2014-08-13T15:44:16-05:00 2013-09-30 042684828 FEELEY & DRISCOLL PC 200 PORTLAND STREET BOSTON MA 02114 990 2012-10-01 042323457 LAHEY CLINIC FOUNDATION INC LAHE 7817445100 41 MALL ROAD BURLINGTON MA 01805 HOWARD R GRANT JD MD 7817445100 2014-08-13 1 ALAN GAROFALO P00744592 6177427788 2012 2015-11-30 17:44:51Z HOWARD R GRANT JD MD 41 MALL ROAD BURLINGTON MA 01805 24292344 0 X WWW.LAHEY.ORG X 1963 MA LAHEY CLINIC FOUNDATION, INC. SUPPORTS LAHEY CLINIC HOSPITAL, INC., LAHEY CLINIC, INC. AND LAHEY CLINIC AFFILIATED SERVICES, INC. (THROUGH JULY 31, 2013) LAHEY HOSPITAL & MEDICAL CENTER, IN ASSOCIATION WITH THE TUFTS UNIVERSITY SCHOOL OF MEDICINE, PROVIDES SUPERIOR HEALTH CARE LEADING TO THE BEST POSSIBLE OUTCOMES FOR EVERY PATIENT. AS ONE OF THE WORLD'S PREMIER HEALTH CARE ORGANIZATIONS, LAHEY HOSPITAL & MEDICAL CENTER AIMS TO EXCEED PATIENT'S HIGH EXPECTATIONS FOR SERVICE AND ADVANCE MEDICINE THROUGH RESEARCH AND THE EDUCATION OF TOMORROW'S HEALTH CARE LEADERS. IN ADDITION, LAHEY HOSPITAL & MEDICAL CENTER IS COMMITTED TO IMPROVING THE HEALTH AND QUALITY OF LIFE OF COMMUNITY RESIDENTS BY SUPPORTING LOCAL ORGANIZATIONS ALIGNED WITH THIS MISSION. 20 11 616 37 -30972 -30972 3285682 4626570 0 0 2677299 19512605 7070 153169 5970051 24292344 0 0 0 0 3029412 4017842 141000 405408 6078758 1885452 2242025 5055864 6665275 914187 17627069 685716006 851356383 332955737 479699756 352760269 371656627 X SEE SCHEDULE O 0 0 LAHEY CLINIC FOUNDATION, INC., (FOUNDATION) IS THE SOLE CORPORATE MEMBER OF LAHEY CLINIC HOSPITAL, INC. (HOSPITAL), LAHEY CLINIC, INC. (CLINIC) AND LAHEY CLINIC AFFILIATED SERVICES, INC. (LCAS). THE FOUNDATION HOLDS CAPITAL ASSETS, INVESTMENTS, DEBT, AND INFRASTRUCTURE COSTS TO PROVIDE ASSISTANCE TO THE HOSPITAL AND CLINIC FOR THE PROVISION OF PATIENT HEALTH CARE SERVICES, PATIENT EDUCATION, COMMUNITY BENEFITS AND COMMUNITY SERVICE PROGRAMS, CONTINUING EDUCATION OF HEALTH CARE PROVIDERS, AS WELL AS HEALTH CARE RESEARCH ACTIVITIES. PHILANTHROPIC EFFORTS, ALSO IN SUPPORT OF THE HOSPITAL AND CLINIC, ARE CARRIED OUT BY THE FOUNDATION. 1 1 0 0 0 0 0 1 0 1 1 1 0 1 1 0 0 1 0 0 1 0 0 1 0 0 0 0 0 1 1 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 1 1 1 0 0 1 196 0 1 616 1 1 1 1 CA 0 0 0 0 0 0 0 0 X 20 11 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 AZ AR CA CO CT FL GA IL KY ME MA MN MO NH NJ NM NY OK PA RI VA WA WI X X TIMOTHY O'CONNOR 7817445100 41 MALL ROAD BURLINGTON MA 01805 X HOWARD R GRANT JD MD 50.00 1.00 X X 1404056 0 268890 JOHN A LIBERTINO MD 1.00 40.00 X 0 774869 64613 RICHARD W NESTO MD 40.00 1.00 X 782068 0 97938 ROGER L JENKINS MD 1.00 40.00 X 0 645142 49359 RICHARD S D'AGOSTINO MD 1.00 40.00 X 0 628799 46859 ANDREW G VILLANUEVA MD 1.00 40.00 X 0 363060 35366 BETSEY CRAWFORD MD 1.00 40.00 X 0 201368 1096 ARTHUR P MOURTZINOS MD 1.00 40.00 X 0 471126 57092 REBECCA C YANG MD 1.00 40.00 X 0 371361 40004 ERIC M BAILEY 1.00 X 0 0 0 CRAIG R BENSON 1.00 X 0 0 0 ANN MARIE CONNOLLY 2.00 X 0 0 0 JAMES D IRVING 1.00 X 0 0 0 J WILLIAM PODUSKA 1.00 X 0 0 0 WINDLE B PRIEM 1.00 X 0 0 0 MICHAEL C RUETTGERS 2.00 X 0 0 0 CAROLYN AIN 1.00 X 0 0 0 JANE C EDMUNDS 1.00 X 0 0 0 DEBORAH MCKENNA 1.00 X 0 0 0 DAVID WAJSGRAS 1.00 X 0 0 0 EDWARD ESKANDARIAN 1.00 X 0 0 0 TIMOTHY O'CONNOR 50.00 1.00 X 810958 0 141710 DAVID SPACKMAN JD 50.00 1.00 X 234832 