TY 2010 Form 990

(A) Name and Title	(B) Average hours per week (describe hours for related organizations in Schedule O)	(C) Position (check all that apply)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(1) William Austin MD Director	2.4	X			61,400	0
(2) Chris Bavasi Director/Chairman	2.5	X	X		0	0
(3) Gary Christensen MD Director	.75	X			0	0
(4) Jim Dorman Director/Vice-Chair	3.0	X	X		0	0
(5) Wayne Fox Director	1.75	X			0	0
(6) L George Hershey DO Director	.6	X			0	0
(7) Bill Jeffers Director	2.4	X			0	0
(8) Bert McKinnon MD Director - NAH Board Chair	2.0	X			0	0
(9) Todd Lewis MD Director - Medical Staff Pres.	1.0	X			0	0
(10) Robert M Montoya Director	2.75	X			0	0
(11) Molly Munger Director	.75	X			0	0
(12) Steve Peru Director/Secretary/Treasurer	.5	X	X		0	0
(13) Richard Hays Director	1.5	X			53,450	0
(14) Guadalupe Woodson FNP Director	1.8	X			0	0
(15) William T Bradel President/CEO	20.0	X	X		617,244	28,446
(16) GREGORY KUZMA VP FINANCE/CFO	20.0		X		355,683	51,215
(17) Steven W Lewis MD Chief Medical Officer	40.0			X	437,766	28,226

(A) Name and business address	(B) Description of services	(C) Compensation
Forest Country Anesthesia PO Box 53301 PHOENIX,AZ85072	MEDICAL SERVICES	2,430,000
CompHealth PO Box 972651 DALLAS,TX75397	medical services	2,205,836
Critical Care Consultants PO Box 967 FLAGSTAFF,AZ86002	MEDICAL SERVICES	1,500,000
Carefusion Solutions 25082 Network Place CHICAGO,IL60673	MEDICAL SERVICES	1,397,103
Northern Arizona Orthopaedics 1485 N Turquoise Drive Ste 200 FLAGSTAFF,AZ86001	MEDICAL SERVICES	1,348,781
2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization 44

Do not include amounts reported on lines 6b, 7b, 8b, 9b, and 10b of Part VIII.	(A) Total expenses	(B) Program service expenses	(C) Management and general expenses	(D) Fundraising expenses
1	Grants and other assistance to governments and organizations in the U.S. See Part IV, line 21	439,010	439,010
2	Grants and other assistance to individuals in the U.S. See Part IV, line 22	0
3	Grants and other assistance to governments, organizations, and individuals outside the U.S. See Part IV, lines 15 and 16	0
4	Benefits paid to or for members	0
5	Compensation of current officers, directors, trustees, and key employees ....	5,163,338	4,000,006	1,065,220	98,112
6	Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ....	0
7	Other salaries and wages	117,783,411	111,271,218	6,061,509	450,684
8	Pension plan contributions (include section 401(k) and section 403(b) employer contributions) ....	10,877,017	10,252,875	582,615	41,527
9	Other employee benefits .......	6,204,577	5,848,549	332,341	23,687
10	Payroll taxes ...........	17,706,727	16,690,683	948,441	67,603
11	Fees for services (non-employees):
a	Management ......	520,064	520,064
b	Legal .........	434,142		345,808	88,334
c	Accounting ...........	154,903		87,458	67,445
d	Lobbying ...........	6,000		6,000
e	Professional fundraising. See Part IV, line 17..	0
f	Investment management fees ......	47,245		47,245
g	Other ..........	32,897,126	31,962,296	527,772	407,058
12	Advertising and promotion ....	711,069	81,562	477,574	151,933
13	Office expenses .......	63,166,057	62,125,086	1,020,947	20,024
14	Information technology ......	929,260	929,260
15	Royalties ..	0
16	Occupancy ...........	4,788,954	4,769,754		19,200
17	Travel ............	272,294	149,209	118,399	4,686
18	Payments of travel or entertainment expenses for any federal, state, or local public officials ......	0
19	Conferences, conventions, and meetings ....	285,099	285,099
20	Interest ...........	3,838,733		3,838,733
21	Payments to affiliates .......	0
22	Depreciation, depletion, and amortization .....	17,550,749	11,850,171	5,689,076	11,502
23	Insurance ..............	747,657	747,657
24	Other expenses. Itemize expenses not covered above. (Expenses grouped together and labeled miscellaneous may not exceed 5% of total expenses shown on line 25 below.)
a	EXP REIMB TO NAH	30,662,028	15,331,014	15,331,014
b	CONSULTING	1,340,623	463,712	874,892	2,019
c	RECRUITING	1,257,934	29,508	1,228,426
d	COLLECTION EXPENSE	575,798	575,798
e	EMPLOYEE RELATIONS	317,519	65,251	250,129	2,139
f	All other expenses	69,407	69,407
25	Total functional expenses. Add lines 1 through 24f	318,746,741	278,457,189	38,833,599	1,455,953
26	Joint costs. Check here if following SOP 98-2 (ASC 958-720). Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation

Part X Balance Sheet
	1	Cashnon-interest-bearing ..........	34,277,901	1	23,439,862
2	Savings and temporary cash investments .......	0	2	25,554,027
3	Pledges and grants receivable, net .........		3
4	Accounts receivable, net .........	42,080,529	4	45,992,614
5	Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
	Schedule L ..........		5
6	Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
	Schedule L ..........		6
7	Notes and loans receivable, net .............	4,737,754	7	2,099,452
8	Inventories for sale or use ..............	6,622,319	8	6,558,112
9	Prepaid expenses and deferred charges ............	2,400,859	9	1,820,964
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	304,644,116
b	Less: accumulated depreciation. .....	10b	170,226,066	136,999,781	10c	134,418,050
11	Investments—publicly traded securities ..........	218,125,021	11	265,742,304
12	Investments—other securities. See Part IV, line 11 ......	12,521,385	12	1,984,837
13	Investments—program-related. See Part IV, line 11 ..		13
14	Intangible assets .........		14
15	Other assets. See Part IV, line 11 ...........	8,030,234	15	7,415,260
16	Total assets. Add lines 1 through 15 (must equal line 34)...	465,795,783	16	515,025,482
	17	Accounts payable and accrued expenses .	27,364,100	17	31,701,252
18	Grants payable ..........		18
19	Deferred revenue ..........		19
20	Tax-exempt bond liabilities ..........	130,545,305	20	124,331,342
21	Escrow or custodial account liability. Complete Part IV of Schedule D..		21
22	Payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........		22
23	Secured mortgages and notes payable to unrelated third parties ..	325,134	23	250,551
24	Unsecured notes and loans payable to unrelated third parties ....		24
25	Other liabilities. Complete Part X of Schedule D.....	54,742,663	25	43,210,110
26	Total liabilities. Add lines 17 through 25.....	212,977,202	26	199,493,255
		Organizations that follow SFAS 117, check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets .....	252,818,581	27	315,532,227
28	Temporarily restricted net assets .....		28
29	Permanently restricted net assets .....		29
	Organizations that do not follow SFAS 117, check here and complete lines 30 through 34.
30	Capital stock or trust principal, or current funds .....		30
31	Paid-in or capital surplus, or land, building or equipment fund .....		31
32	Retained earnings, endowment, accumulated income, or other funds		32
33	Total net assets or fund balances .....	252,818,581	33	315,532,227
34	Total liabilities and net assets/fund balances .....	465,795,783	34	515,025,482

- TIN:

SCHEDULE A
(Form 990 or 990EZ)

Department of the Treasury
Internal Revenue Service

Public Charity Status and Public Support

Complete if the organization is a section 501(c)(3) organization or a section
4947(a)(1) nonexempt charitable trust.

Attach to Form 990 or Form 990-EZ. right arrow

See separate instructions.

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Reason for Public Charity Status (All organizations must complete this part.) See instructions

The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)

A church, convention of churches, or association of churches. section 170(b)(1)(A)(i).

A school described in section 170(b)(1)(A)(ii). (Attach Schedule E.)

A hospital or a cooperative hospital service organization described in section 170(b)(1)(A)(iii).

A medical research organization operated in conjunction with a hospital described in section 170(b)(1)(A)(iii). Enter the hospital's name, city, and state:

An organization operated for the benefit of a college or university owned or operated by a governmental unit described in

section 170(b)(1)(A)(iv). (Complete Part II.)

A federal, state, or local government or governmental unit described in section 170(b)(1)(A)(v).

An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in

section 170(b)(1)(A)(vi). (Complete Part II.)

A community trust described in section 170(b)(1)(A)(vi). (Complete Part II.)

An organization that normally receives: (1) more than 331/3% of its support from contributions, membership fees, and gross

receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of

its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses

acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)

An organization organized and operated exclusively to test for public safety. Seesection 509(a)(4).

An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2). See section 509(a)(3). Check the box that describes the type of supporting organization and complete lines 11e through 11h.

Type I

Type II

Type III - Functionally integrated

Type III - Other

By checking this box, I certify that the organization is not controlled directly or indirectly by one or more disqualified persons other than foundation managers and other than one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2).

If the organization received a written determination from 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 from any of the
following persons?

(i) a person who directly or indirectly controls, either alone or together with persons described in (ii)

Yes

and (iii) below, the governing body of the the supported organization? ................

11g(i)

(ii) a family member 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 information about the supported organization(s).

(i) Name of supported organization	(ii) EIN	(iv) Is the organization in col. (i) listed in your governing document?		(v) Did you notify the organization in col. (i) of your support?		(vi) Is the organization in col. (i) organized in the U.S.?		(vii) Amount of support?
(i) Name of supported organization	(ii) EIN	Yes	No	Yes	No	Yes	No	(vii) Amount of support?


Total

For Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 11285F

Schedule A (Form 990 or 990-EZ) 2010

Page 2

Part II

Support Schedule for Organizations Described in IRC 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi)
(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.)

Section A. Public Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
1	Gifts, grants, contributions, and membership 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 governmental unit to the organization without charge..
4	Total. Add lines 1 through 3..
5	The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)..
6	Public Support. Subtract line 5 from line 4.

Section B. Total Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
7	Amounts from line 4..
8	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
9	Net income from unrelated business activities, whether or not the business is regularly carried on..
10	Other income. (Explain in Part IV.) Do not include gain or loss from the sale of capital assets..
11	Total support (Add lines 7 through 10).

Gross receipts from related activities, etc. (See instructions.) ..................

First Five Years If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization,
check this box and stop here.......................................... right arrow

Section C. Computation of Public Support Percentage

Public Support Percentage for 2010 (line 6 column (f) divided by line 11 column (f)) .........

Public Support Percentage for 2009 Schedule A, Part II, line 14 ...............

16a

33 1/3% support test—2010. If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box
and stop here. The organization qualifies as a publicly supported organization ...................... right arrow

33 1/3% support test—2009. If the organization did not check the box on line 13 or 16a, and line 15 is 33 1/3% or more, check this
box and stop here. The organization qualifies as a publicly supported organization ..................... right arrow

17a

10%-facts-and-circumstances test—2010. If the organization did not check a box on line 13, 16a, or 16b and line 14
is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here. Explain
in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly supported
organization .................................................. right arrow

10%-facts-and-circumstances test—2009. If the organization did not check a box on line 13, 16a, 16b, or 17a and line
15 is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here.
Explain in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly
supported organization .............................................. right arrow

Private Foundation If the organization did not check a box on line 13, 16a, 16b, 17a or 17b, check this box and see
instructions ................................................... right arrow

Schedule A (Form 990 or 990-EZ) 2010

Page 3

Part III

Support Schedule for Organizations Described in IRC 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.)

Section A. Public Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
1	Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .
2	Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose......
3	Gross receipts from activities that are not an unrelated trade or business under section 513..
4	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 governmental unit to the organization without charge..
6	Total. Add lines 1 through 5.
7a	Amounts included on lines 1, 2, and 3 received from disqualified persons...
b	Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year.
c	Add lines 7a and 7b..
8	Public Support (Subtract line 7c from line 6.)

Section B. Total Support

Calendar year (or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
9	Amounts from line 6...
10a	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
b	Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.
c	Add lines 10a and 10b.
11	Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.
12	Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)
13	Total support (Add lines 9, 10c, 11 and 12.).

Section C. Computation of Public Support Percentage

Public Support Percentage for 2010 (line 8 column (f) divided by line 13 column (f)) .........

Public support percentage from 2009 Schedule A, Part III, line 15 ...............

Section D. Computation of Investment Income Percentage

Investment income percentage for 2010 (line 10c column (f) divided by line 13 column (f)) ......

Investment income percentage from 2009 Schedule A, Part III, line 17 .............

19a

33 1/3% support tests—2010. If the organization did not check the box on line 14, and line 15 is more than 33 1/3% and line 17 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization .......... right arrow

33 1/3% support tests—2009. If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3% and line 18 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization .... right arrow

Private Foundation If the organization did not check a box on line 14, 19a or 19b, check this box and see instructions ..... right arrow

Schedule A (Form 990 or 990-EZ) 2010

Page 4

Part IV

Supplemental Information. Supplemental Information. Complete this part to provide the explanation required by Part II, line 10; Part II, line 17a or 17b; or Part III, line 12. Also complete this part for any additional information. (See instructions).

Facts And Circumstances Test

Explanation

Schedule A (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule B
(Form 990, 990-EZ,
or 990-PF)

Department of the Treasury
Internal Revenue Service

Schedule of Contributors

Attach to Form 990, 990-EZ, or 990-PF.

OMB No. 1545-0047

2010

Name of organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Organization type (check one):

Filers of:

Section:

Form 990 or 990-EZ

501(c)( ) (enter number) organization

4947(a)(1) nonexempt charitable trust not treated as a private foundation

527 political organization

Form 990-PF

501(c)(3) exempt private foundation

4947(a)(1) nonexempt charitable trust treated as a private foundation

501(c)(3) taxable private foundation

Check if your organization is covered by the General Rule or a Special Rule.
Note. Only a section 501(c)(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 Form 990, 990-EZ, or 990-PF that received, during the year, $5,000 or more (in money or
property) from any one contributor. Complete Parts I and II.

Special Rules

For a section 501(c)(3) organization filing Form 990 or 990-EZ, that met the 33¹/3% support test of the regulations
under sections 509(a)(1) and 170(b)(1)(A)(vi), and received from any one contributor, during the year, a contribution of the
greater of (1) $5,000 or (2) 2% of the amount on (i) Form 990, Part VIII, line 1h, or (ii) Form 990-EZ, line 1. Complete Parts I and II.

For a section 501(c)(7), (8), or (10) organization filing Form 990, or 990-EZ, that received from any one contributor,
during the year, aggregate contributions of more than $1,000 for use exclusively for religious, charitable,
scientific, literary, or educational purposes, or the prevention of cruelty to children or animals. Complete Parts I, II, and
III.

For a section 501(c)(7), (8), or (10) organization filing Form 990, or 990-EZ, that received from any one contributor,
during the year, contributions for use exclusively for religious, charitable, etc., purposes, but these contributions did
not aggregate to more than $1,000. 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 complete any of the parts unless the General Rule
applies to this organization because it received nonexclusively religious, charitable, etc., contributions of $5,000 or more
during the year. ......................... Arrow Bullet

Caution. An Organization that is not covered by the General Rule and/or the Special Rules does not file Schedule B (Form 990,
990-EZ, or 990-PF), but it must answer “No” on Part IV, line 2 of its Form 990, or check the box in the heading of its
Form 990-EZ, or on line 2 of its Form 990-PF, to certify that it does not meet the filing requirements of Schedule B (Form 990,
990-EZ, or 990-PF).

For Paperwork Reduction Act Notice, see the Instructions
for Form 990, 990-EZ, or 990-PF.

Cat. No. 30613XSchedule B (Form 990, 990-EZ, or 990-PF) (2010)

Name of organization FLAGSTAFF MEDICAL CENTER
Schedule B (Form 990, 990-EZ, or 990-PF) (2010) Page 1 of 1 of Part I
Part I	Contributors (see Instructions)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
RESTRICTED	RESTRICTED RESTRICTED RESTRICTED RESTRICTED, RESTRICTED RESTRICTED	$RESTRICTED	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Name of organization FLAGSTAFF MEDICAL CENTER
Schedule B (Form 990, 990-EZ, or 990-PF) (2010) Page 1 of 1 of Part II
Part II	Noncash Property (see Instructions)
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Page 1 of 1 of Part III

Name of organization
FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part III

Exclusively religious, charitable, etc., individual contributions to section 501(c)(7), (8), or (10) organizations
aggregating more than $1,000 for the year. (Complete columns (a) through (e) and the following line entry.)
For organizations completing Part III, enter the total of exclusively religious, charitable, etc.,
contributions of $1,000 or less for the year. (Enter this information once. See instructions.) Arrow Bullet

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE C
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Political Campaign and Lobbying Activities

For Organizations Exempt From Income Tax Under section 501(c) and section 527
SchCMd Bullet

Complete if the organization is described below.
SchCMd Bullet

Attach to Form 990 or Form 990-EZ. SchCMd Bullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public
Inspection

If the organization answered “Yes,” to Form 990, Part IV, Line 3, or Form 990-EZ, Part V, line 46 (Political Campaign Activities), then
Round Bullet

Section 501(c)(3) organizations: Complete Parts I-A and B. Do not complete Part I-C.
Round Bullet

Section 501(c) (other than section 501(c)(3)) organizations: Complete Parts I-A and C below. Do not complete Part I-B.
Round Bullet

Section 527 organizations: Complete Part I-A only.
If the organization answered “Yes,” to Form 990, Part IV, Line 4, or Form 990-EZ, Part VI, line 47 (Lobbying Activities), then
Round Bullet

Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)) Complete Part II-A. Do not complete Part II-B.
Round Bullet

Section 501(c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II-B. Do not complete Part II-A.
If the organization answered “Yes,” to Form 990, Part IV, Line 5 (Proxy Tax) or Form 990-EZ, Part V, line 35a (Proxy Tax), then
Round Bullet

Section 501(c)(4), (5), or (6) organizations: Complete Part III.

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I-A

Complete if the organization is exempt under section 501(c) or is a section 527 organization.

Provide a description of the organization's direct and indirect political campaign activities on behalf of or in opposition to candidates for public office in Part IV.

Political expenditures .................................... SchCMd Bullet

Volunteer hours ........................................

Part I-B

Complete if the organization is exempt under section 501(c)(3).

Enter the amount of any excise tax incurred by the organization under section 4955 ......... SchCMd Bullet

Enter the amount of any excise tax incurred by organization managers under section 4955 ...... SchCMd Bullet

If the organization incurred a section 4955 tax, did it file Form 4720 for this year? ..............

Yes No

Was a correction made? .........................................

Yes No

If "Yes," describe in Part IV.

Part I-C

Complete if the organization is exempt under section 501(c) except section 501(c)(3).

Enter the amount directly expended by the filing organization for section 527 exempt function activities SchCMd Bullet

Enter the amount of the filing organization's funds contributed to other organizations for section 527 exempt funtion activities .................................... SchCMd Bullet

Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120-POL, line 17b.. SchCMd Bullet

Did the filing organization file Form 1120-POL for this year? ..........................

Yes No

Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing
organization made payments. For each organization listed, enter the amount paid from the filing organization’s funds. Also enter the amount of political contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action committee (PAC). If additional space is needed, provide information in Part IV.

(a) Name	(b) Address	(c) EIN	(d) Amount paid from filing organization's funds. If none, enter -0-.	(e) Amount of political contributions received and promptly and directly delivered to a separate political organization. If none, enter -0-.

For Privacy Act and Paperwork Reduction Act Notice, see the instructions for Form 990.

Cat. No. 50084S

Schedule C (Form 990 or 990-EZ) 2010

Page 2

Part II-A

Complete if the organization is exempt under section 501(c)(3) and filed Form 5768 (election under section 501(h)).

A Check if the filing organization belongs to an affiliated group.
B Check if the filing organization checked box A and "limited control" provisions apply.

