2012-11-12T11:34:58-06:00 2011-12-31 990 2011-01-01 411781624 ALLINA MEDICAL CLINIC ALLI 6122620660 PO BOX 43 INTERNAL ZIP 10890 MINNEAPOLIS MN 554400043 LAURIE M LAFONTAINE 6122625000 2012-11-12 2011 2016-02-24 21:20:13Z X ROBERT WIELAND PO BOX 43 INTERNAL ZIP 10890 MINNEAPOLIS MN 554400043 486405008 0 X WWW.ALLINAMEDICALCLINIC.COM X 1994 MN THE ALLINA MEDICAL CLINIC (AMC) IS A WHOLLY OWNED SUBSIDIARY OF ALLINA HEALTH SYSTEM. ALLINA HEALTH SYSTEM (ALLINA) TOGETHER WITH ITS SUBSIDIARIES IS DEDICATED TO MEETING THE LIFELONG HEALTHCARE NEEDS OF COMMUNITIES THROUGHOUT MINNESOTA AND WESTERN WISCONSIN. AMC IS A MULTI-SPECIALTY GROUP PRACTICE THAT OWNS AND OPERATES 42 PHYSICIAN CLINICS EMPLOYING OVER 700 PROVIDERS WITH OVER 2,600,000 PATIENT VISITS ANNUALLY. ALLINA AND ITS SUBSIDIARIES PROVIDE A FULL RANGE OF PRIMARY AND SPECIALTY HEALTH CARE SERVICES INCLUDING TECHNICALLY ADVANCED INPATIENT AND OUTPATIENT CARE, 24-HOUR EMERGENCY CARE, MEDICAL TRANSPORTATION, PHARMACY, LABORATORY, HOME CARE AND HOSPICE SERVICES. BECAUSE OF ITS CHARITABLE MISSION, ALLINA AND ITS SUBSIDIARIES PROVIDE THESE HEALTH CARE SERVICES AS WELL AS EDUCATIONAL AND WELLNESS PROGRAMS TO COMMUNITY MEMBERS REGARDLESS OF THEIR ABILITY TO PAY FOR SERVICES. X 17 16 0 6 351738 53810 4694845 14899172 448831934 459839257 200833 191165 4990463 4481647 458718075 479411241 23900 130086 0 0 302771904 320354992 0 0 0 155922271 158926163 458718075 479411241 0 0 181913985 0 134310044 0 47603941 0 X OUR MISSIONWE SERVE OUR COMMUNITIES BY PROVIDING EXCEPTIONAL CARE, AS WE PREVENT ILLNESS,RESTORE HEALTH AND PROVIDE COMFORT TO ALL WHO ENTRUST US WITH THEIR CARE.OUR VISION WE WILL: PUT THE PATIENT FIRST; MAKE A DIFFERENCE IN PEOPLE'S LIVES BY PROVIDING EXCEPTIONAL CARE AND SERVICE; CREATE A HEALING ENVIRONMENT WHERE PASSIONATE PEOPLE THRIVE AND EXCEL; AND LEAD COLLABORATIVE EFFORTS THAT SOLVE OUR COMMUNITY'S HEALTH CARE CHALLENGES.OUR VALUESINTEGRITY, RESPECT, TRUST, COMPASSION, AND STEWARDSHIP 0 1 368183011 130087 463972823 COST OF PROVIDING MEDICAL SERVICES:ALLINA IS COMMITTED TO THE COMMUNITIES IT SERVES AND REFLECTS ITS COMMITMENT BY SERVING AS A CHARITABLE HEALTH RESOURCE. TO THIS END, ALLINA AND THE ALLINA MEDICAL CLINIC (AMC) PROVIDE AND ADVOCATE FOR HIGH-QUALITY, EFFICIENT, AFFORDABLE HEALTH CARE SERVICES AND RELATED EDUCATIONAL AND RESEARCH PROGRAMS TO IMPROVE THE HEALTH STATUS OF PATIENTS AND COMMUNITIES IT SERVES.AS THE PHYSICIAN COMPONENT OF AN INTEGRATED DELIVERY SYSTEM, THE AMC IS RESPONSIBLE FOR DEVELOPING THE PRIMARY CARE SYSTEM FOR THE ALLINA HEALTH SYSTEM IN ORDER TO IMPROVE THE HEALTH OUTCOMES IN THE COMMUNITIES THAT IT SERVES. IT SEEKS TO DEVELOP INNOVATIVE METHODS OF HEALTH CARE DELIVERY AND QUALITY IMPROVEMENT.THE AMC PROVIDES PRIMARY HEALTH CARE SERVICES, WHICH ARE NEEDED TO MEET THE HEALTH CARE NEEDS OF THE COMMUNITIES THAT IT SERVES, WITHOUT FULL REIMBURSEMENT FOR THESE SERVICES.MANY OF THE AMC CLINICS SERVE POPULATIONS WITH SPECIAL AND UNIQUE MEDICAL NEEDS. SOME ARE LOCATED IN AREAS THAT HAVE BEEN DESIGNATED AS HEALTH MANPOWER SHORTAGE AREAS. OTHERS ARE LOCATED IN AND SERVE INNER-CITY POPULATIONS. OTHERS SERVE LARGE NATIVE AMERICAN POPULATIONS. 32469400 COST OF PARTICIPATING IN GOVERNMENT PROGRAMS:THE AMC IS COMMITTED TO SERVING ALL PERSONS IN NEED, REGARDLESS OF RACE, CREED, SEX, NATIONALITY, RELIGION, DISABILITY, AGE, OR ABILITY TO PAY. TO PROMOTE ACCESS TO CARE FOR ALL INDIVIDUALS, AMC PARTICIPATES IN THE FOLLOWING PUBLIC HEALTH CARE PROGRAMS: MEDICARE, MEDICAID, MINNESOTACARE, AND GENERAL ASSISTANCE. PAYMENTS FROM THESE PROGRAMS FREQUENTLY DO NOT COVER THE COSTS AMC INCURS TO SERVE PROGRAM BENEFICIARIES. IN 2011, AMC PROVIDED $32,469,400 IN HEALTH CARE SERVICES IN EXCESS OF THE REIMBURSEMENT RECEIVED BY PUBLIC PROGRAMS, AND TAXES AND FEES RELATED TO THESE PROGRAMS. THE FOLLOWING IS A BREAKDOWN OF COSTS RELATED TO THESE PROGRAMS, SERVICES AND ADDITIONAL TAXES AND FEES.COSTS IN EXCESS OF MEDICARE AND MEDICAID PAYMENTSAMC PROVIDES SERVICES TO PUBLIC PROGRAM ENROLLEES. SUCH PUBLIC PROGRAMS HAVE REIMBURSED AT AMOUNTS LESS THAN AMC'S COST. IN 2011, AMC EXPENDED $16,780,552 BEYOND REIMBURSEMENTS TO PROVIDE CARE FOR MEDICARE PATIENTS AND AN ADDITIONAL $5,766,252 BEYOND REIMBURSEMENTS FOR MEDICAID PATIENTS. MINNESOTACARE TAXAMC ALSO PARTICIPATES IN THE FUNDING OF MEDICAL CARE FOR THE UNINSURED THROUGH A MINNESOTACARE TAX OF 2% ON CERTAIN NET REVENUE. PATIENTS WHO ARE UNABLE TO GET INSURANCE THROUGH THEIR EMPLOYER ARE ELIGIBLE TO PARTICIPATE IN MINNESOTACARE. AMC PAID $7,212,562 FOR THE MINNESOTACARE TAX IN 2011.TAXES AND FEESAMC PAYS PROPERTY TAXES TO LOCAL AND STATE GOVERNMENTS USED IN FUNDING CIVIL AND EDUCATION SERVICES TO THE COMMUNITY. IN TOTAL, AMC PAID $2,710,034 MILLION IN TAXES AND FEES IN 2011. 