2014-05-06T14:55:22-05:00 2013-06-30 381357951 PLANTE & MORAN PLLC 750 TRADE CENTRE WAY STE 300 PORTAGE MI 49002 990 2012-07-01 381369611 PORT HURON HOSPITAL PORT 8109875000 1221 PINE GROVE AVENUE PORT HURON MI 48060 JOHN LISTON 8109875000 2014-05-05 1 CAROL LALONDE CPA P00181637 2695674500 2012 2015-11-30 17:44:51Z THOMAS DEFAUW 1221 PINE GROVE AVENUE PORT HURON MI 48060 182866987 0 X WWW.PORTHURONHOSPITAL.ORG X 1879 MI PROVISION OF ACUTE MEDICAL CARE. TO BE A LEADER IN HEALING, AND YOUR PARTNER IN HEALTH. 16 15 1639 186 1183806 -414460 314723 948118 174641937 178174414 1987172 2505039 1252371 1239416 178196203 182866987 0 7319852 0 0 78945462 79752379 0 0 0 89127443 90683218 168072905 177755449 10123298 5111538 153552195 152055193 96948501 78142448 56603694 73912745 X PROVISION OF ACUTE MEDICAL CARE 0 0 137149051 7319852 177043307 FOR THE YEAR ENDED JUNE 30, 2013, PORT HURON HOSPITAL PROVIDED HEALTH CARE SERVICES TO THE POOR AND TO THE BROADER COMMUNITY FOR WHICH THE COST OF PROVIDING SUCH SERVICES EXCEEDED THE RELATED REVENUE. CHARITY CARE IN THE AMOUNT OF $4,989,147 WAS PROVIDED DURING THE YEAR. PORT HURON HOSPITAL PROVIDED $309,179,968 IN THIRD PARTY DISCOUNTS. IN TOTAL, THIS REPRESENTS 63.27% PERCENT OF THE GROSS PATIENT REVENUE FOR THIS YEAR.PORT HURON HOSPITAL ALSO PROVIDED THE COMMUNITY WITH OPPORTUNITIES TO PARTICIPATE IN NUMEROUS EDUCATIONAL, WELLNESS, SCREENING, AND SUPPORTIVE PROGRAMS AT EITHER NO COST OR AT A NOMINAL CHARGE. THE HOSPITAL PROVIDED A TOTAL OF 328 PROGRAMS TO APPROXIMATELY 352,652 PEOPLE OF THE COMMUNITY. 137149051 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 91 0 1 1639 1 1 1 0 0 0 0 0 0 0 0 0 X 16 15 0 0 0 0 1 1 0 1 1 0 0 1 1 1 1 1 1 1 0 0 MI X JOHN LISTON CFO 8109893737 1221 PINE GROVE AVENUE PORT HURON MI 48060 KAREN NIVER MD 3.00 1.00 X X 0 0 0 MONA ARMSTRONG 3.00 1.00 X X 0 0 0 JOHN OGDEN 3.00 1.00 X X 0 0 0 KARL TOMION 3.00 1.00 X X 0 0 0 THOMAS D DEFAUW 40.00 3.00 X X 675721 0 92526 JOHN LISTON 40.00 4.00 X X 314885 0 49333 JANET TURNER LOMASNEY OD 3.00 1.00 X 0 0 0 GLEN BETRUS MD 3.00 0.00 X 0 0 0 JANICE ROSE 3.00 0.00 X 0 0 0 F WILLIAM COOP MD 3.00 0.00 X 0 0 0 FRANKLIN MORTIMER II 3.00 1.00 X 0 0 0 JOHN V BROOKS MD 3.00 0.00 X 0 0 0 DAVID KEYES 3.00 0.00 X 0 0 0 DAVID TRACY MD 3.00 0.00 X 0 0 0 DAVID A THOMPSON 3.00 2.00 X 0 0 0 BASSAM H NASR MD 3.00 0.00 X 0 0 0 RICHARD LEVEILLE 3.00 1.00 X 0 0 0 KATHLEEN METCALF 40.00 0.00 X 265239 0 14440 DR MICHAEL TAWNEY 40.00 0.00 X 351802 0 55194 DAVID MCEWEN 40.00 1.00 X 281392 0 51302 JENNIFER MONTGOMERY 40.00 0.00 X 289348 0 34555 GARY LEROY 40.00 1.00 X 219486 0 43034 DORIS SEIDL 40.00 0.00 X 198145 0 38257 ROBERT L BAUER MD 40.00 0.00 X 279829 0 24759 THOMAS F BROZOVICH MD 40.00 0.00 X 277330 0 19762 TIMOTHY R VANHOWE 40.00 0.00 X 243301 0 10933 