Limits on Lobbying Expenditures (The term "expenditures" means amounts paid or incurred.)		(b) Affiliated Group Totals
1a	Total lobbying expenditures to influence public opinion (grass roots lobbying) ......
b	Total lobbying expenditures to influence a legislative body (direct lobbying) .......
c	Total lobbying expenditures (add lines 1a and 1b) ...................
d	Other exempt purpose expenditures ........................
e	Total exempt purpose expenditures (add lines 1c and 1d) ...............
f	Lobbying nontaxable amount. Enter the amount from the following table in both columns.
	If the amount on line 1e, column (a) or (b) is:The lobbying nontaxable amount is:
	Not over $500,00020% of the amount on line 1e.
	Over $500,000 but not over $1,000,000$100,000 plus 15% of the excess over $500,000.
	Over $1,000,000 but not over $1,500,000$175,000 plus 10% of the excess over $1,000,000.
	Over $1,500,000 but not over $17,000,000$225,000 plus 5% of the excess over $1,500,000.
	Over $17,000,000$1,000,000.

g	Grassroots nontaxable amount (enter 25% of line 1f) .................
h	Subtract line 1g from line 1a. If zero or less, enter -0-. ................
i	Subtract line 1f from line 1c. If zero or less, enter -0-. ................
j	If there is an amount other than zero on either line 1h or line 1i, did the organization file Form 4720 reporting section 4911 tax for this year? ......................................	Yes No

4-Year Averaging Period Under Section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns below. See the instructions for lines 2a through 2f on page 4.)
Lobbying Expenditures During 4-Year Averaging Period
	Calendar year (or fiscal year beginning in)	(a) 2007	(b) 2008	(c) 2009	(d) 2010	(e) Total

2a	Lobbying non-taxable amount

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

c	Total lobbying expenditures

d	Grassroots non-taxable amount

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

f	Grassroots lobbying expenditures

Schedule C (Form 990 or 990-EZ) 2010

Page 3

Part II-B

Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768 (election under section 501(h)).

(a)

Yes

(b)

Amount

During the year, did the filing organization attempt to influence foreign, national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of:

Volunteers? .........................................

Paid staff or management (include compensation in expenses reported on lines 1c through 1i)? ....

Media advertisements? ....................................

Mailings to members, legislators, or the public? .........................

Publications, or published or broadcast statements? .......................

Grants to other organizations for lobbying purposes? .......................

Yes

25,636

Direct contact with legislators, their staffs, government officials, or a legislative body? ........

Rallies, demonstrations, seminars, conventions, speeches, lectures, or any similar means? ......

Other activities? If "Yes," describe in Part IV ..........................

Total. lines 1c through 1i ...................................

25,636

Did the activities in line 1 cause the organization to be not described in section 501(c)(3)? .....

If "Yes," enter the amount of any tax incurred under section 4912 .................

If "Yes," enter the amount of any tax incurred by organization managers under section 4912 .....

If the filing organization incurred a section 4912 tax, did it file Form 4720 for this year? .......

Part III-A

Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6).

Yes

Were substantially all (90% or more) dues received nondeductible by members? ................

Did the organization make only in-house lobbying expenditures of $2,000 or less? ................

Did the organization agree to carryover lobbying and political expenditures from the prior year? ..........

Part III-B

Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6) if BOTH Part III-A, lines 1 and 2 are answered “No” OR if Part III-A, line 3 is answered “Yes”.

Dues, assessments and similar amounts from members .....................

Section 162(e) non-deductible lobbying and political expenditures (do not include amounts of political
expenses for which the section 527(f) tax was paid).

Current year .........................................

Carryover from last year ....................................

Total ...........................................

Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues .

If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political expenditure next year? ................................

Taxable amount of lobbying and political expenditures (see instructions) ..............

Part IV

Supplemental Information

Complete this part to provide the descriptions required for Part l-A, line 1; Part l-B, line 4; Part l-C, line 5; and Part ll-B, line 1i.
Also, complete this part for any additional information.

Identifier	Return Reference	Explanation
SCHEDULE C PART II-B, LINE 1F	LOBBYING ACTIVITY EXPLANATION	FLAGSTAFF MEDICAL CENTER PAID DUES TO THE ARIZONA HOSPITAL AND HEALTHCARE ASSOCIATION. A PERCENTAGE OF THIS AMOUNT OR $6,000 WAS ESTIMATED TO BE ATTRIBUTABLE TO LOBBYING RELATED TO HEALTH CARE ADVOCACY AT THE FEDERAL, STATE, REGIONAL AND LOCAL LEVELS. FLAGSTAFF MEDICAL CENTER ALSO PARTICIPATES IN HEALTHCARE-RELATED LOBBYING ACTIVITIES THROUGH THE SOLE COMMUNITY HOSPITAL COALITION.

Schedule C (Form 990 or 990EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE D
(Form 990)

Department of the Treasury
Internal Revenue Service

Supplemental Financial Statements

Complete if the organization answered "Yes," to Form 990,
Part IV, line 6, 7, 8, 9, 10, 11, or 12.
SchDMd Bullet

Attach to Form 990. SchDMd Bullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990, Part IV, line 6.

		(a) Donor advised funds	(b) Funds and other accounts
1	Total number at end of year .......
2	Aggregate contributions to (during year) ...
3	Aggregate grants from (during year) ...
4	Aggregate value at end of year .......

Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ............

Yes No

Did the organization inform all grantees, donors, and donor advisors in writing that grant funds may be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit. ...................................

Yes No

Part II

Conservation Easements. Complete if the organization answered "Yes" to Form 990, Part IV, line 7.

Purpose(s) of conservation easements held by the organization (check all that apply).

Preservation of land for public use (e.g., recreation or pleasure) Preservation of an historically importantly land area

Protection of natural habitat Preservation of a certified historic structure

Preservation of open space

Complete lines 2a–2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.


a	Total number of conservation easements .......................	2a
b	Total acreage restricted by conservation easements ..................	2b
c	Number of conservation easements on a certified historic structure included in (a) .....	2c
d	Number of conservation easements included in (c) acquired after 8/17/06 ........	2d

Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the taxable year SchDMd Bullet

Number of states where property subject to conservation easement is located SchDMd Bullet

Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and
enforcement of the conservation easements it holds? .............................

Yes No

Staff and volunteer hours devoted to monitoring, inspecting and enforcing conservation easements during the year SchDMd Bullet

Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year SchDMd Bullet

Does each conservation easement reported on line 2(d) above satisfy the requirements of section
170(h)(4)(B)(i) and 170(h)(4)(B)(ii)? ....................................

Yes No

In Part XIV, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8.

If the organization elected, as permitted under SFAS 116, not to report in its revenue statement and balance sheet works of
art, historical treasures, or other similar assets held for public exhibition, education or research in furtherance of public service,
provide, in Part XIV, the text of the footnote to its financial statements that describes these items.

If the organization elected, as permitted under SFAS 116, to report in its revenue statement and balance sheet works of art,
historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service,
provide the following amounts relating to these items:

(i)

Revenues included in Form 990, Part VIII, line 1 ........................ SchDMd Bullet

(ii)

Assets included in Form 990, Part X .............................. SchDMd Bullet

If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 relating to these items:

Revenues included in Form 990, Part VIII, line 1 .......................... SchDMd Bullet

Assets included in Form 990, Part X ............................... SchDMd Bullet

For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990

Cat. No. 52283D

Schedule D (Form 990) 2010

Page 2

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)

Using the organization’s accession and other records, check any of the following that are a significant use of its collection
items (check all that apply):

Public exhibition

Loan or exchange programs

Scholarly research

Other

Preservation for future generations

Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIV.

During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?........

Yes No

Part IV

Escrow and Custodial Arrangements. Complete if the organization answered "Yes" to Form 990,
Part IV, line 9, or reported an amount on Form 990, Part X, line 21.

Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................

Yes No

If "Yes," explain the arrangement in Part XIV and complete the following table:


c	Beginning balance .................................	1c
d	Additions during the year ..............................	1d
e	Distributions during the year .............................	1e
f	Ending balance ...................................	1f

Did the organization include an amount on Form 990, Part X, line 21? .....................

Yes No

If “Yes,” explain the arrangement in Part XIV.

Part V

Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.

		(a)Current Year	(b)Prior Year	(c)Two Years Back
1a	Beginning of year balance ....	1,950,655	1,706,509	1,227,217
b	Contributions ........	1,285,728	521,365	734,776
c	Investment earnings or losses ...	130,323	77,663	17,197
d	Grants or scholarships .....	319,442	242,115	52,946
e	Other expenditures for facilities and programs ........	537,702	67,946	173,685
f	Administrative expenses ....	83,010	44,821	46,050
g	End of year balance ......	2,426,552	1,950,655	1,706,509

Provide the estimated percentage of the year end balance held as:

Board designated or quasi-endowment: SchDMd Bullet

74.400 %

Permanent endowment: SchDMd Bullet

25.600 %

Term endowment: SchDMd Bullet

0 %

Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes

(i) unrelated organizations ........................

3a(i)

(ii) related organizations ........................

3a(ii)

If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? .........

Describe in Part XIV the intended uses of the organization's endowment funds.

Part VI

InvestmentsLand, Buildings, and Equipment. See Form 990, Part X, line 10.

Description of investment		(a) Cost or other basis (investment)	(b)Cost or other basis (other)	(c) Accumulated depreciation	(d) Book value
1a	Land .................	0	4,474,022		4,474,022
b	Buildings ................	0	171,108,382	81,627,695	89,480,687
c	Leasehold improvements ............	0	1,043,860	612,409	431,451
d	Equipment ................	0	118,931,084	86,060,962	32,870,122
e	Other .................	0	9,086,768	1,925,000	7,161,768
Total. Add lines 1a-1e. (Column (d) should equal Form 990, Part X, column (B), line 10(c).)........					134,418,050

Schedule D (Form 990) 2010

Page 3

Part VII

InvestmentsOther Securities. See Form 990, Part X, line 12.

(a) Description of security or category (including name of security)		(b)Book value	(c) Method of valuation: Cost or end-of-year market value
(1)Financial derivatives
(2)Closely-held equity interests
Other








Total. (Column (b) should equal Form 990, Part X, col.(B) line 12.)

Part VIII

InvestmentsProgram Related. See Form 990, Part X, line 13.

(a) Description of investment type		(b) Book value	(c) Method of valuation: Cost or end-of-year market value









Total. (Column (b) should equal Form 990, Part X, col.(B) line 13.)

Part IX

Other Assets. See Form 990, Part X, line 15.

(a) Description				(b) Book value









Total. (Column (b) should equal Form 990, Part X, col.(B) line 15.)...........

Part X

Other Liabilities. See Form 990, Part X, line 25.

1.(a) Description of Liability		(b) Amount
Federal Income Taxes		0
Unemployment		45,663
BCBS IBNR		2,691,576
BioMed Reserve		178,000
Workman's Comp Liability		48,798
CBO Perot Reserve		225,000
Other Current Liabilities		630,617
PROFESSIONAL AND GENERAL LIABILITY		2,424,384
Additional Minimum Pension Liability		36,966,072

Total. (Column (b) should equal Form 990, Part X, col.(B) line 25.)		43,210,110
2. Fin 48 (ASC 740) Footnote. In Part XIV, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC740).

Schedule D (Form 990) 2010

Page 4

Part XI Reconciliation of Change in Net Assets from Form 990 to Financial Statements
1	Total revenue (Form 990, Part VIII, column (A), line 12) ....................	1
2	Total expenses (Form 990, Part IX, column (A), line 25) .....................	2
3	Excess or (deficit) for the year. Subtract line 2 from line 1 .............	3
4	Net unrealized gains (losses) on investments ..........................	4
5	Donated services and use of facilities .............................	5
6	Investment expenses ...................................	6
7	Prior period adjustments ..................................	7
8	Other (Describe in Part XIV) .................................	8
9	Total adjustments (net). Add lines 4 - 8 .............................	9
10	Excess or (deficit) for the year per financial statements. Combine lines 3 and 9 .........	10

Part XII Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1	Total revenue, gains, and other support per audited financial statements .......		1
2	Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a	Net unrealized gains on investments ..........	2a
b	Donated services and use of facilities .........	2b
c	Recoveries of prior year grants ...........	2c
d	Other (Describe in Part XIV): ............	2d
e	Add lines 2a through 2d .....................		2e
3	Subtract line 2e from line 1.....................		3
4	Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b .	4a
b	Other (Describe in Part XIV): ...........	4b
c	Add lines 4a and 4b.......................		4c
5	Total Revenue. Add lines 3 and 4c. (This should equal Form 990, Part I, line 12.) ......		5

Part XIII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1	Total expenses and losses per audited financial statements .............		1
2	Amounts included on line 1 but not on Form 990, Part IX, line 25:
a	Donated services and use of facilities ..........	2a
b	Prior year adjustments ..............	2b
c	Other losses ................	2c
d	Other (Describe in Part XIV): ............	2d
e	Add lines 2a through 2d......................		2e
3	Subtract line 2e from line 1.....................		3
4	Amounts included on Form 990, Part IX, line 25, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b ..	4a
b	Other (Describe in Part XIV): ............	4b
c	Add lines 4a and 4b.......................		4c
5	Total expenses. Add lines 3 and 4c. (This should equal Form 990, Part I, line 18.) ......		5

Part XIV

Supplemental Information

Complete this part to provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X; Part XI, line 8; Part XII, lines 2d and 4b; and Part XIII, lines 2d and 4b. Also complete this part to provide any additional information.

Identifier	Return Reference	Explanation
SCHEDULE D, PART V, LINE 4	INTENDED USES OF ENDOWED FUNDS	MOST OF THE CURRENT ENDOWMENTS ARE BOARD DESIGNATED. CURRENTLY 5% OF THESE FUNDS ARE DESIGNATED FOR DISTRIBUTION BY THE FLAGSTAFF MEDICAL CENTER FOUNDATION COMMITTEE. SUCH DISTRIBUTIONS SHOULD: 1) ADDRESS COMMUNITY HEALTH CARE NEEDS; 2) ADHERE TO THE CORE MISSION OF THE HOSPITAL; OR 3) REFLECT PROJECTS THAT ARE DEEMED IN THE BEST INTEREST OF THE HOSPITAL.
SCHEDULE D, PART X, LINE 2	UNCERTAIN TAX POSITIONS UNDER FIN 48 (ASC 740)	IN ACCORDANCE WITH ACCOUNTING GUIDANCE, MANAGEMENT HAS REVIEWED ALL OPEN TAX YEARS AND HAS DETERMINED THAT THE CORPORATION HAS NO SIGNIFICANT UNCERTAIN TAX POSITIONS.

Schedule D (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE G
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Supplemental Information Regarding
Fundraising or Gaming Activities

Complete if the organization answered "Yes" to Form 990, Part IV, lines 17, 18, or 19,
or if the organization entered more than $15,000 on Form 990-EZ, line 6a.
right arrow

Attach to Form 990 or Form 990-EZ. right arrow

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization
FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Fundraising Activities. Complete if the organization answered "Yes" to Form 990, Part IV, line 17.

Indicate whether the organization raised funds through any of the following activities. Check all that apply.

a	Mail solicitations	e	Solicitation of non-government grants
b	Internet and e-mail solicitations	f	Solicitation of government grants
c	Phone solicitations	g	Special fundraising events
d	In-person solicitations

Did the organization have a written or oral agreement with any individual (including officers, directors, trustees

or key employees listed in Form 990, Part VII) or entity in connection with professional fundraising services?

Yes

If “Yes,” list the ten highest paid individuals or entities (fundraisers) pursuant to agreements under which the fundraiser is
to be compensated at least $5,000 by the organization. Form 990-EZ filers are not required to complete this table.

(i) Name and address of individual or entity (fundraiser)	(ii) Activity	(iii) Did fundraiser have custody or control of contributions?		(iv) Gross receipts from activity	(v) Amount paid to (or retained by) fundraiser listed in col. (i)	(vi) Amount paid to (or retained by) organization
	(ii) Activity	Yes	No	(iv) Gross receipts from activity		(vi) Amount paid to (or retained by) organization
Total .................

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

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50083H

Schedule G (Form 990 or 990-EZ) 2010

Page 2

Part II

Fundraising Events. Complete if the organization answered "Yes" to Form 990, Part IV, line 18, or reported more than $15,000 on Form 990-EZ, line 6a. List events with gross receipts greater than $5,000.

		(a) Event #1 Turquoise Ball (event type)	(b) Event #2 Holes for Heart (event type)	(c) Other Events 3 (total number)	(d) Total Events (Add col. (a) through col. (c))
1	Gross receipts . . .	173,590	60,200	61,766	295,556
2	Less: Charitable contributions . . .	145,280	10,000	17,165	172,445
3	Gross income (line 1 minus line 2) . . .	28,310	50,200	44,601	123,111
4	Cash prizes . . .	10,000	1,900	0	11,900
5	Non-cash prizes . .	1,375	0	2,474	3,849
6	Rent/facility costs . .	5,000	5,700	10,334	21,034
7	Food and beverages . .	13,000	5,800	0	18,800
8	Entertainment . . .	5,300	0	0	5,300
9	Other direct expenses .	48,501	3,981	20,859	73,341
10	Direct expense summary. Add lines 4 through 9 in column (d) ...........				134,224
11	Net income summary. Combine lines 3 and 10 in column (d)............				-11,113

Part III

Gaming. Complete if the organization answered "Yes" to Form 990, Part IV, line 19, or reported more than $15,000 on Form 990-EZ, line 6a.

(a) Bingo

(b) Pull tabs/Instant
bingo/progressive bingo

(c) Other gaming

(d) Total gaming (Add col. (a) through col. (c))

Gross revenue . . . .

Cash prizes . . . .

Non-cash prizes . . .

Rent/facility costs . . .

Other direct expenses . .

Volunteer labor . . .

	Yes
	No

	Yes
	No

	Yes
	No

Direct expense summary. Add lines 2 through 5 in column (d) ........... right arrow

Net gaming income summary. Combine lines 1 and 7 in column (d) .......... right arrow

Enter the state(s) in which the organization operates gaming activities:

Is the organization licensed to operate gaming activities in each of these states? ............

YesNo

If "No," Explain:

10a

Were any of the organization's gaming licenses revoked, suspended or terminated during the tax year? .....

YesNo

If "Yes," Explain:

Does the organization operate gaming activities with nonmembers? .................

YesNo

Is the organization a grantor, beneficiary or trustee of a trust or a member of a partnership or other entity

formed to administer charitable gaming? ...........................

YesNo

Schedule G (Form 990 or 990-EZ) 2010

Page 3

Indicate the percentage of gaming activity operated in:

The organization's facility ......................

13a

An outside facility ........................

13b

Provide the name and address of the person who prepares the organization's gaming/special events books and records:

Name

Address

15a

Does the organization have a contract with a third party from whom the organization receives gaming

revenue? ......................................

YesNo

If "Yes," enter the amount of gaming revenue received by the organization right arrow

$ and the

amount of gaming revenue retained by the third party right arrow

$ .

If "Yes," enter name and address:

Name

Address

Gaming manager information:

Name

Gaming manager compensation right arrow

Description of services provided right arrow

Director/officer Employee Independent contractor

Mandatory distributions:

Is the organization required under state law to make charitable distributions from the gaming proceeds to

retain the state gaming license? ............................

YesNo

Enter the amount of distributions required under state law distributed to other exempt organizations or spent

in the organization's own exempt activities during the tax year right arrow

Part IV

Complete this part to provide additional information for responses to quuestion on Schedule G (see instructions.)

Identifier	ReturnReference	Explanation

Schedule G (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE H
(Form 990)

Department of the Treasury
Internal Revenue Service

Hospitals

Complete if the organization answered "Yes" to Form 990, Part IV, question 20.
MediumBullet

Attach to Form 990. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Charity Care and Certain Other Community Benefits at Cost

Yes

Does the organization have a charity care policy? If "No," skip to question 6a...........

Yes

If "Yes," is it a written policy? .......................

Yes

If the organization has multiple hospitals, indicate which of the following best describes application of the charity care policy to the various hospitals.

Applied uniformly to all hospitals Applied uniformly to most hospitals Generally tailored to individual hospitals

Answer the following based on the charity care eligibility criteria that applies to the largest number of the organization's patients.

Does the organization use Federal Poverty Guidelines (FPG) to determine eligibility for providing free care to low

income individuals? If "Yes," indicate which of the following is the FPG family income limit for eligibility for free care:

Yes

100% 150% 200% Other 125 %

Does the organization use FPG to determine eligibility for providing discounted care to low income individuals? If

"Yes," indicate which of the following is the family income limit for eligibility for discounted care: .....

Yes

200% 250% 300% 350% 400% Other 0 %

If the organization does not use FPG to determine eligibility, describe in Part VI the income based criteria for determining eligibility for free or discounted care. Include in the description whether the organization uses an asset test or other threshold, regardless of income, to determine eligibility for free or discounted care.

