Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 2a · Program service revenue: Net Patient Revenue

  total $72,872,320 · related or exempt $72,872,320

• 2b · Program service revenue: Medical Office Building

  total $1,153,364 · related or exempt $1,153,364

• 2c · Program service revenue: Cafeteria Revenue

  total $239,274 · related or exempt $239,274

• 2f · All other program service revenue

  total $14,449 · related or exempt $14,449

• 3 · Investment income

  total $118,262 · excluded $118,262

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

  securities $41,738

• 7c · Gain or loss

  securities -$41,738

• 7d · Net gain or loss

  total -$41,738 · excluded -$41,738

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $63,614 · program services $63,614

• 5 · Compensation of officers, directors and key employees

  total $1,587,513 · management and general $1,587,513

• 11c · Fees: accounting

  total $300 · management and general $300

• 11f · Fees: investment management

  total $14,549 · management and general $14,549

• 11g · Fees: other

  total $44,388,666 · program services $41,721,821 · management and general $2,666,845

• 12 · Advertising and promotion

  total $665,404 · management and general $665,404

• 13 · Office expenses

  total $1,401,903 · program services $940,214 · management and general $461,689

• 14 · Information technology

  total $3,816,413 · program services $3,470,168 · management and general $346,245

• 16 · Occupancy

  total $2,585,479 · program services $2,585,479

• 17 · Travel

  total $98,870 · management and general $98,870

• 19 · Conferences, conventions and meetings

  total $23,238 · management and general $23,238

• 20 · Interest

  total $762,055 · program services $762,055

• 22 · Depreciation, depletion and amortization

  total $9,801,411 · program services $9,801,411

• 23 · Insurance

  total $69,353 · program services $50,716 · management and general $18,637

• 24a · Other expenses: Medical Supplies

  total $8,411,613 · program services $8,411,613

• 24b · Other expenses: Repairs & Maintenance

  total $2,289,627 · program services $2,289,627

• 24c · Other expenses: State Tax Indigent Asse

  total $1,869,763 · program services $1,869,763

• 24d · Other expenses: Dues & Memberships

  total $66,381 · management and general $66,381

• 24e · All other expenses

  total $61,939 · program services $46,277 · management and general $15,662

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $1,400 · end of year $1,400

• 2 · Savings and temporary cash investments

  beginning of year $1,746,220 · end of year $4,582,947

• 4 · Accounts receivable

  beginning of year $6,937,858 · end of year $9,073,811

• 8 · Inventories for sale or use

  beginning of year $1,898,074 · end of year $2,111,505

• 9 · Prepaid expenses and deferred charges

  beginning of year $603,096 · end of year $155,300

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

  $165,149,418

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

  $29,854,027

• 10c · Land, buildings and equipment, net

  beginning of year $144,875,655 · end of year $135,295,391

• 14 · Intangible assets

  beginning of year $1,216,210 · end of year $689,435

• 15 · Other assets

  beginning of year $2,579,117 · end of year $6,719,740

• 17 · Accounts payable and accrued expenses

  beginning of year $1,753,857 · end of year $2,040,446

• 25 · Other liabilities

  beginning of year $22,867,226 · end of year $25,745,589

• 27 · Net assets without donor restrictions

  beginning of year $135,236,547 · end of year $130,843,494

The filer's explanations (Part III)

