Adventist Health Systemsunbelt Inc

“Adventist Health System/Sunbelt, Inc. (the filing organization) has one member. The sole member of the filing organization is Adventist Health System Sunbelt Healthcare Corporation. Adventist Health System Sunbelt Healthcare Corporation (AHSSHC) is a Florida, not-for-profit corporation that is exempt from federal income tax under Internal Revenue Code (IRC) Section 501(c)(3). There are no other classes of membership in the filing organization.”

“The sole member of the filing organization is AHSSHC. The Board of Directors of the filing organization are appointed by the sole member, AHSSHC, who has the right to elect, appoint or remove any member of the Board of Directors of the filing organization.”

“AHSSHC, as the sole member of the filing organization, has certain reserved powers as set forth in the Bylaws of the filing organization. These reserved powers include the following: a) to approve and disapprove the executive and/or administrative leadership of the filing organization, and their salaries; b) to approve and disapprove the operating Bylaws of the filing organization; c) to set limits and terms for the borrowing of funds; d) to approve or disapprove major building programs and/or purchase or sale of personal property or real property equal to or in excess of One Million dollars; e) to approve or disapprove the annual operating and capital budgets of the filing organization; f) to direct the placement of funds and capital of the filing organization, and the authority to secure naming rights; g) the authority to require adherence to policies adopted; h) to approve or disapprove the implementation of non-traditional, non-healthcare related activities; i) to approve or disapprove performance/quality improvement, revenue cycle and case management programs; j) to approve or disapprove the selection of the auditing firm retained to audit the books; k) to approve or disapprove the election of the fiscal year; l) to approve or disapprove the selection of the group purchasing organization(s); m) to approve or disapprove any joint venture or partnership in which the filing organization would be a member or partner; n) to approve or disapprove the IT systems and other shared services used; o) the authority to require adherence to the system-wide naming nomenclature and service standards apopted; p) to set and enforce policies for physician compensation including commercial reasonableness and fair market value; and q) to exercise such other powers as are necessary in connection with the foregoing.”

“The filing organization's current year Form 990 was reviewed by the Senior VP/Chief Accounting Officer prior to its filing with the IRS. The review conducted by the Senior VP/Chief Accounting Officer did not include the review of any supporting workpapers that were used in preparation of the current year Form 990, but did include a review of the entire Form 990 and all supporting schedules.”

“The Conflict of Interest Policy of the filing organization applies to members of its Board of Directors and its principal officers (to be known as Interested Persons). In connection with any actual or possible conflicts of interest, any member of the Board of Directors of the filing organization or any principal officer of the filing organization (i.e. Interested Persons) must disclose the existence of any financial interest with the filing organization and must be given the opportunity to disclose all material facts concerning the financial interest/arrangement to the Board of Directors of the filing organization or to any members of a committee with board delegated powers that is considering the proposed transaction or arrangement. Subsequent to any disclosure of any financial interest/arrangement and all material facts, and after any discussion with the relevant Board member or principal officer, the remaining members of the Board of Directors or committee with board delegated powers shall discuss, analyze, and vote upon the potential financial interest/arrangement to determine if a conflict of interest exists. According to the filing organization's Conflict of Interest Policy, an Interested Person may make a presentation to the Board of Directors (or committee with board delegated powers), but after such presentation, shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in a conflict of interest. Each Interested Person, as defined under the filing organization's Conflict of Interest Policy, shall annually sign a statement which affirms that such person has received a copy of the Conflict of Interest policy, has read and understands the policy, has agreed to comply with the policy, and understands that the filing organization is a charitable organization that must primarily engage in activities which accomplish one or more of its exempt purposes. The filing organization's Conflict of Interest Policy also requires that periodic reviews shall be conducted to ensure that the filing organization operates in a manner consistent with its charitable purposes.”

“The filing organization's CEO, other officers and key employees are not compensated by the filing organization. Such individuals are compensated by the related top-tier parent organization of the filing organization. Please see the discussion concerning the process followed by the related top-tier parent organization in determining executive compensation in our response to Schedule J, Line 3.”

