Methodist Hospital Group

“John Bookout III, Director of Houston Methodist Research Institute, is the son of John Bookout, who is also a Director of the same entity.”

“-Houston Methodist Hospital is the sole corporate member of Houston Methodist Research Institute and TMH Health Care Group. -Houston Methodist Foundation, is the sole corporate member of TMH Medical Office Buildings. -TMH Health Care Group is the sole corporate member of Diagnostic Center Hospital Corp. of Texas, Methodist Health Centers, Houston Methodist San Jacinto Hospital. -Houston Methodist Specialty Physician Group is the sole corporate member of Methodist Pathology Associates, PLLC, Methodist Radiology Associates, PLLC, TMH Physician Associates, PLLC, and TMH Physicians and Surgeons, PLLC. -Methodist Health Centers is the sole corporate member of HMSTJ, HMSTC and HMSTC Real Property.”

“TMH Health Care Group is the Parent and sole corporate member of Methodist Health Centers, Houston Methodist San Jacinto Hospital, and Diagnostic Center Hospital Corp. of Texas; Houston Methodist Specialty Physician Group is the sole corporate member of Methodist Pathology Associates, PLLC, Methodist Radiology Associates, PLLC, TMH Physician Associates, PLLC, and TMH Physician and Surgeons, PLLC; Houston Methodist Hospital Foundation is the sole corporate memeber of TMH Medical Office Buildings; Houston Methodist Hospital is the sole corporate member of the TMH Health Care Group, and Houston Methodist Research Institute (collectively "Subsidiary" or "Subsidiaries"). Houston Methodist Hospital has the authority to appoint the subidiary organizations' Boards of Directors.”

“Houston Methodist Hospital which is the sole corporate member of the Subsidiaries and group organizations (the "organization") reserves the following powers: -to appoint and remove with or without cause the Directors of the organizations; -to approve the incurrence by the organizations of any indebtedness and all guarantees of the debt of another party; -to approve the annual operating and capital budgets of the organizations after they are prepared and approved by the organizations' Boards of Directors; -to approve the dissolution of organizations; -to approve the organizations' participation in partnerships and joint ventures; -to approve the acquisition or disposition by the organizations of real property from or to a non-Corporation controlled organization through ownership, lease or otherwise; -to approve the disposition or acquisition by the organizations of or the investment by the organization in, another business or all or a portion of the business or operations of another business; -to establish, acquire or invest in any new or different business; and -to direct the organizations in its actions as the corporate member or shareholder of other entities, including but not limited to, approving amendments to the articles of incorporation and bylaws of such other organizations.”

“Management, including certain Officers, works diligently to complete the Form 990 and attached schedules (Return) in a thorough manner. The Return is prepared by a Paid Preparer. Prior to filing the return, a copy of the Form 990 is made available to Board members (including required schedules) and management team members are available to answer any Board members' questions.”

“All individuals serving in a significant decision making capacity complete a Conflict of Interest (COI) questionnaire annually. A comprehensive evaluation and thorough review of all disclosures is performed by a 6-member COI Committee comprised of executives, management, and staff. The results of the COI disclosures are reported to the parent corporation's Audit & Compliance Committees and Boards of Directors, including the actions being taken to protect the integrity of decision-making. In addition, disclosure results are also communicated to management and to affected committee chairs to promote transparency and to ensure that actions are taken and restrictions are imposed where appropriate. Conflicted individuals may not vote or exert self-serving influence on the disclosed matter.”