0 36052 MARYELLEN LEAR 1.00 40.00 X 0 89019 13653 PETER LLOYD 40.00 1.00 X 337924 0 21070 ROBERT E WISE DECEASED 81212 40.00 X 629830 0 0 JOSEPH C CORKERY 40.00 X 477907 0 38754 JOAN M ROBBIO 40.00 X 435914 0 65523 KATHLEEN S JOSE 40.00 X 374399 0 25848 BRUCE A METZ 1.00 40.00 X 0 386071 47101 DONALD F SNELL 1.00 40.00 X 0 714976 106148 PHILLIPS AXTEN 40.00 X 380154 0 16194 THEORN BRADLEY 40.00 X 361486 0 70871 NELSON R GAGNON 40.00 X 319203 0 1714 ROGER J CAMERON 40.00 X 274711 0 32850 ALLEN S DANIS 40.00 X 316264 0 17662 DAVID M BARRETT MD 0.00 X 746929 0 200000 7886635 4645791 1496367 97 1 1 0 DELOITTE CONSULTING LLP PO BOX 7247-6447 PHILADELPHIA PA 19170 EHS CONSULTING 2532066 AMERICAN PERSONNEL HEALTHCARE SERVICES 133 FEDERAL STREET 4TH FLOOR BOSTON MA 02110 PROFESSIONAL STAFFING SERVICES 2020796 ECLIPSYS SOLUTIONS CORPORATION PO BOX 8538-0133 PHILADELPHIA PA 19171 ELECTRONIC HEALTH SYSTEM 1756268 MEDMATICA CONSULTING ASSOCIATES INC 18 BARRINGTON LANE CHESTER SPRINGS PA 19425 EHS CONSULTING 1519887 BRAND UNION CO INC PO BOX 7247-7196 PHILADELPHIA PA 19170 MARKETING CONSULTING SERVICES 1368060 47 4626570 4626570 3429382 -30972 3460354 50301 50301 14886103 1146819 0 0 14886103 1146819 16032922 16032922 OTHER REVENUE 900099 153169 153169 153169 24292344 0 -30972 19696746 27537 27537 8086 8086 3166280 194728 2971552 350763 24572 326191 246446 16869 229577 218730 16653 202077 31176 6787 24389 2740 2740 405408 405408 66520 66520 608633 91155 517478 21915 21915 221197 16686 204511 22987 22987 444279 13270 431009 17738 3927 13811 13922 13922 51611 51611 2782 2782 GENERAL SUPPLIES 736525 50290 686235 6665275 0 586517 6078758 6831224 13982926 118200 71000 6715 4380315 4436944 912621527 551719937 336520330 360901590 90460862 138257750 194043337 274788583 53355023 58917590 685716006 851356383 37808996 56800457 176143259 293867743 2402972 1975450 2431860 114168650 127056106 332955737 479699756 X 258376628 272282903 36275143 39937449 58108498 59436275 352760269 371656627 685716006 851356383 X 17627069 -7656416 8925705 X 0 1 X 1 0 X 3904026 3963818 2768044 3285682 4626570 18548140 3904026 3963818 2768044 3285682 4626570 18548140 18548140 4023413 3204960 3684596 2873563 3479683 17266215 356 6268 8134 7070 153169 174997 35989352 0.51540 0.41010 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X 0 284504199 688023 16904514 6048789 642533 295405414 266009728 946986 25996140 7824838 623817 284504199 275817593 1849984 -726521 10133190 798138 266009728 262176300 814624 23033174 9539545 666960 275817593 274357327 987745 8636901 21526729 278944 262176300 0.77000 0.23000 0.00000 0 0 15393209 15393209 528411529 247399425 281012104 9215827 6331212 2884615 345706147 287578159 58127988 13894815 10411141 3483674 360901590 OTHER INVESTMENTS 274788583 F 274788583 DEFERRED DEBT ISSUE COSTS, NET 3587471 INVESTMENT - LAHEY CLINIC INSURANCE 120000 INVESTMENT - JOINT VENTURE - FELLSWAY DEVELOPMENT 6478936 OTHER RECEIVABLES - EMPLOYEES 370604 ASSETS HELD UNDER SPLIT INTEREST AGREEMENTS 11367452 BENEFICIAL INTEREST IN PERPETUAL AND LEAD TRUSTS 30011435 INVESTMENTS - OTHER 4805121 INTERCOMPANY RECEIVABLES 2176571 58917590 INTERCOMPANY PAYABLES 119902431 SPLIT INTEREST LIABILITY 6166768 CONDITIONAL ASSET RETIREMENT OBLIGATION 986907 127056106 28669187 -7656416 16659829 9003413 