2014-08-01T16:15:24-05:00 2013-09-30 411944416 MCGLADREY LLP 1 SOUTH WACKER SUITE 600 CHICAGO IL 60606 990 2012-10-01 371110690 MEMORIAL HEALTH SYSTEM MEMO 2177883198 701 NORTH FIRST STREET SPRINGFIELD IL 627810001 ROBERT W KAY 2177883198 2014-08-01 1 ZACHARY A FORTSCH P00052725 3126343400 2012 2015-11-30 17:44:51Z EDGAR J CURTIS 701 NORTH FIRST STREET SPRINGFIELD IL 627810001 150778434 0 X WWW.MHSIL.COM X 1981 IL TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE. 17 10 269 16 607792 0 0 0 57010826 58582417 2288199 1307224 2111332 2224555 61410357 62114196 230227 312973 0 0 27008224 29687353 0 0 0 32408495 32729723 59646946 62730049 1763411 -615853 163452152 221282146 65697312 127596945 97754840 93685201 X TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE. 0 0 32475570 18172980 INFORMATION TECHNOLOGYMEMORIAL HEALTH SYSTEM IS PROACTIVE IN IMPLEMENTING TECHNOLOGY THAT BOTH IMPROVES PATIENT SAFETY, QUALITY AND CLINICAL EFFECTIVENESS, AND IMPROVES MEMORIAL HEALTH SYSTEM'S BUSINESS PROCESSES. MEMORIAL HEALTH SYSTEM'S STAFF OF EXPERIENCED INFORMATION TECHNOLOGY PROFESSIONALS IS ON THE CUTTING EDGE OF MEDICAL AND BUSINESS TECHNOLOGY. THEY SUPPORT A VAST ARRAY OF PATIENT CARE AND BUSINESS APPLICATIONS. DURING FY13 SIGNIFICANT INFORMATION TECHNOLOGY PROJECTS INCLUDED: OPTIMIZATION OF COMPUTERIZED PROVIDER ORDER ENTRY SYSTEM AND PHYSICIAN DOCUMENTATION AT ALL AFFILIATE HOSPITALS, MAINTAINED MEANINGFUL USE STAGE 1 PERFORMANCE FOR ALL ELIGIBLE HOSPITALS AND PROVIDERS WHILE PREPARING FOR STAGE 2, IMPLEMENTED VOICE RECOGNITION SOFTWARE IN HOSPITAL AND AMBULATORY CLINICS, EXPANDED CONNECTIONS TO NEW FACILITIES WITHIN OUR NETWORK (JACKSONVILLE MEDICAL OFFICE BUILDING) AND BEYOND (YMCA AND HORACE MANN EMPLOYER BASED OUTREACH CLINIC), COMPLETED LABORATORY MODERNIZATION AND BEDSIDE BARCODE MEDICATION ADMINISTRATION, IMPLEMENTED LAPTOP AND EMAIL ENCRYPTION, CONTINUED PROGRESS TOWARD ICD-10 PREPAREDNESS, INITIATED MIGRATION FROM WINDOWS XP TO WINDOWS 7 AND CONTINUED THE DESIGN AND BUILD PHASES OF OUR ENTERPRISE DATA WAREHOUSE FOR BUSINESS INTELLIGENCE. 5932930 4723158 BUILDING AND FACILITY EXPANSION AND IMPROVEMENTSMEMORIAL HEALTH SYSTEM'S MISSION IS TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE. SAFE, FUNCTIONAL FACILITIES ARE THE FOUNDATION OF THE HEALTHCARE SERVICES WE PROVIDE. DEVELOPING ADDITIONAL CAPACITY TO SERVE THE COMMUNITY IS A PRIMARY OBJECTIVE TO FULFILLING OUR MISSION BOTH IN THE SHORT TERM AS WELL AS IN THE LONG TERM. IN 2013, MEMORIAL MEDICAL CENTER, AN AFFILIATE OF MEMORIAL HEALTH SYSTEM, EMBARKED ON THE MOST SIGNIFICANT EXPANSION PROJECT IN THE 113 YEAR HISTORY OF THE ORGANIZATION. THE TOTAL PROJECT COST IS APPROXIMATELY $152M AND ENCOMPASSES FOUR SPECIFIC COMPONENTS. THE PATIENT CARE TOWER EXPANSION WILL PROVIDE 114 PRIVATE PATIENT ROOMS. THIS ADDITION WILL ENABLE THE MEDICAL CENTER TO ONE DAY PROVIDE ALL PRIVATE ROOMS TO ITS PATIENTS. EVIDENCE HAS SHOWN IMPROVED HEALTHCARE OUTCOMES FOR PATIENTS STAYING IN PRIVATE ROOMS DUE TO REDUCED HOSPITAL ACQUIRED INFECTION RATES AND A MORE PEACEFUL HEALING ENVIRONMENT. THE SECOND COMPONENT IS A SURGICAL SUITE EXPANSION PROVIDING 6 NEW OPERATING ROOMS TO MEET INCREASING CASE VOLUMES. MEMORIAL HEALTH SYSTEM IS ALSO DEVELOPING A CENTER FOR LEARNING AND INNOVATION DESIGNED TO PROVIDE STATE OF THE ART CLINICAL TRAINING FACILITIES FOR PHYSICIANS, RESIDENTS, MEDICAL STUDENTS, NURSING STAFF, AND ALL OTHER EMPLOYEES. THIS FACILITY WILL ALSO BE USED TO IMPROVE MEDICAL EDUCATION THROUGH PARTNERSHIP WITH THE SOUTHERN ILLINOIS SCHOOL OF MEDICINE. FINALLY, THE MEMORIAL MEDICAL CENTER PHYSICAL PLANT IS UNDERGOING A MODERNIZATION TO MEET THE INCREASED DEMAND OF THE AFOREMENTIONED EXPANSION WHILE RETROFITTING EQUIPMENT TO IMPROVE UTILITY CONSUMPTION EFFICIENCY. OTHER CLINICAL PROJECTS COMPLETED FOR THE MEDICAL CENTER INCLUDE: 2 CT SCANNER REPLACEMENTS. AT A COST OF APPROXIMATELY $2.8M INCLUDING EQUIPMENT COST, THE CT REPLACEMENTS PROVIDED CURRENT STATE OF THE ART TECHNOLOGY TO IMPROVE DIAGNOSTIC IMAGING CAPABILITY AT THE MEDICAL CENTER. RENOVATION OF NURSING UNIT. AT A COST OF APPROXIMATELY $1.7M, COSMETIC RENOVATION OF THE NEURO UNIT IN PREPARATION FOR PRIVATE PATIENT ROOMS. RENOVATION OF THE SPECIAL PROCEDURES AREA. AT A COST OF APPROXIMATELY $1.6M, THE RENOVATION INCLUDED THE ADDITION OF THREE ADDITIONAL GI PROCEDURE ROOMS TO MEET ADDITIONAL CASE VOLUMES AS WELL AS RENOVATION OF THE PATIENT PREP/RECOVERY AREA TO SUPPORT EXPANDED OPERATIONS. OR LAMINAR FLOW INSTALLATIONS. AT A COST OF APPROXIMATELY $926K, MEMORIAL MEDICAL CENTER ADDED LAMINAR FLOW CAPABILITY TO TWO ADDITIONAL OPERATING ROOMS TO ALLOW FOR INCREASED VOLUMES IN TOTAL JOINT REPLACEMENT SURGERIES. 