Form Public Disclosure Copy

Transcription

1 Kaleida Health Tax year ended Deceber 31, 2009 For Public Disclosure Copy

2 OMB ½½ For Return of Organization Exept Fro Incoe Tax I Departent of the Treasury Internal Revenue Service Check if applicable: Address change Nae change Terination Aended return Application pending Inspection, 2009, and ending, 20 D Eployer identification nuber Please C Nae of organization use IRS Doing Business As label or print or Nuber and street (or P.O. box if ail is not delivered to street address) type. See Specific City or town, state or country, and ZIP + 4 Instructions. KALEIDA HEALTH E Telephone nuber Roo/suite 726 ECHANGE STREET Initial return Open to Public The organization ay have to use a copy of this return to satisfy state reporting requireents. A For the 2009 calendar year, or tax year beginning B À¾ ½ Under section 501, 527, or 4947(1) of the Internal Revenue Code (except black lung benefit trust or private foundation) (716 ) G Gross receipts 1,159,226,524. H Is this a group return for Yes JAMES KASKIE No affiliates? Yes No 726 ECHANGE STREET, SUITE 200 BUFFALO, NY H Are all affiliates included? If "No," attach a list. (see instructions) Tax-exept status: I 501 ( 3 ) (insert no.) 4947(1) or 527 J Website: H Group exeption nuber K Type of organization: Corporation L Year of foration: 1998 M State of legal doicile: NY Trust Association Other Suary Part I BUFFALO, NY F Nae and address of principal officer: J I Activities & Governance 1 I I Briefly describe the organization's ission or ost significant activities: KALEIDA HEALTH IS THE LARGEST HEALTHCARE PROVIDER IN WNY, SERVING THE AREA'S 8 COUNTIES WITH COMPREHENSIVE SERVICES & PROGRAMS PROVIDED AT 5 ACUTE CARE, 3 LT CARE AS WELL AS OUTPATIENT & PRIMARY CARE SITES a Check this box I if the organization discontinued its operations or disposed of ore than 25% of its assets , ,300 4,234,27 19,854, ,704, ,768,466. 1,057,084,879. 3,820, , ,816, ,010,157. 1,018,259,788. 1,155,716, ,57 260, ,922, ,605,218. I 482,308,79 502,544,574. 1,003,491,958. 1,080,329, ,767,83 75,387, ,611, ,762, ,802,26 700,737, ,960, ,873,704. Nuber of voting ebers of the governing body (Part VI, line 1a) a 7b Nuber of independent voting ebers of the governing body (Part VI, line 1b) Total nuber of eployees (Part V, line 2a) Total nuber of volunteers (estiate if necessary) Total gross unrelated business revenue fro Part VIII, line 12, colun (C) Net Assets or Fund Balances Expenses Revenue b Net unrelated business taxable incoe fro For 990-T, line a Prior Year Current Year Beginning of Year End of Year Contribution and grants (Part VIII, line 1h) COPY FOR Progra service revenue (Part VIII, line 2g) PUBLIC INSPECTION Investent incoe (Part VIII, colun (A), lines 3, 4, and 7d) Other revenue (Part VIII, colun (A), lines 5, 6d, 8c, 9c, 10c, and 11e) Total revenue - add lines 8 through 11 (ust equal Part VIII, colun (A), line 12) Grants and siilar aounts paid (Part I, colun (A), lines 1-3) Benefits paid to or for ebers (Part I, colun (A), line 4) Salaries, other copensation, eployee benefits (Part I, colun (A), lines 5-10) Professional fundraising fees (Part I, colun (A), line 11e) b Total fundraising expenses, Part I, colun (D), line 25) Other expenses (Part I, colun (A), lines 11a-11d, 11f-24f) Total assets (Part, line 16) Part II Total expenses. Add lines (ust equal Part I, colun (A), line 25) Revenue less expenses. Subtract line 18 fro line 12 Total liabilities (Part, line 26) Net assets or fund balances. Subtract line 21 fro line 20 Signature Block Under penalties of perjury, I declare that I have exained this return, including accopanying schedules and stateents, and to the best of y knowledge and belief, it is true, correct, and coplete. Declaration of preparer (other than officer) is based on all inforation of which preparer has any knowledge. Sign Here M M Signature of officer Date Type or print nae and title Preparer's signature Paid Preparer's Use Only M Fir's nae (or yours if self-eployed), address, and ZIP + 4 Date M EIN Phone no KEY TOWER, 50 FOUNTAIN PLAZA BUFFALO, NY May the IRS discuss this return with the preparer shown above? (See instructions) Preparer's identifying nuber (see instructions) P I I I 11/11/10 ERNST & YOUNG U.S. LLP Check if selfeployed For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Yes For * No 990 (2009) 9E RC V KALEIDA PAGE 2

3 For 8868 Application for Extension of Tie To File an (Rev. Api 2009) Exept Organization Return OMB Departent of the Treasury Internal Revenue Service File a separate application for each return. * If you are filing for an Autoatic 3-Month Extension, coplete only Part I and check this box... [ " If you are filing for an Additional (Not Autoatic) 3-Month Extension, coplete only Part II (on page 2 of this for). Do not coplete Part It unlespou have already been granted an autoatic 3-onth extension on a previously filed For 8868, KM Autoatic 3-Month Extension of Tie. Only subit original (no copies needed). A corporation required to file For 990-T and requesting an autoatic 6-onth extension - check this box and coplete Part I only... All other corporations (including 1120-C filers), partnerships, REMICs, and trusts ust use For 7004 to request an extension of tie to file incoe tax returns. Electronic Filing (e-file) Generally, you can electronically file For 8868 if you want a 3-onth autoatic extension of tie to file one of the returns noted below (6 onths for a corporation required to file For 990-T). However, you cannot file For 8868 electronically if (1) you want the additional (not autoatic) 3-onth extension or (2) you file Fors 990-BL, 6069, or 8870, group returns, or a coposite or consolidated Fro 990-T. Instead, you ust subit the fully copleted and signed page 2 (Part II) of For For ore details on the electronic filing of this for, visit wwwirs.gov/efile and click on e-file for Charities & Nonprofits. Type or Nae of Exept Organization Eployer Identification nuber print KALEIDA HEALTH File by the Nuber, street, and roo or suite no. If a P.O. box, see instructions. duedalefor 726 ECHANGE STREET, SUITE 200 filing your return. See City, town or post office, state, and ZIP code. For a foreign address, see instructions. Instructions. BUFFALO, NY Check type of return to be filed (file a sarate application for each return): For 990 For 990-T (corporation) For 4720 For 990-BL E For 990-T (sec. 401 or 408 trust) For 5227 For 990-EZ L For 990-T (trust other than above) For 6069 For 990-PF J For 1041-A For 8870 * The books are in the care of li JON SWIATKOWSKI Telephone p FA li " 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 oranization's four digit Group Exeption Nuber (GEN) If this is for the whole group, check this box - l i. If it is for part of the group, check this box. L r and attach a list with the naes and EINs of all ebers the extension will cover. 1 I request an autoatic 3-onth (6 onths for a corporation required to file For 990-F) extension of tie until 08/ to file the exept organization return for the organization naed above, The extension is for the organization's return for: P R calendar year 2009 or ll j tax year beginning and ending 2 If this tax year is for less than 12 onths, check reason: E Initial return E Final return H Change in accounting period 3a If this application is for For 990-BL, 990-PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions. 3a b If this application is for For 990-PF or 990-T, enter any refundable credits and estiated tax payents ade. Include any prior year overpayent allowed as a credit. 3b c Balance Due. Subtract line 3b fro line 3a. Include your payent with this for, or, if required, deposit with FTD coupon or, if required, by using EFTPS (Electronic Federal Tax Payent Syste). See instructions. Caution. If you are going to ake an electronic fund withdrawal with this For 8868, see For 8453-EO and For 8879-EO for payent instructions. For Privacy Act and Paperwork Reduction Act Notice, see Instructions. For 8868 (Rev ) 9F8054 2,000 8RC V 09-6 KALEIDA PAGE 1

4 For 8868 (Rev ) Page 2 % If you are filing for an Additional (Not Autoatic) 3-Month Extension, coplete only Part II and check this box I Note. Only coplete Part II if you have already been granted an autoatic 3-onth extension on a previously filed For If you are filing for an Autoatic 3-Month Extension, coplete only Part I ( on page 1). % Part II Type or print File by the extended due date for filing the return. See instructions. Additional (Not Autoatic) 3-Month Extension of Tie. Only file the original (no copies needed). Nae of Exept Organization Nuber, street, and roo or suite no. If a P.O. box, see instructions. City, town or post office, state, and ZIP code. For a foreign address, see instructions. Eployer identification nuber KALEIDA HEALTH ECHANGE STREET, SUITE 200 BUFFALO, NY For IRS use only Check type of return to be filed (File a separate application for each return): For 990 For 990-B L For 990-E Z For 990-PF For 990-T (sec. 401 or 408 tr ust) For 990-T (trust other than above) For A For 4720 For 5227 For 6069 For 8870 STOP! Do not coplete Part II if you were not already granted an autoatic 3-onth extension on a previously filed For % The books are in the care of Telephone IJON SWIATKOWSKI I FA I If the organization does not have an office or place of business in the United States, check this box I % If this is for a Group Return, enter the organization's four digit Group Exeption Nuber (GEN). If this is I I for the whole group, check this box. If it is for part of the group, check this box and attach a list with the naes and EINs of all ebers the extension is for. 4 I request an additional 3-onth extension of tie until 11/15/ For calendar year 2009, or other tax year beginning, and ending. 6 7 If this tax year is for less than 12 onths, check reason: State in detail why you need the extension Initial return Final return Change in accounting period ADDITIONAL TIME IS NEEDED TO COLLECT ALL THE INFORMATION NECESSARY TO FILE A COMPLETE AND ACCURATE RETURN. 8a If this application is for For 990-BL, 990-PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions. 8a b If this application is for For 990-PF, 990-T, 4720, or 6069, enter any refundable credits and estiated tax payents ade. Include any prior year overpayent allowed as a credit and any aount paid previously with For b c Balance Due. Subtract line 8b fro line 8a. Include your payent with this for, or, if required, deposit with FTD coupon or, if required, by using EFTPS (Electronic Federal Tax Payent Syste). See instructions. 8c Signature and Verification Under penalties of perjury, I declare that I have exained this for, including accopanying schedules and stateents, and to the best of y knowledge and belief, it is true, correct, and coplete, and that I a authorized to prepare this for. I I I Signature Title Date ERNST & YOUNG U.S. LLP KEY TOWER, 50 FOUNTAIN PLAZA BUFFALO, NY CPA AS AGENT 8/11/10 For 8868 (Rev ) 9F RC V KALEIDA PAGE 1

5 For 990 (2009) Page 2 Stateent of Progra Service Accoplishents Part III Briefly describe the organization's ission: KALEIDA HEALTH IS THE LARGEST HEALTHCARE PROVIDER IN WNY, SERVING THE AREA'S 8 COUNTIES WITH COMPREHENSIVE SERVICES & PROGRAMS PROVIDED AT 5 ACUTE CARE, 3 LT CARE AS WELL AS OUTPATIENT & PRIMARY CARE SITES. 2 Did the organization undertake any significant progra services during the year which were not listed on the prior For 990 or 990-EZ? Yes No If "Yes," describe these new services on Schedule O. 3 Did the organization cease conducting, or ake significant changes in how it conducts, any progra services? Yes No If "Yes," describe these changes on Schedule O. 4 Describe the exept purpose achieveents for each of the organization's three largest progra services by expenses. Section 501(3) and 501(4) organizations and section 4947(1) trusts are required to report the aount of grants and allocations to others, the total expenses, and revenue, if any, for each progra service reported. 4a (Code: ) (Expenses 935,674,054. including grants of 179,57 ) (Revenue 1,141,367,184. ) SEE SCHEDULE O. 4b (Code: ) (Expenses including grants of ) (Revenue ) 4c (Code: ) (Expenses including grants of ) (Revenue ) 4d Other progra services. (Describe in Schedule O.) (Expenses including grants of ) (Revenue ) 4e Total progra service expenses 935,674,054. I For 990 (2009) 9E RC V KALEIDA PAGE 3

6 For 990 (2009) Page 3 Part IV Checklist of Required Schedules Is the organization described in section 501(3) or 4947(1) (other than a private foundation)? If "Yes," coplete Schedule A 1 Is the organization required to coplete Schedule B, Schedule of Contributors? 2 Did the organization engage in direct or indirect political capaign activities on behalf of or in opposition to candidates for public office? If "Yes," coplete Schedule C, Part I 3 Section 501(3) organizations. Did the organization engage in lobbying activities? If "Yes," coplete Schedule C, Part II 4 Sections 501(4), 501(5), and 501(6) organizations. Is the organization subject to the section 6033(e) notice and reporting requireent and proxy tax? If "Yes," coplete Schedule C, Part III 5 Did the organization aintain any donor advised funds or any siilar funds or accounts where donors have the right to provide advice on the distribution or investent of aounts in such funds or accounts? If "Yes," coplete Schedule D, Part I 6 Did the organization receive or hold a conservation easeent, including easeents to preserve open space, the environent, historic land areas, or historic structures? If "Yes," coplete Schedule D, Part II 7 Did the organization aintain collections of works of art, historical treasures, or other siilar assets? If "Yes," coplete Schedule D, Part III 8 Did the organization report an aount in Part, line 21; serve as a custodian for aounts not listed in Part ; or provide credit counseling, debt anageent, credit repair, or debt negotiation services? If "Yes," coplete Schedule D, Part IV 9 Did the organization, directly or through a related organization, hold assets in ter, peranent, or quasi-endowents? If" Yes," coplete Schedule D, Part V 10 Is the organization s answer to any of the following questions "Yes"? If so, coplete Schedule D, Parts VI, VII, VIII, I, or as applicable 11 Did the organization report an aount for land, buildings, and equipent in Part, line 10? If "Yes," coplete Schedule D, Part VI. Did the organization report an aount for investents other-securities in Part, line 12 that is 5% or ore of its total assets reported in Part, line 16? If "Yes," coplete Schedule D, Part VII. Did the organization report an aount for investents-progra related in Part, line 13 that is 5% or ore of its total assets reported in Part, line 16? If "Yes," coplete Schedule D, Part VIII. Did the organization report an aount for other assets in Part, line 15 that is 5% or ore of its total assets reported in Part, line 16? If "Yes," coplete Schedule D, Part I. Did the organization report an aount for other liabilities in Part, line 25? If "Yes," coplete Schedule D, Part. % % % % % Did the organization s separate or consolidated financial stateents for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48? If "Yes," coplete Schedule D, Part. 12 Did the organization obtain separate, independent audited financial stateents for the tax year? If "Yes," coplete Schedule D, Parts I, II, and III A Was the organization included in consolidated, independent audited financial stateent for the tax year? Yes No If "Yes," copleting Schedule D, Parts I, II, and III is optional. 12A 13 Is the organization a school described in section 170(1)(A)(ii)? If "Yes," coplete Schedule E a Did the organization aintain an office, eployees, or agents outside of the United States? 14a b Did the organization have aggregate revenues or expenses of ore than 10,000 fro grantaking, fundraising, business, and progra service activities outside the United States? If "Yes," coplete Schedule F, Part I 14b 15 Did the organization report on Part I, colun (A), line 3, ore than 5,000 of grants or assistance to any organization or entity located outside the United States? If "Yes," coplete Schedule F, Part II Did the organization report on Part I, colun (A), line 3, ore than 5,000 of aggregate grants or assistance to individuals located outside the United States? If "Yes," coplete Schedule F, Part III Did the organization report a total of ore than 15,000 of expenses for professional fundraising services on Part I, colun (A), lines 6 and 11e? If "Yes," coplete Schedule G, Part I Did the organization report ore than 15,000 total of fundraising event gross incoe and contributions on Part VIII, lines 1c and 8a? If "Yes," coplete Schedule G, Part II Did the organization report ore than 15,000 of gross incoe fro gaing activities on Part VIII, line 9a? If "Yes," coplete Schedule G, Part III Did the organization operate one or ore hospitals? If "Yes," coplete Schedule H 20 Yes No For 990 (2009) 9E RC V KALEIDA PAGE 4

7 For 990 (2009) Page 4 Part IV Checklist of Required Schedules (continued) Did the organization report ore than 5,000 of grants and other assistance to governents and organizations in the United States on Part I, colun (A), line 1? If "Yes," coplete Schedule I, Parts I and II Did the organization report ore than 5,000 of grants and other assistance to individuals in the United States on Part I, colun (A), line 2? If "Yes," coplete Schedule I, Parts I and III Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about copensation of the organization's current and forer officers, directors, trustees, key eployees, and highest copensated eployees? If "Yes," coplete Schedule J a Did the organization have a tax-exept bond issue with an outstanding principal aount of ore than 100,000 as of the last day of the year, that was issued after Deceber 31, 2002? If "Yes," answer lines 24b through 24d and coplete Schedule K. If No, go to question 25 24a b Did the organization invest any proceeds of tax-exept bonds beyond a teporary period exception? 24b c Did the organization aintain an escrow account other than a refunding escrow at any tie during the year to defease any tax-exept bonds? 24c d Did the organization act as an "on behalf of" issuer for bonds outstanding at any tie during the year? 24d 25 a Section 501(3) and 501(4) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," coplete Schedule L, Part I 25a 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 Fors 990 or 990-EZ? If "Yes," coplete Schedule L, Part I 25b 26 Was a loan to or by a current or forer officer, director, trustee, key eployee, highly copensated eployee, or disqualified person outstanding as of the end of the organization's tax year? If "Yes," coplete Schedule L, Part II Did the organization provide a grant or other assistance to an officer, director, trustee, key eployee, substantial contributor, or a grant selection coittee eber, or to a person related to such an individual? If "Yes," coplete Schedule L, Part III 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 forer officer, director, trustee, or key eployee? If "Yes," coplete Schedule L, Part IV 28a b A faily eber of a current or forer officer, director, trustee, or key eployee? If "Yes," coplete Schedule L, Part IV 28b c An entity of which a current or forer officer, director, trustee, or key eployee of the organization (or a faily eber) was an officer, director, trustee, or direct or indirect owner? If "Yes," coplete Schedule L, Part IV 28c 29 Did the organization receive ore than 25,000 in non-cash contributions? If "Yes," coplete Schedule M Did the organization receive contributions of art, historical treasures, or other siilar assets, or qualified conservation contributions? If "Yes," coplete Schedule M Did the organization liquidate, terinate, or dissolve and cease operations? If "Yes," coplete Schedule N, Part I Did the organization sell, exchange, dispose of, or transfer ore than 25% of its net assets? If "Yes," coplete Schedule N, Part II Did the organization own 100% of an entity disregarded as separate fro the organization under Regulations sections and ? If "Yes," coplete Schedule R, Part I Was the organization related to any tax-exept or taxable entity? If "Yes," coplete Schedule R, Parts II, III, IV, and V, line Is any related organization a controlled entity within the eaning of section 512(13)? If "Yes," coplete Schedule R, Part V, line Section 501(3) organizations. Did the organization ake any transfers to an exept non-charitable related organization? If "Yes," coplete Schedule R, Part V, line Did the organization conduct ore than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal incoe tax purposes? If "Yes," coplete Schedule R, Part VI Did the organization coplete Schedule O and provide explanations in Schedule O for Part VI, lines 11 and 19? Note. All For 990 filers are required to coplete Schedule O. 38 For 990 (2009) Yes No 9E RC V KALEIDA PAGE 5

8 For 990 (2009) Page 5 Part V b 4a Stateents Regarding Other IRS Filings and Tax Copliance 1a Enter the nuber reported in Box 3 of For 1096, Annual Suary and Transittal of U.S. Inforation Returns. Enter -0- if not applicable 1a 576 b Enter the nuber of Fors W-2G included in line 1a. Enter -0- if not applicable 1b 0 c Did the organization coply with backup withholding rules for reportable payents to vendors and reportable gaing (gabling) winnings to prize winners? 1c 2a Enter the nuber of eployees reported on For W-3, Transittal of Wage and Tax Stateents, filed for the calendar year ending with or within the year covered by this return 2a 10,065 b If at least one is reported on line 2a, did the organization file all required federal eployent tax returns? 2b Note. If the su of lines 1a and 2a is greater than 250, you ay be required to e-file this return. (see instructions) 3a Did the organization have unrelated business gross incoe of 1,000 or ore during the year covered by this return? 3a If "Yes," has it filed a For 990-T for this year? If "No," provide an explanation in Schedule O 3b At any tie 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 b If Yes, enter the nae of the foreign country: I See the instructions for exceptions and filing requireents for For TD F , Report of Foreign Bank and Financial Accounts. 5a Was the organization a party to a prohibited tax shelter transaction at any tie during the tax year? 5a b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? 5b c If "Yes," to question 5a or 5b, did the organization file For 8886-T, Disclosure by Tax-Exept Entity Regarding Prohibited Tax Shelter Transaction? 5c 6a Does the organization have annual gross receipts that are norally greater than 100,000, and did the organization solicit any contributions that were not tax deductible? 6a b If "Yes," did the organization include with every solicitation an express stateent that such contributions or gifts were not tax deductible? 6b 7 Organizations that ay receive deductible contributions under section 170. a Did the organization receive a payent in excess of 75 ade partly as a contribution and partly for goods and services provided to the payor? 7a 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 For 8282? 7c d If "Yes," indicate the nuber of Fors 8282 filed during the year 7d e Did the organization, during the year, receive any funds, directly or indirectly, to pay preius on a personal benefit contract? 7e f Did the organization, during the year, pay preius, directly or indirectly, on a personal benefit contract? 7f g For all contributions of qualified intellectual property, did the organization file For 8899 as required? 7g h For contributions of cars, boats, airplanes, and other vehicles, did the organization file a For 1098-C as required? 7h 8 Sponsoring organizations aintaining donor advised funds and section 509(3) supporting organizations. Did the supporting organization, or a donor advised fund aintained by a sponsoring organization, have excess business holdings at any tie during the year? 8 9 Sponsoring organizations aintaining donor advised funds. a Did the organization ake any taxable distributions under section 4966? 9a b Did the organization ake a distribution to a donor, donor advisor, or related person? 9b 10 Section 501(7) organizations. Enter: a Initiation fees and capital contributions included on Part VIII, line 12 10a b Gross receipts, included on For 990, Part VIII, line 12, for public use of club facilities 10b 11 Section 501(12) organizations. Enter: a Gross incoe fro ebers or shareholders 11a b Gross incoe fro other sources (Do not net aounts due or paid to other sources against aounts due or received fro the.) 11b 12 a Section 4947(1) non-exept charitable trusts. Is the organization filing For 990 in lieu of For 1041? 12a b If "Yes," enter the aount of tax-exept interest received or accrued during the year 12b 9E Yes No For 990 (2009) 8RC V KALEIDA PAGE 6

9 Part VI Governance, Manageent, 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 circustances, processes, or changes in Schedule O. See instructions. Section A. Governing Body and Manageent For 990 (2009) Page 6 1a b a b 8 a b 9 10a b 11 11A 12a b a Enter the nuber of voting ebers of the governing body Enter the nuber of voting ebers that are independent Did any officer, director, trustee, or key eployee have a faily relationship or a business relationship with any other officer, director, trustee, or key eployee? Did the organization delegate control over anageent duties custoarily perfored by or under the direct supervision of officers, directors or trustees, or key eployees to a anageent copany or other person? Did the organization ake any significant changes to its organizational docuents since the prior For 990 was filed? Did the organization becoe aware during the year of a aterial diversion of the organization's assets? Does the organization have ebers or stockholders? Does the organization have ebers, stockholders, or other persons who ay elect one or ore ebers of the governing body? Are any decisions of the governing body subject to approval by ebers, stockholders, or other persons? Did the organization conteporaneously docuent the eetings held or written actions undertaken during the year by the following: The governing body? Each coittee with authority to act on behalf of the governing body? 8a 8b Is there any officer, director, trustee, or key eployee listed in Part VII, Section A, who cannot be reached at the organization's ailing address? If "Yes," provide the naes and addresses in Schedule O 9a Section B. Policies(This Section B requests inforation about policies not required by the Internal Revenue Code.) c a b b Does the organization have local chapters, branches, or affiliates? If "Yes," does the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with those of the organization? Has the organization provided a copy of this For 990 to all ebers of its governing body before filing the for? Describe in Schedule O the process, if any, used by the organization to review this For 99 Does the organization have a written conflict of interest policy? If "No," go to line 13 Are officers, directors or trustees, and key eployees required to disclose annually interests that could give rise to conflicts? Does the organization regularly and consistently onitor and enforce copliance with the policy? If "Yes," describe in Schedule O how this is done Does the organization have a written whistleblower policy? Does the organization have a written docuent retention and destruction policy? Did the process for deterining copensation of the following persons include a review and approval by independent persons, coparability data, and conteporaneous substantiation of the deliberation and decision? The organization's CEO, Executive Director, or top anageent official Other officers or key eployees of the organization If "Yes" to line 15a or 15b, describe the process in Schedule O. (See instructions.) Did the organization invest in, contribute assets to, or participate in a joint venture or siilar arrangeent with a taxable entity during the year? If "Yes," has the organization adopted a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangeents under applicable federal tax law, and taken steps to safeguard the organization's exept status with respect to such arrangeents? 1a 1b b Section C. Disclosure 17 List the states with which a copy of this For 990 is required to be filed NY, I 18 Section 6104 requires an organization to ake its Fors 1023 (or 1024 if applicable), 990, and 990-T (501(3)s only) available for public inspection. Indicate how you ake these available. Check all that apply. Own website Another's website Upon request 19 Describe in Schedule O whether (and if so, how), the organization akes its governing docuents, conflict of interest policy, and financial stateents available to the public. 20 State the nae, physical address, and telephone nuber of the person who possesses the books and records of the organization: IJON SWIATKOWSKI 726 ECHANGE STREET BUFFALO, NY For 990 (2009) 9E RC V KALEIDA PAGE a 7b 10a 10b 11 12a 12b 12c a 15b 16a Yes Yes No No

10 Copensation of Officers, Directors, Trustees, Key Eployees, Highest Copensated Eployees, and Independent Contractors For 990 (2009) Page 7 Part VII Section A. Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees 1a Coplete this table for all persons required to be listed. Report copensation for the calendar year ending with or within the organization's tax year. Use Schedule J-2 if additional space is needed. % % List all of the organization's current officers, directors, trustees (whether individuals or organizations), regardless of aount of copensation. Enter -0- in coluns (D), (E), and (F) if no copensation was paid. List all of the organization's current key eployees. See instructions for definition of "key eployee." List the organization's five current highest copensated eployees (other than an officer, director, trustee, or key eployee) who received reportable copensation (Box 5 of For W-2 and/or Box 7 of For 1099-MISC) of ore than 100,000 fro the organization and any related organizations. % % List all of the organization's forer officers, key eployees, and highest copensated eployees who received ore than 100,000 of reportable copensation fro the organization and any related organizations. List all of the organization's forer directors or trustees that received, in the capacity as a forer director or trustee of the organization, ore than 10,000 of reportable copensation fro the organization and any related organizations. List persons in the following order: individual trustees or directors; institutional trustees; officers; key eployees; highest copensated eployees; and forer such persons. 9E Check this box if the organization did not copensate any current officer, director, or trustee. (A) (B) (C) (D) (E) (F) Nae and Title Average hours per week Position (check all that apply) Individual trustee or director Institutional trustee Officer Key eployee Highest copensated eployee Forer Reportable copensation fro the organization (W-2/1099-MISC) Reportable copensation fro related organizations (W-2/1099-MISC) Estiated aount of other copensation fro the organization and related organizations MATHEW L. BROWN DIRECTOR 1.00 JAMES BUDNY MD E-OFFICIO WITHOUT VOTE 1.00 EVAN EVANS MD DIRECTOR ,00 ROBERT HALONEN PH.D. DIRECTOR 1.00 MURIEL HOWARD PH.D. DIRECTOR 1.00 JAMES KASKIE PRES/CEO E-OFFICIO WITH VOTE ,282, ,139. JOYCE P. KORZEN RN DIRECTOR 1.00 JOHN R. KOELMEL VICE CHAIR 1.00 HON JAMES A. W. MCLEOD SECRETARY 1.00 DAVID A. MILLING MD DIRECTOR 1.00 HERMAN S. MOGAVERO JR. MD DIRECTOR 1.00 DALE N. SCHUMACHER MD DIRECTOR 1.00 FRANCISCO M. VASQUEZ PH.D. DIRECTOR 1.00 EDWARD F. WALSH JR. CHAIRMAN 1.00 ROBERT M. ZAK TREASURER 1.00 ROBERT NOLAN GENERAL COUNSEL , ,672. For 990 (2009) 8RC V KALEIDA PAGE 8

11 Section A. Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees (continued) For 990 (2009) Page 8 Part VII (A) (B) (C) (D) (E) (F) Nae and title Average hours per week Position (check all that apply) Individual trustee or director Institutional trustee Officer Key eployee Highest copensated eployee Forer Reportable copensation fro the organization (W-2/1099-MISC) Reportable copensation fro related organizations (W-2/1099-MISC) Estiated aount of other copensation fro the organization and related organizations CONNIE VARI COO , ,306. JOSEPH KESSLER CFO , ,343. MARGARET PAROSKI MD CMO , ,765. D. ERIC POGUE CHIEF HUMAN RESOURCE OFFICER , ,265. CHERYL KLASS PRESIDENT-WCHOB , ,848. LAWRENCE ZIELINSKI PRESIDENT-BGH , ,133. DONALD BOYD SVP BUSINESS DEVELOPMENT , ,398. CHRISTOPHER LANE PRESIDENT-MFS , ,247. TAMARA OWEN PRESIDENT-MILLARD GATES , ,873. JAMES FOSTER, MD CMO-WCHOB , ,343. FRANCIS MEYER JR. VP INFO SYSTEMS TECHNOLOGY ,40 22,194. JONATHAN SWIATKOWSKI VP FINANCE & BUSI OPERATIONS ,81 25,187. BARBARA LOSI VP CHIEF ADMINISTRATIVE OFR , ,703. 1b Total CONTINUED AT SCHEDULE J-2 I 10,280, ,91 2 Total nuber of individuals (including but not liited to those listed above) who received ore than 100,000 in reportable copensation fro the organization 299 I 3 Did the organization list any forer officer, director or trustee, key eployee, or highest copensated eployee on line 1a? If "Yes," coplete Schedule J for such individual 3 4 For any individual listed on line 1a, is the su of reportable copensation and other copensation fro the organization and related organizations greater than 150,000? If "Yes," coplete Schedule J for such individual 4 5 Did any person listed on line 1a receive or accrue copensation fro any unrelated organization for services rendered to the organization? If "Yes," coplete Schedule J for such person 5 Section B. Independent Contractors 1 Coplete this table for your five highest copensated independent contractors that received ore than 100,000 of copensation fro the organization. ATTACHMENT 4 (A) Nae and business address (B) Description of services Yes (C) Copensation No 2 Total nuber of independent contractors (including but not liited to those listed above) who received ore than 100,000 in copensation fro the organization 89 I For 990 (2009) 9E RC V KALEIDA PAGE 9

12 For 990 (2009) Page 9 Part VIII Contributions, gifts, grants and other siilar aounts Progra Service Revenue Other Revenue 9E a b c d e Stateent of Revenue f All other contributions, gifts, grants, and siilar aounts not included above 1f 6,989,201. g contributions included in lines 1a-1f: 4,801,476. h Total. Add lines 1a-1f Business Code 2a b c d e f g 6a b c d 7a b and sales expenses 3,468, ,01 c Gain or (loss) -3,468, ,01 d Net gain or (loss) 8a 11a b c Federated capaigns Mebership dues Fundraising events Related organizations Governent grants (contributions) NET PATIENT All other progra service revenue Total. Add lines 2a-2f 1a 1b 1c 1d 1e Investent incoe (including dividends, interest, and other siilar aounts) Incoe fro investent of tax-exept bond proceeds Royalties Gross Rents (i) Real (ii) al I I I Less: rental expenses Rental incoe or (loss) 2,122,951. Net rental incoe or (loss) Gross aount fro sales of (i) Securities (ii) Other assets other than inventory Less: cost or other basis Gross incoe fro fundraising events (not including of contributions reported on line 1c). I I See Part IV, line 18 a b Less: direct expenses b c Net incoe or (loss) fro fundraising events I 9a Gross incoe fro gaing activities. See Part IV, line 19 a b Less: direct expenses b c Net incoe or (loss) fro gaing activities I 10a Gross sales of inventory, less returns and allowances a b Less: cost of goods sold b c Net incoe or (loss) fro sales of inventory I Miscellaneous Revenue Business Code 4,561,70 75,153,324. I (A) Total revenue 86,704, (B) Related or exept function revenue SERVICE REVENUE ,052,823,184. 1,052,823,184. (C) Unrelated business revenue MANAGEMENT FEES , ,543. LABORATORY SERV ,071,152. 4,071,152. ALL OTHER PROGRAM SERVICE REVENUE 1,057,084,879. (D) Revenue excluded fro tax under sections 512, 513, or 514 ATTACHMENT 5 4,427, , ,908. 5,154,026. 2,122,951. VENDOR REBATES ,118,412. 1,118,412. d All other revenue ,180,269. 1,362, ,051. e Total. Add lines 11a-11d 8,887, Total Revenue. See instructions 1,155,716,416. 1,054,662,959. 4,234,27 10,114,962. For 990 (2009) 2,122, ,483. 2,064, ,510, ,510,108. UNIVERSITY LEASE INCOME ,232,564. 1,232,564. CAFETERIA ,355,961. 4,355,961. 8RC V KALEIDA PAGE 9