“Houston Methodist Hospital (HMH) (sole corporate member of the Subsidiaries) follows IRS regulations as it relates to establishing a rebuttable presumption of reasonableness related to total compensation of the CEO of the organizations as well as other key employees and compensated officers of the organizations listed below. It has established a process that includes the following elements: A separate committee (the Board Committee) comprised of independent directors meets at least annually to review, deliberate and make recommendations to Houston Methodist Hospital Board of Directors as it relates to any changes in total compensation including base pay, bonus awards from incentive programs or benefits and perquisites of the CEO. For 2014, the Board Committee reviewed and recommended compensation packages for the following positions: -President/CEO, Houston Methodist who serves as Director, Officer; Director and Officer - President and Chief Executive Officer for Methodist Health Centers; Director for the Houston Methodist Research Institute; Director & Officer-Chairperson for Houston Methodist San Jacinto Hospital; Director and Officer - President/CEO for HMH Health Care Group; Director and Officer-Chairperson for HMH Medical Office Buildings (MOB); and Director & Officer-Chairperson for Diagnostic Center Hospital Corporation of Texas(DCH) -EVP, Chief Financial Officer/Chief Business Officer, Houston Methodist Hospital, Officer-Assistant Secretary (Houston Methodist Research Institute), Officer-Assistant Secretary (Methodist Health Centers), Officer-Assistant Secretary (Houston Methodist San Jacinto Hospital), Officer-Secretary for TMH Health Care Group, Director and Officer, Vice Chairperson, Secretary and Treasurer (Diagnostic Center Hospital), and Director and Officer, Secretary & Treasurer (TMH Medical Office Buildings) -EVP, Chief Legal Officer, Strategic & Business Developement Officer of HMH -SVP, Human Resources -SVP and CEO of Houston Methodist San Jacinto Hospital who serves as Director & Officer-President, CEO and Treasurer of Houston Methodist San Jacinto Hospital -President/CEO, Houston Methodist Research Institute who also serves as Director -SVP and CEO, Houston Methodist Sugar Land Hospital who also serves as a Director -SVP and CEO, Houston Methodist Willowbrook Hospital who also serves as a Director -SVP and CEO, Houston Methodist West Houston Hospital who also serves as a Director -SVP and COO, Houston Methodist Research Institute who also serves as Director The Board Committee establishes that no member has any conflict of interest with regard to the executive compensation arrangements being approved. The Board Committee reviews and considers information provided by an external consultant engaged to ensure it has direct access to: -Compensation information paid by comparable organizations, for functionally comparable positions. -Compensation norms in the organization's immediate locale and from other independent compensation surveys by nationally recognized independent firms that represent the organization's logical peer group. -Compensation information that includes information on base salary, incentives, benefits and perquisites for total compensation comparison purposes to ensure reasonable competitive ranking. The Board Committee relies on the comparability data to reach consensus that its recommendations to the Board regarding executive compensation changes are reasonable and in line with the organization's overall total compensation philosophy for executive pay. The deliberations and decisions of the committee are contemporaneously substantiated. The compensation for positions held by the other compensated Officers, Directors and Key Employees listed on Part VII, Section A is determined based on a thorough review of numerous compensation studies conducted by nationally recognized, independent firms that provide market data for total compensation for similar positions. The compensation information con”

“The governing documents (except the Articles of Incorporation, which are on file with the Secretary of the State of Texas), conflict of interest policy and financial statements of the organizations are not made available to the general public.”

“The following list of Officers, Directors, Trustees, Key Employees and Highest Compensated Employees provides entity level details to support the information reported in Part VII since many of the Group's reportable individuals serve more than one entity included in this Group return. In addition, pursuant to Treasury Regulation Section 1 6033-2(D)(5), Houston Methodist Hospital, which is the Central Organization of the Group, elected to report information about its current and former officers, directors, trustees, and key employees, and current highest compensated employees in this Group return.”

“related organization and held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 2). Ernest D. Cockrell, II is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director & Officer, Secretary (average hours per week of 1). Ewing Werlein, Jr., is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director & Officer, Chairperson (average hours per week of 4), Methodist Health Centers - ex officio, Director (average hours per week of 1), Houston Methodist Research Institute - ex officio, Director (average hours per week of 1), TMH Health Care Group - ex officio, Director & Officer, Chairperson (average hours per week of 1). Gary W. Edwards is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 2). Giorgio Borlenghi is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Gregory V. Nelson is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Director & Officer, Vice Chairperson (average hours per week of 2), Houston Methodist Research Institute - Director (average hours per week of 1). Jack C. Searcy is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Director (average hours per week of 1).”