4476483 35131038 SENIOR LEADERSHIPGUIDED BY THE VALUES OF MEMORIAL HEALTH SYSTEM, SENIOR LEADERSHIP IS RESPONSIBLE FOR STRATEGIC PLANNING, PRIORITIZING AMONG COMPETING ISSUES AND ENGAGING IN DIALOGUE AND DECISION-MAKING THAT WILL ENABLE MEMORIAL HEALTH SYSTEM TO ACHIEVE ITS MISSION AND VISION AND ACCOMPLISH ITS STRATEGIC GOALS. IN FY13, MHS SENIOR LEADERSHIP REVIEWED AND CONFIRMED THE ORGANIZATION'S STRATEGIC PLAN, 5 YEAR GOALS AND MEASURES OF SUCCESS TO REFLECT EMERGING PRIORITIES RELATED TO HEALTH REFORM, QUALITY IMPROVEMENT, POPULATION HEALTH AND CARE COORDINATION. IN ADDITION, THE METHOD OF MONITORING AND REPORTING ON HEALTH SYSTEM ACTION PLAN IMPLEMENTATION WAS IMPLEMENTED. IN THE AREA OF INFORMATION SYSTEMS, MHS DEVELOPED AN IMPLEMENTATION PLAN FOR BEDSIDE BAR CODING FOR MEDICATION ADMINISTRATION AT MEMORIAL MEDICAL CENTER AND PATIENT PORTALS AT ALL MHS AFFILIATES. A MULTI-DISCIPLINARY TEAM MET ALL FY13 MILESTONES PERTAINING TO THE TRANSITION FROM ICD-9 TO ICD-10 MEDICAL RECORD CODING. IN THE AREA OF SYSTEM FACILITY PLANNING AND MANAGEMENT, WE COMPLETED CONSTRUCTION AND OPENED A NEW MEDICAL OFFICE BUILDING OCCUPIED BY PHYSICIANS ON THE CAMPUS OF PASSAVANT AREA HOSPITAL IN JACKSONVILLE AND MET ALL CONSTRUCTION MILESTONES FOR A NEW MEDICAL OFFICE BUILDING TO BE OCCUPIED BY SPRINGFIELD CLINIC PHYSICIANS ON THE MEMORIAL MEDICAL CENTER CAMPUS IN SPRINGFIELD. WE ALSO MET ALL CONSTRUCTION MILESTONES ON A 500-CAR PARKING GARAGE ADJACENT TO THIS NEW MEDICAL OFFICE BUILDING ON THE NORTH SIDE OF THE CAMPUS. PLANNING WAS COMPLETED, A CERTIFICATE OF NEED SECURED AND CONSTRUCTION INITIATED ON THE LARGEST FACILITY EXPANSION IN THE HISTORY OF MEMORIAL MEDICAL CENTER. THIS ADVANCING CARE BY DESIGN PROJECT INCLUDES 114 NEW PRIVATE PATIENT ROOMS, EXPANSION OF SURGICAL FACILITIES, CREATION OF A CENTER FOR LEARNING AND INNOVATION AND INFRASTRUCTURE UPGRADES THAT WILL ENABLE ENERGY CONSERVATION FOR OUR ENTIRE CAMPUS. THIS PROJECT WILL IMPROVE PATIENT ACCESS, SAFETY AND QUALITY OF CARE FOR DECADES TO COME AT OUR FLAGSHIP HOSPITAL. OTHER KEY SUCCESSES THIS YEAR DIRECTLY RELATED TO STRONG LEADERSHIP INCLUDE STRONG PERFORMANCE IN THE MEDICARE VALUE-BASED PURCHASING PROGRAM RELATED TO CLINICAL QUALITY AND PATIENT SATISFACTION OUTCOMES, AMONG THE LOWEST MEDICARE RE-ADMISSION RATES IN ILLINOIS, REAFFIRMATION OF MHS' A+/A1 BOND RATING BY MOODY'S AND STANDARD AND POORS, MHS EMPLOYEE ENGAGEMENT SCORES AT THE 97TH PERCENTILE OF THE NATIONAL COMPARISON GROUP AND SIGNIFICANTLY IMPROVED HCAHPS INPATIENT SATISFACTION SCORES AT MEMORIAL MEDICAL CENTER, AS PART OF MHS' GREAT PATIENT EXPERIENCE INITIATIVE. NINE OF OUR 15 PATIENT SATISFACTION SURVEYS ACROSS THE HEALTH SYSTEM WERE AT OR ABOVE THE 75TH PERCENTILE OF THEIR RESPECTIVE NATIONAL PEER GROUPS. PHYSICIAN SATISFACTION RATINGS AT ALL THREE MHS HOSPITALS WERE IN THE TOP 10% OF THEIR NATIONAL PHYSICIAN PEER GROUPS. DURING FY13, ALL 12 MEMORIAL PHYSICIAN SERVICES PRIMARY CARE PHYSICIAN CLINICS RECEIVED THE HIGHEST POSSIBLE LEVEL 3 PATIENT CENTERED MEDICAL HOME DESIGNATION FROM THE NATIONAL COMMISSION ON QUALITY ASSURANCE (NCQA). AN ADDITIONAL PSYCHIATRIC ADVANCED PRACTICE NURSE AND PSYCHIATRIST WERE RECRUITED TO HELP ADDRESS A SEVERE SHORTAGE OF MENTAL HEALTH PROVIDERS IN OUR REGION. MHS' SENIOR LEADERSHIP TEAM ALSO LED A SYSTEM-WIDE INITIATIVE TO IMPROVE PROCESSES AND REDUCE COSTS WHILE IMPROVING QUALITY FOR PATIENTS THAT IS CALLED STRENGTHEN OUR FUTURE. THROUGH THIS INITIATIVE, COSTS WERE REDUCED OVER $20 MILLION IN FY13 AND AN ADDITIONAL $10.3 MILLION IN SAVINGS OPPORTUNITIES HAS BEEN IDENTIFIED FOR FY14. THIS IS A PART OF THE OVERALL STRATEGY TO IMPROVE QUALITY WHILE REDUCING COSTS. TOWARDS THIS END, MHS ALSO IMPLEMENTED A NEW BJC COLLABORATIVE INVOLVING FOUR LEADING HEALTH SYSTEMS IN MISSOURI AND ILLINOIS. THE COLLABORATIVE WILL FOCUS ON WAYS THE MEMBERS CAN ADOPT BEST PRACTICES TO IMPROVE QUALITY, REDUCE COSTS AND BETTER RESPOND TO THE HEALTH CARE NEEDS OF THE POPULATIONS SERVED. DURING FY13, BLESSING HEALTH SYSTEM IN QUINCY, ILLINOIS JOINED THE COLLABORATIVE UNDER MEMORIAL'S SPONSORSHIP. GROUNDWORK WAS ALSO LAID FOR PASSAVANT AREA HOSPITAL IN JACKSONVILLE, ILLINOIS TO JOIN MEMORIAL HEALTH SYSTEM AS OUR 4TH HOSPITAL AFFILIATE. THIS AFFILIATION WILL BE COMPLETED IN FY14. MHS IMPLEMENTED A NEW, EVIDENCE BASED MANAGEMENT LEADERSHIP COMPETENCY MODEL THIS YEAR AND LAUNCHED A NEW PHYSICIAN LEADERSHIP DEVELOPMENT PROGRAM. A REVAMPED INDIVIDUALIZED LEADERSHIP DEVELOPMENT PLAN TEMPLATE AND PROCESS, NEW LEADER ORIENTATION, LEADERSHIP PERFORMANCE APPRAISAL AND MANAGEMENT PROCESSES WERE ALSO IMPLEMENTED THIS YEAR. A REVISED GOVERNANCE STRUCTURE RELATED TO CLINICAL QUALITY AND PATIENT SAFETY WAS IMPLEMENTED, CREATING A GOVERNANCE TEAM COMPRISED OF 50% PRACTICING PHYSICIANS AND 50% SENIOR LEADERS THAT NOW DIRECTS THE DEPLOYMENT OF ORGANIZATIONAL RESOURCES TO IMPROVE CLINICAL PROCESSES AND OUTCOMES. LEAN SIX SIGMA PROCESS IMPROVEMENT TRAINING WAS IMPLEMENTED FOR PHYSICIAN AND ADMINISTRATIVE LEADERS THROUGHOUT THE ORGANIZATION. THIS REVISED STRUCTURE RESULTED IN SEVERAL QUALITY IMPROVEMENTS INCLUDING A PROJECT TITLED "LEAN SIX SIGMA METHODOLOGIES REDUCE HOSPITAL-ACQUIRED PRESSURE ULCER PREVALENCE BY 79 PERCENT IN A TERTIARY MEDICAL CENTER" FOR WHICH MEMORIAL HEALTH SYSTEM WAS AWARDED THE SOLE HEALTH SYSTEM QUALITY EXCELLENCE ACHIEVEMENT AWARD BY THE ILLINOIS HOSPITAL ASSOCIATION INSTITUTE FOR INNOVATIONS IN CARE AND QUALITY. 