TROY C REED 40.00 0.00 X 247449 0 11157 JOSEPTH A GIZONI 40.00 0.00 X 225101 0 24117 3869028 0 469369 59 0 1 0 AHSAAMERICAN HEALTHCARE STAFFING ASSOC PO BOX 945 TRAVERSE CITY MI 49685 CONTRACT LABOR 753810 MCLMICHIGAN CO-TENANCY LAB 300 WEST TEXTILE ROAD ANN ARBOR MI 48108 LAB TESTING 705460 HEALOGICS WOUND CARE & HYPERBARIC SERVIC 5220 BELFORT ROAD SUITE 130 JACKSONVILLE FL 32256 WOUND CARE TREATMENT 439766 PHYSICIAN HEALTHCARE NETWORK 3050 COMMERCE DRIVE FORT GRATIOT MI 48059 MEDICAL/LOANS 348651 BLUE WATER PATHOLOGY PC PO BOX 77556 DETROIT MI 48277 LAB SERVICES 294600 13 948118 1215 948118 PATIENT REVENUE 621500 176600088 176600088 LABORATORY 621500 1243735 112628 1131107 OPERATING REVENUE 621500 330591 330591 178174414 1239233 1239233 1265806 0 1265806 1265806 1265806 CAFETERIA 722210 757781 757781 MISCELLANEOUS 900099 264199 264199 LAUNDRY 812300 217436 52699 164737 1239416 182866987 177043307 1183806 3691756 7319852 7319852 2978213 2978213 63965140 58255873 5709267 2337283 2041280 296003 5606113 5105631 500482 4865630 4249427 616203 232333 232333 169718 169718 19761 19761 485279 485279 15100137 8108952 6991185 330019 1971 328048 1292642 1292642 6347335 55800 6291535 135615 87545 48070 55327 37968 17359 497496 497496 8442579 8442579 1468571 1468571 SUPPLY & MINOR EQUIP 33581907 33521849 60058 PROVISION FOR BAD DEBTS 11295882 11295882 QAAP TAX 4342686 4342686 UTILITIES 1763971 1763971 5121960 4010408 1111552 177755449 137149051 40606398 0 26039687 28900575 26830946 35624403 6717202 6234525 12129091 4666657 4622589 4917340 1953321 1486658 160610924 114166908 46310129 46444016 14707687 12971774 9064260 5839006 5177283 4970239 153552195 152055193 67967588 51342179 16806614 13138609 508118 366923 11666181 13294737 96948501 78142448 X 56603694 73912745 56603694 73912745 153552195 152055193 X 5111538 1171531 11025982 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 19761 19761 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: A PORTION OF DUES PAID TO MHA AND AHA ARE ALLOCATED TO LOBBYING EXPENSES. 2150711 2150711 79323059 61958595 17364464 658773 288649 370124 71264423 47114262 24150161 7213958 4805402 2408556 46444016 CLAIM LIABILITY 6844010 COST REPORT SETTLEMENT PAYABLE 6450727 13294737 X 183768618 1171531 11025982 12197513 171571105 11295882 11295882 182866987 166459567 0 166459567 11295882 11295882 177755449 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE INTERNAL REVENUE SERVICE HAS RULED THAT THE HOSPITAL AND ITS SUBSIDIARIES, ASIDE FROM WILLOW ENTERPRISES, INC., ARE EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE, AND ACCORDINGLY, NO TAX PROVISION IS REFLECTED IN THE CONSOLIDATED FINANCIAL STATEMENTS. WILLOW ENTERPRISES, INC. IS A TAXABLE CORPORATION. INCOME TAX PROVISIONS FOR THIS ENTITY ARE NOT MATERIAL TO THE CONSOLIDATED FINANCIAL STATEMENTS. ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA REQUIRE MANAGEMENT TO EVALUATE TAX POSITIONS TAKEN BY THE HOSPITAL AND RECOGNIZE A TAX LIABILITY IF THE HOSPITAL HAS TAKEN AN UNCERTAIN POSITION THAT MORE LIKELY THAN NOT WOULD NOT BE SUSTAINED UPON EXAMINATION BY THE IRS OR OTHER APPLICABLE TAXING AUTHORITIES. MANAGEMENT HAS ANALYZED THE TAX POSITIONS TAKEN BY THE HOSPITAL AND HAS CONCLUDED THAT AS OF JUNE 30, 2013, THERE ARE NO UNCERTAIN POSITIONS TAKEN OR EXPECTED TO BE TAKEN THAT WOULD REQUIRE RECOGNITION OF A LIABILITY OR DISCLOSURE IN THE FINANCIAL STATEMENTS. THE HOSPITAL IS SUBJECT TO ROUTINE AUDITS BY TAXING JURSIDICTIONS; HOWEVER, THERE ARE CURRENTLY NO AUDITS FOR ANY TAX PERIODS IN PROGRESS. MANAGEMENT BELIEVES IT IS NO LONGER SUBJECT TO INCOME TAX EXAMINATIONS FOR YEARS PRIOR TO JUNE 30, 2010. PART XI, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN PENSION 11,025,982. PART XI, LINE 4B - OTHER ADJUSTMENTS: BAD DEBT NETTED WITH REVENUE 11,295,882. PART XII, LINE 4B - OTHER ADJUSTMENTS: BAD DEBT NETTED WITH REVENUE 11,295,882. 1 1 1 X 1 X 1 1 1 0 1 1 1 1221 1560371 0 1560371 0.00940 2 1969 25952794 22799363 3153431 0.01890 3 3190 27513165 22799363 4713802 0.02830 282 349355 504948 26041 478907 0.00290 4 0 75745 0 75745 0.00050 286 349355 580693 26041 554652 0.00340 289 352545 28093858 22825404 5268454 0.03170 2 53857 53857 0.00030 44 14511 14511 0.00010 236 107 27204 27204 0.00020 16 4562 4562 0.00000 16 1333 1333 0.00000 14 861 861 0.00000 328 107 102328 102328 0.00060 1 11295882 545139 55988044 59904908 -3916864 X 1 1 1 1 PORT HURON HOSPITAL

1221 PINE GROVE AVENUE PORT HURON MI 48060

X X X PORT HURON HOSPITAL 1 1 X X X X X X X X X 11 1 0 1 X X X X X X X X 0 0 1 1 200.000000000000 1 350.000000000000 1 X X X X X X X X 1 1 X X X 1 0 1 X 0 0 PART I, LINE 7, COLUMN (F): THE BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 25, COLUMN (A), BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGE IN THIS COLUMN IS $ 11295882. PART II: FOR MANY YEARS, OUR COMMUNITY LEADERS - WHICH HAVE ALWAYS INCLUDED PORT HURON HOSPITAL LEADERS - HAVE BELIEVED THAT "COMMUNITY BUILDING" IS AN INTEGRAL PART OF CREATING A FOUNDATION FOR BETTER HEALTH. UNHEALTHY CHARACTERISTICS OF OUR SERVICE AREA, SUCH AS CHRONIC HIGH UNEMPLOYMENT, OBESITY RATES, BINGE DRINKING RATES, DEPRESSION, LOW HOME OWNERSHIP RATES, ETC. ARE REDUCED BY OVERALL IMPROVEMENT IN KEY INDICES OF "HEALTHY COMMUNITIES": EMPLOYMENT, MEDIAN HOUSEHOLD INCOME, EDUCATION LEVEL, FRESH FRUITS AND VEGETABLES, RECREATION OPPORTUNITY, CULTURAL DIVERSITY. OUR MANAGEMENT TEAM, COMPRISED OF SOME 60 PEOPLE (NOT COUNTING OVER 1400 ADDITIONAL NON-MANAGMENT EMPLOYEES), IS INVOLVED IN, AND OFTEN PROVIDES LEADERSHIP TO, OVER 50 COMMUNITY