Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 1d · Related organizations

  $1,081,313

• 1f · All other contributions, gifts and grants

  $0

• 2a · Program service revenue: IT SERVICES TO USC

  total $5,855,378 · related or exempt $5,855,378

• 2b · Program service revenue: JV INVESTMENT REVENUE

  total $2,762,954 · related or exempt $2,762,954

• 3 · Investment income

  total $0

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

  total $0

• 5 · Royalties

  total $0

• 6c · Rental income or loss

  real property $0 · personal property $0

• 6d · Net rental income or loss

  total $0

• 7d · Net gain or loss

  total $0

• 8a · Fundraising events: gross income

  $0

• 8b · Fundraising events: direct expenses

  $0

• 8c · Net income from fundraising events

  total $0

• 9a · Gaming: gross income

  $0

• 9b · Gaming: direct expenses

  $0

• 9c · Net income from gaming

  total $0

• 10a · Gross sales of inventory

  $0

• 10b · Cost of goods sold

  $0

• 10c · Net income from sales of inventory

  total $0

• 11a · Other revenue: OTHER INCOME

  total $49,024 · related or exempt $49,024

• 11e · Other revenue, total

  $49,024

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $0

• 2 · Grants to domestic individuals

  total $0

• 3 · Grants to foreign organizations and individuals

  total $0

• 4 · Benefits paid to or for members

  total $0

• 5 · Compensation of officers, directors and key employees

  total $7,567,911 · management and general $7,567,911

• 6 · Compensation of disqualified persons

  total $0

• 7 · Other salaries and wages

  total $88,741,856 · program services $23,912,219 · management and general $64,829,637

• 8 · Pension plan contributions

  total $0

• 9 · Other employee benefits

  total $47,920,292 · program services $14,722,892 · management and general $33,197,400

• 10 · Payroll taxes

  total $0

• 11a · Fees: management

  total $14,839,068 · program services $406,769 · management and general $14,432,299

• 11b · Fees: legal

  total $15,827,116 · management and general $15,827,116

• 11c · Fees: accounting

  total $12,442,862 · program services $8,773,947 · management and general $3,668,915

• 11d · Fees: lobbying

  total $0

• 11e · Fees: professional fundraising services

  total $0

• 11f · Fees: investment management

  total $0

• 11g · Fees: other

  total $1,970,035 · program services $1,571,154 · management and general $398,881

• 12 · Advertising and promotion

  total $12,563,746 · program services $2,360 · management and general $12,561,386

• 13 · Office expenses

  total $860,416 · program services $11,397 · management and general $849,019

• 14 · Information technology

  total $1,743,398 · program services $492,836 · management and general $1,250,562

• 15 · Royalties

  total $0

• 16 · Occupancy

  total $2,265,779 · program services $1,346,255 · management and general $919,524

• 17 · Travel

  total $629,102 · program services $83,336 · management and general $545,766

• 18 · Travel or entertainment for public officials

  total $0

• 19 · Conferences, conventions and meetings

  total $0

• 20 · Interest

  total $0

• 21 · Payments to affiliates

  total $0

• 22 · Depreciation, depletion and amortization

  total $200,000 · program services $88,357 · management and general $111,643

• 23 · Insurance

  total -$194,976 · management and general -$194,976

• 24a · Other expenses: CORPORATE ALLOCATION

  total -$233,865,251 · program services $1,803,353 · management and general -$235,668,604

• 24b · Other expenses: PURCHASED SERVICES

  total $19,329,855 · program services $10,634,381 · management and general $8,695,474