3526809 312973 27798 3526809 312973 27798 46411792 1 0 0 1 0 0 0 0 0 1 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 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 38 0 1 269 1 1 1 0 0 0 0 0 0 0 0 0 0 X 17 10 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 IL X ROBERT W KAY SENIOR VP & CFO 2177883198 701 NORTH FIRST STREET SPRINGFIELD IL 627810001 JOSEPH HURWITZ 2.00 X 0 0 0 JAMES BRUNER 1.70 X X 0 0 0 JOHN BLACKBURN 1.70 X X 0 0 0 CAROL HANSEN POSEGATE 0.80 X X 0 0 0 MARK FERGUSON 1.60 X 0 0 0 DALE BECKER 1.50 X X 0 0 0 RICHARD LEVI 0.80 X 0 0 0 RANDALL GERMERAAD 0.80 X X 0 0 0 NINA HARRIS 1.00 X 0 0 0 HOWARD PETERS III 0.70 X 0 0 0 DIANE RUTLEDGE PHD 1.00 X 0 0 0 SERGIO PECORI 1.10 X 0 0 0 WILLIAM PUTMAN MD 0.90 X 0 0 0 MICHAEL NEUMEISTER MD 0.70 X 0 0 0 DEAN ROBERT JR 0.70 X 0 0 0 GEOFFREY ISRINGHAUSEN 0.70 X 0 0 0 EDGAR CURTIS EX-OFFICIO 25.00 25.00 X X 1346712 0 549974 ROBERT KAY 25.00 25.00 X 552172 0 198444 MITCHELL JOHNSON 25.00 25.00 X 679965 0 178487 DAVID GRAHAM MD 25.00 25.00 X 454470 0 77480 RAJESH GOVINDAIAH MD 25.00 25.00 X 444402 0 51044 ELAINE YOUNG 25.00 25.00 X 269263 0 34407 BRADLEY WARREN 25.00 25.00 X 296265 0 53504 DOUGLAS RAHN DBA 25.00 25.00 X 0 592888 163094 KEVIN ENGLAND 25.00 25.00 X 349591 0 51363 ANNA EVANS JD 25.00 25.00 X 360994 0 82024 GARY CROMPTON 50.00 X 226635 0 25602 EDWARD MCDOWALL 50.00 X 233789 0 39792 AIMEE ALLBRITTON PHD 50.00 X 201260 0 26228 LAURA COSSEY 50.00 X 168933 0 23675 OVIDIU DIACONU 50.00 X 155744 0 21656 ROBERT CLARKE 0.00 X 917463 0 0 FORREST HESTER 0.00 X 101107 0 0 6758765 592888 1576774 46 1 1 0 HAROLD O'SHEA BUILDERS INC 3401 CONSTITUTION DR SPRINGFIELD IL 62711 CONSTRUCTION 35619087 CERNER CORPORATION PO BOX 412702 KANSAS CITY MO 64141 IT CONSULTING SERVICES 5002036 MAINLINE INFORMATION SYSTEMS INC PO BOX 402989 ATLANTA GA 30384 IT MAINTENANCE 2217078 INFORMATION BUILDERS INC PO BOX 7247-7482 PHILADELPHIA PA 191707482 CONSULTING SERVICES 1355030 EOS BUSINESS SERVICES INC PO BOX 414 CHATHAM IL 62629 IT MAINTENANCE 1246931 45 MANAGEMENT FEES 900099 35686279 35131038 555241 IT REIMBURSED EXPENSES 900099 18172980 18172980 PROGRAM RELATED RENT 900099 4723158 4723158 58582417 922430 922430 5011480 5235661 -224181 -224181 4188 -228369 83700439 112932 83247226 181351 453213 -68419 384794 384794 BILLING SERVICE 561000 2418175 45600 2372575 RELATED PARTNERSHIP IN 900099 27798 27798 2763 2763 2448736 62114196 58054974 607792 3451430 312973 312973 4476483 4476483 19419660 11886954 7532706 1980032 1211996 768036 2408867 1243650 1165217 1402311 834760 567551 280243 280243 143200 143200 75000 75000 282934 282934 4897839 1818470 3079369 298041 298041 2132294 1396271 736023 14843492 14765103 78389 2846434 2117316 729118 152285 65377 86908 529832 498083 31749 779693 779693 4940693 4799990 140703 112934 112934 RECRUITMENT 203415 0 203415 REPAIRS & MAINTENANCE 144680 144667 13 MINOR PROJECT COSTS 56613 56613 0 10101 3393 6708 62730049 46411792 16318257 0 795709 15358108 1582261 1546433 5038065 5740150 218429231 69563922 109532417 148865309 39366766 43376335 492951 1343353 6643983 5052458 163452152 221282146 9819402 14466777 18432 18003 14488345 14064575 18280000 77095000 23091133 21952590 65697312 127596945 X 97754840 93685201 97754840 93685201 163452152 221282146 X -615853 2988134 -6441920 X X 0 1 X 1 1 1 X X X 0 0 0 MEMORIAL MEDICAL CENTER 370661220 3 0 1 1 0 MEMORIAL HOME SERVICES 370714225 7 0 1 1 0 ABRAHAM LINCOLN MEMORIAL HOSPITAL 370723793 3 0 1 1 0 TAYLORVILLE MEMORIAL HOSPITAL 370661250 3 0 1 1 0 MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS 370646367 7 0 1 1 0 SPRINGFIELD RESIDENTIAL SERVICES 371298589 7 0 1 1 0 ABRAHAM LINCOLN HEALTHCARE FOUNDATION 363492268 7 0 1 1 0 MEMORIAL MEDICAL CENTER FOUNDATION 371110301 7 0 1 1 0 8 0 0 0 0 0 0 0 0 0 1 75000 75000 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: MEMORIAL HEALTH SYSTEM ENGAGES LOBBYISTS TO ASSIST IT IN SECURING FEDERAL GRANTS AND MONITORING STATE REGULATIONS IN SUPPORT OF FURTHERING THE MEMORIAL HEALTH SYSTEM MISSION WHICH IS "TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE". THIS INCLUDES ASSISTING MEMORIAL HEALTH SYSTEM IN DEVELOPING PRESENTATIONS TO THE ILLINOIS CONGRESSIONAL DELEGATION, REQUESTING APPROPRIATIONS FOR PRIORITY PROJECTS INVOLVING LOCAL PATIENT SAFETY, QUALITY IMPROVEMENT AND IMPROVED LOCAL ACCESS TO MEDICAL CARE. THE LOBBYISTS ALSO ASSIST MEMORIAL IN COMMUNICATING THE IMPORTANCE OF ADEQUATE MEDICAID FUNDING IN SUPPORT OF THE SUBSTANTIAL SERVICES MEMORIAL'S AFFILIATES PROVIDE TO THOSE IN POVERTY AND IN MONITORING LEGISLATIVE AND REGULATORY DEVELOPMENTS THAT WOULD AFFECT MEMORIAL HEALTH SYSTEM'S ABILITY TO CONTINUE DELIVERING ITS SUBSTANTIAL COMMUNITY BENEFIT. 