Part I, Line 1a

As disclosed in our response to Form 990, Part VI, Section A, Line 3, individuals who serve as officers of the filing organization in the roles of Regional CEO, CEO, CFO, CNO, and CMO are compensated by and on the payroll of Adventist Health System Sunbelt Healthcare Corporation (AHSSHC), the parent organization of the healthcare system known as AdventHealth. AHSSHC is exempt from federal income tax under IRC Section 501(c)(3). The filing organization reimburses AHSSHC for the salary and benefit cost of those executives on the payroll of AHSSHC. At the direction of AHSSHC, and in accordance with the reserved powers in the filing organization's governing documents, the executive team listed on Part VII provides services to the filing organization. Travel for companions: AHSSHC has a Corporate Executive Policy that provides a benefit to allow for a traveling AHSSHC executive to have his or her spouse accompany the executive on certain business trips each year. Typically, reimbursement is only provided to certain executive leaders and is usually limited to one business trip per year beyond the annual AdventHealth President's Council business meeting and other meetings where the spouse is specifically invited. The AHSSHC Corporate Executive Spousal Travel Policy was originally approved and reviewed by the AHSSHC Board Compensation Committee, an independent body of the AHSSHC Board of Directors. All spousal travel costs reimbursed to the executive are considered taxable compensation to the executive. Tax Indemnification and gross-up payments: AdventHealth has a system-wide policy addressing gross-up payments provided in connection with employer-provided benefits/other taxable items. Under the policy, certain taxable business-related reimbursements (i.e. taxable business-related moving expenses, taxable items provided in connection with employment) provided to any employee may be grossed-up at a 25% rate upon approval by the filing organization's CEO and CFO. Additionally, employees at the Director level and above are eligible for gross-up payments on gifts received for board of director services. Discretionary spending account: Occasional discretionary spending amounts are periodically provided to eligible executives who attend annual business meetings such as the AdventHealth President's Council, CFO Conference or the CMO/CNO business meeting. Payments provided to each executive are considered taxable compensation to the executive.

Part I, Line 3

The individual who serves as the CEO of the filing organization is appointed and compensated by Adventist Health System Sunbelt Healthcare Corporation (AHSSHC). Compensation and benefits provided to this individual are determined pursuant to policies, procedures, and processes of AHSSHC that are designed to ensure compliance with the intermediate sanctions laws as set forth in IRC Section 4958. AHSSHC has taken steps to ensure that processes are in place to satisfy the rebuttable presumption of reasonableness standard as set forth in Treasury Regulation Section 53.4958-6 with respect to its active executive-level positions. The AHSSHC Board Compensation Committee (the Committee) serves as the governing body for all executive compensation matters. The Committee is composed of certain members of the Board of Directors (the Board) of AHSSHC. Voting members of the Committee include only individuals who serve on the Board as independent representatives, who hold no employment positions with AHSSHC and who do not have relationships with any of the individuals whose compensation is under their review that impacts their best independent judgment as fiduciaries of AHSSHC. The Committee's role is to review and approve all components of the executive compensation plan of AHSSHC. As an independent governing body with respect to executive compensation, it should be noted that the Committee will often confer in executive sessions on matters of compensation policy and policy changes. In such executive sessions, no members of management of AHSSHC are present, other than the Chief People Officer, who remains at the request of the Chairman/committee to provide assistance/information as needed. The Committee is advised by an independent third-party compensation advisor. This advisor prepares all the benchmark studies for the Committee. Compensation levels are benchmarked with a national peer group of other not-for-profit healthcare systems and hospitals of similar size and complexity to AdventHealth and each of its affiliated entities. The following principles guide the establishment of individual executive compensation: - The salary of the President/CEO of AdventHealth will not exceed the 50th percentile of comparable salaries paid by similarly situated organizations; and - Other executive salaries shall be established using market medians. The compensation philosophy, policies, and practices of AHSSHC are consistent with the organization's faith-based mission and conform to applicable laws, regulations, and business practices. As a faith-based organization sponsored by the Seventh-day Adventist Church (the Church), AHSSHC's philosophy and principles with respect to its executive compensation practices reflect the conservative approach of the Church's mission of service and were developed in counsel with the Church's leadership.

