Form 8868 Application for Automatic Extension of Time To File an (Rev. January 2017) Exempt Organization Return OMB No. 1545‐1709 | File a separate application for each return. Department of the Treasury Internal Revenue Service | Information about Form 8868 and its instructions is at www.irs.gov/form8868 .

Electronic filing (e‐file). You can electronically file Form 8868 to request a 6‐month automatic extension of time to file any of the forms listed below with the exception of Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts, for which an extension request must be sent to the IRS in paper format (see instructions). For more details on the electronic filing of this form, visit www.irs.gov/efile, click on Charities & Non‐Profits, and click on e‐file for Charities and Non‐Profits. Automatic 6‐Month Extension of Time. Only submit original (no copies needed). All corporations required to file an income tax return other than Form 990‐T (including 1120‐C filers), partnerships, REMICs, and trusts must use Form 7004 to request an extension of time to file income tax returns. Enter filer's identifying number Type or Name of exempt organization or other filer, see instructions. Employer identification number (EIN) or print NOVANT HEALTH, INC. 56‐1376950 File by the due date for Number, street, and room or suite no. If a P.O. box, see instructions. Social security number (SSN) filing your 2085 FRONTIS PLAZA BLVD return. See instructions. City, town or post office, state, and ZIP code. For a foreign address, see instructions. WINSTON SALEM, NC 27103 Enter the Return Code for the return that this application is for (file a separate application for each return)  0 1 Application Return Application Return Is For Code Is For Code Form 990 or Form 990‐EZ 01 Form 990‐T (corporation) 07 Form 990‐BL 02 Form 1041‐A 08 Form 4720 (individual) 03 Form 4720 (other than individual) 09 Form 990‐PF 04 Form 5227 10 Form 990‐T (sec. 401(a) or 408(a) trust) 05 Form 6069 11 Form 990‐T (trust other than above) 06 Form 8870 12 KAREN DAUGHERTY ¥ The books are in the care of | 2085 FRONTIS PLAZA BLVD ‐ WINSTON SALEM, NC 27103 Telephone No. | 336‐718‐2803 Fax No. | ¥ If the organization does not have an office or place of business in the United States, check this box~~~~~~~~~~~~~~~~~ | ¥ If this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) . If this is for the whole group, check this box | . If it is for part of the group, check this box | and attach a list with the names and EINs of all members the extension is for. 1 I request an automatic 6‐month extension of time until NOVEMBER 15, 2018 , to file the exempt organization return for the organization named above. The extension is for the organization's return for:

| X calendar year 2017 or | tax year beginning , and ending . 2 If the tax year entered in line 1 is for less than 12 months, check reason: Initial return Final return Change in accounting period 3a If this application is for Forms 990‐BL, 990‐PF, 990‐T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions. 3a $ 0. b If this application is for Forms 990‐PF, 990‐T, 4720, or 6069, enter any refundable credits and estimated tax payments made. Include any prior year overpayment allowed as a credit. 3b $ 0. c Balance due. Subtract line 3b from line 3a. Include your payment with this form, if required, by using EFTPS (Electronic Federal Tax Payment System). See instructions. 3c $ 0. Caution: If you are going to make an electronic funds withdrawal (direct debit) with this Form 8868, see Form 8453‐EO and Form 8879‐EO for payment instructions. LHA For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 8868 (Rev. 1‐2017)

723841 04‐01‐17 265 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 2 Part III Statement of Program Service Accomplishments Check if Schedule O contains a response or note to any line in this Part III  X 1 Briefly describe the organization's mission: NOVANT HEALTH EXISTS TO IMPROVE THE HEALTH OF COMMUNITIES, ONE PERSON AT A TIME. SEE SCHEDULE O

2 Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990‐EZ? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes X No If "Yes," describe these new services on Schedule O. 3 Did the organization cease conducting, or make significant changes in how it conducts, any program services?~~~~~~ Yes X No If "Yes," describe these changes on Schedule O. 4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. 4a (Code: ) (Expenses $ 585,035,168. including grants of $ 864,821. ) (Revenue $ 608,829,304. ) NOVANT HEALTH, INC. IS THE PARENT ORGANIZATION OF A NOT‐FOR‐PROFIT INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS, AND OTHER HEALTHCARE SERVICE PROVIDERS (COLLECTIVELY KNOWN AS "NOVANT HEALTH"). NOVANT HEALTH CONSISTS OF MORE THAN 1,500 PHYSICIANS AND OVER 28,000 EMPLOYEES WHO MAKE HEALTHCARE REMARKABLE AT OVER 580 LOCATIONS, INCLUDING 14 MEDICAL CENTERS AND HUNDREDS OF OUTPATIENT FACILITIES AND PHYSICIAN CLINICS. HEADQUARTERED IN WINSTON‐SALEM, NC, NOVANT HEALTH IS COMMITTED TO MAKING HEALTHCARE REMARKABLE FOR PATIENTS AND COMMUNITIES, SERVING MORE THAN 4.7 MILLION PATIENTS ANNUALLY.

4b (Code: ) (Expenses $ 81,288,767. including grants of $ ) (Revenue $ 90,139,428. ) BRUNSWICK COMMUNITY HOSPITAL, LLC (BCH) DBA NOVANT HEALTH BRUNSWICK MEDICAL CENTER, IS A SINGLE MEMBER LLC IN WHICH NOVANT IS THE SOLE MEMBER. BCH EXISTS TO PROMOTE THE HEALTH OF THE INHABITANTS OF THE BRUNSWICK COUNTY AREA OF NC, REGARDLESS OF THE PATIENT'S ABILITY TO PAY. DURING 2017, BCH HAD 74 LICENSED BEDS. THERE WERE 15,141 PATIENT DAYS, WITH AN AVERAGE LENGTH OF STAY OF 3 DAYS, AND AN AVERAGE DAILY CENSUS OF 41. THERE WERE 4,477 DISCHARGES, 73,227 INPATIENT AND OUTPATIENT ENCOUNTERS, AND 32,758 EMERGENCY DEPARTMENT VISITS.

4c (Code: ) (Expenses $ 20,080,972. including grants of $ ) (Revenue $ 22,986,037. ) THE HOLDING COMPANY FOR NOVANT'S AMBULATORY SERVICES, PRESBYTERIAN AMBULATORY HOLDINGS, LLC, IS A SINGLE MEMBER LLC HELD BY NOVANT HEALTH SOUTHERN PIEDMONT REGION, LLC, A SINGLE MEMBER LLC IN WHICH NOVANT HEALTH IS THE SOLE MEMBER. THE AMBULATORY CENTERS' OPERATIONS SERVE THE COMMUNITY BY PROVIDING ACCESS TO MUCH NEEDED HEALTHCARE SERVICES, REGARDLESS OF THE PATIENT'S ABILITY TO PAY. DURING 2017, THERE WERE 57,254 OUTPATIENT ENCOUNTERS.

4d Other program services (Describe in Schedule O.) (Expenses $ including grants of $ ) (Revenue $ ) 4e Total program service expenses | 686,404,907. Form 990 (2017) 732002 11‐28‐17 2 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 3 Part IV Checklist of Required Schedules Yes No 1 Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If "Yes," complete Schedule A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 X 2 Is the organization required to complete Schedule B, Schedule of Contributors? ~~~~~~~~~~~~~~~~~~~~~~ 2 X 3 Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If "Yes," complete Schedule C, Part I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 X 4 Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If "Yes," complete Schedule C, Part II ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4 X 5 Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98‐19? If "Yes," complete Schedule C, Part III ~~~~~~~~~~~~~~ 5 X 6 Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D, Part I 6 X 7 Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? If "Yes," complete Schedule D, Part II~~~~~~~~~~~~~~ 7 X 8 Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete Schedule D, Part III ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 8 X 9 Did the organization report an amount in Part X, line 21, for escrow or custodial account liability, serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 9 X 10 Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi‐endowments? If "Yes," complete Schedule D, Part V ~~~~~~~~~~~~~~~~~~~~~~~~ 10 X 11 If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable. a Did the organization report an amount for land, buildings, and equipment in Part X, line 10? If "Yes," complete Schedule D, Part VI ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 11a X b Did the organization report an amount for investments ‐ other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VII ~~~~~~~~~~~~~~~~~~~~~~~~~ 11b X c Did the organization report an amount for investments ‐ program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VIII ~~~~~~~~~~~~~~~~~~~~~~~~~ 11c X d Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part IX ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 11d X e Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, Part X ~~~~~~ 11e X f Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes," complete Schedule D, Part X ~~~~ 11f X 12a Did the organization obtain separate, independent audited financial statements for the tax year? If "Yes," complete Schedule D, Parts XI and XII ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 12a X b Was the organization included in consolidated, independent audited financial statements for the tax year? If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional ~~~~~ 12b X 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If "Yes," complete Schedule E ~~~~~~~~~~~~~~ 13 X 14a Did the organization maintain an office, employees, or agents outside of the United States? ~~~~~~~~~~~~~~~~ 14a X b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If "Yes," complete Schedule F, Parts I and IV ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 14b X 15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If "Yes," complete Schedule F, Parts II and IV ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 15 X 16 Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If "Yes," complete Schedule F, Parts III and IV ~~~~~~~~~~~~~~~~~~~~~~~~~~ 16 X 17 Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If "Yes," complete Schedule G, Part I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 17 X 18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If "Yes," complete Schedule G, Part II ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 18 X 19 Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If "Yes," complete Schedule G, Part III  19 X Form 990 (2017)

732003 11‐28‐17 3 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 4 Part IV Checklist of Required Schedules (continued) Yes No 20a Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H ~~~~~~~~~~~~~~~~ 20a X b If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return? ~~~~~~~~~~ 20b X 21 Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic government on Part IX, column (A), line 1? If "Yes," complete Schedule I, Parts I and II ~~~~~~~~~~~~~~ 21 X 22 Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? If "Yes," complete Schedule I, Parts I and III ~~~~~~~~~~~~~~~~~~~~~~~~~~ 22 X 23 Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about compensation of the organization's current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule J ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 23 X 24a Did the organization have a tax‐exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If "Yes," answer lines 24b through 24d and complete Schedule K. If "No", go to line 25a ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 24a X b Did the organization invest any proceeds of tax‐exempt bonds beyond a temporary period exception? ~~~~~~~~~~~ 24b X c Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax‐exempt bonds? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 24c X d Did the organization act as an "on behalf of" issuer for bonds outstanding at any time during the year?~~~~~~~~~~~ 24d X 25a Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," complete Schedule L, Part I ~~~~~~~~~~~~~~~~ 25a X b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization's prior Forms 990 or 990‐EZ? If "Yes," complete Schedule L, Part I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 25b X 26 Did the organization report any amount on Part X, line 5, 6, or 22 for receivables from or payables to any current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons? If "Yes," complete Schedule L, Part II ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 26 X 27 Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? If "Yes," complete Schedule L, Part III ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 27 X 28 Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions): a A current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV ~~~~~~~~~~~ 28a X b A family member of a current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV ~~ 28b X c An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or direct or indirect owner? If "Yes," complete Schedule L, Part IV~~~~~~~~~~~~~~~~~~~~~ 28c X 29 Did the organization receive more than $25,000 in non‐cash contributions? If "Yes," complete Schedule M ~~~~~~~~~ 29 X 30 Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If "Yes," complete Schedule M ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 30 X 31 Did the organization liquidate, terminate, or dissolve and cease operations? If "Yes," complete Schedule N, Part I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 31 X 32 Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete Schedule N, Part II ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 32 X 33 Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701‐2 and 301.7701‐3? If "Yes," complete Schedule R, Part I ~~~~~~~~~~~~~~~~~~~~~~~~ 33 X 34 Was the organization related to any tax‐exempt or taxable entity? If "Yes," complete Schedule R, Part II, III, or IV, and Part V, line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 34 X 35a Did the organization have a controlled entity within the meaning of section 512(b)(13)? ~~~~~~~~~~~~~~~~~~ 35a X b If "Yes" to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2 ~~~~~~~~~~~~~~~~~~~ 35b X 36 Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non‐charitable related organization? If "Yes," complete Schedule R, Part V, line 2 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 36 X 37 Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If "Yes," complete Schedule R, Part VI ~~~~~~~~ 37 X 38 Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11b and 19? Note. All Form 990 filers are required to complete Schedule O  38 X Form 990 (2017)

732004 11‐28‐17 4 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 5 Part V Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V  Yes No 1a Enter the number reported in Box 3 of Form 1096. Enter ‐0‐ if not applicable ~~~~~~~~~~~ 1a 2327 b Enter the number of Forms W‐2G included in line 1a. Enter ‐0‐ if not applicable ~~~~~~~~~~ 1b 0 c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners?  1c X 2a Enter the number of employees reported on Form W‐3, Transmittal of Wage and Tax Statements, filed for the calendar year ending with or within the year covered by this return ~~~~~~~~~~ 2a 5298 b If at least one is reported on line 2a, did the organization file all required federal employment tax returns?~~~~~~~~~~ 2b X Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e‐file (see instructions) ~~~~~~~~~~~ 3a Did the organization have unrelated business gross income of $1,000 or more during the year? ~~~~~~~~~~~~~~ 3a X b If "Yes," has it filed a Form 990‐T for this year? If "No," to line 3b, provide an explanation in Schedule O ~~~~~~~~~~ 3b X 4a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)?~~~~~~~ 4a X b If "Yes," enter the name of the foreign country: J BERMUDA, UNITED KINGDOM See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). 5a Was the organization a party to a prohibited tax shelter transaction at any time during the tax year? ~~~~~~~~~~~~ 5a X b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction?~~~~~~~~~ 5b X c If "Yes," to line 5a or 5b, did the organization file Form 8886‐T? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5c 6a Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions? ~~~~~~~~~~~~~~~~~~~~~~~~ 6a X b If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6b 7 Organizations that may receive deductible contributions under section 170(c). a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? 7a X b If "Yes," did the organization notify the donor of the value of the goods or services provided? ~~~~~~~~~~~~~~~ 7b c Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282?  7c X d If "Yes," indicate the number of Forms 8282 filed during the year ~~~~~~~~~~~~~~~~ 7d e Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? ~~~~~~~ 7e X f Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? ~~~~~~~~~ 7f X g If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?~ 7g h If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098‐C? 7h 8 Sponsoring organizations maintaining donor advised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? ~~~~~~~~~~~~~~~~~~~ 8 9 Sponsoring organizations maintaining donor advised funds. a Did the sponsoring organization make any taxable distributions under section 4966? ~~~~~~~~~~~~~~~~~~~ 9a b Did the sponsoring organization make a distribution to a donor, donor advisor, or related person? ~~~~~~~~~~~~~ 9b 10 Section 501(c)(7) organizations. Enter: a Initiation fees and capital contributions included on Part VIII, line 12 ~~~~~~~~~~~~~~~ 10a b Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities ~~~~~~ 10b 11 Section 501(c)(12) organizations. Enter: a Gross income from members or shareholders ~~~~~~~~~~~~~~~~~~~~~~~~~~ 11a b Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 11b 12a Section 4947(a)(1) non‐exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041? 12a b If "Yes," enter the amount of tax‐exempt interest received or accrued during the year  12b 13 Section 501(c)(29) qualified nonprofit health insurance issuers. a Is the organization licensed to issue qualified health plans in more than one state? ~~~~~~~~~~~~~~~~~~~~~ 13a Note. See the instructions for additional information the organization must report on Schedule O. b Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans ~~~~~~~~~~~~~~~~~~~~~~ 13b c Enter the amount of reserves on hand ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 13c 14a Did the organization receive any payments for indoor tanning services during the tax year? ~~~~~~~~~~~~~~~~ 14a X b If "Yes," has it filed a Form 720 to report these payments? If "No," provide an explanation in Schedule O  14b Form 990 (2017)

732005 11‐28‐17 5 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 6 Part VI Governance, Management, and Disclosure For each "Yes" response to lines 2 through 7b below, and for a "No" response to line 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions. Check if Schedule O contains a response or note to any line in this Part VI  X Section A. Governing Body and Management Yes No 1a Enter the number of voting members of the governing body at the end of the tax year ~~~~~~ 1a 12 If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O. b Enter the number of voting members included in line 1a, above, who are independent ~~~~~~ 1b 11 2 Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 X 3 Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors, or trustees, or key employees to a management company or other person? ~~~~~~~~~~~~~~ 3 X 4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? ~~~~~ 4 X 5 Did the organization become aware during the year of a significant diversion of the organization's assets? ~~~~~~~~~ 5 X 6 Did the organization have members or stockholders? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6 X 7a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7a X b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7b X 8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following: a The governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 8a X b Each committee with authority to act on behalf of the governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~ 8b X 9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization's mailing address? If "Yes," provide the names and addresses in Schedule O  9 X Section B. Policies (This Section B requests information about policies not required by the Internal Revenue Code.) Yes No 10a Did the organization have local chapters, branches, or affiliates?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 10a X b If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? ~~~~~~~~~~~~~ 10b 11a Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? 11a X b Describe in Schedule O the process, if any, used by the organization to review this Form 990. 12a Did the organization have a written conflict of interest policy? If "No," go to line 13 ~~~~~~~~~~~~~~~~~~~~ 12a X b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? ~~~~~~ 12b X c Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe in Schedule O how this was done ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 12c X 13 Did the organization have a written whistleblower policy? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 13 X 14 Did the organization have a written document retention and destruction policy? ~~~~~~~~~~~~~~~~~~~~~~ 14 X 15 Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision? a The organization's CEO, Executive Director, or top management official ~~~~~~~~~~~~~~~~~~~~~~~~~~ 15a X b Other officers or key employees of the organization ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 15b X If "Yes" to line 15a or 15b, describe the process in Schedule O (see instructions). 16a Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 16a X b If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization's exempt status with respect to such arrangements?  16b X Section C. Disclosure 17 List the states with which a copy of this Form 990 is required to be filed JAZ,CA,VA,AL,IN,OK 18 Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990‐T (Section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. X Own website Another's website X Upon request Other (explain in Schedule O) 19 Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. 20 State the name, address, and telephone number of the person who possesses the organization's books and records: | KAREN DAUGHERTY ‐ 336‐718‐2803 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 732006 11‐28‐17 Form 990 (2017) 6 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 732007 11‐28‐17 EVP CHIEFDIV &INCLOFFICER (17) BLACKMON, TANYA FORMER SVPCLINICALIMPROVEMENT (16) BEST,DIANA ASST SEC (15) WALSH,BETSY ASST SEC (14) MORRIS,JOHN EVP &CHIEFFINANCIALOFFICER (13) HARGETT,FRED CEO &PRESIDENTNOVANTHEALTH (12) ARMATO,CARL TRUSTEE (11) STONE,LARRY CHAIR (10) STOLZ,ROBERT SEC/TREAS (9) SCHULTE,LAURA TRUSTEE (8) PLYER,DAVID VICE CHAIR (7) PHILLIPS,GEORGEPATRICK TRUSTEE (6) NEILL,THOMAS TRUSTEE (5) MURPHY,DANIELMD TRUSTEE (4) LYLES,VIOLA TRUSTEE (3) BELDEN,RICHARD TRUSTEE (2) BARR,ROBERT TRUSTEE (1) ALLY,DEBORAH and formersuchpersons. List personsinthefollowingorder:individualtrusteesordirectors;institutionaltrustees;officers;keyemployees;highestcompensated more than$10,000ofreportablecompensationfromtheorganizationandanyrelatedorganizations. reportable compensationfromtheorganizationandanyrelatedorganizations. able compensation(Box5ofFormW‐2and/orBox71099‐MISC)morethan$100,000fromtheorganizationandanyrelatedorganizations. Enter ‐0‐incolumns(D),(E),and(F)ifnocompensationwaspaid. 1a Section A. Form 990(2017) Part VII Complete thistableforallpersonsrequiredtobelisted.Reportcompensationthecalendaryearendingwithorwithinorganization'staxyear. ¥ Listalloftheorganization's ¥ Listalloftheorganization's ¥ Listtheorganization'sfive ¥ Listalloftheorganization's ¥ Listalloftheorganization's Check thisboxifneithertheorganizationnoranyrelatedcompensatedcurrentofficer,director,ortrustee. Check ifScheduleOcontainsaresponseornotetoanylineinthisPartVII Employees, andIndependentContractors Compensation ofOfficers,Directors,Trustees,KeyEmployees,HighestCompensated Officers, Directors,Trustees,KeyEmployees,andHighestCompensatedEmployees Name andTitle (A) NOVANT HEALTH,INC. current former directorsortrustees former current current highestcompensatedemployees(otherthananofficer,director,trustee,orkeyemployee)whoreceivedreport‐ officers, keyemployees,andhighestcompensatedemployeeswhoreceivedmorethan$100,000of key employees,ifany.Seeinstructionsfordefinitionof"keyemployee." officers, directors,trustees(whetherindividualsororganizations),regardlessofamountcompensation. organizations hours per hours for Average 60.00 60.00 60.00 60.00 (list any related below week 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 line) (B) that received,inthecapacityasaformerdirectorortrusteeoforganization, box, unlesspersonisbothan X X X X X X X X X X X X officer andadirector/trustee) Individual trustee or director (do notcheckmorethanone

Institutional trustee Position X X X X X X X

Officer (C) X X

7 Key employee Highest compensated employee Former  (W‐2/1099‐MISC) 1,893,766. 3,311,074. compensation organization Reportable 539,669. 706,608. 320,949. 346,362. from the (D) 375. 445. 375. 375. 375. 375. 0. 0. 0. 0. 0. (W‐2/1099‐MISC) compensation organizations from related Reportable 56‐1376950 (E) 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. Form compensation 136,628. 105,159. organizations organization and related amount of 70,785. 90,622. 88,122. 97,312. Estimated from the

other 990 (F) Page

(2017)

0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. X 7 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 732008 11‐28‐17 4022 SELLSDRIVE, HERMITAGE,TN37076 DELOITTE CONSULTING LLP PO BOX911299,DALLAS, TX75391 BBDO ATLANTA PO BOX4869DEPT#145,HOUSTON,TX 77210 ARROW SYSTEMSINTEGRATION PO BOX88314,MILWAUKEE,WI53288 EPIC SYSTEMSCORPORATION PO BOX635,JEFFERSON,NC28640 VANNOY CONSTRUCTION EVP &CHIEFOPERATINGOFFICER (26) LINDSAY,JEFFERY SVP INTEGR&OPEREXCELLENCE (25) LANGFORD,KATHRYN SVP FINANCIALPLAN&ANALYSIS (24) GRIFFIN,JON SVP CHIEFINFOOFFICER (23) GARRETT,DAVID SVP COMMWELLNESS&EDUCATION (22) GARMON-BROWN,OPHELIAMD SVP NERUOSCIENCE (21) ESKIOGLU,ERICMD EVP &CHIEFCONSUMEROFFICER (20) CURETON,JESSE SVP BUSINESSSTRAT&INNOVATION (19) COOK,DAVIDMD EVP &CHIEFLEGALOFFICER (18) BRUNSTETTER,PETER Form 990(2017) Part VII Section B.IndependentContractors 2 1 5 4 3 2 1 d c b $100,000 ofcompensation fromtheorganization Total numberofindependentcontractors (includingbutnotlimitedtothoselistedabove)whoreceived morethan the organization.Reportcompensationforcalendaryearending withorwithintheorganization'staxyear. Complete thistableforyourfivehighestcompensatedindependent contractorsthatreceivedmorethan$100,000ofcompensationfrom rendered totheorganization? Did anypersonlistedonline1areceiveoraccruecompensationfromunrelatedorganizationindividualforservices and relatedorganizationsgreaterthan$150,000? For anyindividuallistedonline1a,isthesumofreportablecompensationandotherfromorganization line 1a? Did theorganizationlistany compensation fromtheorganization Total numberofindividuals(includingbutnotlimitedtothoselistedabove)whoreceivedmorethan$100,000reportable Total (addlines1band1c) Total fromcontinuationsheetstoPartVII,SectionA Sub‐total SEE PART VII, SECTIONACONTINUATION SHEETS Section A.Officers,Directors,Trustees,KeyEmployees,andHighestCompensatedEmployees If "Yes,"completeScheduleJforsuchindividual ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Name andtitle (A) Name andbusinessaddress NOVANT HEALTH,INC.  former If "Yes,"completeScheduleJforsuchperson (A) officer, director,ortrustee,keyemployee,highestcompensatedemployeeon | organizations hours per hours for Average 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 (list any related below week line) (B) If "Yes,"completeScheduleJforsuchindividual | ~~~~~~~~~~ box, unlesspersonisbothan ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ officer andadirector/trustee) Individual trustee or director (do notcheckmorethanone

Institutional trustee Position

Officer (C) 177 X X X X X X X X X

8 Key employee Highest compensated

 employee | | | Former CONSULTING ADVERTISING CONSULTING IT CONSULTING SERVICES CONSTRUCTION 31,702,949. 15,246,395. 16,456,554. 1,168,217. 1,296,086. (W‐2/1099‐MISC) 1,780,027. compensation organization Reportable 897,145. 881,545. 850,044. 966,512. 781,422. 714,808. Description ofservices from the (D) ~~~~~~~~~~~~~ (B) 1,952,290. 1,952,290. (W‐2/1099‐MISC) (continued) compensation organizations from related Reportable 56‐1376950 (E) 0. 0. 0. 0. 0. 0. 55,970,906. 0. 0. 0. 0. 3,250,706. 3,522,944. 3,613,243. 5,322,766. Compensation Form compensation 143,518. 155,292. 214,762. 227,485. 168,940. 196,431. organizations 5 4 3 organization and related amount of 89,691. 95,914. 76,438. Estimated (C) 4,411,939. 2,454,840. 1,957,099. from the

990 other Yes (F) X X Page (2017) 720 No X 8 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 04‐01‐17 732201 Total toPartVII,SectionA,line1c FORMER SVPNHHEART&VASCULAR (46) ALUKO,AKINYELEMD FORMER EVP&CHIEFADMINOFFICER (45) DANIELS,JACQUELINE FORMER SVP (44) VINCENT,PAULA SVP REALESTATE&CONSTRUCTION (43) PARK,DAVID SVP WOMEN'SSERVICES (42) GREGORY,CHEREMD VP CLINICALIMPROVEMENT (41) GARDELLA,JOHNMD SVP POPULATIONHEALTHMGMT (40) VANCE,AMY SVP POPULATIONHEALTH&VBC (39) SCOTT,BERTRAM SVP CORPORATEFINANCE (38) MYERS,SCOTT SVP CANCER (37) LIMENTANI,STEVENMD SVP &CHIEFHUMANEXPOFFICER (36) JENIKE,THOMASMD EVP &CHIEFMEDICALOFFICER (35) ZWENG,THOMASMD SVP PHYSICIANSERVICES (34) WOOLLEN,THOMASMD EVP &CHIEFHROFFICER (33) SMITH-HILL,JANET SVP HOSPITALOPERATIONS (32) SMITH,HARRY SVP BUSINESSDEV&SALES (31) SEEHAUSEN,ROBERT EVP &PRESIDENTNHMG (30) PHIPPS,JOHNMD SVP &CHIEFMEDINFOOFF (29) PATEFIELD,ARTHURMD SVP &CHIEFINVESTOFF (28) MORGAN,WAYNE EVP CHIEFNUR&CLINOPSOFF (27) MIHAL,DENISE Form 990 Part VII Section A. Name andtitle (A) Officers, Directors,Trustees,KeyEmployees,andHighestCompensatedEmployees NOVANT HEALTH,INC.  organizations hours for Average 60.00 60.00 40.00 40.00 40.00 40.00 40.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 (list any related below hours week 0.00 0.00 0.00 line) per (B)

Individual trustee or director (check allthatapply)

Institutional trustee Position

Officer (C) X X X X X X X X X

9 Key employee X X X X X Highest compensated employee X X X X X X Former 1,092,392. 1,327,983. (W‐2/1099‐MISC) 1,191,906. compensation organization Reportable 800,776. 753,675. 757,705. 626,819. 955,528. 597,252. 646,953. 538,787. 658,255. 679,921. 702,082. 690,900. 684,823. 718,887. 880,996. from the (D) 0. 0. 1,225,463. (W‐2/1099‐MISC) compensation organizations (continued) from related Reportable 726,827. (E) 56‐1376950 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. compensation 125,367. 133,491. 140,927. 141,799. 226,293. 165,704. 188,616. 194,938. 101,023. 211,096. 164,454. organizations organization and related amount of 41,139. 83,809. 86,474. 68,837. 68,753. 35,873. 96,427. 84,429. Estimated from the other (F) 0. 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 04‐01‐17 732201 Total toPartVII,SectionA,line1c FORMER SVP (47) ROBSON,MELISSA Form 990 Part VII Section A. Name andtitle (A) Officers, Directors,Trustees,KeyEmployees,andHighestCompensatedEmployees NOVANT HEALTH,INC.  organizations hours for Average 60.00 (list any related below hours week line) per (B)

Individual trustee or director (check allthatapply)

Institutional trustee Position

Officer (C)

10 Key employee

Highest compensated employee X Former 15,246,395. (W‐2/1099‐MISC) compensation organization Reportable 940,755. from the (D) 1,952,290. (W‐2/1099‐MISC) compensation organizations (continued) from related Reportable (E) 56‐1376950 0. 2,454,840. compensation organizations organization and related amount of 95,391. Estimated from the other (F) Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 9 Part VIII Statement of Revenue Check if Schedule O contains a response or note to any line in this Part VIII  (A) (B) (C) (D) Related or Unrelated Revenue excluded Total revenue from tax under exempt function business sections revenue revenue 512 ‐ 514 1 a Federated campaigns ~~~~~~ 1a b Membership dues ~~~~~~~~ 1b c Fundraising events ~~~~~~~~ 1c d Related organizations ~~~~~~ 1d 16,594. e Government grants (contributions) 1e 1,454,495. f All other contributions, gifts, grants, and similar amounts not included above ~~ 1f g Noncash contributions included in lines 1a‐1f: $ 15,509. and Other Similar Amounts Contributions, Gifts, Grants h Total. Add lines 1a‐1f  | 1,471,089. Business Code 2 a CORPORATE SUPPORT 551114 560,012,102. 560,012,102. b NET PATIENT REVENUE 622110 110,666,378. 110,666,378. c AFFILIATED RENTAL 531120 23,967,541. 23,967,541. d CARE CONNECTIONS CALL CENTER 561420 8,145,774. 7,528,621. 617,153. Revenue e INSURANCE PREMIUMS 524298 2,922,503. 2,922,503.

Program Service f All other program service revenue ~~~~~ 621999 2,511,839. 2,511,839. g Total. Add lines 2a‐2f  | 708,226,137. 3 Investment income (including dividends, interest, and other similar amounts)~~~~~~~~~~~~~~~~~ | 38,501,303. 3,380,813. 35,120,490. 4 Income from investment of tax‐exempt bond proceeds | 5 Royalties  | (i) Real (ii) Personal 6 a Gross rents ~~~~~~~ 4,737,030. b Less: rental expenses~~~ 0. c Rental income or (loss) ~~ 4,737,030. d Net rental income or (loss)  | 4,737,030. 4,737,030. 7 a Gross amount from sales of (i) Securities (ii) Other assets other than inventory1,839,803,104. 610,825. b Less: cost or other basis and sales expenses ~~~1,736,302,348. 1,651,059. c Gain or (loss) ~~~~~~~ 103,500,756. -1,040,234. d Net gain or (loss)  | 102,460,522. 102,460,522. 8 a Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line 18 ~~~~~~~~~~~~~ a 18,225. b Less: direct expenses~~~~~~~~~~ b 0. Other Revenue c Net income or (loss) from fundraising events  | 18,225. 18,225. 9 a Gross income from gaming activities. See Part IV, line 19 ~~~~~~~~~~~~~ a b Less: direct expenses ~~~~~~~~~ b c Net income or (loss) from gaming activities  | 10 a Gross sales of inventory, less returns and allowances ~~~~~~~~~~~~~ a 97,606. b Less: cost of goods sold ~~~~~~~~ b 72,414. c Net income or (loss) from sales of inventory  | 25,192. 25,192. Miscellaneous Revenue Business Code 11 a ADMINISTRATION 551114 20,629,542. 10,495,515. 10,134,027. b CLINICAL ENGINEERING MAINT PROG 811219 3,149,125. 3,149,125. c INVESTMENTS 900099 899,030. 899,030. d All other revenue ~~~~~~~~~~~~~ 621111 915,896. 701,145. -109,806. 324,557. e Total. Add lines 11a‐11d ~~~~~~~~~~~~~~~ | 25,593,593. 12 Total revenue. See instructions.  | 881,033,091. 721,954,769. 14,921,217. 142,686,016. 732009 11‐28‐17 Form 990 (2017) 11 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part IX Statement of Functional Expenses Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A). Check if Schedule O contains a response or note to any line in this Part IX  X Do not include amounts reported on lines 6b, (A) (B) (C) (D) Total expenses Program service Management and Fundraising 7b, 8b, 9b, and 10b of Part VIII. expenses general expenses expenses 1 Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 ~ 692,024. 692,024. 2 Grants and other assistance to domestic individuals. See Part IV, line 22 ~~~~~~~ 2,054. 2,054. 3 Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16 ~~~ 170,743. 170,743. 4 Benefits paid to or for members ~~~~~~~ 5 Compensation of current officers, directors, trustees, and key employees ~~~~~~~~ 28,196,000. 28,196,000. 6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ~~~ 13,123,034. 13,123,034. 7 Other salaries and wages ~~~~~~~~~~ 326,302,186.293,965,639. 32,336,547. 8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) 33,631,631. 30,298,736. 3,332,895. 9 Other employee benefits ~~~~~~~~~~ 32,663,935. 29,426,939. 3,236,996. 10 Payroll taxes ~~~~~~~~~~~~~~~~ 20,344,772. 18,328,605. 2,016,167. 11 Fees for services (non‐employees): a Management ~~~~~~~~~~~~~~~~ b Legal ~~~~~~~~~~~~~~~~~~~~ 3,042,843. 3,042,843. c Accounting ~~~~~~~~~~~~~~~~~ 1,435,947. 1,435,947. d Lobbying ~~~~~~~~~~~~~~~~~~ 484,703. 484,703. e Professional fundraising services. See Part IV, line 17 f Investment management fees ~~~~~~~~ 5,084,556. 5,084,556. g Other. (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Sch O.) 71,309,367. 54,206,637. 17,102,730. 12 Advertising and promotion ~~~~~~~~~ 8,454,427. 7,616,606. 837,821. 13 Office expenses~~~~~~~~~~~~~~~ 14,472,529. 11,063,238. 3,409,291. 14 Information technology ~~~~~~~~~~~ 27,886,255. 25,122,727. 2,763,528. 15 Royalties ~~~~~~~~~~~~~~~~~~ 16 Occupancy ~~~~~~~~~~~~~~~~~ 48,921,381. 44,073,272. 4,848,109. 17 Travel ~~~~~~~~~~~~~~~~~~~ 6,522,896. 5,871,604. 651,292. 18 Payments of travel or entertainment expenses for any federal, state, or local public officials 19 Conferences, conventions, and meetings ~~ 917,340. 826,432. 90,908. 20 Interest ~~~~~~~~~~~~~~~~~~ 23,786,421. 21,416,641. 2,369,780. 21 Payments to affiliates ~~~~~~~~~~~~ 22 Depreciation, depletion, and amortization ~~ 95,396,622. 85,942,817. 9,453,805. 23 Insurance ~~~~~~~~~~~~~~~~~ 2,890,544. 2,008,192. 882,352. 24 Other expenses. Itemize expenses not covered above. (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.) a UBI TAXES 5,119,207. 5,119,207. b MEDICAL SUPPLIES 14,647,273. 14,647,273. c REPAIRS & MAINTENANCE 12,894,380. 12,009,479. 884,901. d DUES AND SUBSCRIPTIONS 9,445,978. 9,105,676. 340,302. e All other expenses 23,136,867. 19,609,573. 3,527,294. 25 Total functional expenses. Add lines 1 through 24e 830,975,915.686,404,907.144,571,008. 0. 26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here | if following SOP 98‐2 (ASC 958‐720) 732010 11‐28‐17 Form 990 (2017) 12 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 11 Part X Balance Sheet Check if Schedule O contains a response or note to any line in this Part X  (A) (B) Beginning of year End of year 1 Cash ‐ non‐interest‐bearing ~~~~~~~~~~~~~~~~~~~~~~~~~ 86,821,221. 1 300,754,568. 2 Savings and temporary cash investments ~~~~~~~~~~~~~~~~~~ 384,638,184. 2 341,448,397. 3 Pledges and grants receivable, net ~~~~~~~~~~~~~~~~~~~~~ 3 4 Accounts receivable, net ~~~~~~~~~~~~~~~~~~~~~~~~~~ 61,763,098. 4 57,430,874. 5 Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5 6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instr). Complete Part II of Sch L ~~ 6 7 Notes and loans receivable, net ~~~~~~~~~~~~~~~~~~~~~~~ 150,840,463. 7 149,994,559.

Assets 8 Inventories for sale or use ~~~~~~~~~~~~~~~~~~~~~~~~~~ 14,643,402. 8 14,993,244. 9 Prepaid expenses and deferred charges ~~~~~~~~~~~~~~~~~~ 34,441,841. 9 38,908,726. 10a Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D ~~~ 10a 1,864,932,627. b Less: accumulated depreciation ~~~~~~ 10b 1,061,745,189. 741,397,107. 10c 803,187,438. 11 Investments ‐ publicly traded securities ~~~~~~~~~~~~~~~~~~~ 1,730,018,569. 11 1,757,761,043. 12 Investments ‐ other securities. See Part IV, line 11 ~~~~~~~~~~~~~~ 390,052,874. 12 670,151,840. 13 Investments ‐ program‐related. See Part IV, line 11 ~~~~~~~~~~~~~ 5,555,442. 13 6,295,099. 14 Intangible assets ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7,718,060. 14 7,609,458. 15 Other assets. See Part IV, line 11 ~~~~~~~~~~~~~~~~~~~~~~ 7,293. 15 1,918,023. 16 Total assets. Add lines 1 through 15 (must equal line 34)  3,607,897,554. 16 4,150,453,269. 17 Accounts payable and accrued expenses ~~~~~~~~~~~~~~~~~~ 286,242,153. 17 348,690,022. 18 Grants payable ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 18 19 Deferred revenue ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 18,553,636. 19 17,726,795. 20 Tax‐exempt bond liabilities ~~~~~~~~~~~~~~~~~~~~~~~~~ 1,066,704,698. 20 1,049,126,188. 21 Escrow or custodial account liability. Complete Part IV of Schedule D ~~~~ 21 22 Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified persons. Complete Part II of Schedule L ~~~~~~~~~~~~~~~~~~~~~~~ 22

Liabilities 23 Secured mortgages and notes payable to unrelated third parties ~~~~~~ 345,054,501. 23 349,594,649. 24 Unsecured notes and loans payable to unrelated third parties ~~~~~~~~ 24 25 Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17‐24). Complete Part X of Schedule D ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1,968,352,727. 25 2,234,077,833. 26 Total liabilities. Add lines 17 through 25  3,684,907,715. 26 3,999,215,487. Organizations that follow SFAS 117 (ASC 958), check here | X and complete lines 27 through 29, and lines 33 and 34. 27 Unrestricted net assets ~~~~~~~~~~~~~~~~~~~~~~~~~~~ ‐77,010,161. 27 151,237,782. 28 Temporarily restricted net assets ~~~~~~~~~~~~~~~~~~~~~~ 28 29 Permanently restricted net assets ~~~~~~~~~~~~~~~~~~~~~ 29 Organizations that do not follow SFAS 117 (ASC 958), check here | and complete lines 30 through 34. 30 Capital stock or trust principal, or current funds ~~~~~~~~~~~~~~~ 30 31 Paid‐in or capital surplus, or land, building, or equipment fund ~~~~~~~~ 31 32 Retained earnings, endowment, accumulated income, or other funds ~~~~ 32

Net Assets or Fund Balances 33 Total net assets or fund balances ~~~~~~~~~~~~~~~~~~~~~~ ‐77,010,161. 33 151,237,782. 34 Total liabilities and net assets/fund balances  3,607,897,554. 34 4,150,453,269. Form 990 (2017)

732011 11‐28‐17 13 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Form 990 (2017) NOVANT HEALTH, INC. 56‐1376950 Page 12 Part XI Reconciliation of Net Assets Check if Schedule O contains a response or note to any line in this Part XI  X

1 Total revenue (must equal Part VIII, column (A), line 12) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 881,033,091. 2 Total expenses (must equal Part IX, column (A), line 25) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 830,975,915. 3 Revenue less expenses. Subtract line 2 from line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 50,057,176. 4 Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) ~~~~~~~~~~ 4 ‐77,010,161. 5 Net unrealized gains (losses) on investments ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5 158,642,719. 6 Donated services and use of facilities ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6 7 Investment expenses ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7 8 Prior period adjustments ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 8 9 Other changes in net assets or fund balances (explain in Schedule O) ~~~~~~~~~~~~~~~~~~~ 9 19,548,048. 10 Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 33, column (B))  10 151,237,782. Part XII Financial Statements and Reporting Check if Schedule O contains a response or note to any line in this Part XII  Yes No 1 Accounting method used to prepare the Form 990: Cash X Accrual Other If the organization changed its method of accounting from a prior year or checked "Other," explain in Schedule O. 2a Were the organization's financial statements compiled or reviewed by an independent accountant? ~~~~~~~~~~~~ 2a X If "Yes," check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both: Separate basis Consolidated basis Both consolidated and separate basis b Were the organization's financial statements audited by an independent accountant? ~~~~~~~~~~~~~~~~~~~ 2b X If "Yes," check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both: Separate basis X Consolidated basis Both consolidated and separate basis c If "Yes" to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant?~~~~~~~~~~~~~~~ 2c X If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. 3a As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A‐133? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3a X b If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits  3b Form 990 (2017)

732012 11‐28‐17 14 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE A OMB No. 1545‐0047 (Form 990 or 990‐EZ) Public Charity Status and Public Support Complete if the organization is a section 501(c)(3) organization or a section 2017 4947(a)(1) nonexempt charitable trust. Department of the Treasury | Attach to Form 990 or Form 990‐EZ. Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Reason for Public Charity Status (All organizations must complete this part.) See instructions. The organization is not a private foundation because it is: (For lines 1 through 12, check only one box.) 1 A church, convention of churches, or association of churches described in section 170(b)(1)(A)(i). 2 A school described in section 170(b)(1)(A)(ii). (Attach Schedule E (Form 990 or 990‐EZ).) 3 A hospital or a cooperative hospital service organization described in section 170(b)(1)(A)(iii). 4 A medical research organization operated in conjunction with a hospital described in section 170(b)(1)(A)(iii). Enter the hospital's name, city, and state: 5 An organization operated for the benefit of a college or university owned or operated by a governmental unit described in section 170(b)(1)(A)(iv). (Complete Part II.) 6 A federal, state, or local government or governmental unit described in section 170(b)(1)(A)(v). 7 An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in section 170(b)(1)(A)(vi). (Complete Part II.) 8 A community trust described in section 170(b)(1)(A)(vi). (Complete Part II.) 9 An agricultural research organization described in section 170(b)(1)(A)(ix) operated in conjunction with a land‐grant college or university or a non‐land‐grant college of agriculture (see instructions). Enter the name, city, and state of the college or university: 10 An organization that normally receives: (1) more than 33 1/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions ‐ subject to certain exceptions, and (2) no more than 33 1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.) 11 An organization organized and operated exclusively to test for public safety. See section 509(a)(4). 12 X An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2). See section 509(a)(3). Check the box in lines 12a through 12d that describes the type of supporting organization and complete lines 12e, 12f, and 12g. a Type I. A supporting organization operated, supervised, or controlled by its supported organization(s), typically by giving the supported organization(s) the power to regularly appoint or elect a majority of the directors or trustees of the supporting organization. You must complete Part IV, Sections A and B. b Type II. A supporting organization supervised or controlled in connection with its supported organization(s), by having control or management of the supporting organization vested in the same persons that control or manage the supported organization(s). You must complete Part IV, Sections A and C. c X Type III functionally integrated. A supporting organization operated in connection with, and functionally integrated with, its supported organization(s) (see instructions). You must complete Part IV, Sections A, D, and E. d Type III non‐functionally integrated. A supporting organization operated in connection with its supported organization(s) that is not functionally integrated. The organization generally must satisfy a distribution requirement and an attentiveness requirement (see instructions). You must complete Part IV, Sections A and D, and Part V. e Check this box if the organization received a written determination from the IRS that it is a Type I, Type II, Type III functionally integrated, or Type III non‐functionally integrated supporting organization. f Enter the number of supported organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 20 g Provide the following information about the supported organization(s). (i) Name of supported (ii) EIN (iii) Type of organization (iv) Is the organization listed (v) Amount of monetary (vi) Amount of other in your governing document? organization (described on lines 1‐10 support (see instructions) support (see instructions) above (see instructions)) Yes No FORSYTH MEMORIAL HOSPITAL, INC. 56‐0928089 3 X 193,677,761. FOUNDATION HEALTH SYSTEMS CORP. 56‐1373175 10 X 124,152. THE PRESBYTERIAN HOSPITAL 56‐0554230 3 X 190,911,960. NOVANT MEDICAL GROUP, INC. 58‐1728803 3 X 44,288,392. ROWAN REGIONAL MEDICAL CENTER, INC56‐0547479 3 X 37,087,599. Total 557,768,153. 0. LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990‐EZ. 732021 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 SEE PART VI FOR LINE 15 12G CONTINUATION 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) (Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.) Section A. Public Support Calendar year (or fiscal year beginning in) | (a) 2013 (b) 2014 (c) 2015 (d) 2016 (e) 2017 (f) Total 1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ~~ 2 Tax revenues levied for the organ‐ ization's benefit and either paid to or expended on its behalf ~~~~ 3 The value of services or facilities furnished by a governmental unit to the organization without charge ~ 4 Total. Add lines 1 through 3 ~~~ 5 The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f) ~~~~~~~~~~~~ 6 Public support. Subtract line 5 from line 4. Section B. Total Support Calendar year (or fiscal year beginning in) | (a) 2013 (b) 2014 (c) 2015 (d) 2016 (e) 2017 (f) Total 7 Amounts from line 4 ~~~~~~~ 8 Gross income from interest, dividends, payments received on securities loans, rents, royalties, and income from similar sources ~ 9 Net income from unrelated business activities, whether or not the business is regularly carried on ~ 10 Other income. Do not include gain or loss from the sale of capital assets (Explain in Part VI.) ~~~~ 11 Total support. Add lines 7 through 10 12 Gross receipts from related activities, etc. (see instructions) ~~~~~~~~~~~~~~~~~~~~~~~ 12 13 First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization, check this box and stop here  | Section C. Computation of Public Support Percentage 14 Public support percentage for 2017 (line 6, column (f) divided by line 11, column (f)) ~~~~~~~~~~~~ 14 % 15 Public support percentage from 2016 Schedule A, Part II, line 14 ~~~~~~~~~~~~~~~~~~~~~ 15 % 16a 33 1/3% support test ‐ 2017. If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box and stop here. The organization qualifies as a publicly supported organization ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | b 33 1/3% support test ‐ 2016. If the organization did not check a box on line 13 or 16a, and line 15 is 33 1/3% or more, check this box and stop here. The organization qualifies as a publicly supported organization ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | 17a 10% ‐facts‐and‐circumstances test ‐ 2017. If the organization did not check a box on line 13, 16a, or 16b, and line 14 is 10% or more, and if the organization meets the "facts‐and‐circumstances" test, check this box and stop here. Explain in Part VI how the organization meets the "facts‐and‐circumstances" test. The organization qualifies as a publicly supported organization ~~~~~~~~~~~~~~~ | b 10% ‐facts‐and‐circumstances test ‐ 2016. If the organization did not check a box on line 13, 16a, 16b, or 17a, and line 15 is 10% or more, and if the organization meets the "facts‐and‐circumstances" test, check this box and stop here. Explain in Part VI how the organization meets the "facts‐and‐circumstances" test. The organization qualifies as a publicly supported organization ~~~~~~~~ | 18 Private foundation. If the organization did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see instructions  | Schedule A (Form 990 or 990‐EZ) 2017