8179460 211378 723768 0 374978 73624 8666004 7271242 22786 1148366 31300 170435 61199 8179460 7410408 48483 -47525 0 42758 97366 7271242 5942467 1050046 599812 35500 107317 39100 7410408 5911356 35189 194785 53949 107863 37051 5942467 0.14000 0.59600 0.26400 0 1 1 481647 20502189 20983836 57326471 46506329 24606253 79226547 1364749 54379999 43825782 11918966 768159 37099688 1131887 36735960 148865309 DEFERRED COMPENSATION 9421488 WORKERS' COMPENSATION 319839 RESERVE FOR POST EMPLOYMENT BENEFITS 2770191 DUE TO AFFILIATES 846263 SWAP LIABILITY 3325651 RESTORATION PLAN 5269158 21952590 X 53394580 2988134 1513164 4501298 48893282 282934 12937980 13220914 62114196 50602043 -11532099 -11532099 62134142 282934 312973 595907 62730049 DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE MEMORIAL MEDICAL CENTER FOUNDATION'S ENDOWMENT CONSISTS OF 36 INDIVIDUAL DONOR-RESTRICTED FUNDS ESTABLISHED FOR A VARIETY OF PURPOSES. THE MEMORIAL MEDICAL CENTER FOUNDATION (MMCF) HAS A POLICY OF APPROPRIATING FOR DISTRIBUTION EACH YEAR 5% OF ITS ENDOWMENT FUND'S MOVING AVERAGE FAIR VALUE OVER THE PRIOR 36 MONTHS AS OF SEPTEMBER 30 OF THE PRECEEDING FISCAL YEAR IN WHICH THE DISTRIBUTION IS PLANNED. IN ESTABLISHING THIS POLICY, MMCF CONSIDERED THE LONG-TERM EXPECTED RETURN ON ITS ENDOWMENTS. ACCORDINGLY, OVER THE LONG TERM, THE FOUNDATION EXPECTS THE CURRENT SPENDING POLICY TO ALLOW ITS ENDOWMENT TO GROW AT AN AVERAGE OF THE LONG TERM RATE OF INFLATION. THE PURPOSE OF MEMORIAL HOME SERVICES' ENDOWMENT FUND IS FOR THE INCOME TO BE USED FOR OPERATING EXPENSES. THE PURPOSE OF TAYLORVILLE MEMORIAL HOSPITAL FOUNDATION'S ENDOWMENT FUND IS FOR EDUCATION SCHOLARSHIPS FOR STUDENTS SEEKING A CAREER IN HEALTHCARE. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE AUTHORITATIVE GUIDANCE IN ASC 740, INCOME TAXES, CREATES A SINGLE MODEL TO ADDRESS UNCERTAINTY IN TAX POSITIONS AND CLARIFIES THE ACCOUNTING FOR INCOME TAXES BY PRESCRIBING THE MINIMUM RECOGNITION THRESHOLD A TAX POSITION IS REQUIRED TO MEET BEFORE BEING RECOGNIZED IN THE FINANCIAL STATEMENTS. UNDER THE REQUIREMENTS OF THIS GUIDANCE, TAX-EXEMPT ORGANIZATIONS COULD BE REQUIRED TO RECORD AN OBLIGATION AS THE RESULT OF A TAX POSITION THEY HAVE HISTORICALLY TAKEN ON VARIOUS TAX EXPOSURE ITEMS. EACH OF MEMORIAL HEALTH SYSTEM'S SUBSIDIARIES, EXCLUDING THOSE DESCRIBED IN THE FOLLOWING PARAGRAPH, IS A SEPARATELY INCORPORATED NOT-FOR-PROFIT CORPORATION AS DESCRIBED UNDER SECTION 501(C)(3) OF THE CODE AND IS TAX-EXEMPT FROM FEDERAL INCOME TAXES ON RELATED INCOME PURSUANT TO SECTION 501(A) OF THE CODE. THEY DO, HOWEVER, OPERATE CERTAIN PROGRAMS THAT MAY RESULT IN UNRELATED BUSINESS INCOME. UPON REVIEW AS REQUIRED BY ASC 740, NO TAX PROVISION WAS RECORDED FOR THE YEARS ENDED SEPTEMBER 30, 2013, 2012, OR 2011. MEMORIAL PROPERTIES (MP) IS A LIMITED LIABILITY COMPANY WHOSE SOLE MEMBER IS MEMORIAL PHYSICIAN SERVICES (MPS). MP IS CONSIDERED A DISREGARDED ENTITY FOR TAX PURPOSES AND IS EXEMPT FROM INCOME TAX AS PART OF ITS MEMBER, MPS. MEMORIAL HOME SERVICES OF CENTRAL ILLINOIS (MHSCI) IS A TAXABLE FOR-PROFIT CORPORATION WHOSE SOLE MEMBER IS MEMORIAL HOME SERVICES (MHSVC). PART XI, LINE 2D - OTHER ADJUSTMENTS: NONOPERATING CHANGE IN FV OF INT RATE SWAPS 1,513,164. PART XI, LINE 4B - OTHER ADJUSTMENTS: REIMBURSED IT EXPENSES 18,172,980. RENTAL EXPENSES REPORTED IN F/S AS EXPENSE 990 AS NET -5,235,661. RELATED PARTNERSHIP INCOME BOOK/TAX DIFFERENCE 661. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES REPORTED IN F/S AS EXPENSE 990 AS NET 5,235,661. REIMBURSED IT EXPENSES -18,172,980. NONOPERATING OTHER EXPENSE 1,448,220. RCL NONOP CONTRIBUTION TO SUPPLIES AND EXPENSE -43,000. PART XII, LINE 4B - OTHER ADJUSTMENTS: NONOPERATING CONTRIBUTION EXPENSE 312,973. 1 UNITED WAY OF CENTRAL ILLINOIS INC 1999 WEST WABASH AVENUE SUITE 107 SPRINGFIELD IL 62704 370716060 501(C)(3) 110000 SUPPORT FOR UNITED WAY COMMUNITY FUND. GREATER SPRINGFIELD CHAMBER OF COMMERCE 1011 S SECOND STREET SPRINGFIELD IL 62704 370710280 501(C)(6) 90000 PARTICIPATE IN A PUBLIC AND PRIVATE ECONOMIC GROWTH PARTNERSHIP LED BY THE CHAMBER OF COMMERCE. HOSPITAL SISTERS MISSION OUTREACH PO BOX 1665 SPRINGFIELD IL 62705 352271729 501(C)(3) 44948 RESPONDS TO THE SICK, POOR AND NEEDY THROUGH MEDICAL EQUIPMENT AND SUPPLY RECOVERY AND DISTRIBUTION PROGRAM AND EDUCATION AND AWARENESS OPPORTUNITIES. HANDS OF HOPE FOUNDATION 5208 MEADOWLAND PARKWAY MARION IL 62959 204776744 501(C)(3) 13000 PROVIDE SUPPORT FOR THE HANDS OF HOPE FOUNDATION HOPE SCHOLAR PROGRAM. KIDZEUM OF HEALTH AND SCIENCE PO BOX 9863 SPRINGFIELD IL 62791 371320003 501(C)(3) 40000 PROVIDE SUPPORT FOR THE KIDZEUM HEALTH AND SCIENCE MUSEUM WHICH HAS A VERY STRONG HEALTH EDUCATION COMPONENT FOR CHILDREN. CENTRAL ILLINOIS FOODBANK INC 1937 E COOK ST SPRINGFIELD IL 62703 371106465 501(C)(3) 5625 PROVIDE SUPPORT TO COLLECT AND DISTRIBUTE FOOD TO CHARITABLE AGENCIES THAT SERVE PEOPLE IN NEED. 5 1 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: MHS PROVIDES GRANTS PRIMARILY TO LOCALLY MANAGED 501(C)(3) ORGANIZATIONS THAT SUPPORT OR SHARE THE MISSION