19665774 4626570 4626570 24292344 14762886 8097611 8097611 6665275 0 6665275 PART III, LINE 1A: THE ORGANIZATION MAINTAINS COLLECTIONS OF ART FOR DISPLAY TO IMPROVE THE PATIENT CARE ENVIRONMENT. PART III, LINE 4: THE ORGANIZATION MAINTAINS COLLECTIONS OF ART FOR DISPLAY TO IMPROVE THE PATIENT CARE ENVIRONMENT. DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE ORGANIZATION'S ENDOWMENT FUNDS SUBSIDIZE THE COSTS OF PROVIDING SUPERIOR HEALTH CARE LEADING TO THE BEST POSSIBLE OUTCOME FOR EVERY PATIENT. THE COSTS ARE FOR PATIENT CARE, PATIENT EDUCATION, CONTINUING EDUCATION OF HEALTH CARE PROVIDERS, RESEARCH, AND CAPITAL EXPENDITURES. PART XI, LINE 2D - OTHER ADJUSTMENTS: UNRESTRICTED CONTRIBUTIONS 4,559,051. ASSETS RELEASED FROM TIME RESTRICTIONS 737,679. ASSETS RELEASED FROM RESTRICTIONS 1,925,648. CHANGE IN VALUE OF SPLIT INTEREST AGREEMENTS 256,008. REDESIGNATION OF GIFTS 70,001. OTHER OPERATING REVENUES TRANSFER TO LAHEY CLINIC, INC. AND LAHEY CLINIC HOSPITAL INC. 9,111,442. PART XI, LINE 4B - OTHER ADJUSTMENTS: CONTRIBUTIONS, GIFTS, AND GRANTS 4,626,570. PART XII, LINE 2D - OTHER ADJUSTMENTS: OTHER OPERATING REVENUE COLLECTED BY LAHEY CLINIC FOUNDATION, INC. AND CREDITED TO OVERHEAD EXPENSES ALLOCATED TO LAHEY CLINIC INC. AND LAHEY CLINIC HOSPITAL, INC. 9,111,420. PENSION AND POST RETIREMENT RELATED CHANGES -1,013,809. NORTH AMERICA 0 0 FUNDRAISING 202476 CENTRAL AMERICA/CARIBBEAN 0 0 INVESTMENTS 57168474 0 0 0 0 0 0 57370950 0 57370950 1 0 1 1 0 0 SCHEDULE F, PART I, LINE 3 (1) LAHEY CLINIC FOUNDATION DOES NOT SEPARATELY TRACK EXPENDITURES FOR FUNDRAISING OUTSIDE THE UNITED STATES IN THE REGION. X X X X 0 NEWPORT CREATIVE COMMUNICATIONS 33 RAILROAD AVENUE DUXBURY MA 02332 DIRECT MAILING 0 1342000 391696 -391696 PUBLIC INTEREST COMMUNICATIONS 7700 LEESBURG PIKE SUITE 301 NORTH FALLS CHURCH VA 22043 TELEMARKETING 0 15100 13712 -13712 1357100 405408 -405408 AZ AR CA CO CT FL GA IL KY MA ME MN MO NH NJ NM NY OK PA RI VA WA WI X X X X X 1 1 0 0 0 0 0 1 0 HOWARD R GRANT JD MD 1020410 0 360750 0 22896 0 239397 0 29493 0 1672946 0 0 0 JOHN A LIBERTINO MD 0 751998 0 0 0 22871 0 43600 0 21013 0 839482 0 0 RICHARD W NESTO MD 636722 0 122450 0 22896 0 73300 0 24638 0 880006 0 0 0 ROGER L JENKINS MD 0 622246 0 0 0 22896 0 17000 0 32359 0 694501 0 0 RICHARD S D'AGOSTINO MD 0 606041 0 0 0 22758 0 17000 0 29859 0 675658 0 0 ANDREW G VILLANUEVA MD 0 340302 0 0 0 22758 0 17000 0 18366 0 398426 0 0 BETSEY CRAWFORD MD 0 179602 0 0 0 21766 0 0 0 1096 0 202464 0 0 ARTHUR P MOURTZINOS MD 0 454072 0 0 0 17054 0 34000 0 23092 0 528218 0 0 REBECCA C YANG MD 0 354271 0 0 0 17090 0 17000 0 23004 0 411365 0 0 TIMOTHY O'CONNOR 700450 0 87750 0 22758 0 117000 0 24710 0 952668 0 0 0 DAVID SPACKMAN JD 226808 0 0 0 8024 0 25202 0 10850 0 270884 0 0 0 PETER LLOYD 315286 0 0 0 22638 0 0 0 21070 0 358994 0 0 0 ROBERT E WISE DECEASED 81212 629830 0 0 0 0 0 0 0 0 0 629830 0 0 0 JOSEPH C CORKERY 455011 0 0 0 22896 0 17000 0 21754 0 516661 0 0 0 JOAN M ROBBIO 412652 0 0 0 23262 0 43519 0 22004 0 501437 0 0 0 KATHLEEN S JOSE 351503 0 0 0 22896 0 17000 0 8848 0 400247 0 0 0 BRUCE A METZ 0 363175 0 0 0 22896 0 43932 0 3169 0 433172 0 0 DONALD F SNELL 0 604468 0 87750 0 22758 0 85078 0 21070 0 821124 0 0 PHILLIPS AXTEN 362350 0 0 0 17804 0 13056 0 3138 0 396348 0 0 0 THEORN BRADLEY 