Form 990 for tax year 2022

Revenue

Part VIII, the statement of revenue.

• 1e · Government grants (contributions)

  $242,395

• 2a · Program service revenue: Management Fees

  total $148,702,027 · related or exempt $148,702,027

• 2b · Program service revenue: Telephone Services

  total $613,046 · related or exempt $613,046

• 2c · Program service revenue: Health Information Admin

  total $524,673 · related or exempt $524,673

• 2d · Program service revenue: Other Program Services

  total $315,807 · related or exempt $315,807

• 2e · Program service revenue: Transcription Fees

  total $5,223 · unrelated business $5,223

• 3 · Investment income

  total $69,347,534 · related or exempt $69,347,534

• 4 · Income from investment of tax-exempt bond proceeds

  total $93,732 · related or exempt $93,732

• 6a · Gross rents

  real property $232,128

• 6b · Less rental expenses

  real property $184,361

• 6c · Rental income or loss

  real property $47,767

• 6d · Net rental income or loss

  total $47,767 · unrelated business $47,767

• 7a · Gross sales of assets other than inventory

  securities $320,079

• 7b · Less cost or other basis and sales expenses

  securities $0

• 7c · Gain or loss

  securities $320,079

• 7d · Net gain or loss

  total $320,079 · excluded $320,079

• 10a · Gross sales of inventory

  $4,549,477

• 10b · Cost of goods sold

  $4,491,861

• 10c · Net income from sales of inventory

  total $57,616 · related or exempt $57,616

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $433,696 · program services $433,696

• 5 · Compensation of officers, directors and key employees

  total $10,960,772 · program services $9,855,314 · management and general $1,105,458

• 7 · Other salaries and wages

  total $67,542,487 · program services $60,130,670 · management and general $7,112,844 · fundraising $298,973

• 8 · Pension plan contributions

  total $2,970,280 · program services $2,862,017 · management and general $108,263

• 9 · Other employee benefits

  total $7,888,968 · program services $7,092,163 · management and general $796,805

• 10 · Payroll taxes

  total $5,691,004 · program services $5,097,836 · management and general $593,168

• 11b · Fees: legal

  total $706,040 · management and general $706,040

• 11c · Fees: accounting

  total $426,054 · management and general $426,054

• 11g · Fees: other

  total $15,063,416 · program services $14,021,685 · management and general $1,038,278 · fundraising $3,453

• 12 · Advertising and promotion

  total $3,844,096 · program services $115,611 · management and general $3,719,991 · fundraising $8,494

• 13 · Office expenses

  total $827,521 · program services $821,574 · fundraising $5,947

• 14 · Information technology

  total $24,978,395 · program services $24,978,395

• 16 · Occupancy

  total $1,646,865 · program services $1,223,309 · management and general $405,224 · fundraising $18,332

• 17 · Travel

  total $265,413 · program services $198,897 · management and general $61,180 · fundraising $5,336

• 19 · Conferences, conventions and meetings

  total $484,736 · program services $223,484 · management and general $256,731 · fundraising $4,521

• 20 · Interest

  total $26,934,932 · program services $26,934,932

• 22 · Depreciation, depletion and amortization

  total $447,174 · program services $320,322 · management and general $126,852

• 23 · Insurance

  total $1,097,934 · program services $1,097,934

• 24a · Other expenses: Unrelated Business Inco

  total $5,500 · management and general $5,500

• 24b · Other expenses: Minor Equipment

  total $4,236,643 · program services $4,158,582 · management and general $38,056 · fundraising $40,005

• 24c · Other expenses: Subscriptions

  total $1,370,886 · program services $1,298,757 · management and general $71,977 · fundraising $152

• 24d · Other expenses: Business Dues & License

  total $1,368,924 · program services $1,320,431 · management and general $45,695 · fundraising $2,798