ORGANIZATIONS SUCH AS THE ROTARY CLUB, YMCA, CHAMBERS OF COMMERCE (VARIOUS COMMUNITIES), SCHOOL BOARDS, CHILD ABUSE AND NEGLECT COUNCIL, UNITED WAY, SALVATION ARMY, ST. CLAIR COUNTY, COMMUNITY FOUNDATION, FAITH-BASED ORGANIZATIONS, GIRLS SCOUTS, HUMAN SERVICES COORDINATING BODY, HOSPICE HOUSE, ECONOMIC DEVELOPMENT AUTHORITY, AND PORT HURON AREA MUSEUM. MANY OF THOSE ORGANIZATIONS WERE INVITED TO PARTICIPATE IN OUR COMMUNITY HEALTH NEEDS ASSESSMENT. ALL MANAGERS ARE REQUESTED TO BECOME INVOLVED IN AT LEAST ONE COMMUNITY ORGANIZATION AS A WAY TO "GIVE BACK" TO OUR COMMUNITY, IMPACT COMMUNITY BUILDING, AND STAY "IN TOUCH" WITH THE COMMUNITIES WE SERVE. FURTHERMORE, PORT HURON HOSPITAL TAKES PRIDE IN HIGH LEVELS OF PARTICIPATION IN AREA FUNDRAISERS AND COMMUNITY BUILDING ACTIVITIES SUCH AS MARCH OF DIMES, JAIL AND BAIL, WALK AMERICA, AMERICAN HEART WALK, UNITED WAY, WALK FOR WARMTH, ANNUAL BACK-TO-SCHOOL BACKPACK GIVEAWAY, AND THE CHILD ABUSE & NEGLECT ROOFSIT. SOME OF THOSE EVENTS ARE OPPORTUNITIES FOR HEALTH EDUCATION, SCREENING AND PROMOTION OUTREACH PROVIDED BY OUR EMPLOYEES. PART III, LINE 4: ACCOUNTS RECEIVABLE FOR PATIENTS, INSURANCE COMPANIES, AND GOVERNMENTAL AGENCIES ARE BASED ON GROSS CHARGES. AN ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS IS ESTABLISHED ON AN AGGREGATE BASIS BY USING HISTORICAL WRITE-OFF RATE FACTORS APPLIED TO UNPAID ACCOUNTS BASED ON AGING. LOSS RATE FACTORS ARE BASED ON HISTORICAL LOSS EXPERIENCE AND ADJUSTED FOR ECONOMIC CONDITIONS AND OTHER TRENDS AFFECTING THE HOSPITAL'S ABILITY TO COLLECT OUTSTANDING AMOUNTS. UNCOLLECTIBLE AMOUNTS ARE WRITTEN OFF AGAINST THE ALLOWANCE FOR DOUBTFUL ACCOUNTS IN THE PERIOD THEY ARE DETERMINED TO BE UNCOLLECTIBLE. AN ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS AND INTERIM PAYMENT ADVANCES IS BASED ON EXPECTED PAYMENT RATES FROM PAYORS BASED ON CURRENT REIMBURSEMENT METHODOLOGIES. THIS AMOUNT ALSO INCLUDES AMOUNTS RECEIVED AS INTERIM PAYMENTS AGAINST UNPAID CLAIMS BY CERTAIN PAYORS.THE COST TO CHARGE RATIO WAS USED IN DETERMINING THE BAD DEBT EXPENSE ATTRIBUTABLE TO PATIENTS WHO POTENTIALLY WOULD HAVE QUALIFIED UNDER THE ORGANIZATION'S CHARITY CARE POLICY. PART III, LINE 8: PORT HURON HOSPITAL APPLIES THE COST TO CHARGE RATIO METHODOLOGY AS REQUIRED. ALL OF THE SHORTFALL SHOULD BE CONSIDERED COMMUNITY BENEFIT. PART III, LINE 9B: IF A PATIENT PARTICIPATES IN THE CHARITY CARE PROCESS, THE ACCOUNT IS WRITTEN OFF THE CHARITY AS PER THE CHARITY CARE PROCESS. HOWEVER, IF THE PATIENT IS NON-PARTICIPATIVE IN THE CHARITY CARE PROCESS, THE NORMAL COLLECTION PROCESS WILL ENSUE. PORT HURON HOSPITAL PART V, SECTION B, LINE 3: USING INITAL (PRE-FINAL) RULE GUIDANCE, ENGAGED A CONSULTANT, UTILIZED THE COUNTY-WIDE HEALTH ASSESSMENT PROFILE 2010 (IN WHICH HOSPITAL HAD PARTNERED) FOR