338224 0 0 0 23262 0 41312 0 29559 0 432357 0 0 0 NELSON R GAGNON 318807 0 0 0 396 0 0 0 1714 0 320917 0 0 0 ROGER J CAMERON 251953 0 0 0 22758 0 10333 0 22517 0 307561 0 0 0 ALLEN S DANIS 293368 0 0 0 22896 0 17000 0 662 0 333926 0 0 0 DAVID M BARRETT MD 699503 0 0 0 47426 0 200000 0 0 0 946929 0 0 0 PART I, LINE 3 THE ITEMS CHECKED IN SCHEDULE J, PART I, LINE 1A, VIA AN EXECUTED EMPLOYMENT AGREEMENT, WERE NEGOTIATED AND AGREED TO BY BOTH PARTIES AND THEIR REPRESENTATIVES. PART I, LINES 4A-B DR. DAVID M. BARRETT WAS TERMINATED FROM LAHEY CLINIC FOUNDATION, INC. ON 12/31/2010. SCHEDULE J REQUIRES THE REPORTING OF COMPENSATION BASED ON CALENDAR YEAR 2012. DR. BARRETT'S COMPENSATION PAID FOR CALENDAR YEAR 2012 INCLUDES $699,503 OF SEVERANCE PAYMENTS PER DR. BARRETT'S EMPLOYMENT CONTRACT, AND $47,426 OF TAXABLE LIFE INSURANCE BENEFITS. THE REMAINING AMOUNT PAID TO DR. BARRETT OF $200,000 IS DEFERRED COMPENSATION UNDER A SPLIT DOLLAR AGREEMENT WITH LAHEY CLINIC HOSPITAL, INC. SCHEDULE J, PART I, LINE 4B, PART II COLUMN C THE ORGANIZATION MAINTAINS A 457F NONQUALIFIED DEFERRED COMPENSATION PLAN FOR CERTAIN PHYSICIANS, EXECUTIVE MANAGEMENT AND DEFINED MEDICAL STAFF. THE PLAN OFFERS PARTICIPATING EMPLOYEES AN ANNUAL DEFFERAL OF COMPENSATION IN ADDITION TO THEIR SALARIES. FOR THE CURRENT PERIOD, THE FOLLOWING PERSONS PARTICIPATED IN THE 457F NONQUALIFIED DEFERRED COMPENSATION PLAN: RICHARD W NESTO- AMOUNT $58,300 TIMOTHY O'CONNOR- AMOUNT $117,000 HOWARD R GRANT, J.D., M.D. - AMOUNT = $195,000 DONALD F. SNELL - AMOUNT $58,500 ELIZABETH A. POMFRET - AMOUNT $50,000 PART I, LINE 7 THE NON-FIXED PAYMENT BONUSES REPORTED IN SCHEDULE J, PART II, COLUMN B(II) ARE DETERMINED BY AN INDEPENDENT COMPENSATION COMMITTEE, WHICH INCLUDES A GROUP OF TRUSTEES. IN A SUBJECTIVE MANNER, THE COMMITTEE TAKES INTO ACCOUNT THE ACHIEVEMENTS OF BOTH THE ORGANIZATION AND THE INDIVIDUAL TO DETERMINE AN APPROPRIATE AMOUNT OF SUCH BONUSES. SUPPLEMENTAL INFORMATION PART III SCHEDULE J, PART II LAHEY CLINIC FOUNDATION, INC. AND ITS RELATED ORGANIZATIONS DO NOT COMPENSATE ANY TRUSTEE IN THEIR CAPACITY AS TRUSTEE. ALL COMPENSATION PAID IS FOR WORK PERFORMED IN THEIR CAPACITY OTHER THAN TRUSTEE, WHICH IS LISTED ON FORM 990, PART VII, DIRECTLY FOLLOWING THE TITLE OF THE TRUSTEE. A 2005 MHEFA SERIES C BONDS 042456011 57586CKW4 2005-07-14 161296967 REFUNDING AND DEFEASANCE OF EXISTING LONG-TERM DEBT AND A NEW PARKING GARAGE 0 0 0 B 2007 MHEFA SERIES D BONDS 042456011 57586CE68 2007-08-17 48655976 EXPANSION, RENOVATION, FURNISHING AND EQUIPPING OF AN AMBULATORY CARE CENTER 0 0 0 C 2013 MDFA SERIES E BONDS 134994650 2013-03-07 130000000 CONSTRUCTION/EQUIPPING OF A POWER PLANT AND ACQUISITION OF CAPITAL ASSETS 0 0 0 A 39498956 163666057 1259007 3594356 51328227 107484467 2006 1 0 1 1 B 29756 51388809 870765 50518044 2009 0 0 1 1 C 6615000 130050301 500000 11988119 117562182 0 0 0 1 A 0 1 1 1 1 1 0.00940 0.00240 0.01180 0 0 0 B 0 0 0 0 0 0 0 C 0 0 0 0 0 0 0 A 0 0 0 1 0 0 1 XL ASSET FUND CO I 1.830000000000 1 0 0 B 0 0 0 1 0 0 1 AIG MATCH FUND CORP 1.000000000000 1 0 0 C 0 0 0 1 0 0 0 0 0 A 1 B 1 C 1 BERNARD GORDON FORMER TRUSTEE ASSET ACQUISITION X 5000000 1975450 0 1 1 1975450 ADAM S AIN SON OF TRUSTEE 14080 EMPLOYEE COMPENSATION. 