• 24e · All other expenses

  total $1,014,614 · program services $451,215 · management and general $563,399

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $2,000 · end of year $2,000

• 2 · Savings and temporary cash investments

  beginning of year $173,581,308 · end of year $173,414,799

• 8 · Inventories for sale or use

  beginning of year $1,387,249 · end of year $1,408,886

• 9 · Prepaid expenses and deferred charges

  beginning of year $16,760,041 · end of year $16,556,613

• 10a · Land, buildings and equipment: cost or other basis

  $78,104,168

• 10b · Land, buildings and equipment: accumulated depreciation

  $34,516,546

• 10c · Land, buildings and equipment, net

  beginning of year $37,442,470 · end of year $43,587,622

• 11 · Investments: publicly traded securities

  beginning of year $1,618,337,125 · end of year $1,430,006,888

• 12 · Investments: other securities

  beginning of year $43,581,775 · end of year $40,693,038

• 15 · Other assets

  beginning of year $36,309,896 · end of year $36,283,371

• 17 · Accounts payable and accrued expenses

  beginning of year $63,375,744 · end of year $78,103,347

• 19 · Deferred revenue

  end of year $10,000,000

• 20 · Tax-exempt bond liabilities

  beginning of year $884,849,518 · end of year $1,012,579,985

• 25 · Other liabilities

  beginning of year $60,734,117 · end of year $53,258,289

• 27 · Net assets without donor restrictions

  beginning of year $918,442,485 · end of year $588,011,596

The filer's explanations (Part III)

Part I, Line 1a

Officers and board members attending official board retreats are offered a discretionary spending allowance that may be used for incidental spending and/or companion travel. Amounts are included in taxable compensation. In addition, board members receive tax indemnification payments related to reportable compensation from the spending allowances, which are also included in taxable compensation. Tax gross-up payments related to deferred compensation and reimbursement of fees for personal services for legal and financial planning are provided to certain executives and managers. Amounts are included in taxable compensation.

Part I, Lines 4a-b

Neil Heatherly, Former President/CAO of Parkwest Medical Center, received a severance payment of $430,116 during 2022. The amount is included in taxable compensation. His termination date was November 22, 2021. David Bunch, Former President/CAO of Cumberland Medical Center, received a severance payment of $120,200 during 2022. The amount is included in taxable compensation. His termination date was August 5, 2022. Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of President and CEO, James D. VanderSteeg. Employer contributions of $273,375 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $70,560 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness. Compensation procedures are discussed in detail in Schedule O (Form 990, Part VI, Section B, Line 15a). Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of General Counsel, M. Douglas Campbell, Jr. Employer contributions of $38,183 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $1,301 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness. Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of EVP of Hospital Operations, Michael R. Belbeck. Employer contributions of $43,827 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $1,493 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness.

Disregarded entities

Part I: entities that legally are the filer and file no return of their own.

• Covenant Ventures LLC

  Develop healthcare software · TN · income $0 · assets $0

  Directly controlled by Covenant Health

Related partnerships

Part III: related organizations taxable as a partnership, with the filer's share.

• Covenant-AmSurg ASC Ventures LLC

  Management Company · TN · general or managing partner

• Covenant-KEC ASC Ventures LLC

  Management Company · TN · general or managing partner

• TEC North LLC

  Physician Services · TN · general or managing partner

• The Endoscopy Center of Knoxville

  Physician Services · TN · general or managing partner

Related corporations and trusts

Part IV: related organizations taxable as a corporation or trust.

• Fortress Corporation

  C · Management company · TN · 100% owned · share of income $21,313,657 · share of assets $170,493,898 · controlled entity

  Directly controlled by Covenant Health

• Covenant Medical Group Inc

  C · Physician practice management · TN · 100% owned · share of income $176,321,316 · share of assets $48,905,465 · controlled entity

  Directly controlled by Fortress Corp

• Knoxville Heart Group

  C · Cardiology medical practice · TN · 100% owned · share of income $12,468,907 · share of assets $1,389,590 · controlled entity

  Directly controlled by Covenant Medical Group

• East TN Cardiovascular Surgery Group Inc

  C · Cardiovascular surgical practice · TN · 100% owned · share of income $11,307,497 · share of assets $1,720,592 · controlled entity

  Directly controlled by Covenant Medical Group

• TenHats LLC

  C · Data storage · TN · 100% owned · share of income $3,641,376 · share of assets $18,828,815 · controlled entity

  Directly controlled by Fortress Corp