732022 10‐06‐17 16 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Support Schedule for Organizations Described in Section 509(a)(2) (Complete only if you checked the box on line 10 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.) Section A. Public Support Calendar year (or fiscal year beginning in) | (a) 2013 (b) 2014 (c) 2015 (d) 2016 (e) 2017 (f) Total 1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ~~ 2 Gross receipts from admissions, merchandise sold or services per‐ formed, or facilities furnished in any activity that is related to the organization's tax‐exempt purpose 3 Gross receipts from activities that are not an unrelated trade or bus‐ iness under section 513 ~~~~~ 4 Tax revenues levied for the organ‐ ization's benefit and either paid to or expended on its behalf ~~~~ 5 The value of services or facilities furnished by a governmental unit to the organization without charge ~ 6 Total. Add lines 1 through 5 ~~~ 7a Amounts included on lines 1, 2, and 3 received from disqualified persons b Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year ~~~~~~ c Add lines 7a and 7b ~~~~~~~

8 Public support. (Subtract line 7c from line 6.) Section B. Total Support Calendar year (or fiscal year beginning in) | (a) 2013 (b) 2014 (c) 2015 (d) 2016 (e) 2017 (f) Total 9 Amounts from line 6 ~~~~~~~ 10a Gross income from interest, dividends, payments received on securities loans, rents, royalties, and income from similar sources ~ b Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975 ~~~~ c Add lines 10a and 10b ~~~~~~ 11 Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on ~~~~~~~ 12 Other income. Do not include gain or loss from the sale of capital assets (Explain in Part VI.) ~~~~ 13 Total support. (Add lines 9, 10c, 11, and 12.) 14 First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization, check this box and stop here  | Section C. Computation of Public Support Percentage 15 Public support percentage for 2017 (line 8, column (f) divided by line 13, column (f)) ~~~~~~~~~~~~ 15 % 16 Public support percentage from 2016 Schedule A, Part III, line 15  16 % Section D. Computation of Investment Income Percentage 17 Investment income percentage for 2017 (line 10c, column (f) divided by line 13, column (f)) ~~~~~~~~ 17 % 18 Investment income percentage from 2016 Schedule A, Part III, line 17 ~~~~~~~~~~~~~~~~~~ 18 % 19a 33 1/3% support tests ‐ 2017. If the organization did not check the box on line 14, and line 15 is more than 33 1/3%, and line 17 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization ~~~~~~~~~~ | b 33 1/3% support tests ‐ 2016. If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3%, and line 18 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization ~~~~ | 20 Private foundation. If the organization did not check a box on line 14, 19a, or 19b, check this box and see instructions  | 732023 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 17 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part IV Supporting Organizations (Complete only if you checked a box in line 12 on Part I. If you checked 12a of Part I, complete Sections A and B. If you checked 12b of Part I, complete Sections A and C. If you checked 12c of Part I, complete Sections A, D, and E. If you checked 12d of Part I, complete Sections A and D, and complete Part V.) Section A. All Supporting Organizations Yes No 1 Are all of the organization's supported organizations listed by name in the organization's governing documents? If "No," describe in Part VI how the supported organizations are designated. If designated by class or purpose, describe the designation. If historic and continuing relationship, explain. 1 X 2 Did the organization have any supported organization that does not have an IRS determination of status under section 509(a)(1) or (2)? If "Yes," explain in Part VI how the organization determined that the supported organization was described in section 509(a)(1) or (2). 2 X 3a Did the organization have a supported organization described in section 501(c)(4), (5), or (6)? If "Yes," answer (b) and (c) below. 3a X b Did the organization confirm that each supported organization qualified under section 501(c)(4), (5), or (6) and satisfied the public support tests under section 509(a)(2)? If "Yes," describe in Part VI when and how the organization made the determination. 3b c Did the organization ensure that all support to such organizations was used exclusively for section 170(c)(2)(B) purposes? If "Yes," explain in Part VI what controls the organization put in place to ensure such use. 3c 4a Was any supported organization not organized in the United States ("foreign supported organization")? If "Yes," and if you checked 12a or 12b in Part I, answer (b) and (c) below. 4a X b Did the organization have ultimate control and discretion in deciding whether to make grants to the foreign supported organization? If "Yes," describe in Part VI how the organization had such control and discretion despite being controlled or supervised by or in connection with its supported organizations. 4b c Did the organization support any foreign supported organization that does not have an IRS determination under sections 501(c)(3) and 509(a)(1) or (2)? If "Yes," explain in Part VI what controls the organization used to ensure that all support to the foreign supported organization was used exclusively for section 170(c)(2)(B) purposes. 4c 5a Did the organization add, substitute, or remove any supported organizations during the tax year? If "Yes," answer (b) and (c) below (if applicable). Also, provide detail in Part VI, including (i) the names and EIN numbers of the supported organizations added, substituted, or removed; (ii) the reasons for each such action; (iii) the authority under the organization's organizing document authorizing such action; and (iv) how the action was accomplished (such as by amendment to the organizing document). 5a X b Type I or Type II only. Was any added or substituted supported organization part of a class already designated in the organization's organizing document? 5b c Substitutions only. Was the substitution the result of an event beyond the organization's control? 5c 6 Did the organization provide support (whether in the form of grants or the provision of services or facilities) to anyone other than (i) its supported organizations, (ii) individuals that are part of the charitable class benefited by one or more of its supported organizations, or (iii) other supporting organizations that also support or benefit one or more of the filing organization's supported organizations? If "Yes," provide detail in Part VI. 6 X 7 Did the organization provide a grant, loan, compensation, or other similar payment to a substantial contributor (defined in section 4958(c)(3)(C)), a family member of a substantial contributor, or a 35% controlled entity with regard to a substantial contributor? If "Yes," complete Part I of Schedule L (Form 990 or 990‐EZ). 7 X 8 Did the organization make a loan to a disqualified person (as defined in section 4958) not described in line 7? If "Yes," complete Part I of Schedule L (Form 990 or 990‐EZ). 8 X 9a Was the organization controlled directly or indirectly at any time during the tax year by one or more disqualified persons as defined in section 4946 (other than foundation managers and organizations described in section 509(a)(1) or (2))? If "Yes," provide detail in Part VI. 9a X b Did one or more disqualified persons (as defined in line 9a) hold a controlling interest in any entity in which the supporting organization had an interest? If "Yes," provide detail in Part VI. 9b X c Did a disqualified person (as defined in line 9a) have an ownership interest in, or derive any personal benefit from, assets in which the supporting organization also had an interest? If "Yes," provide detail in Part VI. 9c X 10a Was the organization subject to the excess business holdings rules of section 4943 because of section 4943(f) (regarding certain Type II supporting organizations, and all Type III non‐functionally integrated supporting organizations)? If "Yes," answer 10b below. 10a X b Did the organization have any excess business holdings in the tax year? (Use Schedule C, Form 4720, to determine whether the organization had excess business holdings.) 10b 732024 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 18 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 5 Part IV Supporting Organizations (continued) Yes No 11 Has the organization accepted a gift or contribution from any of the following persons? a A person who directly or indirectly controls, either alone or together with persons described in (b) and (c) below, the governing body of a supported organization? 11a X b A family member of a person described in (a) above? 11b X c A 35% controlled entity of a person described in (a) or (b) above? If "Yes" to a, b, or c, provide detail in Part VI. 11c X Section B. Type I Supporting Organizations Yes No 1 Did the directors, trustees, or membership of one or more supported organizations have the power to regularly appoint or elect at least a majority of the organization's directors or trustees at all times during the tax year? If "No," describe in Part VI how the supported organization(s) effectively operated, supervised, or controlled the organization's activities. If the organization had more than one supported organization, describe how the powers to appoint and/or remove directors or trustees were allocated among the supported organizations and what conditions or restrictions, if any, applied to such powers during the tax year. 1 2 Did the organization operate for the benefit of any supported organization other than the supported organization(s) that operated, supervised, or controlled the supporting organization? If "Yes," explain in Part VI how providing such benefit carried out the purposes of the supported organization(s) that operated, supervised, or controlled the supporting organization. 2 Section C. Type II Supporting Organizations Yes No 1 Were a majority of the organization's directors or trustees during the tax year also a majority of the directors or trustees of each of the organization's supported organization(s)? If "No," describe in Part VI how control or management of the supporting organization was vested in the same persons that controlled or managed the supported organization(s). 1 Section D. All Type III Supporting Organizations Yes No 1 Did the organization provide to each of its supported organizations, by the last day of the fifth month of the organization's tax year, (i) a written notice describing the type and amount of support provided during the prior tax year, (ii) a copy of the Form 990 that was most recently filed as of the date of notification, and (iii) copies of the organization's governing documents in effect on the date of notification, to the extent not previously provided? 1 X 2 Were any of the organization's officers, directors, or trustees either (i) appointed or elected by the supported organization(s) or (ii) serving on the governing body of a supported organization? If "No," explain in Part VI how the organization maintained a close and continuous working relationship with the supported organization(s). 2 X 3 By reason of the relationship described in (2), did the organization's supported organizations have a significant voice in the organization's investment policies and in directing the use of the organization's income or assets at all times during the tax year? If "Yes," describe in Part VI the role the organization's supported organizations played in this regard. 3 X Section E. Type III Functionally Integrated Supporting Organizations 1 Check the box next to the method that the organization used to satisfy the Integral Part Test during the year (see instructions). a The organization satisfied the Activities Test. Complete line 2 below. b X The organization is the parent of each of its supported organizations. Complete line 3 below. c The organization supported a governmental entity. Describe in Part VI how you supported a government entity (see instructions). 2 Activities Test. Answer (a) and (b) below. Yes No a Did substantially all of the organization's activities during the tax year directly further the exempt purposes of the supported organization(s) to which the organization was responsive? If "Yes," then in Part VI identify those supported organizations and explain how these activities directly furthered their exempt purposes, how the organization was responsive to those supported organizations, and how the organization determined that these activities constituted substantially all of its activities. 2a b Did the activities described in (a) constitute activities that, but for the organization's involvement, one or more of the organization's supported organization(s) would have been engaged in? If "Yes," explain in Part VI the reasons for the organization's position that its supported organization(s) would have engaged in these activities but for the organization's involvement. 2b 3 Parent of Supported Organizations. Answer (a) and (b) below. a Did the organization have the power to regularly appoint or elect a majority of the officers, directors, or trustees of each of the supported organizations? Provide details in Part VI. 3a X b Did the organization exercise a substantial degree of direction over the policies, programs, and activities of each of its supported organizations? If "Yes," describe in Part VI the role played by the organization in this regard. 3b X 732025 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 19 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 6 Part V Type III Non‐Functionally Integrated 509(a)(3) Supporting Organizations 1 Check here if the organization satisfied the Integral Part Test as a qualifying trust on Nov. 20, 1970 (explain in Part VI.) See instructions. All other Type III non‐functionally integrated supporting organizations must complete Sections A through E. (B) Current Year Section A ‐ Adjusted Net Income (A) Prior Year (optional) 1 Net short‐term capital gain 1 2 Recoveries of prior‐year distributions 2 3 Other gross income (see instructions) 3 4 Add lines 1 through 3 4 5 Depreciation and depletion 5 6 Portion of operating expenses paid or incurred for production or collection of gross income or for management, conservation, or maintenance of property held for production of income (see instructions) 6 7 Other expenses (see instructions) 7 8 Adjusted Net Income (subtract lines 5, 6, and 7 from line 4) 8 (B) Current Year Section B ‐ Minimum Asset Amount (A) Prior Year (optional) 1 Aggregate fair market value of all non‐exempt‐use assets (see instructions for short tax year or assets held for part of year): a Average monthly value of securities 1a b Average monthly cash balances 1b c Fair market value of other non‐exempt‐use assets 1c d Total (add lines 1a, 1b, and 1c) 1d e Discount claimed for blockage or other factors (explain in detail in Part VI): 2 Acquisition indebtedness applicable to non‐exempt‐use assets 2 3 Subtract line 2 from line 1d 3 4 Cash deemed held for exempt use. Enter 1‐1/2% of line 3 (for greater amount, see instructions) 4 5 Net value of non‐exempt‐use assets (subtract line 4 from line 3) 5 6 Multiply line 5 by .035 6 7 Recoveries of prior‐year distributions 7 8 Minimum Asset Amount (add line 7 to line 6) 8

Section C ‐ Distributable Amount Current Year

1 Adjusted net income for prior year (from Section A, line 8, Column A) 1 2 Enter 85% of line 1 2 3 Minimum asset amount for prior year (from Section B, line 8, Column A) 3 4 Enter greater of line 2 or line 3 4 5 Income tax imposed in prior year 5 6 Distributable Amount. Subtract line 5 from line 4, unless subject to emergency temporary reduction (see instructions) 6 7 Check here if the current year is the organization's first as a non‐functionally integrated Type III supporting organization (see instructions). Schedule A (Form 990 or 990‐EZ) 2017

732026 10‐06‐17 20 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 7 Part V Type III Non‐Functionally Integrated 509(a)(3) Supporting Organizations (continued) Section D ‐ Distributions Current Year 1 Amounts paid to supported organizations to accomplish exempt purposes 2 Amounts paid to perform activity that directly furthers exempt purposes of supported organizations, in excess of income from activity 3 Administrative expenses paid to accomplish exempt purposes of supported organizations 4 Amounts paid to acquire exempt‐use assets 5 Qualified set‐aside amounts (prior IRS approval required) 6 Other distributions (describe in Part VI). See instructions. 7 Total annual distributions. Add lines 1 through 6. 8 Distributions to attentive supported organizations to which the organization is responsive (provide details in Part VI). See instructions. 9 Distributable amount for 2017 from Section C, line 6 10 Line 8 amount divided by line 9 amount (i) (ii) (iii) Section E ‐ Distribution Allocations (see instructions) Excess Distributions Underdistributions Distributable Pre‐2017 Amount for 2017

1 Distributable amount for 2017 from Section C, line 6 2 Underdistributions, if any, for years prior to 2017 (reason‐ able cause required‐ explain in Part VI). See instructions. 3 Excess distributions carryover, if any, to 2017 a b From 2013 c From 2014 d From 2015 e From 2016 f Total of lines 3a through e g Applied to underdistributions of prior years h Applied to 2017 distributable amount i Carryover from 2012 not applied (see instructions) j Remainder. Subtract lines 3g, 3h, and 3i from 3f. 4 Distributions for 2017 from Section D, line 7: $ a Applied to underdistributions of prior years b Applied to 2017 distributable amount c Remainder. Subtract lines 4a and 4b from 4. 5 Remaining underdistributions for years prior to 2017, if any. Subtract lines 3g and 4a from line 2. For result greater than zero, explain in Part VI. See instructions. 6 Remaining underdistributions for 2017. Subtract lines 3h and 4b from line 1. For result greater than zero, explain in Part VI. See instructions. 7 Excess distributions carryover to 2018. Add lines 3j and 4c. 8 Breakdown of line 7: a Excess from 2013 b Excess from 2014 c Excess from 2015 d Excess from 2016 e Excess from 2017 Schedule A (Form 990 or 990‐EZ) 2017

732027 10‐06‐17 21 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part VI Supplemental Information. Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; Part III, line 12; Part IV, Section A, lines 1, 2, 3b, 3c, 4b, 4c, 5a, 6, 9a, 9b, 9c, 11a, 11b, and 11c; Part IV, Section B, lines 1 and 2; Part IV, Section C, line 1; Part IV, Section D, lines 2 and 3; Part IV, Section E, lines 1c, 2a, 2b, 3a, and 3b; Part V, line 1; Part V, Section B, line 1e; Part V, Section D, lines 5, 6, and 8; and Part V, Section E, lines 2, 5, and 6. Also complete this part for any additional information. (See instructions.)

PART I, LINE 12G:

NOVANT HEALTH, INC. PROVIDES STRATEGIC PLANNING, ADMINISTRATIVE

SUPPORT, INVESTMENT GUIDANCE AND MONETARY SUPPORT TO THE SUPPORTED

ORGANIZATIONS LISTED IN PART I, AS WELL AS CAROLINA MEDICORP

ENTERPRISES, INC. AND ROWAN HEALTH SERVICES CORP.

NOVANT HEALTH, INC. PROVIDES SUPPORT ON A PASS‐THROUGH BASIS TO

ENTITIES IN THE NOVANT HEALTH UVA HEALTH SYSTEM INCLUDING CULPEPER

MEMORIAL HOSPITAL, INC. PRINCE WILLIAM HOSPITAL, PWHS FOUNDATION AND

PERSONAL CARE SERVICES. ADDITIONAL SUPPORT IS ALSO PROVIDED TO PRINCE

WILLIAM HEALTH SYSTEM, A TYPE III FUNCTIONALLY INTEGRATED SUPPORTING

ORGANIZATION IN THE AMOUNT OF $661,658.

PART IV, SECTION A, LINE 1:

THERE ARE OTHER PUBLICLY SUPPORTED ORGANIZATIONS WITHIN THE HEALTH

SYSTEM THAT THE FILING ORGANIZATION SUPPORTS. THESE ORGANIZATIONS HAVE

A CONTINUING RELATIONSHIP WITH THE FILING ORGANIZATION BY VIRTUE OF

THEIR RELATIONSHIPS TO THE SPECIFIED SUPPORTED ORGANIZATIONS. BY REASON

OF THIS RELATIONSHIP, A SUBSTANTIAL IDENTITY OF INTEREST HAS BEEN

DEVELOPED BETWEEN THE ORGANIZATIONS THEREBY ESTABLISHING A HISTORIC AND

CONTINUING RELATIONSHIP.

PART IV, SECTION D, LINE 2:

CERTAIN OF THE SUPPORTED ORGANIZATIONS OFFICERS AND/OR DIRECTORS ARE

APPOINTED/ELECTED TO THE FILING ORGANIZATION'S GOVERNING BODY AND AT

LEAST ONE MEMBER OF THE FILING ORGANIZATION'S GOVERNING BODY SERVES ON

THE GOVERNING BODY OF A SUPPORTED ORGANIZATION. THE FILING ORGANIZATION 732028 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 22 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part VI Supplemental Information. Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; Part III, line 12; Part IV, Section A, lines 1, 2, 3b, 3c, 4b, 4c, 5a, 6, 9a, 9b, 9c, 11a, 11b, and 11c; Part IV, Section B, lines 1 and 2; Part IV, Section C, line 1; Part IV, Section D, lines 2 and 3; Part IV, Section E, lines 1c, 2a, 2b, 3a, and 3b; Part V, line 1; Part V, Section B, line 1e; Part V, Section D, lines 5, 6, and 8; and Part V, Section E, lines 2, 5, and 6. Also complete this part for any additional information. (See instructions.)

HAS AN ADEQUATE RELATIONSHIP WITH THE REMAINING SUPPORTED ORGANIZATIONS

BECAUSE IT MAINTAINS A CLOSE AND CONTINUOUS WORKING RELATIONSHIP WITH

THE OFFICERS/DIRECTORS OF THOSE ORGANIZATIONS. THESE RELATIONSHIPS ARE

MAINTAINED THROUGH ONGOING COMMUNICATIONS, REGULAR MEETINGS INCLUDING

ATTENDANCE AT BOARD MEETINGS OF THE SUPPORTED ORGANIZATIONS, AND JOINT

PROJECTS.

PART IV, SECTION D, LINE 3:

REPRESENTATIVES OF THE SUPPORTED ORGANIZATIONS PROVIDE ONGOING FEEDBACK

AND GUIDANCE ON THE BUDGETING, OVERHEAD ALLOCATIONS, AND ASSET

PURCHASING AND UTILIZATION.

PART IV, SECTION E, LINE 3A:

THE ORGANIZATION HAS THE POWER TO REGULARLY APPOINT OR ELECT A MAJORITY

OF OFFICERS, DIRECTORS OR TRUSTEES OF EACH SUPPORTED ORGANIZATION.

PART IV, SECTION E, LINE 3B:

THE FILING ORGANIZATION AS THE HEALTH SYSTEM PARENT PROVIDES

ADMINISTRATIVE OVERSIGHT AND OVERSEES THE PROGRAMS, ACTIVITIES AND

DIRECTION OF THE HEALTH SYSTEM SUPPORTED ORGANIZATIONS (WITH THEIR

INPUT). THE FILING ORGANIZATION ASSUMES THESE ADMINISTRATIVE DUTIES IN

ORDER TO ALLOW THE SUPPORTED ORGANIZATIONS TO FOCUS ON PURSUING THEIR

EXEMPT PURPOSE.

732028 10‐06‐17 Schedule A (Form 990 or 990‐EZ) 2017 23 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule A (Form 990 or 990‐EZ) NOVANT HEALTH, INC. 56‐1376950 Page 8 Part VI Supplemental Information (Schedule A, Part I, Line 12g ‐ Information regarding supported organizations (continuation) (i) Name of supported (ii) EIN (iii) Type of organization (iv) Is the organization (v) Amount of monetary (vi) Amount of organization (described on lines 1‐10 listed in your support other support above) governing document? Yes No COMMUNITY GENERAL HEALTH PARTNERS, IN56‐0636250 3 X 18,159,074. MEDICAL PARK HOSPITAL, INC. 56‐1340424 3 X 13,402,298. PRESBYTERIAN MEDICAL CARE CORP. 56‐1376368 3 X 39,272,487. CULPEPER MEMORIAL HOSPITAL, INC. 54‐0622371 3 X 0. PRINCE WILLIAM HOSPITAL 54‐0696355 3 X 20,569,241. PERSONAL CARE SERVICES 54‐1291284 10 X 275,189. PRESBYTERIAN HOSPITAL FOUNDATION58‐1413074 7 X 0. FORSYTH MEDICAL CENTER FOUNDATION 56‐2120959 7 X 0. AUXILIARY OF FORSYTH MEMORIAL HO56‐0862112 10 X 0. ROWAN REGIONAL MEDICAL CENTER FOUN56‐1424818 7 X 0. ROWAN REGIONAL MEDICAL CENTER AUXI23‐7022472 10 X 0. BRUNSWICK NOVANT MEDICAL CENTER FOUN27‐4616751 7 X 0. COMMUNITY GENERAL HOSPITAL FOUNDATION56‐1828629 7 X 0.

NMG SERVICES, INC. 56‐2098809 10 X 0.

PWHS FOUNDATION 54‐1307595 7 X 0.

Continuation Totals 91,678,289. 732401 04‐01‐17 Schedule A (Form 990 or 990‐EZ) 24 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule B has been removed from this return to protect donor confidentiality; however, a redacted version is available upon request. SCHEDULE C Political Campaign and Lobbying Activities OMB No. 1545‐0047 (Form 990 or 990‐EZ) For Organizations Exempt From Income Tax Under section 501(c) and section 527 2017 J Complete if the organization is described below. J Attach to Form 990 or Form 990‐EZ. Department of the Treasury Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection If the organization answered "Yes," on Form 990, Part IV, line 3, or Form 990‐EZ, Part V, line 46 (Political Campaign Activities), then ¥ Section 501(c)(3) organizations: Complete Parts I‐A and B. Do not complete Part I‐C. ¥ Section 501(c) (other than section 501(c)(3)) organizations: Complete Parts I‐A and C below. Do not complete Part I‐B. ¥ Section 527 organizations: Complete Part I‐A only. If the organization answered "Yes," on Form 990, Part IV, line 4, or Form 990‐EZ, Part VI, line 47 (Lobbying Activities), then ¥ Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)): Complete Part II‐A. Do not complete Part II‐B. ¥ Section 501(c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II‐B. Do not complete Part II‐A. If the organization answered "Yes," on Form 990, Part IV, line 5 (Proxy Tax) (see separate instructions) or Form 990‐EZ, Part V, line 35c (Proxy Tax) (see separate instructions), then ¥ Section 501(c)(4), (5), or (6) organizations: Complete Part III. Name of organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I‐A Complete if the organization is exempt under section 501(c) or is a section 527 organization.

1 Provide a description of the organization's direct and indirect political campaign activities in Part IV. 2 Political campaign activity expenditures ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ J $ 3 Volunteer hours for political campaign activities ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Part I‐B Complete if the organization is exempt under section 501(c)(3). 1 Enter the amount of any excise tax incurred by the organization under section 4955 ~~~~~~~~~~~~~ J $ 2 Enter the amount of any excise tax incurred by organization managers under section 4955 ~~~~~~~~~~ J $ 3 If the organization incurred a section 4955 tax, did it file Form 4720 for this year? ~~~~~~~~~~~~~~~~~~~ Yes No 4a Was a correction made? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No b If "Yes," describe in Part IV. Part I‐C Complete if the organization is exempt under section 501(c), except section 501(c)(3). 1 Enter the amount directly expended by the filing organization for section 527 exempt function activities ~~~~ J $ 2 Enter the amount of the filing organization's funds contributed to other organizations for section 527 exempt function activities ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ J $ 3 Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120‐POL, line 17b ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ J $ 4 Did the filing organization file Form 1120‐POL for this year? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No 5 Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing organization made payments. For each organization listed, enter the amount paid from the filing organization's funds. Also enter the amount of political contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action committee (PAC). If additional space is needed, provide information in Part IV. (a) Name (b) Address (c) EIN (d) Amount paid from (e) Amount of political filing organization's contributions received and funds. If none, enter ‐0‐. promptly and directly delivered to a separate political organization. If none, enter ‐0‐.

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990‐EZ. Schedule C (Form 990 or 990‐EZ) 2017 LHA 732041 11‐09‐17 29 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule C (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II‐A Complete if the organization is exempt under section 501(c)(3) and filed Form 5768 (election under section 501(h)). A Check J if the filing organization belongs to an affiliated group (and list in Part IV each affiliated group member's name, address, EIN, expenses, and share of excess lobbying expenditures). B Check J if the filing organization checked box A and "limited control" provisions apply. (a) Filing (b) Affiliated group Limits on Lobbying Expenditures organization's totals (The term "expenditures" means amounts paid or incurred.) totals

1a Total lobbying expenditures to influence public opinion (grass roots lobbying) ~~~~~~~~~~ b Total lobbying expenditures to influence a legislative body (direct lobbying) ~~~~~~~~~~~ c Total lobbying expenditures (add lines 1a and 1b) ~~~~~~~~~~~~~~~~~~~~~~~~ d Other exempt purpose expenditures ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ e Total exempt purpose expenditures (add lines 1c and 1d) ~~~~~~~~~~~~~~~~~~~~ f Lobbying nontaxable amount. Enter the amount from the following table in both columns. If the amount on line 1e, column (a) or (b) is: The lobbying nontaxable amount is: Not over $500,000 20% of the amount on line 1e. Over $500,000 but not over $1,000,000 $100,000 plus 15% of the excess over $500,000. Over $1,000,000 but not over $1,500,000 $175,000 plus 10% of the excess over $1,000,000. Over $1,500,000 but not over $17,000,000 $225,000 plus 5% of the excess over $1,500,000. Over $17,000,000 $1,000,000.

g Grassroots nontaxable amount (enter 25% of line 1f) ~~~~~~~~~~~~~~~~~~~~~~ h Subtract line 1g from line 1a. If zero or less, enter ‐0‐ ~~~~~~~~~~~~~~~~~~~~~~ i Subtract line 1f from line 1c. If zero or less, enter ‐0‐ ~~~~~~~~~~~~~~~~~~~~~~~ j If there is an amount other than zero on either line 1h or line 1i, did the organization file Form 4720 reporting section 4911 tax for this year?  Yes No 4‐Year Averaging Period Under section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns below. See the separate instructions for lines 2a through 2f.) Lobbying Expenditures During 4‐Year Averaging Period

Calendar year (a) 2014 (b) 2015 (c) 2016 (d) 2017 (e) Total (or fiscal year beginning in)

2a Lobbying nontaxable amount b Lobbying ceiling amount (150% of line 2a, column(e))

c Total lobbying expenditures

d Grassroots nontaxable amount e Grassroots ceiling amount (150% of line 2d, column (e))

f Grassroots lobbying expenditures Schedule C (Form 990 or 990‐EZ) 2017

732042 11‐09‐17 30 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule C (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part II‐B Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768 (election under section 501(h)).

For each "Yes," response on lines 1a through 1i below, provide in Part IV a detailed description (a) (b) of the lobbying activity. Yes No Amount

1 During the year, did the filing organization attempt to influence foreign, national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of: a Volunteers?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X b Paid staff or management (include compensation in expenses reported on lines 1c through 1i)? ~ X c Media advertisements? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X d Mailings to members, legislators, or the public? ~~~~~~~~~~~~~~~~~~~~~~~~~ X e Publications, or published or broadcast statements? ~~~~~~~~~~~~~~~~~~~~~~ X f Grants to other organizations for lobbying purposes? ~~~~~~~~~~~~~~~~~~~~~~ X 15,000. g Direct contact with legislators, their staffs, government officials, or a legislative body? ~~~~~~ X 484,703. h Rallies, demonstrations, seminars, conventions, speeches, lectures, or any similar means?~~~~ X i Other activities? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X 14,627. j Total. Add lines 1c through 1i ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 514,330. 2a Did the activities in line 1 cause the organization to be not described in section 501(c)(3)? ~~~~ X b If "Yes," enter the amount of any tax incurred under section 4912 ~~~~~~~~~~~~~~~~ c If "Yes," enter the amount of any tax incurred by organization managers under section 4912 ~~~ d If the filing organization incurred a section 4912 tax, did it file Form 4720 for this year?  Part III‐A Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6). Yes No 1 Were substantially all (90% or more) dues received nondeductible by members?~~~~~~~~~~~~~~~~~ 1 2 Did the organization make only in‐house lobbying expenditures of $2,000 or less? ~~~~~~~~~~~~~~~~ 2 3 Did the organization agree to carry over lobbying and political campaign activity expenditures from the prior year? 3 Part III‐B Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6) and if either (a) BOTH Part III‐A, lines 1 and 2, are answered "No," OR (b) Part III‐A, line 3, is answered "Yes." 1 Dues, assessments and similar amounts from members ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 2 Section 162(e) nondeductible lobbying and political expenditures (do not include amounts of political expenses for which the section 527(f) tax was paid). a Current year ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2a b Carryover from last year ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2b c Total ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2c 3 Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues ~~~~~~~~ 3 4 If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political expenditure next year? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4 5 Taxable amount of lobbying and political expenditures (see instructions)  5 Part IV Supplemental Information Provide the descriptions required for Part I‐A, line 1; Part I‐B, line 4; Part I‐C, line 5; Part II‐A (affiliated group list); Part II‐A, lines 1 and 2 (see instructions); and Part II‐B, line 1. Also, complete this part for any additional information. PART II‐B, LINE 1, LOBBYING ACTIVITIES:

LINE 1A

THERE IS LIMITED ENGAGEMENT OF THE BOARD.

LINE 1B

THERE ARE THREE FULL TIME GOVERNMENT RELATIONS STAFF POSITIONS AND Schedule C (Form 990 or 990‐EZ) 2017 732043 11‐09‐17 31 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule C (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part IV Supplemental Information (continued)

MINIMAL TIME OF SENIOR LEADERS.

LINE 1F

THE FILING ORGANIZATION MADE A GRANT TO AN ORGANIZATION TO ASSIST IN

THEIR LOBBYING ACTIVITIES ASSOCIATED WITH A REFERENDUM ON MUNICIPAL

BONDS.

LINE 1G

THE GOVERNMENT RELATIONS STAFF AND CERTAIN CONTRACT LOBBYISTS REGULARLY

CONTACT LEGISLATORS AND OTHER GOVERNMENT OFFICIALS REGARDING VARIOUS

RELEVANT HEALTHCARE ISSUES.

LINE 1I

DUES PAID TO CERTAIN ORGANIZATIONS WHICH INCLUDE A PORTION RELATED TO

LOBBYING ACTIVITIES.

Schedule C (Form 990 or 990‐EZ) 2017 732044 11‐09‐17 32 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 OMB No. 1545‐0047 SCHEDULE D Supplemental Financial Statements (Form 990) | Complete if the organization answered "Yes" on Form 990, Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b. 2017 Department of the Treasury | Attach to Form 990. Open to Public Internal Revenue Service |Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" on Form 990, Part IV, line 6. (a) Donor advised funds (b) Funds and other accounts 1 Total number at end of year ~~~~~~~~~~~~~~~ 2 Aggregate value of contributions to (during year) ~~~~ 3 Aggregate value of grants from (during year) ~~~~~~ 4 Aggregate value at end of year ~~~~~~~~~~~~~ 5 Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds are the organization's property, subject to the organization's exclusive legal control?~~~~~~~~~~~~~~~~~~ Yes No 6 Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit?  Yes No Part II Conservation Easements. Complete if the organization answered "Yes" on Form 990, Part IV, line 7. 1 Purpose(s) of conservation easements held by the organization (check all that apply). Preservation of land for public use (e.g., recreation or education) Preservation of a historically important land area Protection of natural habitat Preservation of a certified historic structure Preservation of open space 2 Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year. Held at the End of the Tax Year a Total number of conservation easements ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2a b Total acreage restricted by conservation easements ~~~~~~~~~~~~~~~~~~~~~~~~~~ 2b c Number of conservation easements on a certified historic structure included in (a) ~~~~~~~~~~~~ 2c d Number of conservation easements included in (c) acquired after 7/25/06, and not on a historic structure listed in the National Register ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2d 3 Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year | 4 Number of states where property subject to conservation easement is located | 5 Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? ~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No 6 Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year | 7 Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year | $ 8 Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(ii)? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No 9 In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements. Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets. Complete if the organization answered "Yes" on Form 990, Part IV, line 8. 1a If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items. b If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items: (i) Revenue included on Form 990, Part VIII, line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ (ii) Assets included in Form 990, Part X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ 2 If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the following amounts required to be reported under SFAS 116 (ASC 958) relating to these items: a Revenue included on Form 990, Part VIII, line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ b Assets included in Form 990, Part X  | $ LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule D (Form 990) 2017 732051 10‐09‐17 33 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule D (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets(continued) 3 Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply): a Public exhibition d Loan or exchange programs b Scholarly research e Other c Preservation for future generations 4 Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part XIII. 5 During the year, did the organization solicit or receive donations of art, historical treasures, or other similar assets to be sold to raise funds rather than to be maintained as part of the organization's collection?  Yes No Part IV Escrow and Custodial Arrangements. Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21. 1a Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included on Form 990, Part X? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No b If "Yes," explain the arrangement in Part XIII and complete the following table: Amount c Beginning balance ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1c d Additions during the year ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1d e Distributions during the year ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1e f Ending balance ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1f 2a Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability? ~~~~~ Yes No b If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided on Part XIII  Part V Endowment Funds. Complete if the organization answered "Yes" on Form 990, Part IV, line 10. (a) Current year (b) Prior year (c) Two years back (d) Three years back (e) Four years back 1a Beginning of year balance ~~~~~~~ b Contributions ~~~~~~~~~~~~~~ c Net investment earnings, gains, and losses d Grants or scholarships ~~~~~~~~~ e Other expenditures for facilities and programs ~~~~~~~~~~~~~ f Administrative expenses ~~~~~~~~ g End of year balance ~~~~~~~~~~ 2 Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as: a Board designated or quasi‐endowment | % b Permanent endowment | % c Temporarily restricted endowment | % The percentages on lines 2a, 2b, and 2c should equal 100%. 3a Are there endowment funds not in the possession of the organization that are held and administered for the organization by: Yes No (i) unrelated organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3a(i) (ii) related organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3a(ii) b If "Yes" on line 3a(ii), are the related organizations listed as required on Schedule R?~~~~~~~~~~~~~~~~~~~~ 3b 4 Describe in Part XIII the intended uses of the organization's endowment funds. Part VI Land, Buildings, and Equipment. Complete if the organization answered "Yes" on Form 990, Part IV, line 11a. See Form 990, Part X, line 10. Description of property (a) Cost or other (b) Cost or other (c) Accumulated (d) Book value basis (investment) basis (other) depreciation 1a Land ~~~~~~~~~~~~~~~~~~~~ 128,796,522. 128,796,522. b Buildings ~~~~~~~~~~~~~~~~~~ 661,722,114.364,215,685.297,506,429. c Leasehold improvements ~~~~~~~~~~ 46,191,841. 34,987,341. 11,204,500. d Equipment ~~~~~~~~~~~~~~~~~ 445,971,735.365,472,288. 80,499,447. e Other  582,250,415.297,069,875.285,180,540. Total. Add lines 1a through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10c.) | 803,187,438. Schedule D (Form 990) 2017

732052 10‐09‐17 34 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule D (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part VII Investments ‐ Other Securities. Complete if the organization answered "Yes" on Form 990, Part IV, line 11b. See Form 990, Part X, line 12. (a) Description of security or category (including name of security) (b) Book value (c) Method of valuation: Cost or end‐of‐year market value (1) Financial derivatives ~~~~~~~~~~~~~~~ (2) Closely‐held equity interests ~~~~~~~~~~~ (3) Other (A) OTHER SECURITIES 532,527,074. END‐OF‐YEAR MARKET VALUE (B) INVESTMENTS IN AFFILIATES 137,624,766. COST (C) (D) (E) (F) (G) (H) Total. (Col. (b) must equal Form 990, Part X, col. (B) line 12.) | 670,151,840. Part VIII Investments ‐ Program Related. Complete if the organization answered "Yes" on Form 990, Part IV, line 11c. See Form 990, Part X, line 13. (a) Description of investment (b) Book value (c) Method of valuation: Cost or end‐of‐year market value (1) (2) (3) (4) (5) (6) (7) (8) (9) Total. (Col. (b) must equal Form 990, Part X, col. (B) line 13.) | Part IX Other Assets. Complete if the organization answered "Yes" on Form 990, Part IV, line 11d. See Form 990, Part X, line 15. (a) Description (b) Book value (1) (2) (3) (4) (5) (6) (7) (8) (9) Total. (Column (b) must equal Form 990, Part X, col. (B) line 15.)  | Part X Other Liabilities. Complete if the organization answered "Yes" on Form 990, Part IV, line 11e or 11f. See Form 990, Part X, line 25. 1. (a) Description of liability (b) Book value (1) Federal income taxes 0. (2) OTHER LIABILITIES 103,588,102. (3) DUE TO AFFILIATES 1,945,554,534. (4) THIRD PARTY PAYMENT PAYABLE 1,575,823. (5) NON‐QUALIFIED BENEFIT PLANS 134,292,777. (6) ACCRUED INTEREST 66,597. (7) LINE OF CREDIT 49,000,000. (8) (9) Total. (Column (b) must equal Form 990, Part X, col. (B) line 25.)  | 2,234,077,833. 2. Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII X Schedule D (Form 990) 2017

732053 10‐09‐17 35 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule D (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return. Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. 1 Total revenue, gains, and other support per audited financial statements ~~~~~~~~~~~~~~~~~~~ 1 2 Amounts included on line 1 but not on Form 990, Part VIII, line 12: a Net unrealized gains (losses) on investments ~~~~~~~~~~~~~~~~~~ 2a b Donated services and use of facilities ~~~~~~~~~~~~~~~~~~~~~~ 2b c Recoveries of prior year grants ~~~~~~~~~~~~~~~~~~~~~~~~~ 2c d Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 2d e Add lines 2a through 2d ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2e 3 Subtract line 2e from line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 4 Amounts included on Form 990, Part VIII, line 12, but not on line 1: a Investment expenses not included on Form 990, Part VIII, line 7b ~~~~~~~~ 4a b Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 4b c Add lines 4a and 4b ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4c 5 Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.)  5 Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. 1 Total expenses and losses per audited financial statements ~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 2 Amounts included on line 1 but not on Form 990, Part IX, line 25: a Donated services and use of facilities ~~~~~~~~~~~~~~~~~~~~~~ 2a b Prior year adjustments ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2b c Other losses ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2c d Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 2d e Add lines 2a through 2d ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2e 3 Subtract line 2e from line 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 4 Amounts included on Form 990, Part IX, line 25, but not on line 1: a Investment expenses not included on Form 990, Part VIII, line 7b ~~~~~~~~ 4a b Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~~~~~~~~~ 4b c Add lines 4a and 4b ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4c 5 Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.)  5 Part XIII Supplemental Information. Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part IV, lines 1b and 2b; Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.

PART X, LINE 2: LIABILITY UNDER FIN 48 (ASC 740) FOOTNOTE

THE AUDIT FOR NOVANT HEALTH AND ITS AFFILIATES IS PREPARED ON A

CONSOLIDATED BASIS. THE COMPANY IS REQUIRED TO EVALUATE UNCERTAIN TAX

POSITIONS. THIS EVALUATION INCLUDES A QUANTIFICATION OF TAX RISK IN AREAS

SUCH AS UNRELATED BUSINESS TAXABLE INCOME AND THE TAXATION OF OUR

FOR‐PROFIT SUBSIDIARIES. THIS EVALUATION DID NOT HAVE A MATERIAL EFFECT ON

THE COMPANY'S CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN NET

ASSETS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016.

732054 10‐09‐17 Schedule D (Form 990) 2017 36 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule D (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 5 Part XIII Supplemental Information (continued)

Schedule D (Form 990) 2017 732055 10‐09‐17 37 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE F Statement of Activities Outside the United States OMB No. 1545‐0047 (Form 990) | Complete if the organization answered "Yes" on Form 990, Part IV, line 14b, 15, or 16. 2017 | Attach to Form 990. Department of the Treasury Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number

NOVANT HEALTH, INC. 56‐1376950 Part I General Information on Activities Outside the United States. Complete if the organization answered "Yes" on Form 990, Part IV, line 14b. 1 For grantmakers. Does the organization maintain records to substantiate the amount of its grants and other assistance, the grantees' eligibility for the grants or assistance, and the selection criteria used to award the grants or assistance? ~~ Yes X No

2 For grantmakers. Describe in Part V the organization's procedures for monitoring the use of its grants and other assistance outside the United States. 3 Activities per Region. (The following Part I, line 3 table can be duplicated if additional space is needed.) (a) Region (b) Number of (c) Number of (d) Activities conducted in the region (e) If activity listed in (d) (f) Total offices employees, (by type) (such as, fundraising, pro‐ is a program service, expenditures agents, and in the region gram services, investments, grants to describe specific type for and independent investments contractors recipients located in the region) of service(s) in the region in the region in the region NOVANT HEALTH TEAM MEMBERS IN CONJUNCTION WITH KYBELE VOLUNTEERS SUB-SAHARAN AFRICA 0 7 PROGRAM SERVICES PROVIDED HANDS-ON 25,000.

CENTRAL AMERICA AND THE CARIBBEAN INVESTMENTS 352,931,000.

