Portercare Adventist Health System

“Gary Thurber and John (Mic) Thurber - Family Relationship”

“Portercare Adventist Health System (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.”

“Adventist Health System Sunbelt Healthcare Corporation (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 can be exercised by the board of directors or an authorized committee to the extent not prohibited by the Members bylaws, the Member's president or his/her designee. These reserved powers include: 6.1.1 To approve or disapprove the appointment, removal and compensation of the senior management of the Health Care Facilities, including without limitation, the chief executive officer, chief financial officer and any other executive level Officer deemed appropriate by the Member; 6.1.2 To approve or disapprove these Bylaws and amendments thereto, and any amendments (including a restatement) to the Articles; 6.1.3 To approve or disapprove material changes in the category of services offered by the Corporation; 6.1.4 To approve or disapprove capital expenditures in excess of ONE MILLION DOLLARS ($1,000,000), which action can be approved by specific authorization or as generally authorized in the Corporation's annual capital budget approved by the Member; 6.1.5 To approve or disapprove the sale, donation, or other transfer of real property in excess of ONE MILLION DOLLARS ($1,000,000) in each instance, which action can be approved by specific authorization or as generally authorized in the Corporation's annual operating and/or capital budgets approved by the Member; 6.1.6 The authority to require the Corporation's adherence to policies adopted by the Member; 6.1.7 The authority to set limits and terms for any and all types of financial transactions exceeding ONE HUNDRED THOUSAND DOLLARS ($100,000) for any single or related projects including, without limitation, borrowing of funds, any type of financing, any banking activities, accounts receivable securitization, sale of accounts receivable, letters of credit, credit lines, tax exempt and taxable debt programs and structures, any transactions permitted by the financial documents and financial structure of the Member and any of its affiliated organizations, and any other financing transactions not identified herein; 6.1.8 The authority to approve or disapprove the annual operating and capital budgets and strategic plans for the Corporation; 6.1.9 The authority to secure naming rights and to direct the placement of funds and capital and the making of gifts, sponsorships, donations, loans and transfers of funds or other assets by the Corporation in excess of ONE MILLION DOLLARS ($1,000,000), which action can be approved by specific authorization or as generally authorized in the Corporation's annual operating and/or capital budgets approved by the Member; 6.1.10 To approve or disapprove the sale, purchase, donation, or other conveyance of personal property with a value in excess of ONE MILLION DOLLARS ($1,000,000) not otherwise approved in the current capital or operating budgets, which action can be approved by specific authorization or as generally authorized in the Corporation's annual operating and/or capital budgets approved by the Member; 6.1.11 To approve or disapprove the implementation of non-traditional, non healthcare related activities; 6.1.12 To approve or disapprove performance/quality improvement, revenue cycle and case management programs; 6.1.13 To approve or disapprove the selection of the auditing firm retained to audit the books of the Corporation; 6.1.14 To approve or disapprove the election of the fiscal year of the Corporation; 6.1.15 To approve or disapprove the selection of the Corporation's group purchasing organization(s); 6.1.16 To approve or disapprove any joint venture or partnership in which the Corporation would be a member or partner; 6.1.17 To approve or disapprove the IT systems and other shared services used by the Corporation; 6.1.18 The authority to require the Corporation's adherence to the system-wide naming nomenclature and service s”

“The filing organization's current year Form 990 was reviewed by the Board Chairman, Board Finance Committee Chair, CEO and by the CFO prior to its filing with the IRS. The review conducted by the Board Chairman, Board Finance Committee Chair, CEO and the CFO 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 Board/Officer 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 and officer(s) 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 Portercare Adventist Health System (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 Hlthcare Professionals: Program service expenses 122,205,792. Management and general expenses 0. Fundraising expenses 0. Total expenses 122,205,792. Professional Fees: Program service expenses 32,330,187. Management and general expenses 0. Fundraising expenses 0. Total expenses 32,330,187. Purchased Medical Services: Program service expenses 14,113,021. Management and general expenses 0. Fundraising expenses 0. Total expenses 14,113,021. Environmental Services: Program service expenses 6,360,633. Management and general expenses 0. Fundraising expenses 0. Total expenses 6,360,633. Transcription Services: Program service expenses 293,845. Management and general expenses 0. Fundraising expenses 0. Total expenses 293,845. Recruiting: Program service expenses 14,118,878. Management and general expenses 0. Fundraising expenses 0. Total expenses 14,118,878. Outsourced Food Services: Program service expenses 41,119. Management and general expenses 0. Fundraising expenses 0. Total expenses 41,119. Other Purchased Services: Program service expenses 69,012,788. Management and general expenses 0. Fundraising expenses 0. Total expenses 69,012,788. Management Fees: Program service expenses 0. Management and general expenses 59,434,875. Fundraising expenses 0. Total expenses 59,434,875. Billing and Collection Services: Program service expenses 0. Management and general expenses 11,361,309. Fundraising expenses 0. Total expenses 11,361,309. AH Shared Services Fee: Program service expenses 0. Management and general expenses 17,514,827. Fundraising expenses 0. Total expenses 17,514,827.”

“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.”

“Repayment of Prior Year Grant Funding -1,444,804. Transfer from Related Tax-Exempt Foundation 3,084,785. Transfers from Restricted 108,004. Transfer to Tax-Exempt Parent -9,034,131. Transfer to/from Related Tax-Exempt Organizations 574,966. Transfer to Unrestricted -1,287,051. Gifts 33,749. Rounding -1.”