13 For 990 (2009) Page 10 Part I Stateent of Functional Expenses Section 501(3) and 501(4) organizations ust coplete all coluns. All other organizations ust coplete colun (A) but are not required to coplete coluns (B), (C), and (D). Do not include aounts reported on lines 6b, 7b, 8b, 9b, and 10b of Part VIII. 1 2 Grants and other assistance to governents and organizations in the U.S. See Part IV, line 21 Grants and other assistance to individuals in the U.S. See Part IV, line 22 3 Grants and other assistance to governents, organizations, and individuals outside the U.S. See Part IV, lines 15 and 16 4 Benefits paid to or for ebers 5 Copensation of current officers, directors, trustees, and key eployees 6 Copensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(3)(B) 7 Other salaries and wages 8 Pension plan contributions (include section 401(k) and section 403 eployer contributions) Other eployee benefits a b c d e f g a b c d e f taxes Fees for services (non-eployees): Manageent Legal Accounting Lobbying Professional fundraising services. See Part IV, line 17 Investent anageent fees Other Advertising and prootion Office expenses Inforation technology Royalties Occupancy Travel Payents of travel or entertainent expenses for any federal, state, or local public officials Conferences, conventions, and eetings Interest Payents to affiliates Depreciation, depletion, and aortization Insurance Other expenses. Iteize expenses not covered above. (Expenses grouped together and labeled iscellaneous ay not exceed 5% of total expenses shown on line 25 below.) I Total functional expenses. Add lines 1 through 24f 26 Joint Costs. Check here If following SOP Coplete this line only if the organization reported in colun (B) joint costs fro a cobined educational capaign and fundraising solicitation 9E (A) (B) (C) (D) Total expenses Progra service Manageent and Fundraising expenses general expenses expenses 179,57 179,57 7,937,411. 7,937, ,267, ,008, ,258, ,855, ,250, ,605, ,544, ,126,451. 4,418,322. 1,327, , , ,00 420,00 108,443, ,162,388. 7,281,063. 3,155,013. 1,410,027. 1,744,986. 3,294,958. 2,102,941. 1,192,017. 5,890,033. 3,627,214. 2,262,819. 1,173, , , ,597, ,080,97 2,516, ,424, ,939, ,484, ,200, ,403,945. 3,796,939. HEALTH CARE SUPPLIES 202,362, ,271, ,45 BAD DEBT EPENSE 26,706, ,706,291. EQUIPMENTAL RENTAL & MAINT 20,151,877. 9,053, ,098,346. UTILITIES 11,615,432. 9,320,94 2,294,492. SERVICE CONTRACTS 7,285,58 5,256,622. 2,028,958. All other expenses 21,496, ,407,791. 9,088,732. 1,080,329, ,674, ,655,308. For 990 (2009) 8RC V KALEIDA PAGE 11

14 For 990 (2009) Page 11 Part Assets Liabilities Net Assets or Fund Balances Balance Sheet Cash - non-interest-bearing Savings and teporary cash investents Pledges and grants receivable, net Accounts receivable, net Receivables fro current and forer officers, directors, trustees, key eployees, and highest copensated eployees. Coplete Part II of Schedule L Receivables fro other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(3)(B). Coplete Part II of Schedule L Notes and loans receivable, net Inventories for sale or use Prepaid expenses and deferred charges 10a other basis. Coplete Part VI of Schedule D Less: accuulated depreciation 10b Investents - publicly traded securities Investents - other securities. See Part IV, line 11 Investents - progra-related. See Part IV, line 11 Intangible assets Other assets. See Part IV, line 11 Total assets. Add lines 1 through 15 (ust equal line 34) Accounts payable and accrued expenses Grants payable Deferred revenue Tax-exept bond liabilities a Land, buildings, and equipent: cost or b Escrow or custodial account liability. Coplete Part IV of Schedule D Payables to current and forer officers, directors, trustees, key eployees, highest copensated eployees, and disqualified persons. Coplete Part II of Schedule L Secured ortgages and notes payable to unrelated third parties Unsecured notes and loans payable to unrelated third parties Other liabilities. Coplete Part of Schedule D Total liabilities. Add lines 17 through 25 Organizations that follow SFAS 117, check here I and coplete lines 27 through 29, and lines 33 and 34. Unrestricted net assets Teporarily restricted net assets Peranently restricted net assets Organizations that do not follow SFAS 117, check here and coplete lines 30 through 34. Capital stock or trust principal, or current funds Paid-in or capital surplus, or land, building, or equipent fund Retained earnings, endowent, accuulated incoe, or other funds Total net assets or fund balances Total liabilities and net assets/fund balances (A) Beginning of year (B) End of year 605,69 80,547, ,669, ,50 118,038, ,737, ,850,852. 8,735, ,836,253. 8,216, ,593, ,691, c 266,166, ,890, ,584, ,347, ,186, ,467, ,762, ,611, ,300, ,211, ,289, ,745, I ,631, ,802, ,628, ,737,788. ATCH 6 2,581,549. 8,152, ,175, ,116, ,731, ,208, ,053, ,548,89 103,960, ,762, ,873, ,611,492. For 990 (2009) 9E RC V KALEIDA PAGE 12

15 For 990 (2009) Page 12 1 Part I 2a b c d 3a b Financial Stateents and Reporting Accounting ethod used to prepare the For 990: Cash Accrual Other If the organization changed its ethod of accounting fro a prior year or checked "Other," explain in Schedule O. Were the organization's financial stateents copiled or reviewed by an independent accountant? Were the organization's financial stateents audited by an independent accountant? If "Yes" to line 2a or 2b, does the organization have a coittee that assues responsibility for oversight of the audit, review, or copilation of its financial stateents and selection of an independent accountant? If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. If "Yes" to line 2a or 2b, check a box below to indicate whether the financial stateents for the year were issued on a consolidated basis, separate basis, or both: Separate basis Consolidated basis Both consolidated and separate basis 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? 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. 2a 2b 2c 3a 3b Yes No For 990 (2009) 9E RC V KALEIDA PAGE 13

16 SCHEDULE A (For 990 or 990-EZ) Departent of the Treasury Internal Revenue Service Public Charity Status and Public Support Coplete if the organization is a section 501(3) organization or a section 4947(1) nonexept charitable trust. I Attach to For 990 or For 990-EZ. I See separate instructions. OMB À¾ ½ Open to Public Inspection Nae of the organization Eployer identification nuber KALEIDA HEALTH Part I Reason for Public Charity Status (All organizations ust coplete this part.) See instructions. The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.) 1 2 A church, convention of churches, or association of churches described in A school described in section 170(1)(A)(ii). (Attach Schedule E.) section 170(1)(A)(i). 3 A hospital or a cooperative hospital service organization described in section 170(1)(A)(iii). 4 A edical research organization operated in conjunction with a hospital described in section 170(1)(A)(iii). Enter the hospital's nae, city, and state: 5 An organization operated for the benefit of a college or university owned or operated by a governental unit described in section 170(1)(A)(iv). (Coplete Part II.) e f g h A federal, state, or local governent or governental unit described in section 170(1)(A)(v). An organization that norally receives a substantial part of its support fro a governental unit or fro the general public described in section 170(1)(A)(vi). (Coplete Part II.) A counity trust described in section 170(1)(A)(vi). (Coplete Part II.) An organization that norally receives: (1) ore than 33 1/3 % of its support fro contributions, ebership fees, and gross receipts fro activities related to its exept functions - subject to certain exceptions, and (2) no ore than 33 1/3% of its support fro gross investent incoe and unrelated business taxable incoe (less section 511 tax) fro businesses acquired by the organization after June 30, See section 509(2). (Coplete Part III.) An organization organized and operated exclusively to test for public safety. See section 509(4). An organization organized and operated exclusively for the benefit of, to perfor the functions of, or to carry out the purposes of one or ore publicly supported organizations described in section 509(1) or section 509(2). See section 509(3). Check the box that describes the type of supporting organization and coplete lines 11e through 11h. a Type I b Type II c Type III - Functionally integrated d Type III - Other By checking this box, I certify that the organization is not controlled directly or indirectly by one or ore disqualified persons other than foundation anagers and other than one or ore publicly supported organizations described in section 509(1) or section 509(2). If the organization received a written deterination fro the IRS that it is a Type I, Type II, or Type III supporting organization, check this box Since August 17, 2006, has the organization accepted any gift or contribution fro any of the following persons? (i) A person who directly or indirectly controls, either alone or together with persons described in (ii) Yes No and (iii) below, the governing body of the supported organization? 11g(i) (ii) A faily eber of a person described in (i) above? 11g(ii) (iii) A 35% controlled entity of a person described in (i) or (ii) above? 11g(iii) Provide the following inforation about the supported organization(s). (i) Nae of supported organization (ii) EIN (iii) Type of organization (described on lines 1-9 above or IRC section (see instructions)) (iv) Is the organization in col. (i) listed in your governing docuent? (v) Did you notify the organization in col. (i) of your support? (vi) Is the organization in col. (i) organized in the U.S.? Yes No Yes No Yes No (vii) Aount of support Total For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 990 or 990-EZ. Schedule A (For 990 or 990-EZ) E RC V KALEIDA PAGE 14

17 Part II Support Schedule for Organizations Described in Sections 170(1)(A)(iv) and 170(1)(A)(vi) (Coplete only if you checked the box on line 5, 7, or 8 of Part I.) Section A. Public Support (e) 2009 (f) Total Schedule A (For 990 or 990-EZ) 2009 Page 2 Calendar year (or fiscal year beginning in) I 1 Gifts, grants, contributions, and ebership fees received. (Do not include any "unusual grants.") 2 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf 3 The value of services or facilities furnished by a governental 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 governental unit or publicly supported organization) included on line 1 that exceeds 2% of the aount shown on line 11, colun (f) 6 Public support. Subtract line 5 fro line 4. Section B. Total Support Calendar year (or fiscal year beginning in) I 7 Aounts fro line 4 8 Gross incoe fro interest, dividends, payents received on securities loans, rents, royalties and incoe fro siilar sources 9 Net incoe fro unrelated business activities, whether or not the business is regularly carried on (e) 2009 (f) Total 10 Other incoe. Do not include gain or loss fro the sale of capital assets (Explain in Part IV.) 11 Total support. Add lines 7 through Gross receipts fro related activities, etc. (see instructions) First five years. If the For 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(3) organization, check this box and stop here Section C. Coputation of Public Support Percentage 14 Public support percentage for 2009 (line 6, colun (f) divided by line 11, colun (f)) Public support percentage fro 2008 Schedule A, Part II, line a 33 1/3 % support test If the organization did not check the box on line 13, and line 14 is 33 1/3 % or ore, check this box and stop here. The organization qualifies as a publicly supported organization b 33 1/3 % support test If the organization did not check a box on line 13 or 16a, and line 15 is 33 1/3 % or ore, check this box and stop here. The organization qualifies as a publicly supported organization 17a 10%-facts-and-circustances test If the organization did not check a box on line 13, 16a or 16b, and line 14 is 10% or ore, and if the organization eets the "facts-and-circustances" test, check this box and stop here. Explain in Part IV how the organization eets the "facts-and-circustances test. The organization qualifies as a publicly supported organization b 10%-facts-and-circustances test If the organization did not check a box on line 13, 16a, 16b, or 17a, and line 15 is 10% or ore, and if the organization eets the "facts-and-circustances" test, check this box and stop here. Explain in Part IV how the organzation eets the "facts-and-circustances" 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 I I I I I I % % Schedule A (For 990 or 990-EZ) E RC V KALEIDA PAGE 15

18 Part III Support Schedule for Organizations Described in Section 509(2) (Coplete only if you checked the box on line 9 of Part I.) Section A. Public Support Schedule A (For 990 or 990-EZ) 2009 Page 3 I Calendar year (or fiscal year beginning in) (e) 2009 (f) Total 1 Gifts, grants, contributions, and ebership fees received. (Do not include any "unusual grants.") 2 Gross receipts fro adissions, erchandise sold or services perfored, or facilities furnished in any activity that is related to the organization's tax-exept purpose 3 Gross receipts fro activities that are not an unrelated trade or business under section Tax revenues levied for the organization's benefit and either paid to or expended on its behalf 5 The value of services or facilities furnished by a governental unit to the organization without charge 6 Total. Add lines 1 through 5 7a Aounts included on lines 1, 2, and 3 received fro disqualified persons b Aounts included on lines 2 and 3 received fro other than disqualified persons that exceed the greater of 5,000 or 1% of the aount on line 13 for the year c Add lines 7a and 7b 8 Public support (Subtract line 7c fro line 6.) Section B. Total Support I Calendar year (or fiscal year beginning in) 9 Aounts fro line (e) 2009 (f) Total 10 a Gross incoe fro interest, dividends, payents received on securities loans, rents, royalties and incoe fro siilar sources b Unrelated business taxable incoe (less section 511 taxes) fro businesses acquired after June 30, 1975 c Add lines 10a and 10b 11 Net incoe fro unrelated business activities not included in line 10b, whether or not the business is regularly carried on 12 Other incoe. Do not include gain or loss fro the sale of capital assets (Explain in Part IV.) 13 Total support. (Add lines 9, 10c, 11, and 12.) 14 First five years. If the For 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(3) organization, check this box and stop here Section C. Coputation of Public Support Percentage 15 Public support percentage for 2009 (line 8, colun (f) divided by line 13, colun (f)) 16 Public support percentage fro 2008 Schedule A, Part III, line 15 Section D. Coputation of Investent Incoe Percentage Investent incoe percentage for 2009 (line 10c, colun (f) divided by line 13, colun (f)) Investent incoe percentage fro 2008 Schedule A, Part III, line a 33 1/3 % support tests If the organization did not check the box on line 14, and line 15 is ore than 33 1/3 %, and line b 17 is not ore than 33 1/3 %, check this box and stop here. The organization qualifies as a publicly supported organization 33 1/3 % support tests If the organization did not check a box on line 14 or line 19a, and line 16 is ore than 33 1/3 %, and line 18 is not ore 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 9E Schedule A (For 990 or 990-EZ) RC V KALEIDA PAGE I I I % % % %

19 Schedule A (For 990 or 990-EZ) 2009 Page 4 Part IV Suppleental Inforation. Coplete this part to provide the explanation required by Part II, line 10; Part II, line 17a or 17b; or Part III, line 12. Provide any other additional inforation. See instructions Schedule A (For 990 or 990-EZ) E RC V KALEIDA PAGE 17

20 Schedule B Schedule of Contributors OMB Attach to For 990, 990-EZ, or 990-PF. À¾ ½ I (For 990, 990-EZ, or 990-PF) Departent of the Treasury Internal Revenue Service Nae of the organization Eployer identification nuber KALEIDA HEALTH Organization type (check one): Filers of: Section: For 990 or 990-EZ 501( 3 ) (enter nuber) organization 4947(1) nonexept charitable trust not treated as a private foundation 527 political organization For 990-PF 501(3) exept private foundation 4947(1) nonexept charitable trust treated as a private foundation 501(3) taxable private foundation Check if your organization is covered by the General Rule or a Special Rule. Note. Only a section 501(7), (8), or (10) organization can check boxes for both the General Rule and a Special Rule. See instructions. General Rule For an organization filing For 990, 990-EZ, or 990-PF that received, during the year, 5,000 or ore (in oney or property) fro any one contributor. Coplete Parts I and II. Special Rules For a section 501(3) organization filing For 990 or 990-EZ that et the 33 1/3 % support test of the regulations under sections 509(1) and 170(1)(A)(vi), and received fro any one contributor, during the year, a contribution of the greater of (1) 5,000 or (2) 2% of the aount on (i) For 990, Part VIII, line 1h or (ii) For 990-EZ, line 1. Coplete Parts I and II. For a section 501(7), (8), or (10) organization filing For 990 or 990-EZ that received fro any one contributor, during the year, aggregate contributions of ore than 1,000 for use exclusively for religious, charitable, scientific, literary, or educational purposes, or the prevention of cruelty to children or anials. Coplete Parts I, II, and III. For a section 501(7), (8), or (10) organization filing For 990 or 990-EZ that received fro any one contributor, during the year, contributions for use exclusively for religious, charitable, etc., purposes, but these contributions did not aggregate to ore than 1,00 If this box is checked, enter here the total contributions that were received during the year for an exclusively religious, charitable, etc., purpose. Do not coplete any of the parts unless the General Rule applies to this organization because it received nonexclusively religious, charitable, etc., contributions of 5,000 or ore during the year I Caution. An organization that is not covered by the General Rule and/or the Special Rules does not file Schedule B (For 990, 990-EZ, or 990-PF), but it ust answer "No" on Part IV, line 2 of its For 990, or check the box on line H of its For 990-EZ, or on line 2 of its For 990-PF, to certify that it does not eet the filing requireents of Schedule B (For 990, 990-EZ, or 990-PF). For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 990, 990-EZ, or 990-PF. Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 2

21 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,185. (Coplete Part II if there is Nae, address, and ZIP ,204. (Coplete Part II if there is Nae, address, and ZIP ,30 (Coplete Part II if there is Nae, address, and ZIP ,868. (Coplete Part II if there is Nae, address, and ZIP ,56 (Coplete Part II if there is Nae, address, and ZIP ,15 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 3

22 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,373. (Coplete Part II if there is Nae, address, and ZIP ,40 (Coplete Part II if there is Nae, address, and ZIP ,30 (Coplete Part II if there is Nae, address, and ZIP ,869. (Coplete Part II if there is Nae, address, and ZIP ,50 (Coplete Part II if there is Nae, address, and ZIP ,10 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 4

23 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,25 (Coplete Part II if there is Nae, address, and ZIP ,502. (Coplete Part II if there is Nae, address, and ZIP ,415. (Coplete Part II if there is Nae, address, and ZIP ,15 (Coplete Part II if there is Nae, address, and ZIP ,898. (Coplete Part II if there is Nae, address, and ZIP ,195. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 5

24 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,99 (Coplete Part II if there is Nae, address, and ZIP ,748. (Coplete Part II if there is Nae, address, and ZIP ,875. (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,50 (Coplete Part II if there is Nae, address, and ZIP ,75 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 6

25 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,226. (Coplete Part II if there is Nae, address, and ZIP ,92 (Coplete Part II if there is Nae, address, and ZIP ,554. (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,177. (Coplete Part II if there is Nae, address, and ZIP ,50 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 7

26 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,305. (Coplete Part II if there is Nae, address, and ZIP ,862. (Coplete Part II if there is Nae, address, and ZIP ,331. (Coplete Part II if there is Nae, address, and ZIP ,65 (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,895. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 8

27 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,184. (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,50 (Coplete Part II if there is Nae, address, and ZIP ,012. (Coplete Part II if there is Nae, address, and ZIP ,895. (Coplete Part II if there is Nae, address, and ZIP ,759. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 9

28 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,50 (Coplete Part II if there is Nae, address, and ZIP ,381. (Coplete Part II if there is Nae, address, and ZIP ,439. (Coplete Part II if there is Nae, address, and ZIP ,957. (Coplete Part II if there is Nae, address, and ZIP ,594. (Coplete Part II if there is Nae, address, and ZIP ,616. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 10

29 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,156. (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,621. (Coplete Part II if there is Nae, address, and ZIP ,40 (Coplete Part II if there is Nae, address, and ZIP ,873. (Coplete Part II if there is Nae, address, and ZIP ,625. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 11

30 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,151. (Coplete Part II if there is Nae, address, and ZIP ,694. (Coplete Part II if there is Nae, address, and ZIP ,513. (Coplete Part II if there is Nae, address, and ZIP ,69 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 12

31 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,756. (Coplete Part II if there is Nae, address, and ZIP ,189. (Coplete Part II if there is Nae, address, and ZIP ,804. (Coplete Part II if there is Nae, address, and ZIP ,757. (Coplete Part II if there is Nae, address, and ZIP ,007. (Coplete Part II if there is Nae, address, and ZIP ,50 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 13

32 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,50 (Coplete Part II if there is Nae, address, and ZIP ,668. (Coplete Part II if there is Nae, address, and ZIP ,814. (Coplete Part II if there is Nae, address, and ZIP ,90 (Coplete Part II if there is Nae, address, and ZIP ,54 (Coplete Part II if there is Nae, address, and ZIP ,18 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 14

33 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,555,411. (Coplete Part II if there is Nae, address, and ZIP ,629,244. (Coplete Part II if there is Nae, address, and ZIP ,995. (Coplete Part II if there is Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,11 (Coplete Part II if there is Nae, address, and ZIP ,049. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 15

34 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,00 (Coplete Part II if there is Nae, address, and ZIP ,85 (Coplete Part II if there is Nae, address, and ZIP ,253. (Coplete Part II if there is Nae, address, and ZIP ,10 (Coplete Part II if there is Nae, address, and ZIP ,000,00 (Coplete Part II if there is Nae, address, and ZIP ,164. (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 16

35 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part I Eployer identification nuber Part I Contributors (see instructions) Nae, address, and ZIP ,046,636. (Coplete Part II if there is Nae, address, and ZIP ,111,373. (Coplete Part II if there is Nae, address, and ZIP ,045. (Coplete Part II if there is Nae, address, and ZIP + 4 (Coplete Part II if there is Nae, address, and ZIP + 4 (Coplete Part II if there is Nae, address, and ZIP + 4 (Coplete Part II if there is Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 17

36 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part II Eployer identification nuber Part II Property (see instructions) fro Part I FMV (or estiate) (see instructions) Description of noncash property given Date received VARIOUS MEDICAL EQUIPMENT 73 VAR fro Part I 1,555,411. FMV (or estiate) (see instructions) Description of noncash property given Date received VARIOUS MEDICAL EQUIPMENT 74 VAR fro Part I 2,629,244. FMV (or estiate) (see instructions) Description of noncash property given Date received EKOSONIC CONTROL UNIT 75 VAR 8,995. fro Part I 76 FMV (or estiate) (see instructions) Description of noncash property given ARTHRE PUMP SYSTEM - 5,750 CONTINUOUS WAVE III IRRIGATION PUMP 8,250 VAR 14,00 fro Part I Date received FMV (or estiate) (see instructions) Description of noncash property given Date received POWER BOES FOR ATHROSCOPIC SHAVERS 77 VAR 7,11 fro Part I FMV (or estiate) (see instructions) Description of noncash property given Date received PORTABLE VITAL SIGNS MONITOR 78 VAR 6,049. 9E RC Schedule B (For 990, 990-EZ, or 990-PF) (2009) V KALEIDA PAGE 18

37 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page KALEIDA HEALTH of of Part II Eployer identification nuber Part II Property (see instructions) fro Part I FMV (or estiate) (see instructions) Description of noncash property given Date received CFAE SOFTWARE 79 VAR 15,00 fro Part I FMV (or estiate) (see instructions) Description of noncash property given Date received BLANKET FLUID WARMER 80 VAR 7,85 fro Part I 81 FMV (or estiate) (see instructions) Description of noncash property given Date received MRI - 400,000 OFFICE EQUIPMENT - 63,253 VAR 463,253. fro Part I FMV (or estiate) (see instructions) Description of noncash property given Date received FOUR ARTHROSCOPY PUMPS 82 VAR 21,10 fro Part I Description of noncash property given FMV (or estiate) (see instructions) Date received FMV (or estiate) (see instructions) Date received fro Part I Description of noncash property given 9E RC Schedule B (For 990, 990-EZ, or 990-PF) (2009) V KALEIDA PAGE 19

38 Schedule B (For 990, 990-EZ, or 990-PF) (2009) Nae of organization Page of of Part III Eployer identification nuber KALEIDA HEALTH Part III Exclusivelyreligious, charitable, etc., individual contributions to section 501(7), (8), or (10) organizations aggregating ore than 1,000 for the year. (Coplete coluns through (e) and the following line entry. For organizations copleting Part III, enter the total of exclusively religious, charitable, etc., contributions of 1,000 or less for the year. (Enter this inforation once. See instructions.) I fro Part I Purpose of gift Use of gift Description of how gift is held ATTACHMENT 1 (e) Transfer of gift Transferee's nae, address, and ZIP + 4 fro Part I Purpose of gift Relationship of transferor to transferee Use of gift Description of how gift is held (e) Transfer of gift Transferee's nae, address, and ZIP + 4 fro Part I Purpose of gift Relationship of transferor to transferee Use of gift Description of how gift is held (e) Transfer of gift Transferee's nae, address, and ZIP + 4 fro Part I Purpose of gift Relationship of transferor to transferee Use of gift Description of how gift is held (e) Transfer of gift Transferee's nae, address, and ZIP + 4 Relationship of transferor to transferee Schedule B (For 990, 990-EZ, or 990-PF) (2009) 9E RC V KALEIDA PAGE 20

39 SCHEDULE C Political Capaign and Lobbying Activities (For 990 or 990-EZ) For Organizations Exept Fro Incoe Tax Under section 501 and section 527 I Departent of the Treasury IAttach to For 990 or For 990-EZ. I Section 501(3) organizations: Coplete Parts I-A and B. Do not coplete Part I-C. % Section 527 organizations: Coplete Part I-A only. % OMB À¾ ½ Coplete if the organization is described below. Open to Public See separate instructions Internal Revenue Service Inspection If the organization answered "Yes," to For 990, Part IV, line 3, or For 990-EZ, Part VI, line 46 (Political Capaign Activities), then Section 501 (other than section 501(3)) organizations: Coplete Parts I-A and C below. Do not coplete Part I-B. If the organization answered "Yes," to For 990, Part IV, line 4, or For 990-EZ, Part VI, line 47 (Lobbying Activities), then % Section 501(3) organizations that have filed For 5768 (election under section 501(h)): Coplete Part II-A. Do not coplete Part II-B. Section 501(3) organizations that have NOT filed For 5768 (election under section 501(h)): Coplete Part II-B. Do not coplete Part II-A. If the % organization answered "Yes," to For 990, Part IV, line 5 (Proxy Tax), then Section 501(4), (5), or (6) organizations: Coplete Part III. Nae of organization Eployer identification nuber KALEIDA HEALTH Part I-A Coplete if the organization is exept under section 501 or is a section 527 organization. 1 Provide a description of the organization's direct and indirect political capaign activities in Part IV. 2 Political expenditures I 3 Volunteer hours Coplete if the organization is exept under section 501(3). Enter the aount of any excise tax incurred by the organization under section 4955 Enter the aount of any excise tax incurred by organization anagers under section 4955 I If the organization incurred ṃ a section 4955 tax, did it file For 4720 for this year? Was a correction ade? If "Yes," describe in Part IV Part I-B a b Part I-C Coplete if the organization is exept under section 501, except section 501(3). 1 Enter the aount directly expended by the filing organization for section 527 exept function activities I 2 Enter the aount of the filing organization's funds contributed to other organizations for section 527 exept function activities I 3 Total exept function expenditures. Add lines 1 and 2. Enter here and on For 1120-POL, line 17b I 4 Did the filing organization file For 1120-POL for this year? Yes No 5 Enter the naes, addresses and eployer identification nuber (EIN) of all section 527 political organizations to which payents were ade. For each organization listed, enter the aount paid fro the filing organization's funds. Also enter the aount of political contributions received that were proptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action coittee (PAC). If additional space is needed, provide inforation in Part IV. Yes Yes No No Nae Address EIN Aount paid fro filing organization's funds. If none, enter -0-. (e) Aount of political contributions received and proptly and directly delivered to a separate political organization. If none, enter -0-. For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 990 or 990-EZ. 9E Schedule C (For 990 or 990-EZ) RC V KALEIDA PAGE 37

40 Part II-A Coplete if the organization is exept under section 501(3) and filed For 5768 (election under section 501(h)). A CheckI if the filing organization belongs to an affiliated group. B Check if the filing organization checked box A and "liited control" provisions apply. Schedule C (For 990 or 990-EZ) 2009 Page 2 1 a b c d e f g h i j I Liits on Lobbying Expenditures (The ter "expenditures" eans aounts paid or incurred.) Total lobbying expenditures to influence public opinion (grass roots lobbying) Total lobbying expenditures to influence a legislative body (direct lobbying) Total lobbying expenditures (add lines 1a and 1b) Other exept purpose expenditures Total exept purpose expenditures (add lines 1c and 1d) Lobbying nontaxable aount. Enter the aount fro the following table in both coluns. If the aount on line 1e, colun or is: Not over 500,000 Over 500,000 but not over 1,000,000 Over 1,000,000 but not over 1,500,000 Over 1,500,000 but not over 17,000,000 The lobbying nontaxable aount is: 20% of the aount on line 1e. 100,000 plus 15% of the excess over 500,00 175,000 plus 10% of the excess over 1,000,00 225,000 plus 5% of the excess over 1,500,00 Filing organization's totals Over 17,000,000 1,000,00 Grassroots nontaxable aount (enter 25% of line 1f) Subtract line 1g fro line 1a. If zero or less, enter -0- Subtract line 1f fro line 1c. If zero or less, enter -0- If these is an aount other than zero on either line 1h or line 1i, did the organization file For 4720 reporting section 4911 tax for this year? 4-Year Averaging Period Under Section 501(h) (Soe organizations that ade a section 501(h) election do not have to coplete all of the five coluns below. See the instructions for lines 2a through 2f on page 4.) Lobbying Expenditures During 4-Year Averaging Period Affiliated group totals Yes No Calendar year (or fiscal year beginning in) (e) Total 2 a Lobbying non-taxable aount b Lobbying ceiling aount (150% of line 2a, colun (e)) c Total lobbying expenditures d Grassroots nontaxable aount e Grassroots ceiling aount (150% of line 2d, colun (e)) f Grassroots lobbying expenditures Schedule C (For 990 or 990-EZ) E RC V KALEIDA PAGE 38

41 Coplete if the organization is exept under section 501(3) and has NOT filed For 5768 (election under section 501(h)). Schedule C (For 990 or 990-EZ) 2009 Page 3 Part II-B Yes No Aount 1 During the year, did the filing organization attept to influence foreign, national, state or local legislation, including any attept to influence public opinion on a legislative atter or referendu, through the use of: a Volunteers? b Paid staff or anageent (include copensation in expenses reported on lines 1c through 1i)? c Media advertiseents? d Mailings to ebers, legislators, or the public? e Publications, or published or broadcast stateents? f Grants to other organizations for lobbying purposes? 38,595. g Direct contact with legislators, their staffs, governent officials, or a legislative body? 232,586. h Rallies, deonstrations, seinars, conventions, speeches, lectures, or any siilar eans? i Other activities? If "Yes," describe in Part IV j Total. Add lines 1c through 1i 271, a Did the activities in line 1 cause the organization to be not described in section 501(3)? b If "Yes," enter the aount of any tax incurred under section 4912 c If "Yes," enter the aount of any tax incurred by organization anagers under section 4912 d If the filing organization incurred a section 4912 tax, did it file For 4720 for this year? Part III-A Coplete if the organization is exept under section 501(4), section 501(5), or section 501(6) Were substantially all (90% or ore) dues received nondeductible by ebers? Did the organization ake only in-house lobbying expenditures of 2,000 or less? Did the organization agree to carryover lobbying and political expenditures fro the prior year? Part III-B Coplete if the organization is exept under section 501(4), section 501(5), or section 501(6) if BOTH Part III-A, lines 1 and 2 are answered "No" OR if Part III-A, line 3 is answered "Yes." 1 Dues, assessents and siilar aounts fro ebers 1 2 Section 162(e) nondeductible lobbying and political expenditures (do not include aounts of political expenses for which the section 527(f) tax was paid). a Current year 2a b Carryover fro last year 2b c Total 2c 3 Aggregate aount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues 3 4 If notices were sent and the aount on line 2c exceeds the aount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estiate of nondeductible lobbying and political expenditure next year? 4 5 Taxable aount of lobbying and political expenditures (see instructions) 5 Part IV Suppleental Inforation Coplete this part to provide the descriptions required for Part I-A, line 1; Part I-B, line 4; Part I-C, line 5; and Part II-B, line 1i. Also, coplete this part for any additional inforation. SEE PAGE Yes No Schedule C (For 990 or 990-EZ) E RC V KALEIDA PAGE 39