• 24c · Other expenses: MISSION SUPPORT

  total $10,733,609 · program services $10,733,609

• 24d · Other expenses: MEDICAL SUPPLIES

  total $10,511,904 · program services $10,511,904

• 24e · All other expenses

  total $3,082,642 · program services $540,440 · management and general $2,542,202

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $0 · end of year $0

• 2 · Savings and temporary cash investments

  beginning of year $0 · end of year $0

• 3 · Pledges and grants receivable

  beginning of year $0 · end of year $0

• 4 · Accounts receivable

  beginning of year $0 · end of year $0

• 5 · Loans and receivables from officers and key people

  beginning of year $0 · end of year $0

• 6 · Loans and receivables from disqualified persons

  beginning of year $0 · end of year $0

• 7 · Other notes and loans receivable

  beginning of year $0 · end of year $0

• 8 · Inventories for sale or use

  beginning of year $1,693,586 · end of year $2,480,461

• 9 · Prepaid expenses and deferred charges

  beginning of year $9,176,889 · end of year $9,868,969

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

  $35,990,925

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

  $797,194

• 10c · Land, buildings and equipment, net

  beginning of year $14,954,824 · end of year $35,193,731

• 11 · Investments: publicly traded securities

  beginning of year $0 · end of year $0

• 12 · Investments: other securities

  beginning of year $0 · end of year $0

• 13 · Investments: program-related

  beginning of year $5,456,343 · end of year $1,615,233

• 14 · Intangible assets

  beginning of year $0 · end of year $0

• 15 · Other assets

  beginning of year $132,999,261 · end of year $111,749,771

• 17 · Accounts payable and accrued expenses

  beginning of year $84,399,201 · end of year $93,068,155

• 18 · Grants payable

  beginning of year $0 · end of year $0

• 19 · Deferred revenue

  beginning of year $0 · end of year $0

• 20 · Tax-exempt bond liabilities

  beginning of year $0 · end of year $0

• 21 · Escrow or custodial account liability

  beginning of year $0 · end of year $0

• 22 · Loans and payables to officers and key people

  beginning of year $0 · end of year $0

• 23 · Secured mortgages and notes payable

  beginning of year $0 · end of year $0

• 24 · Unsecured notes and loans payable

  beginning of year $0 · end of year $0

• 25 · Other liabilities

  beginning of year $537,117,548 · end of year $610,977,558

• 27 · Net assets without donor restrictions

  beginning of year -$520,215,797 · end of year -$548,298,653

• 28 · Net assets with donor restrictions

  beginning of year $62,979,951 · end of year $5,161,105

The filer's explanations (Part III)

SCHEDULE J, PART I, LINE 3:

THE ORGANIZATION RELIES ON THE UNIVERSITY OF SOUTHERN CALIFORNIA (USC), A RELATED ORGANIZATION, TO ESTABLISH THE COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. THE COMPENSATION IS DETERMINED ANNUALLY USING THE SAFE HARBOR PROCESS DESCRIBED IN TREASURY REGULATION SECTION 53.4958-6. NAMELY, A COMMITTEE OF THE USC'S BOARD OF DIRECTORS TAKES THE FOLLOWING THREE STEPS: (1) IT ENSURES THAT NO MEMBER OF THE COMMITTEE HAS A CONFLICT OF INTEREST WITH RESPECT TO THE COMPENSATION ARRANGEMENT BEING REVIEWED, (2) IT LOOKS TO COMPARABILITY DATA AND SPECIALIZED COMPENSATION REPORTS (AND IN SOME CASES OPINIONS) PREPARED FOR USC BY COMPENSATION CONSULTANTS WITH RESPECT TO SIMILARLY QUALIFIED INDIVIDUALS IN COMPARABLE POSITIONS AT SIMILARLY SITUATED HEALTHCARE ORGANIZATIONS, AND (3) IT MAINTAINS A CONTEMPORANEOUS RECORD OF ITS DELIBERATIONS AND DECISIONS.

SCHEDULE J, PART I, LINE 4B:

