Centura Health Corporation

“The organizational documents of Centura Health Corporation (CHC) were amended during the tax year ended June 30, 2017. Significant changes to its Bylaws include the following: 1) The removal of the requirement that the President of CHC be the Chief Executive Officer (CEO) of CHC. As such, the CEO of CHC as a member of the Board ex-officio has voting privileges; not the President. 2) The distribution of assets upon dissolution has been expanded to state that if a member is not qualified as an organization exempt from tax under Section 501(c)(3) of the Code, then CHC shall transfer all property and assets upon dissolution or liquidation to any successor corporation of the member which is qualified, and if no such successor is qualified, then to such organization(s) organized and operated exclusively for charitable, education, religious or scientific purposes as shall at the time be so qualified. Any assets not disposed to a member or in accordance with the above procedures shall be disposed of by the District Court to such organization(s) organized and operated exclusively for one or more of the exempt purposes of CHC and then qualified under Section 501(c)(3) of the Code, as such court shall determine. Significant change to the Articles of Amendment include the following: 1) CHC's exempt purpose has been revised to include that CHC is organized and operated, within the meaning of Section 509(a)(3)(A) of the Code, exclusively for the benefit of, to perform the functions of, and/or carry out the religious, charitable, scientific, and educational purposes within the meaning of Section 501(c)(3) of the Code of its members, PAHS and CHIC (the Publicly Supported Organizations) both of which are organizations described under Section 509(a)(1); and CHC shall not engage in activities that are not in furtherance of CHC's purposes as described in its Articles of Incorporation, and is not empowered to operate to support or benefit any organization(s) other than the Publicly Supported Organizations.”

“The filing organization has two members. The members of the filing organization are Portercare Adventist Health System (PAHS), a Florida corporation and Catholic Health Initiatives Colorado (CHIC), a Colorado corporation. Both PAHS and CHIC are not-for-profit corporations that are 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 Board of Trustees (the Board) of the filing organization are appointed by its members, Portercare Adventist Health System (PAHS) and Catholic Health Initiatives Colorado (CHIC). PAHS is entitled to appoint up to seven Trustees to the Board and CHIC is entitiled to appoint up to seven Trustees to the Board. The number of Trustees appointed by PAHS must equal the number of Trustees appointed by CHIC at all times.”

“Portercare Adventist Health System (PAHS) and Catholic Health Initiatives Colorado (CHIC), as the sole members of Centura Health Corporation (the Corporation), have certain reserved powers as set forth in the Bylaws of the filing organization. These reserved powers include the following: (a) to sell, transfer or otherwise dispose of any real estate owned by the Corporation or any Managed Facility with a fair market value in excess of three million dollars ($3,000,000); (b) to sell, transfer or otherwise dispose, (collectively the "transfer") other than in the ordinary course of business, of any other asset by the Corporation or a Managed Facility with a fair market value (individually or collectively) at the time of such transfer in excess of three million dollars ($3,000,000); (c) to enter into any promissory note or debt instrument or guaranty any indebtedness by or on behalf of the Corporation or a Managed Facility in excess of two hundred fifty thousand dollars ($250,000) or to perform under any capital lease with future payments in excess of two hundred fifty thousand dollars ($250,000); (d) to alter, amend, restate or repeal the Articles of Incorporation, Bylaws or Mission Statement of the Corporation or a Managed Facility; action on these matters may also be initiated by one or both of the members; (e) to approve the admission of a new sponsor or other affiliation by a health care system or facility with the Corporation or a Managed Facility; (f) to approve a plan of merger, dissolution, consolidation or corporate reorganization involving the Corporation or a Managed Facility; (g) to waive, settle or compromise any legal proceeding, suit, claim or action (collecting a "claim") against or brought by or on behalf of the Corporation or a Managed Facility if the uninsured portion of the amount in controversy is in excess of two million dollars ($2,000,000); provided, however, the approval of the members shall be required to contest, settle or compromise any claim brought by or on behalf of the federal or state government relating to matters within the scope of the corporate compliance plan of a Managed Facility, regardless of the amount in controversy or the existence of insurance coverage; (h) to acquire any real estate, personal property, membership, ownership or investment interest for the Corporation or a Managed Facility or make any capital expenditure other than pursuant to an annual budget, or substitutions for capital expenditures within a capital budget, which exceed individually, or in the aggregate five million dollars ($5,000,000) in any fiscal year.”