42 Part IV Suppleental Inforation (continued) GRANTS TO OTHER ORGANIZATIONS & DIRECT CONTACT WITH LEGISLATIVE BODY Schedule C (For 990 or 990-EZ) 2009 Page 4 SCHEDULE C, PART II-B, QUESTIONS 1 F AND G THE AMOUNT REFLECTED FOR PART II-B, QUESTION 1F REPRESENTS THE PORTION OF THE DUES PAID TO THE GREATER NEW YORK HOSPITAL ASSOCIATION ATTRIBUTABLE TO LOBBYING ACTIVITIES. THE AMOUNT REFLECTED FOR PART II-B, QUESTION 1G REPRESENTS PAYMENTS MADE TO ORGANIZATIONS IN AN EFFORT TO ADVOCATE ON THE ORGANIZATION'S BEHALF AT THE NEW YORK STATE AND FEDERAL LEVELS AS IT SPECIFICALLY RELATES TO HEALTH CARE LEGISLATION AND REGULATORY ISSUES. Schedule C (For 990 or 990-EZ) E RC V KALEIDA PAGE 40

43 SCHEDULE D (For 990) Suppleental Financial Stateents ICoplete if the organization answered "Yes," to For 990, Part IV, line 6, 7, 8, 9, 10, 11, or 12. Departent of the Treasury IAttach to For 99 I OMB À¾ ½ Open to Public Internal Revenue Service See separate instructions. Inspection Nae of the organization Eployer identification nuber KALEIDA HEALTH Part I Organizations Maintaining Donor Advised Funds or Other Siilar Funds or Accounts.Coplete if the organization answered "Yes" to For 990, Part IV, line 6. 2 a b c d Donor advised funds Funds and other accounts 1 Total nuber at end of year 2 to (during year) 3 Aggregate grants fro (during year) 4 Aggregate value at end of year 5 Did the organization infor 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 infor 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 iperissible private benefit? Yes No Part II Conservation Easeents. Coplete if the organization answered "Yes" to For 990, Part IV, line 7. 1 Purpose(s) of conservation easeents held by the organization (check all that apply). Preservation of land for public use (e.g., recreation or pleasure) Protection of natural habitat Preservation of open space Preservation of an historically iportant land area Preservation of a certified historic structure Coplete lines 2a through 2d if the organization held a qualified conservation contribution in the for of a conservation easeent on the last day of the tax year. Held at the End of the Year Total nuber of conservation easeents 2a Total acreage restricted by conservation easeents 2b Nuber of conservation easeents on a certified historic structure included in 2c Nuber of conservation easeents included in acquired after 8/17/06 2d Nuber of conservation easeents odified, transferred, released, extinguished, or terinated by the organization during the tax year I Nuber of states where property subject to conservation easeent is located I Does the organization have a written policy regarding the periodic onitoring, inspection, handling of violations, and enforceent of the conservation easeents it holds? Yes Staff and volunteer hours devoted to onitoring, inspecting, and enforcing conservation easeents during the year I Aount of expenses incurred in onitoring, inspecting, and enforcing conservation easeents during the year No I Yes No 8 Does each conservation easeent reported on line 2 above satisfy the requireents of section 170(h)(4)(B)(i) and 170(h)(4)(B)(ii)? 9 In Part IV, describe how the organization reports conservation easeents in its revenue and expense stateent, and balance sheet, and include, if applicable, the text of the footnote to the organization s financial stateents that describes the organization s accounting for conservation easeents. Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Siilar Assets. Coplete if the organization answered "Yes" to For 990, Part IV, line 8. 1a If the organization elected, as peritted under SFAS 116, not to report in its revenue stateent and balance sheet works of art, historical treasures, or other siilar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part IV, the text of the footnote to its financial stateents that describes these ites. b If the organization elected, as peritted under SFAS 116, to report in its revenue stateent and balance sheet works of art, historical treasures, or other siilar assets held for public exhibition, education, or research in furtherance of public service, provide the following aounts relating to these ites: (i) Revenues included in For 990, Part VIII, line 1 I (ii) Assets included in For 990, Part I 2 If the organization received or held works of art, historical treasures, or other siilar assets for financial gain, provide the following aounts required to be reported under SFAS 116 relating to these ites: a Revenues included in For 990, Part VIII, line 1 I b Assets included in For 990, Part I For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule D (For 990) E RC V KALEIDA PAGE 41

44 Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Siilar Assets (continued) Schedule D (For 990) 2009 Page 2 3 a b c 4 5 Using the organization's acquisition, acces sion, and other records, check any of the following that are a significant use of its collection ites (check all that apply): Public exhibition d Loan or exchange progras Scholarly research e Other Preservation for future generations Provide a description of the organization's collections and explain how they further the organization's exept purpose in Part IV. During the year, did the organization solici t or receive donations of art, historical treasures, or other siilar assets to be sold to raise funds rather than to be aintained as part of the organization's collection? Yes Escrow and Custodial Arrangeents. Coplete if the organization answered "Yes" to For 990, Part IV, line 9, or reported an aount on For 990, Part, line 21. Part IV No 1a Is the organization an agent, trustee, custo dian or other interediary for contributions or other assets not included on For 990, Part? Yes No b If "Yes," explain the arrangeent in Part I V and coplete the following table: Aount 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 aount on For 990, Part, line 21? Yes No b If "Yes," explain the arrangeent in Part I V. Part V Endowent Funds. Coplete if organization answered "Yes" to For 990, Part IV, line 1 Current Year Prior year Two years back Three years back (e) Four years back 1a b c d e f g Beginning of year balance Contributions Net investent earnings, gains, and losses Grants or scholarships Other expenditures for facilities and progras Adinistrative expenses End of year balance 79,899, ,068, Provide the estiated percentage of the y ear end balance held as: a Board designated or quasi-endowent I25000 % b Peranent endowent I 0000 % c Ter endowent I % 3a Are there endowent funds not in the pos session of the organization that are held and adinistered for the organization by: (i) unrelated organizations (ii) related organizations b If "Yes" to 3a(ii), are the related organizati ons listed as required on Schedule R? 4 Describe in Part IV the intended uses of t he organization's endowent funds. Part VI Investents - Land, Buildings, and Equipent. See For 990, Part, line 1 1a b c d e Description of investent Land Buildings Leasehold iproveents Equipent Other 23,068, ,374, ,865,683. 4,858,054. 3,656, ,863, ,691,074. 4,300,728. Cost or other basis (investent) Cost or other basis (other) Accuulated depreciation I Yes 3a(i) 3a(ii) 3b Book value 903,649, ,913, ,736, ,598,16 16,326,054. 4,636,053. Total. Add lines 1a through 1e. (Colun ust equal For 990, Part, colun (B), line 10.) 266,166,517. No 9,180,045. 9,180, ,130,84 288,517, ,613,592. Schedule D (For 990) E RC V KALEIDA PAGE 42

45 Schedule D (For 990) 2009 Page 3 Part VII Investents - Other Securities. See For 990, Part, line 12. Description of security or category (including nae of security) Financial derivatives Closely-held equity interests Other ATTACHMENT 1 Book value Method of valuation: Cost or end-of-year arket value Total. (Colun ust equal For 990, Part, col. (B) line 12.) Part VIII I 205,347,461. Investents - Progra Related. See For 990, Part, line 13. Description of investent type Book value Method of valuation: Cost or end-of-year arket value Total. (Colun ust equal For 990, Part, col. (B) line 13.) Part I I Other Assets. See For 990, Part, line 15. Description Book value DEFERRED FINANCING COSTS, NET 14,021,453. EQUITY IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES 112,298,215. OTHER RECEIVABLES 14,187,20 OTHER ASSETS 6,294,12 RECEIVABLE FROM INSURANCE RECOVERIES 7,678,287. LONG TERM GRANT FROM HEAL NY 54,988,526. Total. (Colun ust equal For 990, Part, col. (B) line 15.) I Part Other Liabilities. See For 990, Part, line Description of liability Aount Federal incoe taxes DUE TO THIRD PARTY PAYORS 19,390,876. SELF INSURANCE LIABILITY 147,547,826. LINE OF CREDIT 6,000,00 OTHER LIABILITIES 8,538,424. PENSION LIABILITY 158,737,292. ASSET RETIREMENT OBLIGATIONS 10,216,983. CAPITAL LEASE OBLIGATIONS, ETC 9,113,426. CONSTRUCTIONS PAYABLE 5,083, ,467,801. Total. (Colun ust equal For 990, Part, col. (B) line 25.) I 2. FIN 48 Footnote. In Part IV, provide the text of the footnote to the organization's financial stateents that reports the organization's liability for uncertain tax positions under FIN 48. 9E ,628,068. Schedule D (For 990) RC V KALEIDA PAGE 43

46 Part I Reconciliation of Change in Net Assets fro For 990 to Audited Financial Stateents 1 Total revenue (For 990, Part VIII, colun (A), line 12) 1 2 Total expenses (For 990, Part I, colun (A), line 25) 2 3 Excess or (deficit) for the year. Subtract line 2 fro line Net unrealized gains (losses) on investents 4 5 Donated services and use of facilities 5 6 Investent expenses 6 7 Prior period adjustents 7 8 Other (Describe in Part IV.) 8 9 Total adjustents (net). Add lines 4 through Excess or (deficit) for the year per audited financial stateents. Cobine lines 3 and 9 10 Part II Reconciliation of Revenue per Audited Financial Stateents With Revenue per Return Schedule D (For 990) 2009 Page 4 a b c d e 3 4 a b c 5 Total revenue, gains, and other support per audited financial stateents Aounts included on line 1 but not on For 990, Part VIII, line 12: Net unrealized gains on investents Donated services and use of facilities Recoveries of prior year grants Other (Describe in Part IV.) Add lines 2a through 2d Subtract line 2e fro line 1 Aounts included on For 990, Part VIII, line 12, but not on line 1: Investent expenses not included on For 990, Part VIII, line 7b Other (Describe in Part IV.) Add lines 4a and 4b Total revenue. Add lines 3 and 4c. (This ust equal For 990, Part I, line 12.) 4a 4b 72,368,225. 4c 5 Part III Reconciliation of Expenses per Audited Financial Stateents With Expenses per Return 1 Total expenses and losses per audited financial stateents 1 2 Aounts included on line 1 but not on For 990, Part I, line 25: a Donated services and use of facilities 2a b Prior year adjustents 2b c Other losses 2c d Other (Describe in Part IV.) 2d 24,502,803. e Add lines 2a through 2d 2e 3 Subtract line 2e fro line Aounts included on For 990, Part I, line 25, but not on line 1: a Investent expenses not included on For 990, Part VIII, line 7b 4a b Other (Describe in Part IV.) 4b 8,679,60 c Add lines 4a and 4b 4c 5 Total expenses. Add lines 3 and 4c. (This ust equal For 990, Part I, line 18.) 5 Part IV Suppleental Inforation Coplete this part to 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, line 2; Part I, line 8; Part II, lines 2d and 4b; and Part III, lines 2d and 4b. Also coplete this part to provide any additional inforation. SEE PAGE 5 2a 2b 2c 2d 30,454, ,067. 2e 3 1,155,716,416. 1,080,329, ,387, ,454, ,947, ,493, ,893, ,698, ,368, ,502, ,679, Schedule D (For 990) E RC V KALEIDA PAGE 44

47 Schedule D (For 990) 2009 Page 5 Part IV Suppleental Inforation (continued) RECONCILIATION OF CHANGE IN NET ASSETS FROM FORM 990 TO AFS PART I, LINE 8 LESS: MINORITY INTEREST IN CONS SUB (756,067) LESS: CONTRIBUTIONS FOR CAPITAL ACQUISITIONS (4,801,476) LESS: RESTRICTED CONTRIBUTIONS (71,865,683) PLUS: RESTRICTED INVESTMENT LOSS 189,981 PLUS: LOSS ON IMPAIRMENT OR ABANDONMENT ON FIED ASSETS (20,393,850) PLUS: NET ASSETS RELEASED FROM RESTRICTION 8,679, TOTAL (88,947,495) OTHER REVENUE INCLUDED ON BOOKS BUT NOT ON RETURN PART II, LINE 2D MINORITY INTEREST IN SUBSIDIARY (756,067) OTHER REVENUE ON RETURN BUT NOT ON BOOKS PART II, LINE 4B RESTRICTED CONTRIBUTIONS 71,865,683 RESTRICTED INVESTMENT LOSS (189,981) CONTRIBUTIONS FOR CAPITAL ACQUISITION 4,801,476 ASSETS RELEASED FROM RESTRICTIONS (4,108,953) ,368,225 Schedule D (For 990) E RC V KALEIDA PAGE 45

48 Schedule D (For 990) 2009 Page 5 Part IV Suppleental Inforation (continued) OTHER EPENSES ON BOOKS BUT NOT ON RETURN PART III, LINE 2D LOSS ON IMPAIRMENT AND DISPOSAL OF ASSETS 20,393,850 NET REALIZED LOSS ON SALE OF INVESTMENTS 4,108, ,502,803 =========== OTHER EPENSES IN RETURN, NOT IN BOOKS FORM 990, SCHEDULE D, PART III, LINE 4B NET ASSETS RELEASED FROM RESTRICTION FOR OPERATIONS 8,679,600 FIN 48 FOOTNOTE SCHEDULE D, PART THE ORGANIZATION'S AUDITED FINANCIAL STATEMENTS DO NOT REPORT ANY LIABILITY OR HAVE ANY FOOTNOTE REPORTING THE ORGANIZATION'S LIABILITY FOR UNCERTAIN TA POSITIONS UNDER FIN 48. INTENDED USE OF ENDOWMENT FUNDS SCHEDULE D, PART V, QUESTION 4 THE FOLLOWING ARE THE INTENDED USES OF THE ORGANIZATION'S ENDOWMENT FUNDS: 1) CAPITAL EPANSION AND IMPROVEMENT 2) ADVANCEMENT OF MEDICAL EDUCATION AND RESEARCH AND HEALTH CARE SERVICES 3) SUPPORT PEDIATRIC HEALTH CARE SERVICES ATTACHMENT 1 SCHEDULE D, PART VII - INVESTMENTS - OTHER SECURITIES COST DESCRIPTION BOOK VALUE OR FMV Schedule D (For 990) E RC V KALEIDA PAGE 46

49 Part IV Suppleental Inforation (continued) ATTACHMENT 1 (CONT'D) SCHEDULE D, PART VII - INVESTMENTS - OTHER SECURITIES COST DESCRIPTION BOOK VALUE OR FMV Schedule D (For 990) 2009 Page 5 VAR PUBL TRADED SECURITIES 106,261,215. FMV BRANDES INTERNATIONAL EQUITY 21,596,287. FMV PIMCO STOCKPLUS SUBFUND B LLC FMV AAM HIGH YIELD TOTAL RET FUND 6,360,637. FMV INTECH RISK-MANAGED L CAP FUND 12,237,612. FMV FEDERAL ST ASSOC OFFSHORE FUND 6,534,278. FMV ARDEN ENDOWMENT ADVISORS CL G 5,989,478. FMV MCM CF GLOBAL ALPHA I FUND 9,151,808. FMV WTC CTF RESEAR VALUE PUR 4/06 11,559,868. FMV ORRINGTON PLUS CLASS B SEGREG 58,268. FMV BENCHMARK PLUS INST PART L CAP 6,416,528. FMV WTC CIF OPPORTUNISTIC FUND 8,963,418. FMV CHARITABLE TEMPORARY INVEST FD 6. FMV KALEIDA MIT COMMON FUND LP 206,82 FMV COMMON CAP VENTURE PTNRS VI 262,158. FMV COMMON FND CAP PRIVATE EQ P V 401,752. FMV KALEIDA MIT REALITY LP 1,237,21 FMV PIMCO STOCKPLUS SUBFUND B LLC FMV KALEIDA SI REALITY LP 1,800,32 FMV KALEIDA SI TA ASSOC LP FMV SEI CREDIT DISLOCATION FUND 6,309,798. FMV TOTALS 205,347,461. Schedule D (For 990) E RC V KALEIDA PAGE 47

50 SCHEDULE H Hospitals OMB (For 990) ICoplete if the organization answered "Yes" to For 990, Part IV, question 2 À¾ ½ Attach to For 99 Departent of the Treasury Internal Revenue Service ISee separate instructions. Inspection Nae of the organization Eployer identification nuber I Open to Public KALEIDA HEALTH Part I Charity Care and Certain Other Counity Benefits at Cost 1a b a b c 5a b c 6a b a b Does the organization have a charity care policy? If "No," skip to question 6a If "Yes," is it a written policy? 2 If the organization has ultiple hospitals, indicate which of the following best describes application of the charity care policy to the various hospitals. Applied uniforly to all hospitals Generally tailored to individual hospitals Applied uniforly to ost hospitals 3 Answer the following based on the charity care eligibility criteria that applies to the largest nuber of the organization's patients. Does the organization use Federal Poverty Guidelines (FPG) to deterine eligibility for providing free care to low incoe individuals? If "Yes," indicate which of the following is the faily incoe liit for eligibility for free care: 100% 150% 200% Other % Does the organization use FPG to deterine eligibility for providing discounted care to low incoe individuals? If "Yes," indicate which of the following is the faily incoe liit for eligibility for discounted care: 200% 250% 300% 350% 400% Other % If the organization does not use FPG to deterine eligibility, describe in Part VI the incoe based criteria for deterining eligibility for free or discounted care. Include in the description whether the organization uses an asset test or other threshold, regardless of incoe, to deterine eligibility for free or discounted care. 4 Does the organization's policy provide free or discounted care to the "edically indigent"? Does the organization budget aounts for free or discounted care provided under its charity care policy? If "Yes," did the organization's charity care expenses exceed the budgeted aount? 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? Does the organization prepare an annual counity benefit report? If "Yes," does the organization ake it available to the public? Coplete the following table using the worksheets provided in the Schedule H instructions. Do not subit these worksheets with the Schedule H. 7 Charity Care and Certain Other Counity Benefits at Cost Charity Care and Means-Tested Governent Progras Charity care at cost (fro Worksheets 1 and 2) Unreibursed Medicaid (fro Worksheet 3, colun a) c Unreibursed costs - other eanstested governent progras (fro Worksheet 3, colun b) d Total Charity Care and Means-Tested Governent Progras e f g h Other Benefits Counity health iproveent services and counity benefit operations (fro Worksheet 4) Health professions education (fro Worksheet 5) Subsidized health services (fro Worksheet 6) Research (fro Worksheet 7) i Cash and in-kind contributions to counity groups (fro Worksheet 8) j Total. Other Benefits k Total. Add lines 7d and 7j Nuber of activities or progras (optional) s served (optional) Total counity benefit expense Direct offsetting revenue (e) Net counity benefit expense 1a 1b 3a 3b 4 5a 5b 5c 6a 6b Yes (f) Percent of total expense For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule H (For 990) E ,010,691. 1,450, ,559, ,466, ,352, ,114, ,477,47 171,802, ,674, ,100, ,340, ,759, ,330, ,461, ,869, ,431, ,802, ,628, ,908, ,605,34 121,303, RC V KALEIDA PAGE 48 No

51 Counity Building Activities Coplete this table if the organization conducted any counity building activities. Schedule H (For 990) 2009 Page 2 Part II Physical iproveents and housing Econoic developent Counity support Environental iproveents Leadership developent and training for counity ebers Coalition building Counity health iproveent advocacy Workforce developent Other Total Part III Section A. Bad Debt Expense Nuber of activities or progras (optional) s served (optional) Total counity building expense Direct offsetting revenue (e) Net counity building expense (f) Percent of total expense 558, , Bad Debt, Medicare, & Collection Practices Does the organization report bad debt expense in accordance with Healthcare Financial Manageent Association Stateent 15? 1 Enter the aount of the organization's bad debt expense (at cost) 2 17,576,263. Enter the estiated aount of the organization's bad debt expense (at cost) attributable to patients eligible under the organization's charity care policy 3 4,600,00 Provide in Part VI the text of the footnote to the organization's financial stateents that describes bad debt expense. In addition, describe the costing ethodology used in deterining the aounts reported on lines 2 and 3, and rationale for including other bad debt aounts in counity benefit. Section B. Medicare 5 Enter total revenue received fro Medicare (including DSH and IME) 6 Enter Medicare allowable costs of care relating to payents on line 5 7 Subtract line 6 fro line 5. This is the surplus or (shortfall) 8 Describe in Part VI the extent to which any shortfall reported in line 7 should be treated as counity benefit. Also describe in Part VI the costing ethodology or source used to deterine the aount reported on line 6. Check the box that describes the ethod used: Cost accounting syste Cost to charge ratio Other Section C. Collection Practices 9a Does the organization have a written debt collection policy? 9a b If "Yes," does the organization's collection policy contain provisions on the collection practices to be followed for patients who are known to qualify for charity care or financial assistance? Describe in Part VI 9b Part IV Manageent Copanies and Joint Ventures Nae of entity Description of priary activity of entity Organization's profit % or stock ownership % Officers, directors trustees, or key eployees' profit % or stock ownership % Yes No (e) Physicians' profit % or stock ownership % 1 MFSC LLC 2 COMMUNITY MEDICAL PC 3 GENERAL PHYSICIANS P 4 HARLEM ROAD LEASING 5 AMTON IMAGING LLC 6 PARK CLUB LANE LLC 7 WNY HEALTHENET LLC 8 CHILD HEALTH INV I 9 CHILD HEALTH INV II PHYSICIAN SERVICES PHYSICIAN SERVICES PHYSICIAN SERVICES MRI EQUIPMENT LEASING HEALTH CARE SERVICES HEALTH CARE SERVICES HEALTH CARE SERVICES HEALTH CARE SERVICES HEALTH CARE SERVICES E , , ,098, ,771, ,326,733. Schedule H (For 990) RC V KALEIDA PAGE 49

52 Schedule H (For 990) 2009 Page 3 Part V Facility Inforation Nae and address Licensed hospital General edical & surgical Children's hospital Teaching hospital Critical access hospital Research facility ER-24 hours ER-other Other (Describe) BUFFALO GENERAL HOSPITAL 100 HIGH STREET BUFFALO NY DEGRAFF MEMORIAL HOSPITAL 445 TREMONT AVENUE NORTH TONAWANDA NY MILLARD FILLMORE GATES CIRCLE HOSPITAL 3 GATES CIRCLE BUFFALO NY MILLARD FILLMORE SUBURBAN HOSPITAL 1540 MAPLE ROAD WILLIAMSVILLE NY WOMEN & CHILDREN'S HOSPITAL OF BUFFALO 219 BRYANT STREET BUFFALO NY MFSC, LLC AMBULATORY SURGERY CENTER AMBULATORY SURGERY 215 KLEIN ROAD CENTER WILLIAMSVILLE NY DEACONESS CENTER SKILLED NURSING 1001 HUMBOLDT PARKWAY FACILITY BUFFALO NY DEGRAFF SKILLED NURSING FACILITY SKILLED NURSING 445 TREMONT STREET FACILITY NORTH TONAWANDA NY MILLARD FILLMORE GATES SKILLED NURSING SKILLED NURSING 3 GATES CIRCLE FACILITY BUFFALO NY Schedule H (For 990) E RC V KALEIDA PAGE 50

53 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. DESCRIPTION OF COMMUNITY BUILDING ACTIVITIES SCHEDULE H, PART II, LINE 3 KALEIDA HEALTH PURCHASED A BLOCK OF GOODRICH STREET FROM THE CITY OF BUFFALO FOR ITS EPANDING FLAGSHIP MEDICAL CAMPUS. DURING THE PROCESS OF THE SALE, KALEIDA ADVOCATED STRONGLY THAT THE PURCHASE PRICE (1.1 MILLION) GO DIRECTLY INTO THE SURROUNDING INNER-CITY NEIGHBORHOODS. THE CITY OF BUFFALO AGREED AND ANNOUNCED THE FUNDS WILL BE USED TO IMPROVE OR ADD SIDEWALKS, STREETS, LANDSCAPING, INFRASTRUCTURE AND SECURITY CAMERAS IN THE FRUIT BELT NEIGHBORHOOD, WHICH BORDERS KALEIDA'S BUFFALO GENERAL HOSPITAL FACILITY. THE HEALTH AND SAFETY OF NEIGHBORHOOD RESIDENTS ARE IMPROVED WITH THIS INVESTMENT BY CLEARING OUT DEBRIS-FILLED LOTS, REPLACING CRACKED SIDEWALKS AND PROVIDING ADDITIONAL SECURITY TO MAKE THE NEIGHBORHOOD SAFE AND HEALTHY FOR RESIDENTS, THEREBY IMPROVING HEALTH, SAFETY AND WELL-BEING FOR CITY RESIDENTS. KALEIDA HEALTH'S COMMUNITY BUILDING ACTIVITIES INCLUDE PROGRAMS SUCH AS KALEIDA'S ANNUAL TRAINING FOR WOMEN AND MINORITY SUPPLIERS ON "HOW TO DO BUSINESS WITH KALEIDA HEALTH," AIMED AT PROVIDING OPPORTUNITIES FOR Schedule H (For 990) E RC V KALEIDA PAGE 51

54 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. MINORITY AND WOMEN OWNED BUSINESSES TO MEET PURCHASING PROFESSIONALS FROM KALEIDA HEALTH AND THE WESTERN NEW YORK PURCHASING ALLIANCE. THE 3-PART SERIES PROVIDE POTENTIAL SUPPLIERS WITH AN OVERVIEW OF KALEIDA HEALTH'S PURCHASING NEEDS, COVERS THE TECHNICAL ASPECTS OF PROPOSAL SUBMISSION AND ORDER FULFILLMENT REQUIREMENTS. PART I, LINE 3C: KALEIDA HEALTH (KALEIDA) HAS DEVELOPED, IMPLEMENTED AND COMMUNICATES ITS FINANCIAL ASSISTANCE (CHARITY CARE) POLICY, WHICH ASSISTS LOW INCOME, UNINSURED OR UNDERINSURED INDIVIDUALS WHO LACK THE FINANCIAL RESOURCES TO PAY FOR MEDICAL SERVICES RENDERED. LEVELS OF DISCOUNTS ARE AWARDED BASED UPON INCOME AND ASSET VERIFICATION AND IN ACCORDANCE WITH THE FEDERAL POVERTY GUIDELINES AS PUBLISHED ANNUALLY BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES. INDIVIDUALS ARE NOTIFIED DURING INTAKE AND REGISTRATION OF KALEIDA'S CHARITY CARE PROGRAM. AFTER REVIEW OF INCOME AND ASSETS, AN INDIVIDUAL MAY BE APPROVED FOR FREE CARE (100% DISCOUNT) OR A DISCOUNT LEVEL OF 50, 60, 75, OR 90%, Schedule H (For 990) E RC V KALEIDA PAGE 52

55 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. FOR MEDICALLY NECESSARY INPATIENT, OUTPATIENT, EMERGENCY ROOM OR NURSING HOME SERVICES RENDERED AT A KALEIDA FACILITY, AS FOLLOWS: 200% OF FEDERAL POVERTY GUIDELINE IS AWARDED 100% DISCOUNT 250% OF FEDERAL POVERTY GUIDELINE IS AWARDED 90% DISCOUNT 300% OF FEDERAL POVERTY GUIDELINE IS AWARDED 75% DISCOUNT 350% OF FEDERAL POVERTY GUIDELINE IS AWARDED 60% DISCOUNT 400% OF FEDERAL POVERTY GUIDELINE IS AWARDED 50% DISCOUNT THE APPLICANT FOR FREE OR REDUCE PRICE CARE IS CONTACTED BY A FACILITATED ENROLLER FOR FINANCIAL SCREENING AND ENROLLMENT IN A GOVERNMENT-FUNDED PROGRAM, IF ELIGIBLE. PART I, LINE 7: THE AMOUNTS REPORTED IN THE TABLE UNDER PART 1, LINE 7 WERE DETERMINED USING THE HEALTH SYSTEM'S DECISION SUPPORT SOFTWARE PROGRAM AND REVENUE AND EPENSES FROM THE GENERAL LEDGER. THE OVERALL REVENUE AND EPENSES INCLUDED IN THE DECISION SUPPORT SOFTWARE PROGRAM WERE RECONCILED TO THE GENERAL LEDGER WHICH Schedule H (For 990) E RC V KALEIDA PAGE 53

56 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. RECONCILES TO THE AUDITED FINANCIAL STATEMENTS. THE DECISION SUPPORT SOFTWARE PROGRAM ALLOCATES DIRECT COSTS TO EACH PATIENT ACCOUNT BASED ON THE RESOURCES USED BY THAT PATIENT WITHIN THE SPECIFIC COST CENTER. INDIRECT COSTS ARE ALLOCATED USING SIMILAR STEPDOWN METHODOLOGY USED BY CMS IN THE INSTITUTIONAL COST REPORT. Schedule H (For 990) E RC V KALEIDA PAGE 54

57 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. PART III, LINE 4: 2009 AUDITED FINANCIAL STATEMENT NOTE ON BAD DEBTS (D) CHARITY CARE AND BAD DEBT EPENSE KALEIDA PROVIDES CARE TO PATIENTS WHO MEET CERTAIN CRITERIA UNDER ITS CHARITY CARE POLICIES WITHOUT CHARGE OR AT AMOUNTS LESS THAN THEIR ESTABLISHED RATES. BECAUSE KALEIDA DOES NOT ANTICIPATE COLLECTION OF AMOUNTS DETERMINED TO QUALIFY AS CHARITY CARE, THEY ARE NOT REPORTED AS REVENUE. KALEIDA GRANTS CREDIT WITHOUT COLLATERAL TO PATIENTS, MOST OF WHO ARE LOCAL RESIDENTS AND ARE INSURED UNDER THIRD-PARTY ARRANGEMENTS. ADDITIONS TO THE ESTIMATED ALLOWANCE FOR DOUBTFUL ACCOUNTS ARE MADE BY MEANS OF THE PROVISION FOR BAD DEBTS. ACCOUNTS WRITTEN OFF AS UNCOLLECTIBLE ARE DEDUCTED FROM THE ALLOWANCE AND SUBSEQUENT RECOVERIES ARE ADDED. THE AMOUNT OF THE PROVISION FOR BAD DEBTS IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EPECTED NET COLLECTIONS, BUSINESS AND ECONOMIC CONDITIONS, TRENDS IN FEDERAL AND STATE GOVERNMENTAL HEALTHCARE COVERAGE, AND OTHER COLLECTION INDICATORS. Schedule H (For 990) E RC V KALEIDA PAGE 55

58 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. BAD DEBT COSTING METHODOLOGY BAD DEBT EPENSE IS RECORDED USING THE VALUATION METHOD AS OUTLINED IN HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION STATEMENT 15, WHICH REQUIRES BAD DEBT EPENSE TO BE RECORDED AT THE AMOUNT THAT THE PAYER IS EPECTED TO PAY. IN ORDER TO REPORT THE COSTS ASSOCIATED WITH BAD DEBT EPENSE, THE REPORTED BAD DEBT EPENSE NEEDS TO BE ADJUSTED SO THAT THE AMOUNT EPECTED TO BE PAID REFLECTS GROSS CHARGES, PRIOR TO THE APPLICATION OF AN RCC. KALEIDA HEALTH ADJUSTS BAD DEBT EPENSES PRIOR TO THE APPLICATION OF AN RCC SO THAT THE REPORTED BAD DEBT EPENSE AT COST, ON PART III, LINE 2 OF IRS FORM 990, SCHEDULE H REFLECTS THE TRUE COST OF THE BAD DEBTS. THE ORGANIZATION HAS A CHARITY CARE POLICY, AND ANY WRITEOFFS AS A RESULT OF THIS POLICY ARE RECORDED AS CHARITY CARE ALLOWANCES AND ARE A REDUCTION OF NEW PATIENT REVENUE. INDIVIDUALS WHO MAY QUALIFY FOR CHARITY CARE ASSISTANCE UNDER THIS POLICY, BUT DO NOT VOLUNTEER TO COMPLETE THE APPLICATION PROCESS WOULD NOT BE GRANTED CHARITY CARE ASSISTANCE. Schedule H (For 990) E RC V KALEIDA PAGE 56