EUROPE INVESTMENTS 129,285,000.

3 a Sub‐total ~~~~~~ 0 7 482,241,000. b Total from continuation sheets to Part I ~~~ 0 0 0. c Totals (add lines 3a and 3b)  0 7 482,241,000. LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule F (Form 990) 2017 SEE PART V FOR COLUMN (E) DESCRIPTIONS

732071 10‐06‐17 38 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule F (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Grants and Other Assistance to Organizations or Entities Outside the United States. Complete if the organization answered "Yes" on Form 990, Part IV, line 15, for any recipient who received more than $5,000. Part II can be duplicated if additional space is needed.

1 (b) IRS code section (d) Purpose of (e) Amount (f) Manner of (g) Amount of (h) Description (i) Method of (a) Name of organization (c) Region noncash of noncash valuation (book, FMV, and EIN (if applicable) grant of cash grant cash disbursement assistance assistance appraisal, other)

CENTRAL AMERICA MEDICAL EQUIPMENT AND THE CARIBBEAN 0. 42,645.AND SUPPLIES FMV

SUB-SAHARAN MEDICAL EQUIPMENT AFRICA 0. 54,422.AND SUPPLIES FMV

SUB-SAHARAN MEDICAL EQUIPMENT AFRICA 0. 73,676.AND SUPPLIES FMV

2 Enter total number of recipient organizations listed above that are recognized as charities by the foreign country, recognized as tax‐exempt by the IRS, or for which the grantee or counsel has provided a section 501(c)(3) equivalency letter ~~~~~~~~~~~~~~~~~~~~~~ | 3 3 Enter total number of other organizations or entities  | Schedule F (Form 990) 2017

732072 10‐06‐17 39

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule F (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Grants and Other Assistance to Individuals Outside the United States. Complete if the organization answered "Yes" on Form 990, Part IV, line 16. Part III can be duplicated if additional space is needed. (c) Number of (d) Amount of (e) Manner of (f) Amount of (g) Description of (h) Method of (a) Type of grant or assistance (b) Region recipients cash grant cash disbursement noncash noncash assistance valuation assistance (book, FMV, appraisal, other)

Schedule F (Form 990) 2017

732073 10‐06‐17 40

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule F (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part IV Foreign Forms

1 Was the organization a U.S. transferor of property to a foreign corporation during the tax year? If "Yes," the organization may be required to file Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation (see Instructions for Form 926) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Yes No

2 Did the organization have an interest in a foreign trust during the tax year? If "Yes," the organization may be required to separately file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and/or Form 3520‐A, Annual Information Return of Foreign Trust With a U.S. Owner (see Instructions for Forms 3520 and 3520‐A; don't file with Form 990)~~~~~~~~~~~ Yes X No

3 Did the organization have an ownership interest in a foreign corporation during the tax year? If "Yes," the organization may be required to file Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations (see Instructions for Form 5471) ~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Yes No

4 Was the organization a direct or indirect shareholder of a passive foreign investment company or a qualified electing fund during the tax year? If "Yes," the organization may be required to file Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund (see Instructions for Form 8621) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Yes No

5 Did the organization have an ownership interest in a foreign partnership during the tax year? If "Yes," the organization may be required to file Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships (see Instructions for Form 8865) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Yes No

6 Did the organization have any operations in or related to any boycotting countries during the tax year? If "Yes," the organization may be required to separately file Form 5713, International Boycott Report (see Instructions for Form 5713; don't file with Form 990) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes X No

Schedule F (Form 990) 2017

732074 10‐06‐17 41 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule F (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 5 Part V Supplemental Information Provide the information required by Part I, line 2 (monitoring of funds); Part I, line 3, column (f) (accounting method; amounts of investments vs. expenditures per region); Part II, line 1 (accounting method); Part III (accounting method); and Part III, column (c) (estimated number of recipients), as applicable. Also complete this part to provide any additional information. See instructions.

PART I, LINE 3, COLUMN (E):

REGION: SUB‐SAHARAN AFRICA

(E) SPECIFIC TYPES OF SERVICES IN REGION: NOVANT HEALTH TEAM MEMBERS IN

CONJUNCTION WITH KYBELE VOLUNTEERS PROVIDED HANDS‐ON MENTORING AND

COACHING IN THE OBSTETRIC CAPACITY, INCLUDING TEACHING OF ADVANCED LIFE

SUPPORT IN OBSTETRICS (ALSO) COURSE AND ANESTHESIA TECHNIQUES.

732075 10‐06‐17 Schedule F (Form 990) 2017 42 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE G OMB No. 1545‐0047 Supplemental Information Regarding Fundraising or Gaming Activities (Form 990 or 990‐EZ) Complete if the organization answered "Yes" on Form 990, Part IV, line 17, 18, or 19, or if the 2017 organization entered more than $15,000 on Form 990‐EZ, line 6a. Department of the Treasury | Attach to Form 990 or Form 990‐EZ. Open to Public Internal Revenue Service Inspection | Go to www.irs.gov/Form990 for the latest instructions. Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Fundraising Activities. Complete if the organization answered "Yes" on Form 990, Part IV, line 17. Form 990‐EZ filers are not required to complete this part. 1 Indicate whether the organization raised funds through any of the following activities. Check all that apply. a Mail solicitations e Solicitation of non‐government grants b Internet and email solicitations f Solicitation of government grants c Phone solicitations g Special fundraising events d In‐person solicitations 2 a Did the organization have a written or oral agreement with any individual (including officers, directors, trustees, or key employees listed in Form 990, Part VII) or entity in connection with professional fundraising services? Yes No b If "Yes," list the 10 highest paid individuals or entities (fundraisers) pursuant to agreements under which the fundraiser is to be compensated at least $5,000 by the organization.

(iii) Did (v) Amount paid (vi) Amount paid (i) Name and address of individual fundraiser (iv) Gross receipts to (or retained by) (ii) Activity have custody fundraiser to (or retained by) or entity (fundraiser) or control of from activity organization contributions? listed in col. (i)

Yes No

Total  | 3 List all states in which the organization is registered or licensed to solicit contributions or has been notified it is exempt from registration or licensing.

LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990‐EZ. Schedule G (Form 990 or 990‐EZ) 2017

732081 09‐13‐17 43 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule G (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Fundraising Events. Complete if the organization answered "Yes" on Form 990, Part IV, line 18, or reported more than $15,000 of fundraising event contributions and gross income on Form 990‐EZ, lines 1 and 6b. List events with gross receipts greater than $5,000. (a) Event #1 (b) Event #2 (c) Other events (d) Total events (add col. (a) through MASQUERADE UNIFORMS 5 col. (c)) (event type) (event type) (total number)

1 Gross receipts ~~~~~~~~~~~~~~ 4,751. 3,513. 9,961. 18,225. Revenue

2 Less: Contributions ~~~~~~~~~~~

3 Gross income (line 1 minus line 2)  4,751. 3,513. 9,961. 18,225.

4 Cash prizes ~~~~~~~~~~~~~~~

5 Noncash prizes ~~~~~~~~~~~~~

6 Rent/facility costs ~~~~~~~~~~~~

7 Food and beverages ~~~~~~~~~~ Direct Expenses 8 Entertainment ~~~~~~~~~~~~~~ 9 Other direct expenses ~~~~~~~~~~ 10 Direct expense summary. Add lines 4 through 9 in column (d) ~~~~~~~~~~~~~~~~~~~~~~~~ | 11 Net income summary. Subtract line 10 from line 3, column (d)  | 18,225. Part III Gaming. Complete if the organization answered "Yes" on Form 990, Part IV, line 19, or reported more than $15,000 on Form 990‐EZ, line 6a. (b) Pull tabs/instant (d) Total gaming (add (a) Bingo (c) Other gaming bingo/progressive bingo col. (a) through col. (c))

Revenue 1 Gross revenue 

2 Cash prizes ~~~~~~~~~~~~~~~

3 Noncash prizes ~~~~~~~~~~~~~

4 Rent/facility costs ~~~~~~~~~~~~ Direct Expenses

5 Other direct expenses  Yes % Yes % Yes % 6 Volunteer labor ~~~~~~~~~~~~~ No No No

7 Direct expense summary. Add lines 2 through 5 in column (d) ~~~~~~~~~~~~~~~~~~~~~~~~ |

8 Net gaming income summary. Subtract line 7 from line 1, column (d)  |

9 Enter the state(s) in which the organization conducts gaming activities: a Is the organization licensed to conduct gaming activities in each of these states? ~~~~~~~~~~~~~~~~~~~~ Yes No b If "No," explain:

10a Were any of the organization's gaming licenses revoked, suspended, or terminated during the tax year?~~~~~~~~~ Yes No b If "Yes," explain:

732082 09‐13‐17 Schedule G (Form 990 or 990‐EZ) 2017

44 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule G (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 11 Does the organization conduct gaming activities with nonmembers?~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No 12 Is the organization a grantor, beneficiary or trustee of a trust, or a member of a partnership or other entity formed to administer charitable gaming? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No 13 Indicate the percentage of gaming activity conducted in: a The organization's facility ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 13a % b An outside facility ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 13b % 14 Enter the name and address of the person who prepares the organization's gaming/special events books and records:

Name |

Address |

15a Does the organization have a contract with a third party from whom the organization receives gaming revenue? ~~~~~~ Yes No

b If "Yes," enter the amount of gaming revenue received by the organization | $ and the amount of gaming revenue retained by the third party | $ c If "Yes," enter name and address of the third party:

Name |

Address |

16 Gaming manager information:

Name |

Gaming manager compensation | $

Description of services provided |

Director/officer Employee Independent contractor

17 Mandatory distributions: a Is the organization required under state law to make charitable distributions from the gaming proceeds to retain the state gaming license? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Yes No b Enter the amount of distributions required under state law to be distributed to other exempt organizations or spent in the organization's own exempt activities during the tax year | $ Part IV Supplemental Information. Provide the explanations required by Part I, line 2b, columns (iii) and (v); and Part III, lines 9, 9b, 10b, 15b, 15c, 16, and 17b, as applicable. Also provide any additional information. See instructions.

732083 09‐13‐17 Schedule G (Form 990 or 990‐EZ) 2017 45 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule G (Form 990 or 990‐EZ) NOVANT HEALTH, INC. 56‐1376950 Page 4 Part IV Supplemental Information (continued)

Schedule G (Form 990 or 990‐EZ) 732084 04‐01‐17 46 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE H OMB No. 1545‐0047 (Form 990) Hospitals | Complete if the organization answered "Yes" on Form 990, Part IV, question 20. 2017 Department of the Treasury | Attach to Form 990. Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Financial Assistance and Certain Other Community Benefits at Cost Yes No 1a Did the organization have a financial assistance policy during the tax year? If "No," skip to question 6a ~~~~~~~~~~~ 1a X b If "Yes," was it a written policy?  1b X If the organization had multiple hospital facilities, indicate which of the following best describes application of the financial assistance policy to its various hospital 2 facilities during the tax year. X Applied uniformly to all hospital facilities Applied uniformly to most hospital facilities Generally tailored to individual hospital facilities 3 Answer the following based on the financial assistance eligibility criteria that applied to the largest number of the organization's patients during the tax year. a Did the organization use Federal Poverty Guidelines (FPG) as a factor in determining eligibility for providing free care? If "Yes," indicate which of the following was the FPG family income limit for eligibility for free care: ~~~~~~~~~~~~~ 3a X 100% 150% 200% X Other 300 % b Did the organization use FPG as a factor in determining eligibility for providing discounted care? If "Yes," indicate which of the following was the family income limit for eligibility for discounted care: ~~~~~~~~~~~~~~~~~~~~~~~~ 3b X 200% 250% 300% 350% 400% Other % c If the organization used factors other than FPG in determining eligibility, describe in Part VI the criteria used for determining eligibility for free or discounted care. Include in the description whether the organization used an asset test or other threshold, regardless of income, as a factor in determining eligibility for free or discounted care. 4 Did the organization's financial assistance policy that applied to the largest number of its patients during the tax year provide for free or discounted care to the "medically indigent"? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4 X 5a Did the organization budget amounts for free or discounted care provided under its financial assistance policy during the tax year? ~~~~ 5a X b If "Yes," did the organization's financial assistance expenses exceed the budgeted amount?~~~~~~~~~~~~~~~~ 5b X c If "Yes" to line 5b, as a result of budget considerations, was the organization unable to provide free or discounted care to a patient who was eligible for free or discounted care? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5c X 6a Did the organization prepare a community benefit report during the tax year? ~~~~~~~~~~~~~~~~~~~~~~~ 6a X b If "Yes," did the organization make it available to the public?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6b X Complete the following table using the worksheets provided in the Schedule H instructions. Do not submit these worksheets with the Schedule H. 7 Financial Assistance and Certain Other Community Benefits at Cost (a) Number of (b) Persons (c) Total community (d) Direct offsetting (e) Net community (f) Percent Financial Assistance and activities or served benefit expense revenue benefit expense of total Means‐Tested Government Programs programs (optional) (optional) expense a Financial Assistance at cost (from Worksheet 1) ~~~~~~~~~~ 10,673,884. 10,673,884. 4.02% b Medicaid (from Worksheet 3, column a) ~~~~~~~~~~~ 23,036,020. 11,909,840. 11,126,180. 4.20% c Costs of other means‐tested government programs (from Worksheet 3, column b) ~~~~~ d Total Financial Assistance and Means‐Tested Government Programs 33,709,904. 11,909,840. 21,800,064. 8.22% Other Benefits e Community health improvement services and community benefit operations (from Worksheet 4) ~~~~~~~ 390,963. 12,994. 377,969. .14% f Health professions education (from Worksheet 5) ~~~~~~~ 163,958. 163,958. .06% g Subsidized health services (from Worksheet 6) ~~~~~~~ 11,070. 3,500. 7,570. .00% h Research (from Worksheet 7) ~~ i Cash and in‐kind contributions for community benefit (from Worksheet 8) ~~~~~~~~~ 1,000. 1,000. .00% j Total. Other Benefits ~~~~~~ 566,991. 16,494. 550,497. .20% k Total. Add lines 7d and 7j  34,276,895. 11,926,334. 22,350,561. 8.42% 732091 11‐28‐17 LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule H (Form 990) 2017 47 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Community Building Activities Complete this table if the organization conducted any community building activities during the tax year, and describe in Part VI how its community building activities promoted the health of the communities it serves. (a) Number of (b) Persons (c) Total (d) Direct (e) Net (f) Percent of activities or programs served (optional) community offsetting revenue community total expense (optional) building expense building expense 1 Physical improvements and housing 2,500. 2,500. .00% 2 Economic development 150,000. 150,000. .06% 3 Community support 49,442. 49,442. .02% 4 Environmental improvements 5 Leadership development and training for community members 6 Coalition building 7 Community health improvement advocacy 8 Workforce development 54,597. 54,597. .02% 9 Other 10 Total 256,539. 256,539. .10% Part III Bad Debt, Medicare, & Collection Practices Section A. Bad Debt Expense Yes No 1 Did the organization report bad debt expense in accordance with Healthcare Financial Management Association Statement No. 15? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 X 2 Enter the amount of the organization's bad debt expense. Explain in Part VI the methodology used by the organization to estimate this amount ~~~~~~~~~~~~~~~ 2 7,351,407. 3 Enter the estimated amount of the organization's bad debt expense attributable to patients eligible under the organization's financial assistance policy. Explain in Part VI the methodology used by the organization to estimate this amount and the rationale, if any, for including this portion of bad debt as community benefit ~~~~~~~~~~~~~~~~~ 3 0. 4 Provide in Part VI the text of the footnote to the organization's financial statements that describes bad debt expense or the page number on which this footnote is contained in the attached financial statements. Section B. Medicare 5 Enter total revenue received from Medicare (including DSH and IME) ~~~~~~~~~~~~ 5 26,160,042. 6 Enter Medicare allowable costs of care relating to payments on line 5 ~~~~~~~~~~~~ 6 29,814,664. 7 Subtract line 6 from line 5. This is the surplus (or shortfall) ~~~~~~~~~~~~~~~~~~ 7 ‐3,654,622. 8 Describe in Part VI the extent to which any shortfall reported in line 7 should be treated as community benefit. Also describe in Part VI the costing methodology or source used to determine the amount reported on line 6. Check the box that describes the method used: Cost accounting system X Cost to charge ratio Other Section C. Collection Practices 9a Did the organization have a written debt collection policy during the tax year? ~~~~~~~~~~~~~~~~~~~~~~~ 9a X b If "Yes," did the organization's collection policy that applied to the largest number of its patients during the tax year contain provisions on the collection practices to be followed for patients who are known to qualify for financial assistance? Describe in Part VI  9b X Part IV Management Companies and Joint Ventures (owned 10% or more by officers, directors, trustees, key employees, and physicians ‐ see instructions) (a) Name of entity (b) Description of primary (c) Organization's (d) Officers, direct‐ (e) Physicians' activity of entity profit % or stock ors, trustees, or profit % or ownership % key employees' stock profit % or stock ownership % ownership % 1 ENDOSCOPY CENTER OF LAKE NORMAN HEALTHCARE 51.00% .00% 49.00%

732092 11‐28‐17 Schedule H (Form 990) 2017 48 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part V Facility Information Section A. Hospital Facilities (list in order of size, from largest to smallest) How many hospital facilities did the organization operate during the tax year? 1 Name, address, primary website address, and state license number Facility (and if a group return, the name and EIN of the subordinate hospital reporting organization that operates the hospital facility) group Other (describe) Licensed hospital Gen. medical & surgical Children's hospital Teaching hospital Critical access hospital Research facility ER‐24 hours ER‐other 1 NH BRUNSWICK MEDICAL CENTER 240 HOSPITAL DRIVE NE BOLIVIA, NC 28422 WWW.NOVANTHEALTH.ORG H0250 X X X

732093 11‐28‐17 Schedule H (Form 990) 2017 49 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part V Facility Information (continued) Section B. Facility Policies and Practices (complete a separate Section B for each of the hospital facilities or facility reporting groups listed in Part V, Section A)

Name of hospital facility or letter of facility reporting group NH BRUNSWICK MEDICAL CENTER

Line number of hospital facility, or line numbers of hospital facilities in a facility reporting group (from Part V, Section A): 1 Yes No Community Health Needs Assessment 1 Was the hospital facility first licensed, registered, or similarly recognized by a state as a hospital facility in the current tax year or the immediately preceding tax year? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 X 2 Was the hospital facility acquired or placed into service as a tax‐exempt hospital in the current tax year or the immediately preceding tax year? If "Yes," provide details of the acquisition in Section C ~~~~~~~~~~~~~~~~~ 2 X 3 During the tax year or either of the two immediately preceding tax years, did the hospital facility conduct a community health needs assessment (CHNA)? If "No," skip to line 12~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 X If "Yes," indicate what the CHNA report describes (check all that apply): a X A definition of the community served by the hospital facility b X Demographics of the community c X Existing health care facilities and resources within the community that are available to respond to the health needs of the community d X How data was obtained e X The significant health needs of the community f Primary and chronic disease needs and other health issues of uninsured persons, low‐income persons, and minority groups g X The process for identifying and prioritizing community health needs and services to meet the community health needs h X The process for consulting with persons representing the community's interests i X The impact of any actions taken to address the significant health needs identified in the hospital facility's prior CHNA(s) j Other (describe in Section C) 4 Indicate the tax year the hospital facility last conducted a CHNA: 20 16 5 In conducting its most recent CHNA, did the hospital facility take into account input from persons who represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health? If "Yes," describe in Section C how the hospital facility took into account input from persons who represent the community, and identify the persons the hospital facility consulted ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5 X 6a Was the hospital facility's CHNA conducted with one or more other hospital facilities? If "Yes," list the other hospital facilities in Section C ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6a X b Was the hospital facility's CHNA conducted with one or more organizations other than hospital facilities? If "Yes," list the other organizations in Section C ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6b X 7 Did the hospital facility make its CHNA report widely available to the public? ~~~~~~~~~~~~~~~~~~~~~~~~ 7 X If "Yes," indicate how the CHNA report was made widely available (check all that apply): a Hospital facility's website (list url): b X Other website (list url): WWW.NOVANTHEALTH.ORG c X Made a paper copy available for public inspection without charge at the hospital facility d Other (describe in Section C) 8 Did the hospital facility adopt an implementation strategy to meet the significant community health needs identified through its most recently conducted CHNA? If "No," skip to line 11 ~~~~~~~~~~~~~~~~~~~~~~~~ 8 X 9 Indicate the tax year the hospital facility last adopted an implementation strategy: 20 16 10 Is the hospital facility's most recently adopted implementation strategy posted on a website? ~~~~~~~~~~~~~~~~ 10 X a If "Yes," (list url): WWW.NOVANTHEALTH.ORG b If "No," is the hospital facility's most recently adopted implementation strategy attached to this return? ~~~~~~~~~~~ 10b 11 Describe in Section C how the hospital facility is addressing the significant needs identified in its most recently conducted CHNA and any such needs that are not being addressed together with the reasons why such needs are not being addressed. 12a Did the organization incur an excise tax under section 4959 for the hospital facility's failure to conduct a CHNA as required by section 501(r)(3)? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 12a X b If "Yes" to line 12a, did the organization file Form 4720 to report the section 4959 excise tax? ~~~~~~~~~~~~~~~~ 12b c If "Yes" to line 12b, what is the total amount of section 4959 excise tax the organization reported on Form 4720 for all of its hospital facilities? $ 732094 11‐28‐17 Schedule H (Form 990) 2017 50 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 5 Part V Facility Information (continued) Financial Assistance Policy (FAP)

Name of hospital facility or letter of facility reporting group NH BRUNSWICK MEDICAL CENTER Yes No Did the hospital facility have in place during the tax year a written financial assistance policy that: 13 Explained eligibility criteria for financial assistance, and whether such assistance included free or discounted care? ~~~~~ 13 X If "Yes," indicate the eligibility criteria explained in the FAP: a X Federal poverty guidelines (FPG), with FPG family income limit for eligibility for free care of 300 % and FPG family income limit for eligibility for discounted care of 0 % b Income level other than FPG (describe in Section C) c X Asset level d Medical indigency e X Insurance status f Underinsurance status g X Residency h X Other (describe in Section C) 14 Explained the basis for calculating amounts charged to patients?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 14 X 15 Explained the method for applying for financial assistance?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 15 X If "Yes," indicate how the hospital facility's FAP or FAP application form (including accompanying instructions) explained the method for applying for financial assistance (check all that apply): a X Described the information the hospital facility may require an individual to provide as part of his or her application b X Described the supporting documentation the hospital facility may require an individual to submit as part of his or her application c X Provided the contact information of hospital facility staff who can provide an individual with information about the FAP and FAP application process d Provided the contact information of nonprofit organizations or government agencies that may be sources of assistance with FAP applications e Other (describe in Section C) 16 Was widely publicized within the community served by the hospital facility? ~~~~~~~~~~~~~~~~~~~~~~~~ 16 X If "Yes," indicate how the hospital facility publicized the policy (check all that apply): a X The FAP was widely available on a website (list url): SEE SECTION C b X The FAP application form was widely available on a website (list url): SEE SECTION C c X A plain language summary of the FAP was widely available on a website (list url): SEE SECTION C d X The FAP was available upon request and without charge (in public locations in the hospital facility and by mail) e X The FAP application form was available upon request and without charge (in public locations in the hospital facility and by mail) f X A plain language summary of the FAP was available upon request and without charge (in public locations in the hospital facility and by mail) g X Individuals were notified about the FAP by being offered a paper copy of the plain language summary of the FAP, by receiving a conspicuous written notice about the FAP on their billing statements, and via conspicuous public displays or other measures reasonably calculated to attract patients' attention

h X Notified members of the community who are most likely to require financial assistance about availability of the FAP i X The FAP, FAP application form, and plain language summary of the FAP were translated into the primary language(s) spoken by LEP populations j Other (describe in Section C) Schedule H (Form 990) 2017

732095 11‐28‐17 51 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 6 Part V Facility Information (continued) Billing and Collections Name of hospital facility or letter of facility reporting group NH BRUNSWICK MEDICAL CENTER Yes No 17 Did the hospital facility have in place during the tax year a separate billing and collections policy, or a written financial assistance policy (FAP) that explained all of the actions the hospital facility or other authorized party may take upon nonpayment? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 17 X 18 Check all of the following actions against an individual that were permitted under the hospital facility's policies during the tax year before making reasonable efforts to determine the individual's eligibility under the facility's FAP: a Reporting to credit agency(ies) b Selling an individual's debt to another party c Deferring, denying, or requiring a payment before providing medically necessary care due to nonpayment of a previous bill for care covered under the hospital facility's FAP d Actions that require a legal or judicial process e Other similar actions (describe in Section C) f X None of these actions or other similar actions were permitted 19 Did the hospital facility or other authorized party perform any of the following actions during the tax year before making reasonable efforts to determine the individual's eligibility under the facility's FAP? ~~~~~~~~~~~~~~~~~~~~~~ 19 X If "Yes," check all actions in which the hospital facility or a third party engaged: a Reporting to credit agency(ies) b Selling an individual's debt to another party c Deferring, denying, or requiring a payment before providing medically necessary care due to nonpayment of a previous bill for care covered under the hospital facility's FAP d Actions that require a legal or judicial process e Other similar actions (describe in Section C) 20 Indicate which efforts the hospital facility or other authorized party made before initiating any of the actions listed (whether or not checked) in line 19 (check all that apply): a X Provided a written notice about upcoming ECAs (Extraordinary Collection Action) and a plain language summary of the FAP at least 30 days before initiating those ECAs b X Made a reasonable effort to orally notify individuals about the FAP and FAP application process c X Processed incomplete and complete FAP applications d X Made presumptive eligibility determinations e Other (describe in Section C) f None of these efforts were made Policy Relating to Emergency Medical Care 21 Did the hospital facility have in place during the tax year a written policy relating to emergency medical care that required the hospital facility to provide, without discrimination, care for emergency medical conditions to individuals regardless of their eligibility under the hospital facility's financial assistance policy? ~~~~~~~~~~~~~~~ 21 X If "No," indicate why: a The hospital facility did not provide care for any emergency medical conditions b The hospital facility's policy was not in writing c The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Section C) d Other (describe in Section C) Schedule H (Form 990) 2017

732096 11‐28‐17 52 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 7 Part V Facility Information (continued) Charges to Individuals Eligible for Assistance Under the FAP (FAP‐Eligible Individuals) Name of hospital facility or letter of facility reporting group NH BRUNSWICK MEDICAL CENTER Yes No 22 Indicate how the hospital facility determined, during the tax year, the maximum amounts that can be charged to FAP‐eligible individuals for emergency or other medically necessary care. a The hospital facility used a look‐back method based on claims allowed by Medicare fee‐for‐service during a prior 12‐month period b The hospital facility used a look‐back method based on claims allowed by Medicare fee‐for‐service and all private health insurers that pay claims to the hospital facility during a prior 12‐month period c The hospital facility used a look‐back method based on claims allowed by Medicaid, either alone or in combination with Medicare fee‐for‐service and all private health insurers that pay claims to the hospital facility during a prior 12‐month period d X The hospital facility used a prospective Medicare or Medicaid method 23 During the tax year, did the hospital facility charge any FAP‐eligible individual to whom the hospital facility provided emergency or other medically necessary services more than the amounts generally billed to individuals who had insurance covering such care? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 23 X If "Yes," explain in Section C. 24 During the tax year, did the hospital facility charge any FAP‐eligible individual an amount equal to the gross charge for any service provided to that individual?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 24 X If "Yes," explain in Section C. Schedule H (Form 990) 2017

732097 11‐28‐17 53 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part V Facility Information (continued) Section C. Supplemental Information for Part V, Section B. Provide descriptions required for Part V, Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j, 18e, 19e, 20e, 21c, 21d, 23, and 24. If applicable, provide separate descriptions for each hospital facility in a facility reporting group, designated by facility reporting group letter and hospital facility line number from Part V, Section A ("A, 1," "A, 4," "B, 2," "B, 3," etc.) and name of hospital facility.

NH BRUNSWICK MEDICAL CENTER:

PART V, SECTION B, LINE 3E:

SEVERAL SOCIAL, BEHAVIORAL, AND CLINICAL HEALTH NEEDS WERE IDENTIFIED IN

THE NEEDS ASSESSMENT. ONCE THE HEALTH NEEDS WERE IDENTIFIED, SURVEYS AND

COMMUNITY MEETINGS WERE CONDUCTED IN WHICH THE VARIOUS COMMUNITY

STAKEHOLDERS RANKED THE HEALTH ISSUES ACCORDING TO THE YEARS OF POTENTIAL

LIFE LOST AND MAGNITUDE OF IMPACT. THE INFORMATION GATHERED WAS THEN

MATRIXED AND SCORED IN ORDER TO RANK THE FOCUS AREAS AND PRIORITIZE THE

IDENTIFIED HEALTH NEEDS. FURTHER PRIORITIZATION OCCURRED WITH THE REVIEW

BY THE ORGANIZATION'S BOARD.

NH BRUNSWICK MEDICAL CENTER:

PART V, SECTION B, LINE 5:

WHILE CONDUCTING THE CHNA, THE HOSPITAL FACILITY(IES) SOLICITED INPUT

FROM, AND CONSULTED WITH, A VARIETY OF COMMUNITY REPRESENTATIVES

INCLUDING, BUT NOT LIMITED TO, REPRESENTATIVES OF CITY AND COUNTY

GOVERNMENT INCLUDING HEALTH DEPARTMENTS, COMMUNITY‐BASED ORGANIZATIONS,

FOUNDATIONS, CHURCHES, COLLEGES/UNIVERSITIES, COMMUNITY COALITIONS AND

OTHER SOCIAL SERVICE AGENCIES. INPUT WAS GATHERED THROUGH COMMUNITY

MEETINGS, STAKEHOLDERS INTERVIEWS, AND SOLICITED THROUGH WRITTEN COMMENTS

THROUGHOUT THE SURVEY PERIOD UNTIL THE FINAL COMMUNITY PRIORITY SETTING

MEETING(S) AND SURVEY. THE SCOPE OF EXPERTISE WAS BROAD AND INCLUDED SUCH

AREAS AS PUBLIC HEALTH, MINORITY POPULATIONS, HEALTH DISPARITIES, AND

SOCIAL SERVICES. 732098 11‐28‐17 Schedule H (Form 990) 2017 54 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part V Facility Information (continued) Section C. Supplemental Information for Part V, Section B. Provide descriptions required for Part V, Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j, 18e, 19e, 20e, 21c, 21d, 23, and 24. If applicable, provide separate descriptions for each hospital facility in a facility reporting group, designated by facility reporting group letter and hospital facility line number from Part V, Section A ("A, 1," "A, 4," "B, 2," "B, 3," etc.) and name of hospital facility.

NH BRUNSWICK MEDICAL CENTER:

PART V, SECTION B, LINE 11:

THE HOSPITAL FACILITY(IES) IS/ARE A PART OF NOVANT HEALTH, AN INTEGRATED

NOT‐FOR‐PROFIT HEALTH SYSTEM. AS SUCH, NOVANT HEALTH INCLUDES MULTIPLE

HOSPITAL FACILITIES AND HAS ENGAGED IN CHNAS FOR ALL OF THE COMMUNITIES

BEING SERVED. THE FACILITY'S CHNA IDENTIFIED MULTIPLE NEEDS FOR THE

COMMUNITY SERVED. THE NEEDS IDENTIFIED WERE REVIEWED AND PRIORITIZED BY

THE CHNA RESOURCE GROUP AND SUBSEQUENTLY BY EACH FACILITY'S BOARD. THEY

EVALUATED EACH DOCUMENTED NEED AND ITS INTERSECTION WITH THE

ORGANIZATION'S VISION, COMMITMENTS, AND KEY STRENGTHS BEFORE FURTHER

PRIORITIZING THE HEALTH NEEDS AND AGREEING UPON THE TOP HEALTH PRIORITIES

TO BE ADDRESSED. WHERE POSSIBLE, WE HAVE LEVERAGED THE SYSTEM'S STRENGTHS

AND RESOURCES TO BEST ADDRESS THOSE NEEDS THAT ARE HIGHEST IN PRIORITY AND

CONSISTENT ACROSS COMMUNITIES. NOVANT HEALTH AND EACH OF ITS HOSPITAL

FACILITIES HAVE ADOPTED AND EXECUTED AN IMPLEMENTATION STRATEGY THAT

ADDRESSES THE PRIORITIZED COMMUNITY HEALTH NEEDS FROM THE CHNAS. THE

IMPLEMENTATION STRATEGIES OUTLINE THE PLAN THAT THE HOSPITAL FACILITY(IES)

WILL UNDERTAKE TO MEET THOSE HEALTH NEEDS IN EACH OF ITS COMMUNITIES.

CERTAIN NEEDS THAT WERE IDENTIFIED BY THE CHNA HAVE NOT BEEN ADDRESSED. IT

WAS DETERMINED THAT THERE ARE OTHER RESOURCES IN THE COMMUNITY THAT CAN

MORE APPROPRIATELY ADDRESS THESE NEEDS BASED ON SCOPE OF SERVICES AND

SKILL SET. FOR MORE DETAILED INFORMATION, REFER TO THE PUBLICLY AVAILABLE

IMPLEMENTATION PLAN AVAILABLE ON THE WEBSITE; REFER TO THE URL GIVEN

PREVIOUSLY FOR THE POSTING OF THE PLAN.

732098 11‐28‐17 Schedule H (Form 990) 2017 55 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part V Facility Information (continued) Section C. Supplemental Information for Part V, Section B. Provide descriptions required for Part V, Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j, 18e, 19e, 20e, 21c, 21d, 23, and 24. If applicable, provide separate descriptions for each hospital facility in a facility reporting group, designated by facility reporting group letter and hospital facility line number from Part V, Section A ("A, 1," "A, 4," "B, 2," "B, 3," etc.) and name of hospital facility.

NH BRUNSWICK MEDICAL CENTER:

PART V, SECTION B, LINE 13H:

OTHER ELIGIBILITY CRITERIA EXPLAINED IN THE FAP INCLUDE THE FOLLOWING:

FREE CARE IS ONLY APPLICABLE TO MEDICALLY NECESSARY SERVICES; PROVIDER

BASED PHYSICIAN CLINICS REQUIRE THAT PATIENTS MUST HAVE BEEN TREATED BY AN

AFFILIATED MEDICAL GROUP PRIMARY CARE PHYSICIAN WITHIN THE PREVIOUS THREE

YEARS; PATIENTS MUST BE UNABLE TO ACCESS ENTITLEMENT PROGRAMS; PATIENTS

WITH SPECIAL CIRCUMSTANCES SUCH AS BANKRUPTCY MAY ALSO BE ELIGIBLE FOR

CHARITY CARE.

NH BRUNSWICK MEDICAL CENTER

PART V, LINE 16A, FAP WEBSITE:

HTTPS://WWW.NOVANTHEALTH.ORG/HOME/PATIENTS‐‐VISITORS/YOUR‐HEALTHCARE

‐COSTS/FINANCIAL‐ASSISTANCE‐FOR‐THE‐UNINSURED.ASPX

PART V, LINE 16B, FAP APPLICATION WEBSITE:

HTTPS://WWW.NOVANTHEALTH.ORG/HOME/PATIENTS‐‐VISITORS/YOUR‐HEALTHCARE

‐COSTS/FINANCIAL‐ASSISTANCE‐FOR‐THE‐UNINSURED.ASPX

PART V, LINE 16C, FAP PLAIN LANGUAGE SUMMARY WEBSITE:

HTTPS://WWW.NOVANTHEALTH.ORG/HOME/PATIENTS‐‐VISITORS/YOUR‐HEALTHCARE

‐COSTS/FINANCIAL‐ASSISTANCE‐FOR‐THE‐UNINSURED.ASPX

NH BRUNSWICK MEDICAL CENTER:

PART V, SECTION B, LINE 24: 732098 11‐28‐17 Schedule H (Form 990) 2017 56 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 8 Part V Facility Information (continued) Section C. Supplemental Information for Part V, Section B. Provide descriptions required for Part V, Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j, 18e, 19e, 20e, 21c, 21d, 23, and 24. If applicable, provide separate descriptions for each hospital facility in a facility reporting group, designated by facility reporting group letter and hospital facility line number from Part V, Section A ("A, 1," "A, 4," "B, 2," "B, 3," etc.) and name of hospital facility.

IT IS POSSIBLE FOR A FINANCIAL ASSISTANCE POLICY (FAP) ELIGIBLE PATIENT TO

BE CHARGED AN AMOUNT EQUAL TO THE GROSS CHARGE FOR A NON‐EMERGENCY OR

NON‐MEDICALLY NECESSARY SERVICE. HOWEVER, IF THE SERVICE IS DEEMED AN

EMERGENCY OR A MEDICAL NECESSITY, THEN THE FAP ELIGIBLE PATIENT WOULD NOT

BE CHARGED FOR CARE AND WOULD NOT RECEIVE A BILL ONCE FAP ELIGIBILITY HAD

BEEN ESTABLISHED.

732098 11‐28‐17 Schedule H (Form 990) 2017 57 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 9 Part V Facility Information (continued) Section D. Other Health Care Facilities That Are Not Licensed, Registered, or Similarly Recognized as a Hospital Facility

(list in order of size, from largest to smallest)

How many non‐hospital health care facilities did the organization operate during the tax year? 8

Name and address Type of Facility (describe) 1 ENDOSCOPY CENTER OF LAKE NORMAN 16525 HOLLY CREST LANE HUNTERSVILLE, NC 28078 ENDOSCOPY CENTER 2 NH BALLANTYNE OUTPATIENT SURGERY 14215 BALLANTYNE CORPORATE PL, STE 210 CHARLOTTE, NC 28277 AMBULATORY SURGERY CENTER 3 NH BREAST CENTER 1718 EAST 4TH STREET CHARLOTTE, NC 28204 IMAGING CENTER 4 NH HUNTERSVILLE OUTPATIENT SURGERY 10030 GILEAD ROAD HUNTERSVILLE, NC 28078 AMBULATORY SURGERY CENTER 5 NH KERNERSVILLE OUTPATIENT SURGERY 1730 KVILLE MEDICAL PKWY, STE 304 KERNERSVILLE, NC 27284 AMBULATORY SURGERY CENTER 6 NH IMAGING BALLANTYNE 14215 BALLANTYNE CORPORATE PL, STE 140 CHARLOTTE, NC 28277 IMAGING CENTER 7 NH IMAGING STEELE CREEK 13557 STEELECROFT PKWY, SUITE 1100 CHARLOTTE, NC 28278 IMAGING CENTER 8 NH IMAGING SOUTH BRUNSWICK 75 EMERSON BAY ROAD SW, STE 100 CALABASH, NC 28467 IMAGING CENTER

Schedule H (Form 990) 2017

732099 11‐28‐17 58 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information

Provide the following information.

1 Required descriptions. Provide the descriptions required for Part I, lines 3c, 6a, and 7; Part II and Part III, lines 2, 3, 4, 8 and 9b. 2 Needs assessment. Describe how the organization assesses the health care needs of the communities it serves, in addition to any CHNAs reported in Part V, Section B. 3 Patient education of eligibility for assistance. Describe how the organization informs and educates patients and persons who may be billed for patient care about their eligibility for assistance under federal, state, or local government programs or under the organization's financial assistance policy. 4 Community information. Describe the community the organization serves, taking into account the geographic area and demographic constituents it serves. 5 Promotion of community health. Provide any other information important to describing how the organization's hospital facilities or other health care facilities further its exempt purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus funds, etc.). 6 Affiliated health care system. If the organization is part of an affiliated health care system, describe the respective roles of the organization and its affiliates in promoting the health of the communities served. 7 State filing of community benefit report. If applicable, identify all states with which the organization, or a related organization, files a community benefit report.

PART I, LINE 3C:

OTHER CRITERIA BESIDES INCOME AND FPG USED IN DETERMINING ELIGIBILITY FOR

FREE CARE INCLUDE: (1) RESIDENCY ‐ PATIENTS MUST RESIDE WITHIN THE SERVICE

AREA OF THE HOSPITAL; (2) THE KIND OF SERVICE PROVIDED ‐ ONLY MEDICALLY

NECESSARY SERVICES ARE COVERED; (3) PATIENT STATUS ‐ IN PROVIDER BASED

PHYSICIAN CLINICS, PATIENTS MUST HAVE BEEN TREATED BY AN AFFILIATED

MEDICAL GROUP PRIMARY CARE PHYSICIAN WITHIN THE PREVIOUS THREE YEARS; AND

(4) ACCESS TO HEALTH CARE COVERAGE ‐ PATIENTS MUST BE UNABLE TO ACCESS

EMPLOYER SPONSORED HEALTH PLANS OR ENTITLEMENT PROGRAMS. LASTLY, THE

PATIENT MUST BE WITHOUT SUBSTANTIAL LIQUID ASSETS (I.E. CASH‐ON‐HAND).

ASSETS SUCH AS HOUSES, CARS, PENALIZED RETIREMENT SAVINGS FUNDS, ETC. ARE

NOT CONSIDERED LIQUID ASSETS. SUBSTANTIAL ASSETS ARE DEFINED AS ENOUGH

CASH‐ON‐HAND TO COVER THE MEDICAL EXPENSES WITHOUT PLACING A HARDSHIP ON

THE PATIENT. PATIENTS WITH SPECIAL CIRCUMSTANCES SUCH AS BANKRUPTCY MAY

ALSO BE ELIGIBLE FOR CHARITY CARE; DETERMINATION IS MADE ON A CASE BY CASE

BASIS UNDER THESE CIRCUMSTANCES.

732100 11‐28‐17 Schedule H (Form 990) 2017 59 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

PART I, LINE 7:

COSTS REPORTED IN THE TABLE FOR CHARITY CARE AND CERTAIN OTHER COMMUNITY

BENEFITS AMOUNTS ARE CALCULATED USING AN ENTITY SPECIFIC COST TO CHARGE

RATIO BASED ON WORKSHEET 2 (CCR).

PART I, LN 7 COL(F):

THE AMOUNT OF BAD DEBT REMOVED FROM TOTAL EXPENSES (DENOMINATOR) WAS

$7,351,407.

PART II, COMMUNITY BUILDING ACTIVITIES:

THE ORGANIZATION'S COMMUNITY BUILDING ACTIVITIES ADDRESSES THE UNDERLYING

CAUSES OF HEALTH PROBLEMS AND IMPACTS THE HEALTH OF OUR COMMUNITY THROUGH

PARTNERSHIPS WITH LOCAL AGENCIES DEDICATED TO IMPROVING THE LIVES OF ALL

INDIVIDUALS. OUTREACH INCLUDES PROVIDING SUPPORT TO ORGANIZATIONS SUCH AS

LOCAL YMCA'S, UNITED WAY PARTNER AGENCIES, CHAMBERS OF COMMERCE AND OTHER

LOCAL COMMUNITY ORGANIZATIONS, ASSISTING WITH COMMUNITY AND COUNTY

COALITIONS, AND PROVIDING EDUCATION SEMINARS AND TRAINING FOR COMMUNITY

WORKFORCES.

PART III, LINE 2:

THE ALLOWANCE FOR BAD DEBT IS DETERMINED BASED ON MANAGEMENT'S ASSESSMENT

OF SEVERAL FACTORS, INCLUDING HISTORICAL COLLECTION RESULTS, THE AGE OF

THE ACCOUNTS, CHANGES IN COLLECTION PATTERNS AND GENERAL INDUSTRY

CONDITIONS.

PART III, LINE 4:

FOOTNOTE 2 (ACCOUNTS RECEIVABLE) ON PAGE 9 OF THE AUDITED FINANCIAL

STATEMENTS DESCRIBES THE BAD DEBT EXPENSE. Schedule H (Form 990) 732271 08‐21‐17 60 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

PART III, LINE 8:

THE METHODOLOGY USED TO DETERMINE THE MEDICARE ALLOWABLE COSTS REPORTED IN

THE ORGANIZATION'S MEDICARE COST REPORT AS REFLECTED IN THE AMOUNT

REPORTED IN PART III, LINE 6 IS DETERMINED BY FOLLOWING THE MEDICARE

PRINCIPLES OF ALLOWABLE COSTS. COST FOR THE OVERHEAD DEPARTMENTS ARE

STEPPED DOWN TO THE REMAINING COST CENTERS BASED ON STATISTICS FOR EACH

OVERHEAD COST CENTER. ONCE THE STEP‐DOWN PROCESS IS COMPLETE, A COST TO

CHARGE RATIO ("CCR") IS DEVELOPED FOR EACH COST CENTER. THE CCR IS THEN

APPLIED TO THE MEDICARE REVENUE BY COST CENTER AND TOTALED.

IT SHOULD BE NOTED THAT THE MEDICARE COST REPORTS DO NOT ADDRESS ANY

MANAGED CARE MEDICARE REVENUES, COSTS, OR RELATED SHORTFALL. THE TOTAL

REVENUES REPORTED AS RECEIVED FROM MEDICARE IN LINE 5 OF SECTION B ARE

ONLY REPRESENTATIVE OF MEDICARE FEE FOR SERVICE PAYMENTS RECEIVED. THE

ALLOWABLE COSTS ON LINE 6 ARE SIGNIFICANTLY LOWER THAN THE ACTUAL

EXPENDITURES. AS SUCH, THE SHORTFALL IS UNDERESTIMATED.