20534574 UNCOMPENSATED CARE:CHARITY CAREAMC DEFINES CHARITY CARE AS CARE WHICH IS PROVIDED TO PERSONS WILLING, BUT UNABLE, TO PAY. THIS INCLUDES PATIENTS WHOSE CHARGES ARE REDUCED BECAUSE OF INABILITY TO PAY, PATIENTS WHO ARE UNABLE TO PAY THE BALANCE LEFT BY ANY PAYOR (PRIVATE INSURANCE OR PUBLIC PROGRAMS), AND PATIENTS FOR WHOM UNUSUAL CIRCUMSTANCES, OR SPECIAL FINANCIAL HARDSHIP WARRANT SPECIAL CONSIDERATION. THE AMC'S DEFINITION OF CHARITY CARE DOES NOT INCLUDE BAD DEBT (CHARGES WRITTEN OFF FOR PROVIDING SERVICES TO PERSONS ABLE, BUT UNWILLING, TO PAY FOR THESE SERVICES). PROVIDING CHARITY CARE ENSURES THAT ALL MEMBERS OF THE COMMUNITY RECEIVE QUALITY PRIMARY MEDICAL CARE WHEN THEY NEED IT REGARDLESS OF THEIR ABILITY TO PAY. IN 2011, AMC PROVIDED $7,918,675 IN CHARITY CARE.BAD DEBTAMC PROVIDES MEDICAL CARE TO ALL IN NEED. THERE ARE TIMES WHEN PATIENT ACCOUNT BALANCES GO UNPAID, KNOWN AS BAD DEBT. THESE BAD DEBT AMOUNTS IN 2011 TOTALED $12,590,808. 1089499 COMMUNITY SERVICES:INCLUDED IN THIS CATEGORY ARE THE SERVICES PROVIDED BY THE AMC TO RESPOND TO SPECIFIC COMMUNITY NEEDS. IN 2011, $1,089,499 WAS SPENT TO RESPOND TO THESE NEEDS. SERVICES PROVIDED THROUGH THE AMC, AT LOW OR NO COST, TO THESE INDIVIDUALS INCLUDE:-IMMUNIZATION CLINICS-MEDICAL DIRECTORS FOR CIVIC ORGANIZATIONS-BLOOD PRESSURE SCREENING CLINICS-HEALTH SERVICES TO GOVERNMENTAL AGENCIES (JAILS, PUBLIC HEALTH DEPARTMENTS, ETC.)-VIOLENCE AWARENESS INITIATIVES-ON-SITE PHYSICIAN SERVICES FOR SCHOOL EVENTS-HEALTH LECTURERS-TOBACCO CESSATION INITIATIVES 1089499 422276484 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 1 187 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 X 17 16 1 0 0 0 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 MN X TAX SERVICES MAIL ROUTE 10890 6122620660 2925 CHICAGO AVENUE MINNEAPOLIS MN 554071321 X WILLIAM BEER 2.00 X 0 0 0 GARY BHOJWANI 2.00 X 0 2500 0 DAVID DURENBERGER 2.00 X 0 12500 0 NATE GARVIS 2.00 X 0 21700 0 JOSEPH GOSWITZ MD 2.00 X 0 0 0 SUBBARAO INAMPUDI MD 2.00 X 0 23175 0 MARK JORDAHL 2.00 X 0 0 0 REATHA CLARK KING PHD 2.00 X 0 0 0 CHRISTINE MORRISON 4.00 X 0 0 0 JEAN DELANEY NELSON 2.00 X 0 7000 0 HUGH NIERENGARTEN 2.00 X 0 14479 0 KENNETH PAULUS 40.00 X X 0 1522963 628189 GLORIA PEREZ 2.00 X 0 15000 0 DEAN PHILLIPS 4.00 X 0 0 0 REBECCA ROLOFF 2.00 X 0 21000 0 MARK SHEFFERT 2.00 X 0 15000 0 MICHAEL TATTERSFIELD 2.00 X 0 15000 0 JOAN THOMPSON 2.00 X 0 22000 0 RODNEY YOUNG 2.00 X 0 22000 0 DUNCAN GALLAGHER 40.00 X 0 819373 245331 LAURIE LAFONTAINE 40.00 X 0 415523 96778 MICHAEL MARSHALL MD 40.00 X 32468 0 600 ELIZABETH TRUESDELL SMITH 40.00 X 0 471504 158143 ROBERT WIELAND MD 40.00 X 0 596528 255577 RODNEY CHRISTENSEN MD 40.00 X 383879 0 86112 CHERYL HERMANN 40.00 X 336902 0 59578 DEANN WAGNER 40.00 X 267678 0 50999 RICHARD BIRDWELL MD 40.00 X 770307 0 72790 RANDALL CHADWICK JR MD 40.00 X 996413 0 91547 DANA HARMS MD 40.00 X 935461 0 83688 PAUL HAVEL MD 40.00 X 786986 0 87822 JEFFREY NIPPER MD 40.00 X 833797 0 24417 ANDREW PUGH 0.00 X 0 249196 29497 5343891 4266441 1971068 704 1 1 0 KRAUS-ANDERSON CONSTRUCTION CO 525 SOUTH 8TH STREET MINNEAPOLIS MN 55404 CONSTRUCTION SERVICES 5247588 CONSULTING RADIOLOGISTS LTD 1221 NICOLLET MALL STE 600 MINNEAPOLIS MN 55403 PROFESSIONAL SERVICES - PHYSICIAN 4221541 JE DUNN CONSTRUCTION 9855 W 78TH STREET SUITE 270 EDEN PRAIRIE MN 55344 CONSTRUCTION SERVICES 2927540 RJM CONSTRUCTION LLC 7003 WEST LAKE STREET ST LOUIS PARK MN 55426 CONSTRUCTION SERVICES 1647486 SUBURBAN RADIOLOGIC CONSULTANTS LTD 4801 WEST 81ST STREET SUITE 108 BLOOMINGTON MN 55437 PROFESSIONAL SERVICES - MEDICAL 1605794 41 14612902 286270 14899172 PROG.SERV.REVENUE-RELA 621990 459839257 459839257 459839257 3657 3657 780355 0 780355 780355 780355 7181275 6993767 187508 187508 187508 OTHER INVESTMENT INCOM 621990 3349554 3349554 OPTICAL SHOP 446199 351738 351738 3701292 479411241 463972823 351738 187508 126486 126486 3600 3600 1172121 469991 702130 254932610 240599715 14332895 13738852 12932291 806561 35903216 33795462 2107754 14608193 13750596 857597 14291 14291 20079 20079 20048892 19493395 555497 43324 43324 34249142 34033085 216057 54551 47830 6721 16256451 15629590 626861 1380375 1203722 176653 648829 596255 52574 5816224 5816224 2750 2750 11286915 10364840 922075 6206855 5957583 249272 PURCHASED SERVICES 39581066 5055685 34525381 BAD DEBT 12590808 12590808 MINNESOTACARE TAX 7212562 7212562 INCOME TAX - UBI 34481 34481 