Does the organization's policy provide free or discounted care to the "medically indigent"? ......

Does the organization budget amounts for free or discounted care provided under its charity care policy? ...

Yes

If "Yes," did the organization's charity care expenses exceed the budgeted amount?.........

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 eligibile for free or discounted care?...............

Does the organization prepare an annual community benefit report?.............

Yes

If "Yes," does the organization make it available to the public? ..............

Yes

Complete the following table using the worksheets provided in the Schedule H instructions. Do not submit these worksheets with the Schedule H.

Charity Care and Certain Other Community Benefits at Cost

	(c) Total community benefit expense	(d) Direct offsetting revenue	(e) Net community benefit expense	(f) Percent of total expense
a Charity care at cost (from Worksheets 1 and 2) ..	965,970	0	965,970	0.300 %
b Unreimbursed Medicaid (from Worksheet 3, column a) .	87,612,347	42,326,000	45,286,347	14.200 %
c Unreimbursed costs—other means-tested government programs (from Worksheet 3, column b) ....	0	0	0	0 %
dTotal Charity Care and Means-Tested Government Programs .....	88,578,317	42,326,000	46,252,317	14.500 %
Other Benefits e Community health improvement services and community benefit operations (from (Worksheet 4) ....	1,333,128	261,467	1,071,661	0.340 %
f Health professions education (from Worksheet 5) ..	664,652	0	664,652	0.210 %
g Subsidized health services (from Worksheet 6) ..	2,305,313	0	2,305,313	0.720 %
h Research (from Worksheet 7)	0	0	0	0 %
i Cash and in-kind contributions to community groups (from Worksheet 8) ..	438,003	0	438,003	0.140 %
jTotal Other Benefits ...	4,741,096	261,467	4,479,629	1.410 %
kTotal. Add lines 7d and 7j. ..	93,319,413	42,587,467	50,731,946	15.910 %

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50192T Schedule H (Form 990) 2010

Schedule H (Form 990) 2010

Page 2

Part II

Community Building Activities Complete this table if the organization conducted any community building activities.

		(a) Number of activities or programs (optional)	(b) Persons served (optional)	(c) Total community building expense	(d) Direct offsetting revenue	(e) Net community building expense	(f) Percent of total expense
1	Physical improvements and housing
2	Economic development
3	Community support
4	Environmental improvements
5	Leadership development and training for community members
6	Coalition building
7	Community health improvement advocacy
8	Workforce development
9	Other
10	Total

Part III

Bad Debt, Medicare, & Collection Practices

Section A. Bad Debt Expense

Yes

Does the organization report bad debt expense in accordance with Heathcare Financial Management Association Statement No. 15? ..........................

Yes

Enter the amount of the organization's bad debt expense (at cost).....

13,162,219

Enter the estimated amount of the organization's bad debt expense (at cost) attributable to patients eligible under the organization's charity care policy ..

966,248

Provide in Part VI the text of the footnote to the organization's financial statements that describes bad debt expense. In addition, describe the costing methodology used in determining the amounts reported on lines 2 and 3, and rationale for including a portion of bad debt amounts as community benefit.

Section B. Medicare

Enter total revenue received from Medicare (including DSH and IME).....

76,723,900

Enter Medicare allowable costs of care relating to payments on line 5.....

84,626,462

Subtract line 6 from line 5. This is the surplus or (shortfall)........

-7,902,562

Describe in Part VI the extent to which any shortfall reported in line 7 should be treated as community benefit.
Also describe in Part VI the costing methodology or source used to determine the amount reported on line 6.
Check the box that describes the method used:

Cost accounting system Cost to charge ratio Other

Section C. Collection Practices

Does the organization have a written debt collection policy? ...............

Yes

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......

Yes

Part IV

Management Companies and Joint Ventures

(a) Name of entity	(b) Description of primary activity of entity	(c) Organization's profit % or stock ownership %	(d) Officers, directors, trustees, or key employees' profit % or stock ownership%	(e) Physicians' profit % or stock ownership %
1SURGI-CENTER AT FMC	OUTPATIENT SURGERY SERVICES	65.000 %	0 %	35.000 %
2
3
4
5
6
7
8
9
10
11
12
13

Schedule H (Form 990) 2010

Page 3

Part VFacility Information

Section A. Hospital Facilities (list in order of size, measured by total revenue per facility, from largest to smallest) How many hospital facilities did the organization operate during the tax year?1 Name and address		Other (Describe)
1	FLAGSTAFF MEDICAL CENTER 1200 N BEAVER ST FLAGSTAFF,AZ86001	X	X	X

Schedule H (Form 990) 2010

Page 4

Part VFacility Information (continued)

Section B. Facility Policies and Practices.

(Complete a separate Section B for each of the hospital facilities listed in Part V, Section A)

Name of Hospital Facility:FLAGSTAFF MEDICAL CENTER

Line Number of Hospital Facility (from Schedule H, Part V, Section A):1

				Yes	No
Community Health Needs Assessment (Lines 1 through 7 are optional for 2010)
1	During the tax year or any prior tax year, did the hospital facility conduct a community health needs assessment (“Needs Assessment”)? If “No,” skip to question 8. .....................		1
	If “Yes,” indicate what the Needs Assessment describes (check all that apply):
	a	A definition of the community served by the hospital facility
	b	Demographics of the community
	c	Existing health care facilities and resources within the community that are available to respond to the health needs of the community
	d	How data was obtained
	e	The health needs of the community
	f	Primary and chronic disease needs and other health issues of uninsured persons, low-income persons, and minority groups
	g	The process for identifying and prioritizing community health needs and services to meet those needs
	h	The process for consulting with persons representing the community’s interests
	i	Information gaps that limit the hospital facility’s ability to assess all of the community’s health needs
	j	Other (describe in Part VI)
2	Indicate the tax year the hospital facility last conducted a Needs Assessment: 20
3	In conducting its most recent Needs Assessment, did the hospital facility take into account input from persons who represent the community served by the hospital facility? If “Yes,” describe in Part VI how the hospital facility took into account input from persons who represent the community, and identify the persons the hospital facility consulted.		3
4	Was the hospital facility’s Needs Assessment conducted with one or more other hospital facilities? If “Yes,” list the other hospital facilities in Part VI............................		4
5	Did the hospital facility make its Needs Assessment widely available to the public? ...........		5
	If “Yes,” indicate how the Needs Assessment was made widely available (check all that apply):
	a	Hospital facility’s website
	b	Available upon request from the hospital facility
	c	Other (describe in Part VI)
6	If the hospital facility addressed needs identified in its most recently conducted Needs Assessment, indicate how (check all that apply):
	a	Adoption of an implementation strategy to address the health needs of the hospital facility’s community
	b	Execution of the implementation strategy
	c	Development of a community benefit plan for the facility
	d	Participation in community-wide community benefit plan
	e	Inclusion of a community benefit section in operational plans
	f	Adoption of a budget for provision of services that address the needs identified in the CHNA
	g	Prioritization of health needs in the community
	h	Prioritization of services that the hospital facility will undertake to meet health needs in its community
	i	Other (describe in Part VI)
7	Did the hospital facility address all of the needs identified in its most recently conducted Needs Assessment? If “No,” explain in Part VI which needs it has not addressed together with the reasons why it has not addressed such needs.		7
Financial Assistance Policy
	Did the hospital facility have in place during the tax year a written financial assistance policy that:
8	Explains eligibility criteria for financial assistance, and whether such assistance includes free or discounted care?		8
9	Used federal poverty guidelines (FPG) to determine eligibility for providing free care to low incomeindividuals?..		9
	If “Yes,” indicate the FPG family income limit for eligibility for free care: %

Schedule H (Form 990) 2010

Page 5

Part VFacility Information (continued)

				Yes	No
10	Used FPG to determine eligibility for providing discounted care to low income individuals?.........		10
	If “Yes,” indicate the FPG family income limit for eligibility for discounted care: %
11	Explained the basis for calculating amounts charged to patients?.................		11
	If “Yes,” indicate the factors used in determining such amounts (check all that apply):
	a	Income level
	b	Asset level
	c	Medical indigency
	d	Insurance status
	e	Uninsured discount
	f	Medicaid/Medicare
	g	State regulation
	h	Other (describe in Part VI)
12	Explained the method for applying for financial assistance?...................		12
13	Included measures to publicize the policy within the community served by the hospital facility?.......		13
	If “Yes,” indicate how the hospital facility publicized the policy (check all that apply):
	a	The policy was posted at all times on the hospital facility’s web site
	b	The policy was attached to all billing invoices
	c	The policy was posted in the hospital facility’s emergency rooms or waiting rooms
	d	The policy was posted in the hospital facility’s admissions offices
	e	The policy was provided, in writing, to patients upon admission to the hospital facility
	f	The policy was available upon request
	g	Other (describe in Part VI)
Billing and Collections
14	Did the hospital facility have in place during the tax year a separate billing and collections policy, or a written financial assistance policy that explained actions the hospital facility may take upon non-payment?........		14
15	Check all of the following collection actions against a patient that were permitted under the hospital facility's policies at any time during the tax year:
	a	Reporting to credit agency
	b	Lawsuits
	c	Liens on residences
	d	Body attachments or arrests
	e	Other (describe in Part VI)
16	Did the hospital facility engage in or authorize a third party to engage in any of the following collection actions during the tax year?...................................		16
	If “Yes,” check all collection actions in which the hospital facility or a third party engaged (check all that apply):
	a	Reporting to credit agency
	b	Lawsuits
	c	Liens on residences
	d	Body attachments
	e	Other (describe in Part VI)
17	Indicate which actions the hospital facility took before initiating any of the collection actions checked in question 16 (check all that apply):
	a	Notified patients of the financial assistance policy upon admission
	b	Notified patients of the financial assistance policy prior to discharge
	c	Notified patients of the financial assistance policy in communications with the patients regarding the patients’ bills
	d	Documented its determination of whether a patient who applied for financial assistance under the financial assistance policy qualified for financial assistance
	e	Other (describe in Part VI)

Schedule H (Form 990) 2010

Page 6

Part VFacility Information (continued)

Policy Relating to Emergency Medical Care
				Yes	No
18	Did the hospital facility have in place during the tax year a written policy relating to emergency medical care that requires the hospital facility to provide, without discrimination, care for emergency medical conditions to individuals regardless of their eligibility under the hospital facility’s financial assistance policy?..........		18
	If “No,” indicate the reasons why (check all that apply):
	a	The hospital facility did not provide care for any emergency medical conditions
	b	The hospital facility did not have a policy relating to emergency medical care
	c	The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Part VI)
	d	Other (describe in Part VI)
Charges for Medical Care
19	Indicate how the hospital facility determined the amounts generally billed to individuals who had insurance covering emergency or other medically necessary care (check all that apply):
	a	The hospital facility used the lowest negotiated commercial insurance rate for those services at the hospital facility
	b	The hospital facility used the average of the three lowest negotiated commercial insurance rates for those services at the hospital facility
	c	The hospital facility used the Medicare rate for those services
	d	Other (describe in Part VI)
20	Did the hospital facility charge any of its patients who were eligible for assistance under the hospital facility’s financial assistance policy, and to whom the hospital facility provided emergency or other medically necessary services, more than the amounts generally billed to individuals who had insurance covering such care?.........		20
	If “Yes,” explain in Part VI.
21	Did the hospital facility charge any of its patients an amount equal to the gross charge for services provided to that patient?...................................		21
	If “Yes,” explain in Part VI.

Schedule H (Form 990) 2010

Page 7

Part VFacility Information (continued)

Section C. Other Facilities That Are Not Licensed, Registered, or Similarly Recognized as a Hospital Facility (list in order of size, measured by total revenue per facility, from largest to smallest) How many non-hospital facilities did the organization operate during the tax year?
Name and address		Type of Facility (Describe)
1
2
3
4
5
6
7
8
9
10

Schedule H (Form 990) 2010

Page 8

Part VI

Supplemental Information

Complete this part to provide the following information.

1	Required descriptions. Provide the description required for Part I, lines 3c, 6a, and 7; Part II; Part III, lines 4, 8, and 9b; and Part V, Section B, lines 1j, 2, 4c, 6i, 7, 11i, 13i, 17l, 18l, 19e, 21d, 25, and 26.
2	Community health needs assessment. Describe how the organization assesses the health care needs of the communities it serves, in addition to any community health needs assessments reported in Part V, Section B.
3	Patient education of eligibility for assistance. Describe how the organization informs and educates patients and persons who may be billed for patient care about their eligibility for assistance under federal, state, or local government programs or under the organization’s financial assistance policy.
4	Community information. Describe the community the organization serves, taking into account the geographic area and demographic constituents it serves.
5	Promotion of community health. Provide any other information important to describing how the organization’s hospital facilities or other health care facilities further its exempt purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus funds, etc.).
6	Affiliated health care system. If the organization is part of an affiliated health care system, describe the respective roles of the organization and its affiliates in promoting the health of the communities served.
7	State filing of community benefit report. If applicable, identify all states with which the organization, or a related organization, files a community benefit report.

Identifier	ReturnReference	Explanation
PART I, LINE 3B:	explanation for various percentages used:	125% of the Federal Poverty Guide = 100% charity write-off. 150% of FPG = 75% write-off. 175% of FPG = 50% write-off. 200% of FPG = 25% write-off. 300% of FPG = 15% write-off. PART I, LINE 3C: CHARITY CARE INCOME LEVELS ARE BASED ON THE FEDERAL POVERTY GUIDE PUBLISHED IN THE FEBRUARY FEDERAL REGISTER ON AN ANNUAL BASIS. A TIERED METHOD IS UTILIZED FOR DETERMINING WHETHER A PATIENT IS ELIGIBLE FOR 100%, 75%, 50%, 25%, OR 15% WRITE-OFF OF THE SELF PAY BALANCE. OTHER CONSIDERATIONS SUCH AS DISPOSABLE ASSETS ARE CONSIDERED IN THE EVALUATION OF ELIGIBILITY. A DISPOSABLE ASSET MAY BE EXPENSIVE JEWELRY, PLEASURE HORSES, RECREATIONAL VEHICLES, ETC.
PART I, LINE 6A:		THE INFORMATION FOR THE COMMUNITY BENEFITS REPORT IS GATHERED BY THE COMMUNITY RELATIONS DEPARTMENT WHICH IS A DEPARTMENT OF NORTHERN ARIZONA HEALTHCARE. FLAGSTAFF MEDICAL CENTER AND VERDE VALLEY MEDICAL CENTER ARE IDENTIFIED SEPARATELY ON THESE REPORTS.
PART I, LINE 7G:		FLAGSTAFF MEDICAL CENTER (FMC) OPERATES A STATE DESIGNATED LEVEL I TRAUMA CENTER WHICH IS SUBSIDIZED BY THE HOSPITAL. FMC WAS ONE OF THE ORIGINAL SEVEN LEVEL I TRAUMA CENTERS DESIGNATED BY THE STATE OF ARIZONA IN DECEMBER 2005. FMC IS THE ONLY LEVEL I TRAUMA CENTER IN NORTHERN ARIZONA AND IS CRUCIAL TO THE ARIZONA EMERGENCY MEDICAL AND TRAUMA SYSTEM ENSURING TRAUMA PATIENTS RECEIVE LIFE-SAVING SURGICAL TRAUMA CARE AS CLOSE TO THE "GOLDEN HOUR" AS POSSIBLE. FMC IS A NATIONALLY VERIFIED TRAUMA CENTER BY THE AMERICAN COLLEGE OF SURGEONS. TOTAL TRAUMA VOLUME HAS FLUCTUATED BETWEEN 1,200 - 1,500 PATIENTS PER YEAR FOR THE PAST FIVE YEARS. FMC COLLABORATES WITH ALL OF THE HOSPITALS AND LEVEL IV TRAUMA CENTERS IN NORTHERN ARIZONA TO PREVENT TRAUMA INJURY AND TO IMPROVE TRAUMA CARE.
PART I, LINE 7, COL F		COST TO CHARGE PERCENTS ARE BASED ON THE IRS WORKSHEET CALCULATIONS.
PART III, LINE 4:		THE FOOTNOTE TO THE FINANCIAL STATEMENTS INDICATES NET PATIENT ACCOUNTS RECEIVABLE AND NET PATIENT SERVICE REVENUE HAVE BEEN ADJUSTED TO THE ESTIMATED AMOUNTS EXPECTED TO BE RECEIVED. THESE ESTIMATED AMOUNTS ARE SUBJECT TO FURTHER ADJUSTMENTS UPON REVIEW BY THIRD-PARTY PAYORS. MANAGEMENT ESTIMATES THE ALLOWANCE FOR DOUBTFUL ACCOUNTS BASED UPON THE HISTORICAL COLLECTION EXPERIENCE. THE COSTING METHODOLOGY USED TO DETERMINE THE BAD DEBT COST COMES FROM THE PERCENTAGE CALCULATED IN SCHEDULE H PART I WORKSHEET 2. FLAGSTAFF MEDICAL CENTER CALCULATION OF FINANCIAL ASSISTANCE COST IS BASED ON ACTUAL FINANCIAL ASSISTANCE WRITE-OFFS BY THE BUSINESS OFFICE MULTIPLIED BY THE COST-TO-CHARGE RATIO. ALL OF THE FINANCIAL ASSISTANCE WRITE-OFFS ARE ATTRIBUTABLE TO PATIENTS WHO QUALIFIED UNDER THE FINANCIAL ASSISTANCE POLICY. AS A NOT-FOR-PROFIT ENTITY, SERVICES ARE PROVIDED TO ALL PATIENTS REGARDLESS OF THEIR ABILITY TO PAY AND MAKING THIS AVAILABLE TO THE COMMUNITY QUALIFIES BAD DEBT AS A COMMUNITY BENEFIT.
PART III, LINE 8:		THE ENTIRE MEDICARE SHORTFALL SHOULD BE CONSIDERED A COMMUNITY BENEFIT BECAUSE OUR MISSION IS TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE WHETHER OR NOT THIS SERVICE IS PROVIDED AT A LOSS TO THE HOSPITAL. MEDICARE REPRESENTS 35% OF THE HOSPITAL'S GROSS CHARGES AND IS A SIGNIFICANT LOSS FOR THE HOSPITAL. THE HOSPITAL PROVIDES CARE REGARDLESS OF THIS SIGNIFICANT LOSS AND THEREBY RELIEVES THE FEDERAL GOVERNMENT OF THE BURDEN OF PAYING THE FULL COST OF THE MEDICARE BENEFICIARIES. MANY OF THESE PATIENTS WOULD QUALIFY FOR FINANCIAL ASSISTANCE IF THEY WERE NOT IN THE MEDICARE PROGRAM.
PART III, LINE 9B:		ACCORDING TO OUR FINANCIAL ASSISTANCE POLICY, THE FINANCIAL COUNSELORS ASSESS THE PATIENT'S ABILITY TO PAY AT TIME OF ADMISSION/REGISTRATION. IF THE PATIENT STATES THAT THEY ARE UNABLE TO PAY OUT-OF-POCKET EXPENSES, A DETERMINATION IS MADE WHETHER COVERAGE IS AVAILABLE THROUGH AHCCCS OR OTHER MEDICAID PROGRAMS. IF NO OUTSIDE ASSISTANCE IS AVAILABLE, AN APPLICATION IS GIVEN TO THE PATIENT TO BE SUBMITTED FOR FINANCIAL ASSISTANCE CONSIDERATION. IF PATIENT DOESN'T QUALIFY FOR FINANCIAL ASSISTANCE, INCOME LEVELS ARE ASSESSED TO DETERMINE IF THEY QUALIFY FOR LONG-TERM PAYMENT PROGRAM. IF THE FINANCIAL ASSISTANCE APPLICATION IS NOT TURNED IN AND PAYMENT HAS NOT BEEN MADE AFTER NUMEROUS FOLLOW UP PHONE CALLS, THE PATIENT ACCOUNT GOES TO BAD DEBT. Before Pre-Admission and if a patient is eligible for financial assistance, Flagstaff Medical Center's Cashier collects 50% of the estimated liability. The rest of the 50% is set up on a six-month payment plan with a Self-Pay Representative of the Central Business Office.
NEEDS ASSESSMENT:		FLAGSTAFF MEDICAL CENTER ASSESSES COMMUNITY HEALTHCARE NEEDS THROUGH A SURVEY DESIGNED AND ADMINISTERED BY THE PROFESSIONAL RESEARCH CONSULTANTS. THIS SURVEY WAS LAST CONDUCTED IN 2011 AND WAS A FOLLOW-UP TO OTHER SURVEYS THE HOSPITAL HAS CONDUCTED. THE SURVEY INSTRUMENT USED FOR THIS STUDY IS BASED LARGELY ON THE CENTERS FOR DISEASE CONTROL AND PREVENTION BEHAVIORAL RISK FACTOR SURVEILLANCE SYSTEM, AS WELL AS VARIOUS OTHER PUBLIC HEALTH SURVEYS AND CUSTOMIZED QUESTIONS ADDRESSING GAPS IN INDICATOR DATA RELATIVE TO HEALTH PROMOTION AND DISEASE PREVENTION OBJECTIVES AND OTHER RECOGNIZED HEALTH ISSUES.
PATIENT EDUCATION OF ELIGIBILITY FOR ASSISTANCE:		ACCORDING TO OUR FINANCIAL ASSISTANCE POLICY, THE FINANCIAL COUNSELORS ASSESS THE PATIENT'S ABILITY TO PAY AT TIME OF ADMISSION/REGISTRATION. IF THE PATIENT STATES THAT THEY ARE UNABLE TO PAY OUT-OF-POCKET EXPENSES, A DETERMINATION IS MADE WHETHER COVERAGE IS AVAILABLE THROUGH AHCCCS OR OTHER MEDICAID PROGRAMS. IF NO OUTSIDE ASSISTANCE IS AVAILABLE, AN APPLICATION IS GIVEN TO THE PATIENT TO BE SUBMITTED FOR FINANCIAL ASSISTANCE CONSIDERATION. IF PATIENT DOESN'T QUALIFY FOR FINANCIAL ASSISTANCE, INCOME LEVELS ARE ASSESSED TO DETERMINE IF THEY QUALIFY FOR LONG-TERM PAYMENT PROGRAM. IF THE CHARITY APPLICATION IS NOT TURNED IN AND PAYMENT HAS NOT BEEN MADE AFTER NUMEROUS FOLLOW UP PHONE CALLS, THE PATIENT ACCOUNT GOES TO BAD DEBT. Flagstaff Medical Center Website has a billing contact number. Before Pre-Admission, patients are contacted by FMC's Cashier. When patients are contacted, they are educated about the Financial Assistance Policy. FMC Financial Counselors assigned to each nursing unit are able to answer or assist with billing questions. At each Patient Registration desk are displays and brochures of the Billing information, including the Financial Assistance Policy.
COMMUNITY INFORMATION:		FLAGSTAFF MEDICAL CENTER IS A 271-BED ACUTE CARE HOSPITAL LOCATED IN FLAGSTAFF, AZ. FMC OPERATES AS A NOT-FOR-PROFIT TAX-EXEMPT CORPORATION. FMC PROVIDES GENERAL MEDICAL AND SURGICAL ACUTE CARE, BEHAVIORAL HEALTH SERVICES, AND A FULL RANGE OF OUTPATIENT SERVICES TO NORTHERN ARIZONA RESIDENTS AND VISITORS. KEY SERVICES PROVIDED TO THE COMMUNITY INCLUDE A REGIONAL TRAUMA CENTER, OPEN-HEART SURGERY, HIGH-TECH IMAGING, RADIATION/ONCOLOGY, SURGICAL SERVICES, ORTHOPEDIC SERVICES, AND WOMEN, INFANTS AND CHILDREN'S SERVICES. THE HOSPITAL GROSS PAYOR MIX IS AS FOLLOWS: MEDICARE 37%, AHCCCS/MEDICAID 27%, COMMERCIAL AND OTHER 32%, AND SELF PAY 4%. FLAGSTAFF MEDICAL CENTER IS ONE OF THE THREE LARGEST EMPLOYERS IN NORTHERN ARIZONA.
PROMOTION OF COMMUNITY HEALTH:		FLAGSTAFF MEDICAL CENTER SPONSORS VARIOUS COMMUNITY BUILDING ACTIVITIES. IN FISCAL YEAR 2011 THERE WERE MORE THAN 40 COMMUNITY ACTIVITIES THAT QUALIFIED AS COMMUNITY BUILDING ACTIVITIES, INCLUDING BUT NOT LIMITED TO, PHYSICIAN RECRUITMENT, A COMMUNITY NEEDS HEALTH ASSESSMENT, AND WORKING WITH VARIOUS COMMUNITY ORGANIZATIONS SUCH AS AMERICAN CANCER SOCIETY, MUSCULAR DYSTROPHY ASSOCIATION, YMCA, UNITED WAY, BIG BROTHERS AND BIG SISTERS, AND THE COALITION FOR CHILDREN AND YOUTH. THERE ARE MANY OTHER EXAMPLES OF HOW FLAGSTAFF MEDICAL CENTER FURTHERS ITS EXEMPT PURPOSE BY PROMOTING HEALTH IN THE COMMUNITY IT SERVES. THE FMC CANCER CENTER HOSTS A SERIES OF FREE OR LOW-COST SCREENINGS DESIGNED TO HELP RESIDENTS IN THE COMMUNITY TO IDENTIFY ISSUES AS SOON AS POSSIBLE. THIS IS BASED ON THE PREMISE THAT EARLY DETECTION IS OFTEN THE KEY TO SAVING THE LIVES OF CANCER PATIENTS. THERE IS A NAVAJO TRANSLATOR PROGRAM WHICH SERVES A LARGE NUMBER OF PATIENTS FROM THE NAVAJO RESERVATION. THE INTERPRETER PROGRAM HELPS NAVAJO PATIENTS FEEL AT EASE AS THEY CAN DISCUSS THEIR MEDICAL CONDITION IN THEIR NATIVE LANGUAGE. THERE IS ALSO A FIT KIDS OF ARIZONA PROGRAM WHICH STRIVES TO REDUCE THE HEALTH CONSEQUENCES OF CHILDHOOD OBESITY BY PROMOTING HEALTHY LIFESTYLES.
AFFILIATED HEALTH CARE SYSTEM ROLES:		FLAGSTAFF MEDICAL CENTER IS AFFILIATED WITH VERDE VALLEY MEDICAL CENTER. THE BOARD MEMBER MEETINGS ARE COMBINED. THE COMMUNITY BENEFIT REPORT IS SUMMARIZED TOGETHER AND POSTED ON THE HOSPITAL'S WEBSITE. IN THE LAST COUPLE YEARS A SYSTEM-WIDE QUALITY CARDIOLOGY PROGRAM WAS STARTED AND PHYSICIANS COVERED BOTH INSTITUTIONS TO PROVIDE TIMELY PATIENT CARE.

