total $369,677 · program services $220,849 · management and general $148,828

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $5,502,619 · end of year $355,627

• 2 · Savings and temporary cash investments

  beginning of year $255,930 · end of year $108,599

• 4 · Accounts receivable

  beginning of year $1,511,016 · end of year $2,013,615

• 8 · Inventories for sale or use

  beginning of year $34,221 · end of year $34,221

• 9 · Prepaid expenses and deferred charges

  beginning of year $66,270 · end of year $109,475

• 10a · Land, buildings and equipment: cost or other basis

  $69,555,454

• 10b · Land, buildings and equipment: accumulated depreciation

  $24,006,884

• 10c · Land, buildings and equipment, net

  beginning of year $47,029,125 · end of year $45,548,570

• 11 · Investments: publicly traded securities

  beginning of year $0 · end of year $5,300,000

• 15 · Other assets

  beginning of year $22,190,282 · end of year $19,054,107

• 17 · Accounts payable and accrued expenses

  beginning of year $4,021,005 · end of year $3,872,064

• 20 · Tax-exempt bond liabilities

  beginning of year $74,674,592 · end of year $70,193,729

• 21 · Escrow or custodial account liability

  beginning of year $74,825 · end of year $72,583

• 23 · Secured mortgages and notes payable

  beginning of year $715,000 · end of year $715,000

• 24 · Unsecured notes and loans payable

  beginning of year $7,115,000 · end of year $2,210,000

• 25 · Other liabilities

  beginning of year $8,836,256 · end of year $13,043,102

• 27 · Net assets without donor restrictions

  beginning of year -$18,867,266 · end of year -$17,599,601

• 28 · Net assets with donor restrictions

  beginning of year $20,051 · end of year $17,337

The filer's explanations (Part III)

PART I, LINE 3

THE ORGANIZATION RELIED ON WALKER SENIOR SERVICES, INC., A RELATED ORGANIZATION, WHEN SETTING REASONABLE COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. WALKER SENIOR SERVICES, INC. RELIED UPON WRITTEN EMPLOYMENT CONTRACTS, COMPENSATION SURVEYS OR STUDIES AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE.