59 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. KALEIDA HAS USED AN ESTIMATED PERCENTAGE IN CALCULATING THE LEVEL OF CHARITY CARE INCLUDED IN BAD DEBT EPENSE. THIS PERCENTAGE (38%) IS BASED UPON THE RESULTS OF EVALUATING CURRENT DATA THROUGH THE USE OF A PRESUMPTIVE CHARITY CARE ELIGIBILITY SYSTEM THAT PROVIDED AN APPROIMATE RATIO OF A LEVEL SELF PAY BAD DEBT EPENSE WHICH MIGHT HAVE BEEN ELIGIBLE FOR CHARITY CARE IN PART III, LINE 8: THE ORGANIZATION USED THE FILED, BUT UNAUDITED 2009 CMS COST REPORT TO DETERMINE THE AMOUNTS REPORTED ON PART III, SECTION B, LINE 6 MEDICARE ALLOWABLE COSTS RELATING TO PAYMENTS RECEIVED FROM MEDICARE. PART III, LINE 9B: AT SUCH TIME THAT A PATIENT EPRESSES A FINANCIAL CONCERN, THE PATIENT WILL BE OFFERED THE OPPORTUNITY TO APPLY FOR CHARITY CARE. ONCE THE PATIENT SUBMITS THE COMPLETED CHARITY CARE APPLICATION, THE ACCOUNT IS PLACED ON HOLD AND ALL COLLECTION ACTIVITIES ARE SUSPENDED UNTIL AN ELIGIBILITY DETERMINATION IS MADE. IF THE PATIENT IS ELIGIBLE FOR CHARITY CARE, THAN THE PATIENT IS NOTIFIED OF THE LEVEL Schedule H (For 990) E RC V KALEIDA PAGE 57

60 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. OF CHARITY CARE AWARDED. IF 100% CHARITY CARE AWARDED, THAN NO BILL IS SENT TO THE PATIENT. IF LESS THAN 100% CHARITY CARE IS AWARDED, THAN THE PATIENT WILL RECEIVE A BILL PURSUANT TO THE PRIVATE PAY COLLECTION POLICY. PART V: THE ORGANIZATION OPERATES THE FOLLOWING TYPES OF HEALTH CARE FACILITIES OTHER THAN THOSE REQUIRED TO BE LICENSED, REGISTERED OR SIMILARLY RECOGNIZED AS A HEALTH CARE FACILITY UNDER STATE LAW: 3 SKILLED NURSING FACILITIES 90 OUTPATIENT CLINICS NEEDS ASSESSMENT: KALEIDA HEALTH ASSESSES THE HEALTH OF THE COMMUNITIES WE SERVE THROUGH A VARIETY OF MEANS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING: - ERIE COUNTY DEPARTMENT OF HEALTH'S COMMUNITY HEALTH ASSESSMENT (MARCH 2010): INCLUDES DEMOGRAPHIC AND HEALTH STATUS INFORMATION FOR Schedule H (For 990) E RC V KALEIDA PAGE 58

61 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. THE POPULATION, INCLUDING DISEASE PREVALENCE, INCIDENCE, HEALTH RESOURCES AND SERVICE UTILIZATION, PROFILES OF COMMUNITY RESOURCES, BEHAVIORAL RISK FACTORS, UNMET NEED FOR SERVICES, LOCAL HEALTH PRIORITIES, AND OPPORTUNITIES FOR ACTION IN ERIE COUNTY. - NIAGARA COUNTY DEPARTMENT OF HEALTH'S COMMUNITY HEALTH ASSESSMENT (SEPTEMBER 2009): INCLUDES DEMOGRAPHICS, DESCRIPTION OF POPULATIONS AT RISK, DISEASE PREVALENCE, INCIDENCE, ACCESS TO CARE, PROBLEMS AND ISSUES IN THE COMMUNITY, LOCAL HEALTH PRIORITIES, ACCOMPLISHMENTS AND OPPORTUNITIES FOR ACTION IN NIAGARA COUNTY. - KALEIDA HEALTH: COMMUNITY AND PROVIDER HEALTH CARE ASSESSMENT (JANUARY 2008): KALEIDA SPONSORED AND PUBLISHED A POPULATION-BASED, CROSS-SECTIONAL HOUSE-TO-HOUSE COMMUNITY HEALTH NEEDS ASSESSMENT OF 2,000 HEADS OF HOUSEHOLDS IN MEDICALLY UNDERSERVED CITY OF BUFFALO NEIGHBORHOODS. OF THESE HOUSEHOLDS, 1,658 COMMUNITY RESIDENTS PARTICIPATED IN THE SURVEY. THE PURPOSE WAS TO GATHER DATA FROM COMMUNITY RESIDENTS ON HEALTH CARE, PROVIDE INFORMATION ON HOW HEALTH CARE MAY BE IMPROVED Schedule H (For 990) E RC V KALEIDA PAGE 59

62 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. TO BEST SERVE THE COMMUNITY'S NEEDS, AND IDENTIFY WHAT WORKS WELL AND WHAT DOES NOT IN THE LOCAL HEALTH CARE ENVIRONMENT FOR THESE RESIDENTS, FROM THEIR PERSPECTIVE. ADDITIONAL DATA WAS GATHERED FROM COMMUNITY-BASED PRIMARY CARE PROVIDERS TO IDENTIFY OPPORTUNITIES FOR COLLABORATION ON DISEASE PREVENTION FOR PATIENTS UNDER THEIR CARE. - PROJECT CODA: CREATING OPTIONS FOR DIGNIFIED AGING IN ERIE AND NIAGARA COUNTIES (JUNE 2009): A LOCALLY DRIVEN ELDERLY-CENTERED STRATEGY BASED UPON IN-DEPTH RESEARCH ON THE DEMOGRAPHICS AND SPECIFIC NEEDS AND WANTS OF ELDERS, CAREGIVERS AND SERVICE PROVIDERS. THE ASSESSMENT PROVIDES AN OVERVIEW OF THE EISTING LONG-TERM CARE SYSTEM IN ERIE AND NIAGARA COUNTIES, FORECASTS THE FUTURE OF LONG-TERM CARE, AND IDENTIFIES MODELS TO PROJECT FUTURE ECONOMIC AND DEMOGRAPHIC TRENDS, LIKELY SHIFTS IN PUBLIC POLICIES AND PROJECTIONS OF FUTURE CHANGES IN CONSUMER PREFERENCES AND DEMAND FOR AGING SERVICES. - WESTERN NEW YORK HEALTH CARE SAFETY-NET ASSESSMENT (FEBRUARY Schedule H (For 990) E RC V KALEIDA PAGE 60

63 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. 2008): AN ASSESSMENT OF ACCESS, CONSUMER EPERIENCE AND HEALTH INFORMATION TECHNOLOGY. THE ASSESSMENT OFFERS A DESCRIPTION OF THE PRIMARY CARE SAFETY-NET IN THE REGION, ASSESSES ACCESS AND THE SAFETY-NET'S OVERALL CAPACITY AND STRENGTH, ASSESSES CONSUMER'S EPERIENCE WITH THEIR PRIMARY CARE, AND DETERMINES THE INFORMATION TECHNOLOGY CAPACITY OF THE PRIMARY CARE SAFETY NET. REACHING FOR ECELLENCE: COMMUNITY VISION AND VOICES FOR WNY HEALTH CARE (JULY 2009): A COMMUNITY HEALTH ASSESSMENT THAT INCORPORATES THE PERSPECTIVE OF THE COMMUNITY AND USERS OF THE HEALTH CARE SYSTEM IN CURRENT HEALTH CARE STRATEGY DEVELOPMENT. MORE THAN 1700 WESTERN NEW YORKERS WERE ENGAGED IN A SERIES OF COMMUNITY CONVERSATIONS ABOUT WHAT CONSUMERS WANT FOR THE FUTURE OF HEALTH CARE IN THE REGION. THE CONVERSATIONS RESULTED IN 5 HEALTH CARE PRIORITIES, REFLECTING THE TOP CONCERNS OF THE REGION ACROSS RACE, ETHNICITY, AGE, INCOME AND GEOGRAPHY. SECONDARY LEVEL QUANTITATIVE DATA INCLUDE LOCAL SURVEYS, U.S. CENSUS, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES' COMMUNITY HEALTH STATUS Schedule H (For 990) E RC V KALEIDA PAGE 61

64 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. INDICATORS REPORT FOR NY (INCLUDING ERIE AND NIAGARA COUNTIES), AMONG OTHER ASSESSMENTS. KALEIDA'S TEAM USE DATA FROM COMMUNITY HEALTH ASSESSMENTS, SUCH AS THOSE ABOVE, TO SHAPE STRATEGY FOR PRIORITIZING ITS EFFORTS AND IDENTIFYING AREAS OF FOCUS FOR THE COMMUNITY BENEFIT INTERVENTIONS. MANY OF THE INTERVENTIONS ADOPTED BY KALEIDA FOCUS ON POPULATIONS WITH DISPROPORTIONATE UNMET HEALTH NEEDS (DUHN), INCLUDING THE ELDERLY, LOW-INCOME INDIVIDUALS AND FAMILIES, CHILDREN AND YOUTH, AND PERSONS WITH SPECIAL NEEDS. THE GOALS SELECTED FOR EACH INTERVENTION ARE IN SUPPORT OF LOCAL COLLABORATIVE PLANNING EFFORTS WHEN POSSIBLE, AND ENGAGE THE BREADTH OF KALEIDA'S COMMUNITY BENEFIT PROGRAMS. PATIENT EDUCATION OF ELIGIBILITY FOR ASSISTANCE: KALEIDA INFORMS INDIVIDUALS OF AVAILABLE FREE OR REDUCED PRICE SERVICES AT THE TIME OF REGISTRATION INTO THE INPATIENT, OUTPATIENT, EMERGENCY DEPARTMENT, AND LONG-TERM CARE FACILITY. POSTERS INFORMING THE PATIENT/FAMILY OF ASSISTANCE ARE AVAILABLE THROUGHOUT THE KALEIDA LOCATIONS. BROCHURES AND PAMPHLETS INFORMING THE COMMUNITY ARE WIDELY DISTRIBUTED IN THE COMMUNITY AT HEALTH FAIRS, CHURCHES, Schedule H (For 990) E RC V KALEIDA PAGE 62

65 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. SCHOOLS AND OTHER PUBLIC LOCATIONS. INFORMATION REGARDING THE AVAILABILITY OF FINANCIAL ASSISTANCE IS ALSO AVAILABLE THROUGH KALEIDA'S WEBSITE. KALEIDA OFFERS SEVERAL INITIATIVES TO HELP INDIVIDUALS IN OUR COMMUNITY ACCESS AFFORDABLE HEALTH CARE, INCLUDING: FACILITATED ENROLLMENT: TO ASSIST ELIGIBLE INDIVIDUALS WITH HEALTH INSURANCE ENROLLMENT BY OFFERING EDUCATION AND APPLICATION ASSISTANCE FOR MEDICAID, CHILD HEALTH PLUS, FAMILY HEALTH PLUS, PRENATAL CARE ASSISTANCE PROGRAM, AND STATE AID FOR CHILDREN WITH SPECIAL NEEDS. A DEDICATED TELEPHONE NUMBER IS AVAILABLE AND INFORMATION IS PUBLISHED IN PAMPHLETS AT KALEIDA SITES AND AT VARIOUS LOCATIONS THROUGHOUT THE COMMUNITY. FINANCIAL ASSISTANCE PROGRAM: AS DESCRIBED ABOVE, THE KALEIDA FINANCIAL ASSISTANCE PROGRAM OFFERS FREE OR REDUCED-PRICES FOR PATIENTS TREATED AT A KALEIDA HOSPITAL, OUTPATIENT, EMERGENCY ROOM, OR LONG-TERM CARE FACILITY. DISCOUNTS ARE AWARDED BASED UPON INCOME Schedule H (For 990) E RC V KALEIDA PAGE 63

66 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. AND ASSET VERIFICATION. INDIVIDUALS WHO DO NOT QUALITY FOR MEDICAID, CHILD HEALTH PLUS, FAMILY HEALTH PLUS, PRENATAL CARE ASSISTANCE PROGRAM, AND/OR STATE AID FOR CHILDREN WITH SPECIAL NEEDS ARE CONSIDERED FOR FINANCIAL ASSISTANCE (CHARITY CARE). Schedule H (For 990) E RC V KALEIDA PAGE 64

67 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. COMMUNITY INFORMATION: KALEIDA SERVES THE EIGHT COUNTIES OF WESTERN NEW YORK STATE, WITH PRIMARY SERVICE AREAS IN ERIE AND NIAGARA COUNTIES. THE SERVICE AREA HAS A COMBINED POPULATION OF APPROIMATELY 1.6 MILLION PEOPLE. THE EIGHT COUNTY SERVICE AREA INCLUDES: ALLEGANY, CATTARAUGUS, CHAUTAUQUA, ERIE, GENESEE, ORLEANS, NIAGARA AND WYOMING COUNTIES. THE REGION IS DIVERSE IN CHARACTER, RANGING FORM RURAL AREAS AND SMALL TOWNS OF THE SOUTHEASTERN COUNTIES, TO THE DENSER AREAS OF ERIE AND NIAGARA COUNTIES. KALEIDA HEALTH (KALEIDA) IS HEADQUARTERED IN THE CITY OF BUFFALO, (ERIE COUNTY) NEW YORK. THERE ARE SEVERAL FEDERALLY DESIGNATED MEDICALLY UNDERSERVED AREAS, MEDICALLY UNDERSERVED POPULATIONS, AND HEALTH PROFESSIONAL SHORTAGE AREAS IN KALEIDA'S SERVICE AREA. WESTERN NEW YORK COUNTY MEDIUM INCOME POPULATION PERCENT UNEMPLOYED ALLEGANY COUNTRY 49,157 40, CATTARAUGUS COUNTY 79,689 42, CHAUTAUQUA COUNTY 133,503 39, Schedule H (For 990) E RC V KALEIDA PAGE 65

68 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. ERIE COUNTY 909,247 48, GENESEE COUNTY 57,868 49, NIAGARA COUNTY 214,557 45, ORLEANS COUNTY 42,051 46, WYOMING COUNTY 41,398 48, SOURCES: U.S. CENSUS, 2009; NYS LABOR DEPARTMENT DEMOGRAPHIC INFORMATION, ERIE COUNTY, NY: ERIE COUNTY IS THE LARGEST METROPOLITAN COUNTY IN UPSTATE NEW YORK. ACCORDING TO THE U.S. CENSUS 2008 ESTIMATES, THE POPULATION OF ERIE COUNTY INCLUDING THE CITY OF BUFFALO IS 909,247. BUFFALO SERVES AS THE COUNTY SEAT. BUFFALO HAS A POPULATION OF 272,632. THE CITY OF BUFFALO IS THE LARGEST CITY IN THE REGION AND THE SECOND LARGEST CITY IN NEW YORK STATE. BUFFALO IS RANKED AS THE THIRD POOREST CITY IN THE NATION. ERIE COUNTY IS HOME TO 3 CITIES, 16 VILLAGES, 25 TOWNS, AND TWO NATIVE AMERICAN INDIAN RESERVATIONS. ERIE COUNTY IS LARGELY A METROPOLITAN URBAN COUNTY WITH THE MAJORITY OF THE POPULATION LIVING WITHIN THE CITIES AND SURROUNDING COMMUNITIES. THERE IS A Schedule H (For 990) E RC V KALEIDA PAGE 66

69 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. SIGNIFICANT RURAL POPULATION THAT RESIDES OUTSIDE THE FIRST AND SECOND RING SUBURBAN AREAS. THE POPULATION OF ERIE COUNTY HAS BEEN DECLINING OVER THE PAST DECADE. IN THE YEAR 2000, THE POPULATION OF ERIE COUNTY WAS 950,265. THIS REPRESENTS AN APPROIMATELY 4% DECREASE IN POPULATION BETWEEN THE YEARS 2000 AND ACCORDING TO THE U.S. CENSUS, 5.3% OF THE ERIE COUNTY POPULATION ARE UNDER THE AGE OF FIVE, 21.5% ARE UNDER AGE 18, AND 15.6% ARE AGE 65 AND OVER. COMPARED TO NEW YORK STATE AND NATIONAL AGE DISTRIBUTIONS, ERIE COUNTY HAS A SLIGHTLY LOWER PERCENTAGE OF YOUNG PEOPLE AND A HIGHER PERCENTAGE OF PEOPLE AGE 65 AND OLDER. HOWEVER, THE CITY OF BUFFALO POPULATION DISTRIBUTION IS QUITE DIFFERENT FROM ERIE COUNTY. IN BUFFALO, 26.3% OF RESIDENTS ARE UNDER AGE 18, WHICH IS HIGHER THAN BOTH NEW YORK STATE (24.7%) AND THE USA (24.3%). THE PERCENT OF PERSONS AGE 65 AND OVER RESIDING IN THE CITY OF BUFFALO IS LOWER THAN IN ERIE COUNTY AS A WHOLE AND EQUAL TO THE NEW YORK STATE PERCENTAGE OF 13.4%. IN ERIE COUNTY, 51.8% OF THE POPULATION IS FEMALE AND 48.2% MALE. Schedule H (For 990) E RC V KALEIDA PAGE 67

70 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. THIS DISTRIBUTION IS SIMILAR TO THE NEW YORK STATE DISTRIBUTION, HOWEVER THE NATIONAL DISTRIBUTION IS CLOSER TO 50% TO 50%. IN THE CITY OF BUFFALO THERE IS A HIGH PERCENTAGE OF FEMALES (53%) AND LOWER PERCENTAGE OF MALES (47%). ACCORDING TO THE 2007 AMERICAN COMMUNITY SURVEY 82.4% OF THE ERIE COUNTY POPULATION IS NON-HISPANIC WHITES, 13.5% NON-HISPANIC AFRICAN-AMERICANS, 3.7% HISPANIC, 5% NATIVE AMERICANS, AND 2% ASIAN/PACIFIC ISLANDERS. THE CITY OF BUFFALO IS CHARACTERIZED BY A MUCH HIGHER PERCENTAGE OF AFRICAN AMERICANS (39.8%), AND HISPANICS (8.3%). THE WEST SIDE OF BUFFALO IS HOME TO A LARGE IMMIGRANT AND REFUGEE POPULATION WHERE THERE ARE 28 ETHNICITIES AND A MINIMUM OF 31 LANGUAGES AND DIALECTS SPOKEN. LACKAWANNA, NEW YORK, LOCATED JUST SOUTH OF THE CITY OF BUFFALO IS HOME TO A LARGE ARABIAN COMMUNITY, MANY OF WHOM DO NOT SPEAK ENGLISH AS THEIR FIRST LANGUAGE. NEARLY 9% OF THE ERIE COUNTY POPULATION SPEAKS A LANGUAGE OTHER THAN ENGLISH IN THEIR HOMES. THE MEDIAN HOUSEHOLD INCOME IN ERIE COUNTY IS 45,076. THE MEDIAN Schedule H (For 990) E RC V KALEIDA PAGE 68

71 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. EARNINGS FOR MALE FULL-TIME WORKERS IS 46,348. THE MEDIAN EARNINGS FOR FEMALE FULL-TIME WORKERS IS 34,238. FOR ALL FAMILIES IN ERIE COUNTY, 9.9% ARE BELOW THE FEDERAL POVERTY LEVEL. FOR FAMILIES WITH CHILDREN UNDER 18 YEARS OF AGE, 17% ARE BELOW THE FEDERAL POVERTY LEVEL. THE LIKELIHOOD OF FAMILIES LIVING BELOW THE POVERTY LEVEL IS COMPOUNDED FOR FEMALE HEADED FAMILIES THAT DO NOT HAVE A HUSBAND PRESENT. TEN PERCENT OF FAMILIES IN ERIE COUNTY HAVE A FEMALE HEAD OF HOUSEHOLD WITH NO HUSBAND PRESENT AND 31% OF THESE FAMILIES ARE BELOW THE POVERTY LEVEL. FOR THOSE FAMILIES WITH CHILDREN UNDER 18 YEARS OF AGE, 42.5% ARE BELOW THE POVERTY LEVEL AND 53.4% OF THESE FAMILIES WITH CHILDREN UNDER AGE 5 ARE BELOW THE POVERTY LEVEL. ERIE COUNTY'S PER CAPITA INCOME IN 2007 WAS 25,995. IN THE CITY OF BUFFALO WHERE POVERTY IS MORE PREVALENT, THE MEDIAN HOUSEHOLD HOLD INCOME IS 24,536, WHICH IS MORE THAN 20,000 LESS THAN THE COUNTY AS A WHOLE; AND THE PER CAPITA INCOME IN BUFFALO IS 14,991, ALMOST 11,000 LESS THAN THE COUNTY. THE MEDIAN HOUSEHOLD INCOME NATIONALLY IS 66,670, AND 52,944 FOR NEW YORK STATE. IN ERIE COUNTY, 13.7% OF ALL RESIDENTS LIVE BELOW THE FEDERAL POVERTY Schedule H (For 990) E RC V KALEIDA PAGE 69

72 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. LEVEL, WHICH IS VERY SIMILAR TO THE PERCENT FOR NEW YORK STATE. IN THE CITY OF BUFFALO, 26.6% OF RESIDENTS ARE LIVING BELOW THE FEDERAL POVERTY LEVEL. ACCORDING TO THE NEW YORK STATE DEPARTMENT OF HEALTH, AT THE END OF 2008, 6.1% OF ERIE COUNTY RESIDENTS DID NOT HAVE HEALTH INSURANCE AND 8.1% OF ERIE COUNTY RESIDENTS WERE UNEMPLOYED IN ERIE COUNTY HAS A HIGHER HIGH SCHOOL GRADUATION RATE (82.9%) THAN NEW YORK STATE (79.1%), HOWEVER THE CITY OF BUFFALO'S HIGH SCHOOL GRADUATION RATE IS LOWER (74.6%). SIMILARLY, THE CITY OF BUFFALO'S COLLEGE GRADUATION RATE (18.3%) IS SIGNIFICANTLY LOWER THAN ERIE COUNTY (24.5%) AND NEW YORK STATE (27.4%). (ERIE COUNTY DEPARTMENT OF HEALTH COMMUNITY HEALTH ASSESSMENT). DEMOGRAPHIC INFORMATION, NIAGARA COUNTY NEW YORK: NIAGARA COUNTY IS LOCATED JUST NORTH OF ERIE COUNTY. NIAGARA COUNTY CONSISTS OF 26 CITIES, TOWNS AND VILLAGES ALONG WITH THE TUSCARORA INDIAN RESERVATION, WHICH IS LOCATED APPROIMATELY IN THE MIDDLE OF THE COUNTY. THE CITY OF NIAGARA FALLS IS THE MOST POPULATED CITY IN Schedule H (For 990) E RC V KALEIDA PAGE 70

73 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. NIAGARA COUNTY, FOLLOWED BY NORTH TONAWANDA. ACCORDING TO THE U.S. CENSUS, NIAGARA COUNTY HAS A TOTAL POPULATION OF 214,557, WHICH HAS BEEN DECLINING IN RECENT YEARS. NIAGARA COUNTY DEMOGRAPHICS REVEAL THAT 91.3% OF RESIDENTS ARE CAUCASIAN, 7.3% ARE AFRICAN-AMERICAN, 1.6% ARE NATIVE AMERICAN, 1% ASIAN/PACIFIC ISLANDER AND 5% OTHER. THE MEDIAN HOUSEHOLD INCOME FOR NIAGARA COUNTY IS 45,545. TWELVE PERCENT (12%) OF COUNTY RESIDENTS LIVES IN POVERTY AND 9% OF FAMILIES AND 30% OF FEMALE HEADED HOUSEHOLDS WITH NO SPOUSE HAD INCOMES BELOW THE FEDERAL POVERTY LEVEL. ACCORDING TO THE NEW YORK STATE DEPARTMENT OF HEALTH, NEARLY 9% OF PEOPLE IN NIAGARA COUNTY HAD NO HEALTH INSURANCE AT THE END OF ENGLISH IS THE PRIMARY LANGUAGE FOR 94.1% OF NIAGARA COUNTY RESIDENTS AND THE SECOND LANGUAGE SPOKEN IS SPANISH. THERE IS ALSO A SMALL POPULATION OF RECENT IMMIGRANTS FROM RUSSIA THAT RESIDENTS IN NORTH TONAWANDA, MANY OF WHOM SPEAK VERY LITTLE ENGLISH. Schedule H (For 990) E RC V KALEIDA PAGE 71

74 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. NIAGARA FALLS IS THE LARGEST CITY IN NIAGARA COUNTY WITH 48,388 RESIDENTS. THE POPULATION OF THE CITY OF NIAGARA FALLS IS 77.1% CAUCASIAN, 28% AFRICAN-AMERICAN, 3.5% NATIVE AMERICAN, 2.6% HISPANIC, AND 1.1% ASIAN/PACIFIC ISLANDER. THERE ARE 25,383 FEMALES AND 23,005 MALES RESIDING IN NIAGARA FALLS. THE MEDIAN INCOME IN NIAGARA FALLS IS 30,324. ACCORDING TO BUSINESS FIRST, THE UNEMPLOYMENT RATE IN NIAGARA FALLS IN JUNE 2009 WAS ONE OF THE HIGHEST IN THE WESTERN NEW YORK REGION AT 11.4%. THE POVERTY RATES IN NIAGARA FALLS FROM INDICATED THAT AN OVERALL 22% OF RESIDENTS LIVE IN POVERTY. WITHIN THIS GROUP, 33% OF RELATED CHILDREN UNDER AGE 18 LIVE BELOW THE FEDERAL POVERTY LEVEL. IN ADDITION, 34% OF FEMALE HEADED HOUSEHOLDS HAD INCOME BELOW THE FEDERAL POVERTY LEVEL. IN NIAGARA FALLS, 82% OF ADULTS GRADUATED FROM HIGH SCHOOL, 12% EARNED COLLEGE DEGREES, HOWEVER 18% DID NOT COMPLETE HIGH SCHOOL. NORTH TONAWANDA IS THE SECOND LARGEST CITY IN NIAGARA COUNTY, WITH A Schedule H (For 990) E RC V KALEIDA PAGE 72

75 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. TOTAL POPULATION OF 32,113. THERE ARE 16,199 MALES AND 15,914 FEMALES RESIDING IN NORTH TONAWANDA. THE MAJORITY OF RESIDENTS (98.3%) ARE CAUCASIAN, 5% AFRICAN-AMERICAN AND 1.2% ARE ASIAN/PACIFIC ISLANDERS. THE MEDIAN INCOME IN NORTH TONAWANDA IS 44,692. ACCORDING TO BUSINESS FIRST, THE UNEMPLOYMENT RATE IN 2009 WAS 8.9%. A 7% POVERTY LEVEL WAS IDENTIFIED, INCLUDING 5% OF FAMILIES RESIDING IN NORTH TONAWANDA AND 14% OF FEMALE HEADED HOUSEHOLDS WITH NO SPOUSE. 89% OF ADULTS GRADUATED FROM HIGH SCHOOL AND 22% HOLD A COLLEGE DEGREE. TWELVE PERCENT (12%) OF NORTH TONAWANDA RESIDENTS DROPPED OUT OF HIGH SCHOOL. (NIAGARA COUNTY DEPARTMENT OF HEALTH COMMUNITY HEALTH ASSESSMENT. COMMUNITY BUILDING ACTIVITIES: KALEIDA HEALTH PURCHASED A BLOCK OF GOODRICH STREET FROM THE CITY OF BUFFALO FOR ITS EPANDING FLAGSHIP MEDICAL CAMPUS. DURING THE PROCESS OF THE SALE, KALEIDA ADVOCATED STRONGLY THAT THE PURCHASE PRICE (1.1 MILLION) GO DIRECTLY INTO THE SURROUNDING INNER-CITY NEIGHBORHOODS. THE CITY OF BUFFALO AGREED AND ANNOUNCED THE FUNDS WILL BE USED TO IMPROVE OR ADD SIDEWALKS, STREETS, LANDSCAPING, Schedule H (For 990) E RC V KALEIDA PAGE 73

76 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. INFRASTRUCTURE AND SECURITY CAMERAS IN THE FRUIT BELT NEIGHBORHOOD, WHICH BORDERS KALEIDA'S BUFFALO GENERAL HOSPITAL FACILITY. THE HEALTH AND SAFETY OF NEIGHBORHOOD RESIDENTS ARE IMPROVED WITH THIS INVESTMENT BY CLEARING OUT DEBRIS-FILLED LOTS, REPLACING CRACKED SIDEWALKS AND PROVIDING ADDITIONAL SECURITY TO MAKE THE NEIGHBORHOOD SAFE AND HEALTHY FOR RESIDENTS, THEREBY IMPROVING HEALTH, SAFETY AND WELL-BEING FOR CITY RESIDENTS. KALEIDA HEALTH'S COMMUNITY BUILDING ACTIVITIES INCLUDE PROGRAMS SUCH AS KALEIDA'S ANNUAL TRAINING FOR WOMEN AND MINORITY SUPPLIERS ON "HOW TO DO BUSINESS WITH KALEIDA HEALTH," AIMED AT PROVIDING OPPORTUNITIES FOR MINORITY AND WOMEN OWNED BUSINESSES TO MEET PURCHASING PROFESSIONALS FROM KALEIDA HEALTH AND THE WESTERN NEW YORK PURCHASING ALLIANCE. THE 3-PART SERIES PROVIDE POTENTIAL SUPPLIERS WITH AN OVERVIEW OF KALEIDA HEALTH'S PURCHASING NEEDS, COVERS THE TECHNICAL ASPECTS OF PROPOSAL SUBMISSION AND ORDER FULFILLMENT REQUIREMENTS. OTHER INFORMATION: Schedule H (For 990) E RC V KALEIDA PAGE 74

77 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. STATES IN WHICH KALEIDA HEALTH FILES A COMMUNITY BENEFIT REPORT NEW YORK STATE ALSO SEE SCHEDULE O DESCRIPTION FOR FORM 990, PART III FOR A DESCRIPTION OF HOW THE ORGANIZATION FURTHERS ITS EEMPT PURPOSE BY PROMOTING THE HEALTH OF THE COMMUNITY. AFFILIATED HEALTH CARE SYSTEM ROLES: PROMOTING COMMUNITY HEALTH IS HOW WE CARRY OUT THE MISSION OF KALEIDA HEALTH: "TO ADVANCE THE HEALTH OF OUR COMMUNITY." THIS IS THE FOUNDATION OF OUR WORK AT KALEIDA HEALTH. OUR COMMUNITY BENEFIT WORK IS FOCUSED ON THE NEEDS OF LOW INCOME, MEDICALLY UNDERSERVED POPULATIONS. POVERTY TRENDS, COMMUNITY HEALTH RESEARCH AND NEEDS ASSESSMENTS ARE REVIEWED ON A REGULAR BASIS WHILE PLANNING COMMUNITY HEALTH PROGRAMS. KALEIDA HEALTH REPRESENTATIVES ARE ACTIVELY ENGAGED IN VARIOUS COMMUNITY HEALTH COLLABORATIVES WITH THE LOCAL HEALTH DEPARTMENTS, STATE HEALTH DEPARTMENT, AND LOCAL NOT-FOR-PROFIT HEALTH AND HUMAN SERVICE AGENCIES. WE ARE RESPONSIVE TO COMMUNITY PRIORITIES AND DEVELOP PROGRAMS AND SERVICES THAT FILL A GAP OR Schedule H (For 990) E RC V KALEIDA PAGE 75

78 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. SUPPLEMENT AN EISTING PROGRAM. MOST KALEIDA HEALTH COMMUNITY HEALTH OUTREACH PROGRAMS ARE OFFERED IN PARTNERSHIP WITH OTHER COMMUNITY ORGANIZATIONS OR GOVERNMENTAL AGENCIES, IN ORDER TO LEVERAGE RESOURCES TO MEET COMMUNITY NEEDS. INFORMATION REGARDING THE AVAILABILITY OF COMMUNITY HEALTH PROGRAMS, ASSISTANCE WITH HEALTH INSURANCE ENROLLMENT AND FINANCIAL ASSISTANCE FOR MEDICAL CARE RECEIVED AT KALEIDA HEALTH HOSPITALS, EMERGENCY DEPARTMENTS, OUTPATIENT DEPARTMENTS OR LONG-TERM CARE FACILITIES ARE DISSEMINATED TO THE PUBLIC IN ELECTRONIC (WEBSITE) FORM IN THE ANNUAL COMMUNITY BENEFIT REPORT, ANNUAL COMMUNITY SERVICE PLAN, AND DISSEMINATED IN PRINT FORM AT COMMUNITY HEALTH OUTREACH EVENTS. THE VISITING NURSING ASSOCIATION OF WESTERN NEW YORK, INC. IS THE KALEIDA HEALTH HOME CARE AFFILIATE. THE VISITING NURSING ASSOCIATION OF WESTERN NEW YORK PROMOTES THE HEALTH OF THE COMMUNITY BY EDUCATING CHRONIC CARE PATIENTS ON SELF-MANAGEMENT AND PERSONAL CARE IN AREAS SUCH AS REHABILITATION SERVICES, NUTRITION EDUCATION AND THERAPY, INFECTION CONTROL, FALLS RISK ASSESSMENT AND INTERVENTION, AND HEALTH EDUCATION RELATED TO IMPROVED LIFESTYLE CHOICES FOR INDIVIDUALS AND FAMILIES IN THEIR HOMES AND THE COMMUNITY. COMMUNITY-BASED Schedule H (For 990) E RC V KALEIDA PAGE 76