Part I, Line 4b

Sch J, Part I, Line 4b Nonqualified Retirement Plan: Nonqualified Retirement Plan - Texas Health Resources Certain members of the Board of Trustees are compensated by Texas Health Resources (THR), a related entity to the filing organization, and are covered by a nonqualified retirement plan. Participation in the plan is made available to a select group of management and highly compensated employees who are providing services in key positions of management and/or responsibility and who are determined by the THR Board of Trustees. For the active restoration account (Account balances after 12/31/2009) SERP benefits vest while the participant is employed if the participant: - Reaches age 65 - Becomes disabled or dies, - Reaches the following years of service: 2 Years 25%; 3 Years 50%; 4 Years 75% and 5 or more years 100% Participants must be employed on Dec 1 to qualify for the current year's SERP Benefit unless separation is due to death, disability, retirement (Age 65) or early retirement (separation from service at or after age 55 with 75 years of combined age and service with the system.) SERP benefits are calculated each Dec 1. Vested balances are taxed to the employee and the net balances begin accruing earnings. Vested balances are paid in cash lump sum within a 90-day period commencing on the earlier of death, disability, or separation from service. The deferred portion is included in Schedule J, Part II, column C. In frozen restoration accounts (account balances prior to 1/1/2010), the participant or beneficiary shall be taxed on his or her vested SERP benefits upon the earliest of: - Continued employment in THR until age 68 - Termination of employment for disability or death - Involuntary termination of employment without reasonable cause; or - Satisfying a 24 month non-compete period following his/her termination of employment. Payment follows the before mentioned events, except in the case of involuntary separation when the participant must wait 24 months to receive the previously taxed benefit. The Long Term Incentive Plan covers 2, 3 or 4 years. Payouts are made over 2, 3, or 4 years after key performance goals are met. Benefits vest if they are employed at the end of the year the payout is made. Payments can also be made if separation is due to death, disability, retirement (Age 65) or early retirement (separation from service at or after age 55 with 75 years of combined age and service with the system.) In the case of retirement and early retirement, CEO approval must be obtained and a non-compete must be satisfied prior to the end of year payout. A retention agreement may be offered to an executive in a key position or based on succession planning needs of the system. The length of the retention period will be dependent upon the needs of the organization to retain the key executive. Payments are made within 2.50 months following the end of the retention period. Payouts to the following employees were made during the year for all the plans listed above. The amounts below are included in the amount reported on Sch J, Part II, Column B(iii) and Column (F). King, James Kirk - 182,417 Craft, Brian - 59,425 Jackson, David - 53,142 NONQUALIFIED RETIREMENT PLAN - ADVENTIST HEALTH SYSTEM SUNBELT HEALTHCARE CORPORATION Penny Johnson, Kenneth Rose, Stephanie Nelson, Kristen Sutton, and Ronny Ford received compensation from Adventist Health System Sunbelt Healthcare Corporation (AHSSHC), the top-tier parent of the the 49% owner of the filing organization and the parent organization of the healthcare system known as AdventHealth. In recognition of the contribution that each executive makes to the success of AdventHealth, AdventHealth provides supplemental executive retirement benefit plans to eligible executives. As the supplemental executive retirement benefit plans were updated in 2020 and certain individuals still participate as grand-fathered participants in certain plans, the narrative below discusses all plans in which there were any participants in 2023. The SERP III plan effectively replaces the prior SERP II plan, the Executive Flex Benefit Program Plan, and the Senior Executive Death Benefit Plan for qualified executives except for certain grandfathered executive employees.

Part I, Line 4b (Continued):