3478568 2594014 884554 479411241 422276484 57134757 0 10025 0 0 0 40360567 0 0 0 0 0 542300 0 6000 0 97191566 0 0 1610737 0 0 0 42192790 0 181913985 0 29480124 6000 104823920 0 134310044 0 X 47603941 0 47603941 0 181913985 0 0 -47603941 X X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 0 0 0 1 0 0 EXPLANATION OF OTHER LOBBYING ACTIVITIES: PART II-B, LINE 1I: ALLINA MEDICAL CLINIC IS A WHOLLY OWNED SUBSIDIARY OF ALLINA HEALTH SYSTEM. ALLINA HEALTH SYSTEM EMPLOYS VARIOUS INDIVIDUALS AS WELL AS CONTRACTS WITH VARIOUS LOBBYISTS TO MONITOR LEGISLATIVE ACTS IMPORTANT TO ALL OF THE ALLINA SYSTEM ON BOTH A NATIONAL AND STATE LEVEL. ANY AND ALL LOBBYING EXPENSES INCURRED ARE BORNE BY ALLINA HEALTH SYSTEM ON BEHALF OF ITSELF AND VARIOUS RELATED ENTITIES INCLUDING ALLINA MEDICAL CLINIC. 0 0 0 0 0 ALLNA HEALTH SYSTEM FIN 48 (ASC 740) FOOTNOTE (AMOUNTS IN THOUSANDS): (17) TAXES - THE SYSTEM HAS BEEN DETERMINED TO QUALIFY AS A TAX EXEMPT ORGANIZATION UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. THE SYSTEM HAS ALSO BEEN DETERMINED TO BE EXEMPT FROM FEDERAL AND STATE INCOME TAX ON RELATED INCOME UNDER SECTION 501(A) OF THE INTERNAL REVENUE CODE AND MINNESOTA STATUTE SECTION 290.05, SUBDIVISION 2. CERTAIN OF THE SYSTEM'S SUBSIDIARIES AND AFFILIATES QUALIFY AS TAX EXEMPT ORGANIZATIONS, WHILE OTHERS ARE TAXABLE. THE SYSTEM AND ITS SUBSIDIARIES PAID TAXES OF $1,270 AND $1,279 IN 2011 AND 2010, RESPECTIVELY. AS OF DECEMBER 31, 2011 AND 2010, THE TAXABLE SUBSIDIARIES OF THE SYSTEM'S CONTINUING OPERATIONS HAD A GROSS DEFERRED TAX ASSET OF $76,553 AND $74,064, RESPECTIVELY, RESULTING FROM NET OPERATING LOSS CARRYFORWARDS, EMPLOYEE COMPENSATION AND BENEFITS ACCRUALS, PROVISION FOR BAD DEBTS, AND LIMITATION OF CHARITABLE CONTRIBUTIONS, OFFSET BY VALUATION ALLOWANCES OF $75,746 AND $73,766, RESPECTIVELY, AND A GROSS DEFERRED TAX LIABILITY OF $806 AND $298, RESPECTIVELY, PRIMARILY ATTRIBUTABLE TO DEPRECIATION AND A CHANGE IN ACCOUNTING METHOD OF A TAXABLE SUBSIDIARY. THE VALUATION ALLOWANCE INCREASED BY $1,980 AND $2,577 DURING 2011 AND 2010, RESPECTIVELY. AS OF DECEMBER 31, 2011, THE CONTINUING OPERATIONS OF THE SYSTEM AND ITS SUBSIDIARIES HAD NET OPERATING LOSS CARRYFORWARDS OF $156,593 FOR INCOME TAX PURPOSES, WHICH EXPIRE IN VARIOUS YEARS THROUGH 2031. INCOME TAXES ARE ACCOUNTED FOR UNDER THE ASSET AND LIABILITY METHOD. DEFERRED TAX ASSETS AND LIABILITIES ARE RECOGNIZED FOR THE FUTURE TAX CONSEQUENCES ATTRIBUTABLE TO DIFFERENCES BETWEEN THE FINANCIAL STATEMENT AND TAX RETURN METHODS OF ACCOUNTING. DEFERRED TAX ASSETS AND LIABILITIES ARE MEASURED USING THE ENACTED TAX RATES EXPECTED TO APPLY TO TAXABLE INCOME IN THE YEARS IN WHICH THOSE TEMPORARY DIFFERENCES ARE EXPECTED TO BE RECOVERED OR SETTLED. 1 A PLACE FOR YOU INC PO BOX 270 PINE CITY MN 55063 451680589 501(C)(3) 112607 BOOK VALUE DONATION OF AMC PINE CITY CLINIC TO A PLACE FOR YOU INC SHELTER FOR THE HOMELESS 1 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: SCHEDULE I, PART I, LINE 2 ALLINA MEDICAL CLINIC STRICTLY MONITORS GRANT FUNDS TO ENSURE THAT SUCH GRANTS ARE USED FOR PROPER AND INTENDED PURPOSES AND ARE NOT OTHERWISE DIVERTED FROM THE INTENDED USE. THE ORGANIZATION HAS PROCESS WHICH INCLUDES A WRITTEN APPLICATION WHICH REQUIRES SUPPORTING DOCUMENTATION AND SUBSTANTIATION PRIOR TO A GRANT BEING APPROVED AND DISBURSED. IN ADDITION AND DEPENDING ON THE FACTS AND CIRCUMSTANCE OF THE GRANT, THE ORGANIZATION EMPLOYS VARIOUS METHODS TO ENSURE PROPER AND INTENDED USE SUCH AS; PERIODIC REPORTING TO THE ORGANIZATION, FIELD INVESTIGATIONS, CONTRACTS WITH REPAYMENT CLAUSES, REQUIRING ADDITIONAL SUBSTANTIATION AND DOCUMENTATION NOT AVAILABLE AT THE TIME OF THE GRANT, PAYING THIRD PARTIES DIRECTLY ON BEHALF OF THE GRANTEE ORGANIZATION, AND OTHER METHODS AS APPROPRIATE AND WARRANTED. 1 X X X X X 1 1 0 0 0 1 1 0 1 1 KENNETH PAULUS 0 833744 0 631010 0 58209 0 601666 0 26523 0 2151152 0 263827 DUNCAN GALLAGHER 0 571562 0 193509 0 54302 0 219532 0 25799 0 1064704 0 40746 LAURIE LAFONTAINE 0 265458 0 86057 0 64008 0 69703 0 27075 0 512301 0 55786 ELIZABETH TRUESDELL SMITH 0 314539 0 106512 0 50453 0 136806 0 21337 0 629647 0 36349 ROBERT WIELAND MD 0 423944 0 147702 0 24882 0 228202 0 27375 0 852105 0 18700 RODNEY CHRISTENSEN MD 301839 0 72614 0 9426 0 68688 0 17425 0 469992 0 0 0 CHERYL HERMANN 235602 0 68026 0 33274 0 55756 0 3822 0 396480 0 27412 0 DEANN WAGNER 184751 0 54392 0 28535 0 37185 0 13815 0 318678 0 18683 0 RICHARD BIRDWELL MD 705025 0 0 0 65282 0 49578 0 23213 0 843098 0 52645 0 RANDALL CHADWICK JR MD 921204 0 0 0 75209 0 67355 0 24192 0 1087960 