0 ERIC M BAILEY TRUSTEE OF LAHEY CLINIC FOUNDATION, INC. 35000 LAHEY CLINIC HOSPITAL, INC. PURCHASES MEDICAL EQUIPMENT AND SUPPLIES FROM NEUROLOGICA, INC., A COMPANY FOR WHICH MR. BAILEY IS THE PRESIDENT AND CEO. 0 FORM 990, PART IV, LINE 11(F) AND SCHEDULE D, PART X, LINE 2 THE ORGANIZATION'S FINANCIAL STATEMENTS DID NOT REPORT A LIABILITY FOR UNCERTAIN TAX POSITIONS UNDER FIN 48. FORM 990, PART VI, SECTION A, LINE 6 THE LAHEY HOSPITAL AND MEDICAL CENTER CONSISTS OF THREE NON-PROFIT CORPORATIONS, LAHEY CLINIC HOSPITAL, INC. (EIN # 04-2704686), LAHEY CLINIC, INC. (EIN # 04-2704683), LAHEY CLINIC FOUNDATION, INC. (EIN # 04-2323457) ALL THREE OF THE CORPORATIONS ARE TAX EXEMPT UNDER INTERNAL REVENUE CODE SECTION 501(C) (3). LAHEY CLINIC FOUNDATION, INC. IS THE SOLE CORPORATE MEMBER OF EACH OF THE OTHER TWO CORPORATIONS. THE BOARD OF TRUSTEES (GOVERNING BODY) AND CORPORATE OFFICERS OF THE THREE CORPORATIONS CONSIST OF THE EXACT SAME MEMBERS. EFFECTIVE MAY 1, 2012, LAHEY CLINIC FOUNDATION, INC. AND NORTHEAST HEALTH SYSTEM, INC. COMPLETED AN AFFILIATION WITH EACH OTHER AND ESTABLISHED A NEW ORGANIZATION, LAHEY HEALTH SYSTEM, INC. ("LHS"), TO SERVE AS THE PARENT OF THE COMBINED HEALTH SYSTEM. LHS IS NOW THE SOLE CORPORATE MEMBER OF LAHEY CLINIC FOUNDATION, INC. AND NORTHEAST HEALTH SYSTEM,INC. THE SOLE CORPORATE MEMBER OF THE REPORTING ORGANIZATION IS LAHEY CLINIC FOUNDATION, INC. THE REPORTING ORGANIZATION'S MEMBER HAS, WITH RESPECT TO THE REPORTING ORGANIZATION, THE RIGHT TO EXERCISE ALL POWERS CONFERRED ON MEMBERS OF NON-PROFIT CORPORATIONS UNDER MASSACHUSETTS GENERAL LAWS CHAPTER 180, INCLUDING, WITHOUT LIMITATION, POWERS WITH RESPECT TO THE FOLLOWING: (A) APPOINTMENT AND REMOVAL OF MEMBERS OF THE BOARD OF TRUSTEES (SUBJECT TO CERTAIN TRANSITION RULES IN PLACE THROUGH MAY 1, 2016); (B) AMENDMENT OF THE ARTICLES OF ORGANIZATION; (C) AMENDMENT OF THE BY-LAWS; (D) THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE CORPORATION'S ASSETS; AND (E) THE MERGER OR CONSOLIDATION OF THE CORPORATION WITH ANOTHER CORPORATION. ADDITIONALLY, THE RIGHT OF THE REPORTING ORGANIZATION'S MEMBER, LAHEY CLINIC FOUNDATION, INC., TO EXERCISE ITS AUTHORITY AS A MEMBER OF THE REPORTING ORGANIZATION IS SUBJECT TO THE APPROVAL OF LCF'S CORPORATE MEMBER, LHS, WHICH MAY ALSO EXERCISE SUCH POWERS DIRECTLY. THE ARTICLES OF INCORPORATION OF THE REPORTING ORGANIZATION WERE AMENDED MAY 1, 2012 AND THE BY-LAWS WERE AMENDED ON SEPTEMBER 21, 2012 TO REFLECT THE AFOREMENTIONED CHANGES. FORM 990, PART VI, SECTION A, LINE 7A PLEASE SEE PREVIOUS DISCLOSURE FOR FORM 990, PART VI, SECTION A, LINE 6 FORM 990, PART VI, SECTION A, LINE 7B PLEASE SEE PREVIOUS DISCLOSURE FOR FORM 990, PART VI, SECTION A, LINE 6 FORM 990, PART VI, SECTION B, LINE 11 MANAGEMENT PREPARED THE IRS FORM 990 ALONG WITH INDEPENDENT TAX CONSULTANTS WHO SIGN THE RETURN AS A PAID PREPARER. EXECUTIVE MANAGEMENT REVIEWED AND PRESENTED A DRAFT OF THE IRS FORM 990 TO THE AUDIT AND COMPLIANCE COMMITTEE OF THE LAHEY HEALTH SYSTEM, INC. BOARD OF TRUSTEES. PRIOR TO THE FILING DATE, A DRAFT OF THE IRS FORM 990 AND THE FINAL IRS FORM 990 WERE BOTH PROVIDED TO THE ENTIRE BOARD OF TRUSTEES BEFORE THE FILING DATE VIA A SECURED WEBSITE. FORM 990, PART VI, SECTION B, LINE 12C ALL OFFICERS, TRUSTEES, KEY EMPLOYEES, PHYSICIANS AND MANAGEMENT EMPLOYEES AT ALL LEVELS, ARE REQUIRED TO FILL OUT