EVERY HOSPITAL TREATS MEDICARE PATIENTS. SOME HOSPITALS ARE LOCATED IN

HIGH MEDICARE POPULATION AREAS; OTHERS PROVIDE SERVICES DISPROPORTIONATELY

USED BY MEDICARE PATIENTS. MEDICARE RATES AND NUMBERS OF MEDICARE

PATIENTS ARE NOT NEGOTIATED. AS REIMBURSEMENT RATES DECLINE RELATIVE TO

COSTS OF CARE, HOSPITALS CONTINUE TO SERVE THE MEDICARE POPULATION.

WITHOUT THIS SERVICE THESE PATIENTS WOULD BECOME AN OBLIGATION ON THE

GOVERNMENT. ANY UNREIMBURSED COSTS OF THIS CARE ARE A COMMUNITY BENEFIT

PROVIDED BY THE HOSPITAL TO THE COMMUNITY AND GOVERNMENT.

PART III, LINE 9B: Schedule H (Form 990) 732271 08‐21‐17 61 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

THE ORGANIZATION'S BILLING AND COLLECTIONS POLICY DOES EXPLAIN ACTIONS

AGAINST PATIENTS WHO HAVE OUTSTANDING DELINQUENT AMOUNTS, BUT THE POLICY

DOES NOT CONTAIN PROVISIONS FOR COLLECTION PRACTICES AGAINST PATIENTS WHO

ARE ELIGIBLE UNDER THE FINANCIAL ASSISTANCE POLICY (FAP) BECAUSE FAP

ELIGIBLE PATIENTS RECEIVE 100% FREE CARE AND THEREFORE DO NOT RECEIVE

BILLS ONCE FAP ELIGIBILITY HAS BEEN ESTABLISHED.

PART VI, LINE 2: NEEDS ASSESSMENT

THE ORGANIZATION IS PART OF NOVANT HEALTH, AN INTEGRATED NOT‐FOR‐PROFIT

HEALTH SYSTEM, WHICH HAS A COMMUNITY BENEFIT DEPARTMENT ("CB DEPARTMENT")

COMPRISED OF COMMUNITY BENEFIT PROFESSIONALS AND AN ASSOCIATED ADVISORY

WORKING GROUP ("THE COMMUNITY BENEFIT GROUP") THAT INCLUDES

REPRESENTATIVES FROM INTERNAL AUDIT, LEGAL, AND TAX. THE CB DEPARTMENT IS

RESPONSIBLE FOR COORDINATING THE PREPARATION OF THE COMMUNITY HEALTH NEEDS

ASSESSMENTS (CHNA) FOR EACH HOSPITAL WITHIN THE SYSTEM, INCLUDING THE

CHNAS REPORTED IN PART V, SECTION B. EACH HOSPITAL AND THE COMMUNITY

BENEFIT GROUP WORK TOGETHER TO IDENTIFY ORGANIZATIONS AND RESOURCES WITHIN

ITS COMMUNITY THAT CONTRIBUTE TO THE PROCESS. THESE ORGANIZATIONS AND

RESOURCES INCLUDE PUBLIC HEALTH DEPARTMENTS, LOCAL COMMUNITY COALITIONS

REPRESENTING THE MEDICALLY UNDERSERVED, UNITED WAY, LOCAL UNIVERSITIES,

ETC. COMMUNITY HEALTH ASSESSMENTS PREPARED BY OTHER ORGANIZATIONS IN THE

COMMUNITY ARE USED IN COMBINATION WITH INTERNAL HOSPITAL DATA AND

INFORMATION COLLECTED FROM LOCAL AGENCIES TO PREPARE THE HOSPITAL'S CHNA.

IN ADDITION TO ADDRESSING NEEDS IDENTIFIED THROUGH THE CHNA, EACH HOSPITAL

MAY RESPOND TO REQUESTS FOR SPECIFIC COMMUNITY BENEFIT ACTIVITIES OR

PROGRAMS FROM PUBLIC AGENCIES OR COMMUNITY GROUPS.

Schedule H (Form 990) 732271 08‐21‐17 62 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

PART VI, LINE 3: PATIENT EDUCATION OF ELIGIBILITY FOR ASSISTANCE

THE ORGANIZATION IS COMMITTED TO PROVIDING OUTSTANDING HEALTHCARE TO ALL

MEMBERS OF OUR COMMUNITIES, REGARDLESS OF THEIR ABILITY TO PAY. OUR

FINANCIAL COUNSELING TEAMS ARE CONSTANTLY WORKING WITH THE PATIENTS WITHIN

OUR COMMUNITIES TO UNDERSTAND THEIR NEEDS AND ENSURE THAT OUR POLICIES AND

PROCESSES ADDRESS THESE NEEDS. WE ALSO MAINTAIN CONTRACTS WITH MEDICAID

ELIGIBILITY VENDORS AND THESE TEAMS OFFER ADDITIONAL SUPPORT IN PROCESSING

AND ASSESSING HOW WE SERVE THE FINANCIAL NEEDS OF OUR PATIENTS.

BASED ON THE ASSESSMENTS OF OUR COMMUNITIES, THE ORGANIZATION HAS

DEVELOPED FINANCIAL ASSISTANCE POLICIES AND PROGRAMS THAT ADDRESS THE

FINANCIAL NEEDS OF OUR PATIENTS. WE PRIDE OURSELVES ON THE TRANSPARENCY

OF OUR PROGRAMS AND THE EDUCATION WE OFFER OUR PATIENTS AROUND OUR

FINANCIAL ASSISTANCE POLICIES. OUR PROGRAMS ARE DOCUMENTED ON OUR

WEBSITE, ALONG WITH CONTACT INFORMATION FOR OUR FINANCIAL COUNSELORS.

ADDITIONALLY, OUR PROGRAMS ARE DOCUMENTED ON PATIENT FLYERS THROUGHOUT THE

ORGANIZATION'S FACILITIES AND PHYSICIAN OFFICES. OUR PATIENT ACCESS

SPECIALISTS, FINANCIAL COUNSELORS AND BUSINESS OFFICE TEAMS WORK WITH ALL

ELIGIBLE PATIENTS TO EDUCATE THEM ON THE VARIOUS OPTIONS AVAILABLE VIA OUR

FINANCIAL ASSISTANCE PROGRAMS OR GOVERNMENT SPONSORED CARE. THEY ALSO

REFERENCE OUR FINANCIAL ASSISTANCE POLICY IN ALL CONVERSATIONS RELATED TO

PATIENTS BILLS. FINALLY, WE WORK WITH LOCAL AREA FREE HEALTH CLINICS AND

OTHER CHARITABLE ORGANIZATIONS TO PROVIDE CONTINUATION OF CARE FOR THEIR

PATIENTS.

IN ADDITION TO OUR FINANCIAL COUNSELING PROCESSES USED TO IDENTIFY CHARITY

CARE PATIENTS, OUR COLLECTIONS PROCESSES WITHIN OUR BUSINESS OFFICES ALSO Schedule H (Form 990) 732271 08‐21‐17 63 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

HELP IDENTIFY PATIENTS WHO ARE ALREADY ELIGIBLE FOR CHARITY OR WHO MAY BE

ELIGIBLE BASED ON THEIR STATUS WITHIN THE FEDERAL POVERTY GUIDELINES

("FPG"). WE UTILIZE PREVIOUSLY SUBMITTED PATIENT DOCUMENTATION AND CREDIT

AGENCY REPORTED FPG FOR DETERMINATION. SUPPORTING DOCUMENTS ARE VALID 6

MONTHS FROM THE DATE OF SUBMISSION.

OUR POLICIES ARE CONSIDERED FLUID AND ARE UPDATED FREQUENTLY BASED ON

LOCAL AND NATIONAL MARKET STANDARDS AND NATIONAL ECONOMIC CONDITIONS. ANY

UPDATES TO OUR POLICIES REQUIRE MULTI‐LEVEL LEADERSHIP APPROVAL AND ARE

ULTIMATELY APPROVED BY THE ORGANIZATION'S BOARD.

PART VI, LINE 4: COMMUNITY INFORMATION

THE NOVANT HEALTH, INC. FORM 990 INCLUDES THE OPERATIONS OF ONE HOSPITAL.

BRUNSWICK COMMUNITY HOSPITAL, LLC DBA NOVANT HEALTH BRUNSWICK MEDICAL

CENTER

THE ORGANIZATION DEFINES ITS COMMUNITY BY ITS PRIMARY SERVICE AREA, WHICH

IS BRUNSWICK COUNTY, NORTH CAROLINA. THIS IS A RURAL AREA. THERE ARE TWO

ACUTE CARE HOSPITALS IN THE COMMUNITY, ONE OF WHICH IS THE ORGANIZATION.

THE OTHER HOSPITAL IS DESIGNATED AS A CRITICAL ACCESS HOSPITAL.

ACCORDING TO SG2 DATA, THE SPECIFIC POPULATION GROUPS (ETHNIC AND

CULTURAL) ARE AS FOLLOWS: WHITE NON‐HISPANIC (102,841) 81.6%; BLACK

NON‐HISPANIC (13,358) 10.6%; HISPANIC (5,824) 4.6%; ASIAN AND PACIFIC

ISLAND NON‐HISPANIC (946) 0.7%; OTHERS (3,121) 2.5%; FOR A TOTAL

POPULATION OF 126,090. Schedule H (Form 990) 732271 08‐21‐17 64 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

ACCORDING TO US CENSUS BUREAU DATA, THE MEDIAN HOUSEHOLD INCOME LEVEL WAS

$49,356.

ACCORDING TO SG2 DATA, THE AGE BREAKDOWN IS AS FOLLOWS: 0‐17 YEARS

(21,417) 17.0%; 18‐64 YEARS (68,930) 54.7%; 65+ YEARS (35,743) 28.3%.

PART VI, LINE 5: PROMOTION OF COMMUNITY HEALTH

THE ORGANIZATION FURTHERS ITS EXEMPT PURPOSES BY DOING THE FOLLOWING:

1. ADOPTING A FINANCIAL ASSISTANCE POLICY;

2. REMAINING CERTIFIED BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

TO PROVIDES SERVICES TO ALL BENEFICIARIES OF MEDICARE, MEDICAID, AND OTHER

GOVERNMENT PAYMENT PROGRAMS, AND PROVIDING SERVICES IN A NONDISCRIMINATORY

MANNER TO SUCH BENEFICIARIES;

3. OPERATING A FULL‐TIME EMERGENCY ROOM WHICH IS OPEN TO AND ACCEPTS ALL

PERSONS, REGARDLESS OF THEIR ABILITY TO PAY;

4. MAINTAINING AN OPEN MEDICAL STAFF, SUBJECT TO EXCLUSIVE CONTRACTS FOR

HOSPITAL‐BASED SERVICES SUCH AS ANESTHESIOLOGY, RADIOLOGY, PATHOLOGY,

HOSPITALIST, AND EMERGENCY DEPARTMENT SERVICES, TO THE EXTENT AN EXCLUSIVE

CONTRACT FOR THOSE SERVICES IS REQUIRED TO OBTAIN PROPER STAFFING COVERAGE

OR TO PERMIT A MORE EFFICIENT DELIVERY OF THOSE SERVICES WITHIN THE

HOSPITAL FACILITY;

Schedule H (Form 990) 732271 08‐21‐17 65 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

5. MAINTAINING A GOVERNING BOARD CONSISTING PRIMARILY OF A BROAD

CROSS‐SECTION OF LEADERS IN THE COMMUNITY;

6. ADOPTING AND APPLYING A CONFLICT OF INTEREST POLICY, WHICH APPLIES TO

THE GOVERNING BOARD AND ORGANIZATION OFFICERS;

7. PROVIDING HEALTH EDUCATION LECTURES AND WORKSHOPS;

8. PROVIDING HEALTH FAIRS, EDUCATION ON SPECIFIC DISEASES OR CONDITIONS,

AND HEALTH PROMOTION AND WELLNESS PROGRAMS TO THE COMMUNITIES IT SERVES;

9. PROVIDING SUPPORT GROUPS AND SELF HELP PROGRAMS TO THE COMMUNITIES IT

SERVES;

10. PROVIDING COMMUNITY‐BASED CLINICAL SERVICES, INCLUDING WITHOUT

LIMITATION, HEALTH SCREENINGS AND CLINICS FOR UNINSURED OR UNDERINSURED

PERSONS TO THE COMMUNITIES IT SERVES;

11. PROVIDING HEALTHCARE SUPPORT SERVICES, INCLUDING WITHOUT LIMITATION,

INFORMATION AND REFERRAL TO COMMUNITY SERVICES, CASE MANAGEMENT OF

UNDERINSURED AND UNINSURED PERSONS, TELEPHONE INFORMATION SERVICES AND

ASSISTANCE TO ENROLL IN PUBLIC PROGRAMS, SUCH AS STATE CHILDREN'S HEALTH

INSURANCE PROGRAM (SCHIP) AND MEDICAID TO THE COMMUNITIES IT SERVES;

12. PROVIDING SUBSIDIZED HEALTH SERVICES AND CLINICAL PROGRAMS TO THE

COMMUNITIES IT SERVES;

13. PROVIDING CASH AND IN‐KIND CONTRIBUTIONS TO NONPROFIT COMMUNITY Schedule H (Form 990) 732271 08‐21‐17 66 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

HEALTHCARE ORGANIZATIONS IN THE COMMUNITIES IT SERVES; AND

14. GENERALLY PROMOTING THE HEALTH, WELLNESS, AND WELFARE OF THE

COMMUNITIES IT SERVES BY PROVIDING QUALITY HEALTHCARE SERVICES AT

REASONABLE COST.

PLEASE SEE THE NOVANT HEALTH COMMUNITY BENEFIT REPORT, LOCATED AT

HTTP://WWW.NOVANTHEALTH.ORG/HOME/ABOUT‐US/COMPANY‐INFORMATION/

FINANCIAL‐PROFILE/COMMUNITY‐BENEFIT‐REPORT.ASPX.

PLEASE NOTE THAT THE NUMERIC INFORMATION IN THIS REPORT IS NOT BASED UPON

THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN

ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING

GUIDELINES.

PART VI, LINE 6: AFFILIATED HEALTH CARE SYSTEM

THE ORGANIZATION IS AN INTEGRAL PART OF NOVANT HEALTH, A NOT‐FOR‐PROFIT

INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS AND

OTHER HEALTHCARE SERVICE PROVIDERS. NOVANT HEALTH IS RANKED AS ONE OF OUR

NATION'S TOP 20 INTEGRATED HEALTHCARE SYSTEMS CARING FOR PATIENTS AND

COMMUNITIES IN NORTH CAROLINA, SOUTH CAROLINA, AND VIRGINIA. EACH HOSPITAL

PROVIDES SUBSTANTIAL COMMUNITY BENEFIT TO THE COMMUNITY IT SERVES, AS

REPORTED INDIVIDUALLY ON EACH HOSPITAL'S FORM 990, SCHEDULE H. THE

COMMUNITY BENEFIT OF THE SYSTEM AS A WHOLE IS DOCUMENTED IN A SYSTEM‐WIDE

COMMUNITY BENEFIT REPORT, LOCATED AT

HTTPS://WWW.NOVANTHEALTH.ORG/HOME/ABOUT‐US/COMMUNITY‐INVOLVEMENT/

COMMUNITY‐BENEFIT.ASPX. PLEASE NOTE THAT THE NUMERIC INFORMATION IN THIS

REPORT IS NOT BASED UPON THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT Schedule H (Form 990) 732271 08‐21‐17 67 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule H (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 10 Part VI Supplemental Information (Continuation)

HAS BEEN PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL

ASSOCIATION REPORTING GUIDELINES. IT SHOULD NOT BE RELIED UPON AS THE

ORGANIZATION'S FORM 990, SCHEDULE H COMMUNITY BENEFIT REPORT, ITS

COMMUNITY HEALTH NEEDS ASSESSMENT OR COMMUNITY BENEFIT IMPLEMENTATION

STRATEGY. THERE ARE SIGNIFICANT COMMUNITY BENEFIT ACTIVITIES WITHIN

NOVANT HEALTH WHICH MAY NOT BE REPORTABLE ON A SCHEDULE H BECAUSE THEY ARE

NOT CONDUCTED BY AN ENTITY WHICH OWNS OR OPERATES A HOSPITAL.

IN ADDITION TO HOSPITALS, NOVANT HEALTH INCLUDES A PHYSICIAN ORGANIZATION

WITH PRACTICES IN GEORGIA, NORTH CAROLINA, SOUTH CAROLINA, AND VIRGINIA

AND FIVE HOSPITAL FOUNDATIONS WHICH SUPPORT AND ENHANCE THE ACTIVITIES IN

THOSE HOSPITALS' COMMUNITIES. FURTHER, NOVANT HEALTH INCLUDES AMBULATORY

SURGERY CENTERS, IMAGING CENTERS, REHABILITATION CENTERS, AND OTHER

OUTPATIENT FACILITIES; ALL DEDICATED TO PROMOTING THE HEALTH OF THEIR

RESPECTIVE COMMUNITIES.

PART VI, LINE 7: STATE FILING OF COMMUNITY BENEFIT REPORT

NOVANT HEALTH, INC. FILES A SYSTEM‐WIDE COMMUNITY BENEFIT REPORT

PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION

REPORTING GUIDELINES WITH THE NORTH CAROLINA MEDICAL CARE COMMISSION AS

PART OF THE DOCUMENTATION REQUIRED FOR THE ISSUANCE OF TAX EXEMPT BOND

FINANCING.

Schedule H (Form 990) 732271 08‐21‐17 68 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE I Grants and Other Assistance to Organizations, OMB No. 1545‐0047 (Form 990) Governments, and Individuals in the United States Complete if the organization answered "Yes" on Form 990, Part IV, line 21 or 22. 2017 Department of the Treasury | Attach to Form 990. Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I General Information on Grants and Assistance 1 Does the organization maintain records to substantiate the amount of the grants or assistance, the grantees' eligibility for the grants or assistance, and the selection criteria used to award the grants or assistance? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Yes No 2 Describe in Part IV the organization's procedures for monitoring the use of grant funds in the United States. Part II Grants and Other Assistance to Domestic Organizations and Domestic Governments. Complete if the organization answered "Yes" on Form 990, Part IV, line 21, for any recipient that received more than $5,000. Part II can be duplicated if additional space is needed. 1 (a) Name and address of organization (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grant valuation (book, or government (if applicable) cash grant non‐cash noncash assistance or assistance FMV, appraisal, assistance other) AFRICAN AMERICAN POLICY AND TRAINING INSTITUTE - 1833 W 8TH STREET, SUITE 200 - LOS ANGELES, CA 90057 95-4742741 501(C)(3) 29,533. 0. COMMUNITY OUTREACH

BRUNSWICK COUNTY CHAMBER OF COMMERCE - 114 WALL STREET - SHALLOTTE , NC 28459 56-1181498 501(C)(6) 9,500. 0. COMMUNITY OUTREACH

BRUNSWICK COUNTY COMMUNITY COLLEGE FOUNDATION - PO BOX 30 - SUPPLY, NC 28462 58-1493463 501(C)(3) 5,300. 0. COMMUNITY OUTREACH

BTEP, INC. 1030 EDGEHILL RD S, APT 306 CHARLOTTE, NC 28207 47-4752291 501(C)(3) 25,000. 0. COMMUNITY OUTREACH

CAROLINAS CARE PARTNERSHIP 5855 EXECUTIVE CENTER DRIVE CHARLOTTE, NC 28212 31-1768358 501(C)(3) 10,000. 0. COMMUNITY OUTREACH

CENTRAL PIEDMONT COMMUNITY COLLEGE FOUNDATION - PO BOX 35009 - CHARLOTTE, NC 28235 56-0890420 501(C)(3) 50,000. 0. COMMUNITY OUTREACH 2 Enter total number of section 501(c)(3) and government organizations listed in the line 1 table ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | 11. 3 Enter total number of other organizations listed in the line 1 table  | 1. LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule I (Form 990) (2017)

732101 11‐01‐17 69

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule I (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 1 Part II Continuation of Grants and Other Assistance to Governments and Organizations in the United States (Schedule I (Form 990), Part II.)

(a) Name and address of (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grant organization or government if applicable cash grant non‐cash valuation non‐cash assistance or assistance assistance (book, FMV, appraisal, other)

CHARLOTTE REGIONAL PARTNERSHIP 550 S. CALDWELL STREET, SUITE 760 CHARLOTTE, NC 28202 58-1457132 501(C)(3) 150,000. 0. COMMUNITY OUTREACH

COMMUNITY BUILDING INITIATIVE 601 EAST FIFTH STREET, SUITE 330 CHARLOTTE, NC 28202 20-2892726 501(C)(3) 15,000. 0. COMMUNITY OUTREACH

FOUNDATION FOR THE CAROLINAS 220 NORTH TRYON STREET CHARLOTTE, NC 28202 56-6047886 501(C)(3) 21,000. 0. COMMUNITY OUTREACH

MINT HILL EVENTS, INC. 4430 MINT HILL VILLAGE LANE MINT HILL, NC 28227 46-4593964 501(C)(3) 11,000. 0. COMMUNITY OUTREACH

WINSTON-SALEM FOUNDATION 751 W. FOURTH STREET WINSTON-SALEM, NC 27101 56-6037615 501(C)(3) 220,000. 0. COMMUNITY OUTREACH ROWAN REGIONAL MEDICAL CENTER FOUNDATION, INC. - 2085 FRONTIS PLAZA BLVD - WINSTON-SALEM, NC 27103 56-1424818 501(C)(3) 101,650. 0. COMMUNITY OUTREACH

Schedule I (Form 990)

732241 04‐01‐17 70

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule I (Form 990) (2017) NOVANT HEALTH, INC. 56‐1376950 Page 2 Part III Grants and Other Assistance to Domestic Individuals. Complete if the organization answered "Yes" on Form 990, Part IV, line 22. Part III can be duplicated if additional space is needed.

(a) Type of grant or assistance (b) Number of (c) Amount of (d) Amount of non‐ (e) Method of valuation (f) Description of noncash assistance recipients cash grant cash assistance (book, FMV, appraisal, other)

Part IV Supplemental Information. Provide the information required in Part I, line 2; Part III, column (b); and any other additional information.

PART I, LINE 2: PROCEDURES FOR MONITORING THE USE OF GRANT FUNDS

THE FILING ORGANIZATION IS PART OF THE INTEGRATED HEALTHCARE SYSTEM

OPERATED BY NOVANT HEALTH, INC. ("NOVANT HEALTH"), THE PARENT

ORGANIZATION. NOVANT HEALTH'S BYLAWS AUTHORIZE IT TO ESTABLISH CERTAIN

POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. NOVANT HEALTH

HAS ESTABLISHED A SYSTEM‐WIDE CORPORATE POLICY WITH STANDARDIZED

GUIDELINES THAT ARE TO BE USED IN REVIEWING THE ELIGIBILITY AND

SELECTION OF GRANTEES RECEIVING CERTAIN EXEMPT PURPOSE FUNDS. THE

FILING ORGANIZATION MAINTAINS DOCUMENTATION OF THE ELIGIBILITY AND 732102 11‐01‐17 71 Schedule I (Form 990) (2017)

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule I (Form 990) NOVANT HEALTH, INC. 56‐1376950 Page 2 Part IV Supplemental Information

SELECTION CRITERIA AND RECORDS OF THE AMOUNTS ARE MAINTAINED VIA THE

GENERAL LEDGER. FUNDS ARE GENERALLY NOT TRACKED AFTER BEING GRANTED, AS

THE ORIGINAL ELIGIBILITY AND SELECTION CRITERIA HAVE ALREADY BEEN MET.

Schedule I (Form 990) 732291 04‐01‐17 72 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE J Compensation Information OMB No. 1545‐0047 (Form 990) For certain Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees 2017 | Complete if the organization answered "Yes" on Form 990, Part IV, line 23. Open to Public Department of the Treasury | Attach to Form 990. Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Questions Regarding Compensation Yes No 1a Check the appropriate box(es) if the organization provided any of the following to or for a person listed on Form 990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items. X First‐class or charter travel X Housing allowance or residence for personal use X Travel for companions Payments for business use of personal residence X Tax indemnification and gross‐up payments X Health or social club dues or initiation fees X Discretionary spending account Personal services (such as, maid, chauffeur, chef)

b If any of the boxes on line 1a are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain~~~~~~~~~~~ 1b X 2 Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all directors, trustees, and officers, including the CEO/Executive Director, regarding the items checked on line 1a? ~~~~~~~~~~~~ 2 X

3 Indicate which, if any, of the following the filing organization used to establish the compensation of the organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III. X Compensation committee Written employment contract X Independent compensation consultant X Compensation survey or study Form 990 of other organizations X Approval by the board or compensation committee

4 During the year, did any person listed on Form 990, Part VII, Section A, line 1a, with respect to the filing organization or a related organization: a Receive a severance payment or change‐of‐control payment? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4a X b Participate in, or receive payment from, a supplemental nonqualified retirement plan? ~~~~~~~~~~~~~~~~~~~~ 4b X c Participate in, or receive payment from, an equity‐based compensation arrangement?~~~~~~~~~~~~~~~~~~~~ 4c X If "Yes" to any of lines 4a‐c, list the persons and provide the applicable amounts for each item in Part III.

Only section 501(c)(3), 501(c)(4), and 501(c)(29) organizations must complete lines 5‐9. 5 For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any compensation contingent on the revenues of: a The organization? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5a X b Any related organization? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5b X If "Yes" on line 5a or 5b, describe in Part III. 6 For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any compensation contingent on the net earnings of: a The organization? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6a X b Any related organization? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6b X If "Yes" on line 6a or 6b, describe in Part III. 7 For persons listed on Form 990, Part VII, Section A, line 1a, did the organization provide any nonfixed payments not described on lines 5 and 6? If "Yes," describe in Part III~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7 X 8 Were any amounts reported on Form 990, Part VII, paid or accrued pursuant to a contract that was subject to the initial contract exception described in Regulations section 53.4958‐4(a)(3)? If "Yes," describe in Part III ~~~~~~~~~~~ 8 X 9 If "Yes" on line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958‐6(c)?  9 LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule J (Form 990) 2017

732111 10‐17‐17 73 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)‐(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.

(B) Breakdown of W‐2 and/or 1099‐MISC compensation (C) Retirement and (D) Nontaxable (E) Total of columns (F) Compensation other deferred benefits (B)(i)‐(D) in column (B) (i) Base (ii) Bonus & (iii) Other (A) Name and Title compensation reported as deferred compensation incentive reportable on prior Form 990 compensation compensation

(1) ARMATO, CARL (i) 1,428,627.1,281,431. 601,016. 65,453. 39,706. 3,416,233. 7,500. CEO & PRESIDENT NOVANT HEALTH (ii) 0. 0. 0. 0. 0. 0. 0. (2) HARGETT, FRED (i) 834,979. 724,636. 334,151. 59,700. 37,612. 1,991,078. 7,500. EVP & CHIEF FINANCIAL OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (3) MORRIS, JOHN (i) 268,336. 63,654. 14,372. 64,909. 23,213. 434,484. 7,500. ASST SEC (ii) 0. 0. 0. 0. 0. 0. 0. (4) WALSH, BETSY (i) 267,805. 47,741. 5,403. 59,659. 30,963. 411,571. 0. ASST SEC (ii) 0. 0. 0. 0. 0. 0. 0. (5) BEST, DIANA (i) 420,251. 260,886. 25,471. 41,922. 28,863. 777,393. 0. FORMER SVP CLINICAL IMPROVEMENT (ii) 0. 0. 0. 0. 0. 0. 0. (6) BLACKMON, TANYA (i) 282,897. 216,524. 40,248. 122,191. 14,437. 676,297. 7,500. EVP CHIEF DIV & INCL OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (7) BRUNSTETTER, PETER (i) 497,375. 441,553. 27,584. 165,492. 30,939. 1,162,943. 0. EVP & CHIEF LEGAL OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (8) COOK, DAVID MD (i) 451,226. 303,663. 95,155. 133,717. 35,223. 1,018,984. 67,500. SVP BUSINESS STRAT & INNOVATION (ii) 0. 0. 0. 0. 0. 0. 0. (9) CURETON, JESSE (i) 596,659. 552,546. 146,881. 186,897. 40,588. 1,523,571. 102,667. EVP & CHIEF CONSUMER OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (10) ESKIOGLU, ERIC MD (i) 742,197. 405,091. 20,929. 177,329. 37,433. 1,382,979. 0. SVP NERUOSCIENCE (ii) 0. 0. 0. 0. 0. 0. 0. (11) GARMON-BROWN, OPHELIA MD (i) 356,782. 252,711. 272,052. 58,005. 18,433. 957,983. 183,150. SVP COMM WELLNESS & EDUCATION (ii) 0. 0. 0. 0. 0. 0. 0. (12) GARRETT, DAVID (i) 479,860. 316,945. 100,340. 65,017. 30,897. 993,059. 67,950. SVP CHIEF INFO OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (13) GRIFFIN, JON (i) 384,926. 249,023. 80,859. 118,619. 36,673. 870,100. 52,500. SVP FINANCIAL PLAN & ANALYSIS (ii) 0. 0. 0. 0. 0. 0. 0. (14) LANGFORD, KATHRYN (i) 414,671. 268,731. 98,020. 127,867. 15,651. 924,940. 64,500. SVP INTEGR & OPER EXCELLENCE (ii) 0. 0. 0. 0. 0. 0. 0. (15) LINDSAY, JEFFERY (i) 864,258. 720,751. 195,018. 59,700. 29,991. 1,869,718. 7,500. EVP & CHIEF OPERATING OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (16) MIHAL, DENISE (i) 665,743. 495,668. 166,572. 64,738. 19,691. 1,412,412. 7,500. EVP CHIEF NUR & CLIN OPS OFF (ii) 0. 0. 0. 0. 0. 0. 0. Schedule J (Form 990) 2017 732112 10‐17‐17 74

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)‐(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.

(B) Breakdown of W‐2 and/or 1099‐MISC compensation (C) Retirement and (D) Nontaxable (E) Total of columns (F) Compensation other deferred benefits (B)(i)‐(D) in column (B) (i) Base (ii) Bonus & (iii) Other (A) Name and Title compensation reported as deferred compensation incentive reportable on prior Form 990 compensation compensation

(17) MORGAN, WAYNE (i) 419,159. 262,532. 76,014. 129,033. 35,422. 922,160. 57,750. SVP & CHIEF INVEST OFF (ii) 0. 0. 0. 0. 0. 0. 0. (18) PATEFIELD, ARTHUR MD (i) 413,148. 282,270. 58,257. 58,200. 38,227. 850,102. 22,500. SVP & CHIEF MED INFO OFF (ii) 0. 0. 0. 0. 0. 0. 0. (19) PHIPPS, JOHN MD (i) 0. 0. 0. 0. 0. 0. 0. EVP & PRESIDENT NHMG (ii) 582,961. 487,743. 154,759. 183,002. 28,094. 1,436,559. 95,450. (20) SEEHAUSEN, ROBERT (i) 427,281. 278,078. 95,417. 65,700. 35,323. 901,799. 66,000. SVP BUSINESS DEV & SALES (ii) 0. 0. 0. 0. 0. 0. 0. (21) SMITH, HARRY (i) 588,606. 378,396. 125,390. 154,679. 40,259. 1,287,330. 82,500. SVP HOSPITAL OPERATIONS (ii) 0. 0. 0. 0. 0. 0. 0. (22) SMITH-HILL, JANET (i) 443,271. 334,611. 103,114. 154,679. 33,936. 1,069,611. 63,750. EVP & CHIEF HR OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (23) WOOLLEN, THOMAS MD (i) 380,035. 250,412. 88,440. 123,235. 42,469. 884,591. 60,000. SVP PHYSICIAN SERVICES (ii) 0. 0. 0. 0. 0. 0. 0. (24) ZWENG, THOMAS MD (i) 581,854. 503,533. 106,519. 182,642. 43,651. 1,418,199. 68,250. EVP & CHIEF MEDICAL OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (25) JENIKE, THOMAS MD (i) 393,889. 257,732. 33,202. 107,457. 34,342. 826,622. 7,500. SVP & CHIEF HUMAN EXP OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (26) LIMENTANI, STEVEN MD (i) 581,371. 83,000. 26,529. 11,417. 24,457. 726,774. 0. SVP CANCER (ii) 0. 0. 0. 0. 0. 0. 0. (27) MYERS, SCOTT (i) 393,318. 242,005. 66,759. 124,700. 16,228. 843,010. 48,300. SVP CORPORATE FINANCE (ii) 0. 0. 0. 0. 0. 0. 0. (28) SCOTT, BERTRAM (i) 378,670. 227,100. 74,151. 45,601. 23,152. 748,674. 0. SVP POPULATION HEALTH & VBC (ii) 0. 0. 0. 0. 0. 0. 0. (29) VANCE, AMY (i) 347,618. 227,745. 82,892. 106,206. 27,285. 791,746. 54,000. SVP POPULATION HEALTH MGMT (ii) 0. 0. 0. 0. 0. 0. 0. (30) GARDELLA, JOHN MD (i) 311,164. 207,752. 19,871. 46,687. 22,150. 607,624. 0. VP CLINICAL IMPROVEMENT (ii) 0. 0. 0. 0. 0. 0. 0. (31) GREGORY, CHERE MD (i) 384,201. 251,650. 11,102. 91,132. 34,235. 772,320. 0. SVP WOMEN'S SERVICES (ii) 0. 0. 0. 0. 0. 0. 0. (32) PARK, DAVID (i) 339,206. 222,564. 35,482. 58,200. 28,274. 683,726. 7,500. SVP REAL ESTATE & CONSTRUCTION (ii) 0. 0. 0. 0. 0. 0. 0. Schedule J (Form 990) 2017 732112 10‐17‐17 75

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part II Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)‐(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.

(B) Breakdown of W‐2 and/or 1099‐MISC compensation (C) Retirement and (D) Nontaxable (E) Total of columns (F) Compensation other deferred benefits (B)(i)‐(D) in column (B) (i) Base (ii) Bonus & (iii) Other (A) Name and Title compensation reported as deferred compensation incentive reportable on prior Form 990 compensation compensation

(33) VINCENT, PAULA (i) 0. 0. 0. 0. 0. 0. 0. FORMER SVP (ii) 439,926. 253,674. 33,227. 65,528. 18,281. 810,636. 7,500. (34) DANIELS, JACQUELINE (i) 0. 345,665. 609,863. 0. 41,139. 996,667. 7,500. FORMER EVP & CHIEF ADMIN OFFICER (ii) 0. 0. 0. 0. 0. 0. 0. (35) ALUKO, AKINYELE MD (i) 10,717. 300,283. 315,819. 0. 0. 626,819. 219,545. FORMER SVP NH HEART & VASCULAR (ii) 0. 0. 0. 0. 0. 0. 0. (36) ROBSON, MELISSA (i) 333,190. 355,067. 252,498. 57,495. 37,896. 1,036,146. 65,250. FORMER SVP (ii) 0. 0. 0. 0. 0. 0. 0. (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) Schedule J (Form 990) 2017 732112 10‐17‐17 76

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

PART I, LINE 1A: FRINGE OR EXPENSE EXPLANATION

FIRST‐CLASS OR CHARTER TRAVEL:

FIRST‐CLASS OR CHARTER TRAVEL IS NOT A COVERED TRAVEL EXPENSE FOR

EXECUTIVES; THEY ARE LIMITED TO BUSINESS OR COACH CLASS FARES FOR

COMMERCIAL FLIGHTS. HOWEVER, CHARTER TRAVEL IS AVAILABLE TO CERTAIN

EXECUTIVES, BOARD MEMBERS, AND APPROVED BUSINESS PERSONNEL MEETING

APPLICABLE POLICY CRITERIA.

TRAVEL FOR COMPANIONS:

COMPANIONS ARE ALLOWED ON CERTAIN CHARTER FLIGHTS PAID FOR BY THE

ORGANIZATION. IN THAT CASE, THE VALUE OF THE COMPANION'S FLIGHT IS

CALCULATED UNDER APPLICABLE TAX LAWS AND THAT AMOUNT IS INCLUDED IN THE

EXECUTIVE'S TAXABLE INCOME AS PRESCRIBED BY THE APPLICABLE TAX LAWS.

TAX INDEMNIFICATION AND GROSS‐UP PAYMENTS:

EXECUTIVES WHO USE FUNDS MADE AVAILABLE THROUGH THEIR DISCRETIONARY

SPENDING ACCOUNT UNDER THE EXECUTIVE PERQUISITE PLAN (THE "PLAN") TO PAY

PREMIUMS ON CASH VALUE LIFE INSURANCE POLICIES MAY RECEIVE ADDITIONAL Schedule J (Form 990) 2017

732113 10‐17‐17 77

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

COMPENSATION TO ADJUST FOR THE INCOME TAX LIABILITY ASSOCIATED WITH PAYING

PREMIUMS FOR THIS INSURANCE. THE NHUVAHS CEO RECEIVED A GROSS UP ASSOCIATED

WITH THE TAX PAID ON SPECIFIC TAXABLE RELOCATION EXPENSES AFTER A CHANGE

WAS MADE BY THE ORGANIZATION IN HER PRIMARY WORK LOCATION THAT RESULTED IN

THE LOSS OF CERTAIN NON‐REFUNDABLE DEPOSITS.

DISCRETIONARY SPENDING ACCOUNT:

CERTAIN EXECUTIVES RECEIVE A DISCRETIONARY SPENDING ACCOUNT. THE DOLLAR

AMOUNT IN THE ACCOUNT IS PRE‐APPROVED BY THE COMPENSATION AND LEADERSHIP

COMMITTEE OF THE NOVANT HEALTH BOARD OF TRUSTEES. THE ACCOUNT CAN BE USED

ONLY FOR AN APPROVED LIST OF EXPENDITURES. ALL OPTIONS OTHER THAN A

DEFERRED, AT‐RISK, COMPENSATION OPTION ARE CONSIDERED TAXABLE AND ARE

INCLUDED IN THE EXECUTIVE'S TAXABLE INCOME AS PRESCRIBED BY THE APPLICABLE

TAX LAWS.

HOUSING ALLOWANCE OR RESIDENCE FOR PERSONAL USE:

WE PROVIDE TEMPORARY HOUSING ALLOWANCES IN CERTAIN EXECUTIVE RECRUITMENT

AND RELOCATION PACKAGES. IN THE CASE THAT SUCH EXPENSE IS NOT REIMBURSABLE

UNDER THE ACCOUNTABLE PLAN RULES, THE VALUE IS CALCULATED UNDER APPLICABLE Schedule J (Form 990) 2017

732113 10‐17‐17 78

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

TAX LAWS AND THAT AMOUNT IS INCLUDED IN THE EXECUTIVE'S INCOME AS

PRESCRIBED BY THE APPLICABLE TAX LAWS.

HEALTH OR SOCIAL CLUB DUES OR INITIATION FEES:

IN CASES WHERE CORPORATE MEMBERSHIPS ARE NOT AVAILABLE, A MEMBERSHIP MAY BE

OBTAINED IN AN EXECUTIVE'S NAME WITH A "BUSINESS USE ONLY" RESTRICTION.

PART I, LINE 3:

THE FILING ORGANIZATION IS AN INTEGRAL PART OF NOVANT HEALTH, AN INTEGRATED

HEALTHCARE SYSTEM. NOVANT HEALTH, INC. IS THE PARENT ORGANIZATION AND USES

THE PROCESS DESCRIBED IN PART VI, LINE 15A OF THIS RETURN TO ESTABLISH THE

COMPENSATION OF THE TOP MANAGEMENT OFFICIAL OF THE FILING ORGANIZATION.

THIS PROCESS ADHERES TO THE REQUIREMENTS SET FORTH TO SECURE THE REBUTTABLE

PRESUMPTION OF REASONABLENESS AND INCLUDES A REVIEW AND APPROVAL BY

INDEPENDENT AND DISINTERESTED MEMBERS OF A COMPENSATION COMMITTEE,

CONSULTATION WITH INDEPENDENT COMPENSATION CONSULTANTS, THE UTILIZATION OF

THIRD‐PARTY COMPARABILITY DATA SUCH AS PUBLISHED COMPENSATION SURVEYS, AND

CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION.

Schedule J (Form 990) 2017

732113 10‐17‐17 79

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

PART I, LINES 4A‐C: SEVERANCE, NONQUALIFIED, AND EQUITY‐BASED PAYMENTS

SEVERANCE NONQUALIFIED EQUITY‐BASED

ALUKO, AKINYELE 219,545

COOK, DAVID 67,500

CURETON, JESSE 102,667

DANIELS, JACQUELINE 610,745

GARMON‐BROWN, OPHELIA 183,150

GARRETT, DAVID 67,950

GRIFFIN, JON 52,500

LANGFORD, KATHRYN 64,500

MORGAN, WAYNE 57,750

MYERS, SCOTT 48,300

PATEFIELD, ARTHUR 22,500

PHIPPS, JOHN 95,450

ROBSON, MELISSA 102,910 65,250

SMITH, HARRY 82,500

SMITH‐HILL, JANET 63,750

VANCE, AMY 54,000 Schedule J (Form 990) 2017

732113 10‐17‐17 80

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

WOOLLEN, THOMAS 60,000

ZWENG, THOMAS 68,250

PART I, LINE 4A ‐ SEVERANCE PLAN:

ELIGIBLE EXECUTIVES MAY RECEIVE SEVERANCE PAY THAT IS BASED ON ANNUAL

COMPENSATION FOR A SPECIFIED PERIOD OF TIME. THE SEVERANCE PAY WOULD BE

PAID ONLY IN THE EVENT OF CERTAIN TYPES OF EMPLOYMENT TERMINATION, AND

IS FURTHER CONTINGENT ON THE SATISFACTION OF OTHER CONDITIONS SUCH AS

COMPLIANCE WITH A NON‐COMPETITION COVENANT. ANY CURRENT YEAR PAYMENTS

HAVE BEEN INCLUDED IN THE COMPENSATION AMOUNTS REPORTED IN PART VII AND

IN COLUMN (B)(III) OF SCHEDULE J.

THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE NOVANT HEALTH BOARD

REVIEWS, APPROVES, AND OVERSEES ALL ASPECTS AND ALL ELEMENTS OF

EXECUTIVE COMPENSATION AND BENEFITS, INCLUDING THE AMOUNTS AWARDED

UNDER THIS SEVERANCE PLAN.

PART I, LINE 4B ‐ SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS:

THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") IS INTENDED TO

SUPPORT RETENTION OF KEY EXECUTIVES, AND TO OFFER COMPETITIVE TOTAL Schedule J (Form 990) 2017

732113 10‐17‐17 81

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule J (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

COMPENSATION. ELIGIBLE EXECUTIVES WILL BE NOMINATED BY THE CEO AND

APPROVED BY THE NOVANT HEALTH COMPENSATION AND LEADERSHIP COMMITTEE

("THE COMMITTEE") TO PARTICIPATE. GENERALLY, ANNUAL CONTRIBUTIONS TO

THE PLAN OR PAYMENTS TO PARTICIPANTS WILL BE BASED ON A PERCENTAGE OF

THE PARTICIPANT'S BASE SALARY AS OF JANUARY 1ST OF THE PREVIOUS PLAN

YEAR AND ARE REPORTED IN COLUMN (C) OF SCHEDULE J. PRIOR TO MAKING THE

CONTRIBUTIONS OR PAYMENTS, THE COMMITTEE WILL APPROVE THE AMOUNTS AS TO

REASONABLENESS, WHEN COMBINED WITH ALL OTHER ANNUAL COMPENSATION. A 3

YEAR CLASS‐YEAR VESTING PERIOD WILL APPLY UP TO AGE 62, WHEN ALL MONEY

WOULD BE VESTED AND PAID OUT TO THE PARTICIPANT. OTHERWISE, VESTING

WILL OCCUR ON JANUARY 1ST OF EACH YEAR FOR THE APPROPRIATE CLASS‐YEAR

VESTING PERIOD.

THE COMMITTEE REVIEWS, APPROVES, AND OVERSEES ALL ASPECTS AND ALL

ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS.