0 53207 0 DANA HARMS MD 929710 0 0 0 5751 0 59105 0 24583 0 1019149 0 0 0 PAUL HAVEL MD 765751 0 0 0 21235 0 62511 0 25312 0 874809 0 0 0 JEFFREY NIPPER MD 457993 0 0 0 375804 0 15925 0 8492 0 858214 0 250638 0 ANDREW PUGH 0 153955 0 67452 0 27789 0 13333 0 16165 0 278694 0 24674 PART I, LINE 1A PART I, LINE 1A: TAX INDEMNIFICATION AND GROSS-UP PAYMENTS; ALLINA HEALTH SYSTEM PROVIDES THIS TYPE OF PAYMENT AS IT RELATES TO TAXABLE MOVING EXPENSE REIMBURSEMENTS ON CERTAIN EXECUTIVES. MICHAEL MARSHALL, MD - $2,853 HOUSING ALLOWANCE OR RESIDENCE FOR PERSONAL USE: ALLINA HEALTH SYSTEM PROVIDES THIS TYPE OF PAYMENT AS IT RELATES TO TEMPORARY HOUSING FOR CERTAIN EXECUTIVES WHO ARE RELOCATING DUE TO EMPLOYMENT WITH ALLINA AND DO NOT INITIALLY HAVE A PERMANENT RESIDENCE. PART I, LINES 4A-B PART I, LINES 4A-B: DUNCAN GALLAGHER - $26,984; LAURIE LAFONTAINE - $47,328; ELIZABETH SMITH - $39,604; CHERYL HERMANN - $26,669; DEANN WAGNER - $25,340; RICHARD BIRDWELL, MD - $61,506; RANDALL CHADWICK JR, MD - $67,957; JEFFREY NIPPER, MD - $372,104 PART I, LINE 6 MANAGEMENT INCENTIVE PLAN (MIP) ALLINA HEALTH SYSTEM PROVIDES AN ANNUAL INCENTIVE COMPENSATION OPPORTUNITY TO MOST MANAGERS, SOME HIGH-LEVEL INDIVIDUAL CONTRIBUTORS AND EXECUTIVES. UNDER THIS PLAN, THE TARGET AWARD IS EXPRESSED AS A FUNCTION OF THE PARTICIPANT'S SALARY PAID DURING THE CALENDAR YEAR AND REQUIRES AT LEAST FOUR MONTHS OF SERVICE IN AN ELIGIBLE POSITION DURING THE YEAR. ACTUAL AWARDS CAN RANGE FROM 0% TO 150% OF THE TARGET AWARD, BASED ON ALLINA'S PERFORMANCE OVER THE CALENDAR YEAR. PERFORMANCE MEASURES INCLUDE FINANCIAL PERFORMANCE, SERVICE QUALITY, PATIENT SATISFACTION, PATIENT SAFETY AND COMMUNITY SERVICE. NO AWARDS ARE PROVIDED UNLESS THRESHOLD FINANCIAL PERFORMANCE IS ACHIEVED. PARTICIPANTS WHO HAVE LEFT EMPLOYMENT PRIOR TO THE END OF THE YEAR AS THE RESULT OF VOLUNTARY TERMINATION OR TERMINATION FOR POOR PERFORMANCE ARE NOT ELIGIBLE FOR AN AWARD. LONG-TERM INCENTIVE PLAN (LTIP) ALLINA HEALTH SYSTEM HAS A LONG-TERM INCENTIVE PLAN THAT PROVIDES A CASH AWARD OPPORTUNITY TO A SMALL NUMBER OF TOP EXECUTIVES APPROVED FOR PARTICIPATION BY THE COMPENSATION COMMITTEE OF THE BOARD. THE AWARD OPPORTUNITY IS BASED ON ALLINA HEALTH SYSTEM PERFORMANCE DURING OVERLAPPING THREE-YEAR CYCLES. PERFORMANCE MEASURES AND TARGETS ARE DEFINED BY THE COMMITTEE FOR EACH THREE-YEAR PERIOD AND CAN VARY FROM ONE PERIOD TO ANOTHER DEPENDING ON THE COMMITTEE'S JUDGMENT OF THE MOST IMPORTANT MEASURES OF SUCCESS. AWARDS CAN RANGE FROM 0% TO 150% OF TARGET AWARDS. PART I, LINE 8 - CERTAIN AMOUNTS REPORTED ON FORM 990, PART VII WERE PAID OR ACCRUED PURSUANT TO A CONTRACT THAT WAS SUBJECT TO THE INITIAL CONTRACT EXCEPTION DESCRIBED IN REGULATION SECTION 53.4958-4(A)(3). FROM TIME TO TIME, ALLINA MEDICAL CLINIC ENTERS INTO CONTRACTUAL ARRANGEMENTS THAT MAY QUALIFY FOR THE INITIAL CONTRACT EXCEPTION BASED ON THE TERMS AND UNDERSTANDINGS OF THE CONTRACTUAL AGREEMENTS. SUPPLEMENTAL INFORMATION PART III DEFERRED COMPENSATION PLANS TERMS AND CONDITIONS: ALLINA HOSPITALS & CLINICS EXECUTIVE BENEFIT PLAN ALLINA HOSPITALS & CLINICS PHYSICIANS BENEFIT PLAN EXECUTIVE MUTUAL FUND ACCOUNT PLAN THESE ACCOUNTS GIVE THE PARTICIPANT THE OPPORTUNITY FOR CAPITAL ACCUMULATION NOT FULLY AVAILABLE TO THEM THROUGH SOCIAL SECURITY OR THE GENERAL EMPLOYEE RETIREMENT PLANS BECAUSE OF MAXIMUMS PLACED ON COMPENSATION THAT CAN BE RECOGNIZED UNDER FEDERAL LAW FOR PURPOSES OF CONTRIBUTIONS. THEY ALSO SERVE AS AN IMPORTANT NON-COMPETE INCENTIVE TO PARTICIPANTS. PRIOR TO THE YEAR IN WHICH CONTRIBUTIONS ARE MADE, THE PARTICIPANT MUST DESIGNATE A VESTING/PAYOUT DATE CONSISTENT WITH THE CONSTRAINTS OF THE PLANS AND FEDERAL DEFERRED COMPENSATION REGULATIONS. AFTER THE CONTRIBUTIONS ARE MADE, THE PARTICIPANT HAS A ONE-TIME LIMITED OPPORTUNITY TO EXTEND THE ELECTED PAYMENT DATE FOR AT LEAST FIVE YEARS. ONCE THE VESTING/PAYOUT DATE HAS BEEN REACHED, ALLINA WILL WITHHOLD THE APPROPRIATE TAXES AND THE BALANCE WILL BE PAID TO THE PARTICIPANT ON THEIR PAYCHECK AS SOON AS ADMINISTRATIVELY FEASIBLE. IF THE PARTICIPANT TERMINATES EMPLOYMENT VOLUNTARILY BEFORE AN AMOUNT IS PAID, PAYMENT WILL BE SUBJECT TO THE PARTICIPANT'S COMPLIANCE WITH A NON-COMPETE AGREEMENT WITH ALLINA FOR TWO YEARS AFTER TERMINATION. THE PARTICIPANT MAY ELECT FROM AMONG INVESTMENT ALTERNATIVES THAT ARE SIMILAR TO THOSE AVAILABLE IN THE RETIREMENT SAVINGS PLAN. UNLIKE THE RETIREMENT SAVINGS PLAN, THE PARTICIPANT HAS THE STATUS AN UNSECURED CREDITOR OF ALLINA AND WILL NOT HAVE A PREFERRED CLAIM TO PAYMENT IN THE CASE OF THE COMPANY'S INABILITY TO PAY. HOWEVER, THE