AN ANNUAL CONFLICT OF INTEREST DISCLOSURE FORM. THE LAHEY HOSPITAL AND MEDICAL CENTER'S CORPORATE COMPLIANCE DEPARTMENT MONITORS AND REVIEWS EACH DISCLOSURE FOR COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY. THE CORPORATE COMPLIANCE DEPARTMENT MONITORS CONFLICTS OF INTEREST THROUGH DISCLOSURE SOFTWARE, TRAINING, AND INDIVIDUAL REVIEWS WITH PHYSICIANS, KEY EMPLOYEES, AND MANAGERS. DEPENDING ON THE CONFLICT OF INTEREST: A PERSON COULD BE ASKED TO NOT PARTICIPATE IN DECISIONS MADE ON BEHALF OF THE LAHEY HOSPITAL AND MEDICAL CENTER; A PERSON MAY BE TOLD THEY CANNOT BE A PRINCIPAL INVESTIGATOR ON A RESEARCH STUDY; A PERSON MAY BE TOLD THAT THEY CANNOT PERFORM THE TASK THAT CREATES THE CONFLICT; A PERSON COULD BE ASKED TO REMOVE THEMSELVES FROM A COMMITTEE. FORM 990, PART VI, SECTION B, LINE 15 INDEPENDENT MEMBERS OF THE BOARD OF TRUSTEES COMPRISE THE COMPENSATION COMMITTEE. THE COMMITTEE SETS THE COMPENSATION AND BENEFITS FOR THE CEO AND ALSO REVIEWS AND APPROVES RECOMMENDATIONS FOR THE COMPENSATION AND BENEFITS FOR DISQUALIFIED INDIVIDUALS AND OTHERS. THE COMMITTEE SEEKS THE ADVICE OF EXTERNAL COMPENSATION CONSULTANTS. COMPARABILITY DATA IS PROVIDED, ANALYZED, AND DOCUMENTED BY THE EXTERNAL CONSULTANTS. THE LAHEY VICE PRESIDENT OF HUMAN RESOURCE OPERATIONS PROVIDES THE COMMITTEE WITH ANY REQUESTED INFORMATION. THE COMMITTEE MET SEVERAL TIMES THIS YEAR. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION'S GOVERNING DOCUMENTS AND AUDITED FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC UPON REQUEST. THE ORGANIZATION'S CONFLICT OF INTEREST POLICY AND OTHER COMPLIANCE POLICIES ARE MADE AVAILABLE TO THE PUBLIC VIA THE ORGANIZATION'S WEBSITE. IN ADDITION, THE ORGANIZATION PRESENTS FINANCIAL INFORMATION TO THE PUBLIC AS AN ATTACHMENT TO ITS MASSACHUSETTS OFFICE OF THE ATTORNEY GENERAL FORM PC. COMPENSATION FORM 990, PART VII THE COMPENSATION FOR THE TRUSTEES AND OFFICERS OF LAHEY CLINIC FOUNDATION, INC. LISTED IN FORM 990, PART VII, COLUMN E IS FOR EMPLOYEES OF LAHEY CLINIC FOUNDATION, INC., LAHEY CLINIC, INC. AND NORTHEAST HOSPITAL CORPORATION. ALL COMPENSATION PAID IS FOR WORK IN THEIR CAPACITIES OTHER THAN AS TRUSTEES. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: UNRESTRICTED CONTRIBUTIONS 4,559,051. ASSETS RELEASED FROM TIME RESTRICTIONS 737,679. ASSETS RELEASED FROM RESTRICTIONS 1,925,648. PENSION AND POST RETIREMENT RELATED CHANGES 1,013,805. GRANTS AND CONTRIBUTIONS -4,626,570. CHANGES IN TEMPORARY AND PERMANENT NET ASSETS 4,990,083. CHANGE IN VALUE OF SPLIT INTEREST AGREEMENTS 256,008. REDESIGNATION OF GIFTS 70,001. FORM 990, PART IV, LINE 4 LAHEY CLINIC HOSPITAL, INC., A RELATED ORGANIZATION, IS IN CONTACT WITH FEDERAL AND STATE LEGISLATORS REGARDING HEALTH CARE REFORM ISSUES THAT WOULD POTENTIALLY HAVE AN IMPACT ON THE ORGANIZATION AND ITS RELATED ORGANIZATIONS. FORM 990, PART VI, SECTION A, LINES 6, 7A & 7B EFFECTIVE MAY 1, 2012, LAHEY CLINIC FOUNDATION, INC. AND NORTHEAST HEALTH SYSTEM, INC. COMPLETED AN AFFILIATION WITH EACH OTHER AND ESTABLISHED A NEW ORGANIZATION, LAHEY HEALTH SYSTEM, INC. ("LHS"), TO SERVE AS THE PARENT OF THE COMBINED HEALTH SYSTEM. LHS IS NOW THE SOLE CORPORATE MEMBER OF LAHEY CLINIC FOUNDATION, INC. AND NORTHEAST HEALTH SYSTEM, INC. LAHEY HEALTH SYSTEM, INC. HAS, WITH RESPECT TO THE REPORTING