PART I, LINE 5

PURPOSE: THE PURPOSE OF THE PLAN IS TO PROVIDE INCENTIVE COMPENSATION TO ITS MANAGEMENT AND PROFESSIONAL STAFF WHO MAKE SIGNIFICANT CONTRIBUTIONS TO THE ACHIEVEMENT OF BUDGETED FINANCIAL AND STRATEGIC GOALS AS ESTABLISHED BY WALKER METHODIST, INC. ELIGIBILITY: ELIGIBILITY FOR THE PLAN IS LIMITED TO REGULAR MANAGEMENT EMPLOYEES WHO RETAIN THE JOB TITLE OF CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, CHIEF ADMINISTRATIVE OFFICER, VICE PRESIDENT OF OPERATIONS, VICE PRESIDENT OF HUMAN RESOURCES, EXECUTIVE DIRECTORS, DIRECTORS, CONTROLLER, DIRECTORS OF HOUSING, DIRECTOR OF SPIRITUAL CARE, CORPORATE DIRECTORS OF HUMAN RESOURCES AND EDUCATION, AND DEPARTMENT HEADS. OTHER KEY EMPLOYEES MAY BE INCLUDED IN THE PLAN AS APPROVED BY THE CHIEF EXECUTIVE OFFICER. FOR 2023, THE CHIEF EXECUTIVE OFFICER HAS APPROVED INCLUSION OF CORPORATE MANAGERS AND NURSE MANAGERS. IN ORDER TO PARTICIPATE IN THE PLAN FOR A PARTICULAR PLAN YEAR, EMPLOYEES, WHO ARE NEWLY HIRED OR PROMOTED TO AN ELIGIBLE POSITION, MUST BE EMPLOYED IN THE POSITION BY JUNE 30TH OF THAT PLAN YEAR. PLAN GOALS: THE CHIEF EXECUTIVE OFFICER HAS APPROVED THE INCLUSION OF DEPARTMENT HEADS, CORPORATE MANAGERS, AND NURSE MANAGERS IN THE PLAN. DEPARTMENT HEADS, CORPORATE MANAGERS, AND NURSE MANAGERS HAD ONLY ONE GOAL AROUND THEIR RESPECTIVE COMMUNITY'S BUDGETED OPERATING EBITDA. IN ADDITION TO MEETING THE FINANCIAL PLAN GOAL, THEY MUST HAVE BEEN CONTRIBUTING MEANINGFULLY TO THE ADVANCEMENT OF WALKER'S MISSION TO ENHANCE THE LIVES OF OLDER ADULTS THROUGH A CULTURE OF CARE, RESPECT AND SERVICE, AND HAVE OVERALL PERFORMANCE IN LINE WITH WALKER'S VALUES OF RESPECT, IMAGINATION AND COLLABORATION. IF THEIR COMMUNITY ACHIEVED AN OPERATING EBITDA GREATER THAN THE THRESHOLD LEVEL, THEY EARNED A PLAN PAYMENT OF $500. IF THEIR RESPECTIVE COMMUNITY ACHIEVED AN OPERATING EBITDA THAT IS GREATER THAN TARGET BY 3% OR MORE, THEY EARNED A PLAN PAYMENT OF $1,000. EACH DEPARTMENT HEAD, CORPORATE MANAGER, OR NURSE MANAGER WAS ELIGIBLE FOR ONLY ONE OF THE TWO PAYMENTS DESCRIBED ABOVE; PAYMENTS WERE NOT CUMULATIVE. FOR 2023, PLAN PAYMENTS TO ALL OTHER ELIGIBLE EMPLOYEES IDENTIFIED IN THE PLAN WERE EARNED BASED ON ACHIEVING AN ACTUAL EBITDA OF THE PLAN YEAR THAT FALLS WITHIN RANGE OF 93.0% - 115.0% OF BUDGETED OPERATING EBITDA. CORPORATE STAFF PARTICIPANTS HAD ONLY ONE GOAL AROUND WALKER'S BUDGETED OPERATING EBITDA. LOCATION PARTICIPANTS HAD TWO GOALS, WITH 70.0% BASED ON COMMUNITY'S BUDGETED OPERATING EBITDA ACHIEVEMENT AND 30.0% ON CONSOLIDATED ACHIEVEMENT. BOTH THE COMMUNITY AND THE CONSOLIDATED THRESHOLDS MUST HAVE BEEN MET IN ORDER FOR THE LOCATION PARTICIPANTS TO RECEIVE ANY PAYMENT UNDER THIS PLAN, EXCEPT AS OTHERWISE EXPLICITLY SET FORTH IN THE PLAN AGREEMENT. IF A COMMUNITY ACHIEVED OPERATING EBITDA GREATER THAN THE THRESHOLD LEVEL AND WALKER ACHIEVED AN OPERATING EBITDA OF THRESHOLD LEVEL OR GREATER, AFTER TAKING INTO CONSIDERATION THE INCENTIVE PLAN EXPENSES, THE LOCATION PARTICIPANTS EARNED THE VARIABLE PAYOUT AS CALCULATED UNDER THE PLAN. IF A COMMUNITY ACHIEVED AN OPERATING EBITDA OF THRESHOLD LEVEL OR GREATER AND WALKER DID NOT MEET THE THRESHOLD LEVEL, THE DIRECTOR OF THE COMMUNITY RECEIVED 50% OF THE PORTION OF THE ELIGIBLE VARIABLE PAYOUT ATTRIBUTABLE TO THE COMMUNITY'S BUDGETED OPERATING EBITDA ACHIEVEMENT (50% OF THE 70%). WALKER RESERVES THE RIGHT TO CHANGE THE EBITDA TO REFLECT CHANGES IN THE CURRENT BUSINESS PORTFOLIO. CHANGES ARE COMMUNICATED TO PARTICIPANTS.

PART I, LINE 6

SEE THE NARRATIVE IN SCHEDULE J, PART III, RELATED TO PART I, LINE 5. THE BONUSES ARE BASED ON EBITDA (EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION), WHICH IS CLOSELY RELATED TO BOTH REVENUES AND NET EARNINGS.

Disregarded entities

Part I: entities that legally are the filer and file no return of their own.

• WALKER OAK CREEK LLC

  LAND · MN · income $0 · assets $0

  Directly controlled by WALKER METHODIST

• WALKER HIGHVIEW HILLS LLC

  HOUSING & ASSITED LIVING FOR SENIORS · MN · income $1,297,549 · assets $27,226,969

  Directly controlled by WALKER METHODIST

• WALKER THOMPSON HILL LLC

  ASSISTED LIVING & TRANSITIONAL CARE FACILITY · MN · income -$652,666 · assets $18,797,175

  Directly controlled by WALKER METHODIST

• WALKER METHODIST PLAZA GARDENS LLC

  HOUSING & ASSITED LIVING FOR SENIORS · MN · income $233,062 · assets $14,618,052

  Directly controlled by WALKER METHODIST

• WALKER METHODIST LEVANDE LLC

  HOUSING & ASSITED LIVING FOR SENIORS · MN · income $354,474 · assets $11,675,860

  Directly controlled by WALKER METHODIST

Related corporations and trusts

Part IV: related organizations taxable as a corporation or trust.

• WALKER ELDERCARE SERVICES INC

  C · MANAGEMENT & CONSULTING SERVICES · MN · 100% owned · controlled entity

  Directly controlled by WALKER METHODIST