Schedule H (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule I
(Form 990)

Department of the Treasury
Internal Revenue Service

Grants and Other Assistance to Organizations,
Governments and Individuals in the United States

Complete if the organization answered "Yes," to Form 990, Part IV, line 21 or 22.
lBullet

Attach to Form 990

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization
FLAGSTAFF MEDICAL CENTER

Employer identification number
86-0110232

Part I

General Information on Grants and Assistance

Does the organization maintain records to substantiate the amount of the grants or assistance, the grantees' eligibility for the grants or assistance, and
the selection criteria used to award the grants or assistance? ....................................

Yes No

Describe in Part IV the organization's procedures for monitoring the use of grant funds in the United States.

Part II

Grants and Other Assistance to Governments and Organizations in the United States. Complete if the organization answered "Yes" to
Form 990, Part IV, line 21 for any recipient that received more than $5,000. Check this box if no one recipient received more than $5,000. Use
Part IV and Schedule I-1 (Form 990) if additional space is needed ......................... lBullet

(a) Name and address of organization or government	(b) EIN	(c) IRC Code section if applicable	(d) Amount of cash grant	(h) Purpose of grant or assistance
(1) AMERICAN CANCER SOCIETY4550 E BELL RD 126 PHOENIX,AZ85032	84-1316555	501(c)(3)	5,650	FUNDRAISING SPONSORSHIP
(2) BIG BROTHERS BIG SISTERS OF FLAGSTAFFPO BOX 1701 FLAGSTAFF,AZ86002	23-7170086	501(c)(3)	8,000	SPONSORSHIP
(3) CHILDHELP3945 WESTWOOD CIR FLAGSTAFF,AZ86001	95-2884608	501(c)(3)	14,800	SPONSORSHIP & MOBILE ADVOCACY
(4) COCONINO COMMUNITY COLLEGE2800 S LONETREE RD FLAGSTAFF,AZ86001	86-0686666	SCHOOL	106,000	NURSING PROGRAM & SPONSORSHIP
(5) COCONINO COUNTY PUBLIC HEALTH SERVICES2625 N KING ST FLAGSTAFF,AZ86004	86-6000441	GOVT	7,500	HEALTH SCREENINGS
(6) FASDNA2080 W FRESH AIRE ST FLAGSTAFF,AZ86001	27-0766117	501(c)(3)	8,000	GENERAL OPERATIONAL SUPPORT
(7) FLAGSTAFF DOWNTOWN BUSINESSPO BOX 1546 FLAGSTAFF,AZ86002	86-1033923	501(C)(6)	15,000	SPONSORSHIP
(8) NORTH COUNTRY COMMUNITY HEALTHCAREPO BOX 3630 FLAGSTAFF,AZ86003	86-0663432	501(c)(3)	60,000	CAPITAL CAMPAIGN
(9) NORTHERN ARIZONA UNIVERSITY ATHLETICSPO BOX 15400 FLAGSTAFF,AZ86011	86-6004791	SCHOOL	10,000	SPONSORSHIP
(10) NORTHERN ARIZONA UNIVERSITY FOUNDATIONPO BOX 4092 FLAGSTAFF,AZ86011	86-6004791	501(c)(3)	82,166	HEALTH & HUMAN SERVICES
(11) THE YMCAPO BOX 1670 FLAGSTAFF,AZ86003	86-0096799	501(c)(3)	10,000	CAPITAL CAMPAIGN
(12) UNITED WAY OF NORTHERN ARIZONA1515 E CEDAR AVE D FLAGSTAFF,AZ86004	86-0211666	501(c)(3)	25,000	ORGANIZATIONAL MATCH
(13) NORTH COUNTRY COMMUNITY HEALTHCAREPO BOX 3630 FLAGSTAFF,AZ86003	86-0663432	501(c)(3)	18,825	NACASA

Enter total number of section 501(c)(3) and government organizations ......................... Bullet Image

Enter total number of other organizations ................................ . Bullet Image

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50055P

Schedule I (Form 990) 2010

Page 2

Part III

Grants and Other Assistance to Individuals in the United States. Complete if the organization answered "Yes" to Form 990, Part IV, line 22.
Use Schedule I-1 (Form 990) if additional space is needed.

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

Part IV

Supplemental Information. Complete this part to provide the information required in Part I, line 2, and any other additional information.

Identifier	Return Reference	Explanation
SCHEDULE I, PART I, LINE 2	DESCRIPTION OF ORGANIZATION'S PROCEDURES FOR MONITORING THE USE OF GRANTS	FLAGSTAFF MEDICAL CENTER FOUNDATION - GRANTS 1) INDIVIDUALS ON THE USER LEVEL ARE RESPONSIBLE FOR SCREENING AND IDENTIFYING THE NEEDS FOR DISTRIBUTION OF GRANT FUNDS. 2) DEPARTMENT HEADS AND/OR PROGRAM COORDINATORS MUST VALIDATE AND SIGN ALL REQUESTS FOR PAYMENT OR DISBURSEMENT OF THESE FUNDS. 3) WRITTEN REQUESTS ARE REVIEWED BY THE FOUNDATION SPECIALIST FOR OPERATIONS TO VERIFY AVAILABLE FUND BALANCES AND PROPER ACCOUNT NUMBERS. 4) THE FOUNDATION SPECIALIST FOR GRANTS THEN INITIALS THE DOCUMENTS AFTER VERIFYING THE CRITERIA FOR DISBURSEMENT. 5) THE VICE PRESIDENT OF DEVELOPMENT AUTHORIZES THE DISBURSEMENT OF FUNDS BY SIGNATURE. 6) THE FOUNDATION SCANS ALL DOCUMENTS AND SAVES THEM DIGITALLY ON A SECURE SERVER. 7) ALL ORIGINAL DOCUMENTS ARE SUBMITTED TO ACCOUNTS PAYABLE FOR FINAL RECORDING AND PAYMENT. 8) ORIGINAL DOCUMENTS ARE FILED AND ARCHIVED IN A SECURE LOCATION FOR THE REQUIRED LENGTH OF TIME. FMC RELIES ON THE GOVERNANCE PRACTICES OF THE RECIPIENT ORGANIZATION TO USE THE FUNDS FOR THE INTENDED PURPOSE.

Schedule I (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule J
(Form 990)

Department of the Treasury
Internal Revenue Service

Compensation Information

For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet

Complete if the organization answered "Yes" to Form 990,
Part IV, question 23.
SchJMediumBullet

Attach to Form 990. SchJMediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Questions Regarding Compensation

Yes

Check the appropiate box(es) if the organization provided any of the following to or for a person listed in Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.

First-class or charter travel Housing allowance or residence for personal use

Travel for companions Payments for business use of personal residence

Tax idemnification and gross-up payments Health or social club dues or initiation fees

Discretionary spending account Personal services (e.g., maid, chauffeur, chef)

If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement orprovision of all the expenses described above? If "No," complete Part III to explain....

Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
officers, directors, trustees, and the CEO/Executive Director, regarding the items checked in line 1a? ....

Indicate which, if any, of the following the organization uses to establish the compensation of the
organization's CEO/Executive Director. Check all that apply.

Compensation committee Written employment contract

Independent compensation consultant Compensation survey or study

Form 990 of other organizations Approval by the board or compensation committee

During the year, did any person listed in Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:

Receive a severance payment or change-of-control payment? ...............

Participate in, or receive payment from, a supplemental nonqualified retirement plan? ........

Participate in, or receive payment from, an equity-based compensation arrangement? ........

If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.

Only 501(c)(3) and 501(c)(4) organizations only must complete lines 5-9.

For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation 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 form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation 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 Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............

Were any amounts reported in Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regs. section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................

If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................

For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990

Cat. No. 50053T

Schedule J (Form 990) 2010

Page 2

Part II

Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use Schedule J-1 if additional space needed.

For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.

Note. The sum of columns (B)(i)-(iii) must equal the applicable column (D) or column (E) amounts on Form 990, Part VII, line 1a.

(A) Name		(B) Breakdown of W-2 and/or 1099-MISC compensation			(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)	(F) Compensation reported in prior Form 990 or Form 990-EZ
(A) Name		(i) Base compensation	(ii) Bonus & incentive compensation	(iii) Other reportable compensation	(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)
(1) William T Bradel	(i) (ii)	0 486,222	0 69,300	0 61,722	0 9,800	0 18,646	0 645,690	0 0
(2) Steven W Lewis MD	(i) (ii)	0 360,994	0 68,535	0 8,237	0 9,800	0 18,426	0 465,992	0 0
(3) Roger S Schuler	(i) (ii)	0 222,158	0 28,189	0 0	0 80,873	0 13,372	0 344,592	0 0
(4) Marilynn P Belcher	(i) (ii)	0 196,498	0 24,759	0 699	0 8,454	0 13,273	0 243,683	0 0
(5) Richard A Smith	(i) (ii)	0 173,264	0 21,831	0 1,129	0 7,408	0 9,507	0 213,139	0 0
(6) Eric D Cohen MD	(i) (ii)	0 650,000	0 0	0 3,090	0 9,900	0 21,556	0 684,546	0 0
(7) Steven M Peterson MD	(i) (ii)	0 549,750	0 58,630	0 0	0 9,977	0 14,921	0 633,278	0 0
(8) Omar R Wani MD	(i) (ii)	0 600,017	0 0	0 874	0 9,800	0 6,939	0 617,630	0 0
(9) John J Mougin MD	(i) (ii)	0 263,761	0 53,777	0 0	0 9,800	0 16,854	0 344,192	0 0
(10) Mark E Donnelly MD	(i) (ii)	0 386,844	0 249,040	0 0	0 8,715	0 20,257	0 664,856	0 0
(11) GREGORY KUZMA	(i) (ii)	0 311,056	0 44,627	0 0	0 34,065	0 17,150	0 406,898	0 0

Schedule J (Form 990) 2010

Page 3

Part III

Supplemental Information

Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also complete this part for any additional information.

Identifier	Return Reference	Explanation
SCHEDULE J, PART I	SUPPLEMENTAL COMPENSATION INFORMATION	LINE 1A/B: ALL COMPENSATION, BENEFITS AND REIMBURSEMENTS ARE PAID BY NORTHERN ARIZONA HEALTHCARE, THE PARENT ORGANIZATION. BOARD MEMBER AND OFFICER BUSINESS TRAVEL EXPENSES, SUCH AS AIRLINE AND MEALS, FOR COMPANIONS WERE PAID AND REPORTED ON A W-2 OR 1099. GROSS-UP OF TAXES IS DONE ON ALL EMPLOYEE GIFT CERTIFICATES. CURRENTLY, THERE IS NO WRITTEN POLICY FOR THESE ITEMS. IN PRACTICE, THE BOARD MEMBER AND OFFICER BUSINESS TRAVEL EXPENSES ARE APPROVED BY THE NEXT HIGHEST LEVEL. LINE 3: CEO COMPENSATION IS DERIVED BY THE RELATED PARENT ENTITY - NORTHERN ARIZONA HEALTHCARE.

Schedule J (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule K
(Form 990)

Department of the Treasury
Internal Revenue Service

Supplemental Information on Tax Exempt Bonds

Complete if the organization answered "Yes" to Form 990, Part IV, line 24a. Provide descriptions,
explanations, and any additional information in Schedule O (Form 990).
SchKMediumBullet

Attach to Form 990. SchKMediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization
FLAGSTAFF MEDICAL CENTER

Employer identification number
86-0110232

Part I

Bond Issues

(a) Issuer Name		(b) Issuer EIN	(c) CUSIP #	(d) Date Issued	(e) Issue Price	(f) Description of Purpose	(g) Defeased		(h) On Behalf of Issuer		(i) Pool financing
(a) Issuer Name		(b) Issuer EIN	(c) CUSIP #	(d) Date Issued	(e) Issue Price	(f) Description of Purpose	Yes	No	Yes	No	Yes	No
A	INDUSTRIAL DEVELOPMENT AUTHORITY OF YAVAPAI COUNTY	86-0376099		07-25-2008	45,703,133	SEE SCHEDULE O		X		X		X
B	INDUSTRIAL DEVELOPMENT AUTHORITY OF YAVAPAI COUNTY	86-0376099	985900BT5	01-08-2009	20,326,075	SEE SCHEDULE O		X		X		X

Part II

Proceeds

	A		B		C		D
	1 Amount of bonds retired. . . . .	0
2 Amount of bonds defeased . . . .	0
3 Total proceeds of issue . . . .	45,703,133		20,378,642
4 Gross proceeds in reserve funds . .	0
5 Capitalized interest from proceeds.	0
6 Proceeds in refunding escrow. . . . .	45,697,693
7 Issuance costs from proceeds . . .	5,440		257,565
8 Credit enhancement from proceeds.	0
9 Working capital expenditures from proceeds . .	0
10 Capital expenditures from proceeds . .	0		10,126,000
11 Other spent proceeds . .	0
12 Other unspent proceeds. . .	0
13 Year of substantial completion . . .
	Yes	No	Yes	No	Yes	No	Yes	No
14 Were the bonds issued as part of a current refunding issue?	X		X
15 Were the bonds issued as part of an advance refunding issue?		X		X
16 Has the final allocation of proceeds been made? . .	X		X
17 Does the organization maintain adequate books and records to support the final allocation of proceeds? .	X		X

Part III

Private Business Use

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
1 Was the organization a partner in a partnership, or a member of an LLC, which owned property financed by tax-exempt bonds? . . .		X		X
2 Are there any lease arrangements that may result in private business use of bond-financed property? . . . . .		X		X

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50193E

Schedule K (Form 990) 2010

Page 2

Part III

Private Business Use (Continued)

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
3a Are there any management or service contracts that may result in private business use?	X		X
b Are there any research agreements that may result in private business use of bond-financed property? . .		X		X
c Does the organization routinely engage bond counsel or other outside counsel to review any management or service contracts or research agreements relating to the financed property? .	X		X
4 Enter the percentage of financed property used in a private business use by entities other than a section 501(c)(3) organization or a state or local government . . . . . . . . . . . . .	0 %		0 %
5 Enter the percentage of financed property used in a private business use as a result of unrelated trade or business activity carried on by your organization, another section 501(c)(3) organization, or a state or local government .	0 %		0 %
6 Total of lines 4 and 5 . . .. . . . . .	0 %		0 %
7 Has the organization adopted management practices and procedures to ensure the post-issuance compliance of its tax-exempt bond liabilities?	X		X

Part IV

Arbitrage

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
1 Has a Form 8038-T, Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate, been filed with respect to the bond issue? . . .		X		X
2 Is the bond issue a variable rate issue?	X		X
3a Has the organization or the governmental issuer entered into a hedge with respect to the bond issue?		X		X
b Name of provider .
c Term of hedge . .
d Was the hedge superintegrated? .
e Was a hedge terminated? .
4a Were gross proceeds invested in a GIC? .		X		X
b Name of provider .
c Term of GIC . .
d Was the regulatory safe harbor for establishing the fair market value of the GIC satisfied? .
5 Were any gross proceeds invested beyond an available temporary period? .	X		X
6 Did the bond issue qualify for an exception to rebate? . . .	X			X

Schedule K (Form 990) 2010

Page 3

Part V

Supplemental Information

Complete this part to provide additional information for responses to questions on Schedule K (see instructions).