“Methodist San Jacinto Hospital and held the following positions with the Central organization and/or entities included in this Group return: Houston Methodist San Jacinto Hospital - Key Employee, Vice President & Chief Nursing Officer (average hours per week of 50). James N. Adams received all of his Part VII compensation from Houston Methodist Hospital and held the following positions with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Former Key Employee, Vice President & Chief Financial Officer of Houston Methodist Willowbrook Hospital. Janet Leatherwood received all of her Part VII compensation from Methodist Health Centers and held the following positions with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Key Employee, Vice President & Chief Nursing Officer, Houston Methodist Sugar Land Hospital (average hours per week of 50). Joe B. Foster is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Joe Bob Perkins is an uncompensated director. He held the following position with the Central Organization and/or the entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 2). John F. Bookout is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Director & Officer, Senior Chairperson (average hours per week of 4), Methodist Health Centers - Director, average hours per week of 1), Houston Methodist Research Institute - Director (average hours per week of 1), TMH Health Care Group - ex officio, Director & Officer, Senior Chairperson (average hours per week of 1). John F. Bookout, III is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). John P. Kotts is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director, part year (average hours per week of 1). Jonathan Sturgis received all of his Part VII compensation from Houston Methodist San Jacinto Hospital and held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist San Jacinto Hospital - Key Employee, Vice President & Chief Financial Officer (average hours per week of 50). Joseph C. "Rusty" Walter, III is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director & Officer, Assistant Treasurer (average hours per week of 2), Houston Methodist Research Institute - Director and Officer, Chairperson (average hours per week of 1). Joseph R. "Rod" Canion is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Juliet S. Ellis is an uncompensated director. She held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 1). Keith Barber received all of his Part VII compensation from Methodist Health Centers and held the following positions with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Key Employee, Vice President & Chief Financial Officer of Houston Methodist Willowbrook Hospital (average hours per week of 50). Keith O. Reeves, M.D. received all of his Part VII compensation from a related”

“Certain officers/directors of the organizations of the Methodist Hospital Group (Group) are employees of Houston Methodist Hospital, Houston Specialty Physician Group (a subordinate organization within the Group but filing a separate return), Houston Methodist Hospital Foundation (a subordinate organization within the Group but filing a separate return) or its non-Group affiliates (related organizations). The officers and directors who are employed by these related organizations work a total of 50 hours per week on behalf of these organizations and other organizations of Houston Methodist. The compensation shown on Part VII and Schedule J reflects the total compensation earned for the officer/director for the combined hours spent working for all the organizations in the System.”

“Houston Methodist Hospital, EIN 74-1180155 has elected to report certain professional contractors and certain other contractors on a consolidated basis for all of the members of the group, including the parent organization, on this Methodist Hospital Group "Group" return. This election is based upon Treasury Reg Section 1 6033-2(D)(5). As a result one of Methodist Hospital's highest paid contractor is consolidated with the entities within the Group to represent the five highest paid contractors of the Group.”

“Affiliated Organizations Not Included In Group Return (total of 2 entities): (1) TMH Physician Organization (d/b/a Houston Methodist Specialty Physician Group), EIN 57-1201170, 6565 Fannin, Houston, TX 77030 (2) Methodist Hospital Foundation (d/b/a Houston Methodist Hospital Foundation), EIN 76-0094743, 6565 Fannin, Houston, TX 77030.”

“The organizations in Methodist Hospital Group (Group) (See Statement 1) are part of The Methodist Hospital System, doing business as Houston Methodist Hospital, whose mission is: To provide high quality, cost-effective health care that delivers the best value to the people we serve in a spiritual environment of caring in association with internationally recognized teaching and research.”