SERP III Plan: The SERP III plan provides eligible executives a percentage of their base pay, which is credited to a deferred compensation account. The plan also provides for compensation deferral and selection of life insurance coverage and long-term care insurance. To be eligible to participate in the SERP III plan, executives must be on the AHSSHC corporate payroll and be either a CEO of an AdventHealth entity, an AHSSHC Vice President (VP) or VP of an AdventHealth entity with a base salary of at least $330,000 in 2023 (adjusted annually by the same percentage as IRC Section 401(a)(17) limit increases), or other leader specifically approved by the AdventHealth President. Eligible executives do not include grandfathered executives, meaning those executives who would satisfy all the eligibility requirements of the SERP II plan prior to Dec 31, 2027, had the plan not been amended and restated as of Jan. 1, 2020. Contribution credits will be established and maintained by class year accounts for each participant using tiered contribution credit percentages of annual base compensation. Contribution credit percentages range between 15% and 19% of base compensation. Contribution credits will be made each quarter in 25% increments with reductions in contributions if the executive is also a grandfathered FLEX participant (see below). SERP III provides for a class year vesting and payment schedule (7 years for each class year) with respect to amounts accumulated in the executive's deferred compensation account. Upon attainment of a normal retirement age (age 62), or upon certain other circumstances as defined in the SERP III plan document, all deferred amounts are paid immediately to the participant. For any executives working beyond the normal retirement age, future employer contributions will be made quarterly from SERP III directly to the participant as a taxable cash bonus. SERP II Plan: The SERP II plan is a defined benefit, non-tax-qualified deferred compensation plan for certain executives who have provided lengthy service to AdventHealth and/or to other Seventh-day Adventist Church hospitals or health care institutions. Under the provisions of the SERP II plan, benefits are provided to qualifying executive participants on a pro-rata schedule beginning with 20 years of service as an employee of AdventHealth and/or another hospital or health care institution controlled by the Seventh-day Adventist Church and who satisfy certain other qualifying criteria. Eligible employees are restricted to those executives who, as of January 1, 2020, satisfied, or if employment continues, will satisfy the eligibility requirements of SERP II prior to December 31, 2027. This supplemental executive retirement plan (SERP II) was designed to provide eligible executives with the economic equivalent of an annual income beginning at normal retirement age equal to 60% of the average of the participant's three, five or seven highest years of base salary from AdventHealth active employment inclusive of income from all other Seventh-day Adventist Church healthcare employer-financed retirement income sources and investment income earned on those contributions through social security normal retirement age as defined in the plan. The number of years included in highest average compensation is determined by the individual's year of entry to SERP II and by the individual's year of entry to the AdventHealth Executive FLEX Benefit Program. FLEX Plan: The Flex Plan was originally designed to provide eligible executives an opportunity to select from among a variety of supplemental benefits, including a split dollar life insurance policy and long-term care insurance, to individually tailor a benefits program appropriate to each executive's needs. In 2020, the Flex Plan was amended to exclude employed executives who are hired or promoted after a certain date from being eligible to participate in the Flex Plan except for certain insurance coverage features of the plan. The Flex Plan provides eligible participants a pre-determined benefits allowance credit that is equal to a percentage of the executive's base pay from which the cost of mandatory and elective employee benefits is deducted. The benefits allowance credit percentage for any plan year shall not be greater than the maximum dollar amount or the percentage of compensation as determined by the AdventHealth Benefits Administration Committee. For grandfathered eligible employees, the annual pre-determined Flex allowance is contributed and any funds that remain after the cost of mandatory and elective benefits are subtracted are, at the employee's option, contributed to either an IRC 457(f) deferred compensation account or to an IRC 457(b) eligible deferred compensation plan. Upon attainment of age 65, all previous 457(f) deferred amounts are paid immediately to the participant and any future employer contributions are made quarterly from the Plan directly to the participant. The Plan provides for a class year vesting schedule (2 years for each class year) with respect to amounts accumulated in the executive's 457(f) deferred compensation account. Distributions could also be made from the executive's 457(f) deferred compensation account upon attainment of age 65 or upon an involuntary separation. The account will be forfeited by the executive upon a voluntary separation. With respect to grandfathered participants, the Flex Plan documents define eligible employees to include the Chief Executive Officers of AdventHealth entities and Vice Presidents of all AdventHealth entities whose base salary was at least equal to the Internal Revenue Code Section 401(a)(17) compensation limit each year. FLEX Plan FLEX Plan SERP II SERP III Contr. Distr.* Contr./Distr. Contr. Johnson, Penny $ 98,468 $ 85,565 $ 245,198 $ 0 Ford, Ronny $ 0 $ 0 $ 0 $ 59,971 Rose, Kenneth $ 0 $ 0 $ 0 $ 47,599 * Including Investment Earnings

Form 990, Part VII, Section A, Line 5:

The Regional CEO, Penny Johnson, CEO, Kenneth Rose, CFO, Stephanie Nelson, CMO, Ronny Ford, and CNO, Kristen Sutton were compensated by AHSSHC, an unrelated IRC Section 501(c)(3) entity, during 2023 for services provided to the filing organization and its affiliates. Please see our response to Form 990, Part VI, Section A, Line 3 for a discussion concerning the filing organization's affiliation with AHSSHC. Compensation for Penny Johnson, Kenneth Rose, Stephanie Nelson and Kristen Sutton pertaining to the filing organization and its related affiliates, is disclosed in Schedule J, Part II. Compensation for Penny Johnson reflects compensation for services provided to the filing organization and related entities. This executive also provides services to AHHSSHC affiliates, which are unrelated, and are not reflected in this return.