BEHAVIORAL RISK FACTOR SURVEY STATISTICAL FINDING AND COMPARISONS, REVIEWED LOCAL DEMOGRAPHICS AND VITAL HEALTH STATISTICS. DIALOGUED WITH THE COUNTY HEALTH DEPARTMENT ON APPROACH. CONDUCTED SEVERAL KEY IMFORMANT INTERVIEWS. CONDUCTED COMMUNITY STAKEHOLDERS ROUNDTABLE TO OBTAIN KEY INPUT REGARDING COMMUNITY HEALTH PRIORITIES. ASSESSED CURRENT COMMUNITY HEALTH OFFERINGS. AND DEVELOPED A COMMUNITY HEALTH NEEDS ASSESSMENT AND ACTION PLAN THAT WAS PRESENTED TO THE HOSPITAL BOARD OF TRUSTEES FOR APPROVAL. THE ACTION PLAN WAS FURTHER UPDATED IN MARCH, 2013 BY THE BOARD. PORT HURON HOSPITAL PART V, SECTION B, LINE 7: THE HOSPITAL HAS SELECTED ONLY SOME OF THE NEEDS IDENTIFIED IN THE NEEDS ASSESSMENT TO ADDRESS IN THE PLAN, THOSE NEEDS THAT FITS ITS PURPOSE AND FOR WHICH THE HOSPITAL HAS A COMPARATIVE ADVANTAGE RELATIVE TO THE OTHER LOCAL AGENCIES OR RESOURCES. FURTHERMORE, THE CHNA PLAN IS INTENDED TO SPAN AS MUCH AS 3 YEARS AND AS SUCH NOT ALL OF THE NEEDS IDENTIFIED IN THE CHNA HAVE YET BEEN ADDRESSED. PORT HURON HOSPITAL PART V, SECTION B, LINE 12H: PROPENSITY TO PAY PORT HURON HOSPITAL PART V, SECTION B, LINE 14G: PAMPHLETS ARE DISPLAYED AND AVAILABLE IN EMERGENCY ROOM PORT HURON HOSPITAL PART V, SECTION B, LINE 20D: UPON REQUEST WE OFFER 20% PROMPT PAY DISCOUNT FOR NON CO-PAY AND DEDUCTIBLE PORTIONS AND 20% UNINSURED DISCOUNT. IF THE PERSON IS STILL UNABLE TO PAY, WE REVIEW FOR CHARITY CARE OR CATASTROPHIC CARE. PART VI, LINE 2: THE HOSPITAL ASSESSES HEALTH CARE NEEDS OF THE COMMUNITIES IT SERVES BY VARIOUS ONGOING AND AD HOC PROCESSES:-PARTICIPATION IN PERIODIC (ST. CLAIR) COUNTYWIDE NEEDS ASSESSMENT COORDINATED BY ST. CLAIR COUNTY HEALTH DEPARTMENT.-ANNUAL GAP ANALYSIS OF OUTMIGRATION FOR HEALTH CARE SERVICES THROUGH THE MICHIGAN INPATIENT DATA BASE.-PERIODIC CONSUMER PERCEPTION AND PREFERENCES SURVEYS CONDUCTED BY INDEPENDENT PROFESSIONAL SURVEY FIRMS, E.G. EPIC - MRA, LANSING, MI.-ANNUAL STRATEGIC PLANNING PROCESS INCLUDING STRATEGIC PLANNING EVENTS INVOLVING TRUSTEES, PHYSICIANS, AND MANAGEMENT TO REVIEW ENVIRONMENTAL ASSESSMENTS AND KEY STAKEHOLDER FEEDBACK TOWARD DEVELOPING HOSPITAL INITIATIVES FOR THE NEXT OPERATING CYCLE.-HOSPITAL-SPONSORED ADVISORY AND MEMBERSHIP GROUPS SUCH AS "55 PLUS" AND "WOMEN'S WELLNESS ADVISORY TEAM" WHICH PROVIDE INPUT AS TO HOSPITAL DIRECTION ON BETTER ADDRESSING COMMUNITY HEALTH NEEDS.-COMMITMENT TO ONGOING CONTINUOUS IMPROVEMENT. FOR OVER 20 YEARS, THE HOSPITAL HAS BEEN COMMITTED TO THE PRINCIPLE OF CONTINUOUS IMPROVEMENT. APPLIED TO ONGOING MANAGEMENT PLANNING, NUMEROUS OPPORTUNITIES TO BETTER SERVE OUR COMMUNITIES HAVE BEEN IDENTIFIED AND PURSUED. SEVERAL OF THOSE PURSUITS CONTINUE TODAY AND ARE ENUMERATED ON THE IRS 990 SCHEDULE H WORKSHEET INCLUDED HERE: THE LANG (HEALTH) LIBRARY INCORPORATED INTO THE HOSPITAL ENTRANCE ATRIUM PROVIDED SPECIAL HEALTH INFORMATION RESOURCES TO SCHOOLS, EDUCATORS, AND HEALTH CARE PROFESSIONALS; TODAY'S HEALTH WEEKLY HEALTH INFORMATION TELEVISION SHOW OVER THE LOCAL CABLE CHANNEL; AND HEALTH ACCESS, OUR HEALTH INFORMATION AND REFERRAL SERVICE OPERATING 80 HOURS PER WEEK, STAFFED BY RNS AND FIELDING 23,000 CALLS PER YEAR.