OF MHS. REQUESTS TO SUPPORT INITIATIVES IN LINE WITH MHS'S COMMUNITY HEALTH NEEDS ASSESSMENT PRIORITIES RECEIVE SPECIAL CONSIDERATION. SENIOR LEADERSHIP MUST APPROVE ALL GRANTS. MHS EMPLOYEES ARE VOLUNTEER BOARD MEMBERS OR PARTICIPATE AS VOLUNTEERS FOR SOME OF THE ORGANIZATIONS THAT MHS ASSISTS. WHEN AN ORGANIZATION IS GIVEN A DONATION, IT EITHER AGREES TO RESTRICT THE DONATION TO THE PURPOSE FOR WHICH IT WAS REQUESTED OR IT RECEIVES A LETTER DIRECTING THAT DONATION MAY BE USED ONLY FOR THE APPROVED GRANT'S PURPOSE. ADDITIONALLY, EMPLOYEES FREQUENTLY ATTEND MANY OF THE SPONSORED EVENTS OR MHS RECEIVES ACKNOWLEDGEMENT FROM THE ORGANIZATION ABOUT THE PROGRAM THAT WAS SUPPORTED BY THE GRANT. X X X X 0 1 0 0 0 0 0 1 0 EDGAR CURTIS EX-OFFICIO 677268 0 329091 0 340353 0 544650 0 5324 0 1896686 0 0 0 ROBERT KAY 381198 0 148833 0 22141 0 177847 0 20597 0 750616 0 0 0 MITCHELL JOHNSON 203878 0 99893 0 376194 0 173029 0 5458 0 858452 0 0 0 DAVID GRAHAM MD 317056 0 123785 0 13629 0 59343 0 18137 0 531950 0 0 0 RAJESH GOVINDAIAH MD 315243 0 123129 0 6030 0 45369 0 5675 0 495446 0 0 0 ELAINE YOUNG 198846 0 55404 0 15013 0 26763 0 7644 0 303670 0 0 0 BRADLEY WARREN 207185 0 82366 0 6714 0 32454 0 21050 0 349769 0 0 0 DOUGLAS RAHN DBA 0 408418 0 158960 0 25510 0 144385 0 18709 0 755982 0 0 KEVIN ENGLAND 251788 0 70812 0 26991 0 48709 0 2654 0 400954 0 0 0 ANNA EVANS JD 277273 0 77483 0 6238 0 63958 0 18066 0 443018 0 0 0 GARY CROMPTON 165274 0 46283 0 15078 0 21802 0 3800 0 252237 0 0 0 EDWARD MCDOWALL 174153 0 49008 0 10628 0 23794 0 15998 0 273581 0 0 0 AIMEE ALLBRITTON PHD 172296 0 23284 0 5680 0 11378 0 14850 0 227488 0 0 0 LAURA COSSEY 144494 0 20835 0 3604 0 5139 0 18536 0 192608 0 0 0 OVIDIU DIACONU 145439 0 500 0 9805 0 4810 0 16846 0 177400 0 0 0 ROBERT CLARKE 0 0 0 0 917463 0 0 0 0 0 917463 0 0 0 FORREST HESTER 0 0 0 0 101107 0 0 0 0 0 101107 0 0 0 PART I, LINE 3 COMPENSATION AND BENEFITS RECEIVED BY EDGAR CURTIS, PRESIDENT AND CEO OF MEMORIAL HEALTH SYSTEM, WAS COMPRISED OF THE FOLLOWING COMPONENTS; BASE COMPENSATION, INCENTIVE COMPENSATION, OTHER COMPENSATION, RETIREMENT AND OTHER NONTAXABLE BENEFITS. BASE COMPENSATION FOR MR. CURTIS WAS DETERMINED BASED ON THE METHODS DESCRIBED IN PART I, LINE 3 CONDUCTED BY INDEPENDENT COMPENSATION CONSULTANTS. BASE COMPENSATION LEVELS WERE SET BY THE MHS BOARD AT THE 50TH PERCENTILE OF THE RELEVANT COMPENSATION RANGE, AS DETERMINED BY THE INDEPENDENT COMPENSATION CONSULTANTS. INCENTIVE COMPENSATION WAS CONTINGENT ON THE ACHIEVEMENT OF FOUR SPECIFIC PERFORMANCE METRICS OF MHS, AS DEFINED BY THE MHS BOARD. THE ACTUAL INCENTIVE COMPENSATION AMOUNT REALIZED WAS THE RESULT OF NOT ONLY THE ACHIEVEMENT OF THESE FOUR SPECIFIC PERFORMANCE METRICS, BUT ALSO THE BEST OPERATIONAL AND FINANCIAL YEAR IN MHS'S HISTORY. OTHER COMPENSATION IS COMPRISED PRIMARILY OF DEFERRED COMPENSATION PAYOUTS MADE DURING THE YEAR FOR COMPENSATION PREVIOUSLY EARNED IN THE YEARS 1998 AND 1999. THIS PAYOUT DID NOT HAVE AN INCOME STATEMENT IMPACT. RETIREMENT COMPENSATION REFLECTS AN INCREASE IN RETIREMENT BENEFITS OWED BY MHS UPON RETIREMENT OF MR. CURTIS. THIS INCREASE WAS DRAMATICALLY IMPACTED BY ACTUARIAL ASSUMPTIONS OF THE RETIREMENT PLAN, WHICH HAVE HISTORICALLY INCLUDED DRAMATIC CHANGES IN THE DISCOUNT RATE. THE ACTUARIAL ASSUMPTION CHANGES REFLECT THE CUMULATIVE EFFECT IN ONE YEAR FOR 39 YEARS OF SERVICE. THESE CHANGES DID NOT HAVE A CASH OR INCOME STATEMENT IMPACT. NORMAL RETIREMENT COMPENSATION FOR THE YEAR WAS $137,607. LASTLY, NONTAXABLE BENEFITS REFLECT THE VALUE OF HEALTH (MEDICAL, DENTAL, LIFE INSURANCE) BENEFITS RECEIVED DURING THE YEAR. PART I, LINE 4B THE ORGANIZATION OR A RELATED ORGANIZATION, MEMORIAL MEDICAL CENTER, PROVIDES CERTAIN SUPPLEMENTAL RETIREMENT BENEFITS TO THE FOLLOWING OFFICERS AND KEY EMPLOYEES: AIMEE ALLBRITTON, PH.D., $5,291, GARY CROMPTON, $16,130, EDGAR CURTIS, $537,150, KEVIN ENGLAND, $41,279, ANNA EVANS, J.D., $56,458, RAJESH GOVINDAIAH, M.D., $40,762, DAVID GRAHAM, M.D., $59,343, MITCHELL JOHNSON, $165,529, ROBERT KAY, $170,347, EDWARD MCDOWALL, $17,080, DOUGLAS RAHN, D.B.A., $136,885, BRADLEY WARREN, $27,268, AND ELAINE YOUNG, $19,263. THESE BENEFITS ARE PROVIDED THROUGH A NONQUALIFIED DEFERRED COMPENSATION PLAN, UNDER WHICH THE BENEFITS BEING EARNED ARE SUBJECT TO A "SUBSTANTIAL RISK OF FORFEITURE." THE SUPPLEMENTAL RETIREMENT BENEFITS ARE STRUCTURED TO PROVIDE A RETENTION INCENTIVE THAT HAS BEEN DETERMINED BY THE LEADERSHIP COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF MEMORIAL HEALTH SYSTEM TO BE OF SUBSTANTIAL VALUE TO THE ORGANIZATION. THE FOLLOWING CURRENT OR FORMER OFFICERS AND KEY EMPLOYEES RECEIVED DEFERRED COMPENSATION PAYOUTS IN THE CALENDAR YEAR FROM THE ORGANIZATION OR A RELATED ORGANIZATION, MEMORIAL MEDICAL CENTER: ROBERT CLARKE, $917,463, EDGAR CURTIS, $288,059, KEVIN ENGLAND, $2,949, FORREST HESTER, $101,107, MITCHELL JOHNSON, $360,699, AND ELAINE YOUNG, $338. TO BECOME ENTITLED TO THE BENEFITS PROVIDED, EACH COVERED