79 Schedule H (For 990) 2009 Page 4 Part VI Suppleental Inforation Coplete this part to provide the following inforation. 1 Provide the description required for Part I, line 3c; Part I, line 6a; Part I, line 7g; Part I, line 7, colun (f); Part I, line 7; Part III, line 4; Part III, line 8; Part III, line 9b, and Part V. See Instructions. 2 Needs assessent. Describe how the organization assesses the health care needs of the counities it serves. 3 Patient education of eligibility for assistance. Describe how the organization infors and educates patients and persons who ay be billed for patient care about their eligibility for assistance under federal, state, or local governent progras or under the organization's charity care policy Counity inforation. Describe the counity deographic constituents it serves the organization serves, taking into account the geographic area and Counity building activities. Describe how the organization's counity building activities, as reported in Part II, proote the health of the counities the organization serves. Provide any other inforation iportant to describing how the organization's hospitals or other health care facilities further its exept purpose by prooting the health of the counity (e.g., open edical staff, counity board, use of surplus funds, etc.). If the organization is part of an affiliated health care syste, describe the respective roles of the organization and its affiliates in prooting the health of the counities served. If applicable, identify all states with which the organization, or a related organization, files a counity benefit report. PREVENTION PROGRAMS ARE OFFERED THROUGH THE VISITING NURSING ASSOCIATION, SUCH AS THE INFLUENZA IMMUNIZATION PROGRAM. THE VISITING NURSING ASSOCIATION OF WESTERN NEW YORK OFFERS ONE OF THE LARGEST ANNUAL INFLUENZA IMMUNIZATION PROGRAMS IN THE REGION. DURING THE 2009 FLU SEASON, THE VISITING NURSING ASSOCIATION OF WESTERN NEW YORK HOSTED MORE THAN 500 INFLUENZA VACCINE CLINICS AND PROVIDED 37,200 SEASONAL FLU VACCINES, 6,750 H1N1 FLU VACCINES AND 675 PNEUMONIA VACCINES FOR RESIDENTS IN OUR COMMUNITY. Schedule H (For 990) E RC V KALEIDA PAGE 77

80 SCHEDULE I (For 990) Grants and Other Assistance to Organizations, Governents, and Individuals in the United States OMB À¾ ½ Coplete if the organization answered "Yes" to For 990, Part IV, line 21 or 22. Open to Public Departent of the Treasury Internal Revenue Service I Attach to For 99 Inspection Nae of the organization Eployer identification nuber KALEIDA HEALTH Part I General Inforation on Grants and Assistance 1 Does the organization aintain records to substantiate the aount of the grants or assistance, the grantees' eligibility for the grants or assistance, and the selection criteria used to award the grants or assistance? Yes 2 Describe in Part IV the organization's procedures for onitoring the use of grant funds in the United States. Part II 1 Grants and Other Assistance to Governents and Organizations in the United States. Coplete if the organization answered "Yes" to For 990, Part IV, line 21, for any recipient that received ore than 5,00 Check this box if no one recipient received ore than 5,00 Use Part IV and Schedule I-1 (For 990) if additional space is needed Nae and address of organization or governent WNY CLINICAL INFO ECHANGE EIN IRC section if applicable Aount of cash grant (e) Aount of non-cash assistance (f) Method of valuation (book, FMV, appraisal, other) (g) Description of non-cash assistance No I (h) Purpose of grant or assistance 2568 WALDEN AVE, SUITE ,00 N/A N/A CONTRIBUTION BUFFALO URBAN LEAGUE INC 15 E GENESEE STREET BUFFALO, NY (C)(3) 10,00 N/A N/A GALA SPONSOR UB FOUNDATION 3435 MAIN STREET BUFFALO, NY (C)(3) 52,82 N/A N/A ABS PROGRAM ERIE COMMUNITY COLLEGE FOUNDATION, INC ABBOTT ROAD BUFFALO, NY (C)(3) 40,00 N/A N/A ECC HEALTH SCIENCE ECONOMIC DEVELOPMENT GROUP 437 FRANKLIN STREET BUFFALO, NY (C)(3) 10,00 N/A N/A HEALTH SCIENCE CHART ECMC LIFELINE FOUNDATION 462 GRIDER STREET BUFFALO, NY (C)(3) 6,75 N/A N/A GOLF TOURN SPNSR 2 3 Enter total nuber of section 501(3) and governent organizations Enter total nuber of other organizations 5 1 For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule I (For 990) E RC V KALEIDA PAGE 78 I

81 Grants and Other Assistance to Individuals in the United States. Coplete if the organization answered "Yes" on For 990, Part IV, line 22. Use Part IV and Schedule I-1 (For 990) if additional space is needed. Schedule I (For 990) 2009 Page 2 Part III Type of grant or assistance Nuber of recipients Aount of cash grant Aount of non-cash assistance (e) Method of valuation (book, FMV, appraisal, other) (f) Description of non-cash assistance Part IV Suppleental Inforation. Coplete this part to provide the inforation required in Part I, line 2, and any other additional inforation. FORM 990, SCHEDULE I DESCRIPTION OF ORGANIZATION'S PROCEDURES FOR MONITORING THE USE OF GRANTS KALEIDA HEALTH MAKES CONTRIBUTIONS TO ORGANIZATIONS IN WESTERN NEW YORK THAT ALSO HAVE HEALTH CARE RELATED ACTIVITIES. ALL CONTRIBUTIONS MUST BE APPROVED BY THE GOVERNING BODY BEFORE THE MONEY IS DISTRIBUTED. Schedule I (For 990) E RC V KALEIDA PAGE 79

82 SCHEDULE J (For 990) Departent of the Treasury Internal Revenue Service Nae of the organization Copensation Inforation OMB For certain Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees Coplete if the organization answered "Yes" to For 990, I Part IV, line 23. Attach to For 99 See separate instructions. I I À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH Part I Questions Regarding Copensation 1a Check the appropriate box(es) if the organization provided any of the following to or for a person listed in For 990, Part VII, Section A, line 1a. Coplete Part III to provide any relevant inforation regarding these ites. First-class or charter travel Travel for copanions Tax indenification and gross-up payents Discretionary spending account Housing allowance or residence for personal use Payents for business use of personal residence Health or social club dues or initiation fees al services (e.g., aid, chauffeur, chef) Yes No b If any of the boxes on line 1a is checked, did the organization follow a written policy regarding payent or reiburseent or provision of all of the expenses described above? If "No," coplete Part III to explain 2 Did the organization require substantiation prior to reibursing or allowing expenses incurred by all officers, directors, trustees, and the CEO/Executive Director, regarding the ites checked in line 1a? 1b 2 3 Indicate which, if any, of the following the organization uses to establish the copensation of the organization's CEO/Executive Director. Check all that apply. Copensation coittee Independent copensation consultant For 990 of other organizations Written eployent contract Copensation survey or study Approval by the board or copensation coittee 4 During the year, did any person listed in For 990, Part VII, Section A, line 1a, with respect to the filing organization or a related organization: a Receive a severance payent or change-of-control payent? b Participate in, or receive payent fro, a suppleental nonqualified retireent plan? c Participate in, or receive payent fro, an equity-based copensation arrangeent? If "Yes" to any of lines 4a-c, list the persons and provide the applicable aounts for each ite in Part III. 4a 4b 4c a b a b Only section 501(3) and 501(4) organizations ust coplete lines 5-9. For persons listed in For 990, Part VII, Section A, line 1a, did the organization pay or accrue any copensation contingent on the revenues of: The organization? Any related organization? If "Yes" to line 5a or 5b, describe in Part III. For persons listed in For 990, Part VII, Section A, line 1a, did the organization pay or accrue any copensation contingent on the net earnings of: The organization? Any related organization? If "Yes" to line 6a or 6b, describe in Part III. For persons listed in For 990, Part VII, Section A, line 1a, did the organization provide any non-fixed payents not described in lines 5 and 6? If "Yes," describe in Part III Were any aounts reported in For 990, Part VII, paid or accrued pursuant to a contract that was subject to the initial contract exception described in Regs. section (3)? If "Yes," describe in Part III 9 If "Yes" to line 8, did the organization also follow the rebuttable presuption procedure described in Regulations section ? For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule J (For 990) a 5b 6a 6b E RC V KALEIDA PAGE 80

83 Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees. Use Schedule J-1 if additional space is needed. Schedule J (For 990) 2009 Page 2 Part II For each individual whose copensation ust be reported in Schedule J, report copensation fro the organization on row (i) and fro related organizations, described in the instructions, on row (ii). Do not list any individuals that are not listed on For 990, Part VII. Note. The su of coluns (B)(i)-(iii) ust equal the applicable colun (D) or colun (E) aounts on For 990, Part VII, line 1a. 9E (A) Nae (ii) (B) Breakdown of W-2 and/or 1099-MISC copensation (i) Base copensation (ii) Bonus & incentive copensation (iii) Other reportable copensation (C) Retireent and other deferred copensation (D) Nontaxable benefits (E) Total of coluns (B)(i)-(D) (F) Copensation reported in prior For 990 or For 990-EZ JAMES KASKIE ROBERT NOLAN CONNIE VARI JOSEPH KESSLER MARGARET PAROSKI MD CHERYL KLASS LAWRENCE ZIELINSKI DONALD BOYD CHRISTOPHER LANE JAMES FOSTER, MD ROBERT LOVELL D. ERIC POGUE TAMARA OWEN FRANCIS MEYER JR. JONATHAN SWIATKOWSKI (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) 714, , , ,68 400,00 351,15 300, , , , , , , , ,42 308, , , , , , , ,89 170, , , , , , ,945. 1,259, , ,205. 8,50 25,00 3,50 98,214. 6, ,00 428, ,00 3,50 30, ,48 43, , , , , , , , , , , , , , ,783. 5, , , , , ,724. 2, ,848. 5,367. 5, , ,67 2,327, , , , , ,22 573, , ,54 428, ,84 459,47 398, , , ,546. 1,212,44 483, , ,214. BARBARA LOSI Schedule J (For 990) RC V KALEIDA PAGE 81

84 Schedule J (For 990) Page 3 Part III Suppleental Inforation Coplete this part to provide the inforation, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also coplete this part for any additional inforation. HEALTH OR SOCIAL CLUB DUES SCHEDULE J, PART I, LINE 1A AS PART OF THEIR COMPENSATION PACKAGE OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION ARE ENTITLED TO CHOOSE AS AN EECUTIVE PERK THE BENEFIT OF BUSINESS RELATED SOCIAL DUES OR INITIATION FEES. SEVERENCE PAYMENTS SCHEDULE J, PART I, LINE 4A FORMER EVP/COO, ROBERT LOVELL, RECEIVED SEVERENCE PAYMENTS DURING THE YEAR IN THE AMOUNT OF 428,365. EECUTIVE DEFERRED RETIREMENT PLAN SCHEDULE J, PART I, LINE 4B DURING THE YEAR, THE FOLLOWING OFFICERS AND KEY EMPLOYEES LISTED ON FORM 990, PART VII, SECTION A PARTICIPATED IN THE EECUTIVE DEFERRED RETIREMENT PLAN: ROBERT NOLAN, CONNIE VARI, JOSEPH KESSLER, JAMES KASKIE, LARRY ZIELINSKI, DONALD BOYD, MARGARET PAROSKI, AND D. ERIC POGUE. EMPLOYER AND EMPLOYEE CONTRIBUTIONS DURING THE YEAR TO THIS PLAN HAVE Schedule J (For 990) E RC V KALEIDA PAGE 82

85 Schedule J (For 990) Page 3 Part III Suppleental Inforation Coplete this part to provide the inforation, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also coplete this part for any additional inforation. BEEN REPORTED, AS REQUIRED, ON SCHEDULE J, PART II COLUMNS(B)(III) AND (C). DURING 2009, THE FOLLOWING OFFICERS RECEIVED PAYMENTS UNDER AN EECUTIVE DEFERRED RETIREMENT PLAN: CONNIE VARI 220,705 LARRY ZIELINSKI 78,214 JAMES KASKIE 1,212,440 ROBERT NOLAN 483,807 COMPENSATION ARRANGEMENT CONTINGENT ON NET EARNINGS OF THE ORGANIZATION SCHEDULE J, PART I, QUESTION 6B THE ORGANIZATION PLACES A CERTAIN PORTION OF AN EECUTIVES TOTAL AVAILABLE COMPENSATION AT RISK ANNUALLY AND A PROPORTION OF THAT AT-RISK AMOUNT IS DEPENDENT UPON THE CONSOLIDATED HEALTH SYSTEM ATTAINING CERTAIN OPERATING PERFORMANCE TARGETS BOTH FINANCIAL AND NON-FINANCIAL. DURING 2008, CERTAIN FINANCIAL OPERATING TARGETS WHICH WERE SET BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS, INCLUDING TOTAL NET OPERATING MARGIN WERE MET AND ECEEDED RESULTING IN COMPENSATION UNDER THIS ARRANGEMENT PAID TO OFFICERS AND KEY EMPLOYEES DURING Schedule J (For 990) E RC V KALEIDA PAGE 83

86 SCHEDULE J-1 (For 990) Continuation Sheet for Schedule J (For 990) Departent of the Treasury Internal Revenue Service Nae of the organization IAttach to For 990 to list additional inforation for Schedule J (For 990), Part II. See Instructions for Schedule J (For 990). I OMB À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH Part I Continuation of Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees (Schedule J, Part II) (A) Nae (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (B) Breakdown of W-2 and/or 1099-MISC copensation (i) Base copensation (ii) Bonus & incentive copensation (iii) Other reportable copensation (C) Retireent and other deferred copensation (D) Nontaxable benefits (E) Total of coluns (B)(i)-(D) (F) Copensation reported in prior For 990 or For 990-EZ (i) 352,238. 3, ,148. LUCY CAMPBELL MD For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule J-1 (For 990) E RC V KALEIDA PAGE 84

87 SCHEDULE J-2 (For 990) Continuation Sheet for For 990 Departent of the Treasury Internal Revenue Service Nae of the Organization I I Attach to For 990 to list additional inforation for For 990, Part VII, Section A, line 1a. See the Instructions for For 99 Eployer identification nuber OMB À¾ ½ Open to Public Inspection KALEIDA HEALTH Part I Continuation of Officers, Directors, Trustees, Key Eployees, and Highest Copensated Eployees (A) Nae and title (B) Average hours per week (C) Position (check all that apply) Individual trustee or director Institutional trustee Officer Key eployee Highest copensated eployee Forer (D) Reportable copensation fro the organization (W-2/1099-MISC) (E) Reportable copensation fro related organizations (W-2/1099-MSC) (F) Estiated aount of other copensation fro the organization and related organizations LUCY CAMPBELL MD EMPLOYED PHYSICIAN ,238. 3,675. ROBERT LOVELL FORMER COO , ,819. For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule J-2 (For 990) E RC V KALEIDA PAGE 85

88 SCHEDULE K (For 990) Departent of the Treasury Internal Revenue Service Nae of the organization Suppleental Inforation on Tax-Exept Bonds ICoplete if the organization answered "Yes" to For 990, Part IV, line 24a. Provide descriptions, explanations, Iand any additional inforation on Schedule O (For 990). Attach to For 99 See separate instructions. OMB À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH Part I Bond Issues Issuer nae Issuer EIN CUSIP # Date issued (e) Issue price (f) Description of purpose (g) Defeased (h) On behalf of issuer Yes No Yes No A DORMITORY AUTHORITY OF THE STATE OF NEW YORK TQT3 05/20/ ,405,00 REFINANCE BUF GENERAL HOSP MOR B DORMITORY AUTHORITY OF THE STATE OF NEW YORK Q429 09/21/ ,810,00 SEE SCHEDULE O C DORMITORY AUTHORITY OF THE STATE OF NEW YORK /14/ ,356,273. EQUIPMENT PURCHASE D DORMITORY AUTHORITY OF THE STATE OF NEW YORK /28/ ,485,005. EQUIPMENT PURCHASE E Part II Proceeds Total proceeds of issue Gross proceeds in reserve funds Proceeds in refunding or defeasance escrows Other unspent proceeds Issuance costs fro proceeds Working capital expenditures fro proceeds Capital expenditures fro proceeds Year of substantial copletion Were the bonds issued as part of a current refunding issue? Were the bonds issued as part of an advance refunding issue? Has the final allocation of proceeds been ade? Does the organization aintain adequate books and records to support the final allocation of proceeds? Private Business Use A B C D E Part III A B C D E 1 Was the organization a partner in a partnership, or a Yes No Yes No Yes No Yes No Yes No eber of an LLC, which owned property financed by tax-exept bonds? 2 Are there any lease arrangeents with respect to the financed property which ay result in private business use? For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule K (For 990) E ,994, ,710, ,699, ,894, ,890, ,336, ,106. 1,867,994. 3,049, , , , ,680, ,638, ,811, Yes No Yes No Yes No Yes No Yes No 8RC V KALEIDA PAGE 86

89 Schedule K (For 990) 2009 Page 2 Part III Private Business Use (Continued) 3a Are there any anageent or service contracts with respect to the financed property which ay result in private business use? b Are there any research agreeents with respect to the financed property which ay result in private business use? c Does the organization routinely engage bond counsel or other outside counsel to review any anageent or service contracts or research agreeents 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(3) organization or a state or local governent I % 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(3) organization, or a state or local governent I 6 Total of lines 4 and 5 7 Has the organization adopted anageent practices and procedures to ensure the post-issuance copliance of its tax-exept bond liabilities? Arbitrage Part IV A B C D E Yes No Yes No Yes No Yes No Yes No % % 0000% 0000% 0000% A B C D E 1 Has a For 8038-T, Arbitrage Rebate, Yield Reduction Yes No Yes No Yes No Yes No Yes No and Penalty in Lieu of Arbitrage Rebate, been filed with respect to the bond issue? 2 Is the bond issue a variable rate issue? 3a Has the organization or the governental issuer identified a hedge with respect to the bond issue on its books and records? b Nae of provider c Ter of hedge 4a 5 Were gross proceeds invested in a GIC? b Nae of provider c Ter of GIC d Was the regulatory safe harbor for establishing the fair arket value of the GIC satisfied? Were any gross proceeds invested beyond an available teporary period? 6 Did the bond issue qualify for an exception to rebate? SEE SCHEDULE O SEE SCHEDULE O % % % % % % % % % Schedule K (For 990) E RC V KALEIDA PAGE 87

90 SCHEDULE L Transactions With Interested s I OMB À¾ ½ (For 990 or 990-EZ) Coplete if the organization answered "Yes" on For 990, Part IV, line 25a, 25b, 26, 27, 28a, 28b, or 28c, Departent of the Treasury or For 990-EZ, Part V, line 38a or 40b. Open To Public Internal Revenue Service IAttach to For 990 or For 990-EZ. ISee separate instructions. Inspection Nae of the organization Eployer identification nuber KALEIDA HEALTH Part I Excess Benefit Transacations (section 501(3) and section 501(4) organizations only). Coplete if the organization answered "Yes" on For 990, Part IV, line 25a or 25b, or For 990-EZ, Part V, line 40b. 1 Nae of disqualified person Description of transaction Corrected? Yes No 2 3 Enter the aount of tax iposed on the organization anagers or disqualified persons during the year under section 4958 Enter the aount of tax, if any, on line 2, above, reibursed by the organization I I Part II Loans to and/or Fro Interested s. Coplete if the organization answered "Yes" on For 990, Part IV, line 26, or For 990-EZ, Part V, line 38a. Nae of interested person and purpose Loan to or fro the organization? Original principal aount Balance due (e) In default? (f) Approved by board or coittee? (g) Written agreeent? To Fro Yes No Yes No Yes No GEN. PHYSICIANS PC SEE SCHEDULE O 250, ,253. Total I Part III Grants or Assistance Benefitting Interested s. Coplete if the organization answered "Yes" on For 990, Part IV, line 27. Nae of interested person Relationship between interested person and the organization 250,253. Aount and type of assistance Part IV Business Transactions Involving Interested s. Coplete if the organization answered "Yes" on For 990, Part IV, line 28a, 28b, or 28c. Nae of interested person Relationship between interested person and the organization Aount of transaction Description of transaction (e) Sharing of organization's revenues? ATTACHMENT 8 Yes No For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 990 or 990-EZ. Schedule L (For 990 or 990-EZ) E RC V KALEIDA PAGE 88

91 Contributions OMB SCHEDULE M (For 990) ICoplete if the organizations answered "Yes" on For À¾ ½ 990, IPart IV, lines 29 or 3 Open To Public Departent of the Treasury Internal Revenue Service Attach to For 99 Inspection Nae of the organization Eployer identification nuber KALEIDA HEALTH Part I Types of Property Art-Works of art Art-Historical treasures Art-Fractional interests Books and publications Clothing and household goods Cars and other vehicles Boats and planes Intellectual property Securities-Publicly traded Securities-Closely held stock Securities-Partnership, LLC, or trust interests Securities-Miscellaneous Qualified conservation contribution-historic structures Qualified conservation contribution-other Real estate-residential Real estate-coercial Real estate-other Collectibles Food inventory Drugs and edical supplies Taxidery Historical artifacts Scientific speciens Archeological artifacts Other ( ATCH 2 Other ( Other I( Other ( I ) ) ) ) Check if applicable Nuber of contributions Revenues reported on For 990, Part VIII, line 1g 29 Nuber of Fors 8283 received by the organization during the tax year for contributions for which the organization copleted For 8283, Part IV, Donee Acknowledgeent a During the year, did the organization receive by contribution any property reported in Part I, line 1-28 that it ust hold for at least three years fro the date of the initial contribution, and which is not required to be used for exept purposes for the entire holding period? Method of deterining revenues b If "Yes," describe the arrangeent in Part II. 31 Does the organization have a gift acceptance policy that requires the review of any non-standard contributions? a Does the organization hire or use third parties or related organizations to solicit, process, or sell noncash contributions? 32a b If "Yes," describe in Part II. 33 If the organization did not report revenues in colun for a type of property for which colun is checked, describe in Part II. For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule M (For 990) E ,801,476. 8RC V KALEIDA PAGE 89 30a Yes No

92 Suppleental Inforation. Coplete this part to provide the inforation required by Part I, lines 30b, 32b, and 33. Also coplete this part for any additional inforation. Schedule M (For 990) 2009 Page 2 Part II SCHEDULE M, PART I - OTHER NONCASH CONTRIBUTIONS ATTACHMENT 2 (B) NUMBER OF (C) REVENUES (D) METHOD OF DESCRIPTION (A) CHECK CONTRIBUTIONS REPORTED DETERMINING VARIOUS MEDICAL EQUIPMENT 18 4,801,476. REPLACEMENT COST TOTALS 18. 4,801,476. Schedule M (For 990) E RC V KALEIDA PAGE 90

93 SCHEDULE O (For 990) Departent of the Treasury Internal Revenue Service Nae of the organization Suppleental Inforation to For 990 Coplete to provide inforation for responses to specific questions on For 990 or to provide any additional inforation. Attach to For 99 I OMB À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 PROGRAM SERVICE ACCOMPLISHMENTS PART III -- BACKGROUND KALEIDA HEALTH IS A VOLUNTARY, NOT-FOR-PROFIT, NEW YORK STATE DEPARTMENT OF HEALTH ARTICLE 28 LICENSED HOSPITAL-BASED HEALTHCARE DELIVERY SYSTEM SERVING THE COMMUNITIES OF WESTERN NEW YORK STATE AT VARIOUS LEVELS AND WITH FACILITIES IN MULTIPLE LOCATIONS THROUGHOUT THE REGION. KALEIDA HEALTH IS A PRODUCT OF THE 1998 MERGER OF BUFFALO GENERAL HEALTH SYSTEM (BUFFALO GENERAL), MILLARD FILLMORE GATES CIRCLE HOSPITAL (MILLARD GATES), MILLARD FILLMORE SUBURBAN HOSPITAL (MILLARD SUBURBAN), WOMEN AND CHILDREN'S HOSPITAL OF BUFFALO (WOMEN & CHILDREN'S), AND DEGRAFF MEMORIAL HOSPITAL (DEGRAFF). IN ADDITION TO THE 5 KALEIDA HEALTH (KALEIDA) HOSPITALS, KALEIDA OPERATES THREE SKILLED NURSING FACILITIES, AND NUMEROUS OUTPATIENT CLINICS. THE ABOVE FACILITIES OPERATE UNDER ONE TA IDENTIFICATION NUMBER. OUR FAMILY OF HEALTH CARE ORGANIZATIONS IS BONDED TOGETHER INTO ONE FRAMEWORK FOR LEADERSHIP, GOVERNANCE, SHARED SERVICES, FINANCIAL INFRASTRUCTURE AND INFORMATION TECHNOLOGY PLATFORMS. COLLECTIVELY, KALEIDA HEALTH'S MARKET SHARE IS 32.4% IN WESTERN NEW YORK, 43.8% IN ERIE COUNTY AND 27.7% IN NIAGARA COUNTY. ANNUALLY ONE MILLION COMBINED INPATIENT, EMERGENCY DEPARTMENT AND OUTPATIENT VISITS OCCUR AT THE HEALTH CARE FACILITIES IN THE KALEIDA HEALTH SYSTEM, WHICH EMPLOYS 9,500 STAFF AND HAVE NEARLY 1,800 MEDICAL STAFF MEMBERS. DURING 2009, THERE WERE 65,352 INPATIENT DISCHARGES, OF WHICH 15% WERE MEDICAID AND MEDICAID For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule O (For 990) E RC V KALEIDA PAGE 91

94 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) MANAGED CARE, 40% MEDICARE AND MEDICARE MANAGED CARE, AND 1% WERE UNINSURED. KALEIDA HEALTH'S MISSION IS "TO ADVANCE THE HEALTH OF THE COMMUNITY." OUR VISION IS TO BE THE "REGIONAL HEALTH CARE SYSTEM PROVIDING ECEPTIONAL QUALITY SERVICES, WITH A COMMITMENT TO EDUCATION AND RESEARCH, ACCESSIBLE TO ALL". OUR VALUES CLEARLY STATE WHO WE ARE AND HOW WE PERFORM OUR WORK: PATIENT-CENTERED: WE PUT PATIENTS AND FAMILIES FIRST ECELLENCE: AS A TEAM, WE PURSUE ECEPTIONAL PERFORMANCE WITH PASSION ACCOUNTABILITY: WE TAKE PERSONAL RESPONSIBILITY FOR DELIVERING RESULTS INTEGRITY: WE DEMONSTRATE HONESTY IN EVERYTHING WE DO. KALEIDA HEALTH'S PROGRAMS AND AFFILIATES ARE LICENSED BY THE STATE OF NEW YORK DEPARTMENT OF HEALTH AND ACCREDITED BY THE JOINT COMMISSION. KALEIDA IS CERTIFIED BY THE U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES FOR PARTICIPATION IN MEDICARE AND MEDICAID. THE ACCREDITATION COUNSEL FOR GRADUATE MEDICAL EDUCATION APPROVES ALL RESIDENCY PROGRAMS FOR PHYSICIANS, AND THE AMERICAN DENTAL ASSOCIATION APPROVES ITS DENTAL AND ORAL SURGERY PROGRAMS. KALEIDA IS ALSO A MEMBER OF THE COUNCIL OF TEACHING HOSPITALS, THE AMERICAN DENTAL ASSOCIATION, THE AMERICAN MEDICAL ASSOCIATION, AND THE GREATER NEW YORK HOSPITAL ASSOCIATION. Schedule O (For 990) E RC V KALEIDA PAGE 92

95 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) OPERATION OF EMERGENCY ROOMS KALEIDA HEALTH OPERATES FIVE EMERGENCY DEPARTMENTS, ONE IN EACH OF THE ACUTE CARE HOSPITALS, GENERATING A TOTAL OF 175,909 PATIENT VISITS DURING THE EMERGENCY DEPARTMENTS OPERATE 24 HOURS A DAY, 7 DAYS EACH WEEK AND ARE OPEN TO ANYONE, REGARDLESS OF THEIR ABILITY TO PAY FOR SERVICES. BOARD OF DIRECTORS AND COMMUNITY GUIDANCE KALEIDA HEALTH MAINTAINS COMMUNITY CONTROL OVER THE CORPORATION THROUGH ITS BOARD OF DIRECTORS, COMPRISED OF COMMUNITY AND FAITH LEADERS, AND LEADERS IN BUSINESS AND INDUSTRY, HEALTHCARE, AND PHYSICIANS REPRESENTING THE MEDICAL STAFF OF KALEIDA HEALTH. THE MAJORITY OF THE DIRECTORS RESIDE IN WESTERN NEW YORK AND EACH DIRECTOR SERVES A THREE-YEAR TERM. OPEN MEDICAL STAFF AS CONFERRED BY THE BOARD OF DIRECTORS, MEDICAL STAFF MEMBERSHIP IS OFFERED TO PROFESSIONALLY COMPETENT PHYSICIANS, DENTISTS, PODIATRISTS AND OTHER SPECIFIED INDIVIDUALS, WHO CONTINUOUSLY MEET THE QUALIFICATIONS, STANDARDS AND REQUIREMENTS OUTLINED IN THE BYLAWS, RULES AND REGULATIONS, POLICIES OF THE MEDICAL STAFF AND KALEIDA HEALTH, CONSISTENT WITH THE NEEDS OF KALEIDA HEALTH'S PATIENTS. STAFF MEMBERSHIP OR PARTICULAR CLINICAL PRIVILEGES SHALL NOT BE DENIED ON THE BASIS OF AGE, SE, SEUAL Schedule O (For 990) E RC V KALEIDA PAGE 93

96 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) ORIENTATION, RACE, COLOR, CREED, NATIONAL ORIGIN, A DISABILITY UNRELATED TO THE ABILITY TO FULFILL PATIENT CARE AND MEDICAL STAFF RESPONSIBILITIES OR ANY OTHER CRITERION UNRELATED TO THE EFFICIENT DELIVERY OF QUALITY PATIENT CARE, TO PROFESSIONAL QUALIFICATIONS OR TO THE NEEDS OF THE COMMUNITY, OR TO THE PURPOSES, NEEDS, AND CAPABILITIES OF KALEIDA HEALTH. EVERY MEMBER OF THE MEDICAL STAFF ASSISTS THE HOSPITALS IN FULFILLING OUR MISSION AND RESPONSIBILITY TO PROVIDE EMERGENCY AND UNCOMPENSATED CARE FOR THOSE IN NEED. USE OF SURPLUS FUNDS SURPLUS FUNDS ARE USED TO FURTHER THE MISSION AND OPERATIONS OF KALEIDA HEALTH, SUCH AS REINVESTING IN COMMUNITY BENEFIT PROGRAMS, AND MAKING IMPROVEMENTS IN FACILITIES, PATIENT CARE, MEDICAL, NURSING AND ALLIED HEALTH TRAINING, EDUCATION AND RESEARCH IN SUPPORT OF THE HEALTH NEEDS OF THE COMMUNITY. COMMUNITY BENEFIT PROGRAMS AND SERVICES KALEIDA HEALTH OFFERS NUMEROUS COMMUNITY BENEFIT PROGRAMS AND SERVICES IN RESPONSE TO THE COMMUNITY'S NEEDS, BY IMPROVING ACCESS TO CARE, IMPROVE PUBLIC HEALTH, ADVANCE KNOWLEDGE, AND RELIEVE GOVERNMENT PROGRAMS. THESE Schedule O (For 990) E RC V KALEIDA PAGE 94