Schedule J (Form 990) 2017

732113 10‐17‐17 82

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 ENTITY 1 OMB No. 1545‐0047 SCHEDULE K Supplemental Information on Tax‐Exempt Bonds (Form 990) | Complete if the organization answered "Yes" on Form 990, Part IV, line 24a. Provide descriptions, 2017 Department of the Treasury explanations, and any additional information in Part VI. Open to Public Internal Revenue Service | Attach to Form 990. | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Bond Issues (a) Issuer name (b) Issuer EIN (c) CUSIP # (d) Date issued (e) Issue price (f) Description of purpose (g) Defeased (h) On behalf (i) Pooled of issuer financing Yes No Yes No Yes No NORTH CAROLINA MED CARE A COMMISSION 52‐1309402657902U91 12/08/04 110,000,000.SEE PART VI X X X NORTH CAROLINA MED CARE B COMMISSION 52‐1309402657902V25 12/08/04 25,000,000.SEE PART VI X X X NORTH CAROLINA MED CARE C COMMISSION 52‐130940265821DMK4 12/21/17 39,155,000.SEE PART VI X X X NORTH CAROLINA MED CARE D COMMISSION 52‐130940265821DMK4 12/21/17 44,245,000.SEE PART VI X X X Part II Proceeds A B C D 1 Amount of bonds retired  2 Amount of bonds legally defeased  3 Total proceeds of issue  110,000,000. 25,000,000. 39,155,000. 44,245,000. 4 Gross proceeds in reserve funds  5 Capitalized interest from proceeds  6 Proceeds in refunding escrows  7 Issuance costs from proceeds  916,056. 208,194. 8 Credit enhancement from proceeds  9 Working capital expenditures from proceeds  10 Capital expenditures from proceeds  109,083,944. 24,791,806. 11 Other spent proceeds  12 Other unspent proceeds  13 Year of substantial completion  2007 2007 2017 2017 Yes No Yes No Yes No Yes No 14 Were the bonds issued as part of a current refunding issue?  X X X X 15 Were the bonds issued as part of an advance refunding issue?  X X X X 16 Has the final allocation of proceeds been made?  X X X X 17 Does the organization maintain adequate books and records to support the final allocation of proceeds?  X X X X Part III Private Business Use A B C D 1 Was the organization a partner in a partnership, or a member of an LLC, Yes No Yes No Yes No Yes No which owned property financed by tax‐exempt bonds?  X X 2 Are there any lease arrangements that may result in private business use of bond‐financed property?  X X 732121 10‐18‐17 LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. 83 Schedule K (Form 990) 2017

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 ENTITY 2 OMB No. 1545‐0047 SCHEDULE K Supplemental Information on Tax‐Exempt Bonds (Form 990) | Complete if the organization answered "Yes" on Form 990, Part IV, line 24a. Provide descriptions, 2017 Department of the Treasury explanations, and any additional information in Part VI. Open to Public Internal Revenue Service | Attach to Form 990. | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Bond Issues (a) Issuer name (b) Issuer EIN (c) CUSIP # (d) Date issued (e) Issue price (f) Description of purpose (g) Defeased (h) On behalf (i) Pooled of issuer financing Yes No Yes No Yes No NORTH CAROLINA MED CARE A COMMISSION 52‐130940265821DMK4 12/21/17 29,835,000.SEE PART VI X X X NORTH CAROLINA MED CARE B COMMISSION 52‐130940265821DFU0 11/03/10 259,620,763.SEE PART VI X X X NORTH CAROLINA MED CARE C COMMISSION 52‐130940265821DRK9 05/07/13 161,286,657.SEE PART VI X X X IND. DEV. AUTH. COUNTY D OF PRINCE WILLIAM 52‐132565974176HAT2 05/07/13 153,845,821.SEE PART VI X X X Part II Proceeds A B C D 1 Amount of bonds retired  19,295,000. 4,720,000. 2 Amount of bonds legally defeased  3 Total proceeds of issue  29,835,000. 259,673,777. 161,291,650. 153,849,391. 4 Gross proceeds in reserve funds  5 Capitalized interest from proceeds  6 Proceeds in refunding escrows  7 Issuance costs from proceeds  2,703,029. 1,248,186. 1,303,430. 8 Credit enhancement from proceeds  9 Working capital expenditures from proceeds  17,472,178. 2,872,691. 417,886. 10 Capital expenditures from proceeds  239,445,557. 98,928,658. 93,665,728. 11 Other spent proceeds  12 Other unspent proceeds  13 Year of substantial completion  2017 2013 2014 2014 Yes No Yes No Yes No Yes No 14 Were the bonds issued as part of a current refunding issue?  X X X X 15 Were the bonds issued as part of an advance refunding issue?  X X X X 16 Has the final allocation of proceeds been made?  X X X X 17 Does the organization maintain adequate books and records to support the final allocation of proceeds?  X X X X Part III Private Business Use A B C D 1 Was the organization a partner in a partnership, or a member of an LLC, Yes No Yes No Yes No Yes No which owned property financed by tax‐exempt bonds?  X X X 2 Are there any lease arrangements that may result in private business use of bond‐financed property?  X X X 732121 10‐18‐17 LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. 84 Schedule K (Form 990) 2017

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 ENTITY 1 Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part III Private Business Use (Continued) A B C D 3a Are there any management or service contracts that may result in private Yes No Yes No Yes No Yes No business use of bond‐financed property?  X X b If "Yes" to line 3a, does the organization routinely engage bond counsel or other outside counsel to review any management or service contracts relating to the financed property? X X c Are there any research agreements that may result in private business use of bond‐financed property? X X d If "Yes" to line 3c, does the organization routinely engage bond counsel or other outside counsel to review any research agreements relating to the financed property?  4 Enter the percentage of financed property used in a private business use by entities other than a section 501(c)(3) organization or a state or local government  | .00 % .00 % % % 5 Enter the percentage of financed property used in a private business use as a result of unrelated trade or business activity carried on by your organization, another section 501(c)(3) organization, or a state or local government  | .00 % .00 % % % 6 Total of lines 4 and 5  .00 % .00 % % % 7 Does the bond issue meet the private security or payment test?  X X 8a Has there been a sale or disposition of any of the bond‐financed property to a non‐ governmental person other than a 501(c)(3) organization since the bonds were issued? X X b If "Yes" to line 8a, enter the percentage of bond‐financed property sold or disposed of  % % % % c If "Yes" to line 8a, was any remedial action taken pursuant to Regulations sections 1.141‐12 and 1.145‐2?  9 Has the organization established written procedures to ensure that all nonqualified bonds of the issue are remediated in accordance with the requirements under Regulations sections 1.141‐12 and 1.145‐2?  X X Part IV Arbitrage A B C D 1 Has the issuer filed Form 8038‐T, Arbitrage Rebate, Yield Reduction and Yes No Yes No Yes No Yes No Penalty in Lieu of Arbitrage Rebate?  X X X X 2 If "No" to line 1, did the following apply?  a Rebate not due yet?  X X X X b Exception to rebate?  X X X X c No rebate due?  X X X X If "Yes" to line 2c, provide in Part VI the date the rebate computation was performed  3 Is the bond issue a variable rate issue?  X X X X 4a Has the organization or the governmental issuer entered into a qualified hedge with respect to the bond issue?  X X X X b Name of provider  MERRILL LYNCH MERRILL LYNCH SEE PART VI SEE PART VI c Term of hedge  28.3000000 28.3000000 d Was the hedge superintegrated?  X X X X e Was the hedge terminated?  X X X X 732122 10‐18‐17 Schedule K (Form 990) 2017 ENTITY 2 Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part III Private Business Use (Continued) A B C D 3a Are there any management or service contracts that may result in private Yes No Yes No Yes No Yes No business use of bond‐financed property?  X X X b If "Yes" to line 3a, does the organization routinely engage bond counsel or other outside counsel to review any management or service contracts relating to the financed property? X X X c Are there any research agreements that may result in private business use of bond‐financed property? X X X d If "Yes" to line 3c, does the organization routinely engage bond counsel or other outside counsel to review any research agreements relating to the financed property?  4 Enter the percentage of financed property used in a private business use by entities other than a section 501(c)(3) organization or a state or local government  | % .00 % .00 % .00 % 5 Enter the percentage of financed property used in a private business use as a result of unrelated trade or business activity carried on by your organization, another section 501(c)(3) organization, or a state or local government  | % .00 % .00 % .00 % 6 Total of lines 4 and 5  % .00 % .00 % .00 % 7 Does the bond issue meet the private security or payment test?  X X X 8a Has there been a sale or disposition of any of the bond‐financed property to a non‐ governmental person other than a 501(c)(3) organization since the bonds were issued? X X X b If "Yes" to line 8a, enter the percentage of bond‐financed property sold or disposed of  % % % % c If "Yes" to line 8a, was any remedial action taken pursuant to Regulations sections 1.141‐12 and 1.145‐2?  9 Has the organization established written procedures to ensure that all nonqualified bonds of the issue are remediated in accordance with the requirements under Regulations sections 1.141‐12 and 1.145‐2?  X X X Part IV Arbitrage A B C D 1 Has the issuer filed Form 8038‐T, Arbitrage Rebate, Yield Reduction and Yes No Yes No Yes No Yes No Penalty in Lieu of Arbitrage Rebate?  X X X X 2 If "No" to line 1, did the following apply?  a Rebate not due yet?  X X X X b Exception to rebate?  X X X X c No rebate due?  X X X X If "Yes" to line 2c, provide in Part VI the date the rebate computation was performed  3 Is the bond issue a variable rate issue?  X X X X 4a Has the organization or the governmental issuer entered into a qualified hedge with respect to the bond issue?  X X X X b Name of provider  SEE PART VI c Term of hedge  d Was the hedge superintegrated?  X e Was the hedge terminated?  X 732122 10‐18‐17 Schedule K (Form 990) 2017 ENTITY 1 Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part IV Arbitrage (Continued) A B C D Yes No Yes No Yes No Yes No 5a Were gross proceeds invested in a guaranteed investment contract (GIC)?  X X X X b Name of provider  c Term of GIC  d Was the regulatory safe harbor for establishing the fair market value of the GIC satisfied? 6 Were any gross proceeds invested beyond an available temporary period?  X X X X 7 Has the organization established written procedures to monitor the requirements of section 148?  X X X X Part V Procedures To Undertake Corrective Action A B C D Yes No Yes No Yes No Yes No Has the organization established written procedures to ensure that violations of federal tax requirements are timely identified and corrected through the voluntary closing agreement program if self‐remediation isn't available under applicable regulations?  X X X X Part VI Supplemental Information. Provide additional information for responses to questions on Schedule K. See instructions

732123 10‐18‐17 Schedule K (Form 990) 2017 SEE PART VI SUPPLEMENTAL INFORMATION SHEET ENTITY 2 Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 3 Part IV Arbitrage (Continued) A B C D Yes No Yes No Yes No Yes No 5a Were gross proceeds invested in a guaranteed investment contract (GIC)?  X X X X b Name of provider  c Term of GIC  d Was the regulatory safe harbor for establishing the fair market value of the GIC satisfied? 6 Were any gross proceeds invested beyond an available temporary period?  X X X X 7 Has the organization established written procedures to monitor the requirements of section 148?  X X X X Part V Procedures To Undertake Corrective Action A B C D Yes No Yes No Yes No Yes No Has the organization established written procedures to ensure that violations of federal tax requirements are timely identified and corrected through the voluntary closing agreement program if self‐remediation isn't available under applicable regulations?  X X X X Part VI Supplemental Information. Provide additional information for responses to questions on Schedule K. See instructions FORM 990, SCHEDULE K ENTITY 1 FORM 990, SCHEDULE K, PART I, ENTITY 1, LINE A: DESCRIPTION OF PURPOSE (1) ACQUISITION AND INSTALLATION OF CAPITAL EQUIPMENT FOR HEALTHCARE FACILITIES; AND (2) PAY ISSUANCE COSTS

FORM 990, SCHEDULE K, PART IV, ENTITY 1, LINE 2C, COLUMN A: DATE OF LAST REBATE COMPUTATION DECEMBER 8, 2014

FORM 990, SCHEDULE K, PART I, ENTITY 1, LINE B: DESCRIPTION OF PURPOSE (1) ACQUISITION AND INSTALLATION OF CAPITAL EQUIPMENT FOR HEALTHCARE FACILITIES; AND (2) PAY ISSUANCE COSTS

FORM 990, SCHEDULE K, PART IV, ENTITY 1, LINE 2C, COLUMN B: DATE OF LAST REBATE COMPUTATION DECEMBER 8, 2014

FORM 990, SCHEDULE K, PART I, ENTITY 1, LINE C: DESCRIPTION OF PURPOSE CURRENT REFUND THE SERIES 2008A BONDS ISSUED 09/30/16

FORM 990, SCHEDULE K, PART IV, ENTITY 1, LINES 4B & 4C, COLUMN C: NOVANT HEALTH ENTERED INTO QUALIFIED HEDGES WITH RESPECT TO THE BONDS ISSUED ON 09/30/16. THE HEDGES ARE PROVIDED BY GOLDMAN SACHS MITSUI MARINE DERIVATIVE PRODUCTS, LP AND SUNTRUST BANK AND HAVE TERMS OF 17.8 AND 20.3 YEARS, RESPECTIVELY.

732123 10‐18‐17 Schedule K (Form 990) 2017 SEE PART VI SUPPLEMENTAL INFORMATION SHEET Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part VI Supplemental Information. Provide additional information for responses to questions on Schedule K. See instructions (Continued) FORM 990, SCHEDULE K, PART I, ENTITY 1, LINE D: DESCRIPTION OF PURPOSE CURRENT REFUND THE SERIES 2008B BONDS ISSUED 03/03/14

FORM 990, SCHEDULE K, PART IV, ENTITY 1, LINES 4B & 4C, COLUMN D: NOVANT HEALTH ENTERED INTO QUALIFIED HEDGES WITH RESPECT TO THE BONDS ISSUED ON 03/03/14. THE HEDGES ARE PROVIDED BY GOLDMAN SACHS MITSUI MARINE DERIVATIVE PRODUCTS, LP AND SUNTRUST BANK AND HAVE TERMS OF 17.8 AND 20.3 YEARS, RESPECTIVELY.

FORM 990, SCHEDULE K ENTITY 2 FORM 990, SCHEDULE K, PART I, ENTITY 2, LINE A: DESCRIPTION OF PURPOSE CURRENT REFUND THE SERIES 2008C BONDS ISSUED 03/03/14

FORM 990, SCHEDULE K, PART IV, ENTITY 2, LINES 4B & 4C, COLUMN A: NOVANT HEALTH ENTERED INTO QUALIFIED HEDGES WITH RESPECT TO THE BONDS ISSUED ON 03/03/14. THE HEDGES ARE PROVIDED BY GOLDMAN SACHS MITSUI MARINE DERIVATIVE PRODUCTS, LP AND SUNTRUST BANK AND HAVE TERMS OF 17.8 AND 20.3 YEARS, RESPECTIVELY.

FORM 990, SCHEDULE K, PART I, ENTITY 2, LINE B: DESCRIPTION OF PURPOSE (1) ACQUISITION AND INSTALLATION OF CAPITAL EQUIPMENT FOR HEALTHCARE FACILITIES; AND (2) PAY ISSUANCE COSTS

FORM 990, SCHEDULE K, PART II, ENTITY 2, LINE 3, COLUMN B: DIFFERENCE DUE TO INVESTMENT EARNINGS

FORM 990, SCHEDULE K, PART IV, ENTITY 2, LINE 2C, COLUMN B: DATE OF LAST REBATE COMPUTATION OCTOBER 31, 2015

FORM 990, SCHEDULE K, PART I, ENTITY 2, LINE C: DESCRIPTION OF PURPOSE (1) FINANCE THE VERTICAL EXPANSION OF PRESBYTERIAN HOSPITAL HUNTERSVILLE, THE VERTICAL EXPANSION OF PRESBYTERIAN HOSPITAL MATTHEWS, THE CONSTRUCTION AND EQUIPPING OF CLEMMONS MEDICAL CENTER, G‐WING RENOVATIONS AT PRESBYTERIAN HOSPITAL AND MEDICAL, COMPUTER OFFICE AND CAPITAL EQUIPMENT AT PRESBYTERIAN HOSPITAL, PRESBYTERIAN HOSPITAL MATTHEWS AND PRESBYTERIAN HOSPITAL HUNTERSVILLE (2) REFUND A PORTION OF THE 2003A BONDS (3) REFUND A TAXABLE BANK LOAN AND (4) PAY ISSUANCE COSTS

FORM 990, SCHEDULE K, PART II, ENTITY 2, LINE 3, COLUMN C: DIFFERENCE 732124 10‐18‐17 Schedule K (Form 990) 2017 Schedule K (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4 Part VI Supplemental Information. Provide additional information for responses to questions on Schedule K. See instructions (Continued) DUE TO INVESTMENT EARNINGS

FORM 990, SCHEDULE K, PART I, ENTITY 2, LINE D: DESCRIPTION OF PURPOSE (1) FINANCE A 60 BED HOSPITAL IN HAYMARKET, VA (2) REFUND THE PRINCE WILLIAM HOSPITAL SERIES 2002 BONDS (3) PAY ISSUANCE COSTS

FORM 990, SCHEDULE K, PART II, ENTITY 2, LINE 3, COLUMN D: DIFFERENCE DUE TO INVESTMENT EARNINGS

FORM 990, SCHEDULE K, PART III, LINE 3B: PRIVATE BUSINESS USE THE NOVANT HEALTH CARE SYSTEM HAS A LEGAL DEPARTMENT, MATERIALS MANAGEMENT DEPARTMENT AND A RESEARCH DEPARTMENT. THESE DEPARTMENTS REGULARLY REVIEW MANAGEMENT, SERVICE AND RESEARCH AGREEMENTS RELATED TO TAX‐EXEMPT BOND FINANCED PROPERTY. OUTSIDE BOND COUNSEL CONDUCTS ADDITIONAL REVIEW AND DUE DILIGENCE WHEN ENGAGED FOR A BOND ISSUANCE OR REFUNDING PROJECT.

732124 10‐18‐17 Schedule K (Form 990) 2017 SCHEDULE L Transactions With Interested Persons OMB No. 1545‐0047 (Form 990 or 990‐EZ) | Complete if the organization answered "Yes" on Form 990, Part IV, line 25a, 25b, 26, 27, 28a, 28b, or 28c, or Form 990‐EZ, Part V, line 38a or 40b. 2017

Department of the Treasury | Attach to Form 990 or Form 990‐EZ. Open To Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950 Part I Excess Benefit Transactions (section 501(c)(3), section 501(c)(4), and 501(c)(29) organizations only). Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990‐EZ, Part V, line 40b. 1 (b) Relationship between disqualified (d) Corrected? (a) Name of disqualified person (c) Description of transaction person and organization Yes No

2 Enter the amount of tax incurred by the organization managers or disqualified persons during the year under section 4958 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ 3 Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ~~~~~~~~~~~~~~~~ | $

Part II Loans to and/or From Interested Persons. Complete if the organization answered "Yes" on Form 990‐EZ, Part V, line 38a or Form 990, Part IV, line 26; or if the organization reported an amount on Form 990, Part X, line 5, 6, or 22. (a) Name of Relationship (c) Purpose (d) Loan to or (e) Original (g) In (h) Approved (i) Written (b) (f) Balance due by board or from the agreement? interested person with organization of loan organization? principal amount default? committee? To From Yes No Yes No Yes No

Total  | $ Part III Grants or Assistance Benefiting Interested Persons. Complete if the organization answered "Yes" on Form 990, Part IV, line 27. (a) Name of interested person (b) Relationship between (c) Amount of (d) Type of (e) Purpose of interested person and assistance assistance assistance the organization

LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990‐EZ. Schedule L (Form 990 or 990‐EZ) 2017

732131 10‐18‐17 91 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule L (Form 990 or 990‐EZ) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 2 Part IV Business Transactions Involving Interested Persons. Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c. (a) Name of interested person (b) Relationship between interested (c) Amount of (d) Description of (e) Sharing of organization's person and the organization transaction transaction revenues? Yes No COTSWOLD MEDICAL CLINIC (CENTITY OWNED > 35% 161,381.THE FILING X SOLID ROCK PROPERTIES (SRPENTITY OWNED > 35% 111,197.THE FILING X JOHN ARMATO FAMILY MEMBER OF CA 47,541.COMPENSATIO X PETER BRUNSTETTER, JR FAMILY MEMBER OF PE 76,386.COMPENSATIO X CHASE GARRETT FAMILY MEMBER OF DA 61,714.COMPENSATIO X ASHLEY PARK‐RICH FAMILY MEMBER OF DA 65,931.COMPENSATIO X MARY PATEFIELD FAMILY MEMBER OF AR 32,144.COMPENSATIO X ARTHUR J PATEFIELD JR FAMILY MEMBER OF AR 77,458.COMPENSATIO X MELISSA PERRELL FAMILY MEMBER OF JO 277,206.COMPENSATIO X BRANDON RICH FAMILY MEMBER OF DA 92,723.COMPENSATIO X Part V Supplemental Information Provide additional information for responses to questions on Schedule L (see instructions).

SCH L, PART IV, BUSINESS TRANSACTIONS INVOLVING INTERESTED PERSONS:

(A) NAME OF PERSON: COTSWOLD MEDICAL CLINIC (CMC)

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

ENTITY OWNED > 35% BY THOMAS WOOLLEN, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: THE FILING ORGANIZATION HAS A LEASE IN

PLACE WITH CMC

(A) NAME OF PERSON: SOLID ROCK PROPERTIES (SRP)

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

ENTITY OWNED > 35% BY JOHN PHIPPS, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: THE FILING ORGANIZATION HAS A LEASE IN

PLACE WITH SRP

(A) NAME OF PERSON: JOHN ARMATO

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF CARL ARMATO, OFFICER

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: PETER BRUNSTETTER, JR Schedule L (Form 990 or 990‐EZ) 2017 732132 10‐18‐17 92 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule L (Form 990 or 990‐EZ) NOVANT HEALTH, INC. 56‐1376950 Page 2 Part V Supplemental Information Complete this part to provide additional information for responses to questions on Schedule L (see instructions).

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF PETER BRUNSTETTER, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: CHASE GARRETT

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF DAVE GARRETT, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: ASHLEY PARK‐RICH

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF DAVID PARK, FORMER KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: MARY PATEFIELD

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF ARTHUR PATEFIELD, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: ARTHUR J PATEFIELD JR

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF ARTHUR PATEFIELD, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON. 732461 04‐01‐17 Schedule L (Form 990 or 990‐EZ) 93 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule L (Form 990 or 990‐EZ) NOVANT HEALTH, INC. 56‐1376950 Page 2 Part V Supplemental Information Complete this part to provide additional information for responses to questions on Schedule L (see instructions).

(A) NAME OF PERSON: MELISSA PERRELL

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF JOHN PHIPPS, KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: BRANDON RICH

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF DAVID PARK, FORMER KEY EMPLOYEE

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(A) NAME OF PERSON: LAURA MYERS

(B) RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION:

FAMILY MEMBER OF SCOTT MYERS, HIGHLY COMPENSATED EMPLOYEE/FMR KEY EMPLOYEE

(C) AMOUNT OF TRANSACTION $ 83,894.

(D) DESCRIPTION OF TRANSACTION: COMPENSATION PAID BY THE FILING

ORGANIZATION TO THE INTERESTED PERSON.

(E) SHARING OF ORGANIZATION REVENUES? = NO

732461 04‐01‐17 Schedule L (Form 990 or 990‐EZ) 94 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 SCHEDULE O Supplemental Information to Form 990 or 990‐EZ OMB No. 1545‐0047 (Form 990 or 990‐EZ) Complete to provide information for responses to specific questions on Form 990 or 990‐EZ or to provide any additional information. 2017 Department of the Treasury | Attach to Form 990 or 990‐EZ. Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

FORM 990, PI, L1: ORGANIZATION'S MISSION OR MOST SIGNIFICANT ACTIVITIES

NOVANT HEALTH, INC. IS THE PARENT ORGANIZATION OF A NOT‐FOR‐PROFIT

INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS

AND OTHER HEALTHCARE SERVICE PROVIDERS (COLLECTIVELY KNOWN AS "NOVANT

HEALTH"). NOVANT HEALTH CONSISTS OF MORE THAN 1,500 PHYSICIANS AND OVER

28,000 EMPLOYEES WHO MAKE HEALTHCARE REMARKABLE AT OVER 580 LOCATIONS,

INCLUDING 14 MEDICAL CENTERS AND HUNDREDS OF OUTPATIENT FACILITIES AND

PHYSICIAN CLINICS. HEADQUARTERED IN WINSTON SALEM, NC, NOVANT HEALTH IS

COMMITTED TO MAKING HEALTHCARE REMARKABLE FOR PATIENTS AND COMMUNITIES,

SERVING MORE THAN 4.7 MILLION PATIENTS ANNUALLY. DIVERSITY MBA HAS

RECOGNIZED THE ORGANIZATION AS ONE OF THE 50 BEST PLACES FOR WOMEN AND

MANAGERS OF DIVERSE BACKGROUNDS TO WORK AND SK&A RANKS NOVANT HEALTH

AMONG THE TOP 25 INTEGRATED HEALTH SYSTEMS IN THE NATION. IN 2017, THE

NOVANT HEALTH SYSTEM REPORTED $4.6 BILLION IN REVENUES.

GENERAL INFORMATION

NOVANT HEALTH, INC. EXISTS TO SUPPORT THE OVERALL HEALTHCARE SYSTEM AND

DOES SO BY PROVIDING STRATEGIC PLANNING, CENTRALIZED ADMINISTRATIVE

SUPPORT AND THE COORDINATION OF SYSTEM‐WIDE ACTIVITIES. WE EXIST TO

IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. WE ACCOMPLISH THAT

MISSION BY PROVIDING AND SUPPORTING EXCELLENT HEALTHCARE FACILITIES AND

PHYSICIAN PRACTICES, AND MAKING A COMMITMENT TO COMMUNITY OUTREACH AND

SERVICE, INCLUDING THE PROVISION OF PROGRAMS THAT SERVE OUR PATIENTS,

NEIGHBORS, AND OUR COMMUNITIES' MOST VULNERABLE CITIZENS.

LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990‐EZ. Schedule O (Form 990 or 990‐EZ) (2017) 732211 09‐07‐17 95 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

IN ADDITION TO OUR QUALITY AND COMPREHENSIVE CATEGORIES OF SERVICES,

WE'RE VERY PROUD OF OUR PATIENT FINANCIAL ASSISTANCE PROGRAM. WE WORK

WITH PATIENTS TO HELP QUALIFY THEM FOR PUBLIC ASSISTANCE, ESTABLISH A

REASONABLE PAYMENT PLAN, DISCOUNT THEIR BILL OR PROVIDE FREE CARE FOR

THOSE THAT QUALIFY FOR FINANCIAL ASSISTANCE.

COMMUNITY OUTREACH

NOVANT HEALTH PROVIDES HUNDREDS OF PROGRAMS THAT SERVE PATIENTS,

NEIGHBORS AND SOME OF OUR COMMUNITIES' MOST VULNERABLE CITIZENS. WE

PROVIDE FINANCIAL ASSISTANCE FOR THE UNINSURED, SERVICES TO INDIVIDUALS

WITH MEDICAID COVERAGE REIMBURSED AT LESS THAN COST, COMMUNITY HEALTH

EDUCATION, MEDICAL SERVICES THAT LOSE MONEY BUT ARE IMPORTANT FOR THE

COMMUNITY, SUPPORT GROUPS, OUTREACH SERVICES, COMMUNITY EVENTS AND

SCREENINGS. IN ADDITION, WE PARTICIPATE IN MEDICAL RESEARCH, ACADEMIC

HEALTH PROGRAMS AND PARTNERSHIPS WITH A DIVERSE GROUP OF ORGANIZATIONS

TO PROVIDE OTHER COMMUNITY INITIATIVES.

WE ASSIST OUR COMMUNITIES IN OTHER WAYS AS WELL; FOLLOWING ARE JUST A

FEW EXAMPLES:

‐ IN 2017, NOVANT HEALTH PRESBYTERIAN MEDICAL CENTER CONTINUED TO

OFFER MENTAL HEALTH FIRST AID, AN EARLY INTERVENTION AND PUBLIC

EDUCATION PROGRAM. THIS INTERACTIVE COURSE IS DESIGNED TO HELP

IDENTIFY, UNDERSTAND AND RESPOND TO A PERSON EXPERIENCING A MENTAL

HEALTH ISSUE. THE 8‐HOUR ADULT AND YOUTH PROGRAMS TEACH WARNING SIGNS

OF DEPRESSION, ANXIETY DISORDERS, TRAUMA, PSYCHOTIC DISORDERS, EATING

DISORDERS AND SUBSTANCE USE DISORDERS. COMMUNITY PARTICIPANTS LEARN A 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 96 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

5‐STEP ACTION PLAN TO HELP SOMEONE IN A CRISIS AND NON‐CRISIS

SITUATIONS AND HAVE THE UNIQUE OPPORTUNITY TO PRACTICE THE PLAN THROUGH

ROLE PLAYS, SCENARIOS AND ACTIVITIES.

‐ NOVANT HEALTH THOMASVILLE MEDICAL CENTER HOSTED A VARIETY OF FREE

SEMINARS TO HELP PROMOTE EDUCATION AND WELLNESS AND GAVE FREE COMMUNITY

TALKS ON A VARIETY OF HEALTH AND WELLNESS RELATED TOPICS INCLUDING

PARENTING CLASSES, BABYSITTING TRAINING, STROKE PREVENTION, WOMEN'S

HEART ISSUES, HEALTHY EATING, END OF LIFE DECISIONS AND DIABETES

MANAGEMENT. THESE PROGRAMS WERE HELD AT LOCATIONS ACROSS THE COUNTY.

‐ NOVANT HEALTH FORSYTH MEDICAL CENTER HELD OVER 400 FREE SCREENING

EVENTS THAT SERVED APPROXIMATELY 8,000 SCREENING PARTICIPANTS.

LOCATIONS INCLUDE NOVANT HEALTH TRIAD CAMPUSES, LOCAL PUBLIC SCHOOLS,

YMCA/YWCA, RETAIL OUTLETS, CORPORATIONS, FAITH COMMUNITIES, AND SENIOR

CENTERS. THE VARIOUS EVENTS SCREENED FOR DIABETES, PERIPHERAL ARTERY

DISEASE, BONE DENSITY, BLOOD PRESSURE AND HEART HEALTH.

‐ NOVANT HEALTH BRUNSWICK MEDICAL CENTER FOCUSED ON INCREASING

BREAST‐FEEDING IN NEW MOMS, DECREASING SMOKING IN PREGNANT WOMEN AND

DIMINISHING OBESITY IN BRUNSWICK COUNTY. THROUGH THIS INITIATIVE, A

FULL‐TIME LACTATION COORDINATOR WAS HIRED TO PARTNER WITH LOCAL SCHOOLS

TO HELP GET CHILDREN ACTIVE, AND HOSTED SMOKING CESSATION PROGRAMS.

‐ NOVANT HEALTH ROWAN MEDICAL CENTER PROVIDED A POSITIVE IMPACT ON THE

HEALTH OF ROWAN COUNTY RESIDENTS BY PARTNERING WITH THE YMCA OF ROWAN

COUNTY TO OFFER A FREE FIVE‐WEEK COMPREHENSIVE NUTRITION AND WEIGHT

LOSS PROGRAM. LICENSED PROFESSIONALS INCLUDING REGISTERED DIETICIANS, A 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 97 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

HEALTH COACH AND A FITNESS TRAINER LED THE COLLABORATIVE EFFORT TO

PROMOTE EFFECTIVE WEIGHT MANAGEMENT THROUGH PROPER DIET, EXERCISE AND

GENERAL AWARENESS OF GOOD HEALTH.

NEW TECHNOLOGY & SERVICES

IN 2017, NOVANT HEALTH FACILITIES CONTINUED THEIR RELENTLESS FOCUS ON

DELIVERING A REMARKABLE PATIENT EXPERIENCE AND LOOKED FOR INNOVATIVE

WAYS TO DELIVER EXPANDED ACCESS TO CARE, AS WELL AS EASE NAVIGATION OF

THE HEALTHCARE SYSTEM.

NOVANT HEALTH CONTINUED TO INVEST IN ITS ELECTRONIC HEALTH RECORD

(EHR), AND IN 2017 HAD MORE THAN 40,000 APPOINTMENTS PER MONTH

SCHEDULED ONLINE AS A RESULT. WE ALSO SAFELY EXCHANGED OVER 14.5

MILLION RECORDS SO THAT PATIENTS COULD RECEIVE CARE WHEN AND WHERE THEY

NEEDED IT MOST.

CLINICIANS CAN NOW SHARE PATIENTS' MEDICAL INFORMATION BETWEEN

PHYSICIAN OFFICES, OUTPATIENT CENTERS AND HOSPITALS. THIS SHARING OF

INFORMATION IMPROVES SAFETY AND COORDINATION OF CARE AND PROMOTES

CONNECTIVITY AND COMMUNICATION BETWEEN HOSPITAL CAREGIVERS, SPECIALISTS

AND PRIMARY CARE PROVIDERS. EMBARKING ON THE JOURNEY TO CREATE A SHARED

EHR IS THE MOST SIGNIFICANT AND IMPORTANT INVESTMENT NOVANT HEALTH HAS

EVER MADE FOR ITS PATIENTS AND TEAM MEMBERS.

IN ADDITION TO GROWTH INITIATIVES, NOVANT HEALTH HAS FOCUSED ON MAKING

HEALTHCARE MORE CONVENIENT AND EASIER TO ACCESS. VIDEO VISITS ALLOW

PATIENTS TO CONNECT WITH THEIR HEALTHCARE PROVIDERS FROM THE COMFORT OF 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 98 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

THEIR HOMES OR OFFICES. USED FOR NON‐EMERGENT HEALTH CONCERNS, VIDEO

VISITS WORK BEST FOR PATIENTS NEEDING CHRONIC DISEASE MANAGEMENT OR

FOLLOW‐UP CARE WITHOUT A PHYSICAL EXAM. TELEMEDICINE ENABLES US TO

DELIVER HIGH‐LEVEL CLINICAL CARE ANYWHERE BY CONNECTING SMALLER

HOSPITALS WITH SPECIALISTS AT OUR MAJOR MEDICAL CENTERS.

THROUGH THE ELECTRONIC HEALTH RECORD, NOVANT HEALTH MEDICAL GROUP

PHYSICIANS ALSO OFFER A SECURE PATIENT PORTAL ("MYCHART") THAT GIVES

PATIENTS DIRECT ACCESS TO THEIR MEDICAL RECORDS ONLINE AND THROUGH OUR

MOBILE APP. THROUGH THIS FREE ONLINE TOOL PATIENTS CAN COMMUNICATE WITH

THE PHYSICIANS VIA EMAIL, SCHEDULE APPOINTMENTS AND REFILL

PRESCRIPTIONS. BY THE END OF 2017, MORE THAN 800,000 PATIENTS WERE

ENROLLED IN MYCHART.

AS A RESULT OF THESE EFFORTS, NOVANT HEALTH ACHIEVED A 'WORLD'S FIRST'

MILESTONE WHEN WE BECAME THE FIRST HEALTH SYSTEM TO BE REVALIDATED FOR

THE HEALTH INFORMATION AND MANAGEMENT SYSTEMS SOCIETY (HIMSS) ANALYTICS

STAGE 7 AMBULATORY AWARD FOR OUR USE OF AN EHR.

NOVANT HEALTH IS A LEADING HEALTHCARE ORGANIZATION, DEDICATED TO

DELIVERING REMARKABLE HEALTHCARE AND IMPROVING ACCESS AND CONVENIENCE

ACROSS FOUR STATES. HOSPITALS RANGE FROM METROPOLITAN TERTIARY MEDICAL

CENTERS TO SMALL, COMMUNITY HOSPITALS IN RURAL AREAS. OTHER NOVANT

HEALTH FACILITIES AND PROGRAMS INCLUDE PHYSICIAN PRACTICES, OUTPATIENT

SURGERY CENTERS, IMAGING CENTERS, MEDICAL PLAZAS AND REHABILITATION

PROGRAMS.

COMMUNITY BENEFIT REPORT 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 99 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

HTTPS://WWW.NOVANTHEALTH.ORG/HOME/ABOUT‐US/COMMUNITY‐INVOLVEMENT

/COMMUNITY‐BENEFIT.ASPX

THE COMMUNITY BENEFIT REPORT PREPARED BY NOVANT HEALTH IS A SYSTEM‐WIDE

REPORT THAT INCLUDES QUALITATIVE AND QUANTITATIVE INFORMATION. PLEASE

NOTE THAT THE NUMERIC DATA IN THIS REPORT IS NOT BASED UPON THE FORM

990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN ACCORDANCE

WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES. IT

SHOULD NOT BE RELIED UPON AS THE ORGANIZATION'S FORM 990, SCHEDULE H

COMMUNITY BENEFIT REPORT, ITS COMMUNITY HEALTH NEEDS ASSESSMENT OR

COMMUNITY BENEFIT IMPLEMENTATION STRATEGY. IN THIS REPORT, THE NOVANT

HEALTH SYSTEM'S COMMUNITY BENEFIT WAS APPROXIMATELY $794,000,000,

INCLUDING $138,000,000 IN FINANCIAL ASSISTANCE FOR 2017.

FORM 990, PART I, LINE 6:

THE NUMBER OF VOLUNTEERS REPORTED INCLUDES THOSE VOLUNTEERS SERVING AS

BOARD MEMBERS.

FORM 990, PART III, LINE 1: MISSION, VISION AND VALUES

MISSION:

NOVANT HEALTH EXISTS TO IMPROVE THE HEALTH OF COMMUNITIES, ONE PERSON

AT A TIME.

VISION:

WE, THE NOVANT HEALTH TEAM, WILL DELIVER THE MOST REMARKABLE PATIENT 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 100 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

EXPERIENCE, IN EVERY DIMENSION, EVERY TIME.

VALUES:

‐ COMPASSION: WE TREAT OUR CUSTOMERS AND THEIR FAMILIES, STAFF AND

OTHER HEALTHCARE PROVIDERS AS FAMILY MEMBERS BY SHOWING THEM KINDNESS,

PATIENCE, EMPATHY AND RESPECT.

‐ DIVERSITY AND INCLUSION: WE RECOGNIZE THAT EVERY PERSON IS

DIFFERENT, EACH SHAPED BY UNIQUE LIFE EXPERIENCES. THIS ENABLES US TO

BETTER UNDERSTAND ONE ANOTHER AND OUR CUSTOMERS. BY ENGAGING THE

STRENGTHS AND TALENTS OF EACH TEAM MEMBER, WE ENSURE A STRONG

ORGANIZATION CAPABLE OF PROVIDING REMARKABLE HEALTHCARE TO OUR

PATIENTS, FAMILIES AND COMMUNITIES.

‐ PERSONAL EXCELLENCE: WE STRIVE TO GROW PERSONALLY AND

PROFESSIONALLY, AND WE APPROACH EACH SERVICE OPPORTUNITY WITH A

POSITIVE, FLEXIBLE ATTITUDE. HONESTY AND PERSONAL INTEGRITY GUIDE ALL

THAT WE DO.

‐ TEAMWORK: THE NEEDS AND EXPECTATIONS OF ANY ONE CUSTOMER ARE

GREATER THAN THAT WHICH ONE PERSON'S SERVICE EFFORTS CAN SATISFY. WE

SUPPORT EACH OTHER SO THAT TOGETHER AS A TEAM, WE CAN BE SUCCESSFUL IN

THE EYE OF THE CUSTOMER AS A QUALITY SERVICE PROVIDER.

‐ COURAGE: WE ACT BOLDLY IN MAKING THE CHANGES NECESSARY TO ACHIEVE

OUR MISSION, VISION AND PROMISE OF DELIVERING REMARKABLE HEALTHCARE.

OUR PEOPLE:

WE ARE AN INCLUSIVE TEAM OF PURPOSE‐DRIVEN PEOPLE INSPIRED AND UNITED

BY OUR PASSION TO CARE FOR EACH OTHER, OUR PATIENTS AND OUR

COMMUNITIES.

732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 101 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

OUR PROMISE TO PATIENTS:

WE ARE MAKING YOUR HEALTHCARE EXPERIENCE REMARKABLE. WE WILL BRING YOU

WORLD‐CLASS CLINICIANS, CARE AND TECHNOLOGY ‐ WHEN AND WHERE YOU NEED

THEM. WE ARE REINVENTING THE HEALTHCARE EXPERIENCE TO BE SIMPLER, MORE

CONVENIENT AND MORE AFFORDABLE, SO THAT YOU CAN FOCUS ON GETTING BETTER

AND STAYING HEALTHY.

FORM 990, PART VI, SECTION A, LINE 2: FAMILY AND/OR BUSINESS RELATIONSHIPS

BUSINESS RELATIONSHIP

CARL ARMATO

ARTHUR PATEFIELD

BUSINESS RELATIONSHIP

CARL ARMATO

FRED HARGETT

PETER BRUNSTETTER

ROBERT STOLZ

BUSINESS RELATIONSHIP

CARL ARMATO

FRED HARGETT

PETER BRUNSTETTER

TOM ZWENG

JOHN PHIPPS

OPHELIA GARMON‐BROWN

732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 102 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

BUSINESS RELATIONSHIP

CARL ARMATO

FRED HARGETT

JESSE CURETON

BUSINESS RELATIONSHIP

PETER BRUNSTETTER

DENISE MIHAL

JOHN PHIPPS

TOM ZWENG

FORM 990, PART VI, SECTION A, LINE 4: SIGNIFICANT CHANGES TO GOVERNING

DOCUMENTS

NOVANT HEALTH, INC. (NH) FILED AMENDED AND RESTATED ARTICLES, AS APPROVED

BY THE NH BOARD, TO ADD SUPPORTED ORGANIZATIONS.

FORM 990, PART VI, SECTION B, LINE 11: ORGANIZATION'S PROCESS TO REVIEW

FORM 990

THE AUDIT AND COMPLIANCE COMMITTEE OF THE NOVANT HEALTH BOARD OF TRUSTEES

("THE COMMITTEE") HAS RESPONSIBILITY FOR OVERSEEING THE ORGANIZATION'S TAX

MATTERS. THE BOARD OF TRUSTEES HAS DELEGATED THE REVIEW OF THE FORM 990 TO

THE COMMITTEE. THE COMMITTEE IS THE REVIEW BODY FOR ALL OF THE FORM 990S

FILED FOR ORGANIZATIONS WITHIN THE NOVANT HEALTH SYSTEM. THE COMMITTEE

MEETS BEFORE THE FORM 990S ARE FILED WITH THE IRS AND AFTER ALL BOARD

MEMBERS HAVE RECEIVED A COPY OF THE FORM 990 AND A SUMMARY OF ITS CONTENTS.

THE VICE PRESIDENT OF TAX AND LEGAL COUNSEL ATTEND THE MEETING TO ANSWER 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 103 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

ANY QUESTIONS AND ADDRESS ANY SIGNIFICANT DISCLOSURES WITHIN THE FORM 990.

FORM 990, PART VI, SECTION B, LINE 12C: MONITORING AND ENFORCEMENT OF COI

THE ORGANIZATION'S TRUSTEE CONFLICT OF INTEREST POLICY APPLIES TO ALL

TRUSTEES, PRINCIPAL OFFICERS OR MEMBERS OF A COMMITTEE WITH BOARD DELEGATED

POWERS INCLUDING ANY APPLICABLE DISREGARDED ENTITIES. ALL TRUSTEES ARE SENT

AN ANNUAL DISCLOSURE QUESTIONNAIRE. THE TRUSTEE ANNUAL DISCLOSURE

QUESTIONNAIRES ARE REVIEWED BY THE COMPLIANCE DEPARTMENT. WITH RESPECT TO

PARTICULAR TRANSACTIONS THAT COME BEFORE THE BOARD, THE CONFLICT OF

INTEREST POLICY WOULD BE FOLLOWED. THE POTENTIAL CONFLICT OF INTEREST WOULD

BE DISCLOSED BY THE BOARD MEMBER BEFORE A VOTE ON THE TRANSACTION AND THE

REST OF THE BOARD WOULD DETERMINE WHETHER A CONFLICT OF INTEREST EXISTS. IF

THE REST OF THE BOARD DETERMINED THAT A CONFLICT OF INTEREST EXISTED THEN

THE BOARD MEMBER WITH THE CONFLICT OF INTEREST WOULD NOT PARTICIPATE IN THE

DELIBERATIONS AND VOTE.

FORM 990, PART VI, SECTION B, LINE 15A: COMPENSATION PROCESS FOR TOP

OFFICIAL

NOVANT HEALTH, INC. IS THE PARENT ORGANIZATION OF AN INTEGRATED HEALTHCARE

SYSTEM COLLECTIVELY REFERRED TO AS "NOVANT HEALTH." INDEPENDENT AND

DISINTERESTED MEMBERS OF THE NOVANT HEALTH, INC. BOARD OF TRUSTEES (WHO

COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW,

APPROVE, AND OVERSEE ALL ASPECTS OF COMPENSATION AND BENEFITS FOR NOVANT

HEALTH, INC.'S CEO. THE COMMITTEE WORKS WITH AN INDEPENDENT COMPENSATION

CONSULTANT AND USES THIRD PARTY COMPARABILITY DATA FOR FUNCTIONALLY SIMILAR

POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS TO ENSURE THAT TOTAL 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 104 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

COMPENSATION INCLUDING BENEFITS IS REASONABLE. THE COMMITTEE REVIEWS AND

APPROVES CEO COMPENSATION AND BENEFITS ANNUALLY, CONSISTENT WITH THE

WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY OF NOVANT HEALTH, AND IN A MANNER

THAT QUALIFIES FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS, THEREBY

ASSURING THAT TOTAL COMPENSATION AND BENEFITS PROVIDED IS REASONABLE.