Identifier	Return Reference	Explanation

Schedule K (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule L
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Transactions with Interested Persons

Complete if the organization answered
"Yes" on Form 990, Part IV, lines 25a, 25b, 26, 27, 28a, 28b, or 28c,
or Form 990-EZ, Part V lines 38a or 40b.
MediumBullet

Attach to Form 990 or Form 990-EZ. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Excess Benefit Transactions (section 501(c)(3) and section 501 (c)(4) organizations only).
Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b.

1(a) Name of disqualified person	(b) Description of transaction	(c) Corrected?
1(a) Name of disqualified person	(b) Description of transaction	Yes	No

Enter the amount of tax imposed on the organization managers or disqualified persons during the year under section 4958. ......................... Bullet Image

Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ....... Bullet Image

Part II

Loans to and/or From Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 26, or Form 990-EZ, Part V, line 38a.

(a) Name of interested person and purpose	(b) Loan to or from the organization?		(c)Original principal amount	(d)Balance due	(e) In default?		(f) Approved by board or committee?		(g)Written agreement?
(a) Name of interested person and purpose	To	From	(c)Original principal amount	(d)Balance due	Yes	No	Yes	No	Yes	No






Total ............... $

Part III

Grants or Assistance Benefitting Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 27.

(a) Name of interested person	(b)Relationship between interested person and the organization	(c)Amount of grant or type of assistance

For Privacy Act and Paperwork Reduction Act Notice, see the
Instructions for Form 990 or 990-EZ.

Cat. No. 50056A

Schedule L (Form 990 or 990-EZ) 2010

Page 2

Part IV

Business Transactions Involving Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c.

(a) Name of interested person	(b) Relationship between interested person and the organization	(c) Amount of transaction	(d) Description of transaction	(e) Sharing of organization's revenues?
(a) Name of interested person		(c) Amount of transaction	(d) Description of transaction	Yes	No
(1) FOREST COUNTRY ANESTHESIA	CHRISTENSEN / PARTNER	2,430,000	MEDICAL SERVICES		No
(2) CAPSTONE HEALTH PLAN	MUNGER, KUZMA, HERSHEY	450,026	INSURANCE PAYOR TO FMC		No
(3) VICKIE LEWIS	STEVE LEWIS SPOUSE	184,882	COMPENSATION		No
(4) KATHY KUZMA	GREG KUZMA SPOUSE	68,449	COMPENSATION		No
(5) GKC ENTERPRISES	CHRISTENSEN	94,159	ACCOUNT BALANCE AT 6/30/11		No
(6) TODD LEWIS	MEDICAL STAFF PRESIDENT	16,667	FY11 COMPENSATION		No

Part V

Supplemental Information

Complete this part to provide additional information for responses to questions on Schedule L (see instructions).

Identifier	Return Reference	Explanation

Schedule L (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE M
(Form 990)

Department of the Treasury

Internal Revenue Service

NonCash Contributions

Complete if the organization answered "Yes" on Form 990, Part IV, lines 29 or 30.
Right pointing arrow large image

Attach to Form 990.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

Types of Property

	(a) Check if applicable	(b) Number of Contributions or items contributed	(c) Contribution amounts reported on Form 990, Part VIII, line 1g	(d) Method of determining contribution amounts
1 Art—Works of art ....	X	1	400	opinions of experts
2 Art—Historical treasures .
3 Art—Fractional interests ..
4 Books and publications ..	X		3,536	replacement cost
5 Clothing and household goods .......	X		49,531	replacement cost
6 Cars and other vehicles ..
7 Boats and planes ....
8 Intellectual property ...
9 Securities—Publicly traded .
10 Securities—Closely held stock .
11 Securities—Partnership, LLC, or trust interests ....
12 Securities—Miscellaneous ..
13 Qualified conservation contribution—Historic structures .....
14 Qualified conservation contribution—Other ...
15 Real estate—Residential .
16 Real estate—Commercial ..
17 Real estate—Other ...
18 Collectibles .....	X	1	1,000	OPINIONS OF EXPERTS
19 Food inventory ...	X	2	640	COST/SELLING PRICE
20 Drugs and medical supplies .	X	11	4,460	COST/SELLING PRICE
21 Taxidermy ......
22 Historical artifacts ....
23 Scientific specimens ..
24 Archeological artifacts ...
25 Other ( PARENTS KITS )	X	1,200	30,000	COST/SELLING PRICE
26 Other ( )
27 Other ( )
28 Other ( )

Number of Forms 8283 received by the organization during the tax year for contributions
for which the organization completed Form 8283, Part IV, Donee Acknowledgement ...

Yes

30a

During the year, did the organization receive by contribution any property reported in Part I, lines 1-28 that it

must hold for at least three years from the date of the initial contribution, and which is not required to be used

for exempt purposes for the entire holding period? ..................

30a

If "Yes," describe the arrangement in Part II.

Does the organization have a gift acceptance policy that requires the review of any non-standard contributions?

Yes

32a

Does the organization hire or use third parties or related organizations to solicit, process, or sell non-cash

contributions? ............................

32a

If "Yes," describe in Part II.

If the organization did not report revenues in column (c) for a type of property for which column (a) is checked,

describe in Part II.

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 51227J

Schedule M (Form 990) 2010

Page 2

Part II

Supplemental Information. Complete this part to provide the information required by Part I, lines 30b,
32b, and 33. Also complete this part for any additional information.

Identifier	Return Reference	Explanation

Schedule M (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
MediumBullet

Attach to Form 990 or 990-EZ.