97 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) PROGRAMS ARE CONDUCTED IN COMMUNITY-BASED SETTINGS SUCH AS SCHOOLS, CHURCHES, COMMUNITY CENTERS, SENIOR CENTERS, AND PROGRAMS ARE ALSO OFFERED AT KALEIDA'S HOSPITAL CAMPUSES AND FACILITIES. COMMUNITY BENEFIT PROGRAMS AND SERVICES INCLUDE HEALTH FAIRS, HEALTH SCREENINGS, HEALTH EDUCATION LECTURES AND WORKSHOPS FOR COMMUNITY GROUPS AND THE GENERAL PUBLIC, SCHOOL HEALTH EDUCATION PROGRAMS, AND CONSUMER HEALTH INFORMATION IN THE KALEIDA HEALTH LIBRARIES. KALEIDA ALSO OFFERS A NUMBER OF SUBSIDIZED HEALTH SERVICES SUCH AS OUTPATIENT CLINICS, LONG-TERM CARE SERVICES, WOMEN'S HEALTH CENTERS, DIALYSIS SERVICES, BEHAVIORAL HEALTH SERVICES, SCHOOL-BASED HEALTH CENTERS, EARLY CHILDHOOD PROGRAM, EARLY INTERVENTION SERVICES, FAMILY PLANNING SERVICES, WESTERN NEW YORK CLINICAL INFORMATION ECHANGE AND HEALTH-E-LINK, AND WNY POISON CONTROL CENTER, DIAGNOSTIC, THERAPEUTIC AND REHABILITATION SERVICES FOR CHILDREN WITH SPECIAL NEEDS. KALEIDA'S HOSPITALS SERVE AS A MAJOR TEACHING AFFILIATE OF THE STATE UNIVERSITY OF NEW YORK AT BUFFALO'S SCHOOL OF MEDICINE AND BIOMEDICAL SCIENCES AND DENTAL MEDICINE, WITH TRAINING TO 350 MEDICAL AND DENTAL RESIDENTS EACH YEAR. KALEIDA IS INVOLVED IN AND SPONSORS RESEARCH PROJECTS, AND WE PROVIDE LOAN FORGIVENESS FOR PHYSICIANS TO ESTABLISH PRACTICES THAT SERVE THE UNDERSERVED COMMUNITIES OF BUFFALO AND WESTERN NEW YORK. KALEIDA OFFERS CLINICAL TRAINING FACILITIES AND SUPPORT FOR NURSING AND A NUMBER OF ALLIED HEALTH PROFESSIONAL TRAINING PROGRAMS AT LOCAL COLLEGES AND UNIVERSITIES, AND OTHER PROFESSIONAL DEVELOPMENT/CONTINUING EDUCATION TRAINING PROGRAMS FOR COLLEAGUES FROM Schedule O (For 990) E RC V KALEIDA PAGE 95

98 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) HEALTH CARE ORGANIZATIONS ACROSS THE REGION. CONFLICT OF INTEREST POLICY FORM 990, PART VI, SECTION B, LINE 12C UPON EMPLOYMENT AND ANNUALLY THEREAFTER EACH KEY EMPLOYEE AND OFFICER OF THE ORGANIZATION IS REQUIRED TO COMPLETE A CONFLICT OF INTEREST AND DISCLOSURE FORM, PROVIDING SUFFICIENT INFORMATION ABOUT HIS/HER PERSONAL INTERESTS AND RELATIONSHIPS SO THE ORGANIZATION CAN (1) DETERMINE WHETHER ANY POTENTIAL OR ACTUAL CONFLICTS OF INTEREST MAY EIST, AND (2) MONITOR WORK OR SERVICE ASSIGNMENTS TO AVOID PLACING THE KEY EMPLOYEE, OFFICER OR DIRECTOR IN A POSITION WHERE THERE MAY BE AN APPEARANCE, POTENTIAL OR ACTUAL, OF A CONFLICT OF INTEREST OR A QUESTION OF OBJECTIVITY. THE COMPLETED CONFLICTS OF INTEREST AND DISCLOSURE FORMS FOR DIRECTORS ARE RETURNED TO THE ORGANIZATION. COMPENSATION APPROVAL PROCESS FORM 990, PART VI, SECTION B, QUESTION 15 A AND B ON A REGULAR BASIS, THE ORGANIZATION PROVIDES DOCUMENTATION TO THE COMPENSATION COMMITTEE OF THE BOARD WITH RESPECT TO THE COMPENSATION OF THE ORGANIZATION'S OFFICERS AND KEY EMPLOYEES FOR REVIEW AND APPROVAL. SUCH INFORMATION INCLUDES COMPARABLE DATA FROM SIMILAR SIZE TA-EEMPT ORGANIZATIONS IN THE WESTERN NEW YORK COMMUNITY AS WELL AS COMPENSATION FOR THESE POSITIONS (AS DISCLOSED ON FORM 990) WITH OTHER ORGANIZATIONS IN THE HEALTH CARE INDUSTRY THAT ARE OF SIMILAR SIZE, DEMOGRAPHICS AND GEOGRAPHY. REVIEW AND APPROVAL OF THE COMPENSATION ARRANGEMENT BY THE OFFICERS/EECUTIVE COMMITTEE IS DOCUMENTED. Schedule O (For 990) E RC V KALEIDA PAGE 96

99 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) PROCEDURE TO EVALUATE JOINT VENTURE ARRANGEMENT FORM 990, PART VI, SECTION B, QUESTION 16B THE ORGANIZATION HAS NOT ADOPTED A FORMAL WRITTEN POLICY OR PROCEDURE REQUIRING THE ORGANIZATION TO EVALUATE ITS PARTICIPATION IN JOINT VENTURE ARRANGEMENTS. HOWEVER, THE NORMAL DUE DILIGENCE PROCESS UNDERTAKEN IN CONJUNCTION WITH THE ORGANIZATION'S ETERNAL LEGAL COUNSEL, ACCOUNTANTS AND OTHER BUSINESS ADVISORS DOES INCLUDE A REVIEW TO DETERMINE THE FOLLOWING: 1) THE IMPACT OF THE ARRANGEMENT UNDER APPLICABLE FEDERAL AND STATE LAW 2) WHETHER THE ARRANGEMENT WILL JEOPARDIZE THE ORGANIZATION'S EEMPT STATUS AS A SECTION 501(C)(3) CHARITABLE ORGANIZATION - HOSPITAL 3) WHETHER THE ARRANGEMENT WILL RESULT IN ANY UNRELATED BUSINESS TAABLE INCOME 4) THE IMPACT OF THE ARRANGEMENT ON ANY EISTING CONTRACTUAL AGREEMENTS OR OTHER BUSINESS RELATIONSHIPS AND 5) WHETHER THE ARRANGEMENT WILL RESULT IN ANY CONFLICTS OF INTEREST. IF THERE ARE CONCERNS WITH RESPECT TO ANY OF THE ABOVE MATTERS, THE ORGANIZATION WILL TAKE APPROPRIATE STEPS TO ENSURE THAT, IF THE JOINT VENTURE IS PURSUED, THE ARRANGEMENT WILL BE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE LAW AND TO SAFEGUARD THE ORGANIZATIONS TA-EEMPT STATUS. A FORMAL WRITTEN POLICY AND PROCEDURE HAS BEEN ADOPTED DURING AND IS EFFECTIVE FOR THE 2010 TA YEAR. ACCESS TO ORGANIZATIONAL DOCUMENTS FORM 990, PART VI, SECTION C, QUESTION 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST AT ITS OFFICE AT 726 ECHANGE STREET, SUITE 200, BUFFALO, NY 1421 A NOMINAL FEE IS CHARGED IF COPIES ARE REQUESTED. Schedule O (For 990) E RC V KALEIDA PAGE 97

100 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) BUSINESS TRANSACTIONS INVOLVING INTERESTED PERSONS SCHEDULE L, PART IV DELAWARE SURGICAL GROUP, PC COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: DELAWARE SURGICAL GROUP, PC IS AN ENTITY IN WHICH A CURRENT BOARD MEMBER OF THE ORGANIZATION, EVAN EVANS, MD ALSO HAS A PARTNERSHIP INTEREST AT THE TIME OF THE TRANSACTION. COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (DELAWARE SURGICAL GROUP, PC) IN THE NORMAL COURSE OF BUSINESS. WALSH DUFFIELD COMPANIES, INC. COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: WALSH DUFFIELD COMPANIES, INC. IS AN ENTITY OF WHICH THE CURRENT BOARD CHAIRMAN OF THE ORGANIZATION, EDWARD F. WALSH, JR. ALSO SERVES AS PRESIDENT AND COO AS WELL AS PART SHAREHOLDER AT THE TIME OF THE TRANSACTION. COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (WALSH DUFFIELD COMPANIES, INC.) IN THE NORMAL COURSE OF BUSINESS FOR INSURANCE BROKERAGE SERVICES. BUFFALO NIAGARA MEDICAL CAMPUS: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: THE CURRENT BOARD CHAIRMAN OF THE FILING ORGANIZATION (KALEIDA HEALTH), EDWARD F. WALSH, JR., WAS ALSO SERVING AS A BOARD MEMBER OF THE BUFFALO NIAGARA MEDICAL CAMPUS AT THE TIME OF THE TRANSACTION. COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (BUFFALO NIAGARA MEDICAL CAMPUS) PARTICIPATION DUES AND FOR SERVICES IN THE NORMAL COURSE OF BUSINESS. Schedule O (For 990) E RC V KALEIDA PAGE 98

101 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) BUFFALO NIAGARA PARTNERSHIP: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: THE CURRENT PRESIDENT/CEO OF THE FILING ORGANIZATION (KALEIDA HEALTH), JAMES KASKIE, WAS ALSO SERVING AS A BOARD MEMBER OF THE BUFFALO NIAGARA PARTNERSHIP AT THE TIME OF THE TRANSACTION. COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (BUFFALO NIAGARA PARTNERSHIP) PARTICIPATION DUES. GREATER NEW YORK HOSPITAL ASSOCIATION: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: THE CURRENT PRESIDENT/CEO OF THE FILING ORGANIZATION (KALEIDA HEALTH), JAMES KASKIE, WAS ALSO SERVING AS A BOARD MEMBER OF THE GREATER NEW YORK HOSPITAL ASSOCIATION AT THE TIME OF THE TRANSACTION. COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (GREATER NEW YORK HOSPITAL ASSOCIATION) PARTICIPATION DUES. JOCELYN VARI: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: JOCELYN VARI IS A FAMILY MEMBER OF A CURRENT OFFICER OF THE ORGANIZATION, CONNIE VARI, WHO RECEIVED COMPENSATION FROM THE ORGANIZATION IN ECESS OF 10,00 COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (JOCELYN VARI) IN THE NORMAL COURSE OF BUSINESS TO FURNISH SERVICES AS PERFORMANCE IMPROVEMENT PROJECT COORDINATOR. Schedule O (For 990) E RC V KALEIDA PAGE 99

102 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) DAVID VARI: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: DAVID VARI IS A FAMILY MEMBER OF A CURRENT OFFICER OF THE ORGANIZATION, CONNIE VARI, WHO RECEIVED COMPENSATION FROM THE ORGANIZATION IN ECESS OF 10,00 COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (DAVID VARI) IN THE NORMAL COURSE OF BUSINESS FOR PERFORMANCE OF SERVICES AS AN EMPLOYEE RELATIONS SPECIALIST. BONNIE PLEUTHNER: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: BONNIE PLEUTHNER IS A FAMILY MEMBER OF A CURRENT OFFICER OF THE ORGANIZATION, CONNIE VARI, WHO RECEIVED COMPENSATION FROM THE ORGANIZATION IN ECESS OF 10,00 COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (BONNIE PLUETHNER) IN THE NORMAL COURSE OF BUSINESS FOR PERFORMANCE OF SERVICES AS A REGISTED NURSE. SUSAN EVANS: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: SUSAN EVANS IS A FAMILY MEMBER OF A CURRENT OFFICER OF THE ORGANIZATION, EVAN EVANS MD, WHO RECEIVED COMPENSATION FROM THE ORGANIZATION IN ECESS OF 10,00 COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (SUSAN EVANS) IN THE NORMAL COURSE OF BUSINESS FOR PERFORMANCE OF SERVICES AS A DISCHARGE PLANNER. Schedule O (For 990) E RC V KALEIDA PAGE 100

103 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) DR. ANDRAS VARI: COLUMN B - RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION: DR. ANDRAS VARI IS THE HUSBAND OF A CURRENT OFFICER OF THE ORGANIZATION, CONNIE VARI, WHO RECEIVED COMPENSATION FROM THE ORGANIZATION IN ECESS OF 10,00 COLUMN D - DESCRIPTION OF THE TRANSACTION: DURING 2009, THE ORGANIZATION PAID THE INTERESTED PERSON (DR. ANDRAS VARI) IN THE NORMAL COURSE OF BUSINESS FOR PERFORMANCE OF PHYSICIAN SERVICES. REVIEW PROCESS FOR FORM 990 FORM 990, PART IV, SECTION A, QUESTION 10 ORGANIZATION'S MANAGEMENT (A TEAM COMPRISED OF REPRESENTATIVES OF THE FINANCE, HUMAN RESOURCES, AND LEGAL DEPARTMENTS) IN CONSULTATION WITH THE ORGANIZATION'S TA ADVISORS, ERNST & YOUNG REVIEW THE FORM 99 THE FINANCIAL REVIEW IS BASED ON THE ORGANIZATION'S AUDITED FINANCIAL STATEMENTS FOR THE RELEVANT TIME PERIOD. BEFORE THE FORM 990 IS FILED WITH THE IRS THE FINANCE COMMITTEE OF THE ORGANIZATION'S BOARD OF DIRECTORS REVIEWS THE FORM 990 AND PROVIDES A COPY OF THE SAME TO THE ORGANIZATION'S FULL BOARD OF DIRECTORS. DELEGATION OF CMO DUTIES FORM 990, PART VI, QUESTION 3 DURING 2009, THE ORGANIZATION CONTRACTED WITH UNIVERSITY NEUROLOGY FOR THE SERVICES OF MARGARET PAROSKI IN HER CAPACITY AS CHIEF MEDICAL OFFICER (CMO) OF THE ORGANIZATION. PART OF HER ROLE AS CMO IS CONTROL OVER CERTAIN MANAGEMENT DUTIES WITH RESPECT TO EMPLOYED PHYSICIANS THAT CUSTOMARILY ARE PERFORMED BY OR UNDER THE DIRECT SUPERVISION OF OFFICERS OR KEY EMPLOYEES. Schedule O (For 990) E RC V KALEIDA PAGE 101

104 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) HOURS DEVOTED TO RELATED ORGANIZATIONS FORM 990, SCHEDULE J-2, PART I THE FOLLOWING INDIVIDUALS LISTED ON SCHEDULE J-2, PART I, COLUMN A EACH DEVOTED 4 HOURS IN TOTAL TO RELATED ORGANIZATIONS: CONNIE VARI, JOSEPH KESSLER, LAWRENCE ZIELINSKI TRANSACTIONS WITH RELATED ORGANIZATIONS SCHEDULE R, PART V, TRANSACTION TYPE C THERE IS A VARIANCE BETWEEN THE AMOUNT REFLECTED ON PART VIII, LINE 1D (AND SCHEDULE B) - GIFTS, GRANTS AND CONTRIBUTIONS FROM THE FOLLOWING RELATED ORGANIZATIONS AND THE AMOUNT INCLUDED ON SCHEDULE R, PART V AS A RESULT OF THE VARIANCE IN TIMING OF THE RECORDING OF THE TRANSFER BETWEEN THE TWO ORGANIZATIONS. KALEIDA HEALTH FOUNDATION RECORDED GRANTS PAID TO THE FILING ORGANIZATION IN THE AMOUNT OF 1,288,676 (SEE SCHEDULE R, PART V) VERSUS THE 1,555,411 RECORDED BY THE FILING ORGANIZATION AS GRANTS RECEIVED (SEE PART VIII, LINE 1D AND SCHEDULE B). THE WOMEN & CHILDREN'S HOSPITAL OF BUFFALO FOUNDATION RECORDED GRANTS PAID TO THE FILING ORGANIZATION IN THE AMOUNT OF 2,635,858 (SEE SCHEDULE R, PART V) VERSUS THE 2,629,244 RECORDED BY THE FILING ORGANIZATION AS GRANTS RECEIVED (SEE PART VIII, LINE 1D AND SCHEDULE B). DESCRIPTION OF NYS DOH HEAL GRANT IN 2009, THE NEW YORK STATE DEPARTMENT OF HEALTH AWARDED KALEIDA HEALTH A 65 MILLION GRANT TO BE UTILIZED TOWARDS THE CLOSURE OF MILLARD FILLMORE GATES CIRCLE HOSPITAL AND THE RELOCATION OF ESSENTIAL SERVICES TO A NEWLY CREATED COMPREHENSIVE HEART AND VASCULAR INSTITUTE IN A BUILDING ADJACENT TO BUFFALO GENERAL HOSPITAL (ONE OF THE HOSPITALS INCLUDED IN THIS FILING Schedule O (For 990) E RC V KALEIDA PAGE 102

105 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) ORGANIZATION'S HEALTH SYSTEM). DURING 2009, NEW YORK STATE REMITTED APPROIMATELY 10 MILLION OF THIS GRANT TO KALEIDA HEALTH BASED ON EPENSES THE FILING ORGANIZATION HAS INCURRED TO DATE ON THIS PROJECT. EVEN THOUGH THE REMAINING AMOUNT OF THE GRANT WILL NOT BE RECEIVED UNTIL FUTURE YEARS, THE ENTIRE 65 MILLION HAS BEEN INCLUDED IN THE 2009 FORM 990, PART VIII, LINE 1E AND IN SCHEDULE B TO BE CONSISTENT WITH THE ORGANIZATION'S AUDITED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. LOANS TO INTERESTED PERSONS SCHEDULE L, PART II GENERAL PHYSICIANS P.C. (GPPC) IS AN INTERSTED PERSON TO KALEIDA HEALTH SINCE DR. ANDRAS VARI, 100% OWNER OF GPPC, IS THE HUSBAND OF KALEIDA HEALTH'S COO CONNIE VARI. DURING 2009, KALEIDA HEALTH LOANED GENERAL PHYSICIANS P.C. MONEY TO RE-ACTIVATE THE PHYSICIAN PRACTICE THAT HAS BEEN DORMANT SINCE THE LOAN WAS MADE TO ASSIST GENERAL PHYSICIANS P.C. TO MAKE COMPENSATION PAYMENTS TO THE PHYSICIANS IN THE PRACTICE AND WILL BE REPAID TO KALEIDA ONCE GPPC HAS RE-ESTABLISHED ITS PATIENT BASE AND HAS THE ABILITY TO REPAY. SCHEDULE K - SUPPLEMENTAL DISCLOSURE REGARDING TA EEMPT BONDS SCHEDULE K - PARTS I, II AND IV PART I, LINE B, COLUMN F - DESCRIPTION OF PURPOSE OF 2006 TA EEMPT BOND ISSUE FROM DORMITORY AUTHORITY OF THE STATE OF NEW YORK: RENOVATE AND EPAND PATIENT CARE AREAS AT MILLARD FILLMORE SUBURBAN AND TO RENOVATE AND EPAND THE CARDIAC PROCEDURE LABORATORIES AT BUFFALO GENERAL HOSPITAL AND MILLARD FILLMORE GATES HOSPITAL. Schedule O (For 990) E RC V KALEIDA PAGE 103

106 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) PART II, LINE 5, COLUMN B - DETAIL OF ISSUANCE COSTS FROM PROCEEDS FROM 2006 ISSUE FROM DORMITORY AUTHORITY OF THE STATE OF NEW YORK: ISSUANCE COSTS - 1,213,231 AND CREDIT ENHANCEMENT FEE - 1,836,365 PART IV, LINE 4B - NAME OF PROVIDER FOR GUARANTEED INSURANCE CONTRACTS: COLUMN A ISSUE FROM DORMITORY AUTHORITY OF THE STATE OF NEW YORK: BAYERISCHE LANDESBANK COLUMN B ISSUE FROM DORMITORY AUTHORITY OF THE STATE OF NEW YORK: CONSTRUCTION FUND - MBIA, INC. RESERVE FUND - MBIA, INC. PART IV, LINE 4C - TERM OF GUARANTEED INSURANCE CONTRACT FOR 2006 ISSUE FROM DORMITORY AUTHORITY OF THE STATE OF NEW YORK: CONSTRUCTION FUND YEARS RESERVE FUND YEARS NOTE RE COMPENSATION OF CURRENT AND FORMER DIRECTORS PART VII, COLUMN (E) AND (F); SCHEDULE J, COLUMN (E) AS PER THE FORM 990 INSTRUCTIONS, NONTAABLE LIFE AND DISABILITY INSURANCE LESS THAN 10,000 SHOULD NOT BE INCLUDED IN FORM 990, PART VII, COLUMN F. Schedule O (For 990) E RC V KALEIDA PAGE 103

107 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 3 (CONT'D) HOWEVER, THIS 10,000 ECEPTION DOES NOT APPLY FOR NONTAABLE BENEFITS TO BE REPORTED IN FORM 990, SCHEUDLE J. AS SUCH THE SUM OF PART VII, COLUMN (D) AND (F) IS LESS THAN SCHEDULE J, PART II, COLUMN (E) BY THE NONTAABLE LIFE AND DISABILITY INSURANCE FOR THE FOLLOWING INDIVIDUALS: JAMES KASKIE, ROBERT NOLAN, CONNIE VARI, JOSEPH KESSLER, CHERYL KLASS, LAWRENCE ZIELINSKI, DONALD BOYD, CHRISTOPHER LANE, JAMES FOSTER, MD, ROBERT LOVELL, D. ERIC POGUE, TAMARA OWEN, FRANCIS MEYER, JR., JONATHAN SWIATKOWSKI, BARBARA LOSI, LUCY CAMPBELL, MD ATTACHMENT 4 990, PART VII- COMPENSATION OF THE FIVE HIGHEST PAID IND. CONTRACTORS NAME AND ADDRESS DESCRIPTION OF SERVICES COMPENSATION UNIVERSITY PEDIATRIC ASSOCIATES MEDICAL SERVICES 4,177, BRYANT STREET BUFFALO, NY WNY RADIOLOGY LLC RADIOLOGY SERVICES 3,545,64 PO BO 4029 BUFFALO, NY ARAMARK HEALTHCARE SUPPORT SVC DIETARY SERVICES 3,334,334. PO BO CHARLOTTE, NC UNIVERSITY NEUROLOGY INC MEDICAL SERVICES 2,901, HIGH STREET BUFFALO, NY SODEHO MANAGEMENT INC CLEANING&LAUNDRY SVC 2,455,178. PO BOES WOBURN, MA TOTAL COMPENSATION 16,414,475. Schedule O (For 990) E RC V KALEIDA PAGE 104

108 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 5 FORM 990, PART VIII - INVESTMENT INCOME (A) (B) (C) (D) TOTAL RELATED OR UNRELATED ECLUDED DESCRIPTION REVENUE EEMPT REVENUE BUSINESS REV. REVENUE UNIVERSITY ORTHOPEDICS (HARLEM ROAD LEASING) -157, ,67-85,908. AMTON IMAGING -483, ,277. INVESTMENT INCOME 5,068,118. 5,068,118. TOTALS 4,427, , ,908. 5,068,118. FORM 990, PART - SECURED MORTGAGES AND NOTES PAYABLE LENDER: KEY BANK INTEREST RATE: MATURITY DATE: 05/31/2009 REPAYMENT TERMS: MONTHLY INSTALLMENTS SECURITY PROVIDED: NONE PURPOSE OF LOAN: DEGRAFF MORTGAGE ATTACHMENT 6 BEGINNING BALANCE DUE... 2,581,549. ENDING BALANCE DUE... 2,267,865. LENDER: PRUDENTIAL HUNTOON PAIGE ASSOC. ORIGINAL AMOUNT: 100,253,00 INTEREST RATE: MATURITY DATE: 02/01/2037 REPAYMENT TERMS: 25 YEARS PURPOSE OF LOAN: FINANCE THE COST OF THE DEVELOPMENT OF THE GHVI. BEGINNING BALANCE DUE... ENDING BALANCE DUE... 5,884,703. TOTAL BEGINNING MORTGAGES AND OTHER NOTES PAYABLE 2,581,549. TOTAL ENDING MORTGAGES AND OTHER NOTES PAYABLE 8,152,568. Schedule O (For 990) E RC V KALEIDA PAGE 106

109 Schedule O (For 990) 2009 Page 2 Nae of the organization Eployer identification nuber KALEIDA HEALTH ATTACHMENT 7 SCHEDULE B, PART III - SECTION 501(C)(7),(8), OR (10) ORGANIZATIONS THAT RECEIVED MORE THAN 1,000 IN CHARITABLE GIFTS DURING THE YEAR not used (A) NO. FROM PART I (B) PURPOSE OF GIFT 83 (C) (D) (E), USE OF GIFT DESCRIPTION OF HOW GIFT IS HELD TRANSFER OF GIFT RECIPIENT'S NAME, ADDRESS, AND ZIP CODE RELATIONSHIP TO TRANSFEREE SCHEDULE L, PART IV ATTACHMENT 8 (A) NAME OF INTERESTED PERSON (B) RELATIONSHIP (C) AMOUNT (D) DESCRIPTION OF TRANSACTION (E) YES NO DELAWARE SURGICAL GROUP, PC SEE SCHEDULE O 87,80 SEE SCHEDULE O WALSH DUFFIELD COMPANIES, INC. SEE SCHEDULE O 141,627. SEE SCHEDULE O BUFFALO NIAGARA MEDICAL CAMPUS SEE SCHEDULE O 324,002. SEE SCHEDULE O BUFFALO NIAGARA PARTNERSHIP SEE SCHEDULE O 17,90 SEE SCHEDULE O GREATER NEW YORK HOSPITAL ASSOCIATION SEE SCHEDULE O 70,30 SEE SCHEDULE O JOCELYN VARI SEE SCHEDULE O 67,618. SEE SCHEDULE O DAVID VARI SEE SCHEDULE O 43,331. SEE SCHEDULE O BONNIE PLEUTHNER SEE SCHEDULE O 69,975. SEE SCHEDULE O SUSAN EVANS SEE SCHEDULE O 72,715. SEE SCHEDULE O DR. ANDRAS VARI SEE SCHEDULE O 322,205. SEE SCHEDULE O 9E Schedule O (For 990) RC V KALEIDA PAGE 107

110 SCHEDULE R (For 990) Departent of the Treasury Internal Revenue Service Nae of the organization Part I Related Organizations and Unrelated Partnerships ICoplete if Ithe organization answered "Yes" to For 990, Part IV, line 33, 34, 35, 36 or 37. Attach to For 99 See separate instructions. I Identification of Disregarded Entities (Coplete if the organization answered "Yes" on For 990, Part IV, line 33.) Nae, address, and EIN of disregarded entity Priary activity Legal doicile (state or foreign country) Total incoe OMB À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH (e) End-of-year assets KALEIDA HEALTH MCO LLC ECHANGE STREET, SUITE 200 BUFFALO, NY DORMANT NY KH KALEIDA IPA LLC ECHANGE STREET, SUITE 200 BUFFALO, NY DORMANT NY KH KALEIDA WNYI LLC 726 ECHANGE STREET BUFFALO, NY HEALTH CARE NY -210, ,377. KH (f) Direct controlling entity Part II Identification of Related Tax-Exept Organizations (Coplete if the organization answered "Yes" on For 990, Part IV, line 34 because it had one or ore related tax-exept organizations during the tax year.) Nae, address, and EIN of related organization Priary activity Legal doicile (state or foreign country) Exept Code section (e) Public charity status (if section 501(3)) MILLARD FILLMORE AMBULATORY SURG CENTER ECHANGE STREET, SUITE 200 BUFFALO, NY SUPPORTG ORG NY 501(C)(3) 11A KH WATERFRONT HEALTH CARE CENTER ECHANGE STREET, SUITE 200 BUFFALO, NY HEALTH CARE NY 501(C)(3) 9 KH VNA HOME CARE SERVICES ECHANGE STREET, SUITE 200 BUFFALO, NY HOME HLTH CAR NY 501(C)(3) 9 KH VNA OF WESTERN NEW YORK ECHANGE STREET, SUITE 200 BUFFALO, NY HOME HLTH CAR NY 501(C)(3) 9 KH GENERAL HOME CARE (GHC) ECHANGE STREET, SUITE 200 BUFFALO, NY DORMANT NY 501(C)(3) 9 KH KALEIDA HEALTH FOUNDATION ECHANGE STREET BUFFALO, NY FUNDRAISING NY 501(C)(3) 7 KH THE WOMEN & CHILDREN'S HOSP OF BFLO FDN ECHANGE STREET BUFFALO, NY FUNDRAISING NY 501(C)(3) 7 KH (f) Direct controlling entity For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule R (For 990) E RC V KALEIDA PAGE 108

111 Identification of Related Organizations Taxable as a Partnership (Coplete if the organization answered "Yes" on For 990, Part IV, line 34 because it had one or ore related organizations treated as a partnership during the tax year.) Schedule R (For 990) 2009 Page 2 Part III Nae, address, and EIN of related organization MFSC LLC Priary activity Legal doicile (state or foreign country) Direct controlling entity (e) Predoinant incoe (related, unrelated, excluded fro tax under sections ) (f) Share of total incoe (g) Share of end-of-year assets (h) Disproportionate allocations? (i) Code V-UBI aount in box 20 of Schedule K-1 (For 1065) (j) General or anaging partner? Yes No Yes No 100 HIGH STREET HEALTH CARE NY KH RELATED 646,662. 2,149,922. HARLEM ROAD LEASING LLC MAIN STREET EQUIPMENT LEASING NY KH UNRELATED -85, , ,908. AMTON IMAGING LLC P.O. BO 1368 HEALTH CARE NY KALEIDAWNYI LLC RELATED -210, ,377. PARK CLUB LANE LLC SHERIDAN DRIVE HEALTH CARE NY KALEIDAWNYI LLC RELATED HIGH ST MEDICAL DEVELOP. ASSOC 350 ESSJAY ROAD, SUITE 101 HEALTH CARE NY GHC RELATED 30, ,766. SITE E LLC 726 ECHANGE STREET, SUITE 200 REAL ESTATE MGMT NY KPI UNRELATED Part IV Identification of Related Organizations Taxable as a Corporation or Trust (Coplete if the organization answered "Yes" on For 990, Part IV, line 34 because it had one or ore related organizations treated as a corporation or trust during the tax year.) Nae, address, and EIN of related organization Priary activity Legal doicile (state or foreign country) Direct controlling entity (e) Type of entity (C corp, S corp, or trust) (f) Share of total incoe (g) Share of end-of-year assets (h) Percentage ownership KALEIDA PROPERTIES INC ECHANGE STREET, SUITE 200 BUFFALO, NY PROP MGMT SER NY KH C CORP 716,564. 9,225, WESTLINK CORPORATION ECHANGE STREET, SUITE 200 BUFFALO, NY MED & DIAG SE NY KH C CORP , Schedule R (For 990) E RC V KALEIDA PAGE 109

112 Schedule R (For 990) 2009 Page 3 Part V Transactions With Related Organizations (Coplete if the organization answered "Yes" on For 990, Part IV, line 34, 35, or 36.) Note. Coplete line 1 if any entity is listed in Parts II, III, or IV of this schedule. 1 During the tax year, did the organization engage in any of the following transactions with one or ore related organizations listed in Parts II IV? a Receipt of (i) interest (ii) annuities (iii) royalties or (iv) rent fro a controlled entity b Gift, grant, or capital contribution to other organization(s) c Gift, grant, or capital contribution fro other organization(s) d Loans or loan guarantees to or for other organization(s) e Loans or loan guarantees by other organization(s) f g h i j k l n o p Sale of assets to other organization(s) Purchase of assets fro other organization(s) Exchange of assets Lease of facilities, equipent, or other assets to other organization(s) Lease of facilities, equipent, or other assets fro other organization(s) Perforance of services or ebership or fundraising solicitations for other organization(s) Perforance of services or ebership or fundraising solicitations by other organization(s) Sharing of facilities, equipent, ailing lists, or other assets Sharing of paid eployees Reiburseent paid to other organization for expenses Reiburseent paid by other organization for expenses q Other transfer of cash or property to other organization(s) 1q r Other transfer of cash or property fro other organization(s) 1r 2 If the answer to any of the above is "Yes," see the instructions for inforation on who ust coplete this line, including covered relationships and transaction thresholds. Aount involved Nae of other organization Transaction type (a r) 1a 1b 1c 1d 1e 1f 1g 1h 1i 1j 1k 1l 1 1n 1o 1p Yes No (1) (2) (3) (4) (5) (6) MILLARD FILLMORE AMBULATORY SURGERICAL CENTER O 86,38 MILLARD FILLMORE AMBULATORY SURGERICAL CENTER E 58,86 MILLARD FILLMORE AMBULATORY SURGERICAL CENTER C 377,045. WATERFRONT HEALTH CARE CENTER D 2,495,419. WATERFRONT HEATH CARE CENTER P 2,355,575. VNA HOME CARE SERVICES D 219,85 Schedule R (For 990) E RC V KALEIDA PAGE 110