FORM 990, PART VI, SECTION B, LINE 15B: COMPENSATION PROCESS FOR OFFICERS

NOVANT HEALTH, INC. IS THE PARENT ORGANIZATION OF AN INTEGRATED HEALTHCARE

SYSTEM COLLECTIVELY REFERRED TO AS "NOVANT HEALTH." INDEPENDENT AND

DISINTERESTED MEMBERS OF THE NOVANT HEALTH, INC. BOARD OF TRUSTEES (WHO

COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW,

APPROVE, AND OVERSEE ALL ASPECTS OF COMPENSATION AND BENEFITS FOR CERTAIN

EXECUTIVES ("EXECUTIVES") SERVING AS OFFICERS OR KEY EMPLOYEES FOR NOVANT

HEALTH ENTITIES. THE COMMITTEE WORKS WITH AN INDEPENDENT COMPENSATION

CONSULTANT AND USES THIRD PARTY COMPARABILITY DATA FOR FUNCTIONALLY SIMILAR

POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS TO ENSURE THAT TOTAL

COMPENSATION AND BENEFITS FOR EACH EXECUTIVE IS REASONABLE FOR THAT

EXECUTIVE'S POSITION. THE COMMITTEE REVIEWS AND APPROVES EXECUTIVE

COMPENSATION AND BENEFITS ANNUALLY, CONSISTENT WITH THE WRITTEN EXECUTIVE

COMPENSATION PHILOSOPHY OF NOVANT HEALTH, AND IN A MANNER THAT QUALIFIES

FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS, THEREBY ASSURING THAT

TOTAL COMPENSATION AND BENEFITS PROVIDED TO EACH EXECUTIVE IS REASONABLE.

FORM 990, PART VI, SECTION C, LINE 19: GOVERNING DOCUMENTS DISCLOSURE

THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS CONTAINING ALL ORGANIZATIONS

IN THE NOVANT HEALTH SYSTEM ARE POSTED TO THE NOVANT HEALTH WEBSITE. THE

GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT AVAILABLE TO 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 105 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

THE PUBLIC.

FORM 990, PART VII, SECTION A, COLUMN B: RELATED ORGANIZATIONS

THE ORGANIZATION EMPLOYS CERTAIN EXECUTIVES WHOSE ROLES ARE SUCH THAT

THEY PROVIDE SERVICES TO NOT ONLY THE ORGANIZATION, BUT ALSO TO SOME OR

ALL OF THE OTHER TAX‐EXEMPT ORGANIZATIONS WITHIN THE HEALTHCARE SYSTEM.

FOR EXAMPLE, MANY OF THESE EXECUTIVES' ROLES FOCUS ON PARTICULAR

SERVICE LINES WHICH CROSS THE VARIOUS GEOGRAPHIC MARKETS OUR

ORGANIZATIONS SERVE, THUS THE SERVICES PROVIDED BY THESE EXECUTIVES MAY

BENEFIT AND BE RECEIVED BY MULTIPLE ORGANIZATIONS WITHIN THE SYSTEM.

THE EXECUTIVES DO NOT ALLOCATE THEIR HOURS BETWEEN THE VARIOUS

ORGANIZATIONS, BUT RATHER THEIR TIME SPENT ON SERVICES TO THE

ORGANIZATION IS INCLUSIVE OF SERVICES TO ALL OF THE ORGANIZATIONS THEY

SERVE WITHIN THE SYSTEM.

FORM 990, PART IX, LINE 6: COMPENSATION OF DISQUALIFIED PERSONS

THE AMOUNTS REPORTED HERE INCLUDE AMOUNTS ATTRIBUTABLE TO DISQUALIFIED

PERSONS (DQP) AS DEFINED IN THE INSTRUCTIONS, BUT NOW ALSO INCLUDES

AMOUNTS ATTRIBUTABLE TO INDIVIDUALS THAT MAY NOT DEFINITIVELY BE

CONSIDERED DQPS UNDER THE 4958 RULES. WE HAVE OPTED TO TAKE A MORE

EXPANSIVE APPROACH AS TO WHO MAY BE CONSIDERED A DQP AND REPORT THEM

HERE AS WELL.

FORM 990, PART XI, LINE 9, CHANGES IN NET ASSETS:

PARTNERSHIPS: 2,623,731. 732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 106 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule O (Form 990 or 990‐EZ) (2017) Page 2 Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

INVESTMENT ADJUSTMENT: 77,262.

FASB/ACCOUNTING CHANGES: ‐485,331.

MALPRACTICE INSURANCE: ‐260,261.

DERIVATIVES/SWAP: 7,329,537.

CAPITAL CONTRIBUTION: ‐2,500,000.

MEMBERSHIP INTEREST PURCHASE: 12,592,368.

ROUNDING: ‐1.

NON‐CASH DONATIONS: 170,743.

TOTAL TO FORM 990, PART XI, LINE 9 19,548,048.

732212 09‐07‐17 Schedule O (Form 990 or 990‐EZ) (2017) 107 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 OMB No. 1545‐0047 SCHEDULE R Related Organizations and Unrelated Partnerships (Form 990) | Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37. 2017 | Attach to Form 990. Department of the Treasury Open to Public Internal Revenue Service | Go to www.irs.gov/Form990 for instructions and the latest information. Inspection Name of the organization Employer identification number NOVANT HEALTH, INC. 56‐1376950

Part I Identification of Disregarded Entities. Complete if the organization answered "Yes" on Form 990, Part IV, line 33.

(a) (b) (c) (d) (e) (f) Name, address, and EIN (if applicable) Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

ASHEVILLE OPEN MRI, LLC - 56-2001227 2085 FRONTIS PLAZA BLVD FOUNDATION HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 6,811,541. 1,294,366.SYSTEMS CORP. CABARRUS DIAGNOSTIC IMAGING, LLC - 62-1715203, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 1,294,851. 3,378,550.SYSTEMS CORP. CAPE FEAR DIAGNOSTIC IMAGING, LLC - 62-1833647, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 342,000. 251,364.SYSTEMS CORP. CAPE FEAR MOBILE IMAGING, LLC - 20-0599346 2085 FRONTIS PLAZA BLVD CAPE FEAR DIAGNOSTIC WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 567,600. 193,740.IMAGING, LLC Identification of Related Tax‐Exempt Organizations. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related tax‐exempt Part II organizations during the tax year. (a) (b) (c) (d) (e) (f) (g) Section 512(b)(13) Name, address, and EIN Primary activity Legal domicile (state or Exempt Code Public charity Direct controlling controlled of related organization foreign country) section status (if section entity entity? 501(c)(3)) Yes No AUXILIARY OF FORSYTH MEMORIAL HOSPITAL - 56-0862112, 2085 FRONTIS PLAZA BLVD, WINSTON FORSYTH MEMORIAL SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 10 HOSPITAL, INC. X BRUNSWICK NOVANT MEDICAL CENTER FOUNDATION - BRUNSWICK 27-4616751, 2085 FRONTIS PLAZA BLVD, WINSTON COMMUNITY SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 7 HOSPITAL, LLC X CAROLINA MEDICORP ENTERPRISES, INC. - 58-1466368, 2085 FRONTIS PLAZA BLVD, WINSTON NOVANT MEDICAL SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 12B, II GROUP, INC. X COMMUNITY GENERAL HEALTH PARTNERS, INC. - 56-0636250, 2085 FRONTIS PLAZA BLVD, WINSTON NOVANT HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 TRIAD REGION, LLC X For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule R (Form 990) 2017

732161 09‐11‐17 LHA 108

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) NOVANT HEALTH, INC. 56‐1376950

Part I Continuation of Identification of Disregarded Entities

(a) (b) (c) (d) (e) (f) Name, address, and EIN Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

CAROLINA IMAGING, LLC OF FAYETTEVILLE - 56-1876345, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 10,570,275. 2,166,959.SYSTEMS CORP. CAROLINAS DIAGNOSTIC IMAGING, LLC - 57-1121114, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 1,180,559. 1,758,767.SYSTEMS CORP. CHAPEL HILL DIAGNOSTIC IMAGING, LLC - 56-2049126, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 832,650. 783,791.SYSTEMS CORP. FOUNDATION HEALTH MOBILE IMAGING, LLC - 33-1039097, 2085 FRONTIS PLAZA BLVD, WINSTON CAROLINA IMAGING, LLC SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 1,970,175. 7,395,994.OF FAYETTEVILLE DURHAM DIAGNOSTIC IMAGING, LLC - 56-2272517 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 10,362,527. 5,187,470.TRIAD IMAGING, LLC JACKSONVILLE DIAGNOSTIC IMAGING, LLC - 94-3419385, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 3,439,730. 3,661,107.TRIAD IMAGING, LLC LOUISBURG/NOVANT, LLC - 58-1681238 2085 FRONTIS PLAZA BLVD FOUNDATION HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 24,322. 0.SYSTEMS CORP. MECKLENBURG DIAGNOSTIC IMAGING, LLC - 56-2016235, 2085 FRONTIS PLAZA BLVD, WINSTON FOUNDATION HEALTH SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 6,848,667. 3,079,601.SYSTEMS CORP. PIEDMONT IMAGING, LLC - 56-1876341 2085 FRONTIS PLAZA BLVD FOUNDATION HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 10,144,389. 3,687,580.SYSTEMS CORP. TRIAD IMAGING, LLC - 56-2001223 2085 FRONTIS PLAZA BLVD FOUNDATION HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 4,510,199. 1,641,393.SYSTEMS CORP.

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Part I Continuation of Identification of Disregarded Entities

(a) (b) (c) (d) (e) (f) Name, address, and EIN Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

EXCEL IMAGING, LLC - 20-4253946 2085 FRONTIS PLAZA BLVD FORSYTH MEMORIAL WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.HOSPITAL, INC. SALEM MRI, LLC 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.EXCEL IMAGING, LLC THE BREAST CLINIC MRI, LLC 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.EXCEL IMAGING, LLC 1427 EAST FOURTH STREET, LLC - 20-1523667 2085 FRONTIS PLAZA BLVD PROVIDENCE ROAD LAND WINSTON SALEM, NC 27103 REAL ESTATE NORTH CAROLINA 0. 0.PARTNERS, LLC 1600 ELIZABETH AVENUE, LLC - 26-0757319 2085 FRONTIS PLAZA BLVD PROVIDENCE ROAD LAND WINSTON SALEM, NC 27103 REAL ESTATE NORTH CAROLINA 0. 0.PARTNERS, LLC BRUNSWICK COMMUNITY HOSPITAL, LLC - 20-4278130, 2085 FRONTIS PLAZA BLVD, WINSTON NOVANT HEALTH TRIAD SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 90,139,428. 104,526,618.REGION, LLC CALL-A-NURSE, LLC - 43-1965884 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 101. 0.NOVANT HEALTH, INC. NOVANT ASSET MANAGEMENT, LLC - 26-0705491 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 ASSET MGMT NORTH CAROLINA 1,892,060. 130,508.NOVANT HEALTH, INC. NOVANT HEALTH BRUNSWICK ENDOSCOPY CENTER, LLC - 82-0831203, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 0. 968,443.NOVANT HEALTH, INC. NOVANT HEALTH CASUALTY, LLC - 81-2938127 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 INSURANCE NORTH CAROLINA 39. 25,049.NOVANT HEALTH, INC.

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Part I Continuation of Identification of Disregarded Entities

(a) (b) (c) (d) (e) (f) Name, address, and EIN Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

NOVANT HEALTH SOUTHERN PIEDMONT REGION, LLC - 56-2120972, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 HOLDING COMPANY NORTH CAROLINA 0. 0.NOVANT HEALTH, INC. NOVANT HEALTH TRIAD REGION, LLC - 56-2120973, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 HOLDING COMPANY NORTH CAROLINA 0. 0.NOVANT HEALTH, INC. PRESBYTERIAN AMBULATORY HOLDINGS, LLC - 26-1705594, 2085 FRONTIS PLAZA BLVD, WINSTON NOVANT HEALTH SOUTHERN SALEM, NC 27103 HOLDING COMPANY NORTH CAROLINA 0. 0.PIEDMONT REGION, LLC PRESBYTERIAN BREAST CENTER, LLC - 26-0069792, 2085 FRONTIS PLAZA BLVD, WINSTON PRESBYTERIAN AMBULATORY SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 4,252,237. 1,486,404.HOLDINGS, LLC PRESBYTERIAN DIAGNOSTIC CENTER AT CABARRUS, LLC - 27-0295685, 2085 FRONTIS PLAZA BLVD, PRESBYTERIAN AMBULATORY WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.HOLDINGS, LLC NOVANT HEALTH MINT HILL MEDICAL CENTER, LLC - 26-0599536, 2085 FRONTIS PLAZA BLVD, NOVANT HEALTH SOUTHERN WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 80,713,239.PIEDMONT REGION, LLC PRESBYTERIAN IMAGING CENTERS, LLC - 72-1568954, 2085 FRONTIS PLAZA BLVD, WINSTON PRESBYTERIAN AMBULATORY SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 6,590,438. 2,579,615.HOLDINGS, LLC PRESBYTERIAN MOBILE IMAGING, LLC - 20-2935595, 2085 FRONTIS PLAZA BLVD, WINSTON PRESBYTERIAN IMAGING SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.CENTERS, LLC PRESBYTERIAN SAMEDAY SURGERY CENTER AT HUNTERSVILLE, LLC - 26-2422926, 2085 FRONTIS PRESBYTERIAN AMBULATORY PLAZA BLVD, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 8,418,466. 2,596,387.HOLDINGS, LLC NOVANT HEALTH MONROE OUTPATIENT SURGERY, LLC - 20-3135267, 2085 FRONTIS PLAZA BLVD, PRESBYTERIAN AMBULATORY WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 361. 4,191.HOLDINGS, LLC

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Part I Continuation of Identification of Disregarded Entities

(a) (b) (c) (d) (e) (f) Name, address, and EIN Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

PRESBYTERIAN SAMEDAY SURGERY CENTER AT BALLANTYNE, LLC - 20-3135052, 2085 FRONTIS PRESBYTERIAN AMBULATORY PLAZA BLVD, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 3,724,534. 1,290,006.HOLDINGS, LLC NOVANT PROPERTIES, LLC - 26-3378448 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 REAL ESTATE NORTH CAROLINA 0. 0.NOVANT HEALTH, INC. SAME DAY SURGERY CENTER FRANKLIN, LLC 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.NOVANT HEALTH, INC. SAMEDAY SURGERY CENTER AT PRESBYTERIAN, LLC - 68-0561430, 2085 FRONTIS PLAZA BLVD, PRESBYTERIAN AMBULATORY WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.HOLDINGS, LLC NOVANT HEALTH KERNERSVILLE OUTPATIENT SURGERY, LLC - 82-1651821, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.NOVANT HEALTH, INC. TORRENCE STREET PARTNERS, LLC - 56-2217412 2085 FRONTIS PLAZA BLVD PROVIDENCE ROAD LAND WINSTON SALEM, NC 27103 REAL ESTATE NORTH CAROLINA 0. 0.PARTNERS, LLC NOVANT HEALTH PHYSICIAN INSURANCE PROTECTED CELL, LLC - 81-2946353, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 INSURANCE NORTH CAROLINA 2,929,229. 7,620,766.NOVANT HEALTH, INC. PROVIDENCE ROAD LAND PARTNERS, LLC - 56-2264109, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 REAL ESTATE NORTH CAROLINA 1,557,932. 37,991,743.NOVANT HEALTH, INC. NOVANT HEALTH-PRINCE WILLIAM ASSET CO. - 81-0887677, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 ASSET HOLDING COMPANY NORTH CAROLINA 15,320,790. 118,435,609.NOVANT HEALTH, INC. FORSYTH MEDICAL GROUP, LLC - 31-1725913 2085 FRONTIS PLAZA BLVD NOVANT MEDICAL GROUP, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 43,397,905. 16,861,823.INC.

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Part I Continuation of Identification of Disregarded Entities

(a) (b) (c) (d) (e) (f) Name, address, and EIN Primary activity Legal domicile (state or Total income End‐of‐year assets Direct controlling of disregarded entity foreign country) entity

NOVANT HEALTH PHARMACY SERVICES, LLC - 47-4615021, 2085 FRONTIS PLAZA BLVD, WINSTON THE PRESBYTERIAN SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 64,702,685. 18,417,813.HOSPITAL NOVANT HEALTH CENTER CITY OUTPATIENT SURGERY, LLC, 2085 FRONTIS PLAZA BLVD, THE PRESBYTERIAN WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.HOSPITAL PRINCE WILLIAM HEALTH SYSTEM ASC/MOB, LLC - 20-3195704, 2085 FRONTIS PLAZA BLVD, WINSTON PRINCE WILLIAM HEALTH SALEM, NC 27103 HEALTHCARE VIRGINIA 545,620. 6,790,144.SYSTEM PRINCE WILLIAM-FAUQUIER CANCER CENTER, LLC - 05-0570221, 2085 FRONTIS PLAZA BLVD, WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 10,396,513. 30,722,598.PRINCE WILLIAM HOSPITAL NMG AFFILIATE PRACTICE I, LLC - 56-2084786 2085 FRONTIS PLAZA BLVD PRINCE WILLIAM HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 30,684,404. 8,322,017.SYSTEM VIENNA DIAGNOSTIC IMAGING, LLC - 74-3065759 2085 FRONTIS PLAZA BLVD PRINCE WILLIAM HEALTH WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 1,727,064. 3,522,107.SYSTEM ROWAN MEDICAL SERVICES, LLC 2085 FRONTIS PLAZA BLVD ROWAN REGIONAL MEDICAL WINSTON SALEM, NC 27103 INACTIVE NORTH CAROLINA 0. 0.CENTER, INC. ROWAN COMMUNITY SERVICES, LLC - 27-2991035 2085 FRONTIS PLAZA BLVD ROWAN REGIONAL MEDICAL WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 0. 0.CENTER, INC. NMG SOUTHPARK SERVICES, LLC - 45-0600400 2085 FRONTIS PLAZA BLVD WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 2,179,258. 288,505.NMG SERVICES, INC.

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Part II Continuation of Identification of Related Tax‐Exempt Organizations

(a) (b) (c) (d) (e) (f) (g) Section 512(b)(13) Name, address, and EIN Primary activity Legal domicile (state or Exempt Code Public charity Direct controlling controlled of related organization foreign country) section status (if section entity organization? 501(c)(3)) Yes No COMMUNITY GENERAL HOSPITAL FOUNDATION, INC. COMMUNITY GENERAL - 56-1828629, 2085 FRONTIS PLAZA BLVD, HEALTH PARTNERS, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 7 INC. X FORSYTH MEDICAL CENTER FOUNDATION - 56-2120959, 2085 FRONTIS PLAZA BLVD, WINSTON FORSYTH MEMORIAL SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 7 HOSPITAL, INC. X FORSYTH MEMORIAL HOSPITAL, INC. - 56-0928089 2085 FRONTIS PLAZA BLVD NOVANT HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 TRIAD REGION, LLC X FOUNDATION HEALTH SYSTEMS CORP. - 56-1373175 2085 FRONTIS PLAZA BLVD NOVANT HEALTH, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 10 INC. X MEDICAL PARK HOSPITAL, INC. - 56-1340424 2085 FRONTIS PLAZA BLVD NOVANT HEALTH WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 TRIAD REGION, LLC X NMG SERVICES, INC. - 56-2098809 2085 FRONTIS PLAZA BLVD NOVANT HEALTH, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 10 INC. X NOVANT MEDICAL GROUP, INC. - 58-1728803 2085 FRONTIS PLAZA BLVD NMG SERVICES, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 INC. X PERSONAL CARE SERVICES - 54-1291284 2085 FRONTIS PLAZA BLVD PRINCE WILLIAM WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) LINE 10 HEALTH SYSTEM X PRESBYTERIAN HOSPITAL FOUNDATION - NOVANT HEALTH 58-1413074, 2085 FRONTIS PLAZA BLVD, WINSTON SOUTHERN PIEDMONT SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 7 REGION, LLC X PRESBYTERIAN MEDICAL CARE CORPORATION - NOVANT HEALTH 56-1376368, 2085 FRONTIS PLAZA BLVD, WINSTON SOUTHERN PIEDMONT SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 REGION, LLC X PRINCE WILLIAM HEALTH SYSTEM - 54-1278944 2085 FRONTIS PLAZA BLVD LINE 12C, NOVANT HEALTH UVA WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) III-FI HEALTH SYSTEM X PRINCE WILLIAM HOSPITAL - 54-0696355 2085 FRONTIS PLAZA BLVD PRINCE WILLIAM WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) LINE 3 HEALTH SYSTEM X

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Part II Continuation of Identification of Related Tax‐Exempt Organizations

(a) (b) (c) (d) (e) (f) (g) Section 512(b)(13) Name, address, and EIN Primary activity Legal domicile (state or Exempt Code Public charity Direct controlling controlled of related organization foreign country) section status (if section entity organization? 501(c)(3)) Yes No PWHS FOUNDATION - 54-1307595 2085 FRONTIS PLAZA BLVD PRINCE WILLIAM WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) LINE 7 HEALTH SYSTEM X ROWAN HEALTH SERVICES CORPORATION - 56-1424814, 2085 FRONTIS PLAZA BLVD, WINSTON LINE 12C, NOVANT HEALTH, SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) III-FI INC. X ROWAN REGIONAL MEDICAL CENTER AUXILIARY - ROWAN REGIONAL 23-7022472, 2085 FRONTIS PLAZA BLVD, WINSTON MEDICAL CENTER, SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 10 INC. X ROWAN REGIONAL MEDICAL CENTER FOUNDATION, ROWAN REGIONAL INC. - 56-1424818, 2085 FRONTIS PLAZA BLVD, MEDICAL CENTER, WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 7 INC. X ROWAN REGIONAL MEDICAL CENTER, INC. - ROWAN HEALTH 56-0547479, 2085 FRONTIS PLAZA BLVD, WINSTON SERVICES SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 CORPORATION X SELF INSURANCE FUND - NOVANT HEALTH, INC. - 58-1867242, 2085 FRONTIS PLAZA BLVD, WINSTON LINE 12C, NOVANT HEALTH, SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) III-FI INC. X THE PRESBYTERIAN HOSPITAL - 56-0554230 NOVANT HEALTH 2085 FRONTIS PLAZA BLVD SOUTHERN PIEDMONT WINSTON SALEM, NC 27103 HEALTHCARE NORTH CAROLINA 501(C)(3) LINE 3 REGION, LLC X CULPEPER MEMORIAL HOSPITAL, INC. - 54-0622371, 2085 FRONTIS PLAZA BLVD, WINSTON NOVANT HEALTH UVA SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) LINE 3 HEALTH SYSTEM X NOVANT HEALTH UVA HEALTH SYSTEM - 81-0868533 2085 FRONTIS PLAZA BLVD NOVANT HEALTH, WINSTON SALEM, NC 27103 HEALTHCARE VIRGINIA 501(C)(3) LINE 12A, I INC. X

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Part III Identification of Related Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related organizations treated as a partnership during the tax year. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Legal Predominant income General or Name, address, and EIN Primary activity domicile Direct controlling Share of total Share of Disproportionate Code V‐UBI Percentage of related organization entity (related, unrelated, income end‐of‐year amount in box managing ownership (state or allocations? partner? foreign excluded from tax under assets 20 of Schedule country) sections 512‐514) Yes No K‐1 (Form 1065) Yes No BLUE HERON REAL ESTATE OPPORTUNITY FUND I, LLC - 45-2601527, 1111 HAYNES RENTAL REAL NOVANT HEALTH, STREET, SUITE 203, RALEIGH, ESTATE NC INC. INVESTMENT -176,404. 3,188,796. X -134,855. X 58.59% CULPEPER SURGERY CENTER, LLC - 54-1975624, 541 SUNSET CULPEPER LANE, SUITE 201, CULPEPER, VA MEMORIAL 22701 HEALTHCARE VA HOSPITAL, INC. RELATED 622,217. 925,306. X N/A X 55.67% ENDOSCOPY CENTER OF LAKE PRESBYTERIAN NORMAN, LLC (ECLN) (AKA. AMBULATORY PECH) - 20-5112015, 13808 HOLDINGS, LLC PROFESSIONAL CENTER DRIVE, HEALTHCARE NC (NOVANT RELATED 380,658. 656,078. X N/A X 51.00% HAYMARKET SURGERY CENTER, LLC - 46-2874962, 2085 FRONTIS PLAZA BLVD., WINSTON-SALEM, PRINCE WILLIAM NC 27103 HEALTHCARE VA HOSPITAL RELATED 265,422. 2,449,920. X N/A X 51.01%

Part IV Identification of Related Organizations Taxable as a Corporation or Trust. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related organizations treated as a corporation or trust during the tax year. (a) (b) (c) (d) (e) (f) (g) (h) (i) Section Name, address, and EIN Primary activity Legal domicile Direct controlling Type of entity Share of total Share of Percentage 512(b)(13) of related organization (state or entity (C corp, S corp, income end‐of‐year ownership controlled foreign or trust) assets entity? country) Yes No ADEPT HEALTH, INC. FKA NOVANT HEALTH SHARED SERVICES, INC. - 56-2226937, 2085 FRONTIS NOVANT HEALTH, PLAZA BLVD., WINSTON SALEM, NC 27103 ADMIN SERVICES NC INC. C CORP 18,479,211. 11,166,920. 100.00% X CHOICEHEALTH, INC. - 56-1896065 2085 FRONTIS PLAZA BLVD. NOVANT HEALTH, WINSTON SALEM, NC 27103 MANAGED CARE NC INC. C CORP 2,544,636. 562,432. 100.00% X COMMUNICARE, INC. - 56-1952950 COMMUNITY 2085 FRONTIS PLAZA BLVD. GENERAL HEALTH WINSTON SALEM, NC 27103 RENTAL REAL ESTATE NC PARTNERS, INC. C CORP 0. 975,662. 100.00% X KERNERSVILLE MEDICAL CENTER PARK OWNERS' ASSOCIATION - 47-1511401, 2085 FRONTIS PLAZA NOVANT HEALTH, BLVD., WINSTON SALEM, NC 27103 RENTAL REAL ESTATE NC INC. C CORP 0. 1,185,541. 100.00% X MEDQUEST, INC. & SUBSIDIARIES - 22-3860764 3480 PRESTON RIDGE RD., STE 600 NOVANT HEALTH, ALPHARETTA, GA 30005 DIAGNOSTIC IMAGING DE INC. C CORP 96,159,469. 74,815,193. 100.00% X 732162 09‐11‐17 116 Schedule R (Form 990) 2017 SEE PART VII FOR CONTINUATIONS

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) NOVANT HEALTH, INC. 56‐1376950

Part III Continuation of Identification of Related Organizations Taxable as a Partnership

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Legal Predominant income Disproportion‐ General or Name, address, and EIN Primary activity domicile Direct controlling Share of total Share of Code V‐UBI Percentage of related organization entity (related, unrelated, income end‐of‐year amount in box managing ownership (state or ate allocations? partner? foreign excluded from tax under assets 20 of Schedule country) sections 512‐514) Yes No K‐1 (Form 1065) Yes No HOLLY SPRINGS SURGERY CENTER, LLC - 47-3460976, 600 VILLAGE WALK DRIVE, HOLLY SPRINGS, NC NOVANT HEALTH, 27540 HEALTHCARE NC INC. RELATED 0. 0. X N/A X .00% LATITUDE MULTI-FAMILY RECOVERY FUND, LP - 45-3360465, 350 SOUTH BEVERLY RENTAL REAL NOVANT HEALTH, DRIVE, SUITE 300, BEVERLY ESTATE CA INC. INVESTMENT 2,396,368. 0. X 1,414,853. X .00% MATTHEWS SURGERY CENTER, LLC - 27-3634811, 2085 FRONTIS PRESBYTERIAN PLAZA BLVD, WINSTON-SALEM, NC MEDICAL CARE 27103 HEALTHCARE NC CORP. RELATED 391,815. 2,829,433. X N/A X 50.00% PRINCE WILLIAM AMBULATORY SURGERY CENTER, LLC (PWASC) - 77-0594498, 2085 FRONTIS PRINCE WILLIAM PLAZA BLVD., WINSTON-SALEM, HEALTHCARE VA HOSPITAL RELATED 796,625. 2,365,988. X N/A X 51.00% SOUTHPARK SURGERY CENTER, LLC - 87-0714098, 2085 FRONTIS THE PLAZA BLVD, WINSTON-SALEM, NC PRESBYTERIAN 27103 HEALTHCARE NC HOSPITAL RELATED 1,767,061. 4,490,557. X N/A X 60.00%

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Part IV Continuation of Identification of Related Organizations Taxable as a Corporation or Trust

(a) (b) (c) (d) (e) (f) (g) (h) (i) Section Name, address, and EIN Primary activity Legal domicile Direct controlling Type of entity Share of total Share of Percentage 512(b)(13) of related organization (state or entity (C corp, S corp, income end‐of‐year ownership controlled foreign or trust) assets entity? country) Yes No NOVANT HEALTH FOUNDATION, INC. - 81-3895369 2085 FRONTIS PLAZA BLVD. NOVANT HEALTH, WINSTON SALEM, NC 27103 INACTIVE NC INC. C CORP 0. 0. 100.00% X NOVANT HEALTH TRINOVA INSURANCE PROTECTED CELL, INC. - 81-2963143, 2085 FRONTIS PLAZA NOVANT HEALTH, BLVD., WINSTON SALEM, NC 27103 INSURANCE NC INC. C CORP 16,504. 9,508,883. 100.00% X ROWAN MEDICAL ALLIANCE, INC. - 56-1992669 ROWAN REGIONAL 2085 FRONTIS PLAZA BLVD. MEDICAL WINSTON SALEM, NC 27103 INSURANCE NC CENTER, INC. C CORP 0. 0. 100.00% X ROWAN MEDICAL FACILITIES, INC. - 56-1424672 ROWAN HEALTH 2085 FRONTIS PLAZA BLVD. SERVICES WINSTON SALEM, NC 27103 MEDICAL SUPPLIES NC CORPORATION C CORP 0. 350. 100.00% X SALEM DIAGNOSTICS, INC. - 56-1513621 2085 FRONTIS PLAZA BLVD. SALEM HEALTH WINSTON SALEM, NC 27103 HEALTH RELATED NC SERVICES, INC. C CORP 0. 0. 100.00% X SALEM HEALTH SERVICES, INC. - 56-1342654 NOVANT HEALTH 2085 FRONTIS PLAZA BLVD. TRIAD REGION, WINSTON SALEM, NC 27103 HEALTH RELATED NC LLC C CORP 0. 1,466,719. 100.00% X THE PARK AT MONROE PROPERTY OWNERS ASSOCIATION, INC. - 46-3910256, 2085 FRONTIS NOVANT HEALTH, PLAZA BLVD., WINSTON SALEM, NC 27103 RENTAL REAL ESTATE NC INC. C CORP 111,139. 102,786. 100.00% X

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Part V Transactions With Related Organizations. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36.

Note: Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule. Yes No 1 During the tax year, did the organization engage in any of the following transactions with one or more related organizations listed in Parts II‐IV? a Receipt of (i) interest, (ii) annuities, (iii) royalties, or (iv) rent from a controlled entity ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1a X b Gift, grant, or capital contribution to related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1b X c Gift, grant, or capital contribution from related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1c X d Loans or loan guarantees to or for related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1d X e Loans or loan guarantees by related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1e X

f Dividends from related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1f X g Sale of assets to related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1g X h Purchase of assets from related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1h X i Exchange of assets with related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1i X j Lease of facilities, equipment, or other assets to related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1j X

k Lease of facilities, equipment, or other assets from related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1k X l Performance of services or membership or fundraising solicitations for related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1l X m Performance of services or membership or fundraising solicitations by related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1m X n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1n X o Sharing of paid employees with related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1o X

p Reimbursement paid to related organization(s) for expenses ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1p X q Reimbursement paid by related organization(s) for expenses~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1q X

r Other transfer of cash or property to related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1r X s Other transfer of cash or property from related organization(s)  1s X 2 If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds. (a) (b) (c) (d) Name of related organization Transaction Amount involved Method of determining amount involved type (a‐s)

(1) ADEPT HEALTH, INC. A 228,517.FMV

(2) CHOICEHEALTH, INC. A 254,022.FMV

(3) FOUNDATION HEALTH SYSTEMS CORP. A 141,078.FMV

(4) FORSYTH MEMORIAL HOSPITAL, INC. A 10,731,943.FMV

(5) NOVANT MEDICAL GROUP, INC. A 10,317,218.FMV

(6) THE PRESBYTERIAN HOSPITAL A 1,561,858.FMV 732163 09‐11‐17 119 Schedule R (Form 990) 2017

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) NOVANT HEALTH, INC. 56‐1376950

Part V Continuation of Transactions With Related Organizations (Schedule R (Form 990), Part V, line 2)

(a) (b) (c) (d) Name of other organization Transaction Amount involved Method of determining type (a‐r) amount involved

(7)PRESBYTERIAN MEDICAL CARE CORP. A 77,990.FMV

(8)CAROLINA MEDICORP ENTERPRISES, INC. A 654,915.FMV

(9)FOUNDATION HEALTH SYSTEMS CORP. A 6,457,290.COST

(10)MEDQUEST A 3,380,813.COST

(11)FOUNDATION HEALTH SYSTEMS CORP. D 108,868,954.COST

(12)MEDQUEST D 57,000,000.COST

(13)FOUNDATION HEALTH SYSTEMS CORP. K 540,307.FMV

(14)NOVANT MEDICAL GROUP, INC. K 644,659.FMV

(15)MEDQUEST M 1,571,489.COST

(16)NOVANT MEDICAL GROUP, INC. P 2,556,759.COST

(17)MEDQUEST P 3,896,699.COST BRUNSWICK NOVANT MEDICAL CENTER (18)FOUNDATION Q 63,228.COST

(19)COMMUNITY GENERAL HEALTH PARTNERS, INC. Q 27,103,305.COST COMMUNITY GENERAL HOSPITAL FOUNDATION, (20)INC. Q 61,152.COST

(21)CHOICEHEALTH, INC. Q 805,070.COST

(22)CAROLINA MEDICORP ENTERPRISES, INC. Q 5,361,468.COST

(23)FOUNDATION HEALTH SYSTEMS CORP. Q 2,441,054.COST

(24)AUXILIARY OF FORSYTH MEMORIAL HOSPITAL Q 954,240.COST

732225 04‐01‐17 120

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) NOVANT HEALTH, INC. 56‐1376950

Part V Continuation of Transactions With Related Organizations (Schedule R (Form 990), Part V, line 2)

(a) (b) (c) (d) Name of other organization Transaction Amount involved Method of determining type (a‐r) amount involved

(7)FORSYTH MEDICAL CENTER FOUNDATION Q 2,574,649.COST

(8)FORSYTH MEMORIAL HOSPITAL, INC. Q 364,563,378.COST

(9)HAYMARKET SURGERY CENTER, LLC Q 3,233,127.COST

(10)MEDICAL PARK HOSPITAL Q 27,686,704.COST

(11)MATTHEWS SURGERY CENTER, LLC Q 1,782,924.COST

(12)ADEPT HEALTH, INC. Q 8,617,426.COST

(13)NOVANT HEALTH UVA HEALTH SYSTEM Q 3,250,565.COST

(14)NOVANT MEDICAL GROUP, INC. Q 148,805,833.COST

(15)NMG SERVICES, INC. Q 7,312,647.COST

(16)PERSONAL CARE SERVICES Q 1,537,353.COST

(17)THE PRESBYTERIAN HOSPITAL Q 382,952,672.COST

(18)PRESBYTERIAN HOSPITAL FOUNDATION Q 2,974,126.COST

(19)PRESBYTERIAN MEDICAL CARE CORP. Q 59,103,122.COST PRINCE WILLIAM AMBULATORY SURGERY CENTER, (20)LLC Q 5,427,160.COST

(21)PRINCE WILLIAM HOSPITAL Q 85,611,521.COST

(22)PRINCE WILLIAM HEALTH SYSTEM Q 5,986,834.COST

(23)PWHS FOUNDATION Q 237,488.COST

(24)ROWAN HEALTH SERVICES CORP. Q 493,474.COST

732225 04‐01‐17 121

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) NOVANT HEALTH, INC. 56‐1376950

Part V Continuation of Transactions With Related Organizations (Schedule R (Form 990), Part V, line 2)

(a) (b) (c) (d) Name of other organization Transaction Amount involved Method of determining type (a‐r) amount involved

(7) ROWAN REGIONAL MEDICAL CENTER, INC. Q 62,573,882.COST ROWAN REGIONAL MEDICAL CENTER FOUNDATION, (8) INC. Q 738,262.COST SELF INSURANCE FUND ‐ NOVANT HEALTH, (9) INC. Q 7,033,500.COST

(10) SOUTHPARK SURGERY CENTER, LLC Q 7,477,915.COST ROWAN REGIONAL MEDICAL CENTER FOUNDATION, (11) INC. B 101,650.COST

(12) CHOICEHEALTH, INC. R 2,500,000.COST

(13) PROVIDENCE ROAD LAND PARTNERS, LLC S 12,592,368.COST

(14)

(15)

(16)

(17)

(18)

(19)

(20)

(21)

(22)

(23)

(24)

732225 04‐01‐17 122

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 4

Part VI Unrelated Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 37.

Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Are all Name, address, and EIN Primary activity Legal domicile Predominant income partners sec. Share of Share of Dispropor‐ Code V‐UBI General or Percentage managing of entity (state or foreign (related, unrelated, 501(c)(3) total end‐of‐year tionate amount in box 20 ownership excluded from tax under orgs.? allocations? of Schedule K‐1 partner? country) income assets sections 512‐514) Yes No Yes No (Form 1065) Yes No

Schedule R (Form 990) 2017

732164 09‐11‐17 123

16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Schedule R (Form 990) 2017 NOVANT HEALTH, INC. 56‐1376950 Page 5 Part VII Supplemental Information. Provide additional information for responses to questions on Schedule R. See instructions.

PART III, IDENTIFICATION OF RELATED ORGANIZATIONS TAXABLE AS PARTNERSHIP:

NAME, ADDRESS, AND EIN OF RELATED ORGANIZATION:

BLUE HERON REAL ESTATE OPPORTUNITY FUND I, LLC

EIN: 45‐2601527

1111 HAYNES STREET, SUITE 203

RALEIGH, NC 27604

NAME, ADDRESS, AND EIN OF RELATED ORGANIZATION:

ENDOSCOPY CENTER OF LAKE NORMAN, LLC (ECLN) (AKA. PECH)

EIN: 20‐5112015

13808 PROFESSIONAL CENTER DRIVE

HUNTERSVILLE, NC 28078

DIRECT CONTROLLING ENTITY: PRESBYTERIAN AMBULATORY HOLDINGS, LLC (NOVANT

HEALTH, INC.)

NAME, ADDRESS, AND EIN OF RELATED ORGANIZATION:

LATITUDE MULTI‐FAMILY RECOVERY FUND, LP

EIN: 45‐3360465

350 SOUTH BEVERLY DRIVE, SUITE 300

BEVERLY HILLS, CA 90212

NAME, ADDRESS, AND EIN OF RELATED ORGANIZATION:

PRINCE WILLIAM AMBULATORY SURGERY CENTER, LLC (PWASC)

EIN: 77‐0594498

2085 FRONTIS PLAZA BLVD.

WINSTON‐SALEM, NC 27103

732165 09‐11‐17 Schedule R (Form 990) 2017 124 16191018 143879 NH 2017.04030 NOVANT HEALTH, INC. NH1 Novant Health, Inc. and Affiliates Consolidated Financial Statements and Supplemental Information December 31, 2017 and 2016 Novant Health, Inc. and Affiliates Index December 31, 2017 and 2016

Page(s)

Report of Independent Auditors...... 1–2

Consolidated Financial Statements

Balance Sheets ...... 3

Statements of Operations and Changes in Net Assets ...... 4–5

Statements of Cash Flows ...... 6–7

Notes to Consolidated Financial Statements ...... 8–49

Report of Independent Auditors on Supplementary Information………………………………………..50

Schedule of Cost of Community Benefit Programs ...... 51

Report of Independent Auditors on Accompanying Consolidating Information…..…………………52

Consolidating Supplemental Schedules……...... 53–56

Notes to Consolidating Supplemental Schedules...... 57–58 Report of Independent Auditors

To the Board of Trustees of Novant Health, Inc.

We have audited the accompanying consolidated financial statements of Novant Health, Inc. and Affiliates (the “Company”), which comprise the consolidated balance sheets as of December 31, 2017 and 2016, and the related consolidated statements of operations and changes in net assets and of cash flows for the years then ended.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers LLP, 800 Green Valley Road, Suite 500, Greensboro, NC 27408 T: (336) 665 2700, F: (336) 665 2699, www.pwc.com/us Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Novant Health, Inc. and Affiliates as of December 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

March 26, 2018

Novant Health, Inc. and Affiliates Consolidated Balance Sheets December 31, 2017 and 2016

(in thousands of dollars) 2017 2016

Assets Current assets Cash and cash equivalents $ 408,698 $ 260,988 Accounts receivable, net of allowance for doubtful accounts of $227,609 in 2017 and $230,511 in 2016 518,502 511,649 Short-term investments 300,071 260,319 Current portion of assets limited as to use 18,713 18,586 Deferred tax asset 2,190 - Current assets held for sale - 14,173 Receivable for settlement with third-party payors 21,232 13,897 Other current assets 197,048 181,750 Total current assets 1,466,454 1,261,362 Assets limited as to use 181,140 147,124 Long-term assets held for sale - 57,193 Long-term investments 2,314,684 2,014,688 Property and equipment, net 2,018,908 1,940,642 Intangible assets and goodwill, net 325,916 287,466 Investments in affiliates 43,476 32,046 Deferred tax asset 1,246 - Other assets 111,089 107,011 Total assets $ 6,462,913 $ 5,847,532 Liabilities and Net Assets Current liabilities Current portion of long-term debt $ 67,609 $ 66,624 Short-term borrowings 88,049 83,627 Accounts payable 194,738 160,192 Accrued liabilities 414,351 358,685 Current liabilities held for sale - 13,498 Estimated third-party payor settlements 39,706 33,296 Total current liabilities 804,453 715,922 Long-term debt, net of current portion 1,343,676 1,325,810 Long-term liabilities held for sale - 1,682 Derivative financial instruments 44,832 50,305 Employee benefits and other liabilities 340,074 305,476 Total liabilities 2,533,035 2,399,195 Commitments and contingencies

Net assets Unrestricted - attributable to Novant Health 3,778,254 3,291,669 Unrestricted - noncontrolling interests 77,639 96,620 Total unrestricted net assets 3,855,893 3,388,289 Temporarily restricted 62,353 48,767 Permanently restricted 11,632 11,281 Total net assets 3,929,878 3,448,337 Total liabilities and net assets $ 6,462,913 $ 5,847,532

The accompanying notes are an integral part of these consolidated financial statements.

3 Novant Health, Inc. and Affiliates Consolidated Statements of Operations and Changes in Net Assets Years Ended December 31, 2017 and 2016

(in thousands of dollars) 2017 2016

Operating revenues Patient service revenues (net of contractual allowances and discounts) $ 4,532,188 $ 4,308,993 Provision for bad debts (212,874) (204,535) Net patient service revenues less provision for bad debts 4,319,314 4,104,458 Other revenue 276,078 235,665 Total operating revenues 4,595,392 4,340,123 Operating expenses Salaries and employee benefits 2,543,037 2,278,632 Supplies and other 1,568,236 1,456,401 Depreciation expense 238,069 237,416 Amortization expense 2,892 2,972 Impairment charge - 11,850 Interest expense 68,719 81,832 Total operating expenses 4,420,953 4,069,103 Operating income 174,439 271,020 Non-operating income (expense) Investment income 307,847 151,097 Income tax expense (3,028) (3,371) Gain on extinguishment of debt - 6,304 Other net periodic pension (costs) benefit (1,388) 30,155 Excess of revenues over expenses $ 477,870 $ 455,205

Continued on following page

The accompanying notes are an integral part of these consolidated financial statements.

4 Novant Health, Inc. and Affiliates Consolidated Statements of Operations and Changes in Net Assets, continued Years Ended December 31, 2017 and 2016

(in thousands of dollars) 2017 2016

Unrestricted net assets Excess of revenues over expenses $ 477,870 $ 455,205 Change in funded status of defined benefit plans (739) 1,066 Unrealized gain on derivative financial instruments 7,330 5,564 Formation of Novant Health UVA Health System - 92,187 Purchase of noncontrolling interest (9,800) - Other changes in unrestricted net assets (7,057) 237 Increase in unrestricted net assets 467,604 554,259 Temporarily restricted net assets Contributions and investment income 20,217 11,131 Formation of Novant Health UVA Health System - 740 Net assets released from restrictions for operations (6,631) (6,862) Increase in temporarily restricted net assets 13,586 5,009 Permanently restricted net assets Contributions 351 300 Increase in permanently restricted net assets 351 300 Increase in total net assets 481,541 559,568 Net assets, beginning of year 3,448,337 2,888,769 Net assets, end of year $ 3,929,878 $ 3,448,337

The accompanying notes are an integral part of these consolidated financial statements.