CAROL FOLT: DURING THE CALENDAR YEAR THE PRESIDENT PARTICIPATED IN TWO RETENTION PROGRAMS. UNDER THE FIRST PLAN, A PAYMENT OF $2,000,000 (ACCRUING AT $666,667 PER FISCAL YEAR, PLUS INTEREST, BEGINNING ON JULY 1, 2021, SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE) IS SCHEDULED TO VEST IN 2024 AND BE PAYABLE BETWEEN VESTING DATE AND MARCH 2025. A RATABLE ACCRUAL OF $666,667 FROM CALENDAR YEAR 2023 IS INCLUDED IN SCHEDULE J, PART II, COLUMN (C). UNDER THE SECOND PLAN, 10% OF THE PRESIDENT'S COMBINED BASE SALARY AND BONUS LESS THE PRESIDENT'S SECTION 401(A) CONTRIBUTION FOR THE YEAR IS DEFERRED SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE, AND IS SCHEDULED TO VEST IN 2024 AND BE PAYABLE BETWEEN VESTING DATE AND MARCH 2025. THE PLAN WAS EFFECTIVE STARTING IN DECEMBER 2021. A RATABLE ACCRUAL OF $252,000 FROM CALENDAR YEAR 2023 IS INCLUDED IN SCHEDULE J, PART II, COLUMN (C). ERIK BRINK: UNDER HIS EMPLOYMENT AGREEMENT EFFECTIVE SEPTEMBER 13, 2023, THE CFO WAS ENTITLED TO A SIGNING BONUS OF $250,000 (ACCRUING AT $125,000 PER YEAR) SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE, WHICH IS SCHEDULED TO VEST AND BE PAYABLE IN 2025. FOR CALENDAR YEAR 2023 A RATABLE ACCRUAL OF $36,458 HAS BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN (C). BEONG-SOO KIM: DURING CALENDAR YEAR 2023, SENIOR VICE PRESIDENT & GENERAL COUNSEL AT THE UNIVERSITY OF SOUTHERN CALIFORNIA, PARTICIPATED IN A RETENTION PROGRAM. A PAYMENT OF $1,000,000 (ACCRUING AT $200,000 PER YEAR) IS SCHEDULED TO VEST AND BE PAYABLE IN 2026 SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE. AN ACCRUAL OF $200,000 HAS BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN (C). STEVEN D. SHAPIRO, MD: UNDER HIS EMPLOYMENT AGREEMENT, THE SENIOR VICE PRESIDENT OF HEALTH AFFAIRS WAS ELIGIBLE FOR A DEFERRED BONUS. DURING CALENDAR YEAR 2023 HE WAS ELIGIBLE TO RECEIVE A PAYMENT IN THE GREATER AMOUNT OF $750,000 OR BASED ON PERFORMANCE METRICS. A PAYMENT OF $1,000,000 WAS PAID OUT IN CALENDAR YEAR 2023 AND HAS BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN B(II). HE ALSO PARTICIPATED IN A RETENTION BONUS PLAN IN WHICH A PAYMENT OF $1,000,000 (ACCRUING AT $200,000 PER YEAR) IS SCHEDULED TO VEST AND BE PAYABLE IN 2026 SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE. AN ACCRUAL OF $200,000 HAS BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN (C). ROD HANNERS: DURING CALENDAR YEAR 2023, CEO OF KECK MEDICINE OF USC, PARTICIPATED IN A RETENTION PROGRAM. THE RETENTION AWARD WAS SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE. A PAYMENT OF $250,000 VESTED ON DECEMBER 31, 2022 AND WAS PAID IN JANUARY 2023. THE PAYMENT AMOUNT HAS BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN (B)(II). OTHER: IN 1994 USC CREATED A 457(F) SUPPLEMENTAL RETIREMENT PLAN TO PROVIDE MAKE-UP BENEFITS TO EMPLOYEES WHOSE COMPENSATION EXCEEDS THE EARNINGS LIMITATION FOR CONTRIBUTIONS TO THE USC DEFINED CONTRIBUTION RETIREMENT PLAN. AS OF JANUARY 1, 2005, THE PLAN WAS FROZEN AND PARTICIPANTS, WITH RESPECT TO FUTURE MAKE UP BENEFITS, WERE NO LONGER PERMITTED TO DEFER THESE BENEFITS.

SCHEDULE J, PART II:

DURING 2023, THE INDIVIDUALS REPORTED ON SCHEDULE J, PART II WERE PAID BY THE UNIVERSITY OF SOUTHERN CALIFORNIA ("USC"), A RELATED ORGANIZATION. CERTAIN DIRECTORS OF USC HEALTH SYSTEM ARE FULL-TIME EMPLOYEES OF THE USC ADMINISTRATION. THESE INDIVIDUALS ARE NOT COMPENSATED FOR THEIR ROLE AS DIRECTORS OF USC HEALTH SYSTEM. FOR PURPOSES OF FORM 990 REPORTING, A COMMON LAW EMPLOYEE ANALYSIS HAS BEEN COMPLETED BY THE FILING ORGANIZATION TO DETERMINE ITS KEY EMPLOYEES AND HIGHEST COMPENSATED EMPLOYEES.

Related partnerships

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

• HM FUND II

  INVESTMENTS · NY

  Directly controlled by USC

• STRIPES V MEADOWS CO-INVEST LP

  INVESTMENTS · NY

  Directly controlled by USC

• CHATEAU LATOUR SPVI LLC

  INVESTMENTS · CA

  Directly controlled by USC

• RF-PUMA CO-INVEST LP

  INVESTMENTS · TN

  Directly controlled by USC

Related corporations and trusts

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

• MAY ROBERTS DEWRIGHT TRUST

  T · USC SUPPORT · CA · controlled entity

  Directly controlled by NA

• INTEGRATED DIGITAL ASSET CORPORATION

  C · 3RD PARTY CON · CA · controlled entity

  Directly controlled by NA

• CHARITABLE REMAINDER TRUST (346)

  T · FUNDRAISING · CA · controlled entity

  Directly controlled by NA

• POOLED INCOME FUND (1)

  T · FUNDRAISING · CA · controlled entity

  Directly controlled by NA

• CHARITABLE REMAINDER TRUST (1)

  T · INVESTMENT · CA · controlled entity

  Directly controlled by USCAHF