“The entities in the Methodist Hospital Group (see Statement 1) included in this return perform different activities. The program service accomplishments for the activities are described below. 1. Methodist Health Centers does business as Houston Methodist Sugar Land Hospital (HMSL), Houston Methodist Willowbrook Hospital (HMWB), and Houston Methodist West Hospital (HMW). 1a. HMSL is located in Sugar Land, Texas, which is approximately 21 miles southwest of downtown Houston, Texas. As of December 31, 2014, HMSL's operating bed capacity was 243. Principal medical services provided by HMSL include Inpatient and Outpatient Medical and Surgical Care, Intensive Care, 18 Surgery Suites, one Bronchoscopy Suite, two Endoscopy Suites, a Radiation Therapy Center, three Cardiac Catheterization Labs, a 24-Hour Emergency Care Center, a Birthing and Women's Center, an Acute Wound Care Center, a comprehensive Breast Center, a complete Sports Medicine and Outpatient Physical Therapy Rehabilitation Center and State of the Art Imaging Services, including MRI, CT, and Nuclear Medicine. HMSL has earned quality-based hospital accreditation through Det Norske Veritas (DNV), chest pain accreditation through the Society of Cardiovascular Patient Care, and accreditation with the commendation by the American College of Surgeons - Commission on Cancer. HMSL recorded 191,125 visits during 2014 which were comprised of 131,445 Outpatient visits, 44,991 Emergency Visits, and 14,689 Inpatient Admissions. 1b. HMWB is located in the northwest area of Harris County, approximately 25 miles northwest of downtown Houston, Texas. As of December 31, 2014, HMWB's operating bed capacity was 241. Principal medical services provided by HMWB include Inpatient and Outpatient Medical and Surgical Care, Surgery Suites, Endoscopy Suites, a Cardiac Catheterization Lab, a 24-Hour Emergency Care Center, a Birthing Center with a Level III Nursery, an Intensive Care Unit, General and Diagnostic Radiology, Nuclear Medicine, Laboratory, Radiation Therapy, Sports Medicine, Physical Therapy, Infusion and 24 hour coverage in the OBED and ICU. HMWB recorded 87,249 Outpatient visits, 15,274 Admissions and 59,377 Emergency Room visits for a total of 161,900 visits in 2014. 1c. HMW is located in the western part of Harris County, approximately 21 miles west of downtown Houston, Texas. On December 17, 2010, HMW opened its emergency center, operating rooms, ICU, surgery center and all ancillary support services. Since then, the hospital has opened additional specialty & outpatient areas including a cancer center, birthing center, breast center, cath labs and cardiac imaging, and a physical therapy area. During 2014 HMW had 68,826 outpatient visits, 37,454 emergency room visits and 10,315 inpatient admissions. Currently, HMW has 193 licensed operating beds. The campus master plan includes expansion space to increase the inpatient capacity to 400 beds, and to accommodate four professional buildings and two parking garages. 2. Houston Methodist St. John Hospital (HMSTJ) is one of the newest members of Houston Methodist and operates as an acute care hospital in Nassau Bay, Texas. The hospital has 137 licensed operating beds as of December 31, 2014. In addition to having over 500 physicians and 800 staff members to offer advanced medical and surgical care, HMSTJ has earned quality-based hospital accreditation through Det Norske Veritas (DNV), chest pain accreditation through the Society of Cardiovascular Patient Care and is a Stroke Ready Designated facility through DNV. HMSTJ recorded 158,331 visits during 2014 which were comprised of 129,322 Outpatient visits, 22,960 Emergency Visits, and 6,049 Inpatient Admissions. 3. Houston Methodist St. Catherine Hospital (HMSTC) is a specialty care hospital providing long-term acute care (LTAC) services in the Katy community. LTAC patients receive daily care from a dedicated medical team for a period of typically 25 days or more. The services provided incl”

“with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Allen Becker is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director, part year (average hours per week of 1). Andrew von Eschenbach, MD is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Ann Scanlon McGinity received all of her Part VII compensation from Houston Methodist Hospital and held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Key Employee, Senior Vice President & Chief Nursing Executive, part year (average hours per week of 50). Antonio Gotto, M.D., D. Phil, ex officio is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Beryl O. Ramsey received all of her Part VII compensation from Methodist Health Centers and held the following positions with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Director, Senior Vice President/Hospital, Chief Executive Officer, Houston Methodist Willowbrook Hospital (average hours per week of 50). Bishop Janice Riggle Huie is an uncompensated director. She held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 2). Bret T. Curran received all of his Part VII compensation from Houston Methodist Hospital and held the following position with the Central Organization and/or entities included in this Group return: TMH Medical Office Buildings - Director (average hours per week of 2). Bruce Kennedy, M.D. received all of his Part VII compensation from Houston Methodist San Jacinto Hospital and held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist San Jacinto Hospital - Key Employee, Vice President & Chief Medical Officer (average hours per week of 40). C. Richard Stasney, M.D. received all of his Part VII compensation from a related organization and held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Carlton E. Baucum is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Director & Officer, Treasurer (average hours per week of 2), TMH Health Care Group - Director (average hours per week of 1). Catherine S. Jodeit is an uncompensated director. She held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director (average hours per week of 1). Chris Siebenaler received all of his Part VII compensation from Methodist Health Centers and held the following positions with the Central Organization and/or entities included in this Group return: Methodist Health Centers - Director, Senior Vice President/Hospital Chief Executive Officer - Houston Methodist Sugar Land (average hours per week of 50). Connie Dyer is an uncompensated director. She held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 2), Methodist Health Centers - Director & Officer, Vice Chairperson (average hours per week of 2). Dan Dinges is an uncompensated director. He held the fol”

“positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Director (average hours per week of 2), Houston Methodist Research Institute - Director (average hours per week of 1). Nancy J Pittman received all of her Part VII compensation from Houston Methodist St. John Hospital. She held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist St. John Hospital - Key Employee - Chief Nursing Officer, part year (average hours per week of 50). Neal Copeland received all of his Part VII compensation from Houston Methodist Research Institute and held the following position: Houston Methodist Research Institute - Scientist (average hours per week of 50). Noel R. Rainey received all of his Part VII compensation from Houston Methodist Hospital and held the following positions with the Central Organization and/or entities included in this Group return: TMH Medical Office Buildings - Director & Officer, President & Chief Executive Officer (average hours per week of 50). Paul Generale is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist St. John Hospital - Director & Officer, Vice Chairperson (average hours per week of 1). Pete Alfaro is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist San Jacinto Hospital - Director & Officer, Vice Chairperson (average hours per week of 1). Ramon Cantu received all of his Part VII compensation from Houston Methodist Hospital and held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Key Employee, Executive Vice President, Chief Legal Officer & Business and Strategic Development Officer (average hours per week of 48) TMH Medical Office Buildings - Former, Director & Officer, Secretary/Treasurer, Diagnostic Center Hospital - Former, Director & Officer, Vice Chairperson, Secretary/Treasurer, Houston Methodist San Jacinto Hospital - Former, Officer, Assistant Secretary, Methodist Health Centers - Former, Officer, Assistant Secretary, Houston Methodist Research Institute - Former, Officer, Assistant Secretary, TMH Health Care Group - Former, Officer, Secretary, Houston Methodist St. John Hospital - Director (average hours per week of 1), Houston Methodist St. Catherine Hospital - Director & Officer, Vice Chairperson (average hours per week of 1). Renu Khator, Ph.D. is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: Houston Methodist Research Institute - Director, part year (average hours per week of 1). Rev. Kenneth R. Levingston is an uncompensated director. He held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital - Director (average hours per week of 1), Methodist Health Centers - Director & Officer, Secretary (average hours per week of 1). Richard A. Peebles is an uncompensated director. He held the following position with the Central Organization and/or entities included in this Group return: San Jacinto Methodist Hospital - Director & Officer, Secretary (average hours per week of 5). Robert A. Phillips, M. D., Ph.D. received all of his Part VII compensation from Houston Methodist Hospital and held the following positions with the Central Organization and/or entities included in this Group return: Houston Methodist Hospital- Key Employee, Executive Vice President & Chief Medical Officer (average hours per week of 10), Methodist Health Centers - Director & Officer, Chief Medical Officer (average hours per week of 10). Robert K. Eardley received all of his Part VII compensation from Houston Methodist Hospital and held the following position: Houst”

“Change in Health Care Group 125,998,119. The Methodist Hospital Research Institute Use of Grant Fund - Equipment 75,006. Transfer from The Methodist Hospital-Service Organ. of Greater Houston -28,989,160. Investment in HM St. John, HM St. Catherine, and HM St. Catherine Real Prop 127,900,000. Minority Interest 29,100,000. Rounding 3.”

“Diagnostic Center Hospital (DCH) of the Methodist Hospital Group does not follow SFAS 117. Due to software limitations, the section could not be presented properly and therefore Diagnostic Center Hospital's amount of Retained Earnings and Common Stock are included on line 27 instead of line lines 30 and 32. Line 30 - Capital Stock or trust principal, etc. - $37,482,581 Line 32 - Retained earnings, endowment, etc. - $15,013,719”

“The A-133 Audit referred to on lines 3a & 3b was obtained by Houston Methodist Research Institute.”