“The filing organization's current year Form 990 was reviewed by the CEO and by the CFO prior to its filing with the IRS. The review conducted by the 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 Conflict of Interest Policy of the filing organization applies to members of its Board of Trustees (the Board) and its principal officers and key employees (to be known as Interested Persons). Consistent with the filing organization's integrity standards, it is policy that each Board of Trustee member, or any corporate officer or key employee of the filing organization act at all times in a manner that is consistent with the filing organization's mission and values-based service to the community and exercise care that he or she does not have any personal interest which might conflict with or appear to conflict with the interest of the filing organization or which might influence their judgment or actions in performing their duties. In connection with an actual or possible transaction or arrangement involving the filing organization, any board member, corporate officer, or key employee who has a direct or indirect financial interest must disclose and be given the opportunity to share all material facts with the Board considering the proposed transaction or arrangement. Board members, corporate officers, and key employees are also required to disclose any possible conflicts on an annual basis through a Conflict of Interest Questionnaire. Procedure for disclosing and reviewing transaction or arrangement potential conflicts of interest: 1) Board members, corporate officers, and key employees that have a financial interest in any actual or possible transaction involving the filing organization are required to disclose the financial interest. 2) In order to determine if a conflict of interest exists, the individual who is considered to have a financial interest may make a presentation to the Board or Board committee. After such presentation, the individual shall leave the meeting for discussion and a vote on the issue. 3) After exercising due diligence, the Board or Board committee shall determine whether the filing organization can obtain a more advantageous transaction with reasonable efforts from another person or entity. If a more advantageous transaction is not reasonably attainable, the Board or Board committee shall determine by a majority vote of the disinterested members whether the transaction is in the filing organization's best interest and is fair. Procedure for disclosing and reviewing other conflicts of interest: 1) Board members, corporate officers, and key employees shall also disclose in advance to the filing organization's leaders any non-transactional actions or relationships that have the potential to create a conflict of interest. 2) The Board or Board committee shall carefully review and scrutinize any potential conflict of interest. By a majority vote of the disinterested members, the Board shall take whatever action is deemed appropriate with respect to the Board member, corporate officer, or key employee under the circumstances, including possible corrective action, in order to best protect the interests of the filing organization. 3) On an annual basis, Board members, corporate officers, and key employees will also be sent an email requesting they complete the Board member and corporate officer Conflict of Interest Questionnaire by the specified due date in the email. 4) The corporate responsibility department shall notify the chairperson of the Board of any potential conflicts and the chairperson, or designee, shall perform further investigation as he or she deems appropriate. Record of proceedings: The minutes of the Board and Board committee shall contain the names of persons who disclosed or otherwise were found to have a financial interest and the nature of the financial interest; and the names of persons who were present for discussions and votes relating to any financial interest, the content of the discussion, including any alternatives, and a record of the Board or Board committee decision. Violations of the conflicts of interest policy: If the Board or Board committee has reasonable cause to”

“Question 15 a&b: External consultants are engaged to provide market-based compensation studies to make recommendations to the filing organization's Compensation Committee regarding the compensation of the filing organization's CEO and CFO. The Compensation Committee is appointed by the Board of Trustees. The Board of Trustees may remove at any time, with or without cause, any member of the Compensation Committee; provided the filing organization's members, Portercare Adventist Health System (PAHS) and Catholic Health Initiatives Colorado (CHIC), shall have exclusive authority to appoint or remove, with or without cause, any member it or they appoint to the Compensation Committee. The consultant's recommendations are presented to and deliberated by the Compensation Committee. The Compensation Committee relies upon all available comparable compensation data in finalizing its decision concerning compensation for its senior executive positions. The Compensation Committee deliberations and decisions are documented appropriately. The filing organization's Human Resources department performs an annual analysis of the market to determine compensation ranges for the remainder of the filing organization's Executives which are reviewed and approved by the filing organization's senior leadership.”

“The filing organization's organizing and governing documents are available on the Colorado Secretary of State website. The filing organization does not generally make its Conflict of Interest Policy or financial statements available to the public.”

“Centura Health Corporation has not formally adopted a written policy or written procedure regarding joint ventures. Practices are in place that require the filing organization to perform an analysis and evaluation of its participation in every joint venture in which the filing organization will have an ownership interest. The internal review and analysis ensures that the filing organization will not become a participant in any joint ventures that could potentially threaten the tax-exempt status of the filing organization.”

“Payments to Hlthcare Professionals: Program service expenses 3,679,819. Management and general expenses 0. Fundraising expenses 0. Total expenses 3,679,819. Professional Fees: Program service expenses 18,590,184. Management and general expenses 0. Fundraising expenses 0. Total expenses 18,590,184. Purchased Medical Services: Program service expenses 5,757,568. Management and general expenses 0. Fundraising expenses 0. Total expenses 5,757,568. Environmental Services: Program service expenses 260,445. Management and general expenses 0. Fundraising expenses 0. Total expenses 260,445. Transcription Services: Program service expenses 6,875. Management and general expenses 0. Fundraising expenses 0. Total expenses 6,875. Recruiting: Program service expenses 727,260. Management and general expenses 0. Fundraising expenses 0. Total expenses 727,260. Management Fees: Program service expenses 0. Management and general expenses 1,708,900. Fundraising expenses 0. Total expenses 1,708,900. Billing and Collection Services: Program service expenses 0. Management and general expenses 4,792,208. Fundraising expenses 0. Total expenses 4,792,208. Lab Courier Fees: Program service expenses 3,551,998. Management and general expenses 0. Fundraising expenses 0. Total expenses 3,551,998.”

“Acquisition of CIN LLC 3,494,344. Contribution from Tax-Exempt Related Supported Organizations 54,200,000.”