COMPANY DOES SET ASIDE ASSETS FOR ITS OBLIGATIONS BY ACTUALLY INVESTING THE PROMISED ASSETS CONSISTENT WITH PARTICIPANT ELECTIONS. ALLINA SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP) THIS PLAN WAS AMENDED EFFECTIVE DECEMBER 31, 2008, SUCH THAT NO FUTURE BENEFITS ACCRUE FOR SERVICE AFTER THAT DATE. ELIGIBLE ALLINA EXECUTIVES PARTICIPATED IN A DEFINED CONTRIBUTION SERP. EMPLOYER CREDITS WERE MADE EACH YEAR TO THEIR SERP BALANCE ACCORDING TO THE FOLLOWING SCHEDULE: EXEC YRS OF SERVICE CONTRIBUTION % OF PENSIONABLE EARNINGS 0-5 2.75% 6-10 3.50% 11+ 4.75% EXECUTIVES WERE ALSO CREDITED AN AMOUNT EQUAL TO THE EXCESS AMOUNT THAT WOULD HAVE BEEN CREDITED TO THE PENSION ACCOUNT PLAN WERE IT NOT FOR THE QUALIFIED PLAN COMPENSATION LIMITS. DEPOSITS EARN THE INVESTMENT RATE OF RETURN EQUAL TO THE PENSION ACCOUNT PLAN CREDITING RATE AS DECLARED BY ALLINA. THE CURRENT RATE IS 4%. THE PARTICIPANT VESTS AFTER THREE YEARS OF EXECUTIVE SERVICE PROVIDED THAT IF THE PARTICIPANT TERMINATES EMPLOYMENT WITH ALLINA PRIOR TO AGE 65 FOR ANY REASON OTHER THAN ELIMINATION OF POSITION, THE PARTICIPANT MUST FULFILL THE TERMS OF A COVENANT NOT TO COMPETE BENEFITS ARE PAID AS A SINGLE LUMP-SUM AMOUNT UPON AGE 65 RETIREMENT OR JOB POSITION ELIMINATION. IN THE CASE OF OTHER VOLUNTARY TERMINATIONS, PAYMENT IS DELAYED UNTIL COMPLETION OF THE TWO-YEAR NON-COMPETE PERIOD. THE SERP IS PAYABLE FROM ALLINA'S GENERAL ASSETS. IF ALLINA BECOMES INSOLVENT, THE PARTICIPANT WILL BE AN UNSECURED CREDITOR AND WILL HAVE NO PREFERRED CLAIM TO ANY ASSETS. ALLINA EXECUTIVE RETIREMENT BENEFIT RESTORATION PLAN ELIGIBLE ALLINA EXECUTIVES PARTICIPATE IN A DEFERRED COMPENSATION RETIREMENT PLAN. EXECUTIVES ARE CREDITED AN AMOUNT EQUAL TO THE EXCESS AMOUNT THAT WOULD HAVE BEEN CREDITED TO THE ALLINA RETIREMENT SAVINGS PLAN WERE IT NOT FOR THE QUALIFIED PLAN COMPENSATION LIMITS. EMPLOYER CREDITS ARE MADE EACH YEAR TO THEIR ACCOUNT BALANCE ACCORDING TO THE FOLLOWING SCHEDULE AS OF THE END OF THE PLAN YEAR: PARTICIPANT'S YEARS OF VESTING SERVICE APPLICABLE PERCENTAGE LESS THAN 1 0% 1-5 5.0% 6-10 5.5% 11-15 6.0% 16 OR MORE 6.5% DEPOSITS EARN THE INVESTMENT RATE OF RETURN EQUAL TO THE INVESTMENT OPTIONS SELECTED BY THE PARTICIPANT WHICH ARE THE SAME OPTIONS AVAILABLE UNDER THE QUALIFIED PLAN. A PARTICIPANT WHO HAS COMPLETED AT LEAST TWO YEARS OF SERVICE BECOMES VESTED IN THE PORTION OF HIS OR HER ACCOUNT ATTRIBUTABLE TO THE ANNUAL RESTORATION CREDIT FOR A PARTICULAR YEAR AS OF JANUARY 15 OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE ANNUAL RESTORATION CREDIT IS EARNED. IN THE EVENT OF TERMINATION (OTHER THAN BECAUSE OF DEATH) PRIOR TO AGE 67, THE DISTRIBUTION DATE SHALL BE AS SOON AS ADMINISTRATIVELY POSSIBLE AFTER TERMINATION IN THE FORM OF A LUMP SUM PAYMENT. THE PLAN IS PAYABLE FROM ALLINA'S GENERAL ASSETS. IF ALLINA BECOMES INSOLVENT, THE PARTICIPANT WILL BE AN UNSECURED CREDITOR AND WILL HAVE NO PREFERRED CLAIM TO ANY ASSETS. THIS PLAN WAS EFFECTIVE JANUARY 1, 2009. EXECUTIVE SEVERANCE PLAN ALLINA PROVIDES SALARY CONTINUATION FOR EXECUTIVES WHOSE EMPLOYMENT HAS BEEN INVOLUNTARILY TERMINATED FOR REASONS OTHER THAN CAUSE OR POOR PERFORMANCE. THE LENGTH OF THE SEVERANCE PAY PERIOD IS DEFINED BY THE PLAN AND DEPENDS ON THE LEVEL OF THE EXECUTIVE POSITION. UNDER THE PLAN THE SEVERED EXECUTIVE ALSO COULD CONTINUE CERTAIN BENEFITS FOR A LIMITED PERIOD OF TIME. IN 2009 THE PLAN WAS AMENDED TO FURTHER RESTRICT SEVERANCE BENEFITS IN THE CASE THAT THE EXECUTIVE OBTAINS OTHER EMPLOYMENT DURING THE SEVERANCE PERIOD. ALL ASSETS AND LIABILITIES OF THE ORGANIZATION VIA MERGER 2011-12-31 189714407 NET BOOK VALUE 363261413 ALLINA HEALTH SYSTEM 2925 CHICAGO AVENUE MINNEAPOLIS MN 554071321 501 (C)(3) 1 1 0 0 1 1 1 1 0 0 PART I, LINE 2E: EXPLANATION FOR PART I - LINE 2 A - THE BOARD OF DIRECTORS FOR ALLINA HEALTH SYSTEM AND ALLINA MEDICAL CLINIC CONSIST OF EXACTLY THE SAME MEMBERS PRIOR TO THE 12/31/2011 MERGER TRANSACTION DESCRIBED HEREIN. ALLINA MEDICAL CLINIC MERGED WITH AND INTO ALLINA HEALTH SYSTEM, THE SURVIVING AND SUCCESSOR ORGANIZATION. THEREFORE, ALLINA MEDICAL CLINIC DIRECTORS WILL REMAIN DIRECTORS OF ALLINA HEALTH SYSTEM, THE SURVIVING ORGANIZATION. EXPLANATION FOR PART I - LINE 2 B - ALLINA MEDICAL CLINIC OFFICERS, KEY EMPLOYEES AND OTHER EMPLOYEES WILL GENERALLY CONTINUE TO BE EMPLOYED BY ALLINA HEALTH SYSTEM, THE SURVIVING AND SUCCESSOR ORGANIZATION. DETAILS OF ALLINA HEALTH SYSTEM/ALLINA MEDICAL CLINIC MERGER:AS MORE FULLY DESCRIBED IN THE ATTACHED ARTICLES OF MERGER, ALLINA MEDICAL CLINIC MERGED WITH AND INTO ITS PARENT ORGANIZATION ALLINA