-PARTICIPATION IN AD HOC COMMUNITY INITIATIVES FOR THE PURPOSE OF ADDRESSING SPECIFIC COMMUNITY HEALTH GAPS SUCH AS (1) RECENT UNITED WAY - ST. CLAIR COUNTY HEALTH DEPARTMENT INITIATIVE ON ESTABLISHING AN ADULT INDIGENT DENTAL CLINIC, AND (2) HELMET SAFETY INITIATIVE DEVELOPED THOUGH PHH FOUNDATION'S COMMUNITY BENEFIT COMMITTEE THAT INCLUDED SCHOOL DISTRICT AND POLICE REPRESENTATIVES. PART VI, LINE 3: THE HOSPITAL HAS BROCHURES AVAILABLE FOR PATIENTS REGARDING THEIR OPTIONS. THE HOSPITAL ALSO COMMUNICATES THAT A PATIENT MAY CALL IF THEY NEED FINANCIAL ASSISTANCE VIA PHONE CALLS AND BILLING STATEMENTS. THE HOSPITAL HAS A REPRESENTATIVE THAT IS WILLING TO WORK WITH THE PATIENTS TO HELP THEM TRY TO GET INSURANCE OR OTHER FORMS OF ASSISTANCE. PART VI, LINE 4: PORT HURON HOSPITAL AND ITS AFFILIATES SERVE A THREE-SIDED MARKET "HALF MOON", LIMITED TO THE EAST BY LAKE HURON AND THE ONATRIO, CA BORDER. THAT MARKET IS DESCRIBED GENERALLY AS ST. CLAIR COUNTY, SANILAC COUNTY, PLUS LESSER PARTS OF FOUR CONTINUOUS COUNTIES: HURON, LAPEER, TUSCOLA, AND MACOMB. THIS AREA IS LARGELY RURAL WITH THE LARGEST CITY, PORT HURON, CLAIMING A POPULATION OF AROUND 36,000. IT CAN BE DESCRIBED AS A BLUE COLLAR COMMUNITY. SOME 25-30% OF WORKERS WHO RESIDE IN ST. CLAIR COUNTY COMMUTE OUT OF COUNTY TO JOBS. IN TOTAL, THE MARKET INCLUDES APPROXIMATELY 220,000 RESIDENTS, OF WHOM THREE QUARTERS RESIDE IN ST. CLAIR COUNTY.OUR MARKET FOLLOWS THE STATE AVERAGES DEMOGRAPHICALLY WITH SOME EXCEPTIONS: A LOWER PERCENTAGE OF AFRICAN-AMERICANS, A HIGHER PERCENTAGE OF NATIVE-AMERICANS, A LOWER AVERAGE HOUSEHOLD INCOME, A HIGHER PERCENTAGE OF OVER AGE 65 POPULATION. PART VI, LINE 5: N/A REPORTS FILED WITH STATES PART VI, LINE 7 MI 0 PARKVIEW PROPERTY MANAGEMENT CORPORATION PO BOX 5011 PORT HURON MI 48060 382467310 501(C)(3) 7319852 FORGIVENESS OF DEBT 1 X X 1 1 X X X X 0 1 0 0 0 0 0 0 0 THOMAS D DEFAUW 490676 0 126906 0 58139 0 71567 0 20959 0 768247 0 0 0 JOHN LISTON 262230 0 47171 0 5484 0 32945 0 16388 0 364218 0 0 0 KATHLEEN METCALF 256466 0 8773 0 0 0 13500 0 940 0 279679 0 0 0 DR MICHAEL TAWNEY 291482 0 51525 0 8795 0 27789 0 27405 0 406996 0 0 0 DAVID MCEWEN 237181 0 38664 0 5547 0 29288 0 22014 0 332694 0 0 0 JENNIFER MONTGOMERY 241086 0 43200 0 5062 0 30541 0 4014 0 323903 0 0 0 GARY LEROY 156034 0 26455 0 36997 0 29958 0 13076 0 262520 0 0 0 DORIS SEIDL 162580 0 27900 0 7665 0 27881 0 10376 0 236402 0 0 0 ROBERT