Wheaton Franciscan Services Inc

“Part IV Lines 12a-12b and Part XII Lines 2a-2c: Beginning March 1, 2016 a system reorganization took place, and organizations that were formerly managed and governed by Wheaton Franciscan Services, Inc. were transferred to other parent organizations that were outside the Wheaton Franciscan Healthcare System. As a result, a system or stand-alone review or audit was not completed for Fiscal 2016. Part V Line 1a and Part VII Section B Line 1-2: Wheaton Franciscan Healthcare streamlined their reporting of IRS Forms 1099-MISC so that most 1099-MISC are now reported using the FEIN number of the parent organization or of a related organization. The actual expense continues to be paid by, or transferred to, the individual entity which is normally a subsidiary or related organization to the organization(s) issuing the 1099. For this reason, the reader may notice on some 990s that there are top 5 independent contractors reported, but no 1099s are reported. Likewise on the 990s of the organization(s) reporting number of 1099s, there may be a disproportionate share of 1099s reported as compared with the actual expenses and top 5 independent contractors reported. Part VI Section A Line 4: The organizations Bylaws were amended in May 2016 from two (2) classes of members to solely the individuals that serve as the Provincial Directress and the Provincial Councilors of the Wheaton Franciscan Sisters. Part VI Section A Lines 6-8b: WFSI had two members, the Class I Members and the Sponsor Member Board. Effective April 2016 this changed to one member, the individuals that serve as the Provincial Directress and the Provincial Councilors of the Wheaton Franciscan Sisters, which holds several reserved powers over WFSI. These reserved powers include, but are not limited to, the election of members of the governing body and election of officers, and amendments to governing documents; these approvals are based on recommendations from the governing body. Part VI, Section B, Line 11a and 11b: Ministries that were affiliates of Wheaton Franciscan Healthcare during the fiscal year ending June 30, 2016 used a multiple-level review process on all IRS Forms 990 to ensure accurate and timely filing for all organizations. Under the direction of the Tax Manager, the Accounting Departments in each region prepare Forms 990, 990-T, and associated state filings. When complete, the return is first reviewed by a Senior-Level (or higher) associate in the Finance Department, who focuses on income statement and balance sheet items, and schedules where transactions of this type might be reported. If discrepancies are found, the item will be corrected prior to the next step in the review process. Once cleared through Finance, the return is provided to the Tax Department, where the Tax Manager concentrates primarily on consistency of reporting between all returns, accuracy of tax related information, and narrative explanation of any outliers. Again, any problems or questions are investigated and corrected. Depending on the level of complexity of the year in question, as well as the individual issues specific to that filing, certain returns may be selected for outside review by a public accounting firm. This decision will vary from year to year based on many factors, and sometimes outside review is not utilized at all. Also, certain schedules, such as Schedule H or Schedule J may be reviewed by committees, such as the Community Benefit Team or the Compensation Committee in selected years. The board has also asked for formal presentations on various 990 topics over the years. This decision will vary from year to year, again based on many factors. Once all levels of review have been completed, the Tax Manager (or the designated employee in the applicable region) will schedule an appointment with the signer of the 990. This is normally a Senior Vice President or CFO of the applicable region, who will perform an additional, normally high level review prior to signing the return”

“Part VI Section B Lines 15b: For calendar year 2015, the filing organization has paid individuals who served as either Officers or Key Employees during the reporting period. These individuals have the following compensation structure: The compensation for the organizations officers and key employees paid by the filing organization is reviewed and approved on an annual basis, as part of the WFSI Executive Compensation Plan, by the Executive Committee of the Wheaton Franciscan Services, Inc. Board of Directors the Executive Committee of the WFSI Board, an independent board, acting in a manner consistent with its conflicts of interest policy. The WFSI Boards decision is informed by an opinion on market comparable compensation data provided to the WFSI Board by an independent compensation expert. The WFSI Board maintains contemporaneous documentation of the substantiation of the deliberation and decisions it makes. Part VI Section C Line 19: Ministries that were affiliates of Wheaton Franciscan Healthcare during the fiscal year ending June 30, 2016 provided upon request certain documents including our financial statements, conflict of interest policy, and governing documents that support our tax exempt status, including, but not limited to, articles of incorporation and bylaws. During fiscal 2016, all ministries were transferred to new parent organizations and all organizations are currently working on policy review and implementation in order to adopt and streamline existing policies to those of the new parent. Part VII Column B: Ministries that were affiliates of Wheaton Franciscan Healthcare during the fiscal year ending June 30, 2016 operated as a controlled group of related healthcare organizations. As such, many employees who are at the Director level or above, or who are Officers and/or Directors of organizations where Wheaton has common boards and other overlaps in committee representations, spend significant time devoted to tasks not only for the filing organization, but also for related organizations. While there is no official time study tracking that is done, it is estimated that for each employee, tasks devoted to related organizations could approximate up to 80% or more of total hours. Part IX Lines 8-9: Certain employee benefits for affiliated organizations were centrally managed by Wheaton Franciscan Services, Inc. through March 1, 2016 and are reflected on Lines 8 and 9. The salary expense for these associates is reflected on the IRS Form 990 of the affiliated organization. Part XI Line 9 Reverse PL/GL Premiums Paid ($ 3,528,579) Deduction for PL/GL Claims Paid 1,170,000 WFIC Return of Capital-Prior Year 5,140,965 Transition Adjustment 248,159,407 Change in Equity Transfer-WFIC (10,466,623) Equity Transfer upon transition (45,553,824) Loan write-off Marianjoy 20,553,824 Total $215,475,170 Disclosure Statement Related to Forms 5471: Under the constructive ownership rules of Internal Revenue Code Sections 958(a) and (b), the taxpayer is required to file Forms 5471, Information Return of US persons with respect to certain foreign corporations, as a category 4 and/or 5 filer with respect to Wheaton Franciscan Insurance Company, FEIN #98-0691609. These filing requirements are or will be satisfied through the filing of Forms 5471 with respect to the foreign corporation on the taxpayers behalf by the US taxpayers identified below who have the same filing requirement. Taxpayer name: Wheaton Franciscan Services, Inc. Address: 26 w171 Roosevelt Road, Wheaton IL 60187 FEIN number of US Tax return with which form 5471 was filed: 36-3262111 IRS Service Center where US Tax return was or will be filed: e-filed IRS Service Center where US Tax return was or will be filed: e-filed”