HEALTH SYSTEM, A MINNESOTA 317A NONPROFIT CORPORATION AND 501(C)(3) TAX EXEMPT ORGANIZATION, ON DECEMBER 31, 2011. ALLINA HEALTH SYSTEM IS THE SURVIVING AND SUCCESSOR ORGANIZATION. AS A RESULT AND FOR TAX REPORTING PURPOSES, ALL ASSETS AND LIABILITIES OF ALLINA MEDICAL CLINIC HAVE BEEN TRANSFERRED TO ALLINA HEALTH SYSTEM AS OF DECEMBER 31, 2011. THE FUND BALANCE TRANSFERRED WAS $47,603,941. FOLLOWING THE MERGER TRANSACTION, THE PROGRAM SERVICES AND ACTIVITIES CONDUCTED BY ALLINA MEDICAL CLINIC SHALL BE CONDUCTED BY ALLINA HEALTH SYSTEM. CHANGES IN PROGRAM SERVICES FORM 990, PART III, LINE 3 AS MORE FULLY DESCRIBED IN THE ATTACHED ARTICLES OF MERGER, ALLINA MEDICAL CLINIC MERGED WITH AND INTO ITS PARENT ORGANIZATION ALLINA HEALTH SYSTEM, A MINNESOTA 317A NONPROFIT CORPORATION AND 501(C)(3) TAX EXEMPT ORGANIZATION, ON DECEMBER 31, 2011. ALLINA HEALTH SYSTEM IS THE SURVIVING AND SUCCESSOR ORGANIZATION. AS A RESULT AND FOR TAX REPORTING PURPOSES, ALL ASSETS AND LIABILITIES OF ALLINA MEDICAL CLINIC HAVE BEEN TRANSFERRED TO ALLINA HEALTH SYSTEM AS OF DECEMBER 31, 2011. THE FUND BALANCE TRANSFERRED WAS $47,603,941. FOLLOWING THE MERGER TRANSACTION, THE PROGRAM SERVICES AND ACTIVITIES CONDUCTED BY ALLINA MEDICAL CLINIC SHALL BE CONDUCTED BY ALLINA HEALTH SYSTEM. FORM 990, PART VI, SECTION A, LINE 2 MARK SHEFFERT AND RODNEY YOUNG - BUSINESS RELATIONSHIP FORM 990, PART VI, SECTION A, LINE 6 ALLINA HEALTH SYSTEM IS THE SOLE CORPORATE MEMBER ORGANIZATION AND PARENT ORGANIZATION OF ALLINA MEDICAL CLINIC. SEE SCHEDULE R FOR FURTHER DETAILS. FORM 990, PART VI, SECTION A, LINE 7A AS THE SOLE CORPORATE MEMBER ORGANIZATION, ALLINA HEALTH SYSTEM HOLDS CERTAIN RESERVED POWERS OVER ALLINA MEDICAL CLINIC. THE RESERVED POWERS ARE FULLY DESCRIBED IN ALLINA MEDICAL CLINIC'S GOVERNING DOCUMENTS AND INCLUDE SUCH POWERS AS ELECTION AND APPROVAL OF DIRECTORS, FINAL APPROVAL OF AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS, APPROVAL OF STRATEGIC PLANS AND CAPITAL AND OPERATING BUDGETS, APPROVAL OF PLANS OF MERGER OR CONSOLIDATION, APPROVAL OF INCURRENCE OF DEBT OR EXPENDITURES IN EXCESS OF CERTAIN AMOUNTS, AND VARIOUS OTHER RESERVED POWERS AS DESCRIBED THEREIN. FORM 990, PART VI, SECTION A, LINE 7B 7B - SAME AS LINE 7A DESCRIPTION ABOVE. FORM 990, PART VI, SECTION B, LINE 11 THE ALLINA MEDICAL CLINIC FORM 990 WAS PREPARED BY THE TAX SERVICES FUNCTION OF ALLINA HEALTH SYSTEM, ALLINA MEDICAL CLINIC'S SOLE CORPORATE MEMBER AND PARENT ORGANIZATION. THE FORM 990 FILING WAS SUBJECTED TO A RIGOROUS REVIEW PROCESS BY ALLINA'S TAX MANAGER AND TAX DIRECTOR. ALLINA'S VICE PRESIDENT OF FINANCE & TREASURY ALSO PERFORMED AN EXECUTIVE REVIEW OF THE FORM 990. AFTER THE MANAGEMENT REVIEW PROCESS DESCRIBED ABOVE WAS COMPLETED, THE FINAL FORM 990, AS ULTIMATELY FILED WITH THE INTERNAL REVENUE SERVICE [IRS], WAS PROVIDED TO EACH VOTING MEMBER OF ALLINA MEDICAL CLINIC'S BOARD OF DIRECTORS. AN ALLINA MEDICAL CLINIC BOARD OF DIRECTORS MEETING WAS HELD ON NOVEMBER 1, 2012 TO REVIEW AND DISCUSS THE FORM 990 FILING. THE ALLINA MEDICAL CLINIC BOARD OF DIRECTORS VOTED ON AND APPROVED A RESOLUTION APPROVING THE FORM 990 AND THE MINNESOTA CHARITABLE TRUST ANNUAL REPORT TO BE FILED WITH THE MINNESOTA ATTORNEY GENERAL. THE BOARD OF DIRECTORS RESOLUTION ALSO DIRECTED OFFICERS TO FILE THE FORM 990 WITH THE IRS AND THE CHARITABLE TRUST ANNUAL REPORT WITH THE CHARITIES DIVISION OF THE OFFICE OF THE MINNESOTA ATTORNEY GENERAL. THE ABOVE STATED REVIEW AND APPROVAL PROCESS OCCURRED PRIOR TO FILING THE ALLINA MEDICAL CLINIC FORM 990 WITH THE IRS AND MINNESOTA CHARITABLE TRUST ANNUAL REPORT WITH THE MINNESOTA ATTORNEY GENERAL. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION HAS SEVERAL METHODS OF MONITORING AND ENFORCING COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY. FIRST, THE ORGANIZATION REGULARLY DISTRIBUTES CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRES TO ITS OFFICERS, DIRECTORS, TRUSTEES, AND KEY EMPLOYEES. THESE INDIVIDUALS ARE REQUIRED TO DISCLOSE ANNUALLY ANY INTEREST THAT COULD GIVE RISE TO CONFLICTS, INCLUDING ANY FAMILY OR BUSINESS RELATIONSHIP. SECOND, THE GENERAL COUNSEL'S OFFICE ANNUALLY DELIVERS A REPORT TO ALLINA'S BOARD OF DIRECTORS WHICH INCLUDES, AMONG OTHER THINGS, THE RESULTS OF THE CONFLICT OF INTEREST QUESTIONNAIRE, AN ANALYSIS OF POTENTIAL CONFLICTS, AND GUIDANCE FOR SATISFACTORILY RESOLVING CONFLICTS. THIRD, THE ORGANIZATION UNDERTAKES MANDATORY COMPLIANCE TRAINING OF ALL ITS EMPLOYEES WHICH INCLUDES TRAINING ON CONFLICTS OF INTEREST. FOURTH, ALL EMPLOYEES RECEIVE, AND ARE EXPECTED TO CONDUCT THEMSELVES IN