113 Schedule R (For 990) 2009 Page 4 Part VI Unrelated Organizations Taxable as a Partnership (Coplete if the organization answered "Yes" on For 990, Part IV, line 37.) Provide the following inforation for each entity taxed as a partnership through which the organization conducted ore than five percent of its activities (easured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investent partnerships. Nae, address, and EIN of entity Priary activity Legal doicile (state or foreign country) Are all partners section 501(3) organizations? (e) Share of end-of-year assets (f) Disproportionate allocations? (g) Code V-UBI aount in box 20 of Schedule K-1 (For 1065) (h) General or anaging partner? Yes No Yes No Yes No Schedule R (For 990) E RC V KALEIDA PAGE 111

114 SCHEDULE R-1 (For 990) Departent of the Treasury Internal Revenue Service Nae of filing organization Continuation Sheet for Schedule R (For 990) IAttach to For 990 to list additional inforation for Schedule R (For 990), IPart I; Part II; Part III; Part IV; Part V, line 2; or Part VI. See instructions for Schedule R (For 990). OMB À¾ ½ Open to Public Inspection Eployer identification nuber KALEIDA HEALTH Part I Continuation of Identification of Disregarded Entities Nae, address, and EIN of disregarded entity Priary activity Legal doicile (state or foreign country) Total incoe (e) End-of-year assets (f) Direct controlling entity For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for For 99 Schedule R-1 (For 990) E RC V KALEIDA PAGE 112

115 Schedule R-1 (For 990) 2009 Page 2 Part II Continuation of Identification of Related Tax-Exept Organizations Nae, address, and EIN of related organization Priary activity Legal doicile (state or foreign country) Exept Code section (e) Public charity status (if section 501(3)) (f) Direct controlling entity Schedule R-1 (For 990) E RC V KALEIDA PAGE 113

116 Schedule R-1 (For 990) 2009 Page 3 Part III Continuation of Identification of Related Organizations Taxable as a Partnership Nae, address, and EIN of related organization Priary activity Legal doicile (state or foreign country) Direct controlling entity (e) Predoinant incoe (related, unrelated, excluded fro tax under sections ) (f) Share of total incoe (g) Share of end-of-year assets (h) Disproportionate allocations? (i) Code V-UBI aount on box 20 of K-1 (j) General or anaging partner? Yes No Yes No Schedule R-1 (For 990) E RC V KALEIDA PAGE 114

117 Schedule R-1 (For 990) 2009 Page 4 Part IV Continuation of Identification of Related Organizations Taxable as a Corporation or Trust Nae, address, and EIN of related organization Priary activity Legal doicile (state or foreign country) Direct controlling entity (e) Type of entity (C corp, S corp, or trust) (f) Share of total incoe (g) Share of end-of-year assets (h) Percentage ownership Schedule R-1 (For 990) E RC V KALEIDA PAGE 115

118 Schedule R-1 (For 990) 2009 Page 5 Part V Continuation of Transactions With Related Organizations (Schedule R (For 990), Part V, line 2) (A) Nae of other organization (B) Transaction type (a-r) (C) Aount involved (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) VNA HOME CARE SERVICES P 1,423,28 VNA OF WESTERN NEW YORK N 82,748. VNA OF WESTERN NEW YORK P 3,135,12 VNA OF WESTERN NEW YORK D 371,819. MFSC LLC J 546,017. MFSC LLC D 53,447. MFSC LLC O 716,827. KALEIDA PROPERTIES R 1,915,799. KALEIDA PROPERTIES N 98,486. KALEIDA PROPERTIES P 305,89 KALEIDA HEALTH FOUNDATION C 1,288,676. KALEIDA HEALTH FOUNDATION R 869,60 KALEIDA HEALTH FOUNDATION D 647,046. WOMENS AND CHILDRENS HOSPITAL OF BUFFALO FDN C 2,635,858. WOMENS AND CHILDRENS HOSPITAL OF BUFFALO FDN R 648,511. (22) (23) (24) Schedule R-1 (For 990) E RC V KALEIDA PAGE 116

119 Schedule R-1 (For 990) 2009 Page 6 Part VI Continuation of Unrelated Organizations Taxable as a Partnership Nae, address, and EIN of entity Priary activity Legal doicile (state or foreign country) Are all partners section 501(3) organizations? (e) Share of end-of-year assets (f) Disproportionate allocations? (g) Code V-UBI aount on Box 20 of K-1 (h) General or anaging partner? Yes No Yes No Yes No Schedule R-1 (For 990) E RC V KALEIDA PAGE 117

120 KALEIDA HEALTH Consolidated Financial Stateents and Other Financial Inforation Deceber 31, 2009 and 2008 (With Independent Auditors' Report Thereon)

121 KALEIDA HEALTH Consolidated Financial Stateents and Other Financial Inforation Deceber 31, 2009 and 2008 Table of Contents Independent Auditors' Report 1 Consolidated Financial Stateents: Consolidated Balance Sheets 2 Consolidated Stateents of Operations and Changes in Net Assets 4 Consolidated Stateents of Cash Flows 6 Notes to Consolidated Financial Stateents 7 Other Financial Inforation 1 Consolidating Balance Sheet as of Deceber 31, Consolidating Stateent of Operating Revenue and Expenses for the year ended Deceber 31, Page

122 KPMG LLP 515 Broadway Albany, NY Independent Auditors' Report The Board of Directors Kaleida Health: We have audited the accopanying consolidated balance sheets of Kaleida Health (Kaleida) as of Decebers 31, 2009 and 2008, and the related consolidated stateents of operations and changes in net assets, and cash flows for the years then ended. These consolidated financial stateents are the responsibility of Kaleida's anageent. Our responsibility is to express an opinion on these consolidated financial stateents based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of Aerica. Those standards require that we plan and perfor the audit to obtain reasonable assurance about whether the financial stateents are free of aterial isstateent. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circustances, but not for the purpose of expressing an opinion on the effectiveness of Kaleida's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes exaining, on a test basis, evidence supporting the aounts and disclosures in the financial stateents, assessing the accounting principles used and significant estiates ade by anageent, as well as evaluating the overall financial stateent presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial stateents referred to above present fairly, in all aterial respects, the financial position of Kaleida Health as of Deceber 31, 2009 and 2008, and the results of their operations and changes in net assets, and their cash flows for the years then ended in confority with U.S. generally accepted accounting principles. Our audits were conducted for the purpose of foring an opinion on the consolidated financial stateents taken as a whole. The accopanying consolidating inforation as of and for the year ended Deceber 31, 2009, included on pages 29 through 31 is presented for purposes of additional analysis of the consolidated financial stateents rather than to present the financial position and results of operations of the individual copanies. The consolidating inforation has been subjected to the auditing procedures applied in the audit of the 2009 consolidated financial stateents and, in our opinion, is fairly stated in all aterial respects in relation to the 2009 consolidated financial stateents taken as a whole. April 26, 2010 O>Mnc, LcP' KPMG LLP, a U.S. liited liability partnership, Is the U.S. eberfir of KPMG Inteational, a Swiss cooperative.

123 KALEIDA HEALTH Consolidated Balance Sheets Deceber 31, 2009 and 2008 (Dollars in thousands) Assets Current assets: Cash and cash equivalents 70,050 41,997 Investents (notes 6 and 7) 149, ,990 Accounts receivable: Patient, less estiated allowance for doubtful accounts of 40,527 in 2009 and 37,577 in , ,419 Other 7,748 9,783 Inventories 23,364 25,258 Prepaid expenses and other current assets 8,939 9,510 Total current assets 378, ,957 Assets liited as to use (notes 5, 6, 7, and 9): Designated under debt and lease agreeents 50,685 38,546 Designated under self-insurance progras 128, ,037 Board designated and donor restricted 81,489 64,984 Other 1,589 1, , ,177 Property and equipent, less accuulated depreciation and aortization (notes 8 and 9) 282, ,789 Receivable for insurance recoveries (note 5) 7,678 5,809 Grant receivable (note 2) 54,987 - Deferred financing costs, net 14,045 11,483 Other 4,955 5,954 Total assets 1,005, ,169 See accopanying notes to consolidated financial stateents. 2

124 Liabilities and Net Assets Current liabilities: Accounts payable and other accrued expenses 76,718 66,871 Accrued payroll and related expenses 50,079 49,777 Line of credit (note 9) 6,000 Estiated third-party payor settleents (note 4) 21,722 1,354 Current portion of long-ter debt (note 9) 18,678 22,927 Other current liabilities 5,543 5,497 Total current liabilities 178, ,426 Long-ter debt, less current portion (note 9) 216, ,856 Construction costs payable (note 9) 5,083 1,022 Estiated self-insurance reserves (note 5) 153, ,858 Asset retireent obligations (note 12) 10,217 10,049 Other long-ter liabilities (note 11) 162, , , ,267 Total liabilities 726, ,693 Coitents and contingencies (notes 8, 10, and 15) Net assets: Unrestricted 143,864 74,690 Teporarily restricted (note 13) 115,208 50,732 Peranently restricted (note 13) 19,549 15,054 Total net assets 278, ,476 Total liabilities and net assets 1,005, ,169 3

125 KALEIDA HEALTH Consolidated Stateents of Operations and Changes in Net Assets Years ended Deceber 31, 2009 and 2008 (Dollars in thousands) Operating revenue: Net patient service revenue (notes 3 and 4) 1,145,164 1,067,103 Other operating revenue (note 6) 19,035 24,026 Net assets released fro restrictions for operations (note 13) 9,373 11,119 Total operating revenue 1,173,572 1,102,248 Operating expenses: Salaries and benefits Purchased services, supplies, and other 632, , , ,711 Depreciation and aortization 59,717 60,062 Provision for bad debts 29,441 26,335 Interest 12,983 11,369 Total operating expenses 1,159,394 1,085,018 Incoe fro operations 14,178 17,230 Other incoe (losses): Investent incoe (losses) (note 6) 8,700 (8,816) Net realized losses on sales of investents (note 6) (6,870) (3,231) Net change in unrealized gains and losses on investents (note 6) 41,312 (44,754) Loss on ipairent and disposal of assets (note 8) (20,394) - Total other incoe (losses), net 22,748 (56,801) Excess (deficiency) of revenue over expenses 36,926 (39,571) 4 (Continued)

126 KALEIDA HEALTH Consolidated Stateents of Operations and Changes in Net Assets Years ended Deceber 31, 2009 and 2008 (Dollars in thousands) Unrestricted net assets: Excess (deficiency) of revenue over expenses 36,926 (39,571) Pension and postretireent related changes other than net periodic cost (note 11) 20,224 (145,742) Contributions for capital acquisitions Net assets released fro restrictions for property acquisitions 11,476 1,653 Net cuulative unrealized gains transferred to trading securities (note 6) - (5,886) Other transfers, net (10) (4) Increase (decrease) in unrestricted net assets 69,174 (189,112) Teporarily restricted net assets: Contributions, bequests, and grants (notes 20) and 8) 76,697 12,671 Restricted investent losses (98) (211) Net change in-unrealized gains and losses on investents 8,989 (12,731) Net assets released fro restrictions for operations (9,373) (11,119) Net assets released fro restrictions for property acquisitions (11,476) (1,653) Other transfers, net (263) (424) Increase (decrease) in teporarily restricted net assets 64,476 (13,467) Peranently restricted net assets: Contributions 2 Restricted investent losses (273) (425) Net change in unrealized gains and losses on investents 4,495 (6,391) Other transfers, net Increase (decrease) in peranently restricted net assets 4,495 (6,386) Change in net assets 138,145 (208,965) Net assets, beginning of year 140, ,441 Net assets, end of year 278, ,476 See accopanying notes to consolidated financial stateents. 5

127 KALEIDA HEALTH Consolidated Stateents of Cash Flows Years ended Deceber 31, 2009 and 2008 (Dollars in thousands) Operating activities: Change in net assets 138,145 (208,965) Adjustents to reconcile change in net assets to net cash provided by operating activities: Depreciation and aortization 59,717 60,062 Accretion expense Loss on ipairent and disposal of assets 20,394 - Restricted contributions, bequests, and grants (66,738) (2,143) Change in receivable for insurance recoveries (1,869) 3,651 Change in interests in liited partnerships (5,395) 13,429 Net change in unrealized gains and losses on investents (54,796) 69,762 Provision for bad debts 29,441 26,335 Pension and postretireent related changes other than net periodic cost (20,224) 145,742 Change in operating assets and liabilities: Patient accounts receivable (36,891) (32,306) Other receivables, inventories, and prepaid expenses Accounts payable, accrued expenses, and accrued payroll 4,500 10,149 (4,495) 5,364 Estiated third-party payor settleents 20,368 (12,975) Other assets 999 (25) Other liabilities 11,849 (492) Net cash provided by operating activities 110,422 63,484 Investing activities: Additions to property and equipent, net of change in construction costs payable (72,032) (67,862) Net purchases of investents (14,966) (6,391) Net cash used by investing activities (86,998) (74,253) Financing activities: Principal payents on debt and capital lease obligations (21,094) (20,200) Proceeds fro restricted contributions, bequests, and grants 11,751 2,143 Proceeds fro long-ter debt 11,647 25,836 Proceeds fro line of credit 6,000 - Increase in deferred financing fees (3,675) Net cash provided by financing activities 4,629 7,779 Net increase (decrease) in cash and cash equivalents 28,053 (2,990) Cash and cash equivalents, beginning of year 41,997 44,987 Cash and cash equivalents, end of year 70,050 41,997 Suppleental schedules on noncash investing activities: Capital lease obligations 1,495 3,321 Interest paid 12,950 13,334 See accopanying notes to consolidated financial stateents. 6

128 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (1) Organization and Basis of Consolidation Kaleida Health (Kaleida) is an integrated healthcare delivery syste that provides acute, skilled nursing, rehabilitative, outpatient, and hoe healthcare services priarily to the residents of Western New York. The entities consolidated within Kaleida are the Hospital Corporation (Buffalo General Hospital, Woen and Children's Hospital, the Millard Filloie Hospitals, DeGraff Meorial Hospital, and three hospital based nursing facilities), Waterfront Health Care Center, Visiting Nursing Association of WNY, Inc., VNA Hoe Care Services, Inc., several other wholly owned subsidiaries, and two charitable foundations that raise funds for Kaleida. On Noveber 28, 2006, the Coission on Health Care Facilities in the 21st Century (Berger Coission) created by the Governor and New York State Legislature issued recoendations on health care capacity and resources in New York State. The Berger Coission report discussed, aong other things, the context and process under which the recoendations were ade, the authority granted to the NYS Departent of Health (DOH) to ipleent the recoendations, and how the ipleentation of these recoendations ay be tied and funded. The Berger Coission's recoendations included consolidation, closures, conversions, and restructuring of hospital and nursing hoe systes throughout New York State, including at Kaleida. In connection with the recoendations issued by the Berger Coission, Kaleida has undertaken the developent of a global heart vascular institute (GHVI) located adjacent to Buffalo General Hospital, and developed plans to carryout the closure and relocation of services fro Millard Fillore Gates Hospital (Gates) to the Buffalo General Hospital capus within a period of twenty-four onths. During 2009, Kaleida received all the necessary approvals and funding to ove forward with the GHVI. Notes 8 and 9 provide additional inforation related to the GHVI construction and financing. Also, Kaleida and Erie County Medical Center Corporation (ECMCC), pursuant to a recoendation of the Berger Coission, agreed contractually in June 2008 to subordinate certain planning activities and quality iproveent progras to Great Lakes Health, a stand-alone not-for-profit corporation. All significant intercopany transactions between Kaleida and its subsidiaries have been eliinated in consolidation. (2) Suary of Significant Accounting Policies Basis of Presentation In June 2009, the Financial Accounting Standards Board (FASB) authorized FASB Accounting Standards Codification (ASC or Codification) to becoe the single source of authoritative nongovernental U.S. generally accepted accounting principles (GAAP). The Codification brings together in one place the authoritative accounting standards that existed in a nuber of forats including FASB Stateents and Interpretations, Eerging Issues Task Force Abstracts, FASB Staff Positions and Aerican Institute of Certified Public Accountants (AICPA) Stateents of Positions and Accounting and Auditing Guides. The Codification is effective for financial stateents issued for annual periods ending after Septeber 15, Since the Codification is the accuulation of existing GAAP, it did not have any ipact on Kaleida's consolidated financial stateents. 7 (Continued)

129 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 The accopanying consolidated financial stateents of Kaleida are presented consistent with ASC 954, which addresses the presentation of financial stateents for health care entities. In accordance with the provisions of ASC 954, net assets and revenue, expenses, gains, and losses are classified based on the existence or absence of donor-iposed restrictions. Accordingly, unrestricted net assets are aounts not subject to donor-iposed stipulations and are available for operations. Teporarily restricted net assets are restricted by donors and are reflected as net assets released fro restrictions in unrestricted net assets to the extent utilized during the period. Peranently restricted net assets are subject to the restrictions of gift instruents requiring that the principal be aintained in perpetuity while peritting the incoe to be utilized for general purposes. Kaleida considers events or transactions that occur after the consolidated balance sheet date, but before the consolidated financial stateents are issued, to provide additional evidence relative to certain estiates or to identify atters that require additional disclosure. These consolidated financial stateents were issued on April 26, 2010 and subsequent events have been evaluated through that date. Use of Estiates The preparation of consolidated financial stateents in confority with U.S. generally accepted accounting principles requires anageent to ake estiates and assuptions that affect the aounts reported in the financial stateents and accopanying notes. The ost significant areas which are affected by the use of estiates include the allowance for doubtful accounts, estiated third-party payor settleents, self-insurance reserves, valuation of certain alternative investents, and pension obligations. Actual results could differ fro those estiates, and the differences in estiates fro actual results could be significant. Cash and Cash Equivalents Cash equivalents include aounts invested in short-ter interest-bearing accounts and highly liquid debt instruents with original aturity dates of three onths or less. For purposes of the consolidated stateents of cash flows, cash equivalents exclude aounts aintained within investent portfolios and aounts classified as assets liited as to use. Kaeida invests cash in oney arket securities at Deceber 31, 2009 and aintains cash balances in financial institutions in excess of federal deposit insurance liits. Charity Care and Bad Debt Expense Kaleida provides care to patients who eet certain criteria under its charity care policies without charge or at aounts less than their established rates. Because Kaleida does not anticipate collection of aounts deterined to qualify as charity care, they are not reported as revenue. Kaleida grants credit without collateral to patients, ost of who are local residents and are insured under third-party arrangeents. Additions to the estiated allowance for doubtful accounts are ade by eans of the provision for bad debts. Accounts written off as uncollectible are deducted fro the allowance and subsequent recoveries are added. The aount of the provision for bad debts is based upon anageent's assessent of historical and expected net collections, business and econoic 8 (Continued)

130 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 conditions, trends in Federal and State governental healthcare coverage, and other collection indicators. (e) Net Patient Service Revenue Net patient service revenue is reported at the estiated net realizable aounts fro patients, third-party payors, and others for services rendered. Revenue under certain third-party payor agreeents is subject to audit and retroactive adjustent. Provision for estiated third-party payor settleents and adjustents are estiated in the period the related services are rendered and adjusted in future periods as final settleents are deterined (note 4). 09 Investents and Investent Incoe Investents are reported at fair value pursuant to ASC 820, Fair Value Measureents and Disclosures which addresses fair value easureents and disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the easureent date. See note 7 for a discussion of fair value easureents. Participation units in pooled investent funds held within unrestricted, teporarily restricted, and peranently restricted net assets are deterined onthly based on the fair value of the underlying investents at the calculation date. Incoe earned on pooled investents is allocated to participating funds based on their respective unit shares of the pool. In 2008, Kaleida deterined the investent portfolio is ore appropriately classified as trading as opposed to available-for-sale based on investent philosophy, strategy and the nature and frequency of investent activity. Accordingly, all unrealized gains and losses on unrestricted investents are reported as a coponent of excess (deficiency) of revenue over expenses in the accopanying 2009 and 2008 consolidated stateents of operations and changes in net assets. Investent incoe or loss (including interest, dividends, realized gains and losses on investents, change in interest in liited partnerships, and change in unrealized gains and losses) is included in excess (deficiency) of revenue over expenses, unless the incoe is restricted by the donor or law. Further, investent incoe fro funds designated for self-insurance progras and debt and lease agreeents are recorded as a coponent of operating revenue. In Deceber 2008, the FASB issued ASC and 55; which require additional disclosures for eployers' defined benefit pension plan assets. ASC and 55 requires eployers to disclose inforation about fair value easureents of plan assets siilar to the disclosures required under ASC 82 The adoption of ASC and 55 did not have a aterial ipact on Kaleida's consolidated financial position, results of operations or cash flows since its requireents were liited to additional disclosures (note 11). (g) Inventories Inventories consist principally of pharaceutical and other edical supplies and are stated at the lower of cost or arket. Cost is deterined using the first-in, first-out ethod. 9 (Continued)

131 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (h) Assets Liited as to Use Assets liited as to use include investents aintained by a trustee under irrevocable self-insurance agreeents and cash and investents held by trustees pursuant to debt agreeents. Assets liited as to use also include investents set aside by the board of directors for specific purposes, as well as investents restricted by donors and grantors for a specific tie period or purpose. () Property and Equipent Property and equipent are carried at cost, except for donated ites, which are recorded at fair arket value at the date of donation. Cost includes interest incurred on related indebtedness during periods of construction. The costs of routine aintenance and repairs are charged to expense as incurred. Kaleida onitors its long-lived assets for ipairent indicators on an ongoing basis. If ipairent indicators exist, Kaleida perfors the required analysis and records ipairent charges. In conducting its analysis, Kaleida copares the undiscounted cash flows expected to be generated fro the long-lived assets to the related net book values. If the undiscounted cash flows exceed the net book value, the long-lived assets are considered not to be ipaired. If the net book value exceeds the undiscounted cash flows, an ipairent loss is easured and recognized (note 8). Depreciation is coputed using the straight-line ethod over the estiated useful lives of the assets. The estiated useful lives of assets generally follow Aerican Hospital Association guidelines: land iproveents, 10 years; buildings, fixtures, and iproveents, 10 to 40 years; and ovable equipent, 3 to 15 years. Assets recorded as capital leases are aortized over the lease ter of the asset or its useful life, if shorter. Lease aortization is included within depreciation and aortization expense. (") Grant Receivable During 2008, Kaleida was awarded a 65 illion grant fro the New York State Departent of Health (DO14), through the Health Care Efficiency and Affordability Law for New Yorkers progra (HEAL NY). The grant was awarded in order to fund the ipleentation of the recoendations ade by the Berger Coission. During 2009 the Grant Disburseent Agreeent was finalized with DOH and Kaleida incurred expenditures and received funds under the grant during 2009 to support the GHVI project. The grant proceeds will be spent for the GHVI project through Deceber 31,2011. (k) Deferred Financing Costs Kaleida has capitalized various costs associated with obtaining long-ter financing. These costs are being aortized over the ters of related obligations. (1) Self-Insured Progras Certain divisions of Kaleida are partially self-insured for edical alpractice, general liability, and workers' copensation costs, with excess liability policies for exposures in excess of self-insurance retentions. Trusts have been established for the purpose of setting aside assets. Under the trust 10 (Continued)

132 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 agreeents, the trust assets can be used only for payent of losses, related expenses, and the costs of adinistering the trust. In 2009, Kaleida becae a self insured for eployee health coverage. Kaleida has recorded a provision for estiated clais which is based on Kaleida's own experience and includes the estiated cost of reported clais and clais incurred but not yet reported. To reduce its risk for catastrophe clais, Kaleida has purchased stop loss coverage. () Donor Contributions Unconditional proises to give cash and other assets are reported at fair value at the date the proise is received. The gifts are reported as either teporarily or peranently restricted support if they are received with donor stipulations liiting the use of the donated assets. When a donor restriction expires, that is, when a stipulated tie restriction ends or purpose restriction is accoplished, teporarily restricted net assets are reclassified to unrestricted net assets and reported as net assets released fro restrictions and included as a coponent of total operating revenue, if for operations, or as an addition to unrestricted net assets, if for capital purposes. Contributions whose restrictions lapse, expire, or are otherwise et in the sae reporting period as the contribution was received are recorded as unrestricted support and included as additions to unrestricted net assets. (n) (o) (p) Financial Instruents The carrying values of cash and cash equivalents, accounts receivable, accounts payable and line of credit are reasonable estiates of their fair value due to the short-ter nature of these financial instruents.' Kaleida's long-ter debt instruents are carried at cost. Fair values are estiated based on quoted arket prices for the sae or siilar issues. The estiated fair value of Kaleida's long-ter debt as of Deceber 31, 2009 and 2008 is approxiately illion and illion, respectively. The value of debt was estiated by discounted cash flow analysis using current borrowing rates for siilar types of arrangeents. Judgent is required in certain circustances to develop the estiates of fair value, and the estiates ay not be indicative of the aounts that could be realized in a current arket exchange. Incoe Taxes Kaleida and substantially all of its affiliates have been deterined by the Internal Revenue Service to be organizations described in Internal Revenue Code (the Code) Section 501(3) and, therefore, are exept fro federal incoe taxes on related incoe pursuant to Section 501 of the Code. Excess (Deficiency) of Revenue over Expenses Kaleida's priary ission is eeting the healthcare needs of the people in the regions in which it operates. Kaleida is coitted to providing a broad range of general and specialized healthcare services, including inpatient acute care, long-ter care, hoe care, outpatient services, and other healthcare related services. The consolidated stateents of operations and changes in net assets include a perforance indicator, excess (deficiency) of revenue over expenses. Changes in unrestricted net assets which are excluded fro the excess (deficiency) of revenue over expenses consistent with industry practice include I I (Continued)

133 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (q) contributions of long-lived assets, and pension and postretireent related changes other than net periodic cost. For purposes of display, transactions deeed by anageent to be recurring, aj or or central to the provision of healthcare services, including unrestricted contributions and interest and dividends fro funds designated for self-insurance progras and debt and lease agreeents, are reported as operating revenue and expenses in the deterination of Kaleida's operating results. Investent trading activities and peripheral transactions (i.e. ipairent charges for Berger Coission restructuring and gains and losses related to disposal of fixed assets) are reported as other incoe or losses. Reclassifications Certain aounts in the 2008 consolidated financial stateents have been reclassified to confor to 2009 presentation. (3) Uncopensated Care (Unaudited) Kaleida accepts all patients regardless of their ability to pay. A patient's care ay be classified as charity care in accordance with certain established policies of Kaleida. Essentially, these policies define charity services as those services for which no payent is anticipated. In addition, Kaleida serves the largest Medicaid and indigent patient population in Western New York whose healthcare service is only partially paid for by the Medicaid progra. The following table suarizes uncopensated care provided during the years ended Deceber 31: (Dollars in thousands) Charity care excluded fro revenue, based on established rates for services provided 8,390 6,973 Revenue shortfall copared to expenses for services provided to Medicaid and indigent patients 67,099 59,064 75,489 66,037 Kaleida also provided additional uncopensated services of approxiately 29.4 illion and 26.3 illion in 2009 and 2008, respectively, representing uncollectible patient accounts. (4) Third,-Party Reiburseent Agreeents Kaleida has agreeents with third-party payors that provide for payents at aounts different fro their established rates as follows: Inpatient Acute Care Services Inpatient acute care services rendered are paid at prospectively deterined rates per discharge in accordance with the Federal Prospective Payent Syste (PPS) for Medicare and generally at negotiated or otherwise pre-deterined aounts under the provisions of the New York Health Care Refor Act (HCRA) for Medicaid and other Non-Medicare payors. Inpatient nonacute services are 12 (Continued)

134 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 paid at various rates under different arrangeents with third-party payors, coercial insurance carriers, and health aintenance organizations. The basis for payent under these agreeents includes prospectively deterined per die and per visit rates and fees, discounts fro established charges, fee schedules, and reasonable cost subject to liitations. Medicare outpatient services are paid under a prospective payent syste whereby services are reibursed on a predeterined aount for each outpatient procedure, subject to various andated odifications. In addition, under HCRA, all Non-Medicare payors are required to ake surcharge payents for the subsidization of indigent care and other health care initiatives. The percentage aounts of the surcharge varies by payor and applies to a broader array of health care services. Also, certain payors are required to fund a pool for graduate edical education expenses through surcharges on payents to hospitals for inpatient services or through voluntary election to pay a covered lives assessent directly to the New York State Departent of Health (DOH). Skilled Nursing and Hoe Health Care Services Net patient service revenue for skilled nursing services under the Medicaid progra is based on a odified pricing syste using the Resource Utilization Group (RUGs) patient classification syste. Under this ethodology, reiburseent is at a predeterined rate depending on the intensity of the services rendered to residents regardless of the cost of delivering those services. Medicaid's predeterined rate is coputed using cost report data fro the facility's designated base year and eleents fro annual cost report filings. Medicare reiburseent for skilled nursing services are deterined on a PPS basis. Under skilled nursing PPS, a single per die rate is paid that covers all routine, ancillary, and capital related costs. The per die payent is adjusted for each Medicare beneficiary, based on their care needs as easured by a patient assessent for. Hoe health care services for Medicare are reibursed under a prospective payent syste (PPS) which is based on a 60 day episode, case ix adjusted into one of the hoe health resource groups (HHRG). Adjustents exist for low and high utilization of services during a 60-day episode. Medicare will generally ake an initial payent of 60% based on the subitted HHRG with the balance of the payent due at the end of the 60 day episode or at discharge, whichever occurs sooner. For all Non-Medicare payors, the basis of payent includes prospectively deterined per visit rates and fees, discount on charges, and fee schedules. Kaleida is required to prepare and file various reports of actual and allowable costs annually. Provisions have been ade in the consolidated financial stateents for prior and current years' estiated final settleents. The difference between the aount provided and the actual final settleent is recorded as an adjustent to net patient service revenue as adjustents becoe known or as years are no longer subject to audits, reviews, and investigations. During 2009 and 2008, Kaleida recorded adjustents for estiated settleents with third-party payors, which resulted in changes to net patient service revenue of approxiately (5.7) illion and 8.8 illion, respectively. Net patient service revenue fro Medicare and New York State Medicaid progras accounted for approxiately 23% and 11%, respectively, of total net patient service revenue for the year ended Deceber 31, 2009, and 24% and 12%, respectively, of total net patient service revenue for the year ended Deceber 31, Significant concentrations of patient accounts receivable at Deceber 31, 2009 and 2008 include Medicare 21% and 25%, Medicaid 12% and 12%, and health aintenance organizations 42% and 40%, respectively. 13 (Continued)

135 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 Laws and regulations governing the Medicare and Medicaid progras are coplex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estiates will change by a aterial aount in the near ter. Kaleida receives regulatory inquiries and reviews in the noral course of business. Copliance with such laws and regulations can be subject to future governent review and interpretation as well as significant regulatory action, including fines, penalties, and exclusion fro the Medicare and Medicaid progras. Kaleida believes it is in substantive copliance with all applicable laws and regulations. (5) Self-Insurance Trusts and Estiated Self-Insurance Reserves Kaleida is partially self-insured for edical alpractice, general liability, and workers' copensation costs, and excess liability policies are generally aintained for exposures in excess of self-insurance retentions. Trusts are established for the purpose of setting aside assets based on actuarial funding recoendations. Under the trust agreeents, the trust assets can be used only for payent of losses, related expenses, and the costs of adinistering the trust. The estiated liability for both asserted and unasserted self-insurance clais for edical alpractice, general liability and workers' copensation are discounted at 3.5% at Deceber 31, 2009 and Estiated self-insurance reserves are approxiately 154 illion and 140 illion at Deceber 31, 2009 and 2008, respectively. As of Deceber 31, 2009 and 2008, 7.7 illion and 5.8 illion, respectively, is recoverable fro Kaleida's excess liability policies. At Deceber 31, 2009, Kaleida has irrevocable secured letters of credit supporting the edical alpractice and workers copensation self-insurance progras totaling approxiately 42.8 illion. The annual fee for the letters of credit approxiates 75 basis points and they renew autoatically unless the issuer notifies both parties in writing sixty days in advance. At Deceber 31, 2009 and 2008, there were various actions filed against Kaleida by forer patients and others seeking copensatory and punitive daages. In 2009, Kaleida secured a surety bond in order to preserve its right to appeal certain judgents filed for ongoing clais. The surety bond is collateralized with an irrevocable letter of credit. The letter of credit is secured with assets within the self insurance trust. Manageent believes current estiates for known and unknown clais reflected in the self-insurance accrual are adequate. If the ultiate costs differ fro the estiates, such additional aounts will be accrued when known. Excess coverage retroactive to the date of Kaleida's foration has been obtained for incidents reported after Deceber 31, (Continued)