EMPLOYEE MUST MEET SUBSTANTIAL REQUIREMENTS RELATING TO FURTHER EMPLOYMENT. UNTIL THOSE REQUIREMENTS ARE SATISFIED, IF EVER, THE EMPLOYEE IS NOT ENTITLED TO THESE AMOUNTS. IF THE EMPLOYEE WERE TO HAVE TERMINATED EMPLOYMENT VOLUNTARILY IN THE YEAR TO WHICH THIS RETURN APPLIES AND NOT MET THESE SUBSTANTIAL REQUIREMENTS, THESE SUPPLEMENTAL RETIREMENT BENEFITS WOULD HAVE BEEN FORFEITED. THESE SUPPLEMENTAL RETIREMENT BENEFITS ARE PART OF A RETIREMENT PROGRAM THAT PROVIDES RETIREMENT INCOME FOR ALL YEARS OF SERVICE THAT THE EMPLOYEE PROVIDES TO THE ORGANIZATION. ACCORDINGLY, ANY RETIREMENT BENEFITS SHOULD BE VIEWED AS APPLYING TO THE ENTIRE LENGTH OF THE EMPLOYEE'S SERVICE. THE LEADERSHIP COMPENSATION COMMITTEE OF THE MHS BOARD APPROVES ALL RETIREMENT BENEFITS, TOGETHER WITH ALL OTHER FORMS OF COMPENSATION AND BENEFITS FOR THESE AND OTHER SENIOR LEADERS, IN A MANNER INTENDED TO QUALIFY FOR THE "REBUTTABLE PRESUMPTION OF REASONABLENESS" UNDER FEDERAL INCOME TAX LAW. PART I, LINE 7 MEMBERS OF SENIOR MANAGEMENT RECEIVE INCENTIVE COMPENSATION UNDER THE ANNUAL INCENTIVE COMPENSATION PLANS SPONSORED BY MEMORIAL HEALTH SYSTEM. THESE AMOUNTS ARE INCLUDED IN SCHEDULE J, PART II, COLUMN (B)(II). THE PLANS ARE DESIGNED TO CONDITION A PORTION OF COMPENSATION ON PERFORMANCE AGAINST PRE-DETERMINED ORGANIZATIONAL GOALS APPROVED IN ADVANCE BY THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF MEMORIAL HEALTH SYSTEM. THE LEADERSHIP COMPENSATION COMMITTEE OF THE BOARD HAS REVIEWED THE REASONABLENESS OF ALL SUCH PAYMENTS, AND HAS CONCLUDED, AS THE RESULT OF A PROCESS THAT IS DESIGNED TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER FEDERAL TAX LAW, THAT ALL SUCH AMOUNTS ARE REASONABLE AND DO NOT EXCEED FAIR MARKET VALUE FOR THE SERVICES PROVIDED. A ILLINOIS HEALTH FACILITIES AUTHORITY 362780046 45200P2U4 2003-12-17 31000000 SEE SCHEDULE K 0 0 0 B ILLINOIS FINANCE AUTHORITY 861091967 45200FJ59 2009-12-22 147401639 SEE SCHEDULE K 0 0 0 A 31100606 11406560 329438 110306 19254302 2004 1 0 1 1 B 147552600 1350000 146202600 2011 0 0 1 1 A 0 1 1 1 1 1 0.00000 0.01300 0.01300 0 0 1 B 0 1 1 1 1 1 0.00100 0.03000 0.03100 0 0 1 A 0 0 0 1 1 1 US BANCORP PIPER JAFFRAY FINANCIAL 18.800000000000 1 0 0 0 1 B 0 1 0 0 0 0 0 0 1 A 1 B 1 SCHEDULE K SUPPLENTAL INFORMATION SCHEDULE K: ONE SCHEDULE K WAS COMPLETED AT THE PARENT LEVEL ONLY. HOWEVER, EACH AFFILIATE IS STILL SHOWING ITS ALLOCATION OF THE LIABILITY ON THE BALANCE SHEET. SCHEDULE K PART I, COLUMN (F) CONTINUATIONS: THE PURPOSE OF THE 2003 ISSUE WAS TO REFUND THE 1993 SERIES ISSUED ON 8/5/93 IN THE AMOUNT OF $11,406,560. PROCEEDS WERE ALSO USED TO PAY ISSUANCE EXPENSES AND TO PURCHASE EQUIPMENT AND SOFTWARE FOR MEMORIAL HEALTH SYSTEM. PROCEEDS WERE ALSO USED FOR CONSTRUCTION AND BUILDING IMPROVEMENTS AND TO CONSTRUCT AND EQUIP AN OUTPATIENT PSYCHIATRIC FACILITY. THE PURPOSE OF THE 2009 ISSUE WAS TO PAY ISSUANCE COSTS, CONSTRUCT AND EQUIP A REPLACEMENT HOSPITAL FACILITY FOR ABRAHAM LINCOLN MEMORIAL HOSPITAL, RENOVATE AND REMODEL TAYLORVILLE MEMORIAL HOSPITAL, RENOVATE, REMODEL, AND EQUIP MEMORIAL MEDICAL CENTER, CONSTRUCT A PARKING GARAGE ADJACENT TO MEMORIAL MEDICAL CENTER, CONSTRUCT AND EQUIP A WOUND CARE CENTER, RENOVATE A PAIN CLINIC, CONSTRUCT AND EQUIP A CONSOLIDATED IMAGING SERVICES AREA, PURCHASE VARIOUS PARCELS OF REAL PROPERTY IN SPRINGFIELD, IL AND TAYLORVILLE, IL FOR FUTURE EXPANSION OF EXISTING FACILITIES, CONSTRUCT AND EQUIP A SPACE FOR PHYSICAL THERAPY WITHIN THE NEW YMCA IN SPRINGFIELD, IL, AND ROUTINE CAPITAL EXPENDITURES. SCHEDULE K PART II, LINE 3: TOTAL PROCEEDS ISSUED AMOUNT IN COLUMNS A & B DOESN'T TIE TO PART I COLUMN (E) DUE TO INVESTMENT EARNINGS INCLUDED IN PART II. SCHEDULE K PART III, LINE 3B & 3D: MEMORIAL HEALTH SYSTEM'S INTERNAL COUNSEL, AS WELL AS EXTERNAL BOND COUNSEL, ROUTINELY REVIEWS MANAGEMENT AND SERVICE CONTRACTS AND RESEARCH AGREEMENTS RELATING TO FINANCED PROPERTY . SCHEDULE K PART III, LINE 5: ISSUANCE COSTS ARE INCLUDED IN THESE PERCENTAGES. SCHEDULE K PART IV, LINE 1: THE ARBITRAGE REBATE FILING IS ONLY REQUIRED EVERY 5 YEARS; THE 2009 ISSUANCE HAS NOT YET MET THIS REQUIREMENT. SCHEDULE K PART IV, LINE 2C: THE REBATE COMPUTATION FOR COLUMN A WAS PERFORMED ON 12/17/2013. SCHEDULE K PART IV, LINE 4B: THE PROVIDER USED FOR QUALIFIED HEDGE FOR COLUMN A IS U.S. BANCORP PIPER JAFFRAY FINANCIAL PRODUCTS INC. SORLING NORTHRUP HANNA CULLEN & COCHRAN LTD BOARD MEMBER IS COO AT SORLING, NORTHRUP, HANNA, CULLEN & COCHRAN 141551 MEMORIAL HEALTH SYSTEM PAID FEES TO THE LAW OFFICE OF SORLING, NORTHRUP, HANNA, CULLEN & COCHRAN, LTD FOR LEGAL SERVICES FOR THE YEAR ENDED SEPTEMBER 30, 2013 IN THE AMOUNT OF $141,551. MARK H. FERGUSON IS A MEMBER OF THE BOARD OF DIRECTORS AND IS A PARTNER AND CHIEF OPERATING OFFICER AT SORLING, NORTHRUP, HANNA, CULLEN & COCHRAN, LTD. ALL FEES ARE NEGOTIATED AT FAIR MARKET VALUE FOR THE SERVICES PROVIDED. 