ACCORDANCE WITH ALLINA'S CODE OF CONDUCT. THE CODE OF CONDUCT CONTAINS EDUCATIONAL MATERIALS AND GUIDANCE TO RESOLVE POTENTIAL CONFLICTS OF INTEREST. FIFTH, ALLINA MAINTAINS A CORPORATE INTEGRITY HOTLINE, A CONFIDENTIAL 24 HOUR EXTERNAL RESOURCE TO HELP ANSWER QUESTIONS RELATED TO ETHICAL BUSINESS CONDUCT. ALL CALLS TO THE INTEGRITY LINE ARE KEPT CONFIDENTIAL. FORM 990, PART VI, SECTION B, LINE 15 ALLINA MEDICAL CLINIC'S COMPENSATION AND BENEFITS PROGRAMS ARE VESTED IN AND ADMINISTERED IN CONJUNCTION WITH ALLINA HEALTH SYSTEM, ALLINA MEDICAL CLINIC'S SOLE MEMBER PARENT ORGANIZATION. THE COMPENSATION COMMITTEE OF THE ALLINA HEALTH SYSTEM BOARD OF DIRECTORS IS RESPONSIBLE FOR ALL COMPENSATION AND BENEFITS PROGRAM ELEMENTS FOR NON-COLLECTIVELY BARGAINED ALLINA MEDICAL CLINIC AND ALLINA HEALTH SYSTEM EMPLOYEES. ALLINA HEALTH SYSTEM USES A PROCESS FOR DETERMINING COMPENSATION FOR THE ALLINA MEDICAL CLINIC PRESIDENT, THE ALLINA HEALTH SYSTEM CHIEF EXECUTIVE OFFICER, AND CERTAIN OTHER OFFICERS AND KEY EMPLOYEES THAT INCLUDED ALL OF THE FOLLOWING ELEMENTS: REVIEW AND APPROVAL BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS, THE MEMBERS OF WHICH ARE INDEPENDENT AND WITHOUT A CONFLICT OF INTEREST AS DEFINED IN REGULATION SECTION 53.4958-6(C)(1)(III). ENGAGEMENT OF AN INDEPENDENT COMPENSATION CONSULTANT SPECIALIZING IN EXECUTIVE COMPENSATION USE OF DATA AS TO COMPARABLE COMPENSATION FOR SIMILARLY QUALIFIED PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS CONTEMPORANEOUS DOCUMENTATION, SUBSTANTIATION AND RECORDKEEPING WITH RESPECT TO DELIBERATIONS AND DECISIONS REGARDING THE COMPENSATION ARRANGEMENT THE ABOVE DESCRIBED PROCESS AND AN ASSESSMENT IS PERFORMED AT LEAST ANNUALLY FOR THE FOLLOWING ALLINA HEALTH SYSTEM POSITIONS: CHIEF EXECUTIVE OFFICER/PRESIDENT, CHIEF FINANCIAL OFFICER, CHIEF CLINICAL OFFICER, EXECUTIVE VICE PRESIDENT - ALLINA HOSPITALS, PRESIDENT - ABBOTT NORTHWESTERN HOSPITAL, PRESIDENT - UNITED HOSPITAL, PRESIDENT - MERCY HOSPITAL, PRESIDENT - UNITY HOSPITAL, EXECUTIVE VICE PRESIDENT - AMBULATORY CARE, PRESIDENT - ALLINA CLINICS, SENIOR VICE PRESIDENT - GENERAL COUNSEL, SENIOR VICE PRESIDENT - CLINICAL SERVICES LINES, SENIOR VICE PRESIDENT - CHIEF COMPLIANCE OFFICER. IN ADDITION, THE COMPENSATION COMMITTEE REVIEWS AND APPROVES ALL COMPENSATION CHANGES OF THE ALLINA MEDICAL CLINIC PRESIDENT, ALLINA HEALTH SYSTEM CHIEF EXECUTIVE OFFICER AND THE OTHER AFOREMENTIONED POSITIONS LISTED IN ADVANCE OF THE CHANGE. FORM 990, PART VI, SECTION C, LINE 19 ALLINA MEDICAL CLINIC MAKES ITS FORM 990, FORM 1023, GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. TO ARRANGE AN INSPECTION OR RECEIVE A COPY, PLEASE CONTACT THE FOLLOWING: ALLINA MEDICAL CLINIC TAX SERVICES MAIL ROUTE 10890 P.O. BOX 43 MINNEAPOLIS, MN 55407-0043 TELEPHONE: 612-262-0660 PHYSICAL ADDRESS: 2925 CHICAGO AVENUE MINNEAPOLIS, MN 55407-1321 THE FORM 990 AND FORM 1023 ARE ALSO AVAILABLE DIRECTLY FROM THE INTERNAL REVENUE SERVICE. THE FORM 990 IS ALSO AVAILABLE FROM THE CHARITIES DIVISION OF THE OFFICE OF THE MINNESOTA ATTORNEY GENERAL. FORM 990, PART VII, SECTION A COMPENSATION OF $13,000 FOR SERVICES JOSEPH GOSWITZ, MD PROVIDED AS A MEMBER OF THE BOARD OF DIRECTORS AND AS CHAIRMAN OF THE ALLINA PHYSICIAN GOVERNANCE COMMITTEE WAS PAID TO HOSPITAL PATHOLOGY ASSOCIATES, A PHYSICIAN PRACTICE FOR WHICH DR. GOSWITZ IS A MEMBER. FINANCIAL STATEMENTS AUDITED BY AN INDEPENDENT ACCOUNTANT FORM 990, PART XII, LINE 2B ALLINA MEDICAL CLINIC'S FINANCIAL STATEMENTS WERE INCLUDED AS A COMPONENT PART OF THE CONSOLIDATED FINANCIAL STATEMENTS OF ITS PARENT ORGANIZATION, ALLINA HEALTH SYSTEM. THE CONSOLIDATED ALLINA HEALTH SYSTEM FINANCIAL STATEMENTS WERE AUDITED BY THE INDEPENDENT PUBLIC ACCOUNTING FIRM KPMG, LLP. THE AUDIT WAS CONDUCTED IN ACCORDANCE WITH AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES. KPMG, LLP ISSUED AN UNQUALIFIED OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS MEANING THE 2011 CONSOLIDATED FINANCIAL STATEMENTS OF ALLINA HEALTH SYSTEM PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF ALLINA HEALTH SYSTEM AS OF DECEMBER 31, 2011 AND THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE YEAR THEN ENDED IN CONFORMITY WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. PART XII, LINE 2C EXPLANATION THIS PROCESS REMAINS UNCHANGED FROM PRIOR YEAR. GENERAL NARRATIVE ALLINA HEALTH SYSTEM IS THE SOLE CORPORATE MEMBER ORGANIZATION AND PARENT ORGANIZATION OF ALLINA MEDICAL CLINIC. SEE SCHEDULE R FOR FURTHER DETAILS. ALLINA HEALTH SYSTEM PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 363261413 