ORGANIZATION, THE RIGHT TO EXERCISE ALL POWERS CONFERRED ON MEMBERS OF NON-PROFIT CORPORATIONS UNDER MASSACHUSETTS GENERAL LAWS CHAPTER 180, INCLUDING, WITHOUT LIMITATION, POWERS WITH RESPECT TO THE FOLLOWING: (A) APPOINTMENT AND REMOVAL OF MEMBERS OF THE BOARD OF TRUSTEES (SUBJECT TO CERTAIN TRANSITION RULES IN PLACE THROUGH MAY 1, 2016); (B) AMENDMENT OF THE ARTICLES OF ORGANIZATION; (C) AMENDMENT OF THE BY-LAWS; (D) THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE CORPORATION'S ASSETS; AND (E) THE MERGER OR CONSOLIDATION OF THE CORPORATION WITH ANOTHER CORPORATION. THE ARTICLES OF INCORPORATION OF THE REPORTING ORGANIZATION WERE AMENDED MAY 1, 2012 AND THE BY-LAWS WERE AMENDED ON SEPTEMBER 21, 2012 TO REFLECT THE AFOREMENTIONED CHANGES. FORM 990, PART VI, SECTION B, LINE 14 LAHEY HOSPITAL & MEDICAL CENTER HAS WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY KNOWN AS THE "RETENTION OF ADMINISTRATIVE AND CLINICAL DOCUMENTS". THE POLICIES, PROCEDURES, AND STANDARDS ARE MONITORED, MANAGED, AND REVISED BY THE RECORDS MANAGEMENT STEERING COMMITTEE. THE REVISED "RETENTION OF ADMINISTRATIVE AND CLINICAL DOCUMENTS" POLICY WAS APPROVED BY THE MEDICAL PRACTICE AND UTILIZATION COMMITTEE ON JULY 26, 2012. FORM 990, PART VI, SECTION B, LINE 16B THE ORGANIZATION NEGOTIATES ARRANGEMENTS TO INCLUDE TERMS AND SAFEGUARDS TO ENSURE THAT THE ORGANIZATION'S EXEMPT STATUS IS PROTECTED. FROM A LEGAL PERSPECTIVE, IN-HOUSE LEGAL COUNSEL, WITH THE INPUT OF EXTERNAL LEGAL COUNSEL, REVIEWS ALL PROPOSED JOINT VENTURE AND PARTNERSHIP AGREEMENTS. FROM A FINANCIAL PERSPECTIVE, LAHEY'S FINANCE MANAGEMENT TEAM REVIEWS ALL PROPOSED JOINT VENTURE AND PARTNERSHIP AGREEMENTS. BOTH REVIEWS TAKE PLACE BEFORE LAHEY HOSPITAL & MEDICAL CENTER ENTERS INTO ANY SUCH AGREEMENTS. FORM 990, PART VII LAHEY CLINIC FOUNDATION, INC. AND ITS RELATED ORGANIZATIONS DO NOT COMPENSATE ANY TRUSTEE IN THEIR CAPACITY AS A TRUSTEE. ALL COMPENSATION PAID IS FOR WORK PERFORMED IN THE EMPLOYEE'S JOB TITLE, WHICH IS LISTED ON FORM 990, PART VII DIRECTLY FOLLOWING THE TITLE OF "TRUSTEE". FORM 990, PART VII; PART IX, LINE 5; SCHEDULE J COMPENSATION, BENEFIT AND PENSION EXPENSES FOR OFFICERS, TRUSTEES AND KEY EMPLOYEES, OF LAHEY CLINIC FOUNDATION, INC. ARE PAID BY LAHEY CLINIC FOUNDATION, INC. AS THE PARENT COMPANY OF LAHEY CLINIC HOSPITAL, INC., AND LAHEY CLINIC, INC., LAHEY CLINIC FOUNDATION, INC. ALLOCATES A SIGNIFICANT PORTION OF THE AFOREMENTIONED EXPENSES TO ITS AFFILIATES. THE AFFILIATES THEN REIMBURSE LAHEY CLINIC FOUNDATION, INC. LAHEY CLINICAL HOSPITAL INC 41 MALL ROAD BURLINGTON MA 01805 042704686 HEALTHCARE MA 501(C) (3) 3 LCF INC 1 LAHEY CLINIC INC 41 MALL ROAD BURLINGTON MA 01805 042704683 HEALTHCARE MA 501(C) (3) 9 LCF INC 1 LAHEY HEALTH SHARED SERVICES INC 41 MALL ROAD BURLINGTON MA 01805 043178972 ADMINISTRATIVE SUPPORT TO LHS AND AFFILIATES MA 501(C) (3) 9 LHS INC 1 NORTHEAST HEALTH SYSTEM INC 85 HERRICK STREET BEVERLY MA 01915 043240453 SUPPORT MA 501(C) (3) 11C LHS INC 0 NORTHEAST BEHAVIORAL HEALTH CORPORATION ZERO CENTENNIAL DRIVE PEABODY MA 01960 042777145 BEHAVIORAL HEALTH CARE MA 501(C) (3) 7 NEHS INC 0 HEALTH AND EDUCATION HOUSING SERVICES INC 131 RANTOUL STREET BEVERLY MA 01915 223232914 HUD HOUSING MA 501(C) (3) 9 NEBH CORP 0 NORTHEAST HOSPITAL CORPORATION 85 HERRICK