5 Novant Health, Inc. and Affiliates Consolidated Statements of Cash Flows Years Ended December 31, 2017 and 2016

(in thousands of dollars)

2017 2016

Cash flows from operating activities Increase in net assets $ 481,541 $ 559,568 Adjustments to reconcile changes in net assets to net cash provided by operating activities Depreciation, amortization, and accretion 244,278 241,688 Gain on sale of real estate (3,997) (4,234) Impairment charge - 11,850 Gain on extinguishment of debt - (6,304) Actuarial loss (gain) on pension and postretirement benefits 684 (42,400) Change in funded status of defined benefit plans 739 (1,066) Increase in unrestricted net assets related to consolidated affiliated entities - (92,927) Share of earnings in affiliates, net of distributions (1,688) 587 Net realized and unrealized gains on assets limited as to use and investments (282,612) (129,464) Change in fair value of interest rate swaps (5,473) (7,636) Contributions restricted for capital (10,288) (2,314) Provision for bad debts 212,874 204,535 Changes in operating assets and liabilities, net of assets acquired and liabilities assumed Accounts receivable (245,463) (320,730) Accounts payable and accrued liabilities 74,560 (24,227) Deferred taxes, net (1,595) 1,627 Other assets and liabilities, net (6,702) 6,542 Net cash provided by operating activities 456,858 395,095 Cash flows from investing activities Capital expenditures (286,213) (288,282) Proceeds from sales of long-term investments 1,548,043 943,012 Purchase of long-term investments (1,582,752) (1,022,634) Proceeds from sales of short-term investments 495,034 605,914 Purchase of short-term investments (534,421) (400,551) Proceeds from sale of property and equipment 5,535 3,503 Investments in unconsolidated affiliates (8,898) (992) Cash acquired - 13,198 Other investing activities (4,524) (190) Net cash used in investing activities (368,196) (147,022) Cash flows from financing activities Principal payments on long-term debt (141,650) (374,566) Proceeds from issuance of bonds, net of deferred issuance costs 113,235 - Proceeds from sale of accounts receivable, net 34,333 37,709 Cash proceeds from (payments for) repurchase agreements, net 4,513 (3,066) Cash proceeds from (payments on) other financing 9,417 (1,565) Cash proceeds from revolving credit facility 49,000 - Cash paid for consolidated entities (9,800) - Net cash provided by (used in) financing activities 59,048 (341,488) Net increase (decrease) in cash and cash equivalents 147,710 (93,415) Cash and cash equivalents Beginning of year 260,988 354,403 End of year $ 408,698 $ 260,988

The accompanying notes are an integral part of these consolidated financial statements.

6 Novant Health, Inc. and Affiliates Consolidated Statements of Cash Flows, continued Years Ended December 31, 2017 and 2016

(in thousands of dollars)

2017 2016

Supplemental disclosure of cash flow information Interest paid $ 69,914 $ 89,813 Income taxes paid 5,988 1,810 Supplemental disclosure of noncash operating activities Settlement of patient receivables and other liabilities 475 1,108 Supplemental disclosure of noncash financing and investing activities Property and equipment financed through current liabilities 50,150 31,685

.

The accompanying notes are an integral part of these consolidated financial statements.

7 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

1. Reporting Entity

Novant Health, Inc. (“Novant Health” or the “Company”) is a nonprofit, integrated health care network of physician clinics, outpatient centers and hospitals that serves patients and communities in North Carolina, Virginia and South Carolina. Novant Health consists of over 1,500 physicians and 26,000 team members at approximately 500 locations, including 14 medical centers and hundreds of outpatient facilities and physician clinics. Headquartered in Winston-Salem, North Carolina, Novant Health is committed to making healthcare remarkable for patients and communities, serving more than 4 million patients annually. Novant Health and its affiliates serve their communities with programs including health education, home health care, prenatal clinics, community clinics and immunization services.

2. Summary of Significant Accounting Policies

Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Principles of Consolidation The consolidated financial statements include the accounts of all affiliates controlled by Novant Health. All intercompany transactions and balances have been eliminated. Investments in affiliates in which the Company does not have control or has a 50% or less interest are accounted for by either the equity or cost method.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Significant estimates include, but are not limited to, accounts receivable allowances, third-party payor settlements, goodwill and intangible asset valuation and subsequent recoverability, useful lives of intangible assets and property and equipment, medical and professional liability and other self-insurance accruals, and pension related assumptions.

Fair Value of Financial Instruments The fair value of financial instruments approximates the carrying amount reported in the consolidated balance sheets for cash and cash equivalents, investments other than alternatives, assets limited as to use and interest rate swaps. More information can be found in Note 7, Fair Value Measurements.

Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with an original maturity of three months or less, excluding amounts limited as to use by board designation, donors or trustees.

8 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Accounts Receivable Accounts receivable consist primarily of amounts owed by various governmental agencies, insurance companies and patients. Novant Health manages these receivables by regularly reviewing the accounts and contracts and by providing appropriate allowances for uncollectible amounts. In evaluating the collectability of accounts receivable from third-party payors, the Company analyzes contractually due amounts and provides an allowance for doubtful accounts and a provision for bad debts, if necessary (for example, for anticipated uncollectible deductibles and copayments on accounts for which the third-party payor has not yet paid, or for payors who are known to be having financial difficulties that make the realization of amounts due unlikely). In evaluating the collectability of accounts receivable from patients (including both patients without insurance and patients with deductible and copayment balances due for which third-party coverage exists), Novant Health considers several factors, including historical collection results, the age of the accounts, changes in collection patterns and general industry conditions. Novant Health records a provision for bad debts in the period of service based on the analysis and consideration of these factors. Once collection efforts are complete, any difference between the amount charged and the amount collected is written off against the allowance for doubtful accounts.

Other Current Assets Other current assets include inventories (which primarily consist of hospital and medical supplies and pharmaceuticals), prepaid expenses and other receivables. Inventory costs are determined primarily using the average cost method and are stated at the lower of cost or market value.

Investments Investments are classified as trading securities. All investments are designated as trading at the time of acquisition. Accordingly, unrealized gains and losses on investments are included in excess of revenues over expenses, unless the income or loss is restricted by donor or law. Long- term investments are classified as noncurrent assets as the Company does not expect to use these funds to meet its current liabilities.

Investments in equity and debt securities with readily determinable fair values are measured at fair value in the accompanying consolidated balance sheets. The Company also invests in alternative and private equity investments through limited partnerships and limited liability corporations (“LLCs”). These investments are recorded using the equity method of accounting (which approximates fair value) with the related earnings reported as investment income in the accompanying consolidated financial statements. The values provided by the respective partnership or LLC are based on market value or other estimates that require varying degrees of judgment. Because these investments are not readily marketable, the estimated value is subject to additional uncertainty and, therefore, may differ from the value that would have been used had a market for such investments existed. Such differences could be material. The Company believes the carrying amount of these investments is a reasonable estimate of fair value.

Investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect the investment balances included in the consolidated financial statements.

9 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Assets Limited as to Use Assets limited as to use primarily include assets held by trustees and assets designated for specific purposes by the Board of Trustees.

Derivatives The Company selectively enters into interest rate protection agreements to mitigate changes in interest rates on variable rate borrowings. The notional amounts of such agreements are used to measure the interest to be paid or received and do not represent the amount of exposure to loss. None of these agreements are used for speculative or trading purposes.

Derivatives are recognized on the consolidated balance sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. The Company formally documents the hedging relationships at inception of the contract for derivative transactions, including identifying the hedge instruments and hedged items, as well as the risk management objectives and strategies for entering into the hedge transaction. At inception and on a quarterly basis thereafter, the Company assesses the effectiveness of derivatives used to hedge transactions. If a cash flow hedge is deemed effective, the change in fair value is recorded as an other change in unrestricted net assets. If after assessment it is determined that a portion of the derivative is ineffective, then that portion of the derivative’s change in fair value will be immediately recognized in excess of revenues over expenses. The change in fair value of all derivatives that do not qualify for hedge accounting is also recognized in excess of revenues over expenses.

Property and Equipment Property and equipment are recorded at cost, if purchased, or at fair value at the date of donation, if donated. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized over the life of the lease or the useful life of the asset, whichever is shorter.

Following is a summary of the estimated useful lives used in computing depreciation:

Buildings 30–40 years Machinery and equipment 3–15 years Software 3–10 years Furniture and fixtures 7–14 years

Certain facilities and equipment held under capital leases are classified as property and equipment and amortized on the straight-line method over the period of the lease term or the estimated useful life of the asset, whichever is shorter. The related obligations are recorded as liabilities. Amortization of equipment under capital lease is included in depreciation expense.

Maintenance and repairs of property and equipment are expensed in the period incurred. Replacements or improvements that increase the estimated useful life of an asset are capitalized. The Company also capitalizes the cost of software developed for internal use. Assets that are sold, retired or otherwise disposed of are removed from the respective asset cost and accumulated depreciation accounts and any gain or loss is included in the results of operations.

10 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Operating leases are accounted for in accordance with generally accepted accounting principles (“GAAP”), which requires the recognition of fixed rental payments, including rent escalations, on a straight-line basis over the term of the lease.

Under the terms of the 1984 deed in which the Forsyth County Board of County Commissioners conveyed the assets of Forsyth Memorial Hospital (the “Hospital”) to Novant Health, Novant Health is required to operate the Hospital as a community general hospital open to the general public, and if Novant Health is dissolved, a successor nonprofit corporation approved by the Forsyth County Board of County Commissioners must carry out the terms and conditions of this conveyance. If these terms are not met, all ownership rights to the Hospital shall revert to the County, including the buildings and land together with the personal property and equipment associated with the Hospital with a net book value of approximately $228,683 at December 31, 2017.

Gifts of long-lived assets such as land, buildings, or equipment are excluded from excess of revenues over expenses and are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long-lived assets are placed in service.

Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired companies. Intangible assets generally represent the acquisition date fair value of certain rights or relationships obtained in such business acquisitions.

The Company considers certificates of need, which are required by certain states prior to the acquisition of high cost capital items, to be indefinite-lived intangible assets. The Company also has intangible assets with identifiable useful lives related to business acquisitions. These assets include business relationships and corporate trade names. In accordance with GAAP, the Company amortizes the cost of these intangible assets with identifiable useful lives down to their estimated residual value.

Following is a summary of the estimated useful lives used in computing amortization:

Business relationships 26 years Corporate trade name 29 years

On an annual basis, Novant Health tests goodwill and indefinite-lived assets for impairment. If it is more likely than not that the indefinite-lived asset is impaired, additional testing for impairment is required. GAAP prescribes that impairment for indefinite-lived intangibles is evaluated by comparing the fair value of the asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized as the amount of that excess.

11 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Impairment tests are performed at the reporting unit level for units that have goodwill. If it is more likely than not that the fair value of the reporting unit exceeds the carrying value of the reporting unit, additional impairment testing is not required. If it is more likely than not that the carrying value of the reporting unit exceeds the fair value of the reporting unit, additional testing for impairment is required. GAAP prescribes a two-step process for testing for goodwill impairments after applying the qualitative assessment. The first step is to determine if the carrying value of the reporting unit with goodwill is less than the related fair value of the reporting unit. The fair value of the reporting unit is determined through use of discounted cash flow methods and/or market based multiples of earnings and sales methods. If the carrying value of the reporting unit is less than the fair value of the reporting unit, the goodwill is not considered impaired. If the carrying value is greater than the fair value, the potential for impairment of goodwill exists. The goodwill impairment is determined by allocating the current fair value of the reporting unit among the assets and liabilities based on a purchase price allocation methodology as if the reporting unit was being acquired in a business combination. The fair value of the goodwill is implied from this allocation and compared to the carrying value with an impairment loss recognized if the carrying value is greater than the implied fair value.

Investments in Affiliates Investments in entities which Novant Health does not control, but in which it has a substantial ownership interest and can exercise significant influence, are accounted for using the equity method. Investments in entities of 20% or less and where there are no qualitative indicators of significant influence are accounted for using the cost method.

Other Assets Other assets consist of notes and pledges receivable, insurance receivables, prepaid pension costs and the cash surrender value of insurance policies.

Compensated Absences The Company’s employees earn vacation days at varying rates depending on years of service. Vacation time accumulates up to certain limits, at which time no additional vacation hours can be earned. Provided this hourly limit is not met, employees can continue to accumulate vacation hours and time can be carried over to future years. Accrued vacation time is included in accrued liabilities on the Company’s consolidated balance sheets.

12 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Pension and Postretirement Benefit Plans Our defined benefit plans are measured using actuarial techniques that reflect management’s assumptions for discount rate, investment returns on plan assets, salary increases, expected retirement, mortality, employee turnover and future increases in healthcare costs. We determine the discount rate (which is required to be the rate at which the projected benefit obligation could be effectively settled as of the measurement date) with the assistance of actuaries, who calculate the yield on a theoretical portfolio of high-grade corporate bonds (rated Aa or better) with cash flows that are designed to match our expected benefit payments in future years. Our expected rate of return is a judgmental matter which is reviewed on an annual basis and revised as appropriate.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-07, Compensation Benefits (Topic 715), Improving the Presentation of Net Periodic Costs and Net Periodic Postretirement Benefit Costs. The amendments in this update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the consolidated statement of operations and changes in net assets separately from the service cost component and outside a subtotal of income from operations in non-operating income (expense). We adopted the amendment during the first quarter of 2017 and have adjusted 2016 to conform to the current year presentation.

Also during the fourth quarter of 2017, we changed our method of accounting for our defined benefit pension plans. Under our new method of accounting, we will recognize changes in the fair value of plan assets and actuarial gains or losses in our operating results annually in the fourth quarter each year. The new method of accounting is referred to as “mark-to-market” accounting (“MTM”). Historically, we recognized actuarial gains and losses, subject to a corridor, as a component of other changes in unrestricted net assets and amortized these gains and losses as a component of pension expense over the average future service period of the covered employees. In addition, for purposes of calculating the expected return on plan assets, we will no longer use an averaging technique permitted under accounting principles generally accepted in the United States for the market-related value of plan assets but instead will use actual fair value of plan assets. The adoption of MTM is a voluntary change in accounting principle that is required to be adopted retrospectively. Therefore, 2016 has been recast to conform to the current year presentation reflecting the retirement plan accounting changes as discussed further in Note 19, Employee Benefit Plans and Other Postretirement Benefit Plans.

We believe the immediate recognition of actuarial gains and losses under MTM is a preferable method of accounting as it aligns the recognition of changes in the fair value of plan assets and liabilities in the consolidated statements of operations and changes in net assets with the fair value accounting principles that are used to measure the net funded status of the plans in our consolidated balance sheets and also eliminates the impact on future periods of any deferred gains or losses.

The cumulative effect of the change for the adoption of the mark-to-market accounting on net assets as of January 1, 2016 was a reduction of $76,400, with an offset to other changes in unrestricted net assets and therefore no impact to total unrestricted net assets.

13 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table summarizes the adjustments made as a result of the adoption of ASU 2017-07 and the change in accounting principle: As reported As adjusted 2016 Adjustment 2016 Consolidated statement of operations and changes in net assets Operating expenses: Salaries and employee benefits $ 2,290,877 $ (12,245) $ 2,278,632 Operating income 258,775 12,245 271,020 Non-operating income (expense): Other net periodic pension costs - 30,155 30,155 Excess of revenues over expenses 412,805 42,400 455,205

Unrestricted net assets: Change in funded status of defined benefit plans 47,862 (46,796) 1,066 Loss on voluntary pension settlement (4,396) 4,396 -

Consolidated statement of cash flows Operating cash flow changes: Loss on voluntary pension settlement 4,396 (4,396) - Change in funded status of defined benefit plans (47,862) 46,796 (1,066) Actuarial loss (gain) on pension and postretirement benefits - (42,400) (42,400)

Self-Insurance Reserves The Company is self-insured for certain employee health benefit options, workers’ compensation and malpractice. These costs are accounted for on an accrual basis to include estimates of future payments for claims incurred.

Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are those whose use has been limited by donors to a specific time period or purpose. Permanently restricted net assets have been restricted by donors to be maintained in perpetuity. The earnings on permanently restricted net assets are available for use as specified by the donors. The Company’s temporarily restricted and permanently restricted net assets are predominantly held by related foundations for various hospital service costs and community health programs.

Contributions Received Unconditional promises to give cash and other assets are reported at fair value at the date the promise is received. Conditional promises to give and indications of intentions to give are reported at fair value at the date the gift is received or the condition is met. The gifts are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is met, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the consolidated statements of operations and changes in net assets as net assets released from restrictions, which is included in other operating revenue. Donor-restricted contributions whose restrictions are met within the same year as received are reported as unrestricted contributions in the accompanying consolidated financial statements.

14 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Statement of Operations All activities of Novant Health deemed by management to be ongoing, major and central to the provision of healthcare services are reported as operating revenue and expenses. Other activities are deemed to be non-operating and include investment income, income tax expense, gain on extinguishment of debt and other net periodic pension (costs) benefit.

Novant Health receives supplemental Medicaid payments from the state of North Carolina through a federally approved disproportionate share program (“Medicaid DSH”). During 2012, the federal government approved an amendment to the Medicaid DSH plan. This amendment, referred to as the Medicaid Gap Assessment Program (“GAP”), provides a new funding model whereby hospitals are assessed an amount based on a percentage of their costs and are then paid supplemental amounts in an effort to reduce Medicaid losses. Novant Health records GAP payments received as net patient service revenue and GAP assessments paid as other operating expense on the consolidated statements of operations and changes in net assets. These supplemental payments are recognized in income when earned, if reasonably estimable and deemed collectible. There can be no assurance that this program will not be discontinued or materially modified. During 2017, Novant Health received $156,623 and paid $75,518 for the GAP program. During 2016, Novant Health received $137,002 and paid $67,212 for the GAP program.

The consolidated statements of operations and changes in net assets include excess of revenues over expenses. Changes in unrestricted net assets which are excluded from excess of revenues over expenses include changes in funded status of defined benefit plans, purchase of noncontrolling interest, unrealized gains on derivative financial instruments that apply hedge accounting and the formation of the Novant Health UVA Health System.

Other Revenue Other revenue consists primarily of earnings from investments in affiliates accounted for using the equity method of accounting, pharmacy revenue and contributions.

Income Taxes Novant Health is classified as a nonprofit organization pursuant to Section 501(c)(3) of the Internal Revenue Code and is exempt from income taxes on revenue earned from its tax-exempt purposes. Novant Health also operates various for-profit subsidiaries which operate in service lines that are complimentary to the Company’s tax-exempt purpose. Income from activities that are determined by IRS regulations to be unrelated to the tax-exempt purposes as well as income from activities of for-profit subsidiaries of the Company are subject to federal and state taxation.

The Company provides for income taxes using the asset and liability method. This approach recognizes the amount of federal, state and local taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequences of events recognized in the consolidated financial statements and income tax returns. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates in the period in which such laws or rates are enacted.

A valuation allowance is required when it is more likely than not that some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient future taxable income.

15 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Reclassifications Certain balances in the prior fiscal year have been reclassified to conform to the presentation adopted in the current fiscal year.

3. Organizational Changes

Formation of Novant Health UVA Health System Effective January 1, 2016, Novant Health and The Rector and Visitors of the University of Virginia on behalf of its Medical Center (“UVAMC”) entered into an integration and joint operating agreement (the “Integration Agreement”). The Integration Agreement provides for the creation of a regional healthcare alliance through the creation of a new not-for-profit corporation, Novant Health UVA Health System. Novant Health and UVAMC are the sole members of Novant Health UVA Health System. Novant Health agreed to exchange its sole membership in Prince William Health System for a 60% membership interest in Novant Health UVA Health System. UVAMC agreed to exchange its sole membership in Culpeper Memorial Hospital for a 40% membership interest in Novant Health UVA Health System.

Novant Health recognized the fair value of Culpeper Memorial Hospital and its subsidiaries (“CMH”) in its consolidated balance sheets and included the operations of Novant Health UVA Health System in its consolidated statements of operations and changes in net assets beginning January 1, 2016. This resulted in the recognition of the following amounts in Novant Health’s consolidated balance sheet as of January 1, 2016:

Cash and cash equivalents $ 11,397 Accounts receivable, net of allowance for doubtful accounts 11,241 Receivable for settlement with third-party payors 2,192 Other current assets 3,706 Assets limited as to use 796 Property and equipment, net 56,924 Long-term investments 2,883 Intangible assets and goodwill, net 25,280 Current portion of long-term debt 217 Accounts payable 6,308 Accrued liabilities 3,654 Long-term debt 739 Employee benefits and other liabilities 4,000 Net assets 99,501

The integration agreement includes a working capital true-up based on target net assets at the date of formation. This provision resulted in a payable to UVA of $6,574 at the date of formation.

16 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Assets Held for Sale The Company classifies assets and liabilities (“disposal group”) as held for sale when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. In addition, the Company considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current value, and whether actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The disposal group is measured at the lower of its carrying amount or fair value less cost to sell and long-lived assets within the disposal group are not depreciated while classified as held for sale. In December 2016, it was determined that MedQuest, Inc. and its subsidiaries met all of the criteria to classify it as an asset held for sale. The disposal group was written down to $56,186, or its fair value less cost to sell. As a result, an impairment charge of $9,400 was recorded. In April 2017, the plan to sell this disposal group was withdrawn, and as a result, these assets and liabilities are no longer classified as held for sale.

The following table summarizes the carrying amounts of major classes of assets and liabilities held for sale at December 31, 2016:

Cash and cash equivalents $ 1,898 Accounts receivable, net of allowance for doubtful accounts 6,316 Deferred tax asset 3,251 Other current assets 2,708 Current assets held for sale 14,173

Property and equipment, net 15,482 Intangible assets and goodwill, net 41,382 Other long-term assets 329 Long-term assets held for sale 57,193

Accrued liabilities 13,498 Current liabilities held for sale 13,498

Employee benefits and other liabilities 1,682 Long-term liabilities held for sale 1,682

17 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

4. Net Patient Service Revenue

Net patient service revenue is presented net of provisions for contractual adjustments and other allowances. Novant Health has agreements with third-party payors that provide for payments at amounts different from its established rates. Retroactive adjustments are accrued on an estimated basis in the period the related service is rendered and adjusted in future periods as final settlements are determined. For uninsured patients that do not qualify for charity care, Novant Health recognizes revenue on the basis of its standard rates for services provided, less discounts for uninsured patients as provided by the Company’s financial assistance policies. Based on historical experience, many of the Company’s uninsured patients will be unable or unwilling to pay for the services provided. As a result, Novant Health records a significant provision for bad debts related to uninsured patients in the period the services are provided. Patient service revenue, net of contractual allowances and discounts (but before the provision for bad debts), recognized in the period from these major payor sources, is as follows:

2017 2016

Third-party payors $ 4,442,354 $ 4,227,059 Self-pay 89,834 81,934 Total $ 4,532,188 $ 4,308,993

Patient deductibles and co-payments under third-party payor programs are included within the third party payors’ amount above.

A summary of the payment arrangements with major third-party payors follows:

Medicare and Medicaid Inpatient acute care services rendered to program beneficiaries are paid at prospectively determined rates per diagnosis. These rates vary according to a patient classification system that is based on clinical, diagnostic and other factors. Inpatient non-acute services, certain outpatient services, and defined capital and medical education costs related to beneficiaries are paid based on a cost reimbursement methodology. Outpatient services are paid at a prospectively determined rate. Novant Health is reimbursed for cost reimbursable items at a tentative rate with final settlement determined after submission of annual cost reports by Novant Health and audits thereof by the fiscal intermediary. For the Company’s fourteen acute facilities, Medicare cost reports are final settled through 2010 for one facility, through 2013 for ten facilities and through 2014 for the remaining three facilities. The Company’s Medicaid cost reports are final settled through 2013 for two facilities, through 2014 for nine facilities and through 2015 for the remaining three facilities.

Revenue from the Medicare and Medicaid programs accounted for approximately 31.2% and 5.3%, respectively, of Novant Health’s net patient service revenue for the year ended 2017, and 31.0% and 5.3%, respectively, of Novant Health’s net patient service revenue for the year ended 2016. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. As a result, there is at least a possibility that recorded estimates will change by a material amount in the near term.

18 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Other Payors Novant Health also has entered into payment agreements with certain commercial insurance carriers, health maintenance organizations and preferred provider organizations. The basis for payment to Novant Health under these agreements includes prospectively determined rates per discharge, discounts from established charges and prospectively determined daily rates.

Payments for services covered by these programs and certain other third-party payor contracts are generally less than billed charges. Provisions for contractual adjustments including Medicare, Medicaid, and managed care total approximately $6,954,649 (or 58%) and $6,127,154 (or 57%) of 2017 and 2016 gross patient service revenue, respectively.

The allowance for doubtful accounts is determined based on management’s assessment of historical and expected net collections, business and economic conditions, the age of the accounts, trends in federal and state governmental health care coverage and other collection indicators. The Company’s self-pay write-offs (including charity care) were $674,134 in 2017 compared to $601,555 in 2016. Novant Health has not changed its charity care or uninsured discount policies during 2017 or 2016. Novant Health does not maintain a material allowance for doubtful accounts from third-party payors, nor did it have significant write-offs from third-party payors.

Novant Health has a program of factoring certain patient receivables with recourse to a third-party. Novant Health is obligated to repurchase factored receivables upon occurrence of certain conditions of the program. Accordingly, Novant Health accounts for the factoring as a secured borrowing. The factored receivables are recorded at their estimated net realizable value and are shown as other assets in the consolidated balance sheets. An offsetting liability, representing Novant Health’s potential recourse for these receivables, is part of employee benefits and other liabilities in the consolidated balance sheets. As of December 31, 2017, the factored notes and the related liabilities were $43,653 and $55,191 respectively. As of December 31, 2016, the factored notes and the related liabilities were $42,289 and $51,547, respectively.

5. Charity Care and Community Benefit

In accordance with Novant Health’s mission to improve the health of its communities one person at a time, Novant Health facilities accept patients regardless of their ability to pay. At acute facilities, uninsured patients qualify for a full write-off of their bills if their household income is at or below 300% of the federal poverty level. Novant Health also offers a catastrophic discount for patients with an account balance greater than $5, flexible payment plans, and discounts for uninsured patients who do not qualify for the charity care program. In addition to these programs for hospitals, Novant Health physician groups and outpatient centers also have charity care programs to assist patients in need. The Company’s approximate cost of providing care to indigent patients was $138,927 and $122,017 for the years ended December 31, 2017 and 2016, respectively. Novant Health estimates the costs of providing traditional charity care using each facility’s estimated ratio of costs to charges. Funds received from gifts or grants to subsidize charity services provided were $2,270 and $2,124 for the years ended December 31, 2017 and 2016, respectively.

19 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

In addition to providing charity care to uninsured patients, Novant Health also provides services to beneficiaries of public programs and various other community health services intended to improve the health of the communities in which the Company operates. Novant Health uses the following four categories to identify the resources utilized for the care of persons who are underserved and for providing community benefit programs to the needy:

• Traditional charity care, which includes the cost of services provided to persons who cannot afford health care because of inadequate resources and who are uninsured.

• Unpaid cost of Medicare, which represents the unpaid cost of services provided to persons through the government program for individuals age 65 and older as well as those that qualify for federal disability benefits.

• Unpaid cost of Medicaid, which represents the unpaid cost of services provided to persons covered by the government program for medically indigent patients.

• Community benefit programs consist of the unreimbursed costs of certain programs and services for the general community, mainly for indigent patients but also for people with chronic health risks. Examples of these programs include health promotion and education, free clinics and screenings, and other community services.

6. Other Current Assets

Other current assets consist of the following at December 31:

2017 2016

Inventory $ 90,869 $ 82,091 Prepaids 45,217 39,541 Other receivables 60,962 60,118 $ 197,048 $ 181,750

7. Assets Limited as to Use and Investments

Short-Term Investments Novant Health holds certain investments that are short-term in nature and have original maturity dates ranging from three to twelve months. Short-term investments consist of the following at December 31:

2017 2016

Certificates of deposit $ 10,218 $ 58 Fixed income - government securities 289,853 260,261 $ 300,071 $ 260,319

20 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Assets Limited as to Use The designation of assets limited as to use is as follows:

2017 2016

Current Long-Term Current Long-Term Portion Portion Portion Portion

Under general and professional liability funding arrangement held by trustee $ 12,229 $ 43,613 $ 12,089 $ 42,084 Designated by board to service benefit plans 6,484 137,527 6,497 105,040 $ 18,713 $ 181,140 $ 18,586 $ 147,124

Assets limited as to use are invested primarily in cash and cash equivalents and corporate, U.S. government and U.S. agency debt obligations.

Long-Term Investments Investments are reported at either fair value, the equity method of accounting or at NAV as a practical expedient. The composition of long-term investments is as follows:

December 31, 2017 On Equity At Fair Value Method At NAV Total

Cash and cash equivalents $ 125,777 $ - $ - $ 125,777 U.S. equities 491,394 30,572 207,130 729,096 International equities 330,348 60,604 159,147 550,099 Fixed income - government securities 189,197 - - 189,197 Fixed income - corporate and other 12,736 56,682 10,149 79,567 Hedge funds - 314,661 - 314,661 Private equity - 6,198 - 6,198 Emerging markets 1,435 - 163,166 164,601 Real estate and other 46,213 109,275 - 155,488 $ 1,197,100 $ 577,992 $ 539,592 $ 2,314,684

December 31, 2016 On Equity At Fair Value Method At NAV Total

Cash and cash equivalents $ 168,714 $ - $ - $ 168,714 U.S. equities 376,753 19,875 230,038 626,666 International equities 126,434 60,089 184,083 370,606 Fixed income - government securities 127,475 - - 127,475 Fixed income - corporate and other 28,604 58,764 27,013 114,381 Hedge funds - 362,498 - 362,498 Emerging markets 24,843 - 88,889 113,732 Real estate and other 33,558 97,058 - 130,616 $ 886,381 $ 598,284 $ 530,023 $ 2,014,688

21 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Long-term investments carried at NAV may be redeemed or liquidated only after giving notice to the fund manager. The notice period ranges from 5 to 30 days. These investments have been reported at NAV by each fund as a practical expedient to estimate their fair value. Novant Health has the ability to redeem its interests at or near the financial statement date. Novant Health defines near term as within 90 days of the financial statement date.

The Company’s investments in hedge funds include limited partnerships, limited liability corporations, and off-shore investment funds. The underlying investments of the limited partnerships and limited liability corporations include, among others, futures and forward contracts, options, and securities sold short, intended to hedge against changes in the market value of investments. These financial instruments may result in loss due to changes in the market (market risk) and are less liquid than the Company’s other investments.

The Company’s investments in hedge funds represent 13.6% and 18.0% of total long-term investments held at December 31, 2017 and 2016, respectively. These instruments may contain elements of both credit and market risk. Such risks include, but are not limited to, limited liquidity, absence of oversight, dependence upon key individuals, emphasis on speculative investments (both derivatives and nonmarketable investments), and nondisclosure of portfolio composition.

Novant Health is obligated under certain investment agreements to periodically advance additional funding up to specified levels. As of December 31, 2017 and 2016, Novant Health had future commitments of $121,952 and $67,167, respectively, for which capital calls had not been exercised.

Investment income for assets limited as to use and investments is comprised of the following for the years ended December 31:

2017 2016

Income Interest and dividend income $ 25,235 $ 21,633 Net realized gains 111,997 29,251 Net unrealized gains 170,615 100,213 $ 307,847 $ 151,097

Investment income is shown net of related expenses on the consolidated statements of operations and changes in net assets. Investment related administrative expenses were $5,382 and $4,767 for the years ended December 31, 2017 and 2016, respectively.

22 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

8. Fair Value Measurements

Novant Health categorizes, for disclosure purposes, assets and liabilities measured at fair value in the financial statements based upon whether the inputs used to determine their fair values are observable or unobservable. Observable inputs are inputs which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about pricing the asset or liability, based on the best information available in the circumstances.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement of the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Novant Health follows the three-level fair value hierarchy to categorize these assets and liabilities recognized at fair value at each reporting period, which prioritizes the inputs used to measure such fair values. Level inputs are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities on the reporting date. Investments classified in this level generally include exchange-traded equity securities, futures, pooled short-term investment funds, options and exchange- traded mutual funds.

Level 2: Inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Investments classified in this level generally include fixed income securities, including fixed income government obligations; asset-backed securities; certificates of deposit; derivatives; as well as certain U.S. and international equities which are not traded on an active exchange.

Level 3: Inputs that are unobservable for the asset or liability. Investments classified in this level generally include investments in preferred stock.

Assets and liabilities classified as Level 1 are valued using unadjusted quoted market prices for identical assets or liabilities in active markets. Novant Health uses techniques consistent with the market approach and income approach for measuring fair value of its Level 2 assets and liabilities. The market approach is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach generally converts future amounts (cash flows or earnings) to a single present value amount (discounted).

23 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

As of December 31, 2017 and 2016, the Level 1 and Level 2 assets and liabilities listed in the fair value hierarchy tables below utilize the following valuation techniques and inputs:

Certificates of deposit The fair value of certificates of deposit is based on cost plus accrued interest. Significant observable inputs include security cost, maturity, and relevant short-term interest rates.

Fixed income and debt securities The fair value of investments in fixed income and debt securities is primarily determined using techniques that are consistent with the market approach. Significant observable inputs include benchmark yields, reported trades, observable broker/dealer quotes, issuer spreads, and security specific characteristics, such as early redemption options.

U.S., international, emerging markets and other exchange-traded funds The fair value of investments in U.S., international, emerging markets and other exchange-traded funds are primarily determined using either quoted prices in active markets or the calculated net asset value. The values for underlying investments are fair value estimates determined by external fund managers based on operating results, balance sheet stability, growth, and other business and market sector fundamentals. The investments in Level 2 may be redeemed or liquidated on a daily basis with no notice.

Derivatives The fair value of derivative contracts is primarily determined using techniques consistent with the market approach. Significant observable inputs to valuation models include interest rates, credit spreads, volatilities and maturity.

During 2017 and 2016, there were no transfers between Level 1 and 2.

24 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table summarizes fair value measurements, by level, at December 31, 2017 for all financial assets and liabilities measured at fair value on a recurring basis in the financial statements:

Fair Value Measurements at Reporting Date Using Quoted prices Significant in active other Significant markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Total

Assets Short-term investments: Certificates of deposit $ - $ 10,218 $ - $ 10,218 Fixed income - government securities - 289,853 - 289,853 Total short-term investments - 300,071 - 300,071

Assets limited as to use: Cash and cash equivalents 8,361 - - 8,361 U.S. equities 121,602 - - 121,602 International equities 5,053 - - 5,053 Fixed income - government securities 10,749 38,397 - 49,146 Fixed income - corporate and other 384 15,307 - 15,691 Total assets limited as to use 146,149 53,704 - 199,853

Long-term investments: Cash and cash equivalents 125,777 - - 125,777 U.S. equities 491,394 - - 491,394 International equities 330,348 - - 330,348 Fixed income - government securities - 189,197 - 189,197 Fixed income - corporate and other 10,308 2,428 - 12,736 Emerging markets 1,435 - - 1,435 Other exchange-traded funds 46,213 - - 46,213 Total long-term investments 1,005,475 191,625 - 1,197,100

Total assets at fair value $ 1,151,624 $ 545,400 $ - $ 1,697,024

Liabilities Accrued liabilities $ 6,289 $ - $ - $ 6,289 Derivative financial instruments - 44,832 - 44,832 Deferred compensation liabilities 133,745 - - 133,745 Total liabilities at fair value $ 140,034 $ 44,832 $ - $ 184,866

25 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table summarizes fair value measurements, by level, at December 31, 2016 for all financial assets and liabilities measured at fair value on a recurring basis in the financial statements:

Fair Value Measurements at Reporting Date Using Quoted prices Significant in active other Significant markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Total

Assets Short-term investments: Certificates of deposit $ - $ 58 $ - $ 58 Fixed income - government securities - 260,261 - 260,261 Total short-term investments - 260,319 - 260,319

Assets limited as to use: Cash and cash equivalents 4,261 - - 4,261 U.S. equities 96,396 - - 96,396 International equities 2,157 - - 2,157 Fixed income - government securities 9,549 38,439 - 47,988 Fixed income - corporate and other 344 14,564 - 14,908 Total assets limited as to use 112,707 53,003 - 165,710

Long-term investments: Cash and cash equivalents 168,714 - - 168,714 U.S. equities 376,753 - - 376,753 International equities 126,434 - - 126,434 Fixed income - government securities - 127,475 - 127,475 Fixed income - corporate and other 22,502 6,102 - 28,604 Emerging markets 24,843 - - 24,843 Other exchange-traded funds 33,558 - - 33,558 Total long-term investments 752,804 133,577 - 886,381

Total assets at fair value $ 865,511 $ 446,899 $ - $ 1,312,410

Liabilities Accrued liabilities $ 6,302 $ - $ - $ 6,302 Derivative financial instruments - 50,305 - 50,305 Deferred compensation liabilities 103,373 - - 103,373 Total liabilities at fair value $ 109,675 $ 50,305 $ - $ 159,980

Impairment Charges As a result of its impairment testing for 2016, the Company recorded impairment charges of $11,850 to reduce the carrying value of long-lived property and equipment assets from their carrying value of $3,250 to their estimated fair value of $800 and to reduce the carrying value of assets held for sale from their carrying value of $65,586 to their estimated fair value, less costs to sell of $56,186. This impairment charge is included in the consolidated statements of operations and changes in net assets. Impairment testing for 2017 yielded no impairment.

26 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

9. Property and Equipment

Property and equipment consists of the following at December 31:

2017 2016

Land and land improvements $ 289,897 $ 278,304 Leasehold improvements 175,673 152,892 Buildings and building improvements 1,899,125 1,784,714 Buildings under capital lease obligations 33,130 26,997 Equipment 1,793,218 1,664,465 Equipment under capital lease obligations 4,410 4,537 Software 496,704 500,216 Construction-in-progress 195,802 187,358 4,887,959 4,599,483 Less: Accumulated depreciation (2,869,051) (2,658,841) $ 2,018,908 $ 1,940,642

Novant Health reviews long-lived assets for recoverability as required when events and changes in circumstances indicate that its carrying value may not be recoverable. As a result of this review, $2,450 was recorded in impairment charges related to property and equipment assets in 2016. No impairment charges were recorded in 2017.

At December 31, 2017 and 2016, land and buildings with a net book value of $21,393 and $25,040, respectively, were leased to various unrelated health care organizations, with terms ranging from six months to five years. Depreciation expense and capital lease related amortization expense for the years ended December 31, 2017 and 2016 amounted to $238,069 and $237,416, respectively. Accumulated amortization for buildings and equipment under capital lease obligations was $22,297 and $22,801 at December 31, 2017 and 2016, respectively. Construction contracts of approximately $418,423 exist for the expansion of existing hospitals and facility renovations. At December 31, 2017, the remaining commitment on these contracts was $167,355.

On June 27, 2009, Novant Health sold a portfolio of 22 medical office buildings to a third-party real estate investor. The combined selling price of the buildings was $122,280. Novant Health is leasing space in each of the buildings from the buyer. The transaction was recorded as a sale-leaseback and resulted in a total gain of $59,889. Novant Health recognized gains from this transaction of $3,997 in 2017 and 2016. The remaining deferred gain of $25,982 will be recognized over the average life of Novant Health’s lease agreements with the buyer.

27 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

10. Intangible Assets and Goodwill

Intangible assets consist of the following at December 31:

Gross Accumulated Net Intangible Amortization Intangible Balance at December 31, 2017 Unamortized intangible assets Certificates of need $ 70,416 $ - $ 70,416 Total unamortized intangible assets 70,416 - 70,416 Amortized intangible assets Business relationships 45,300 (17,287) 28,013 Corporate trade name and other intangibles 27,188 (6,725) 20,463 Total amortized intangible assets 72,488 (24,012) 48,476 Total intangible assets $ 142,904 $ (24,012) $ 118,892 Balance at December 31, 2016 Unamortized intangible assets Certificates of need $ 47,228 $ - $ 47,228 Total unamortized intangible assets 47,228 - 47,228 Amortized intangible assets Business relationships 44,132 (15,472) 28,660 Corporate trade name and other intangibles 23,285 (5,568) 17,717 Total amortized intangible assets 67,417 (21,040) 46,377 Total intangible assets $ 114,645 $ (21,040) $ 93,605

As discussed in Note 3, certain intangible assets were presented as held for sale in 2016.

Amortization expense related to intangible assets was $2,971 and $2,972 for the years ended December 31, 2017 and 2016, respectively. Estimated annual amortization expense for intangible assets for the years 2018 through 2022 is approximately $2,716 per year.

28 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31: 2017 2016

As of January 1 Goodwill, net of accumulated amortization $ 208,621 $ 230,765 Accumulated impairment losses (14,760) (37,563) 193,861 193,202 Goodwill acquired, net of purchase price adjustments and other - 13,822 Goodwill reclassified as held for sale 13,163 (13,163) 207,024 193,861 As of the end of the period Goodwill, net of accumulated amortization 244,587 208,621 Accumulated impairment losses (37,563) (14,760) $ 207,024 $ 193,861

Novant Health reviews long-lived assets for recoverability as required when events and changes in circumstances indicate that its carrying value may not be recoverable. During 2017 and 2016, no impairment charges to amortizable intangible assets were recorded as a result of this review. Our impairment tests presume stable or improving results at certain Novant Health reporting units which are based on the implementation of programs and initiatives that are designed to achieve projected results. If these projections are not met, or in the future negative trends occur which would impact our future outlook, further impairments of goodwill and other intangible assets may occur. Future restructuring of our markets that could potentially change our reporting units could also result in future impairments of goodwill.

11. Investments in Affiliates

Novant Health has noncontrolling interests in fifteen healthcare related entities. The Company’s ownership interests in the entities range from 8.0% to 51.0%. These investments are accounted for using either the cost or equity method.

A summary of investments, ownership percentages, investment amounts and the Company’s share of earnings for the years ended December 31 is as follows:

Share of Earnings % Ownership Investment Balance of Investee Investee 2017 2016 2017 2016 2017 2016

Advanced Services 23% 23% $ 23,680 $ 22,520 $ 1,926 $ 1,170 Providence Plaza LLC 30% 30% 4,521 4,497 216 203 Harris Land TIC 28% n/a 4,945 - (61) - Provider-Lead Patient-Centered Care of NC 9% 9% 2,918 1,100 - - Plaza Center LLC 20% 20% 2,540 2,529 133 124 Other Various Various 4,872 1,400 795 170 $ 43,476 $ 32,046 $ 3,009 $ 1,667

29 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table presents summarized financial information related to investments in the above noncontrolled entities as of December 31:

2017 2016

Assets $ 194,838 $ 155,880 Liabilities 55,091 48,962 Equity 139,747 106,918 Total revenue 194,742 183,805 Total expenses 187,187 179,939 Net income 7,555 3,866 Novant Health's share of net income 3,009 1,667

12. Other Assets

Other assets consist of the following at December 31:

2017 2016

Notes receivable and other $ 56,182 $ 54,853 Cash surrender value of insurance policies 24,257 21,470 Pledges receivable 17,019 15,111 Reinsurance receivables 9,552 10,047 Prepaid pension costs 4,079 5,530 $ 111,089 $ 107,011

13. Accrued Liabilities

Accrued liabilities consist of the following at December 31:

2017 2016

Accrued compensation $ 263,348 $ 214,162 Payroll taxes and withholdings 20,284 17,025 Interest 9,815 9,550 Postretirement benefit liability 1,345 1,320 Pension liability 223 221 Other accrued liabilities 84,152 82,035 Self-insurance Employee medical claims liability 17,966 17,272 Malpractice and workers' compensation liability 17,218 17,100 $ 414,351 $ 358,685

30 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

14. Long-Term Debt

Following is a summary of long-term debt at December 31:

2017 2016

Tax-exempt revenue bonds $ 787,150 $ 803,630 Taxable revenue bonds 500,000 500,000 Taxable variable rate demand bonds 44,800 53,800 Total bonds 1,331,950 1,357,430 Borrowings on revolving credit facility 49,000 - Capital lease obligations and other notes payable 31,919 35,815 1,412,869 1,393,245 Unamortized premium or discount, net 6,035 7,020 Unamortized debt issuance costs, net (7,619) (7,831) 1,411,285 1,392,434 Less: Current maturities (67,609) (66,624) $ 1,343,676 $ 1,325,810

Tax-Exempt Revenue Bonds Novant Health has tax-exempt financing agreements through conduit issuers. These bonds are comprised of the following at December 31:

2017 2016

Series 2013 A and B Current Interest Term Bonds and Serial Bonds, bearing interest at rates ranging from 3.0% to 5.0% payable semi-annually and maturing through 2046; principal payments began in 2014 $ 274,750 $ 279,965 Series 2010 A Current Interest Term Bonds and Serial Bonds, bearing interest at rates ranging from 4.0% to 5.3% payable semi-annually and maturing through 2043; principal payments begin in 2023 264,165 264,165 Series 2008 A, B and C Variable Rate Demand Bonds, bearing interest at variable rates payable monthly and maturing through 2028; principal payments began in 2009 113,235 124,500 Series 2004 A and B Variable Rate Demand Bonds, bearing interest at variable rates payable monthly and maturing through 2034; principal payments begin in 2025 135,000 135,000 $ 787,150 $ 803,630

31 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

In 2003, Novant Health entered into a new Master Trust Indenture (the “Agreement”). The Agreement authorizes the creation of a Combined Group, which consists of the members of the Obligated Group and the Restricted Affiliates. Novant Health and two of its affiliates that operate tertiary care hospitals, Novant Health Forsyth Medical Center and Novant Health Presbyterian Medical Center, are the members of the Obligated Group. The members of the Obligated Group are jointly and severally liable for the payment of all obligations under the Agreement. The Company’s Restricted Affiliates, which include certain other subsidiaries of the Company, are not directly obligated to pay obligations under the Agreement, but the members of the Obligated Group have covenanted in the Agreement to cause the Restricted Affiliates to provide funds to the members of the Obligated Group to pay obligations under the Agreement. All bonds issued by Novant Health subsequent to 2003 are collateralized by the Obligated Group.