HEALTHCARE SERVICES MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 ABBOTT NORTHWESTERN HOSPITAL FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 043643816 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 MERCY & UNITY HOSPITALS FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 300086426 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 PHILLIPS EYE INSTITUTE FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 411613017 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 SISTER KENNY FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 411952989 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 UNITED HOSPITAL FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 237420998 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 CENTER FOR HEALTHCARE INNOVATION FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 263553868 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 ALLINA ASSOCIATED FOUNDATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 274116873 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 ASPEN ASSET CORPORATION PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 411788674 HOLDING TITLE TO PROPERTY MN 501(C)(2) ALLINA HEALTH SYSTEM 0 ASPEN MEDICAL GROUP PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 411452624 HEALTHCARE SERVICES MN 501(C)(4) ALLINA HEALTH SYSTEM 0 ALLINA INTEGRATED MEDICAL NETWORK PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 275129095 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 UNITED AND CHILDRENS AMBULATORY SURGERY CENTER ASSOCIATION 310 NORTH SMITH AVENUE ST PAUL MN 55102 411694626 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 MBP FACILITY LLC PO BOX 43 MR 10890 MINNEAPOLIS MN 554400043 454078371 SUPPORTING ORGANIZATION MN 501(C)(3) LINE 11A, I ALLINA HEALTH SYSTEM 0 WESTHEALTH INC 2855 CAMPUS DRIVE PLYMOUTH MN 55441 411768814 HEALTHCARE SERVICES MN 501(C)(3) LINE 3 ALLINA HEALTH SYSTEM 0 APPLE VALLEY BUILDING ASSOCIATES LLC 14655 GALAXIE AVENUE S APPLE VALLEY MN 55124 411677072 RENTAL REAL ESTATE MN N/A METROPOLITAN INTEGRATED CANCER CARE LLC 16825 NORTHCHASE DRIVE SUITE 1300 HOUSTON TX 77060 205068485 RADIOLOGY TX N/A SOUTHWEST SURGICAL CENTER LLC 920 EAST 28TH STREET SUITE 500 MINNEAPOLIS MN 55407 412013700 SURGICAL SERVICES MN N/A MAGNETO LEASING LLC 225 SMITH AVE N SUITE 201 ST PAUL MN 55102 201582501 RENTAL EQUIPMENT MN N/A WEST SUBURBAN HEALTH CAMPUS 2855 CAMPUS DRIVE PLYMOUTH MN 55441 411730888 RENTAL REAL ESTATE MN N/A ASPEN SLEEP CENTER LLC 1010 BANDANA BOULEVARD WEST ST PAUL MN 55108 261850227 HEALTHCARE SERVICES MN N/A GERIATRIC SERVICES OF MINNESOTA LLC 3366 OAKDALE AVE NORTH SUITE 551 ROBBINSDALE MN 55422 453357936 HEALTHCARE SERVICES MN N/A NORTHSTAR SLEEP CENTER LLC 920 EAST 28TH STREET SUITE 700 MINNEAPOLIS MN 55407 452532456 HEALTHCARE SERVICES MN N/A DISTRICT ONE CANCER CENTER LLC 200 STATE AVENUE FAIRBAULT MN 55021 451258847 HEALTHCARE SERVICES MN ALLINA MEDICAL CLINIC RELATED -9381 507565 0 1 0.50000 CROSBY CARDIOVASCULAR SERVICES LLC 920 E 28TH STREET SUITE 500 MINNEAPOLIS MN 55407 HEALTHCARE SERVICES MN N/A MOBILE IMAGING SERVICES LLC 1221 NICOLLET MALL SUITE 600 MINNEAPOLIS MN 55403 411883212 RADIOLOGY MN N/A HEALTHSPAN SERVICES CORPORATION PO BOX 43 MINNEAPOLIS MN 55440 411716415 DEBT COLLECTION MN N/A C ALLINA SPECIALTY ASSOCIATES PO BOX 43 MINNEAPOLIS MN 55440 411802815 HEALTHCARE SERVICES MN N/A C ALLINA CLINIC HOLDINGS LTD PO BOX 43 MINNEAPOLIS MN 55407 263954371 HOLDING COMPANY MN N/A C QUELLO CLINIC LIMITED PO BOX 43 MINNEAPOLIS MN 55407 410874754 HEALTHCARE SERVICES MN N/A C ALLINA HEALTH SYSTEM TRUST 500 GRANT STREET SUITE 0625 PITTSBURGH PA 15258 274612988 TRUST PA N/A T ALLINA HEALTH SYSTEM DEFINED BENEFIT MASTER TRUST 500 GRANT STREET SUITE 0625 PITTSBURGH PA 15258 376520273 TRUST PA N/A T 0 0 1 0 0 0 0 0 0 0 1 1 1 1 0 0 1 1 DETAILS OF ALLINA HEALTH SYSTEM/ALLINA MEDICAL CLINIC MERGER: AS MORE FULLY DESCRIBED IN THE ATTACHED ARTICLES OF MERGER, ALLINA MEDICAL CLINIC MERGED WITH AND INTO ITS PARENT ORGANIZATION ALLINA HEALTH SYSTEM, A MINNESOTA 317A NONPROFIT CORPORATION AND 501(C)(3) TAX EXEMPT ORGANIZATION, ON DECEMBER 31, 2011. ALLINA HEALTH SYSTEM IS THE SURVIVING AND SUCCESSOR ORGANIZATION. AS A RESULT AND FOR TAX REPORTING PURPOSES, ALL ASSETS AND LIABILITIES OF ALLINA MEDICAL CLINIC HAVE BEEN TRANSFERRED TO ALLINA HEALTH SYSTEM AS OF DECEMBER 31, 2011. THE FUND BALANCE TRANSFERRED WAS $47,603,941. FOLLOWING THE MERGER TRANSACTION, THE PROGRAM SERVICES AND ACTIVITIES CONDUCTED BY ALLINA MEDICAL CLINIC SHALL BE CONDUCTED BY ALLINA HEALTH SYSTEM.