STREET BEVERLY MA 01915 042121317 HEALTHCARE MA 501(C) (3) 3 NEHS INC 0 NORTHEAST MEDICAL PRACTICES INC 85 HERRICK STREET BEVERLY MA 01915 043201853 HEALTHCARE MA 501(C) (3) 9 NEH CORP 0 SEACOAST NURSING & REHABILITATION CENTER 300 WASHINGTON STREET GLOUCESTER MA 01930 041305001 HEALTHCARE MA 501(C) (3) 9 NEHS INC 0 NORTHEAST PROFESSIONAL REGISTRY OF NURSES 800 CUMMINGS CENTER BEVERLY MA 01915 201287349 HEALTHCARE MA 501(C) (3) 9 NESH CORP 0 NORTHEAST SENIOR HEALTH CORPORATION 131 RANTOUL STREET BEVERLY MA 01915 042731137 HEALTHCARE MA 501(C) (3) 9 NEHS INC 0 CAB HEALTH & RECOVERY 111 MIDDLETON ROAD DANVERS MA 01923 042400270 SUBSTANCE ABUSE MA 501(C) (3) 9 NEBH CORP 0 LAHEY HEALTH SYSTEM INC 41 MALL ROAD BURLINGTON MA 01805 611665701 SUPPORT MA 501(C) (3) 11C III-FI N/A 0 LAHEY CLINIC INSURANCE CO LTD PO BOX HM 2450 HAMILTON BD INSURANCE BD LHS INC C 65876208 1.00000 0 PERPETUAL TRUSTS (7) 41 MALL ROAD BURLINGTON MA 01805 SUPPORT MA SEE PART VII T 566574 13959588 1.00000 0 REMAINDER TRUSTS (17) 41 MALL ROAD BURLINGTON MA 01805 SUPPORT MA SEE PART VII T 588395 16051847 1.00000 0 POOLED INCOME FUNDS (4) 41 MALL ROAD BURLINGTON MA 01805 SUPPORT MA SEE PART VII T 764918 11367452 1.00000 0 NORTHEAST PROPRIETARY CORPORATION 85 HERRICK STREET BEVERLY MA 01915 042855191 MEDICAL SERVICES MA NEHS INC C 0 NORTHEAST MASSACHUSETTS INDEMNITY CO LTD GOVERNORS SQ 23 LIME TREE BAY AVE GRAND CAYMAN CJ KY1-1102 980440187 INSURANCE CJ NHS INC C 0 0 0 0 1 1 0 0 0 0 1 0 1 1 1 1 1 1 1 1 LAHEY CLINIC INC N 176421148 FMV LAHEY CLINIC HOSPITAL INC N -294226333 FMV FORM 990, SCHEDULE R, PART IV, LINE 2 LAHEY CLINIC FOUNDATION INC. AND NORTHEAST HOSPITAL CORPORATION, RESPECTIVELY, HAVE FOUR AND THREE PERPETUAL TRUSTS. THE PERPETUAL TRUSTS ARE DOMICILED IN MASSACHUSETTS AND PENNSYLVANIA. FORM 990, SCHEDULE R, PART IV, LINE 3 LAHEY CLINIC FOUNDATION, INC. HAS SEVENTEEN REMAINDER TRUSTS. THE REMAINDER TRUSTS ARE DOMICILED IN MASSACHUSETTS AND NEW HAMPSHIRE. FORM 990, SCHEDULE R, PART IV, LINE 4 LAHEY CLINIC FOUNDATION, INC. AND NORTHEAST HOSPITAL CORPORATION, RESPECTIVELY, HAVE THREE AND ONE POOLED INCOME FUNDS. FORM 990, SCHEDULE R, PART V, LINE L IN ADDITION TO CONDUCTING FUNDRAISING AND SOLICIATION EFFORTS ON ITS OWN BEHALF, LAHEY CLINIC FOUNDATION, INC. ALSO CONDUCTS FUNDRAISING AND SOLICITATION EFFORTS ON BEHALF OF LAHEY CLINIC HOSPITAL, INC. AND LAHEY CLINIC, INC. FORM 990, SCHEDULE R, PART V, LINE M IN ADDITION TO CONDUCTING FUNDRAISING AND SOLICITATION EFFORTS ON THEIR OWN BEHALF, LAHEY CLINIC HOSPITAL, INC. AND LAHEY CLINIC, INC. CONDUCT FUNDRAISING AND SOLICITATION EFFORTS ON BEHALF OF LAHEY CLINIC FOUNDATION, INC. FORM 990, SCHEDULE R, PART V, LINE N ALL ENTITIES WITHIN THE LAHEY HEALTH SYSTEM, INC. SHARE FACILITIES, EQUIPMENT, MAILING LISTS, AND OTHER ASSETS. FOR A LIST OF ALL ENTITIES SEE SCHEDULE R. FORM 990, SCHEDULE R, PART V, LINE O-S LAHEY HEALTH SYSTEM, INC. AND ITS RELATED ORGANIZATIONS, LAHEY CLINIC FOUNDATION, INC. AND ITS RELATED ORGANIZATIONS, AND NORTHEAST HEALTH SYSTEM, INC. AND ITS RELATED ORGANIZATIONS, PROVIDE VARIOUS CORPORATE AND OTHER SERVICES TO EACH OTHER. THESE ORGANIZATIONS REIMBURSE ONE ANOTHER FOR EXPENSES INCURRED SUCH AS EMPLOYEE SALARIES, MATERIALS, SUPPLIES, UTILITIES, ETC. CASH IS ALSO TRANSFERRED BETWEEN THE THREE CORPORATIONS.