The bond agreements provide for early redemption periods of the bonds prior to mandatory redemption, subject to a premium, generally ranging from 0.0% to 2.0%, as defined in the agreements. In accordance with the bond indenture agreements, the bonds are general, unsecured obligations of Novant Health. The bond indentures require Novant Health to cause the Restricted Affiliates to comply with certain covenants, including the maintenance of a minimum debt service coverage ratio and a minimum number of days cash on hand. As of December 31, 2017 and 2016, Novant Health is in compliance with these bond covenants.

The Series 2004 A and B Variable Rate Demand Bonds are collateralized by a standby purchase agreement (“SBPA”) issued by JP Morgan Chase Bank National Association. The SBPA expires January 31, 2021. If the SBPA should be used to fund tenders due to a failed remarketing, repayment in quarterly installments over three years is required. As a result, the Company has classified $36,818 of the 2004 bonds as current at December 31, 2017 and 2016.

In March 2011, the documents related to the Series 2008 A, B and C Variable Rate Demand Bonds were amended to allow the conversion of the bonds to bank direct purchase index floating rate bonds. In December 2017, the Series 2008 A, B, and C Variable Rate Demand Bonds were refinanced. Subsequent to the refinancing, the direct purchase agreements have a term of seven years and will expire in December 2024.

In November 2016, Novant called the Series 2006 Current Interest Term Bonds at par and repaid them with cash from operations. This resulted in a $6,304 gain on extinguishment.

Taxable Revenue Bonds On September 23, 2009, Novant Health issued $350,000 of taxable fixed rate bonds (the “2009 A Bonds”). $250,000 of these bonds bear interest at a rate of 5.85% and mature in 2019. The remaining $100,000 of these bonds matured in 2014. Proceeds of the 2009 A Bonds were used to refinance a portion of the Company’s revolving credit facility in January 2010.

On November 12, 2009, Novant Health issued $100,000 of taxable fixed rate bonds (the “2009 B Bonds”). The 2009 B Bonds bear interest at a rate of 5.35% and matured in 2016. Proceeds of the 2009 B Bonds were used to refinance the remaining portion of the Company’s revolving credit facility in January 2010.

On April 23, 2013, Novant Health issued $250,000 of taxable fixed rate bonds (the “2013 C Bonds”). The 2013 C Bonds bear interest at a rate of 4.37% and mature in 2043. Proceeds of the 2013 C Bonds were used for eligible purposes, including the refinancing of long-term debt.

32 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The taxable revenue bonds are subject to the same covenant requirements that are included in the bond agreements for the tax-exempt revenue bonds.

Taxable Variable Rate Demand Bonds In 1997, Novant Health issued Taxable Variable Rate Demand Bonds, totaling $87,800, collateralized by an irrevocable letter of credit issued by Wachovia Bank of North Carolina, N.A. The irrevocable letter of credit is collateralized by the bonds, all income, earnings, profits, interest, premium or other payments on the bonds, and all proceeds arising from the sale, exchange or collection of the bonds. Interest on the bonds is payable on a quarterly basis. Mandatory sinking fund requirements began in 2001 and will continue until their final maturity of June 1, 2022. At December 31, 2017 and 2016, the rate of interest on the variable bonds was 1.56% and 0.76%, respectively. The irrevocable letter of credit is currently available through September 15, 2020.

Other Long-Term Debt Other long-term debt consists of a promissory note related to the redemption of a membership interest and various loans and notes on buildings and capital leases, bearing interest at rates ranging from 3.01% to 12.15%.

Scheduled maturities of all long-term debt are as follows:

Years Ending December 31 2018 $ 30,790 2019 277,267 2020 27,368 2021 44,205 2022 76,826 Thereafter 956,413 $ 1,412,869

Novant Health capitalized $3,126 and $1,552 of interest in 2017 and 2016, respectively.

Revolving Credit Facility On June 13, 2013, Novant Health entered into a $200,000 Senior Revolving Credit Facility. In March 2017, the Senior Revolving Credit Facility was amended and is available through March 27, 2022. At December 31, 2017, $151,000 was available for borrowing. The line of credit bears interest at variable rates.

Debt Issuance Costs Effective January 1, 2016, Novant Health adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that unamortized debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the associated debt. Debt issuance costs are amortized using the effective interest method over the life of the related debt agreement and instruments.

33 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

15. Short-Term Borrowings

Short-term bororowings consist primarily of securities repurchase transactions. Securities repurchase transactions are conducted by the Company under a standardized securities industry master agreement, amended to suit the specificities of each respective counter-party. These agreements generally provide detail as to the nature of the transaction, including provisions for payment netting, established parameters concerning the ownership and custody of the collateral securities, including the right to substitute collateral during the term of the agreement, and provide for remedies in the event of default by either party. The Company’s securities repurchase agreements are accounted for as a secured borrowing and are reported in the consolidated balance sheets as short-term borrowings. The Company posts collateral in the form of U.S. treasury and agency securities and receives an amount equal to approximately 98% of the fair value of the securities to be repurchased during January 2018 at interest rates ranging from 1.52% to 1.70%. At December 31, 2017 and 2016, the fair value amounts outstanding were $88,041 and $83,528, respectively. Interest rates on the outstanding balances at December 31, 2017 ranged from 1.52% to 1.70%. The maturity dates of the agreements are four weeks.

16. Interest Rate Swaps

As of August 18, 2008, concurrent with the 2008 bond issuance, Novant Health entered into two interest rate swap agreements to hedge the variable interest rates of the 2008 bonds. The swaps are based on an aggregate notional amount of $113,235. Novant Health receives a variable rate which is tied to 68% of LIBOR, and pays a fixed rate of 3.679% and 3.621% for the $83,400 and $29,835 notional amounts, respectively. In July 2006, Novant Health entered into a floating-to- fixed swap agreement with a notional amount of $135,000 and a term of 28 years to hedge the floating rate 2004 bonds. Novant Health receives a variable rate which is tied to 64.8% of LIBOR plus 12 basis points and pays a fixed interest rate of 3.8%. The swaps have been designated as cash flow hedges and are carried on the consolidated balance sheets at fair value. These swaps qualify for hedge accounting and were assessed for effectiveness at the time the contracts were entered into and are assessed for effectiveness on an ongoing basis at each quarter end using the hypothetical derivative method. Unrealized gains and losses related to the effective portion of the swaps are recognized as a change in unrestricted net assets and gains or losses related to ineffective portions are recognized in excess of revenues over expenses as interest expense. As of December 31, 2017 and 2016, Novant Health’s swaps are all designated as hedged instruments and are recorded as long-term liabilities in the consolidated balance sheets.

34 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following table summarizes the effect of the interest rate swaps on the consolidated statements of operations and changes in net assets for the years ended December 31:

Amount of Gain Amount of Gain (Loss) Recognized in Change Recognized in Excess in Unrestricted Net of Revenues Over Assets Expenses

Statement of Operations and Changes in Net Assets Location

2017 2016 2017 2016 Derivatives designated as hedged instruments Change in fair value of hedged interest rate swaps $ 7,330 $ 5,564 $ - $ - Hedge ineffectiveness - - (1,857) 2,071 $ 7,330 $ 5,564 $ (1,857) $ 2,071

17. Employee Benefits and Other Liabilities

Employee benefits and other liabilities consist of the following at December 31:

2017 2016

Deferred gains $ 58,808 $ 64,711 Self-insurance malpractice and workers' compensation, net of current portion 58,775 57,499 Deferred compensation liability 133,745 103,373 Employee benefits and other 65,459 56,494 Postretirement benefit liability, net of current portion 20,710 20,167 Pension liability, net of current portion 2,577 3,232 $ 340,074 $ 305,476

35 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

18. Income Taxes

The provision for federal and state income taxes is as follows:

2017 2016

Current tax expense Federal $ 4,752 $ 1,183 State 964 561 5,716 1,744 Deferred tax expense (benefit) Federal (2,687) 1,607 State (1) 20 (2,688) 1,627 $ 3,028 $ 3,371

The components of deferred taxes are as follows: 2017 2016

Deferred tax assets Loss carryforwards $ 25,395 $ 37,585 Deferred charge for intercompany transfer 9,304 - Allowance for doubtful accounts 1,019 - Accrued expenses 1,302 - Property and equipment 544 Other 278 90 Total deferred tax assets 37,842 37,675 Deferred tax liabilities Intangible assets (6,960) - Total deferred tax liabilities (6,960) - Valuation allowance (27,446) (37,675) Net deferred tax asset $ 3,436 $ -

GAAP requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. In making this determination, management considers all available positive and negative evidence affecting specific deferred tax assets, including the Company’s past and anticipated future performance, reversal of deferred tax liabilities, length of carryback and carryforward periods and implementation of tax planning strategies.

Objective positive evidence is necessary to support a conclusion that a valuation allowance is not needed for all or a portion of deferred tax assets when significant negative evidence exists.

36 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Cumulative losses in recent years are the most compelling form of negative evidence considered by management in this determination. For the years ended December 31, 2017 and 2016, management has determined that based on all available evidence, a valuation allowance of $27,446 and $37,675, respectively, is appropriate.

As of December 31, 2017, the Company had approximately $98,804 of federal and $70,517 of state loss carryforwards available to reduce taxable income. The loss carryforwards expire through 2037. In addition, at December 31, 2017, the Company had approximately $955 of federal and $614 of state contribution carryforwards available to reduce taxable income.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code which impact our year ended December 31, 2017 including, but not limited to, reducing the corporate tax rate from 35% to 21% and repealing the corporate alternative minimum tax effective January 1, 2018.

Shortly after the Tax Act was enacted, the U.S. Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which provides guidance on accounting for the Tax Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Act enactment date, during which a company may complete the accounting for the impacts of the Tax Act under ASC Topic 740. Per SAB 118, the Company must reflect the income tax effects of the Tax Act in the reporting period in which the accounting under ASC Topic 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, the Company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. If a Company cannot determine a provisional estimate to be included in the financial statements, the Company should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted. If a Company is unable to provide a reasonable estimate of the impacts of the Tax Act in a reporting period, a provisional amount must be recorded in the first reporting period in which a reasonable estimate can be determined.

The Company’s year-end income tax provision includes $2,958 of income tax benefit for the remeasurement of certain deferred tax assets, liabilities and the related valuation allowance to reflect the corporate tax rate reduction impact to the Company’s net deferred tax balance.

In addition, the Company reclassed the alternative minimum tax credit deferred tax asset to federal income tax receivable and released the related valuation allowance resulting in an income tax benefit of $1,093 for the year ended December 31, 2017.

Novant Health has completed its accounting for the effects of the Tax Reform Act on its deferred tax assets and liabilities. Other provisions of the Tax Act for which the Company has finalized or is continuing to finalize its accounting are not material (or expected to be material) to the consolidated financial statements as of and for the year ended December 31, 2017.

37 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Income tax expense reported in the consolidated statements of operations and changes in net assets is shown below:

2017 2016

Federal taxes $ 2,065 $ 2,790 State income taxes 963 581 Income tax expense $ 3,028 $ 3,371

The Company is required to evaluate uncertain tax positions. This evaluation includes a quantification of tax risk in areas such as unrelated business taxable income and the taxation of our for-profit subsidiaries. This evaluation did not have a material effect on the Company’s consolidated statements of operations and changes in net assets for the years ended December 31, 2017 and 2016.

19. Employee Benefit Plans and Other Postretirement Benefit Plans

Certain Novant Health affiliates participate in the Pension Restoration Plan of Novant Health, Inc. (the “Novant Plan”), a noncontributory defined benefit pension plan covering substantially all the affiliates’ employees of record as of December 1998. Participation is limited to vested employees as of December 31, 1998. Effective January 1, 2008, and July 1, 2009, the Company assumed two noncontributory defined benefit plans, the Pension Plan for the Employees of Rowan Regional Medical Center (the “Rowan Plan”) and the Prince William Hospital Corporation Cash Balance Pension Plan (the “Prince William Plan”), respectively. Participation in the Rowan Plan was closed to new entrants and the accrued benefits were frozen as of December 31, 2003. Participation in the Prince William Plan was closed to new entrants and the accrued benefits were frozen as of April 1, 2010. The assets of the plans are primarily invested in common trust funds, common stocks, bonds, notes and U.S. government securities.

On February 20, 2018, the Board of Trustees decided to cease all future accruals and terminate the Novant Plan effective April 30, 2018. The Board of Trustees also decided to terminate the Rowan Plan and the Prince William Plan as of April 30, 2018. The impact to Novant Health’s consolidated financial statements is not expected to be material.

During the first quarter of 2017, the Company adopted ASU 2017-07, Compensation Benefits (Topic 715), Improving the Presentation of Net Periodic Costs and Net Periodic Postretirement Benefit costs as described in Note 2.

During the fourth quarter of 2017, the Company adopted mark-to-market accounting for the recognition of our actuarial gains and losses related to our defined benefit pension and postretirement healthcare plans as described in Note 2.

38 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Certain Novant Health affiliates have supplemental retirement income plans covering highly compensated employees. These are nonqualified plans which are not subject to ERISA funding requirements. As such, Novant Health intends only to fund the plans in amounts equivalent to the plans’ annual benefit payments. During 2013, the Company implemented a new supplemental retirement income plan that covers certain highly compensated employees. This plan acts as a defined contribution plan and annual funding requirements are determined under provisions of the plan. Some of these plans are non-qualified deferred compensation plans which provide certain individuals meeting specific criteria with the ability to defer compensation. The assets of these plans are held in a rabbi trust, which restricts access to the assets. The assets of these plans, along with the associated liabilities, are recorded as current and long-term assets limited as to use, accrued liabilities, and employee benefits and other liabilities on the consolidated balance sheet.

Novant Health also provides fixed dollar amounts for health care and life insurance benefits to certain retired employees. Covered employees may become eligible for these benefits if they meet minimum age and service requirements, and if they are eligible for retirement benefits. Novant Health has the right to modify or terminate these benefits.

Information regarding benefit obligations, plan assets, funded status, expected cash flows and net periodic benefit cost follows within this footnote. Postretirement Defined Benefit Plans Healthcare Benefit Plans 2017 2016 2017 2016

Change in benefit obligations Projected benefit obligation at beginning of year $ 289,660 $ 336,480 $ 21,487 $ 21,904 Service cost 330 925 108 121 Interest cost 10,932 14,363 814 841 Actuarial loss (gain) 15,279 (867) 655 (538) Assumption change (1,180) (10,595) - - Settlements (3,802) (36,079) - - Benefits paid (14,225) (14,567) (1,009) (841) Projected benefit obligation at end of year $ 296,994 $ 289,660 $ 22,055 $ 21,487

The assumption changes for 2017 and 2016 are primarily due to changes in the discount rate. During 2016, the Company announced a limited lump sum window distribution of present valued pension benefits to terminated vested participants of the plans meeting certain criteria. The benefit election window was open from August 29, 2016 to October 31, 2016 and benefit distributions were made in December 2016. The reduction in the number of plan participants will reduce the cost of administering the plans in the future.

39 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Postretirement Weighted-Average Assumptions Used to Defined Benefit Plans Healthcare Benefit Plans Determine End of Year Benefit Obligations 2017 2016 2017 2016

Discount rate 3.30% - 3.54% 3.65% - 4.06% 3.30% - 3.55% 3.65% - 4.05% Rate of compensation increase(1) 5.00% 5.00% N/A N/A Health care cost trend on covered charges N/A N/A 9.0% in 2018 9.5% in 2017, grading to grading to 5.0% in 2025 5.0% in 2025

(1) The compensation increase does not apply to the Rowan Plan or the Prince William Plan as benefits under these plans were frozen at December 31, 2017 and 2016.

Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would not have a significant effect on the amounts reported as of December 31, 2017.

Plan Assets Postretirement Defined Benefit Plans Healthcare Benefit Plans 2017 2016 2017 2016 Change in plan assets Fair value of plan assets at beginning of year $ 291,737 $ 307,774 $ - $ - Actual return on plan assets 25,473 35,000 - - Employer contributions 190 184 1,009 841 Settlements (3,802) (36,079) - - Benefits paid (14,225) (14,567) (1,009) (841) Plan expenses (1,100) (575) - -

Fair value of plan assets at end of year $ 298,273 $ 291,737 $ - $ -

The Company’s primary investment objective for the defined benefit plans (“the Plans”) is to invest the plan assets so that they will generate sufficient cash flows needed to fund future payments as they come due. Given the funded status of the Plans, they are invested 100% in a portfolio of diversified fixed income assets whose overall characteristics closely match that of the Plans’ liabilities.

Novant Health’s pension plan asset allocation and target allocation by asset category at December 31, 2017 are as follows:

Target Percentage of Range Plan Assets

Asset Category Fixed income securities 85–100% 98.7% Cash and other 0–4% 1.3% 100.0%

40 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The fair values of the Company’s plan assets at December 31, 2017, by asset category are as follows:

Fair Value Measurements at Reporting Date Using Quoted prices in Significant active markets for Significant other unobservable identical assets observable inputs inputs At NAV (Level 1) (Level 2) (Level 3) Total

Fixed income securities $ 176,302 $ - $ 117,965 $ - $ 294,267 Cash and other - 4,006 - - 4,006 Total fair value of the Company's plan assets $ 176,302 $ 4,006 $ 117,965 $ - $ 298,273

The fair values of the Company’s plan assets at December 31, 2016, by asset category are as follows:

Fair Value Measurements at Reporting Date Using Quoted prices in Significant active markets for Significant other unobservable identical assets observable inputs inputs At NAV (Level 1) (Level 2) (Level 3) Total

Equity securities U.S. equity $ - $ 10,401 $ - $ - $ 10,401 Developed non-U.S. equity - 4,667 - - 4,667 Emerging markets equity - 1,109 - - 1,109 Fixed income securities U.S. fixed income 193,784 - 77,700 - 271,484 Cash and other - 4,076 - - 4,076 Total fair value of the Company's plan assets $ 193,784 $ 20,253 $ 77,700 $ - $ 291,737

41 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

Funded Status

The funded status of the plans recognized in the consolidated balance sheets and the amounts recognized in unrestricted net assets follows as of December 31: Postretirement Defined Benefit Plans Healthcare Benefit Plans 2017 2016 2017 2016 End of Year Fair value of plan assets at end of year $ 298,273 $ 291,737 $ - $ - Benefit obligation at end of year 296,994 289,660 22,055 21,487 Funded status $ 1,279 $ 2,077 $ (22,055) $ (21,487)

Amount recognized in the balance sheets Prepaid benefit cost at measurement date $ 5,087 $ 6,805 $ - $ - Accrued benefit cost (2,420) (3,337) (21,121) (21,295) Change in unrestricted net assets (1,388) (1,391) (934) (192) Net asset (liability) recognized $ 1,279 $ 2,077 $ (22,055) $ (21,487)

Amounts recognized in unrestricted net assets Prior service cost $ 1,282 $ 1,539 $ - $ - Net actuarial loss (gain) 106 (148) 934 192 $ 1,388 $ 1,391 $ 934 $ 192

Other changes in plan assets and benefit obligations Net loss (gain) $ 93 $ (33,875) $ 655 $ (538) Amortization of net loss 161 33,814 87 25 Amortization of prior service credit (257) (491) - - Total recognized in unrestricted net assets $ (3) $ (552) $ 742 $ (513)

At the end of 2017 and 2016, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets within the defined benefit pension plans were as follows:

2017 2016 Projected benefit obligation $ 296,994 $ 289,660 Accumulated benefit obligation 292,839 285,846 Fair value of plan assets 298,273 291,737

Cash Flows The Company does not plan to make any contributions to its defined benefit pension plans in 2018. The Company expects to make contributions to the supplemental retirement income plans of approximately $4,104 for the 2018 fiscal year.

42 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The following assumed benefit payments, which reflect expected future service, as appropriate, and were used in the calculation of projected benefit obligations, are estimated to be paid as follows:

Defined Postretirement Benefit Healthcare Plans Benefit Plans Expected benefit payments 2018 $ 23,113 $ 1,341 2019 18,318 1,121 2020 18,558 1,176 2021 18,862 1,221 2022 19,445 1,257 2023–2027 90,535 6,533

Net periodic benefit cost Postretirement Defined Benefit Plans Healthcare Benefit Plans 2017 2016 2017 2016

Service cost $ 330 $ 925 $ 108 $ 121 Interest cost 10,932 14,363 814 841 Estimated return on plan assets (11,299) (12,011) - - Amortization of prior service cost 257 491 - - Recognized net actuarial loss (gain) 771 (33,815) (87) (25) Net periodic benefit cost (credit) $ 991 $ (30,047) $ 835 $ 937 Total recognized in net periodic benefit cost and unrestricted net assets $ 988 $ (30,599) $ 1,577 $ 424

The components of net periodic pension and postretirement benefit costs other than the service component are included in non-operating income (expense) on the consolidated statements of operations and changes in net assets.

Amounts expected to be amortized from unrestricted net assets into net periodic benefit cost during the year ending December 31, 2018 are as follows: Defined Postretirement Benefit Healthcare Plans Benefit Plans

Actuarial net (gain) loss $ (126) $ 7 Prior service cost 257 -

43 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

The weighted-average assumptions used to determine net periodic benefit cost were as follows: Postretirement Defined Benefit Plans Healthcare Benefit Plans 2017 2016 2017 2016

Discount rate 3.65% - 4.06% 2.65% - 4.44% 3.65% - 4.05% 3.70% - 4.05% Expected return on plan assets 4.00% 4.00% N/A N/A Rate of compensation increase(1) 5.00% 5.00% N/A N/A Health care cost trend on covered charges N/A N/A 9.5% in 2017 10.0% in 2016, grading to grading to 5.0% in 2025 5.0% in 2025

(1) The compensation increase does not apply to the Rowan Plan or the Prince William Plan as benefits under these plans were frozen at December 31, 2017 and 2016.

In developing the expected return on plan assets, the Company considers the plan assets’ historical actual return, targeted asset allocations, and the anticipated future economic environment and long-term performance of individual asset classes, based on the Company’s investment strategy. While appropriate consideration is given to recent and historical investment performance, the assumption represents management’s best estimate of the long-term prospective return.

In addition to these plans, Novant Health sponsors a number of defined contribution plans. Contributions are determined under various formulas. Costs related to such plans amounted to $75,503 and $65,734 in 2017 and 2016, respectively.

Certain Novant Health affiliates participate in cafeteria plans which provide certain benefits, including basic medical and dental coverage, long-term disability benefits, reimbursement of supplemental dependent care expenses and group life insurance benefits. The affiliates contribute predetermined amounts for each full-time and part-time employee, which is allocated to the various benefit options in accordance with the participant’s election. Affiliate contributions to these plans were approximately $234,150 in 2017 and $207,535 in 2016.

44 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

20. Noncontrolling Interests

The following table reconciles the carrying amounts of the Company’s controlling interest and the noncontrolling interests for unrestricted net assets:

Controlling Noncontrolling Total Interest Interests

Balance at January 1, 2016 $ 2,834,030 $ 2,820,367 $ 13,663 Excess (deficit) of revenues over expenses 455,205 465,612 (10,407) Change in funded status of defined benefit plans 1,066 1,066 - Unrealized gain on derivative financial instruments 5,564 5,564 - Formation of Novant Health UVA Health System 92,187 (2,032) 94,219 Other changes in unrestricted net assets 237 1,092 (855) Balance at December 31, 2016 3,388,289 3,291,669 96,620 Excess (deficit) of revenues over expenses 477,870 487,956 (10,086) Change in funded status of defined benefit plans (739) (739) - Unrealized gain on derivative financial instruments 7,330 7,330 - Purchase of noncontrolling interest (9,800) - (9,800) Other changes in unrestricted net assets (7,057) (7,962) 905 Balance at December 31, 2017 $ 3,855,893 $ 3,778,254 $ 77,639

21. Professional and General Liability Insurance Coverage

Novant Health is self-insured for professional and general liability exposures up to certain limits. The Company has umbrella policies in place above those limits. The provision for estimated medical malpractice claims includes estimates of the ultimate costs for reported claims and claims incurred but not reported. Novant Health also participates in a self-insured program for workers’ compensation and is self-insured for certain health benefits options. A portion of these self-insured professional liabilities is funded through a revocable trust fund operated by Novant Health. At December 31, 2017 and 2016, undiscounted professional and general liability loss reserves of $75,993 and $74,599, respectively, are included in current liabilities and employee benefits and other liabilities on the consolidated balance sheets. Expenses related to these plans amounted to $14,870 and $13,252 in 2017 and 2016, respectively.

45 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

22. Commitments and Contingencies

The Company and its affiliates are presently involved in various personal injury, regulatory investigations, tort actions and other claims and assessments arising out of the normal course of business. Management believes that Novant Health has adequate legal defenses, self-insurance reserves and/or insurance coverage for these asserted claims, as well as any unasserted claims and does not believe these claims will have a material effect on the Company’s operations or financial position. The health care industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government health care program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. In recent years, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by health care providers. Violations of these laws and regulations could result in expulsion from government health care programs together with the imposition of significant fines and penalties, as well as significant repayments for patient services previously billed.

23. Operating Leases

Certain operating properties and equipment are leased under noncancelable operating leases. Total rental expense under operating leases was $95,602 and $90,058 in 2017 and 2016, respectively. Future minimum rentals under noncancelable operating leases with terms of more than one year are as follows:

Years Ending December 31 2018 $ 87,587 2019 76,931 2020 66,514 2021 56,098 2022 47,219 Thereafter 124,413 $ 458,762

Novant Health leases six plots of land to a third-party under long-term ground lease agreements. Total rental income under these lease agreements was $1,207 and $1,186 in 2017 and 2016, respectively. The future rental income related to the ground leases are as follows:

Years Ending December 31 2018 $ 1,240 2019 1,263 2020 1,286 2021 1,309 2022 1,333 Thereafter 85,238 $ 91,669

46 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

24. Concentrations of Credit Risk

Novant Health provides services primarily to the residents of various counties within North Carolina, South Carolina and Virginia without collateral or other proof of ability to pay. Most patients are local residents who are insured partially or fully under third-party payor arrangements.

The mix of receivables from patients and third-party payors at December 31 is as follows:

2017 2016

Medicare 25.4% 28.3% Medicaid 5.8% 6.7% Other third-party payors 63.3% 60.1% Patients 5.5% 4.9% 100.0% 100.0%

Novant Health places the majority of its cash and investments with corporate and financial institutions. Novant Health maintains cash balances in excess of FDIC insured limits; however, the Company has not experienced any losses on such deposits.

25. Functional Expenses

Novant Health provides general health care services to residents within its geographic region. Expenses relating to providing these services at December 31 are as follows:

2017 2016

Health care services $ 3,266,273 $ 2,953,320 General and administrative 1,154,680 1,115,783 $ 4,420,953 $ 4,069,103

26. Subsequent Events The Company evaluated subsequent events and transactions for potential recognition or disclosure in the consolidated financial statements through March 26, 2018, the day the consolidated financial statements were issued. Other than disclosed in Note 19, no other items required recognition or disclosure.

27. Significant Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606). Since that date, the FASB has issued additional guidance to clarify and refine the guidance in Topic 606. This guidance replaces existing industry-specific guidance and provides guidelines based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration. The guidance also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

47 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

This guidance was effective for Novant Health beginning January 1, 2018. Novant Health has elected to use the full retrospective transition method. The most significant impact will be to the presentation of the income statement where the provision for bad debts will be recorded as a direct reduction of revenue and will not be presented as a separate line item. The adoption of this guidance is not expected to have a significant impact on the recognition of net revenues for any period.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. This guidance removes the requirement that deferred tax liabilities be separated into current and noncurrent amounts on a classified balance sheet. Instead, deferred tax liabilities and assets are presented as noncurrent. This guidance was effective for Novant Health on January 1, 2018 and is not expected to have a significant impact on Novant Health’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825- 10), Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance requires equity investments to be measured at fair value with changes in fair value recognized in net income and simplifies the impairment assessment of equity investments without readily determinable fair values. This guidance will be effective for Novant Health on January 1, 2019 with prospective application and a cumulative-effect adjustment at the date of adoption. We are evaluating the provisions of this guidance to determine the impact on Novant Health’s consolidated financial statements. This guidance also amends disclosure requirements to no longer require the application of the fair value of financial instruments disclosure guidance (such as fair value of debt). Novant Health elected to early adopt this provision effective January 1, 2016.

In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842). The most significant change from current practice is that this guidance requires the recognition of lease assets and liabilities for those leases classified as operating leases under current guidance. The guidance also provides direction for the measurement of lease assets and liabilities and additional required disclosures. This guidance will be effective for Novant Health on January 1, 2019 with modified retrospective presentation required. In January 2018, the FASB exposed for comment a set of targeted improvements, including the option for an additional transition methodology with a cumulative-effect adjustment at the date of adoption. We are currently evaluating the impact of adopting this guidance on Novant Health’s consolidated financial statements, including reviewing key terms of all leases, evaluating software available to manage and perform calculations required by the guidance and implementing processes and procedures necessary to adopt and maintain compliance with the requirements of the guidance.

In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958), Presentation of Financial Statements of Not-for-Profit Entities. This guidance was effective for Novant Health on January 1, 2018 and requires retrospective presentation, with exceptions to retrospective presentation for certain disclosures. This guidance requires the presentation of two classes of net assets, rather than the currently required three classes. The guidance also requires enhanced disclosures of amounts and nature of donor imposed and internally designated funds and requires new disclosures about information useful for assessing liquidity and availability of resources. We are currently evaluating the impact of adopting this guidance on Novant Health’s consolidated financial statements.

48 Novant Health, Inc. and Affiliates Notes to Consolidated Financial Statements December 31, 2017 and 2016

(in thousands of dollars)

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. This standard provides additional guidance related to the presentation and classification of certain items in the statement of cash flow for which there is diversity in practice. The provisions of this guidance are effective for Novant Health on January 1, 2019 with early adoption permitted and retrospective application, unless it is impracticable. We are currently evaluating the impact of adopting this guidance on Novant Health’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business to assist with the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance provides a screen to determine whether an integrated set of assets and activities is not a business to reduce the number of transactions that need to be further evaluated. Novant Health elected to adopt this guidance effective January 1, 2017. This guidance was applied prospectively to evaluate transactions occurring after the adoption date and did not have a significant impact on Novant Health’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the current Step 1). This guidance is effective for Novant Health on January 1, 2022. We are evaluating the provisions of this guidance to determine how goodwill impairment testing will be impacted and whether to elect to adopt this guidance prior to the stated effective date. The adoption of this guidance would only impact Novant Health’s consolidated financial statements in situations where there is impairment of a reporting unit.

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Novant Health elected to early adopt this guidance as described in Note 2.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance makes changes to the hedge accounting model to align the model more closely with risk management practices and to simplify its application. The guidance is effective for Novant Health on January 1, 2019 on a modified retrospective basis except for presentation and disclosure. The guidance may be early adopted. Novant Health only uses the hedge accounting model to hedge the impact of interest rate changes on certain of its variable rate bonds. The impact of adopting this guidance is not expected to be significant, although the ineffective portion of the change in the fair value of the interest rate swap will no longer be recognized in excess of revenues over expenses and will instead be recognized as a change in unrestricted net assets in the consolidated statements of operations and changes in net assets.

49

Other Financial Information

Report of Independent Auditors

To the Board of Trustees of Novant Health, Inc.

We have audited the consolidated financial statements of Novant Health, Inc. and Affiliates as of December 31, 2017 and for the year then ended and our report thereon appears on page 2 of this document. That audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The Schedule of Cost of Community Benefit Programs as of December 31, 2017 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements taken as a whole.

March 26, 2018

PricewaterhouseCoopers LLP, 800 Green Valley Road, Suite 500, Greensboro, NC 27408 T: (336) 665 2700, F: (336) 665 2699, www.pwc.com/us Novant Health, Inc. and Affiliates Schedule of Cost of Community Benefit Programs December 31, 2017

(in thousands of dollars)

The net cost, excluding the provision of bad debts, of providing care to indigent patients and community benefit programs is as follows:

2017

Traditional charity care$ 138,927 Unpaid cost of Medicare 486,590 Unpaid cost of Medicaid 107,060 Community benefit programs 61,868 $ 794,445

As discussed in Note 2 in the accompanying consolidated financial statements, Novant Health received supplemental Medicaid payments during 2017. These amounts are included in the community benefit amount for 2017.

51 Report of Independent Auditors

To the Board of Trustees of Novant Health, Inc.

We have audited the consolidated financial statements of Novant Health, Inc. and Affiliates as of December 31, 2017 and for the year then ended and our report thereon appears on page 2 of this document. That audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The consolidating information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The consolidating information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the consolidating information is fairly stated, in all material respects, in relation to the consolidated financial statements taken as a whole. The consolidating information is presented for purposes of additional analysis of the consolidated financial statements rather than to present the financial position, results of operations and cash flows of the individual companies and is not a required part of the consolidated financial statements. Accordingly, we do not express an option of the financial position, results of operations and cash flows of the individual companies.

March 26, 2018

PricewaterhouseCoopers LLP, 800 Green Valley Road, Suite 500, Greensboro, NC 27408 T: (336) 665 2700, F: (336) 665 2699, www.pwc.com/us Novant Health, Inc. and Affiliates Consolidating Balance Sheet December 31, 2017

Combined Unrestricted (in thousands of dollars) Group Affiliates Eliminations Total

Assets Current assets Cash and cash equivalents $ 335,358 $ 73,340 $ - $ 408,698 Accounts receivable, net of allowance for doubtful accounts 459,011 59,491 - 518,502 Short-term investments 299,912 159 - 300,071 Current portion of assets limited as to use 6,484 12,229 - 18,713 Deferred tax asset - 2,190 - 2,190 Receivable for settlement with third-party payors 17,881 3,351 - 21,232 Other current assets 172,113 25,869 (934) 197,048 Total current assets 1,290,759 176,629 (934) 1,466,454 Assets limited as to use 137,527 43,613 - 181,140 Long-term investments 2,003,142 311,542 - 2,314,684 Property and equipment, net 1,678,436 340,472 - 2,018,908 Intangible assets and goodwill, net 244,337 81,579 - 325,916 Investments in affiliates 75,278 23,678 (55,480) 43,476 Deferred tax asset - 1,246 - 1,246 Other assets 84,612 26,477 - 111,089 Total assets $ 5,514,091 $ 1,005,236 $ (56,414) $ 6,462,913 Liabilities and Net Assets Current liabilities Current portion of long-term debt $ 62,880 $ 4,729 $ - $ 67,609 Short-term borrowings 88,041 8 - 88,049 Accounts payable 173,299 21,439 - 194,738 Accrued liabilities 362,595 52,291 (535) 414,351 Estimated third-party payor settlements 35,554 4,152 - 39,706 Due to (from) related organizations (247,053) 247,053 - - Total current liabilities 475,316 329,672 (535) 804,453 Long-term debt, net of current portion 1,316,794 26,882 - 1,343,676 Derivative financial instruments 44,832 - - 44,832 Employee benefits and other liabilities 281,729 58,345 - 340,074 Total liabilities 2,118,671 414,899 (535) 2,533,035 Net assets Unrestricted - attributable to Novant Health 3,393,231 503,772 (118,749) 3,778,254 Unrestricted - noncontrolling interests - 14,769 62,870 77,639 Total unrestricted net assets 3,393,231 518,541 (55,879) 3,855,893 Temporarily restricted 2,189 60,164 - 62,353 Permanently restricted - 11,632 - 11,632 Total net assets 3,395,420 590,337 (55,879) 3,929,878 Total liabilities and net assets $ 5,514,091 $ 1,005,236 $ (56,414) $ 6,462,913

See accompanying notes to consolidating supplemental schedules.

53 Novant Health, Inc. Consolidating Statement of Operations Year Ended December 31, 2017

Combined Unrestricted (in thousands of dollars) Group Affiliates Eliminations Total

Operating revenues Patient service revenues (net of contractual allowances and discounts) $ 4,050,722 $ 481,466 $ - $ 4,532,188 Provision for bad debts (180,624) (32,250) - (212,874) Net patient service revenues less provision for bad debts 3,870,098 449,216 - 4,319,314 Other revenue 150,419 144,945 (19,286) 276,078 Total operating revenues 4,020,517 594,161 (19,286) 4,595,392 Operating expenses Salaries and employee benefits 2,276,240 273,890 (7,093) 2,543,037 Supplies and other 1,266,288 312,234 (10,286) 1,568,236 Depreciation expense 197,760 40,309 - 238,069 Amortization expense 2,297 595 - 2,892 Interest expense 59,598 9,121 - 68,719 Total operating expenses 3,802,183 636,149 (17,379) 4,420,953 Operating income (loss) 218,334 (41,988) (1,907) 174,439 Non-operating income (expense) Investment income 268,987 37,353 1,507 307,847 Income tax benefit (expense) (5,112) 2,084 - (3,028) Other net periodic pension (costs) benefit (2,793) 1,405 - (1,388) Excess (deficit) of revenues over expenses $ 479,416 $ (1,146) $ (400) $ 477,870

See accompanying notes to consolidating supplemental schedules.

54 Novant Health, Inc. Combined Group Combining Balance Sheet December 31, 2017

Obligated Restricted Combined (in thousands of dollars) Group Affiliates Eliminations Group Total

Assets Current assets Cash and cash equivalents $ 333,453 $ 1,905 $ - $ 335,358 Accounts receivable, net of allowance for doubtful accounts 300,796 158,215 - 459,011 Short-term investments 299,912 - - 299,912 Current portion of assets limited as to use 6,484 - - 6,484 Receivable for settlement with third-party payors 8,483 9,398 - 17,881 Other current assets 140,329 33,485 (1,701) 172,113 Total current assets 1,089,457 203,003 (1,701) 1,290,759 Assets limited as to use 136,859 668 - 137,527 Long-term investments 2,003,142 - - 2,003,142 Property and equipment, net 1,203,404 475,032 - 1,678,436 Intangible assets and goodwill, net 49,243 195,094 - 244,337 Investments in affiliates 164,716 (2,784) (86,654) 75,278 Other assets 226,909 19,735 (162,032) 84,612 Total assets $ 4,873,730 $ 890,748 $ (250,387) $ 5,514,091 Liabilities and Net Assets Current liabilities Current portion of long-term debt $ 62,872 $ 1,709 $ (1,701) $ 62,880 Short-term borrowings 88,041 - - 88,041 Accounts payable 160,796 12,503 - 173,299 Accrued liabilities 264,418 98,177 362,595 Estimated third-party payor settlements 27,572 7,982 - 35,554 Due to (from) related organizations (507,947) 260,894 - (247,053) Total current liabilities 95,752 381,265 (1,701) 475,316 Long-term debt, net of current portion 1,316,572 162,254 (162,032) 1,316,794 Derivative financial instruments 44,832 - - 44,832 Employee benefits and other liabilities 255,955 25,774 - 281,729 Total liabilities 1,713,111 569,293 (163,733) 2,118,671 Net assets Unrestricted - attributable to Novant Health 3,160,608 319,277 (86,654) 3,393,231 Temporarily restricted 11 2,178 - 2,189 Total net assets 3,160,619 321,455 (86,654) 3,395,420 Total liabilities and net assets $ 4,873,730 $ 890,748 $ (250,387) $ 5,514,091

See accompanying notes to consolidating supplemental schedules.

55 Novant Health, Inc. Combined Group Combining Statement of Operations Year Ended December 31, 2017

Obligated Restricted Combined (in thousands of dollars) Group Affiliates Eliminations Group Total

Operating revenues Patient service revenues (net of contractual allowances and discounts) $ 2,492,113 $1,558,609 $ - $ 4,050,722 Provision for bad debts (102,286) (78,338) - (180,624) Net patient service revenues less provision for bad debts 2,389,827 1,480,271 - 3,870,098 Other revenue 124,184 52,384 (26,149) 150,419 Total operating revenues 2,514,011 1,532,655 (26,149) 4,020,517 Operating expenses Salaries and employee benefits 1,288,785 987,455 - 2,276,240 Supplies and other 826,686 465,751 (26,149) 1,266,288 Depreciation expense 121,418 76,342 - 197,760 Amortization expense - 2,297 - 2,297 Interest expense 37,222 22,376 - 59,598 Total operating expenses 2,274,111 1,554,221 (26,149) 3,802,183 Operating income (loss) 239,900 (21,566) - 218,334 Non-operating income (expense) Investment income 268,949 38 - 268,987 Income tax expense (5,112) - - (5,112) Other net periodic pension costs (525) (2,268) - (2,793)

Excess (deficit) of revenues over expenses $ 503,212 $ (23,796) $ - $ 479,416

See accompanying notes to consolidating supplemental schedules.

56 Novant Health, Inc. Notes to Consolidating Supplemental Schedules December 31, 2017

1. Consolidated Financial Statements Reporting Entity

Novant Health, Inc. (“Novant Health” or the “Company”) is a nonprofit, integrated health care network of physician clinics, outpatient centers and hospitals that serves patients and communities in North Carolina, Virginia and South Carolina. Novant Health consists of nearly 1,500 physicians and 26,000 team members at approximately 500 locations, including 14 medical centers and hundreds of outpatient facilities and physician clinics. Headquartered in Winston-Salem, North Carolina, Novant Health is committed to making healthcare remarkable for patients and communities, serving more than 4 million patients annually. Novant Health and its affiliates serve their communities with programs including health education, home health care, prenatal clinics, community clinics and immunization services.

2. Basis of Presentation and Summary of Significant Accounting Policies

Novant Health, Inc. Consolidating Balance Sheet and Consolidating Statement of Operations (which Combines the Information of the Combined Group and Unrestricted Affiliates)

The Total column reconciles to the consolidated financial statements of Novant Health, Inc. and includes the accounts of all affiliates controlled by Novant Health, Inc. The Total is comprised of the Combined Group (as described below, which is comprised of the Obligated Group and Restricted Affiliates) and the Unrestricted Affiliates, which represent affiliates not meeting the definition of the Obligated Group or Restricted Affiliates as defined below.

The Eliminations column represents the elimination of intercompany transactions and balances between the Combined Group and the Unrestricted Affiliates.

The consolidating balance sheet and consolidating statement of operations are otherwise prepared in accordance with accounting policies described in the accompanying notes to the consolidated financial statements. These schedules are not intended to be a presentation in accordance with accounting principles generally accepted in the United States of America, as a result of the exclusion of all required disclosures.

Combined Group Combining Balance Sheet and Statement of Operations

As noted in footnote 14 to the consolidated financial statements, the Company is subject to a Master Trust Indenture (the “Agreement”) which authorizes the creation of a Combined Group, which consists of the members of the Obligated Group and the Restricted Affiliates.

The members of the Obligated Group are jointly and severally liable for the payment of all obligations under the Agreement. The members of the Obligated Group are Novant Health and its two affiliates that operate tertiary care hospitals, Forsyth Memorial Hospital, Inc. d/b/a Novant Health Forsyth Medical Center and The Presbyterian Hospital d/b/a Novant Health Presbyterian Medical Center, both of which are North Carolina nonprofit corporations. In the accompanying Combined Group combining balance sheet and combining statement of operations, the Obligated Group column presents information of the aforementioned entities.

57 Novant Health, Inc. Notes to Consolidating Supplemental Schedules December 31, 2017

Restricted Affiliates represent entities that are not directly obligated to pay obligations under the Agreement, but the members of the Obligated Group have covenanted in the Agreement to cause the Restricted Affiliates to provide funds to the members of the Obligated Group to pay obligations under the Agreement. The Company has designated twelve of its affiliates as Restricted Affiliates. Seven of these Restricted Affiliates, Medical Park Hospital, Inc. d/b/a Novant Health Medical Park Hospital, Community General Health Partners, Inc. d/b/a Novant Health Thomasville Medical Center, Presbyterian Medical Care Corp. d/b/a Novant Health Matthews Medical Center, Brunswick Community Hospital d/b/a Novant Health Brunswick Medical Center, Presbyterian Orthopaedic Hospital, LLC d/b/a Novant Health Charlotte Orthopaedic Hospital, Prince William Hospital Corporation d/b/a Novant Health UVA Prince William Medical Center, and Prince William Health System, operate, or maintain a significant investment in, hospitals. The other five Restricted Affiliates, Carolina Medicorp Enterprises, Inc., Forsyth Medical Group, LLC, Foundation Health Systems Corp., Novant Medical Group, Inc. f/k/a Presbyterian Regional Healthcare Corp. and Salem Health Services, Inc., provide, or invest in subsidiaries or joint ventures which provide health care and ancillary services. All of the members of the Combined Group, except Salem Health Services, Inc., are exempt from federal and state income taxation.

The Eliminations column represents the elimination of intercompany transactions and balances between the Obligated Group and the Restricted Affiliates.

The Combined Group combining balance sheet and combining statement of operations are otherwise prepared in accordance with accounting policies described in the accompanying notes to the consolidated financial statements. These schedules are not intended to be a presentation in accordance with accounting principles generally accepted in the United States of America, as a result of the exclusion of all required disclosures.

58