0 HURWITZ ENTERPRISES LLC BOARD MEMBER IS OWNER OF HURWITZ ENTERPRISES, LLC 135170 MEMORIAL HEALTH SYSTEM PAID FEES TO HURWITZ ENTERPRISES, LLC FOR REAL ESTATE DEVELOPMENT, BROKERAGE, AND CONSULTING SERVICES FOR THE YEAR ENDED SEPTEMBER 30, 2013 IN THE AMOUNT OF $135,170. JOSEPH M. HURWITZ IS A MEMBER OF THE BOARD OF DIRECTORS AND IS OWNER OF HURWITZ ENTERPRISES, LLC. ALL FEES ARE NEGOTIATED AT FAIR MARKET VALUE FOR THE SERVICES PROVIDED. 0 LEVI RAY AND SHOUP INC BOARD MEMBER IS OWNER OF LEVI, RAY AND SHOUP, INC. 103625 MEMORIAL HEALTH SYSTEM PAID FEES TO LEVI, RAY AND SHOUP, INC. FOR SERVICES FOR THE YEAR ENDED SEPTEMBER 30, 2013 IN THE AMOUNT OF $103,625. RICHARD H. LEVI IS A MEMBER OF THE BOARD OF DIRECTORS AND IS OWNER OF LEVI, RAY AND SHOUP, INC. ALL FEES ARE NEGOTIATED AT FAIR MARKET VALUE FOR THE SERVICES PROVIDED. 0 SPRINGFIELD CLINIC LLP BOARD MEMBER IS EMPLOYEE AND BOARD MEMBER OF SPRINGFIELD CLINIC, LLP 794016 MEMORIAL HEALTH SYSTEM PAID FEES TO SPRINGFIELD CLINIC, LLP FOR THE YEAR ENDED SEPTEMBER 30, 2013 IN THE AMOUNT OF $794,016. A PHYSICIAN AND BOARD MEMBER OF THIS COMPANY, WILLIAM D. PUTMAN, M.D., IS ALSO A MEMBER OF MEMORIAL HEALTH SYSTEM'S BOARD OF DIRECTORS. ALL FEES ARE NEGOTIATED AT ARM'S LENGTH AND ARE AT FAIR MARKET VALUE FOR THE SERVICES PROVIDED. 0 FORM 990, PART VI, SECTION A, LINE 2 MEMORIAL HEALTH SYSTEM BOARD MEMBERS JAMES BRUNER, RICHARD LEVI, AND SERGIO PECORI ARE ALL ON THE ILLINOIS NATIONAL BANK BOARD OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 6 THE CORPORATION CONTAINS 101 INDIVIDUAL MEMBERS WHO ELECT THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7A THE INDIVIDUAL MEMBERS OF THE CORPORATION HAVE THE POWER AND AUTHORITY TO ELECT THE CORPORATION'S BOARD OF DIRECTORS, AS WELL AS THE POWER AND AUTHORITY TO REMOVE MEMBER ELECTED DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7B INDIVIDUAL MEMBERS OF THE CORPORATION HAVE NO VOTING RIGHTS WITH RESPECT TO THE MANAGEMENT, CONTROL OR OPERATION OF THE AFFAIRS AND PROPERTIES OF THE CORPORATION. ONLY THE BOARD OF DIRECTORS CAN MAKE DECISIONS IN THAT REGARD. FORM 990, PART VI, SECTION B, LINE 11 A FINAL DRAFT COPY OF THE MHS FORM 990 AND ALL ATTACHMENTS IS PROVIDED TO ALL OF THE MEMORIAL HEALTH SYSTEM BOARD OF DIRECTORS AND A BOARD COMMITTEE PRIOR TO FILING. AT THE BOARD MEETING, A PRESENTATION IS MADE BY THE CFO TO THE BOARD, FOLLOWED BY A QUESTION AND ANSWER SESSION. ALL QUESTIONS AND COMMENTS ARISING FROM THESE REVIEWS ARE ADDRESSED PRIOR TO SUBMISSION OF THE RETURN TO THE APPROPRIATE TAXING AUTHORITIES. FORM 990, PART VI, SECTION B, LINE 12C ALL OFFICERS, DIRECTORS AND KEY EMPLOYEES OF THE CORPORATION ARE REQUIRED TO ANNUALLY REVIEW THE CONFLICT OF INTEREST POLICY AND COMPLETE A SPECIFIC DISCLOSURE STATEMENT WHICH IS ATTACHED TO THE POLICY. MEMORIAL HEALTH SYSTEM MONITORS AND ENFORCES ITS CONFLICT OF INTEREST POLICY BY IDENTIFYING ANY POTENTIAL CONFLICTS AT THE TIME EACH MEETING AGENDA IS PREPARED. ANY OFFICER OR DIRECTOR WHO HAS A CONFLICT IS NOTIFIED OF SUCH CONFLICT, AS WELL AS THEIR OBLIGATION TO ABSTAIN FROM THE DISCUSSION AND VOTE ON ANY CONFLICTED ISSUES(S). SUCH ABSTENTION(S), IF REQUIRED, ARE DOCUMENTED IN THE MINUTES OF EACH MEETING. BOARD MEMBERS ARE ALSO REQUIRED TO UPDATE THEIR CONFLICT OF INTEREST DISCLOSURE STATEMENTS PROMPTLY IN THE EVENT OF ANY CHANGE IN PERSONAL OR BUSINESS ACTIVITIES THAT WOULD REQUIRE SUCH DISCLOSURE. FORM 990, PART VI, SECTION B, LINE 15 THE MEMORIAL HEALTH SYSTEM BOARD OF DIRECTORS HAS APPOINTED A LEADERSHIP COMPENSATION COMMITTEE MADE UP OF PAST AND PRESENT INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS, AND HAS DELEGATED TO IT THE RESPONSIBILITY OF ADMINISTERING, OVERSEEING AND APPROVING ALL FORMS OF COMPENSATION AND BENEFITS PROVIDED TO EXECUTIVE LEADERSHIP, INCLUDING THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER AND OTHER SENIOR VICE PRESIDENTS, WHO ARE KEY EMPLOYEES. THE BOARD HAS ADOPTED A LEADERSHIP COMPENSATION PHILOSOPHY STATEMENT DESCRIBING THE ROLE AND RESPONSIBILITIES OF THE COMMITTEE. THIS PHILOSOPHY EXPRESSLY STATES THE COMMITTEE'S INTENT, ON BEHALF OF THE CORPORATION, TO TAKE ALL THE STEPS NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES. THE COMMITTEE ANALYZES EVERY ELEMENT OF COMPENSATION (INCLUDING CURRENT, INCENTIVE AND DEFERRED COMPENSATION) AND BENEFITS (INCLUDING QUALIFIED AND NON-QUALIFIED BENEFITS). THE COMMITTEE CONDUCTS ITS REVIEW AND APPROVAL PROCESS AT LEAST ANNUALLY, AND APPROVES COMPENSATION AND BENEFITS ONLY TO THE EXTENT THAT THE COMMITTEE HAS CONCLUDED THAT THE COMPENSATION AND BENEFITS CONSTITUTE NO MORE THAN REASONABLE COMPENSATION FOR EACH EXECUTIVE. IN CONNECTION WITH THE MOST RECENT REVIEW AND APPROVAL PROCESS, THE COMMITTEE RECEIVED PROFESSIONAL ADVICE FROM AN INDEPENDENT CONSULTANT AND OUTSIDE LEGAL COUNSEL. THE COMMITTEE CONSISTS ENTIRELY OF PAST AND PRESENT DISINTERESTED MEMBERS OF THE BOARD OR DISINTERESTED COMMITTEE MEMBERS WHO UNDER STATE CORPORATE LAW MAY SERVE ON SUCH A COMMITTEE. THE COMMITTEE WORKS WITH ITS COMPENSATION CONSULTANT TO PREPARE AND REVIEW IN ADVANCE COMPREHENSIVE DATA SHOWING THE COMPENSATION PROVIDED BY SIMILARLY SITUATED ORGANIZATIONS FOR FUNCTIONALLY SIMILAR POSITIONS. THE COMMITTEE ALSO PREPARES A TIMELY AND THOROUGH WRITTEN RECORD OF ITS PROCEDURAL CRITERIA NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS OF MEMORIAL HEALTH SYSTEM, SUCH AS ARTICLES OF INCORPORATION AND ANY AMENDMENTS THERETO, ARE AVAILABLE TO THE GENERAL PUBLIC THROUGH THE ILLINOIS SECRETARY OF STATE'S OFFICE. THESE GOVERNING DOCUMENTS, AS WELL AS THE BYLAWS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS, ARE AVAILABLE UPON REQUEST FROM THE CORPORATION. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: NONOPERATING RECONCILING ITEMS 420,917. CHANGE IN UNRESTRICTED NET ASSETS -8,215,425. EXEC SALARIES IN MGMT FEE INCOME 1,353,249. RELATED PARTNERSHIP INCOME BOOK/TAX VARIANCE -661. FAIR MARKET VALUE FOR RENTAL INCOME RECEIVED SCHEDULE R, PART V, LINE 2 MEMORIAL HEALTH SYSTEM COLLECTED RENTAL INCOME FROM AFFILIATES DURING THE FISCAL YEAR ENDED SEPTEMBER 30, 2013. THE VALUES LISTED IN SCHEDULE R, PART V, LINE 2 WERE DETERMINED USING FAIR MARKET VALUE. MEMORIAL MEDICAL CENTER 701 NORTH FIRST ST SPRINGFIELD IL 627810001 370661220 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A) (III) MEMORIAL HEALTH SYSTEM 1 MEMORIAL HEALTH VENTURES 701 NORTH FIRST ST SPRINGFIELD IL 627810001 363492266 HEALTHCARE ACTIVITIES IL 501(C)(3) 509(A)(3) TYPE II MEMORIAL HEALTH SYSTEM 1 ABRAHAM LINCOLN MEMORIAL HOSPITAL 200 STAHLHUT DR LINCOLN IL 62656 370723793 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A) (III) MEMORIAL HEALTH SYSTEM 1 TAYLORVILLE MEMORIAL HOSPITAL 201 EAST PLEASANT TAYLORVILLE IL 62568 370661250 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A) (III) MEMORIAL HEALTH SYSTEM 1 MEMORIAL HOME SERVICES 720 NORTH BOND ST SPRINGFIELD IL 627024915 370714225 HOME HEALTH, HOSPICE, AND CONTINUOUS CARE SERVICES IL 501(C)(3) 170(B)(1)(A) (VI) MEMORIAL HEALTH SYSTEM 1 MEMORIAL PHYSICIAN SERVICES 701 NORTH FIRST ST SPRINGFIELD IL 627810001 371181194 HEALTH CLINICS IL 501(C)(3) 509(A)(3) TYPE II MEMORIAL HEALTH SYSTEM 1 MEMORIAL MEDICAL CENTER FOUNDATION 701 NORTH FIRST ST SPRINGFIELD IL 62781 371110301 GRANTS TO HOSPITALS, OTHER CHARITABLE ORGANIZATIONS, AND SCHOLARSHIPS IL 501(C)(3) 170(B)(1)(A) (VI) MEMORIAL HEALTH SYSTEM 1 TAYLORVILLE MEMORIAL HOSPITAL FOUNDATION 201 EAST PLEASANT TAYLORVILLE IL 62568 371337485 GRANTS TO OTHER CHARITABLE ORGANIZATIONS AND HOSPITALS IL 501(C)(3) 509(A)(3)TYPE III-FI N/A 0 MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS 710 NORTH EIGHTH ST SPRINGFIELD IL 627026395 370646367 TRAINING, PSYCHIATRIC, AND RESIDENT SERVICES FOR MENTALLY ILL AND DISABLED IL 501(C)(3) 170(B)(1)(A) (VI) MEMORIAL HEALTH SYSTEM 1 ABRAHAM LINCOLN HEALTHCARE FOUNDATION 200 STAHLHUT DR LINCOLN IL 62656 363492268 GRANTS TO OTHER CHARITABLE ORGANIZATIONS AND HOSPITALS IL 501(C)(3) 170(B)(1)(A) (VI) MEMORIAL HEALTH SYSTEM 1 SPRINGFIELD RESIDENTIAL SERVICES 710 NORTH EIGHTH ST SPRINGFIELD IL 62702 371298589 RESIDENTIAL HUD HOUSING PROJECT FOR MENTALLY ILL IL 501(C)(3) 170(B)(1)(A) (VI) MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS 1 MEMORIAL HOME SERVICES OF CENTRAL ILLINOIS INC 701 NORTH FIRST ST SPRINGFIELD IL 62781 371190216 PROVIDE DURABLE MEDICAL EQUIPMENT AND SUPPLIES TO PATIENTS IL MEMORIAL HOME SERVICES C 1 1 1 0 0 0 0 1 1 0 1 1 1 1 1 1 1 1 0 0 MEMORIAL HEALTH VENTURES A 421526 FMV MEMORIAL HOME SERVICES A 120489 FMV MEMORIAL MEDICAL CENTER A 2398387 FMV MEMORIAL PHYSICIAN SERVICES A 1533378 FMV MEMORIAL HOME SERVICES OF CENTRAL ILLINOIS A 6497 FMV MEMORIAL PHYSICIAN SERVICES B 8468292 FMV MEMORIAL HEALTH VENTURES J 421526 FMV MEMORIAL HOME SERVICES J 120489 FMV MEMORIAL MEDICAL CENTER J 2398387 FMV MEMORIAL PHYSICIAN SERVICES J 1533378 FMV MEMORIAL MEDICAL CENTER K 145243 FMV MEMORIAL PHYSICIAN SERVICES K 458352 FMV MEMORIAL MEDICAL CENTER L 40100107 FMV ABRAHAM LINCOLN MEMORIAL HOSPITAL L 2484345 FMV TAYLORVILLE MEMORIAL HOSPITAL L 2297162 FMV MEMORIAL PHYSICIAN SERVICES L 3529391 FMV MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS L 482040 FMV MEMORIAL HOME SERVICES L 744728 FMV MEMORIAL HEALTH VENTURES L 729946 FMV MEMORIAL HEALTH VENTURES L 298896 FMV MEMORIAL HEALTH VENTURES Q 227667 FMV MEMORIAL MEDICAL CENTER P 5393884 FMV MEMORIAL MEDICAL CENTER O 916630 FMV MEMORIAL MEDICAL CENTER M 518257 FMV MEMORIAL MEDICAL CENTER L 283049 FMV MEMORIAL MEDICAL CENTER Q 9739060 FMV MEMORIAL HOME SERVICES Q 94234 FMV MEMORIAL PHYSICIAN SERVICES Q 1939362 FMV MEMORIAL PHYSICIAN SERVICES L 1787830 FMV MEMORIAL PHYSICIAN SERVICES P 846432 FMV ABRAHAM LINCOLN MEMORIAL HOSPITAL O 115935 FMV ABRAHAM LINCOLN MEMORIAL HOSPITAL Q 138831 FMV TAYLORVILLE MEMORIAL HOSPITAL Q 122625 FMV MEMORIAL MEDICAL CENTER N 912068 FMV MEMORIAL HOME SERVICES N 120489 FMV MEMORIAL PHYSICIAN SERVICES O 55963 FMV MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS Q 57373 FMV MEMORIAL MEDICAL CENTER G 111865 FMV MEMORIAL HEALTH VENTURES H 83823 FMV