Related partnerships

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

• AMH Cath Labs LLC

  Hospital · TX

• Arlington Surgery Center LLC

  Amb Surg Ctr · TX

• Castle Hills Surgicare LLC

  Amb Surg Ctr · TX

• Cleburne Surgical Center LLC

  Amb Surg Ctr · TX

• Cross Timbers Surgery Center LLC

  Amb Surg Ctr · TX

• Denton Surgery Center LLC

  Amb Surg Ctr · TX

• Flower Mound Hospital Prts LLC

  Hospital · TX

• Fort Worth Endoscopy Center LLC

  Endoscopy Center · TX

• Greenville Surgery Center LLC

  Amb Surg Ctr · TX

• Health Imaging Partners LLC

  Medical Imaging · TX

• Mansfield Endoscopy Center LLC

  Endoscopy Center · TX

• North Dallas Surgical Center LLC

  Amb Surg Ctr · TX

• Opthalmology Surgery Center of Dallas

  Amb Surg Ctr · TX

• Park Hill Surgery Center LLC

  Amb Surg Ctr · TX

• Physician Medical Center LLC

  Hospital · TX

• Presbyterian Cancer Center-Dallas LLC

  Cancer Ctr · TX

• Rockwall Regional Hospital LLC

  Hospital · TX

• South Arlington Surgical Providers LLC

  Amb Surg Ctr · TX

• Southlake Specialty Hospital LLC

  Hospital · TX

• Surgical Caregivers of Fort Worth LLC

  Amb Surg Ctr · TX

• Texas Health Craig Ranch Surgery Center LLC

  Amb Surg Ctr · TX

• Texas Health Huguley Surgery Center LLC

  Amb Surg Ctr · TX

• Texas Health Orthopedic Surgery Center Alliance LLC

  Amb Surg Ctr · TX

• Texas Health Spine Surgery Center Allen LLC

  Amb Surg Ctr · TX

• Texas Health Supply Chain Services LLC

  Purchasing Co · TX

• Texas Health Surgery Center Alliance LLC

  Amb Surg Ctr · TX

• Texas Health Surgery Center Bedford LLC

  Amb Surg Ctr · TX

• Texas Health Surgery Center Irving LLC

  Amb Surg Ctr · TX

• Texas Health Surgery Center Waxahachie LLC

  Amb Surg Ctr · TX

• Texas Health Surgery Center Willow Park LLC

  Inactive · TX

• Texas Hlth Spine Surgery Center Alliance LLC

  Amb Surg Ctr · TX

• Texas Institute for Surgery LLP

  Hospital · TX

• TH Flower Mound Orthopedic Surgery Center LLC

  Amb Surg Ctr · TX

• TH Surgery Center Chisholm Trail LLC

  Amb Surg Ctr · TX

• TH Surgery Center Forney LLC

  Inactive · TX

• TH Surgery Center Preston Plaza LLC

  Amb Surg Ctr · TX

• TH Surgery Center Rockwall LLC

  Amb Surg Ctr · TX

• TH Surgery Center SW Fort Worth LLC

  Amb Surg Ctr · TX

• THR-STT Rockwall ASC LLC

  Amb Surg Ctr · TX

• THR-STT Southlake ASC LLC

  Amb Surg Ctr · TX

• USMD Hospital at Arlington LP

  Hospital · TX

• USMD Hospital at Fort Worth LP

  Hospital Closed · TX

• Walnut Hill Surgery Center LLC

  Amb Surg Ctr · TX

• Willow Park Endoscopy Center LLC

  Amb Surg Ctr · TX

• Wilson Creek Surigcal Center LLC

  Amb Surg Ctr · TX

• Women's Specialty Surgery Center of Dallas LLC

  Amb Surg Ctr · TX

Related corporations and trusts

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

• Grace Indemnity Company SPC Ltd

  C · Captive Insurance · CJ

• Texas Health Biomedical Advancement Center Inc

  C · Research · TX