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Identifier	Return Reference	Explanation
FORM 990, PART I, LINE 6	VOLUNTEER RESPONSIBILITIES	FMC VOLUNTEERS PROVIDE CLERICAL ASSISTANCE IN MULTIPLE DEPARTMENTS AND SUPPORT SERVICES SUCH AS WHEELCHAIR ASSISTANCE AND ESCORTING PATIENTS AND FAMILIES WHO ENTER AT THE MAIN ENTRY. THEY VOLUNTEER AT THE INFORMATION DESK AND GIFT SHOP AND MAKE DELIVERIES OF GIFTS, READING MATERIALS AND MAIL TO PATIENT ROOMS. THEY PROVIDE LOBBY MUSIC, NAVAJO AND SPANISH INTERPRETATION, SPIRITUAL CARE, AND CARING CANINE AND CARING CLOWN VISITS TO PATIENTS. THEY ROCK BABIES IN THE SPECIAL CARE NURSERY, PROVIDE MENDED HEARTS PATIENT AND FAMILY SUPPORT, AND ASSIST IN THE FOUNDATION AND AT SPECIAL EVENTS. VOLUNTEERS ASSIST IN OTHER DEPARTMENTS SUCH AS THE CANCER CENTER, BIOMEDICAL ENGINEERING, MAIL ROOM, NUTRITION SERVICES, PHARMACY, WOMEN AND INFANTS' CENTER, PHYSICAL THERAPY, FIT KIDS, BARIATRIC CLINIC, EMERGENCY AND SURGICAL SERVICES AND THE TAYLOR HOUSE.
FORM 990 PART III LINE 4A	DESCRIPTION OF PROGRAM SERVICE ACCOMPLISHMENTS	ONE OF THE NICEST THINGS ABOUT LIVING IN NORTHERN ARIZONA IS YOU DON'T HAVE TO TRAVEL TO GET EXCELLENT HEALTHCARE. SINCE 1936, FLAGSTAFF MEDICAL CENTER (FMC), A MEMBER OF NORTHERN ARIZONA HEALTHCARE, HAS PROVIDED HIGH QUALITY HEALTHCARE SERVICES TO RESIDENTS AND VISITORS TO NORTHERN ARIZONA. WE ARE DEDICATED TO PATIENT-CENTERED CARE WITH A PERSONAL TOUCH. FMC IS LICENSED BY MEDICARE AND THE STATE OF ARIZONA. FOUNDED BY DR. CHARLES SECHRIST AS FLAGSTAFF HOSPITAL, THE 25-BED HOSPITAL WAS DONATED TO THE COMMUNITY OF FLAGSTAFF IN 1955. TODAY, FLAGSTAFF MEDICAL CENTER REMAINS A NOT-FOR-PROFIT HOSPITAL, GOVERNED BY A VOLUNTEER BOARD OF DIRECTORS. WE TREAT EVERY PATIENT, REGARDLESS OF THEIR ABILITY TO PAY. EVERY YEAR, FLAGSTAFF MEDICAL CENTER INVESTS IN YOUR COMMUNITY HOSPITAL TO ENSURE WE ARE PROVIDING THE BEST, SAFEST CARE, CLOSE TO HOME. WE PROVIDE KEY SERVICES TO NORTHERN ARIZONA RESIDENTS AND VISITORS, INCLUDING A REGIONAL TRAUMA CENTER; OPEN-HEART SURGERY; HIGH-TECH IMAGING; A CANCER CENTER; SURGICAL SERVICES; ORTHOPEDIC SERVICES; WOMEN, INFANTS' AND CHILDREN'S SERVICES; AND MORE. FMC CURRENTLY HAS: - 267 INPATIENT BEDS - 222 PHYSICIANS ON OUR ACTIVE MEDICAL STAFF - 14,607 ANNUAL INPATIENT HOSPITAL ADMISSIONS - 63,475 INPATIENT DAYS - 100,427 ANNUAL OUTPATIENT HOSPITAL VISITS - 40,599 ANNUAL EMERGENCY DEPARTMENT VISITS - 1,251 BABIES BORN THIS YEAR AT FMC FLAGSTAFF MEDICAL CENTER'S MISSION AND VISION --------------------------------------------- VISION - NORTHERN ARIZONA HEALTHCARE, IN PARTNERSHIP WITH OUR COLLEAGUES AND PHYSICIANS, WILL BE THE HIGHEST QUALITY, COST-EFFECTIVE, PREFERRED HEALTHCARE DELIVERY SYSTEM IN NORTHERN AND CENTRAL ARIZONA. WE WILL EXCEED THE EXPECTATIONS OF THOSE WE SERVE BY: - DEVELOPING QUALITY HEALTHCARE SERVICES USING ADVANCED TECHNOLOGY TO IMPROVE THE HEALTH STATUS AND TO MEET THE GROWING NEEDS OF THE COMMUNITIES WE SERVE. - FOSTERING AN ORGANIZATIONAL CULTURE THAT ACTS AS A MAGNET FOR RECRUITING AND RETAINING HIGHLY QUALIFIED COLLEAGUES AND PHYSICIANS. - ENSURING EXCEPTIONAL VALUE FOR OUR PATIENTS AND FINANCIAL STRENGTH FOR OUR INSTITUTIONS. - DEVELOPING STRATEGIC ALLIANCES AND PARTNERSHIPS WITH PROVIDERS AND ORGANIZATIONS TO ENSURE COMPREHENSIVE SERVICES FOR OUR PATIENTS. VALUES - WE ARE COMMITTED TO MEETING THE NEEDS AND EXCEEDING THE EXPECTATIONS OF OUR PATIENTS. - COLLEAGUES - WE WILL CREATE AN ORGANIZATIONAL CULTURE WHERE COLLEAGUES FEEL VALUED AND TAKE A SENSE OF PRIDE IN THEIR WORK. - QUALITY - WE CONTINUOUSLY STRIVE TO ACHIEVE EXCELLENCE AT ALL LEVELS IN THE ORGANIZATION. - SAFETY - WE ARE COMMITTED TO MAINTAINING A SAFE ENVIRONMENT FOR OUR PATIENTS, VISITORS AND COLLEAGUES. - LEADERSHIP - WE PROMOTE LEADERSHIP AS AN ATTITUDE, NOT A POSITION, PUTTING VALUE ON BOTH PEOPLE AND THE WORK THEY DO. - TEAMWORK - WE ARE COLLEAGUES WORKING TOGETHER, SHARING KNOWLEDGE, TALENTS, AND SKILLS TO ACHIEVE COMMON GOALS. - INTEGRITY - WE WILL BE FORTHRIGHT, HONEST AND RESPECTFUL. - DIVERSITY - WE EMBRACE THE DIVERSITY OF OUR PEOPLE, PATIENTS AND THE COMMUNITIES WE SERVE.
FORM 990, PART VI, QUESTION 6	DESCRIPTION OF THE MEMBERS OF THE ORGANIZATION AND THEIR RIGHTS	NORTHERN ARIZONA HEALTHCARE CORPORATION IS THE SOLE CORPORATE MEMBER OF FLAGSTAFF MEDICAL CENTER.
FORM 990, PART VI, QUESTION 7A	DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS	THE FLAGSTAFF MEDICAL CENTER (FMC) GOVERNANCE COMMITTEE NOMINATES FOR POSITIONS ON THE FMC BOARD OF DIRECTORS. DIRECTORS ARE ELECTED BY THE BOARD OF DIRECTORS OF THE SOLE CORPORATE MEMBER FROM THE NOMINATIONS THAT HAVE BEEN PROVIDED. THE SOLE CORPORATE MEMBER ELECTS THOSE PERSONS NOMINATED UNLESS THE BOARD OF DIRECTORS OF THE SOLE CORPORATE MEMBER BY A SUPER MAJORITY VOTE DETERMINES THAT A NOMINEE'S ELECTION WOULD BE DETRIMENTAL TO THE BEST INTERESTS OF FMC OR THE SOLE CORPORATE MEMBER. FORM 990, PART VI, LINE 7B DECISIONS REQUIRING APPROVAL & TYPE OF VOTING RIGHTS AS SOLE CORPORATE MEMBER, NORTHERN ARIZONA HEALTHCARE CORPORATION APPROVES THE BOARD OF DIRECTORS THAT ARE ELECTED BY THIS ENTITY. ALSO AS SOLE CORPORATE MEMBER, NORTHERN ARIZONA HEALTHCARE CORPORATION HAS RESERVED THE RIGHT AND AUTHORITY TO APPROVE OR DISAPPROVE THOSE ACTS OR POWERS AS SET FORTH IN THE "RESERVED POWERS CHART" THAT IS PART OF THE BYLAWS.
FORM 990, PART VI, QUESTION 11B	REVIEW OF THE FORM 990 BY THE ORGANIZATION'S GOVERNING BODY	THE FORM 990 IS PREPARED BY AN ACCOUNTING FIRM BASED ON DATA GATHERED BY THE CONTROLLER AND THE ORGANIZATION'S FINANCIAL OPERATIONS GROUP. THE CFO REVIEWS THE DRAFT FORM 990 AND PROVIDES ADDITIONAL COMMENTS. THE FINAL DRAFT VERSION OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS AND KEY OFFICERS PRIOR TO THE MAY 15 DUE DATE FOR THE FORM 990. ANY ADDITIONAL COMMENTS SUGGESTED BY THE GOVERNING BODY ARE THEN INCORPORATED INTO THE FINAL VERSION OF THE FORM 990 TO BE FILED WITH THE IRS BY THE FINAL DUE DATE. IF ANY SUGGESTED CHANGES ARE MATERIAL OR SIGNIFICANT, AN ADDITIONAL DRAFT IS DISTRIBUTED TO THE GOVERNING BODY PRIOR TO FILING.
FORM 990, PART VI, QUESTION 12C	DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICT OF INTEREST	THE ORGANIZATION REGULARLY MONITORS AND ENFORCES COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY (BOARD POLICY 6.1). THIS IS ACCOMPLISHED BY A NUMBER OF MECHANISMS. FIRST, THE CONFLICT OF INTEREST QUESTIONNAIRE IS REVIEWED BY THE GOVERNANCE COMMITTEE OF THE BOARD. AS PART OF THE QUESTIONNAIRE, SELF-DISCLOSURE IS REQUIRED BY BOARD MEMBERS. IN ADDITION, INDIVIDUAL DISCLOSURE BY BOARD MEMBERS OCCURS AT BOARD MEETINGS WHEN NECESSARY (I.E. A BOARD MEMBER WILL EXCLUDE HIMSELF FROM VOTING ON AN ISSUE IN WHICH HE MAY HAVE A CONFLICT OF INTEREST).
FORM 990, PART VI, QUESTIONS 15A & 15B	COMPENSATION PROCESS	THE PROCESS FOR DETERMINING COMPENSATION OF THE ORGANIZATION'S CEO AND OTHER OFFICERS INCLUDES THE PREPARATION OF COMPARABLE DATA BY TOWERS WATSON, AN INDEPENDENT CONSULTING FIRM. IN ADDITION, THIS INFORMATION IS REVIEWED BY THE GOVERNANCE COMMITTEE OF THE BOARD AND IS DOCUMENTED IN BOARD MINUTES. THE MOST RECENT REVIEW WAS PERFORMED IN JANUARY 2010.
FORM 990, PART VI, QUESTION 19	AVAILABILITY OF CERTAIN DOCUMENTS TO THE GENERAL PUBLIC	THE ORGANIZATION'S FINANCIAL STATEMENTS ARE AVAILABLE THROUGH THE ARIZONA DEPARTMENT OF HEALTH SERVICES. IN ADDITION, THEY ARE AVAILABLE THROUGH THE ELECTRONIC MUNICIPAL MARKET ACCESS (EMMA) AS PART OF THE ORGANIZATION'S CONTINUING DISCLOSURE DOCUMENTS THAT ARE REQUIRED BY ITS PUBLIC DEBT REQUIREMENTS. THE ORGANIZATION DOES NOT MAKE ITS GOVERNING DOCUMENTS OR ITS CONFLICT OF INTEREST POLICY AVAILABLE TO THE PUBLIC.
FORM 990, PART VII	HOURS DEVOTED TO RELATED ORGANIZATIONS	BERT MCKINNON SERVES ON THE BOARD OF NORTHERN ARIZONA HEALTHCARE CORPORATION (NAHC) AND FLAGSTAFF MEDICAL CENTER (FMC). HE DEVOTED 2 HOURS PER WEEK TO EACH ORGANIZATION. CHRIS BAVASI SERVES ON THE BOARD OF NAHC AND FMC. HE DEVOTED 2.5 HOURS PER WEEK TO EACH ORGANIZATION. GARY CHRISTENSEN SERVES ON THE BOARD OF NAHC AND FMC. HE DEVOTED 0.75 HOURS PER WEEK TO EACH ORGANIZATION. JAMES DORMAN SERVES ON THE BOARD OF NAHC AND FMC. HE DEVOTED 3 HOURS PER WEEK TO EACH ORGANIZATION. WAYNE FOX SERVES ON THE BOARD OF NAHC AND FMC. HE DEVOTED 1.75 HOURS PER WEEK TO EACH ORGANIZATION. ROBERT M. MONTOYA SERVES ON THE BOARD OF NAHC AND FMC. HE DEVOTED 2.75 HOURS PER WEEK TO EACH ORGANIZATION. MOLLY MUNGER SERVES ON THE BOARD OF NAHC AND FMC. SHE DEVOTED 0.75 HOURS PER WEEK TO EACH ORGANIZATION. GREGORY KUZMA IS THE VP AND CHIEF FINANCIAL OFFICER OF NAHC, FMC AND VVMC. HE DEVOTED 20 HOURS PER WEEK TO EACH NAHC AND FMC, AND HE DEVOTED 11 HOURS TO VVMC. WILLIAM BRADEL IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF NAHC AND FMC. HE DEVOTED 20 HOURS PER WEEK TO EACH ORGANIZATION. RICHARD SMITH IS THE VP OF DEVELOPMENT OF FMC AND VVMC. HE DEVOTED 20 HOURS PER WEEK TO EACH ORGANIZATION. ALL COMPENSATION IS PAID BY NAHC ALL COMPENSATION IS PAID BY NAHC
FORM 990, PART XI, LINE 5	EXPLANATION OF OTHER CHANGES IN NET ASSETS	UNREALIZED GAIN/LOSS IN INVESTMENT $16,111,692 DECREASE IN UNFUNDED PENSION LIABILITY 14,484,000 NET ASSET TRANSFERS FROM (TO) AFFILIATE (4,110,000) PARTNERSHIP K1 BOOK AND TAX DIFFERENCES 555,865 ELIMINATIONS (384,023) -------------- TOTAL $26,657,534 ==============
SCHEDULE K, PART I	SUPPLEMENTAL INFORMATION	LINE A - THE NAME OF THE ISSUE IS HOSPITAL REVENUE REFUNDING BONDS (NORTHERN ARIZONA HEALTHCARE SYSTEM) SERIES 2008A. THIS ISSUE REFUNDS BONDS FROM 12/12/96 AND 10/31/02. TOTAL ISSUANCE PRICE WAS $57,096,705 WHICH WAS ALLOCATED $45,703,133 TO FLAGSTAFF MEDICAL CENTER AND $11,393,572 TO VERDE VALLEY MEDICAL CENTER. LINE B - THE NAME OF THE ISSUE IS $52,795,000 HOSPITAL REVENUE BONDS (NORTHERN ARIZONA HEALTHCARE SYSTEM) SERIES 2008B. THIS ISSUE REFUNDS BONDS FROM 1/27/05. TOTAL ISSUANCE PRICE WAS $52,795,000 WHICH WAS ALLOCATED $20,326,075 TO FLAGSTAFF MEDICAL CENTER AND $32,468,925 TO VERDE VALLEY MEDICAL CENTER. THE 2008B BONDS WERE ALSO USED, IN PART, TO FINANCE "NEW MONEY" PROJECTS. $10,073,432.20 WAS USED FOR BUILDINGS AND LONG-LIVED EQUIPMENT.
FORM 990, PART V, QUESTION 5A	PARTY TO PROHIBITED TAX SHELTER TRANSACTION	FLAGSTAFF MEDICAL CENTER IS FILING FOUR FORMS 8886, REPORTABLE TRANSACTION DISCLOSURE STATEMENT, ON A PROTECTIVE BASIS TO REPORT ITS INTERESTS IN THE FOLLOWING LIMITED PARTNERSHIPS: LC ENTERPRISES LP (DISSOLVED 6/2011), JORDAN FAMILY INVESTMENTS LP, NAAM ENTERPRISES LP, AND GKC ENTERPRISES LP (INTEREST REDEEMED 1/9/2012). FLAGSTAFF MEDICAL CENTER IS FILING ONE FORM 8886 TO REPORT ITS INTEREST IN DUDDIE FAMILY LIMITED PARTNERSHIP. FLAGSTAFF MEDICAL CENTER IS NOT REQUIRED TO DISCLOSE THE DUDDIE FAMILY LP ON FORM 8886-T, DISCLOSURE BY TAX-EXEMPT ENTITY REGARDING PROHIBITED TAX SHELTER TRANSACTION, BECAUSE IT RECEIVED THE DONATED LIMITED PARTNERSHIP INTEREST PRIOR TO MAY 17, 2006. TREAS. REG. 1.6033-5(D)(4) ("[D]ISCLOSURE IS NOT REQUIRED WITH RESPECT TO ANY PROHIBITED TAX SHELTER TRANSACTION ENTERED INTO BY A TAX-EXEMPT ENTITY ON OR BEFORE MAY 17, 2006.")
FORM 8886, 1 OF 5	THE DUDDIE FAMILY LIMITED PARTNERSHIP	LINE 6 A-C NOTE: THE TAX ADVICE PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC WAS LIMITED TO ADVICE PERTAINING TO THE DISCLOSURE OF THE TRANSACTION DESCRIBED IN THIS FORM 8886. THE SERVICES PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC DID NOT INVOLVE ANY TAX ADVICE PERTAINING TO THE STRUCTURING OF THE TRANSACTION DISCLOSED IN THIS FORM 8886 OR ADVISING THE TAXPAYER BEYOND ITS REPORTABLE TRANSACTION DISCLOSURE AND RELATED OBLIGATIONS. THE FEES PAID BY THE TAXPAYER TO ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC RELATE ONLY TO POST-TRANSACTIONAL TAX ADVICE CONCERNING ITS DISCLOSURE OBLIGATIONS AND ITS WITHDRAWAL FROM THE DUDDIE FAMILY LIMITED PARTNERSHIP. LINE 7B - CONTINUATION FROM FORM 8886 (5) THE PETERSON GRANDCHILDREN'S TRUST (TRUST #2"). DONORS AND FOUNDATION ENTERED INTO THE TRANSACTION, THE PARTNERSHIP, ON OR ABOUT DECEMBER 31, 1990. ON OR ABOUT JANUARY 30, 1997, FOUNDATION, EIN 94-2540279, ADOPTED ARTICLES OF DISSOLUTION, AND ON OR ABOUT NOVEMBER 1, 2000, FOUNDATION, EIN 94-2540279, WAS ADMINISTRATIVELY DISSOLVED AND FLAGSTAFF MEDICAL CENTER INC. ("FLAGSTAFF"), EIN 86-0100232, THE THEN SOLE MEMBER OF THE FOUNDATION, SUCCEEDED TO THE INTERESTS OF THE FOUNDATION IN THE REMAINING ASSETS OF THE FOUNDATION AFTER PROVISION FOR ALL LIABILITIES OF THE FOUNDATION UPON ITS DISSOLUTION. FLAGSTAFF IS THE SUCESSOR ENTITY TO FOUNDATION FOR FEDERAL INCOME TAX PURPOSES. CONSEQUENTLY, FLAGSTAFF MEDICAL CENTER, INC. IS THE ENTITY RESPONSIBLE FOR DISCLOSING THIS TRANSACTION UNDER TREAS. REG. SECTION 1.6011-4, ET SEQ. THE DUDDIE FAMILY LIMITED PARTNERSHIP AGREEMENT (THE "AGREEMENT") DESCRIBES DONORS HAVING CONTRIBUTED $800,000 TO THE PARTNERSHIP AS AN INITIAL CAPITAL CONTRIBUTION. THE AGREEMENT FURTHER DECRIBES TIMOTHY G. DUDDIE AND SHERYL P. DUDDIE CONTRIBUTING AN ADDITIONAL $200,000 TO THE PARTNERSHIP "ON BEHALF OF" FOUNDATION, RESULTING IN FOUNDATION OWNING APPROXIMATELY 20% OF THE LIMITED PARTNERSHIP INTERESTS. PER FOUNDATION'S 2009 SCHEDULE K-1 PROVIDED TO FLAGSTAFF BY PARTNERSHIP, FOUNDATION IS ALLOCATED 19.4% OF THE PROFIT, LOSS AND CAPITAL OF PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES. PURSUANT TO THE TERMS OF THE AGREEMENT, THE GENERAL PARTNERS HAVE FULL CONTROL OVER THE TIMING AND AMOUNT OF DISTRIBUTIONS FROM THE PARTNERSHIP. FLAGSTAFF, IN ITS CAPACITY AS LIMITED PARTNER IN THE PARTNERSHIP, GENERALLY MAY NOT DEMAND DISTRIBUTIONS OR PARTAKE IN THE MANAGEMENT OF THE PARTNERSHIP. FLAGSTAFF MAY NOT TRANSFER ITS LIMITED PARTNERSHIP INTEREST WITHOUT SATISFYING CERTAIN CONDITIONS, INCLUDING RIGHTS OF FIRST REFUSAL HELD BY THE GENERAL PARTNERS AND THE LIMITED PARTNERS UNDER THE TERMS OF THE AGREEMENT. THE OPTION AGREEMENT (THE "OPTION"), EFFECTIVE DECEMBER 31, 1990, WAS ENTERED INTO BY TRUST #1 AND FOUNDATION. THE OPTION PROVIDES FOUNDATION THE RIGHT TO REQUIRE TRUST #1 TO PURCHASE ITS INTEREST IN PARTNERSHIP, AT THE GREATER OF FAIR MARKET VALUE OR THE ORIGINAL GIFT VALUE OF FOUNDATION'S LIMITED PARTNERSHIP INTEREST, WHICH WAS ESTABLISHED WHEN FOUNDATION RECEIVED ITS INTEREST IN THE PARTNERSHIP. THE RIGHT TO EXERCISE THE OPTION RUNS FOR 60 DAYS AFTER THE DATE OF DEATH OF THE LAST TO DIE OF "THE INSURED GENERAL PARTNERS OR GRANTORS, IF THE GENERAL PARTNERS ARE REVOCABLE FAMILY TRUSTS." THE OPTION ALSO PROVIDES THAT TRUST #1 "HAS OR WILL PROCURE LIFE INSURANCE ON THE LIVES OF THE GENERAL PARTNERS." FLAGSTAFF DOES NOT POSESS ENOUGH INFORMATION TO DETERMINE TO WHAT EXTENT, IF ANY, TRUST #2 HAS PARTICIPATED IN THE PARTNERSHIP WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. PARTNERSHIP PROVIDED A 2009 SCHEDULE K-1 TO FLAGSTAFF INDICATING THAT TRUST #2 OWNS A 1.54% OF THE PROFIT, LOSS AND CAPITAL OF PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES. ON OR ABOUT OCTOBER 25, 2010 FLAGSTAFF FIRST BECAME AWARE THAT PARTNERSHIP MIGHT BE VIEWED AS SUBSTANTIALLY SIMILAR TO THE NOTICE 2004-30 TRANSACTION, AND THEREFORE MAY HAVE PARTICIPATED IN A LISTED TRANSACTION WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. CONSEQUENTLY, FLAGSTAFF'S INITIAL DISCLOSURE OF PARTNERSHIP WAS FILED WITH THE 2009 FORM 990 WITH RESPECT TO FLAGSTAFF'S TAXABLE YEAR ENDED JUNE 30, 2010. FLAGSTAFF HAS RETAINED LEGAL COUNSEL AND, AFTER REPEATED ATTEMPTS TO NEGOTIATE WITHDRAWAL FROM THE PARTNERSHIP WERE UNSUCCESSFUL, FILED A LAWSUIT CURRENTLY PENDING IN THE CALIFORNIA STATE COURTS SEEKING DISSOLUTION OF THE PARTNERSHIP AND OTHER RELIEF. FOUNDATION JOINED FLAGSTAFF AS A PLAINTIFF IN THE LAWSUIT AS DEEMED NECESSARY TO WIND UP AND LIQUIDATE FOUNDATION'S AFFAIRS IN FURTHERANCE OF FOUNDATION'S PRIOR DISSOLUTION. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFITS FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS A LIMITED PARTNER. THEREFORE, FLAGSTAFF IS UNABLE TO PROVIDE AN ESTIMATE OF ANY SUCH EXPECTED TAX BENEFITS. ADDITIONALLY, THERE SHOULD BE NO DISCLOSURE TO THE EXTENT THAT FLAGSTAFF IS VIEWED AS ENTERING INTO THE PARTNERSHIP SOLELY PRIOR TO FEBRUARY 28, 2000. THE ORIGINAL TEMP. TREAS. REGS. ISSUED FEBRUARY 28, 2000 UNDER TREAS. REG. SECTION 1.6011-4T MAY GOVERN FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP. THESE TREAS. REGS. REQUIRE DISCLOSURE ONLY FOR LARGE TRANSACTIONS THAT PROVIDE TAX SAVINGS IN EXCESS OF CERTAIN DOLLAR THRESHOLDS (THE "PROJECTED TAX EFFECT TEST"). THE PROJECTED TAX EFFECT TEST, AS DESCRIBED IN THESE REGULATIONS, REQUIRE A TRANSACTION TO BE REPORTED WHERE IT IS EXPECTED TO REDUCE THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY BY MORE THAN $1 MILLION IN ANY SINGLE TAXABLE YEAR OR BY A TOTAL OF $2 MILLION FOR ANY COMBINATION OF TAXABLE YEARS. HOWEVER, A LISTED TRANSACTION IS NOT TREATED AS A REPORTABLE TRANSACTION IF IT HAS AFFECTED THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY AS REPORTED ON ANY TAX RETURN FILED ON OR BEFORE FEBRUARY 28, 2000. BECAUSE FLAGSTAFF IS A TAX-EXEMPT I.R.C. SECTION 501(C)(3) ENTITY, FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP WAS NOT EXPECTED TO REDUCE ITS TAX LIABILITY AT ALL . THEREFORE, UNDER TEMP. TREAS. REG. SECTION 1.6011-4T, FLAGSTAFF MAY NOT HAVE A DISCLOSURE REQUIREMENT WITH RESPECT TO ITS INVESTMENT IN THE PARTNERSHIP PRIOR TO FEBRUARY 28, 2000.* * SINCE 2001, TEMP. TREAS. REG. SECTION 1.6011-4T HAS BEEN MODIFIED A NUMBER OF TIMES BEFORE BEING FINALIZED IN 2003. BASED ON THE VARIOUS EFFECTIVE DATES FOR THE DIFFERENT SECTIONS THAT HAVE CHANGED, IT APPEARS THAT THE FEBRUARY 28, 2000 INITIAL TEMP. TREAS. REG. SECTION 1.6011-4T IN T.D. 8877 MAY GOVERN THE DISCLOSURE OBLIGATIONS OF FLAGSTAFF WITH RESPECT TO ITS PARTICIPATION IN THE PARTNERSHIP THROUGH ITS LIMITED PARTNERSHIP INTEREST THAT WAS OBTAINED PRIOR TO FEBRUARY 28, 2000, ON OCTOBER 5, 1995. FLAGSTAFF HAS NOT, NOR DOES NOT, EXPECT ANY TAX BENEFIT FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS LIMITED PARTNER.