136 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (6) Investents The coponents of investents at Deceber 31 are suarized as follows: (Dollars in thousands) Current investents: Cash and cash equivalents 12,148 18,696 Fixed incoe utual funds 33,342 27,620 Coon stocks 23,136 13,301 Coon collective funds 57,971 47,173 Liited partnerships 23,206 18, , ,990 Assets liited as to use: Designated under debt and lease agreeents: Cash and cash equivalents 20,956 6,834 U.S. governent securities 29,729 31,712 50,685 38,546 Designated under self-insurance progras: Cash and cash equivalents 43,081 35,852 U.S. governent securities 3,488 2,860 Fixed incoe utual funds 21,947 18,684 Coon stocks 13,810 8,389 Coon collective funds 32,066 26,119 Liited partnerships 14,366 15, , ,037 Board designated and donor restricted: Cash and cash equivalents 11,414 6,246 U.S. governent securities Fixed incoe utual funds 17,224 15,424 Coon stocks 11,598 7,144 Coon collective funds 29,275 25,913 Liited partnerships 11,719 9,998 81,489 64,984 Other: Cash and cash equivalents 1,589 1, , , (Continued)

137 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 Unrestricted investent incoe includes the following for the years ended Deceber 31: (Dollars in thousands) Other operating revenue: Interest and dividends 3,330 2,788 Other incoe (losses): Investent incoe (losses): Interest and dividends 3,305 4,613 Change in interests in liited partnerships 5,395 (13,429) 8,700 (8,816) Net realized losses on sale of investents L j6,870) (3,231 ) Net change in unrealized gains and losses on investents 41,312 (44,754) (7) Fair Value Measureents Kaleida estiates fair value on a valuation fraework that uses a fair value hierarchy that prioritizes the inputs to valuation techniques to easure fair value. The hierarchy gives the highest priority to quoted prices in active arkets for identical assets or liabilities (Level I easureents) and the lowest priority to unobservable inputs (Level 3 easureents). The three levels of fair value hierarchy are described below: Level 1: Quoted prices in active arkets that are accessible at the easureent date for identical assets and liabilities. Level 2: Inputs, other than quoted prices in active arkets, that are observable either directly or indirectly and fair value is deterined through the use of odels or other valuation ethodologies. Level3: Unobservable inputs that are supported by little or no arket activity and that are significant to the fair value of the asset or liabilities. Level 3 assets and liabilities include financial instruents whose value is deterined using pricing odels, discounted cash flow ethodologies, or siilar techniques, as well as instruents for which the deterination of fair value requires significant anageent judgent or estiation. Kaleida adopted the provisions of Accounting Standards Update (ASU) , Investents in Certain Entities that Calculate Net Asset Value per Share (or its Equivalents). ASU allows for the estiation of the fair value of investents in certain investent copanies (i.e., liited partnerships and coon collective funds) for which the investent does not have a readily deterinable value by using net asset value (NAV) per share or its equivalent as a practical expedient. Cash equivalents are generally valued at the NAV reported by the financial institution. Fair values for utual funds, coon stocks, and fixed incoe utual funds are based on quoted arket prices or dealer quotes, where available. When quoted arket prices are not available for fixed incoe securities, fair value is based on quoted arket prices of coparable instruents. When necessary, Kaleida utilizes atrix pricing fro a third party pricing vendor to deterine fair value pricing for fixed incoe securities. 16 (Continued)

138 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 Matrix prices are based on quoted prices for fixed incoe securities with siilar coupons, ratings, and aturities, rather than on specific bids and offers for the designated security. The fair value of Kaleida's interest in coon collective funds and liited partnerships, for which the funds and liited partnerships do not have a readily deterinable value, is ade using the NAV per share or its equivalent as a practical expedient. For coon collective funds, Kaleida invests in the funds rather than in the securities underlying each fund, therefore, the level in the fair value hierarchy in which each fund is classified is based on the tiing of the pricing of the funds and the nature of liquidity restrictions for the funds. For liited partnerships, NAV is deterined using current estiates of fair value in the absence of readily deterinable public arket values, therefore, the level in the fair value hierarchy in which each liited partnership is classified is based priarily on the Kaleida's ability to redee its interest at or near the date of the consolidated balance sheet. The inputs and ethodology used for valuing or classifying investents for financial reporting purposes are not necessarily an indication of the risk associated with investing in those investents. The preceding ethods ay produce a fair value calculation that ay not be indicative of net realizable value or reflective of future fair value. Furtherore, although Kaleida believes its valuation ethods are appropriate and consistent with other arket participants the use of different ethodologies or assuptions to deterine the fair value of certain financial investents could result in a different fair value easureent at the reporting date. The following table presents Kaleida's financial assets at Deceber 31, 2009 and 2008 that are easured at fair value on a recurring basis. The financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value easureents (dollars in thousands): 2009 Total Level 1 Level 2 Level 3 Investents: Cash and cash equivalents 89,188 89, Fixed incoe utual funds 72,513 72,513 Coon stocks 48,544 48, Coon collective funds 119,312 21,916 97, U.S. governent obligations 33,476-33,476 - Liited partnerships 49,291-49, , , ,760 49, (Continued)

139 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and Total Level 1 Level 2 Level 3 Investents: Cash and cash equivalents 69,238 69, Fixed incoe utual funds 61,728 61, Coon stocks 28,834 28, Coon collective funds 99,205 17,266 73,136 8,803 U.S. governent obligations 34,831-34,831 - Liited partnerships 43, , , , ,967 52,134 A suary of activity for all investents with Level 3 fair value easureents for the years ended Deceber 31 follows (dollars in thousands): Balance, beginning of year 52,134 43,485 Net (sales) purchases (8,209) 22,471 Net realized (losses) gains (753) 407 Change in net unrealized gains and losses 6,231 (14,229) Balance, end of year.49, Redeption of liited partnerships generally requires provision of written notice prior to the redeption date. At the discretion of the fund anagers, investents in liited partnerships ay be deeed teporarily illiquid, including restrictions suspending noral liquidity ters on lock-ups with definite expiration dates, or restriction until the fund anager liquidates certain fund assets. At Deceber 31, 2009, Kaleida did not have any significant exposure to teporarily illiquid investents due to voluntary lock-up agreeents. 18 (Continued)

140 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (8) Property and Equipent A suary of property and equipent at Deceber 31 follows: (D1ollars in thousands) Land and land iproveents 22,860 21,184 Buildings, fixtures, and iproveents 650, ,681 Movable equipent 525, ,382 1,199,442 1,209,247 Less accuulated depreciation and aortization 959, , , ,834 Construction in progress 42,267 15, , ,789 During 2009, Kaleida began construction of a global heart vascular institute (GHVI) adjacent to Buffalo General Hospital. The GHVI will be a ten story building with an estiated cost of approxiately 291 illion. The project is a collaboration between the State University of New York at Buffalo (UB) and Kaleida. It is expected that UB will occupy the top four floors of the GHVI and UB will contribute approxiately 118 illion to cover construction and fit-up costs associated with that space. Kaleida will fund its share of the GHVI with 65 illion in HEAL NY grant funding (note 20)) and the proceeds fro governent insured debt of 100 illion and a 8 illion equity contribution (note 9). Coitents outstanding at Deceber 31, 2009, for the construction of the GHVI totaled illion. Further, Kaleida concluded that the developents in 2009 related to DOH's approval and the subsequent financing and initiation of construction of the GHVI, is the triggering event for relocating services and the closure of Gates by the end of Accordingly, Kaleida recorded a charge of approxiately 24 illion to write down the net book value of Gates and various other projects ipacted by the Berger Coission recoendations. At Deceber 31, aounts included above for property and equipent under capital leases are as follows: (Dollars in thousands) Property and equipent 82,305 80,448 Less accuulated aortization 55,885 44,536 26,420 35, (Continued)

141 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (9) Debt Debt consists of the following at Deceber 31: (Dollars in thousands) Mortgage payable in onthly installents of 625,000, including interest at 5.25% through August 1, ,057 76,622 Mortgage payable in onthly installents of 574,000 including interest at 6.04% through Noveber 1, Thereafter, onthly principal and interest installents of 355,000, with the reaining principal balance due April 1, ,218 53,012 Mortgage notes payable in onthly installents of 338,000, including interest at 5.05%, through October 1, ,078 56,604 Mortgage notes payable in onthly installents of 107,000, including interest at 5.05%, through February 1, ,178 17,211 Mortgage payable in onthly installents of 48,000 including interest at 6.25% through July 1, ,485 5,708 Mortgage notes payable with interest only payents at 6.35% through February Once fully drawn, onthly principal and interest will be required through February 1, ,885 - Capital lease obligations, less iputed interest of 1,126,000 and 1,641,000 at Deceber 31, 2009 and 2008, respectively. 16,177 22,790 Industrial developent bond payable in onthly fixed principal installents of 25,000, plus interest at 5.57% through January Thereafter, varying onthly principal and interest installents through January The bonds are secured by the related assets being financed. 2,541 2,841 Other 9,212 7, , ,783 Less current aturities 18,678 22, , ,856 Mortgages Payable The ortgages payable, which are insured by the U.S. Departent of Housing and Urban Developent (HUD), are secured by essentially all assets of the respective borrowing entities. 20 (Continued)

142 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 On Deceber 4, 2009, Kaleida secured a loan coitent of approxiately 103 illion by entering into a new ortgage note and building loan agreeent. The proceeds fro the loan coitent will be used to finance the cost of the developent of the GHVI in order to carry out the closure of services and relocation fro Gates (see note 1). The ortgage note, when fully drawn, will have a 25 year ter, fixed onthly payents and an annual interest rate of 6.35%. The ortgage note is insured by HUD. At Deceber 31, 2009, Kaleida has drawn illion for costs related to the GHVI project. Kaleida has entered into Regulatory Agreeents with HUD, which set forth certain provisions and requireents. Aong these requireents are certain perforance indicators, financial ratios, and reporting requireents. Also aong these requireents is the funding of a Mortgage Reserve Fund (Mortgage Reserve) as established by the Mortgage Reserve Fund Agreeent, dated May 20, 2004, as aended Septeber 21, 2006 and Deceber 4, As required under the Mortgage Reserve, Kaleida is required to aintain a certain balance either through deposits or investent earnings. Failure to coply with these requireents ay result in oversight activities by HUD. At Deceber 31, 2008, Kaleida was not in copliance with the required debt service coverage ratio as a result of investent arket declines. As a result, through 2010 Kaleida will continue to be required to obtain HUD approvals for short-ter borrowings, leases or other long-ter debt obligations over threshold aounts, and for certain transactions with affiliates. Manageent believes they are in copliance with all current year requireents. Under the ters of the borrowing agreeents, Kaleida established certain bank trustee accounts which include the Mortgage Reserve Fund and Kaleida's equity contribution for the GVI project. Included in the accopanying consolidated financial stateents, classified as assets liited as to use, are Kaleida's balances in these funds at Deceber 31 as follows: (Dollarsin thousands) Mortgage reserve fund 42,683 38,546 GVI project equity 8,002-50,685 38,546 Construction costs payable at year end will be paid with proceeds advanced fro the HUD insured loan coitent secured in Deceber Capital Leases The ajority of the capital lease obligations represent arrangeents entered into with GE Capital to finance acquisitions of various pieces of equipent. These arrangeents are adinistered by the Doritory Authority of the State of New York (DASNY) as part of their Tax-Exept Leasing Progra (TELP). 21 (Continued)

143 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 Future annual principal payents of long-ter debt for the next five years as of Deceber 31, 2009 follows (dollars in thousands): , , , , ,333 Line of Credit In October 2009, Kaleida entered into a Revolving Credit Loan Agreeent (Loan Agreeent) with a financial institution. The Loan Agreeent, which expires in Septeber 2011, requires Kaleida to payoff the outstanding balance annually for a period of twenty business days. The axiu aggregate principal aount of credit that can be extended under the Loan Agreeent is 20 illion. Interest is payable onthly and is calculated at the greater of the adjusted LIBOR rate plus a argin of 2.65% or a base rate calculated as the bank's prie rate plus 200 basis points. Kaleida also pays onthly an unused facility fee equal to 20 basis points per year on the average unused daily balance. DASNY ahd HUD agreed to subordinate their security interest in the first 30 illion worth of patient accounts receivable to the bank as collateral for borrowings on the Loan Agreeent. At Deceber 31, 2009, 6 illion is outstanding on the Loan Agreeent which bears interest at 3.5% at year end. (10) Lease Coitents Kaleida leases various equipent and facilities under noncancelable operating leases expiring at various dates in the future. Rental expense for all operating leases were approxiately 26 illion and 23 illion in 2009 and 2008, respectively. Future iniu payents under noncancelable operating leases as of Deceber 31, 2009 having lease ters in excess of one year are as follows (dollars in thousands): , , , , ,938 (11) Pension and Other Postretireent Benefits Pension Plans Defined Benefit Plan - Kaleida sponsors a defined benefit plan (the Plan) covering substantially all of its eligible eployees. The Plan provides benefits based upon years of service and the eployee's copensation. Kaleida's funding policy is to contribute aounts required by the Eployee Retireent Incoe Security Act. The aount to be funded is subject to annual review by anageent and Kaleida's consulting actuary. 22 (Continued)

144 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 The following table sets forth the defined benefit pension plan's projected benefit obligation and fair value of plan assets at Deceber 31: (Dollars in thousands) Change in projected benefit obligation: Benefit obligation at beginning of year 434, ,939 Service cost 16,637 14,993 Interest cost 26,357 24,958 Plan aendents Actuarial losses 13,850 20,585 Benefits paid (13,537) (12,637) Benefit obligation at end of year 478, ,838 Change in plan assets: Fair value of plan assets at beginning of year 255, ,292 Actual return on plan assets 63,025 (97,607) Eployer contributions 20,700 16,800 Benefits paid (13,537) (12,637) Fair value of assets at end of year 326, ,848 The funded status of the plan and aounts recognized in the consolidated balance sheets at Deceber 31, are as follows: (Dollars in thousands) Funded status at end of year: Fair value of plan assets 326, ,848 Proj cted benefit obligation 478, ,838 Pension liability recognized in the consolidated balance sheets at end of year (included as a coponent of other long-ter liabilities) (152,303) (178990) Aount recorded in unrestricted net assets at end of year: Net actuarial loss (136,988) (158,134) Prior service costs (1,047) ( ) (644) (158:778) The estiated prior service cost and net actuarial loss that will be aortized fro unrestricted net assets in 2010 are approxiately 191,000 and 3.8 illion, respectively. 23 (Continued)

145 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 The accuulated benefit obligations at the Plan's easureent date for 2009 and 2008 was approxiately 417 illion and 379 illion, respectively. The coponents of net periodic pension cost for the years ended Deceber 31 is as follows: (Dollars in thousands) Service cost 16,637 14,993 Interest cost Expected return on plan assets 26,357 (29,870) 24,958 (28,466) Aortization of net prior service credit (209) (209) Aortization of actuarial loss 1,842 - Net periodic pension cost 14,757 11,276 The weighted average assuptions used to deterine pension cost and benefit obligations at the Plan's easureent date (Deceber 31): Discount rate for benefit obligations 6.00% 6.20% Discount rate for net pension cost Rate of copensation increase Expected long-ter rate of return on plan assets Investent Policy - The Plan's investent policy provides for a diversified portfolio to 'iniize risk to the extent possible. The expected long-ter rate of return on plan assets reflects long-ter earnings expectations on existing plan assets and those contributions expected to be received during the current plan year. In estiating that rate, appropriate consideration was given to historical returns earned by plan assets in the fund and the rates of returns expected to be available for reinvestent. Rates of return were adjusted to reflect current capital arket assuptions and investent allocations. 24 (Continued)

146 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 The following table presents Kaleida's defined benefit pension plan's assets at Deceber 31, 2009 that are easured at fair value on a recurring basis. The hierarchy and inputs to valuation techniques to easure fair value of the plan's assets are the sae as outlined above in note 7 of the consolidated financial stateents (dollars in thousands): Total Level 1 Level 2 Level 3 Investents: Cash and cash equivalents 25,921 25, Fixed incoe utual funds 75,626 75,626 Coon stocks 25,259 25, Coon collective funds 113,484 12, , Liited partnerships 81, ,415 Insurance contract 4,331-4, , , ,762 81,567 The insurance contract held within Kaleida's defined benefit plan is recorded at contract value which approxiates fair value. A suary of activity for all investents with Level 3 fair value easureents for the year ended Deceber 31, 2009 follows (dollars in thousands): Balance, beginning of year 63,402 Net purchases 9,626 Net realized losses (2,795) Change in net unrealized gains and losses 11,334 Balance, end of year 81,567 Contributions - For the plan year ended Deceber 31, 2009, Kaleida has contributed 27 illion. Expected contributions for the plan year ending Deceber 31, 2010 will be ade at a level recoended by Kaleida's consulting actuary and in accordance with ERISA funding requireents. Estiated Future Benefit Payents - The following benefit payents, which reflect expected future service, are as follows for the Plan (dollars in thousands): , , , , , , (Continued)

147 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 The expected benefits are based on the sae assuptions used to easure Kaleida's benefit obligations at Deceber 31, 2009 and include future eployee service. Other Pension Benefit Plans - In addition, Kaleida contributes to a ulti-eployer defined benefit pension plan as required by union contracts fro which benefits are paid to certain union eployees. Additionally, Kaleida provides an eployer-atched Tax Sheltered Annuity progra (403 Plan) for nonunion eployees. Total expense under these plans was approxiately 2.6 illion and 2.1 illion for 2009 and 2008, respectively. Retiree Health and Life Insurance Plan Kaleida also aintains a contributory retiree health and life insurance plan covering only certain eligible eployees of DeGraff Meorial Hospital (DeGraff). The following table sets forth the funded status and aounts recognized in the consolidated balance sheets at Deceber 3 1: (Dollars in tousandst Accuulated postretireent obligation at end of year 5,446 4,390 Fair value of plan assets at end of year - - Postretireent obligation recognized at end of year included as a coponent of other long-ter liabilities (5,446) (4,390) Net postretireent benefit cost was approxiately 368,000 and 447,000 for the years ended Deceber 31, 2009 and 2008, respectively. The weighted average assuptions used to deterine postretireent benefit cost and obligations at the Plan's easureent date (Deceber 31): Discount rate for benefit obligations 5.80% 6.30% Discount rate for net postretireent cost For easureent purposes, 2009 increases in the per capita cost of covered health care benefits were assued for edical and prescription drugs at 9.0%. The rate is assued to decrease gradually to 5% by 2015 and reain at that level thereafter for all classifications. An one-percentage point change in assued healthcare cost trend rates would not have a aterial ipact on the future cost or benefit obligation. 26 (Continued)

148 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (12) Asset Retireent Obligations Kaleida has asset retireent obligations (AROs) arising fro regulatory requireents to perfor certain asset retireent activities in the event they renovate or deolish buildings in the future. The liability was initially easured at fair value and subsequently is adjusted for accretion expense and changes in the aount or tiing of the estiated cash flows. The following table presents the activity for the AROs for the years ended Deceber 31: (Dollars in thousands) Balance at beginning of year 10,049 9,830 Net obligations settled in current period (605) (321) Accretion expense Balance at end of year 10,217 10,049 (13) Teporarily and Peranently Restricted Net Assets Teporarily restricted net assets at Deceber 31 are available for the following purposes: (Dollars in thousands) Capital expansion and iproveents Advanceent of edical education and research and 66,507 10,195 healthcare services 48,701 40, ,208 50,732 Peranently restricted net assets at Deceber 31 are restricted as follows: (Dollars in thousands) Funds to be held in perpetuity, the incoe fro which is expendable to support healthcare services, including edical research 13,040 9,990 Funds to be held in perpetuity, the incoe fro which is expendable to support pediatric healthcare services 6,509 5,064 19,549 15,054 In 2009 and 2008, net assets were released fro donor restrictions by incurring expenses satisfying the restricted purposes of operating expenses of 9.4 illion and 11.1 illion, respectively, and purchases of equipent of 11.5 illion and 1.7 illion, respectively. 27 (Continued)

149 KALEIDA HEALTH Notes to Consolidated Financial Stateents Deceber 31, 2009 and 2008 (14) Functional Expenses Kaleida provides general healthcare services to residents within its geographic location. Expenses related to these services are as follows for the years ended Deceber 3 1: (Dollars in thousands) Healthcare services 997, ,265 General and adinistrative 162, ,753 1,159,394 1,085,018 (15) Coitents and Contingencies Concentration of Credit Risk Financial instruents that potentially subject Kaleida to concentrations of credit risk consist priarily of accounts receivable and certain investents. Investents, which include governent obligations, arketable equity securities, other alternative investents funds, and fixed incoe securities, are not concentrated in any corporation or industry. Kaleida receives a significant portion of its payents for services rendered fro a liited nuber of governent and coercial third-party payors, including Medicare, Medicaid, and various health aintenance organizations. Kaleida has not historically incurred any significant concentrated credit losses in the noral course of business. Conversion of DeGraff Meorial Hospital The Berger Coission had recoended that DeGraff Meorial Hospital be converted to a residential health care facility. Based upon subsequent consideration, the NYS Coissioner of Health (Coissioner) deferred that recoendation until a further arket and need based analysis could be copleted. The Coissioner will have until the end of 2011 to reevaluate this recoendation. Closure of Waterfront Health Care Center In Noveber 2009, Kaleida filed a request with DOH to close Waterfront Health Care Center. On January 15, 2010, DOH approved the plan of closure. Kaleida has not initiated the plan of closure. Collective Bargaining Agreeents A significant portion of Kaleida eployees work under collective bargaining agreeents, the ajority of which will expire in May

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153 Kaleida Health Tax year ended Deceber 31, 2009 For 990T - Public Disclosure Copy

154 990-T OMB Exept Organization Business Incoe Tax Return(and proxy tax under section 6033(e)) For Departent of the Treasury For calendar year 2009 or other tax year beginning, 2009, and À¾ ½ I Internal Revenue Service Open to Public Inspection ending, 20. See separate instructions. for 501(3) Organizations Only Check box if Nae of organization ( Check box if nae changed and see instructions.) D Eployer identification nuber A address changed (Eployees' trust, see instructions for Block D on page 9.) B Exept under section KALEIDA HEALTH 501( C )( 03 ) Print Nuber, street, and roo or suite no. If a P.O. box, see page 8 of instructions or 408(e) 220(e) E Unrelated business activity codes Type (See instructions for Block E on page 9.) 408A ECHANGE STREET City or town, state, and ZIP code C Book value of all assets BUFFALO, NY at end of year F Group exeption nuber (See instructions for Block F on page 9.) I 933,611,492. G Check organization type I 501 corporation 501 trust 401 trust Other trust H Describe the organization's priary unrelated business activity. I ATTACHMENT 1 I During the tax year, was the corporation a subsidiary in an affiliated group or a parent-subsidiary controlled group? I Yes No If "Yes," enter the nae and identifying nuber of the parent corporation. I J The books are in care of IJON SWIATKOWSKI Telephone nuber I Part I Unrelated Trade or Business Incoe (A) Incoe (B) Expenses (C) Net 1 a Gross receipts or sales 4,071,152. b Less returns and allowances c Balance 1c 4,071,152. I 2 Cost of goods sold (Schedule A, line 7) 2 3 Gross profit. Subtract line 2 fro line 1c 3 4 a Capital gain net incoe (attach Schedule D) 4a b Net gain (loss) (For 4797, Part II, line 17) (attach For 4797) 4b c Capital loss deduction for trusts 4c 5 Incoe (loss) fro partnerships and S corporations (attach stateent) 5 6 Rent incoe (Schedule C) 6 7 Unrelated debt-financed incoe (Schedule E) 7 8 Interest, annuities, royalties, and rents fro controlled organizations (Schedule F) 8 9 Investent incoe of a section 501(7), (9), or (17) organization (Schedule G) 9 10 Exploited exept activity incoe (Schedule I) Advertising incoe (Schedule J) Other incoe (See page 10 of the instructions; attach schedule.) Total. Cobine lines 3 through Part II 4,234,27 28,154. 4,206,116. Deductions Not Taken Elsewhere (See page 11 of the instructions for liitations on deductions.) (Except for contributions, deductions ust be directly connected with the unrelated business incoe.) 14 Copensation of officers, directors, and trustees (Schedule K) Salaries and wages Repairs and aintenance Bad debts Interest (attach schedule) Taxes and licenses Charitable contributions (See page 13 of the instructions for liitation rules.) Depreciation (attach For 4562) 21 4,071,152. 4,071, ,908. ATCH 2-85, , , , ,543. ATCH 3 190, , Less depreciation claied on Schedule A and elsewhere on return 22a 22b 23 Depletion Contributions to deferred copensation plans Eployee benefit progras Excess exept expenses (Schedule I) Excess readership costs (Schedule J) Other deductions (attach schedule) Total deductions. Add lines 14 through Unrelated business taxable incoe before net operating loss deduction. Subtract line 29 fro line Net operating loss deduction (liited to the aount on line 30) Unrelated business taxable incoe before specific deduction. Subtract line 31 fro line Specific deduction (Generally 1,000, but see line 33 instructions for exceptions.) 33 2,270, , Unrelated business taxable incoe. Subtract line 33 fro line 32. If line 33 is greater than line 32, enter the saller of zero or line For Privacy Act and Paperwork Reduction Act Notice, see instructions. For 990-T (2009) 9E , ,25 ATTACHMENT 4-24,739. 3,639, , ,523. 1,00 8RC V KALEIDA PAGE 118

155 For 8868 Application for Extension of Tie To File an (Rev. ApHi 2009) Exept Organization Return OMB Departent of the Treasury Internal Revenue Service File a separate application for each return. * If you are filing for an Autoatic 3-Month Extension, coplete only Part I and check this box.... L... * If you are filing for an Additional (Not Autoatic) 3-Month Extension, coplete only Part II (on page 2 of this for). Do not coplete Part II unlespou have already been granted an autoatic 3-onth extension on a previously filed For EM Autoatic 3-Month Extension of Tie. Only subit original (no copies needed). A corporation required to file For 990-T and requesting an autoatic 6-onth extension - check this box and coplete Part I only... All other corporations (including 1120-C filers), partnerships, REMICs, and trusts ust use For 7004 to request an extension of tie to file incoe tax returns. Electronic Filing (e-file) Generally, you can electronically file For 8868 if you want a 3-onth autoatic extension of tie to file one of the returns noted below (6 onths for a corporation required to file For 990-T). However, you cannot file For 8868 electronically if (1) you want the additional (not autoatic) 3-onth extension or (2) you file Fors 990-BL, 6069, or 8870, group returns, or a coposite or consolidated Fro 990-T. Instead, you ust subit the fully copleted and signed page 2 (Part I) of For For ore details on the electronic filing of this for, visit and click on a-file for Charities & Nonprofits. Type or Nae of Exept Organization Eployer Identification nuber print KALEIDA HEALTH File by the Nuber, street, and roo or suite no. If a P.O. box, see instructions. duedatefor 726 ECHANGE STREET, SUITE 200 filing your return. See City, town or post office, state, and ZIP code. For a foreign address, see instructions. Instructions. BUFFALO, NY Check type of return to be filed (file a separate application for each return): For 990 For 990-T (corporation) For 4720 For 990-BL For 990-T (sec. 401 or 408 trust) For 5227 For 990-EZ U For 990-T (trust other than above) For 6069 For 990-PF For 1041-A For 8870 * The books are in the care of 1 JON SWIATKOWSKI Telephone, FA li " If the organization does not have an office or place of business in the United States, check this box... b EJ * If this is for a Group Return, enter the organization's four digit Group Exeption Nuber (GEN) If this is for the whole group, check this box - 0 I. If it is for part of the group, check this box, and attach a list with the naes and EINs of all ebers the extension will cover I I request an autoatic 3-onth (6 onths for a corporation required to file For 990-T) extension of tie uni- 11/15,2010 to file the exept organization return for the organization naed above. The extension is for the organization's return for: :, M] calendar year 2009 or.e tax year beginning. andending 2 If this tax year is for less than 12 onths, check reason: E Initial return E Final return D-- Change in accounting period 3a If this application is for For 990-BL, 990-PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions. 3a b If this application is for For 990-PF or 990-T, enter any refundable credits and estiated tax payents ade. Include anyprior year overpayent allowed asacredit. 3b c Balance Due. Subtract line 3b fro line 3a. Include your payent with this for, or. if required, deposit with FTD coupon or, if required, by using EFTPS (Electronic Federal Tax Payent Syste), See instructions. 3c Caution. If you are going to ake an electronic fund withdrawal with this For 8868, see For 8453-EO and For 8879-EO for Payent instructions. For Privacy Act and Paperwork Reduction Act Notice, see Instructions. For 8868 (Rev ) 9FB RC V 09-6 KALEIDA PAGE 2

156 For 990-T (2009) Page 2 Part III Tax Coputation 35 Organizations Taxable as Corporations. See instructions for tax coputation on page 15. Controlled group ebers (sections 1561 and 1563) check here I See instructions and: a Enter your share of the 50,000, 25,000, and 9,925,000 taxable incoe brackets (in that order): (1) (2) (3) b Enter organization's share of: (1) Additional 5% tax (not ore than 11,750) (2) Additional 3% tax (not ore than 100,000) c Incoe tax on the aount on line 34 I 35c 36 Trusts Taxable at Trust Rates. See instructions for tax coputation on page 16. Incoe tax on the aount on line 34 fro: Tax rate schedule or Schedule D (For 1041) Proxy tax. See page 16 of the instructions I Alternative iniu tax Total. Add lines 37 and 38 to line 35c or 36, whichever applies 39 Part IV Tax and Payents 40 a Foreign tax credit (corporations attach For 1118; trusts attach For 1116) 40a b Other credits (see page 16 of the instructions) 40b c General business credit. Attach For c d Credit for prior year iniu tax (attach For 8801 or 8827) 40d e Total credits. Add lines 40a through 40d 40e 41 Subtract line 40e fro line Other taxes. Check if fro: For 4255 For 8611 For 8697 For 8866 Other (attach schedule) Total tax. Add lines 41 and a Payents: A 2008 overpayent credited to a b 2009 estiated tax payents 44b c Tax deposited with For c d Foreign organizations: Tax paid or withheld at source (see instructions) 44d e Backup withholding (see instructions) 44e f Other credits and payents: For 2439 For 4136 Other Total I 44f 45 Total payents. Add lines 44a through 44f 45 I 46 Estiated tax penalty (see page 4 of the instructions). Check if For 2220 is attached Tax due. If line 45 is less than the total of lines 43 and 46, enter aount owed Overpayent. If line 45 is larger than the total of lines 43 and 46, enter aount overpaid Enter the aount of line 48 you want: Credited to 2010 estiated tax I Refunded I49 Part V Stateents Regarding Certain Activities and Other Inforation (see instructions on page 17) 1 At any tie during the 2009 calendar year, did the organization have an interest in or a signature or other authority over a financial account (bank, securities, or other) in a foreign country? If YES, the organization ay have to file For TD F , Report of Foreign Bank and Financial Accounts. If YES, enter the nae of the foreign country here 2 During the tax year, did the organization receive a distribution fro, or was it the grantor of, or transferor to, a foreign trust? 3 I I I If YES, see page 5 of the instructions for other fors the organization ay have to file. Enter the aount of tax-exept interest received or accrued during the tax year Schedule A - Cost of Goods Sold. Enter ethod of inventory valuation 1 Inventory at beginning of year 1 6 Inventory at end of year 6 2 Purchases 2 7 Cost of goods sold. Subtract line 3 Cost of labor 3 6 fro line 5. Enter here and in 4 a Additional section 263A costs Part I, line 2 7 (attach schedule) 4a 8 Do the rules of section 263A (with respect to Yes No b Other costs (attach schedule) 4b property produced or acquired for resale) apply 5 Total. Add lines 1 through 4b 5 to the organization? Under penalties of perjury, I declare that I have exained this return, including accopanying schedules and stateents, and to the best of y knowledge and belief, it is true, correct, and coplete. Declaration of preparer (other than taxpayer) is based on all inforation of which preparer has any knowledge. Sign Here M May the IRS discuss this return with the preparer shown below (see Signature of officer Date Title instructions)? Yes No Date Preparer's Paid M Check if signature self-eployed Preparer's Use Only Fir's nae (or yours if self-eployed), address, and ZIP code M M 11/10/ Yes Preparer's SSN or PTIN P ERNST & YOUNG U.S. LLP EIN KEY TOWER, 50 FOUNTAIN PLAZA Phone no BUFFALO, NY No For 990-T (2009) 9E RC V KALEIDA PAGE 119