L BAUER MD 279829 0 0 0 0 0 13500 0 11259 0 304588 0 0 0 THOMAS F BROZOVICH MD 277330 0 0 0 0 0 19762 0 0 0 297092 0 0 0 TIMOTHY R VANHOWE 243301 0 0 0 0 0 10933 0 0 0 254234 0 0 0 TROY C REED 247449 0 0 0 0 0 11157 0 0 0 258606 0 0 0 JOSEPTH A GIZONI 225101 0 0 0 0 0 11855 0 12262 0 249218 0 0 0 PART I, LINE 1A HEALTH CLUB BENEFITS WERE PROVIDED TO THE CHIEF EXECUTIVE OFFICER AND TREATED AS TAXABLE COMPENSATION. TRAVEL FOR COMPANIONS WAS PROVIDED TO THE CHIEF EXECUTIVE OFFICER AND TREATED AS TAXABLE INCOME. PART I, LINE 4B THE FOLLOWING INDIVIDUALS MADE CONTRIBUTIONS A SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN: DAVID MCEWEN $15,788 DR. MICHAEL TAWNEY $21,039 THOMAS DEFAUW $58,067 JOHN LISTON $19,445 JENNIFER MONTGOMERY $17,808 DORIS SEIDL $11,827 PART I, LINE 6 PORT HURON HOSPITAL OFFERS AN ANNUAL INCENTIVE PROGRAM TO THE EXECUTIVE TEAM (PRESIDENT/CEO AND VICE-PRESIDENTS). THE EXECUTIVE COMPENSATION COMMITTEE OVERSEES THE ESTABLISHMENT, IMPLEMENTATION, AND APPROVAL OF THE INCENTIVE PROGRAMS. THE ANNUAL INCENTIVE PROGRAM PLAN CONTAINS 2 SETS OF MEASURES: CIRCUIT BREAKER AND ORGANIZATION INCENTIVE PROGRAM MEASURERS, STANDARDS, AND WEIGHTS. CIRCUIT BREAKER MEASURERS INCLUDE BOTH PATIENT SATISFACTION AND OPERATING INCOME PLUS A RESERVE FOR INCENTIVE COMPENSATION. THE SECOND SET OF MEASURES INCLUDES UP TO 5 MEASURES IMPORTANT TO THE ORGANIZATION. THE INCENTIVE PAYOUT IS CALCULATED AS A PERCENTAGE OF BASE SALARY, FROM A RANGE OF PERCENTAGES. THE PRESIDENT/CEO INCENTIVE RANGES FROM 18.5% TO 37% AND THE VICE PRESIDENTS RANGE FROM 12% TO 24%. FAILURE TO PERFORM AT BELOW THRESHOLD LEVELS FOR THE CIRCUIT BREAKER MEASURES RESULTS IN A CURTAILED OR ELIMINATED INCENTIVE PAYMENT. A MICHIGAN STATE HOSPITAL FINANCE AUTHORITY 382889417 59465HKZ8 2009-05-12 14645000 FACILITY IMPROVEMENTS, EQUIPMENT ACQUISITIONS, CURRENT REFUNDINGS 0 0 0 B MICHIGAN FINANCE AUTHORITY 800596186 59447PDV0 2011-03-24 23815000 FACILITY IMPROVEMENTS, EQUIPMENT ACQUISITIONS, CURRENT REFUNDINGS 0 0 0 A 12326228 14646627 192540 6393895 8060193 2012 1 0 1 1 B 5146110 23817405 292633 195084 6296919 12522332 4510437 2014 1 0 0 1 A 0 0 0 0 0 0 1 B 0 0 0 0 0 0 1 A 0 1 0 0 0 0 0 0 1 B 0 1 0 0 0 0 0 0 1 A 1 B 1 PHYSICIAN HEALTHCARE INVESTORS BASSAM H. NASR, MD, BOARD MEMBER OF PHH AND PART OWNER 80495 RENTAL/LEASE SLEEP CENTER 0 FORM 990, PART VI, SECTION A, LINE 6 THE SOLE MEMBER OF THIS CORPORATION IS BLUE WATER HEALTH SERVICES CORPORATION. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBER SHALL HAVE THE EXCLUSIVE RIGHT TO APPOINT AND REMOVE MEMBERS OF THE BOARD OF TRUSTEES. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 WAS PROVIDED TO THE BOARD FOR REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C ALL TRUSTEES AND DIRECTORS ANNUALLY COMPLETE THE CONFLICT OF INTEREST POLICY. THE GOVERNANCE REVIEWS THE CONLFICT OF INTEREST POLICY ANNUALLY AND DISCLOSES ANY POTENTIAL CONFLICTS AT THAT TIME. ANY PERCEIVED OR POTENTIAL CONFLICTS ARE SHARED WITH THE BOARD CHAIR AND VICE-CHAIR FOR ANY DISCUSSION OR ACTION IF A CONFLICT SHOULD ARISE. FORM 990, PART VI, SECTION B, LINE 15A THE EXECUTIVE COMPENSATION COMMITTEE IS A SUBCOMMITTEE OF THE BOARD OF DIRECTORS RESPONSIBLE FOR ANNUALLY EVALUATING THE PERFORMANCE AND COMPENSATION OF THE CHIEF EXECUTIVE OF THE CORPORATION. THEY ARE RESPONSIBLE FOR ENSURING PORT HURON HOSPITAL CAN ATTRACT, RETAIN AND MOTIVATE TALENTED EXECUTIVES WHO ARE ENTRUSTED TO ACHIEVE PERFORMANCE OBJECTIVES AND TO FULFILL THE HOSPITAL'S MISSION. THE COMMITTEE UTILIZES THE SERVICES OF AN INDEPENDENT CONSULTANT TO ANALYZE TOTAL REMUNERATION AND COMPARATIVE STUDIES TO ENSURE TOTAL COMPENSATION IS REASONABLE AND COMPETITIVE. THE MOST RECENT YEAR THIS PROCESS WAS UNDERTAKEN WAS FISCAL YEAR 2013. FORM 990, PART VI, SECTION C, LINE 19 DOCUMENTS ARE AVAILABLE UPON REQUEST. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: CHANGE IN ADDITIONAL MINIMUM PENSION LIABILITY 11,025,982. FORM 990, PART XII, LINE 2C: THERE HAVE BEEN NO CHANGES FROM PRIOR YEAR. BLUE WATER HEALTH SERVICES CORPORATION 1221 PINE GROVE AVENUE PORT HURON MI 48060 382453295 MANAGEMENT CORP MI 501(C)(3) LINE 9 N/A 0 PORT HURON HOSPITAL FOUNDATION PO BOX 5011 PORT HURON MI 48061 382777750 SUPPORTING ORG MI 501(C)(3) LINE 11A, I PORT HURON HOSPITAL 1 MARWOOD MANOR NURSING HOME PO BOX 5011 PORT HURON MI 48061 382683251 NURSING HOME MI 501(C)(3) LINE 9 BLUE WATER HEALTH SERVICES 1 PARKVIEW PROPERTY MANAGEMENT CORP PO BOX 5011 PORT HURON MI 48061 382467310 MANAGEMENT CORP MI 501(C)(3) LINE 11A, I PORT HURON HOSPITAL 1 WILLOW ENTERPRISES PO BOX 5011 PORT HURON MI 48061 382491659 RENT/SALE OF MEDICAL EQUIPMENT MI PORT HURON HOSPITAL C 361733 2638627 1.00000 0 1 1 1 0 0 0 0 0 0 1 1 1 1 0 1 0 1 0 0 PARKVIEW PROPERTY MANAGEMENT CORP J 520612 ALLOCATION OF COST PORT HURON HOSPITAL FOUNDATION C 948118 CASH PARKVIEW PROPERTY MANAGEMENT CORP B 7319852 CASH PORT HURON HOSPITAL FOUNDATION L 99455 ALLOCATION OF COST PARKVIEW PROPERTY MANAGEMENT CORP L 31275 ALLOCATION OF COST MARWOOD MANOR NURSING HOME L 114473 ALLOCATION OF COST WILLOW ENTERPRISES L 71176 ALLOCATION OF COST WILLOW ENTERPRISES K 62148 ALLOCATION OF COST WILLOW ENTERPRISES O 2578743 ALLOCATION OF COST PARKVIEW PROPERTY MANAGEMENT CORP O 159710 ALLOCATION OF COST WILLOW ENTERPRISES P 72157 ALLOCATION OF COST WILLOW ENTERPRISES Q 27842 ALLOCATION OF COST PORT HURON HOSPITAL FOUNDATION O 327595 ALLOCATION OF COST MARWOOD MANOR NURSING HOME Q 323337 ALLOCATION OF COST PARKVIEW PROPERTY MANAGEMENT CORP A 115966 ALLOCATION OF COST WILLOW ENTERPRISES J 37475 ALLOCATION OF COST