FORM 8886, 2 OF 5	GKC ENTERPRISES LTD PARTNERSHIP	LINE 6 A-C NOTE: THE TAX ADVICE PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC WAS LIMITED TO ADVICE PERTAINING TO THE DISCLOSURE OF THE TRANSACTION DESCRIBED IN THIS FORM 8886. THE SERVICES PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC DID NOT INVOLVE ANY TAX ADVICE PERTAINING TO THE STRUCTURING OF THE TRANSACTION DISCLOSED IN THIS FORM 8886 OR ADVISING THE TAXPAYER BEYOND ITS REPORTABLE TRANSACTION DISCLOSURE AND RELATED OBLIGATIONS. THE FEES PAID BY THE TAXPAYER TO ERNST & YOUNG LLP, POLSINELLI SHUGHART PC AND FENNEMORE CRAIG, P.C. RELATE ONLY TO POST-TRANSACTIONAL TAX ADVICE CONCERNING ITS DISCLOSURE OBLIGATIONS AND ITS WITHDRAWAL FROM GKC ENTERPRISES LIMITED PARTNERSHIP. LINE 7B - CONTINUATION FROM FORM 8886 ON OR ABOUT DECEMBER 31, 1990, 66% OF GARY S. CHRISTENSEN'S OWNERSHIP, AS A LIMITED PARTNER, WAS TRANSFERRED TO THE FOUNDATION. SOME TIME AFTER THE TRANSACTION WAS ENTERED INTO, THE BOY SCOUTS OF AMERICA, MONTANA COUNCIL, WERE ADMITTED TO THE PARTNERSHIP AS A LIMITED PARTNER. ON OR ABOUT JANUARY 30, 1997, FOUNDATION, EIN 94-2540279, ADOPTED ARTICLES OF DISSOLUTION, AND ON OR ABOUT NOVEMBER 1, 2000, FOUNDATION, EIN 94-2540279, WAS ADMINSTRATIVELY DISSOLVED AND FLAGSTAFF MEDICAL CENTER, INC. ("FLAGSTAFF"), EIN 86-0100232, THE THEN SOLE MEMBER OF THE FOUNDATION, SUCCEEDED TO THE INTERESTS OF THE FOUNDATION IN THE REMAINING ASSETS OF THE FOUNDATION AFTER PROVISION FOR ALL LIABILITIES OF THE FOUNDATION UPON ITS DISSOLUTION. FLAGSTAFF IS THE SUCCESSOR ENTITY TO FOUNDATION FOR FEDERAL INCOME TAX PURPOSES. CONSEQUENTLY, FLAGSTAFF MEDICAL CENTER, INC. IS THE ENTITY RESPONSIBLE FOR DISCLOSING THIS TRANSACTION UNDER TREAS. REG. SECTION 1.6011-4, ET SEQ. GKC ENTERPRISES LIMITED PARTNERSHIP AGREEMENT, DATED DECEMBER 1, 1990, (THE "AGREEMENT") DESCRIBES DONORS AS HAVING CONTRIBUTED $100 TO THE PARTNERSHIP AS AN INITIAL CAPITAL CONTRIBUTION. PER FOUNDATION'S 2009 SCHEDULE K-1 PROVIDED TO FLAGSTAFF BY PARTNERSHIP, FOUNDATION IS ALLOCATED 36.6% OF THE PROFIT, LOSS AND CAPITAL OF PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES. PURSUANT TO THE TERMS OF THE AGREEMENT, THE GENERAL PARTNERS HAVE FULL CONTROL OVER THE TIMING AND AMOUNT OF DISTRIBUTIONS FROM THE PARTNERSHIP. FLAGSTAFF, IN ITS CAPACITY AS LIMITED PARTNER IN THE PARTNERSHIP, GENERALLY MAY NOT DEMAND DISTRIBUTIONS OR PARTAKE IN THE MANAGEMENT OF THE PARTNERSHIP. FLAGSTAFF MAY NOT TRANSFER ITS LIMITED PARTNERSHIP INTEREST WITHOUT SATISFYING CERTAIN CONDITIONS, INCLUDING RIGHTS OF FIRST REFUSAL HELD BY THE GENERAL PARTNERS AND THE LIMITED PARTNERS UNDER THE TERMS OF THE AGREEMENT. IT IS UNKNOWN IF AN OPTION AGREEMENT EXISTS, WHICH WOULD ALLOW A THIRD PARTY TO PURCHASE FOUNDATION'S INTEREST IN PARTNERSHIP UPON THE DEATH OF THE GENERAL PARTNER. ON OR ABOUT AUGUST 10, 2010 FLAGSTAFF FIRST BECAME AWARE THAT PARTNERSHIP MIGHT BE VIEWED AS SUBSTANTIALLY SIMILAR TO THE NOTICE 2004-30 TRANSACTION, AND THEREFORE MAY HAVE PARTICIPATED IN A LISTED TRANSACTION WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. CONSEQUENTLY, FLAGSTAFF'S INITIAL DISCLOSURE OF PARTNERSHIP WAS FILED WITH THE 2009 FORM 990 WITH RESPECT TO FLAGSTAFF'S TAXABLE YEAR ENDED JUNE 30, 2010. FLAGSTAFF HAS RETAINED LEGAL COUNSEL AND HAS NEGOTIATED WITHDRAWAL FROM THE PARTNERSHIP. ON OR ABOUT FEBRUARY 14, 2012, THE PARTNERSHIP REDEEMED FLAGSTAFF'S INTEREST IN THE PARTNERSHIP UPON PAYMENT TO FLAGSTAFF OF THE REDEMPTION PRICE OF $86,122.90, PURSUANT TO AN AGREEMENT FOR REDEMPTION OF LIMITED PARTNERSHIP INTEREST DATED EFFECTIVE AS OF JANUARY 9, 2012. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFITS FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS A LIMITED PARTNER. THEREFORE, FLAGSTAFF IS UNABLE TO PROVIDE AN ESTIMATE OF ANY SUCH EXPECTED TAX BENEFITS. ADDITIONALLY, THERE SHOULD BE NO DISCLOSURE TO THE EXTENT THAT FLAGSTAFF IS VIEWED AS ENTERING INTO THE PARTNERSHIP SOLELY PRIOR TO FEBRUARY 28, 2000. THE ORIGINAL TEMP. TREAS. REGS. ISSUED FEBRUARY 28, 2000 UNDER TREAS. REG. SECTION 1.6011-4T MAY GOVERN FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP. THESE TREAS. REGS. REQUIRE DISCLOSURE ONLY FOR LARGE TRANSACTIONS THAT PROVIDE TAX SAVINGS IN EXCESS OF CERTAIN DOLLAR THRESHOLDS (THE "PROJECTED TAX EFFECT TEST"). THE PROJECTED TAX EFFECT TEST, AS DESCRIBED IN THESE REGULATIONS, REQUIRE A TRANSACTION TO BE REPORTED WHERE IT IS EXPECTED TO REDUCE THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY BY MORE THAN $1 MILLION IN ANY SINGLE TAXABLE YEAR OR BY A TOTAL OF $2 MILLION FOR ANY COMBINATION OF TAXABLE YEARS. HOWEVER, A LISTED TRANSACTION IS NOT TREATED AS A REPORTABLE TRANSACTION IF IT HAS AFFECTED THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY AS REPORTED ON ANY TAX RETURN FILED ON OR BEFORE FEBRUARY 28, 2000. BECAUSE FLAGSTAFF IS A TAX-EXEMPT I.R.C. SECTION 501(C)(3) ENTITY, FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP WAS NOT EXPECTED TO REDUCE ITS TAX LIABILITY AT ALL . THEREFORE, UNDER TEMP. TREAS. REG. SECTION 1.6011-4T, FLAGSTAFF MAY NOT HAVE A DISCLOSURE REQUIREMENT WITH RESPECT TO ITS INVESTMENT IN THE PARTNERSHIP PRIOR TO FEBRUARY 28, 2000.* * SINCE 2001, TEMP. TREAS. REG. SECTION 1.6011-4T HAS BEEN MODIFIED A NUMBER OF TIMES BEFORE BEING FINALIZED IN 2003. BASED ON THE VARIOUS EFFECTIVE DATES FOR THE DIFFERENT SECTIONS THAT HAVE CHANGED, IT APPEARS THAT THE FEBRUARY 28, 2000 INITIAL TEMP. TREAS. REG. SECTION 1.6011-4T IN T.D. 8877 MAY GOVERN THE DISCLOSURE OBLIGATIONS OF FLAGSTAFF WITH RESPECT TO ITS PARTICIPATION IN THE PARTNERSHIP THROUGH ITS LIMITED PARTNERSHIP INTEREST THAT WAS OBTAINED PRIOR TO FEBRUARY 28, 2000, ON OR ABOUT DECEMBER 31, 1990. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFIT FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS LIMITED PARTNER.
FORM 8886, 3 OF 5	LC ENTERPRISES LIMITED PARTNERSHIP	LINE 6 A-C NOTE: THE TAX ADVICE PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC WAS LIMITED TO ADVICE PERTAINING TO THE DISCLOSURE OF THE TRANSACTION DESCRIBED IN THIS FORM 8886. THE SERVICES PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC DID NOT INVOLVE ANY TAX ADVICE PERTAINING TO THE STRUCTURING OF THE TRANSACTION DISCLOSED IN THIS FORM 8886 OR ADVISING THE TAXPAYER BEYOND ITS REPORTABLE TRANSACTION DISCLOSURE AND RELATED OBLIGATIONS. THE FEES PAID BY THE TAXPAYER TO ERNST & YOUNG LLP, POLSINELLI SHUGHART PC AND FENNEMORE CRAIG, P.C. RELATE ONLY TO POST-TRANSACTIONAL TAX ADVICE CONCERNING ITS DISCLOSURE OBLIGATIONS AND ITS WITHDRAWAL FROM LC ENTERPRISES LIMITED PARTNERSHIP. LINE 7B - CONTINUATION FROM FORM 8886 DONORS ENTERED INTO THE TRANSACTION, THE PARTNERSHIP, ON OR ABOUT DECEMBER 1, 1990. ON OR ABOUT NOVEMBER 1, 2000, FOUNDATION, EIN 94-2540279, WAS ADMINISTRATIVELY DISSOLVED AND FLAGSTAFF MEDICAL CENTER, INC. ("FLAGSTAFF"), EIN 86-0110232, THE THEN SOLE MEMBER OF THE FOUNDATION, SUCCEEDED TO THE INTERESTS OF THE FOUNDATION IN THE REMAINING ASSETS OF THE FOUNDATION AFTER PROVISION FOR ALL LIABILITIES OF THE FOUNDATION UPON ITS DISSOLUTION. FLAGSTAFF IS THE SUCCESSOR ENTITY TO FOUNDATION FOR FEDERAL INCOME TAX PURPOSES. CONSEQUENTLY, FLAGSTAFF MEDICIAL CENTER, INC. IS THE ENTITY RESPONSIBLE FOR DISCLOSING THIS TRANSACTION UNDER TREAS. REG. SECTION 1.6011-4, ET SEQ. LC ENTERPRISES LIMITED PARTNERSHIP AGREEMENT, DATED DECEMBER 1, 1990, (THE "AGREEMENT") DESCRIBES DONORS AS HAVING CONTRIBUTED $100 TO THE PARTNERSHIP AS AN INITIAL CAPITAL CONTRIBUTION. THE AGREEMENT WAS EFFECTIVELY AMENDED ON JANUARY 1, 1991 FOR THE ADDITION OF CLIEF L. CASTLETON AS A LIMITED PARTNER. LLOYD V. CASTLETON, IN HIS CAPACITY AS A LIMITED PARTNER, GIFTED 1% OF HIS OWNERSHIP INTEREST TO CLIEF L. CASTLETON. LLOYD V. CASTLETON DIED IN 2008. THIS PARTNERSHIP WAS DISSOLVED ON JUNE 21, 2011. FOUNDATION'S OWNERSHIP PERCENTAGE PRIOR TO THE PARTNERSHIP DISSOLUTION WAS UNKNOWN. PURSUANT TO THE TERMS OF THE AGREEMENT, THE GENERAL PARTNERS HAD FULL CONTROL OVER THE TIMING AND AMOUNT OF DISTRIBUTIONS FROM THE PARTNERSHIP. FLAGSTAFF, IN ITS CAPACITY AS LIMITED PARTNER IN THE PARTNERSHIP, GENERALLY COULD NOT DEMAND DISTRIBUTIONS OR PARTAKE IN THE MANAGEMENT OF THE PARTNERSHIP. FLAGSTAFF COULD NOT TRANSFER ITS LIMITED PARTNERSHIP INTEREST WITHOUT SATISFYING CERTAIN CONDITIONS, INCLUDING RIGHTS OF FIRST REFUSAL HELD BY THE GENERAL PARTNERS AND THE LIMITED PARTNERS UNDER THE TERMS OF THE AGREEMENT. IT WAS UNKNOWN IF AN OPTION AGREEMENT EXISTED, WHICH WOULD ALLOW A THIRD PARTY TO PURCHASE FOUNDATION'S INTEREST IN PARTNERSHIP UPON THE DEATH OF THE GENERAL PARTNER. ON OR ABOUT AUGUST 10, 2010 FLAGSTAFF FIRST BECAME AWARE THAT PARTNERSHIP MIGHT BE VIEWED AS SUBSTANTIALLY SIMILAR TO THE NOTICE 2004-30 TRANSACTION, AND THEREFORE MAY HAVE PARTICIPATED IN A LISTED TRANSACTION WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. CONSEQUENTLY, FLAGSTAFF'S INITIAL DISCLOSURE OF PARTNERSHIP WAS FILED WITH THE 2009 FORM 990 WITH RESPECT TO FLAGSTAFF'S TAXABLE YEAR ENDED JUNE 30, 2010. FLAGSTAFF RETAINED LEGAL COUNSEL TO SEEK DISSOLUTION OF THE PARTNERSHIP. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFITS FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). THEREFORE, FLAGSTAFF IS UNABLE TO PROVIDE AN ESTIMATE OF ANY SUCH EXPECTED TAX BENEFITS. ADDITIONALLY, THERE SHOULD BE NO DISCLOSURE TO THE EXTENT THAT FLAGSTAFF IS VIEWED AS ENTERING INTO THE PARTNERSHIP SOLELY PRIOR TO FEBRUARY 28, 2000. THE ORIGINAL TEMP. TREAS. REGS. ISSUED FEBRUARY 28, 2000 UNDER TREAS. REG. SECTION 1.6011-4T MAY GOVERN FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP. THESE TREAS. REGS. REQUIRE DISCLOSURE ONLY FOR LARGE TRANSACTIONS THAT PROVIDE TAX SAVINGS IN EXCESS OF CERTAIN DOLLAR THRESHOLDS (THE "PROJECTED TAX EFFECT TEST"). THE PROJECTED TAX EFFECT TEST, AS DESCRIBED IN THESE REGULATIONS, REQUIRE A TRANSACTION TO BE REPORTED WHERE IT IS EXPECTED TO REDUCE THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY BY MORE THAN $1 MILLION IN ANY SINGLE TAXABLE YEAR OR BY A TOTAL OF $2 MILLION FOR ANY COMBINATION OF TAXABLE YEARS. HOWEVER, A LISTED TRANSACTION IS NOT TREATED AS A REPORTABLE TRANSACTION IF IT HAS AFFECTED THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY AS REPORTED ON ANY TAX RETURN FILED ON OR BEFORE FEBRUARY 28, 2000. BECAUSE FLAGSTAFF IS A TAX-EXEMPT I.R.C. SECTION 501(C)(3) ENTITY, FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP WAS NOT EXPECTED TO REDUCE ITS TAX LIABILITY AT ALL. THEREFORE, UNDER TEMP. TREAS. REG. SECTION 1.6011-4T, FLAGSTAFF MAY NOT HAVE A DISCLOSURE REQUIREMENT WITH RESPECT TO ITS INVESTMENT IN THE PARTNERSHIP PRIOR TO FEBRUARY 28, 2000.* * SINCE 2001, TEMP. TREAS. REG. SECTION 1.6011-4T HAS BEEN MODIFIED A NUMBER OF TIMES BEFORE BEING FINALIZED IN 2003. BASED ON THE VARIOUS EFFECTIVE DATES FOR THE DIFFERENT SECTIONS THAT HAVE CHANGED, IT APPEARS THAT THE FEBRUARY 28, 2000 INITIAL TEMP. TREAS. REG. SECTION 1.6011-4T IN T.D. 8877 MAY GOVERN THE DISCLOSURE OBLIGATIONS OF FLAGSTAFF WITH RESPECT TO ITS PARTICIPATION IN THE PARTNERSHIP THROUGH ITS LIMITED PARTNERSHIP INTEREST THAT WAS OBTAINED PRIOR TO FEBRUARY 28, 2000, ON OR ABOUT DECEMBER 31, 1990. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFIT FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS LIMITED PARTNER.
FORM 8886, 4 OF 5	JORDAN FAMILY INVESTMENTS LIMITED PARTNERSHIP	LINE 5D TAXPAYER RECEIVED THE SCHEDULE K-1 FROM THE ENTITY ON OR ABOUT THE TIME THE FORM 1065 WAS FILED WITH THE INTERNAL REVENUE SERVICE. LINE 6 A-C NOTE: THE TAX ADVICE PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC WAS LIMITED TO RECENT ADVICE PERTAINING TO THE DISCLOSURE OF THE TRANSACTION DESCRIBED IN THIS FORM 8886. THE SERVICES PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC DID NOT INVOLVE ANY TAX ADVICE PERTAINING TO THE STRUCTURING OF THE TRANSACTION DISCLOSED IN THIS FORM 8886 OR ADVISING THE TAXPAYER BEYOND ITS REPORTABLE TRANSACTION DISCLOSURE AND RELATED OBLIGATIONS. THE FEES PAID BY THE TAXPAYER TO ERNST & YOUNG LLP, POLSINELLI SHUGHART PC, AND FENNEMORE CRAIG, P.C. RELATE ONLY TO POST-TRANSACTIONAL TAX ADVICE CONCERNING ITS DISCLOSURE OBLIGATIONS AND ITS WITHDRAWAL FROM THE JORDAN FAMILY INVESTMENTS LIMITED PARTNERSHIP. LINE 7B - CONTINUATION FROM FORM 8886 AT AN UNKNOWN DATE, MICHAEL E. JORDAN, AS A LIMITED PARTNER, TRANSFERRED A PERCENTAGE OF HIS OWNERSHIP INTEREST TO THE FOUNDATION. DONORS ENTERED INTO THE TRANSACTION, THE PARTNERSHIP, ON OR ABOUT DECEMBER 1, 1990. SOME TIME AFTER THE TRANSACTION WAS ENTERED INTO THE BOY SCOUTS OF AMERICA, MONTANA COUNCIL, WERE ADMITTED TO THE PARTNERSHIP AS A LIMITED PARTNER. ON OR ABOUT JANUARY 30, 1997, FOUNDATION, EIN 94-2540279, ADOPTED ARTICLES OF DISSOLUTION, AND ON OR ABOUT NOVEMBER 1, 2000 FOUNDATION, EIN 94-2540279, WAS ADMINISTRATIVELY DISSOLVED AND FLAGSTAFF MEDICAL CENTER, INC. ("FLAGSTAFF"), EIN 86-0110232, THE THEN SOLE MEMBER OF THE FOUNDATION, SUCCEEDED TO THE INTERESTS OF THE FOUNDATION IN THE REMAINING ASSETS OF THE FOUNDATION AFTER PROVISION FOR ALL LIABILITIES OF THE FOUNDATION UPON ITS DISSOLUTION. FLAGSTAFF IS THE SUCCESSOR ENTITY TO FOUNDATION FOR FEDERAL INCOME TAX PURPOSES. CONSEQUENTLY, FLAGSTAFF MEDICAL CENTER, INC. IS THE ENTITY RESPONSIBLE FOR DISCLOSING THIS TRANSACTION UNDER TREAS. REG. SECTION 1.6011-4, ET SEQ. THE JORDAN FAMILY INVESTMENTS LIMITED PARTNERSHIP AGREEMENT, DATED DECEMBER 1, 1990, (THE "AGREEMENT") DESCRIBES DONORS AS HAVING CONTRIBUTED $100 TO THE PARTNERSHIP AS AN INITIAL CAPITAL CONTRIBUTION. THE INITIAL PARTNERSHIP AGREEMENT LISTS MICHAEL E. JORDAN AS THE GENERAL PARTNER. ACCORDING TO THE PARTNERSHIP'S 2009 K-1, THE GENERAL PARTNER IS NOW WILLIAM J. JORDAN. CLIFFORD JORDAN AND THERESA JORDAN BECAME LIMITED PARTNERS PRIOR TO 2008. PER FOUNDATION'S 2010 SCHEDULE K-1 PROVIDED TO FLAGSTAFF BY PARTNERSHIP, FOUNDATION IS ALLOCATED 42.1% OF THE PROFIT, LOSS AND CAPITAL OF PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES. PURSUANT TO THE TERMS OF THE AGREEMENT, THE GENERAL PARTNERS HAVE FULL CONTROL OVER THE TIMING AND AMOUNT OF DISTRIBUTIONS FROM THE PARTNERSHIP. FLAGSTAFF, IN ITS CAPACITY AS LIMITED PARTNER IN THE PARTNERSHIP, GENERALLY MAY NOT DEMAND DISTRIBUTIONS OR PARTAKE IN THE MANAGEMENT OF THE PARTNERSHIP. FLAGSTAFF MAY NOT TRANSFER ITS LIMITED PARTNERSHIP INTEREST WITHOUT SATISFYING CERTAIN CONDITIONS, INCLUDING RIGHTS OF FIRST REFUSAL HELD BY THE GENERAL PARTNERS AND THE LIMITED PARTNERS UNDER THE TERMS OF THE AGREEMENT. IT IS UNKNOWN IF AN OPTION AGREEMENT EXISTS, WHICH ALLOWS A THIRD PARTY TO PURCHASE FOUNDATION'S INTEREST IN PARTNERSHIP UPON THE DEATH OF THE GENERAL PARTNER. ON OR ABOUT AUGUST 10, 2010 FLAGSTAFF FIRST BECAME AWARE THAT PARTNERSHIP MIGHT BE VIEWED AS SUBSTANTIALLY SIMILAR TO THE NOTICE 2004-30 TRANSACTION, AND THEREFORE MAY HAVE PARTICIPATED IN A LISTED TRANSACTION WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. CONSEQUENTLY, FLAGSTAFF'S INITIAL DISCLOSURE OF PARTNERSHIP WAS FILED WITH THE 2009 FORM 990 WITH RESPECT TO FLAGSTAFF'S TAXABLE YEAR ENDED JUNE 30, 2010. FLAGSTAFF HAS RETAINED LEGAL COUNSEL AND IS NEGOTIATING WITHDRAWAL FROM THE PARTNERSHIP. FLAGSTAFF MAY SEEK A JUDICIAL REMEDY IF NECESSARY. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFITS FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS A LIMITED PARTNER. THEREFORE, FLAGSTAFF IS UNABLE TO PROVIDE AN ESTIMATE OF ANY SUCH EXPECTED TAX BENEFITS. ADDITIONALLY, THERE SHOULD BE NO DISCLOSURE TO THE EXTENT THAT FLAGSTAFF IS VIEWED AS ENTERING INTO THE PARTNERSHIP SOLELY PRIOR TO FEBRUARY 28, 2000. THE ORIGINAL TEMP. TREAS. REGS. ISSUED FEBRUARY 28, 2000 UNDER TREAS. REG. SECTION 1.6011-4T MAY GOVERN FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP. THESE TREAS. REGS. REQUIRE DISCLOSURE ONLY FOR LARGE TRANSACTIONS THAT PROVIDE TAX SAVINGS IN EXCESS OF CERTAIN DOLLAR THRESHOLDS (THE "PROJECTED TAX EFFECT TEST"). THE PROJECTED TAX EFFECT TEST, AS DESCRIBED IN THESE REGULATIONS, REQUIRE A TRANSACTION TO BE REPORTED WHERE IT IS EXPECTED TO REDUCE THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY BY MORE THAN $1 MILLION IN ANY SINGLE TAXABLE YEAR OR BY A TOTAL OF $2 MILLION FOR ANY COMBINATION OF TAXABLE YEARS. HOWEVER, A LISTED TRANSACTION IS NOT TREATED AS A REPORTABLE TRANSACTION IF IT HAS AFFECTED THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY AS REPORTED ON ANY TAX RETURN FILED ON OR BEFORE FEBRUARY 28, 2000. BECAUSE FLAGSTAFF IS A TAX-EXEMPT I.R.C. SECTION 501(C)(3) ENTITY, FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP WAS NOT EXPECTED TO REDUCE ITS TAX LIABILITY AT ALL . THEREFORE, UNDER TEMP. TREAS. REG. SECTION 1.6011-4T, FLAGSTAFF MAY NOT HAVE A DISCLOSURE REQUIREMENT WITH RESPECT TO ITS INVESTMENT IN THE PARTNERSHIP PRIOR TO FEBRUARY 28, 2000.* * SINCE 2001, TEMP. TREAS. REG. SECTION 1.6011-4T HAS BEEN MODIFIED A NUMBER OF TIMES BEFORE BEING FINALIZED IN 2003. BASED ON THE VARIOUS EFFECTIVE DATES FOR THE DIFFERENT SECTIONS THAT HAVE CHANGED, IT APPEARS THAT THE FEBRUARY 28, 2000 INITIAL TEMP. TREAS. REG. SECTION 1.6011-4T IN T.D. 8877 MAY GOVERN THE DISCLOSURE OBLIGATIONS OF FLAGSTAFF WITH RESPECT TO ITS PARTICIPATION IN THE PARTNERSHIP THROUGH ITS LIMITED PARTNERSHIP INTEREST THAT WAS OBTAINED PRIOR TO FEBRUARY 28, 2000, ON OR ABOUT DECEMBER 31, 1990. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFIT FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS LIMITED PARTNER.
FORM 8886, 5 OF 5	NAAM ENTERPRISES LIMITED PARTNERSHIP	LINE 5D TAXPAYER RECEIVED THE SCHEDULE K-1 FROM THE ENTITY ON OR ABOUT THE TIME THE FORM 1065 WAS FILED WITH THE INTERNAL REVENUE SERVICE. LINE 6 A-C NOTE: THE TAX ADVICE PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC WAS LIMITED TO RECENT ADVICE PERTAINING TO THE DISCLOSURE OF THE TRANSACTION DESCRIBED IN THIS FORM 8886. THE SERVICES PROVIDED BY ERNST & YOUNG LLP, FENNEMORE CRAIG, P.C., AND POLSINELLI SHUGHART PC DID NOT INVOLVE ANY TAX ADVICE PERTAINING TO THE STRUCTURING OF THE TRANSACTION DISCLOSED IN THIS FORM 8886 OR ADVISING THE TAXPAYER BEYOND ITS REPORTABLE TRANSACTION DISCLOSURE AND RELATED OBLIGATIONS. THE FEES PAID BY THE TAXPAYER TO ERNST & YOUNG LLP, POLSINELLI SHUGHART PC, AND FENNEMORE CRAIG, P.C. RELATE ONLY TO POST-TRANSACTIONAL TAX ADVICE CONCERNING ITS DISCLOSURE OBLIGATIONS AND ITS WITHDRAWAL FROM NAAM ENTERPRISES LIMITED PARTNERSHIP. LINE 7B - CONTINUATION FROM FORM 8886 AT AN UNKNOWN DATE, HARI BHAJAN SINGH KHALSA AND HARI BHAJAN KAUR KHALSA, IN THEIR CAPACITY AS LIMITED PARTNERS, TRANSFERRED A PERCENTAGE OF THEIR OWNERSHIP INTEREST TO THE FOUNDATION. DONORS ENTERED INTO THE TRANSACTION, THE PARTNERSHIP, ON OR ABOUT DECEMBER 1, 1990. ON OR ABOUT NOVEMBER 1, 2000, FOUNDATION, EIN 94-2540279, WAS ADMINISTRATIVELY DISSOLVED AND FLAGSTAFF MEDICAL CENTER, INC. ("FLAGSTAFF"), EIN 86-0110232, THE THEN SOLE MEMBER OF THE FOUNDATION, SUCCEEDED TO THE INTERESTS OF THE FOUNDATION IN THE REMAINING ASSETS OF THE FOUNDATION AFTER PROVISION FOR ALL LIABILITIES OF THE FOUNDATION UPON ITS DISSOLUTION. FLAGSTAFF IS THE SUCCESSOR ENTITY TO FOUNDATION FOR FEDERAL INCOME TAX PURPOSES. CONSEQUENTLY, FLAGSTAFF MEDICAL CENTER, INC. IS THE ENTITY RESPONSIBLE FOR DISCLOSING THIS TRANSACTION UNDER TREAS. REG. SECTION 1.6011-4, ET SEQ. NAAM ENTERPRISES LIMITED PARTNERSHIP AGREEMENT (THE "AGREEMENT") DESCRIBES DONORS AS HAVING CONTRIBUTED $100 TO THE PARTNERSHIP AS AN INITIAL CAPITAL CONTRIBUTION. PER FOUNDATION'S 2010 SCHEDULE K-1 PROVIDED TO FLAGSTAFF BY PARTNERSHIP, FOUNDATION IS ALLOCATED 22% OF THE PROFIT, LOSS AND CAPITAL OF PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES. PURSUANT TO THE TERMS OF THE AGREEMENT, THE GENERAL PARTNERS HAVE FULL CONTROL OVER THE TIMING AND AMOUNT OF DISTRIBUTIONS FROM THE PARTNERSHIP. FLAGSTAFF, IN ITS CAPACITY AS LIMITED PARTNER IN THE PARTNERSHIP, GENERALLY MAY NOT DEMAND DISTRIBUTIONS OR PARTAKE IN THE MANAGEMENT OF THE PARTNERSHIP. FLAGSTAFF MAY NOT TRANSFER ITS LIMITED PARTNERSHIP INTEREST WITHOUT SATISFYING CERTAIN CONDITIONS, INCLUDING RIGHTS OF FIRST REFUSAL HELD BY THE GENERAL PARTNERS AND THE LIMITED PARTNERS UNDER THE TERMS OF THE AGREEMENT. IT IS UNKNOWN IF AN OPTION AGREEMENT EXISTS, WHICH ALLOWS A THIRD PARTY TO PURCHASE FOUNDATION'S INTEREST IN PARTNERSHIP UPON THE DEATH OF THE GENERAL PARTNER. ON OR ABOUT AUGUST 10, 2010 FLAGSTAFF FIRST BECAME AWARE THAT PARTNERSHIP MIGHT BE VIEWED AS SUBSTANTIALLY SIMILAR TO THE NOTICE 2004-30 TRANSACTION, AND THEREFORE MAY HAVE PARTICIPATED IN A LISTED TRANSACTION WITHIN THE MEANING OF TREAS. REG. SECTION 1.6011-4, ET SEQ. CONSEQUENTLY, FLAGSTAFF'S INITIAL DISCLOSURE OF PARTNERSHIP WAS FILED WITH THE 2009 FORM 990 WITH RESPECT TO FLAGSTAFF'S TAXABLE YEAR ENDED JUNE 30, 2010. FLAGSTAFF HAS RETAINED LEGAL COUNSEL AND IS NEGOTIATING WITHDRAWAL FROM THE PARTNERSHIP. FLAGSTAFF MAY SEEK A JUDICIAL REMEDY IF NECESSARY. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFITS FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS A LIMITED PARTNER. THEREFORE, FLAGSTAFF IS UNABLE TO PROVIDE AN ESTIMATE OF ANY SUCH EXPECTED TAX BENEFITS. ADDITIONALLY, THERE SHOULD BE NO DISCLOSURE TO THE EXTENT THAT FLAGSTAFF IS VIEWED AS ENTERING INTO THE PARTNERSHIP SOLELY PRIOR TO FEBRUARY 28, 2000. THE ORIGINAL TEMP. TREAS. REGS. ISSUED FEBRUARY 28, 2000 UNDER TREAS. REG. SECTION 1.6011-4T MAY GOVERN FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP. THESE TREAS. REGS. REQUIRE DISCLOSURE ONLY FOR LARGE TRANSACTIONS THAT PROVIDE TAX SAVINGS IN EXCESS OF CERTAIN DOLLAR THRESHOLDS (THE "PROJECTED TAX EFFECT TEST"). THE PROJECTED TAX EFFECT TEST, AS DESCRIBED IN THESE REGULATIONS, REQUIRE A TRANSACTION TO BE REPORTED WHERE IT IS EXPECTED TO REDUCE THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY BY MORE THAN $1 MILLION IN ANY SINGLE TAXABLE YEAR OR BY A TOTAL OF $2 MILLION FOR ANY COMBINATION OF TAXABLE YEARS. HOWEVER, A LISTED TRANSACTION IS NOT TREATED AS A REPORTABLE TRANSACTION IF IT HAS AFFECTED THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY AS REPORTED ON ANY TAX RETURN FILED ON OR BEFORE FEBRUARY 28, 2000. BECAUSE FLAGSTAFF IS A TAX-EXEMPT I.R.C. SECTION 501(C)(3) ENTITY, FLAGSTAFF'S PARTICIPATION IN THE PARTNERSHIP WAS NOT EXPECTED TO REDUCE ITS TAX LIABILITY AT ALL . THEREFORE, UNDER TEMP. TREAS. REG. SECTION 1.6011-4T, FLAGSTAFF MAY NOT HAVE A DISCLOSURE REQUIREMENT WITH RESPECT TO ITS INVESTMENT IN THE PARTNERSHIP PRIOR TO FEBRUARY 28, 2000.* * SINCE 2001, TEMP. TREAS. REG. SECTION 1.6011-4T HAS BEEN MODIFIED A NUMBER OF TIMES BEFORE BEING FINALIZED IN 2003. BASED ON THE VARIOUS EFFECTIVE DATES FOR THE DIFFERENT SECTIONS THAT HAVE CHANGED, IT APPEARS THAT THE FEBRUARY 28, 2000 INITIAL TEMP. TREAS. REG. SECTION 1.6011-4T IN T.D. 8877 MAY GOVERN THE DISCLOSURE OBLIGATIONS OF FLAGSTAFF WITH RESPECT TO ITS PARTICIPATION IN THE PARTNERSHIP THROUGH ITS LIMITED PARTNERSHIP INTEREST THAT WAS OBTAINED PRIOR TO FEBRUARY 28, 2000, ON OR ABOUT DECEMBER 31, 1990. FLAGSTAFF HAS NOT, NOR DOES IT, EXPECT ANY TAX BENEFIT FROM THE TRANSACTION, INCLUDING DEDUCTIONS, EXCLUSIONS FROM GROSS INCOME, NONRECOGNITION OF GAIN, TAX CREDITS, ADJUSTMENTS (OR THE ABSENCE OF ADJUSTMENTS) TO THE BASIS OF PROPERTY, LOSS, OR TAX CREDITS. FLAGSTAFF IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER I.R.C. SECTION 501(C)(3). FLAGSTAFF ONLY EXPECTS DISTRIBUTIONS FROM THE PARTNERSHIP IN ITS CAPACITY AS LIMITED PARTNER.