“The filing organization is a part of the system of healthcare organizations known as AdventHealth. The audited consolidated financial statements of AdventHealth and of the AdventHealth "Obligated Group" are filed annually with the Municipal Securities Rulemaking Board (MSRB). The "Obligated Group" is a group of AHSSHC subsidiaries that are jointly and severally liable under a Master Trust Indenture that secures debt primarily issued on a tax-exempt basis. Unaudited quarterly financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) are also filed with MSRB for AdventHealth on a consolidated basis and for the grouping of AdventHealth subsidiaries comprising the "Obligated Group". The filing organization does not generally make its governing documents or conflict of interest policy available to the public.”

“For those Board of Director members, officers, and key employees who devote less than full-time to the filing organization (based upon the average number of hours per week shown in column (B) on page 7 of the return) the compensation amounts shown in columns (E) and (F) on page 7 were provided in conjunction with that person's responsibilities and roles in serving in an executive leadership position as an employee of Adventist Health System Sunbelt Healthcare Corporation.”

“The amounts shown in Part VIII, Line 7, column (i) of the Form 990 represent an allocated share of capital gain/(loss) from a system wide, corporate administered, investment program.”

“The parent corporation and sole top-tier member of Adventist Health System/Sunbelt, Inc. (the filing organization) is Adventist Health System Sunbelt Healthcare Corporation (AHSSHC). AHSSHC is a Florida, not-for-profit corporation that is exempt from federal income tax under Internal Revenue Code (IRC) Section 501(c)(3). AHSSHC has established a shared service center to centralize the Accounts Payable (A/P) function for all AHSSHC subsidiary organizations. The filing organization has entered "0" in Part V, Line 1a because the filing organization no longer issues Form 1099 returns, rather, all such returns are filed by and under the name and EIN of AHSSHC as the payor subject to the information reporting requirements of Section 6041. The facts and circumstances support a position that AHSSHC, as a payor on behalf of its subsidiary organizations in a shared service environment, will have sufficient management and oversight in connection with the subsidiary organizations' payments to meet the standard set forth in Treas. Reg. Section 1.6041-1(e). AHSSHC will not merely be making payments at the direction of its subsidiary organizations. Accordingly, AHSSHC is considered the payor subject to the information reporting requirements of Section 6041.”

“Payments to Healthcare Professionals: Program service expenses 565,711,181. Management and general expenses 0. Fundraising expenses 0. Total expenses 565,711,181. Professional Fees: Program service expenses 129,449,180. Management and general expenses 1,176. Fundraising expenses 0. Total expenses 129,450,356. Purchased Medical Services: Program service expenses 27,935,183. Management and general expenses 0. Fundraising expenses 0. Total expenses 27,935,183. Environmental Services: Program service expenses 15,415,615. Management and general expenses 0. Fundraising expenses 0. Total expenses 15,415,615. Transcription Services: Program service expenses 1,600,077. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,600,077. Recruiting: Program service expenses 8,773,367. Management and general expenses 0. Fundraising expenses 0. Total expenses 8,773,367. Food Service Contracts: Program service expenses 28,826. Management and general expenses 0. Fundraising expenses 0. Total expenses 28,826. Miscellaneous Purchased Services: Program service expenses 7,986,820. Management and general expenses 0. Fundraising expenses 0. Total expenses 7,986,820. AdventHealth Management Fees: Program service expenses 0. Management and general expenses 205,934,420. Fundraising expenses 0. Total expenses 205,934,420. Billing & Collection Services: Program service expenses 0. Management and general expenses 39,447,332. Fundraising expenses 0. Total expenses 39,447,332. AdventHealth Shared Services Fee: Program service expenses 0. Management and general expenses 75,680,892. Fundraising expenses 0. Total expenses 75,680,892. EHR Management Fees: Program service expenses 0. Management and general expenses -1,271,906. Fundraising expenses 0. Total expenses -1,271,906.”

“The amounts shown on line 2 of Part X of this return include the filing organization's interest in a central investment pool maintained by Adventist Health System Sunbelt Healthcare Corporation, the filing organization's top-tier parent. The investments in the central investment pool are recorded at market value.”

“Transfer to Top-Tier Tax-Exempt Parent -52,237,266. Transfer from Top-Tier Tax-Exempt Parent 148,141,531. Allocation to tax-exempt parent with respect to debt -616,635. Transfer to tax-exempt affiliates -1,883,385. Transfer from supporting foundation 9,297,053. Restricted contributions released -158,000. Gifts 66,480. Other 5,170.”