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.

Cat. No. 51056K

Schedule O (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE R
(Form 990)

Department of the Treasury
Internal Revenue Service

Related Organizations and Unrelated Partnerships

Complete if the organization answered "Yes" to Form 990, Part IV, line 33, 34, 35, 36, or 37.
MediumBullet

Attach to Form 990. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

FLAGSTAFF MEDICAL CENTER

Employer identification number

86-0110232

Part I

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

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

Part II

Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	(g) Section 512(b)(13) controlled organization
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	Yes	No
(1) NORTHERN ARIZONA HEALTHCARE POST OFFICE BOX 1268 FLAGSTAFF,AZ860011268 74-2410946	HEALTHCARE	AZ	501(C)3	9	NONE
(2) VERDE VALLEY MEDICAL CENTER 86-0100882	HEALTHCARE	AZ	501(C)3	3	NAH

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50135Y

Schedule R (Form 990) 2010

Page 2

Part III

Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Predominant income(related, unrelated, excluded from tax under sections 512-514)	(f) Share of total income	(g) Share of end-of-year assets	(h) Disproprtionate allocations?		(i) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	(j) General or managing partner?		(k) Percentage ownership
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity		(f) Share of total income	(g) Share of end-of-year assets	Yes	No	(i) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No
(1) ALLIANCE MED LAB 20-0584165	LAB SERVICES	AZ	NA	RELATED	335,642	0		No	-1,328		No	100.000 %
(2) TASC LLC 86-0913157	AMBULATORY SVCS	AZ	NA	RELATED	104,495	1,091,243		No	0	Yes		65.000 %

Part IV

Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Type of entity (C corp, S corp, or trust)
(1) UNITRUSTS (2)	HOSPITAL SUPPORT	AZ	FMC	TRUST

Schedule R (Form 990) 2010

Page 3

Part V

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

Note. Complete line 1 if any entity is listed in Parts II, III or IV.

Yes

1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?

a Receipt of (i) interest (ii) annuities (iii) royalties (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .

b Gift, grant, or capital contribution to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Gift, grant, or capital contribution from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d Loans or loan guarantees to or for other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

e Loans or loan guarantees by other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f Sale of assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Purchase of assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h Exchange of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

i Lease of facilities, equipment, or other assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

j Lease of facilities, equipment, or other assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

k Performance of services or membership or fundraising solicitations for other organization(s) . . . . . . . . . . . . . . . . . . . . . .

l Performance of services or membership or fundraising solicitations by other organization(s) . . . . . . . . . . . . . . . . . . . . . .

m Sharing of facilities, equipment, mailing lists, or other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

n Sharing of paid employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

o Reimbursement paid to other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

p Reimbursement paid by other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

q Other transfer of cash or property to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

r Other transfer of cash or property from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.

(a) Name of other organization	(b) Transaction type(a-r)	(c) Amount involved
(1) VERDE VALLEY MEDICAL CENTER	p	15,111,010
(2) VERDE VALLEY MEDICAL CENTER	r	15,228
(3) ALLIANCE MED LAB	R	691,520
(4) THE AMBULATORY SURGI-CENTER OF FMC LLC	R	0
(5)
(6)

Schedule R (Form 990) 2010

Page 4

Part VI

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

Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.

(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Are all partners section 501(c)(3) organizations?		(e) Share of end-of-year assets	(f) Disproprtionate allocations?		(g) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	(h) General or managing partner?
(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	Yes	No	(e) Share of end-of-year assets	Yes	No	(g) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No

Schedule R (Form 990) 2010

Page 5

Part VII

Supplemental Information

Complete this part to provide additional information for responses to questions on Schedule R (see instructions).

Identifier	Return Reference	Explanation

Additional Data

Software ID:
Software Version:

1	Briefly describe the organization’s mission or most significant activities: FLAGSTAFF MEDICAL CENTER WILL IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE.
2	Check this box
3	Number of voting members of the governing body (Part VI, line 1a) ....	3	15
4	Number of independent voting members of the governing body (Part VI, line 1b) ....	4	8
5	Total number of individuals employed in calendar year 2010 (Part V, line 2a) ...	5	0
6	Total number of volunteers (estimate if necessary) ....	6	434
7a	Total unrelated business revenue from Part VIII, column (C), line 12 ..	7a	617,481
b	Net unrelated business taxable income from Form 990-T, line 34 ..	7b	0

		Prior Year	Current Year
8	Contributions and grants (Part VIII, line 1h) .........	665,692	895,347
9	Program service revenue (Part VIII, line 2g) .........	369,897,462	345,652,747
10	Investment income (Part VIII, column (A), lines 3, 4, and 7d ) ....	4,620,525	6,741,488
11	Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)	1,882,242	1,513,271
12	Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)...................	377,065,921	354,802,853
13	Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...	337,801	439,010
14	Benefits paid to or for members (Part IX, column (A), line 4) ....	0	0
15	Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10)	152,963,112	157,735,070
16a	Professional fundraising fees (Part IX, column (A), line 11e)....	0	0
b	Total fundraising expenses (Part IX, column (D), line 25) 1,455,953
17	Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f)....	189,171,985	160,572,661
18	Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25)	342,472,898	318,746,741
19	Revenue less expenses. Subtract line 18 from line 12......	34,593,023	36,056,112
		Beginning of Current Year	End of Year
20	Total assets (Part X, line 16)............	465,795,783	515,025,482
21	Total liabilities (Part X, line 26)............	212,977,202	199,493,255
22	Net assets or fund balances. Subtract line 21 from line 20 .....	252,818,581	315,532,227

Sign Here

	Signature of officer	Date

	Type or print name and title.

Paid Preparer's Use Only	Preparer's signature	Date	Check if self- employed	Preparer’s taxpayer identification number (see instructions)
	Firm’s name (or yours if self-employed), address, and ZIP + 4			EIN
				Phone no.


4a	(Code: ) (Expenses $ 278,457,189 including grants of $ 439,010 ) (Revenue $ 346,730,937 )
	SEE SCHEDULE O

4b	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4c	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4d	Other program services. (Describe in Schedule O.)
	(Expenses $ including grants of $ ) (Revenue $ )
4e	Total program service expenses$ 278,457,189

(A) Name and Title	(B) Average hours per week (describe hours for related organizations in Schedule O)			(D) Reportable compensation from the organization (W- 2/1099-MISC)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(A) Name and Title
(18) Roger S Schuler VP Ancillary Services	40.0	X		0	250,347	94,245
(19) Marilynn P Belcher CNO/VP Patient Care Services	40.0	X		0	221,956	21,727
(20) Richard A Smith VP Development	20.0	X		0	196,224	16,915
(21) Kai R McSwain VP Professional Services	40.0	X		0	84,485	5,210
(22) Alice Gagnaire 12010 - 9232010 VP Professional Services	40.0	X		0	122,450	2,708
(23) Eric D Cohen MD Physician	40.0		X	0	653,090	31,456
(24) Steven M Peterson MD Physician	40.0		X	0	608,380	24,898
(25) Omar R Wani MD Physician	40.0		X	0	600,891	16,739
(26) John J Mougin MD Physician	40.0		X	0	317,538	26,654
(27) Mark E Donnelly MD Physician	40.0		X	0	635,884	28,972

1b	Sub-Total................
c	Total from continuation sheets to Part VII, Section A....
d	Total (add lines 1b and 1c)............	0	5,216,788	377,411

				(A) Total revenue	(B) Related or exempt function revenue	(C) Unrelated business revenue	(D) Revenue excluded from tax under sections 512, 513, or 514
1a	Federated campaigns..1a
b	Membership dues....1b
c	Fundraising events....1c		172,445
d	Related organizations...1d
e	Government grants (contributions)1e		133,802

f	All other contributions, gifts, grants, and similar amounts not included above1f		589,100
g	Noncash contributions included in lines 1a-1f:$ 90,467
h	Total. Add lines 1a-1f.......			895,347
			Business Code
2a	Patient Services		622,110	314,240,974	314,240,974
b	Pharmacy		446,110	3,482,728	2,888,399	594,329
c	Cafeteria		722,310	1,988,139	1,988,139
d	Mob/Intercomp Rent		531,120	1,522,802	1,522,802
e	Physician Revenue		900,099	23,186,016	23,186,016
f	All other program service revenue .			1,232,088	1,207,608	24,480
g	Total. Add lines 2a–2f........			345,652,747
3	Investment income (including dividends, interest
	and other similar amounts).....			2,631,378	232,475	-1,328	2,400,231
4	Income from investment of tax-exempt bond proceeds..			0
5	Royalties............			0
		(i) Real	(ii) Personal
6a	Gross Rents	59,860
b	Less: rental expenses
c	Rental income or (loss)	59,860
d	Net rental income or (loss).......			59,860			59,860
		(i) Securities	(ii) Other
7a	Gross amount from sales of assets other than inventory	3,921,772	5,260,000
b	Less: cost or other basis and sales expenses		5,071,661
c	Gain or (loss)	3,921,772	188,339
d	Net gain or (loss)..........			4,110,110			4,110,110
8a	Gross income from fundraising events (not including $ 172,445 of contributions reported on line 1c). See Part IV, line 18 ...
	a		123,111
b	Less: direct expenses ...b		134,224
c	Net income or (loss) from fundraising events..			-11,113			-11,113
9a	Gross income from gaming activities. See Part IV, line 19 ...
	a
b	Less: direct expenses ...b
c	Net income or (loss) from gaming activities...			0
10a	Gross sales of inventory, less returns and allowances .
	a
b	Less: cost of goods sold ..b
c	Net income or (loss) from sales of inventory..			0
Miscellaneous Revenue			Business Code
11a	Non Patient Rooms		900,099	232,630	232,630
b	Admin Support Revenue		900,099	125,190	125,190
c	Education Classes		900,099	359,679	359,679
d	All other revenue ....			747,025	747,025
e	Total. Add lines 11a–11d ......			1,464,524
12	Total revenue. See Instructions....			354,802,853	346,730,937	617,481	6,559,088


				(A) Beginning of year		(B) End of year
1	Cashnon-interest-bearing ..........			34,277,901	1	23,439,862
2	Savings and temporary cash investments .......			0	2	25,554,027
3	Pledges and grants receivable, net .........				3
4	Accounts receivable, net .........			42,080,529	4	45,992,614
5	Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
	Schedule L ..........				5
6	Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
	Schedule L ..........				6
7	Notes and loans receivable, net .............			4,737,754	7	2,099,452
8	Inventories for sale or use ..............			6,622,319	8	6,558,112
9	Prepaid expenses and deferred charges ............			2,400,859	9	1,820,964
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	304,644,116
b	Less: accumulated depreciation. .....	10b	170,226,066	136,999,781	10c	134,418,050
11	Investments—publicly traded securities ..........			218,125,021	11	265,742,304
12	Investments—other securities. See Part IV, line 11 ......			12,521,385	12	1,984,837
13	Investments—program-related. See Part IV, line 11 ..				13
14	Intangible assets .........				14
15	Other assets. See Part IV, line 11 ...........			8,030,234	15	7,415,260
16	Total assets. Add lines 1 through 15 (must equal line 34)...			465,795,783	16	515,025,482
17	Accounts payable and accrued expenses .			27,364,100	17	31,701,252
18	Grants payable ..........				18
19	Deferred revenue ..........				19
20	Tax-exempt bond liabilities ..........			130,545,305	20	124,331,342
21	Escrow or custodial account liability. Complete Part IV of Schedule D..				21
22	Payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........				22
23	Secured mortgages and notes payable to unrelated third parties ..			325,134	23	250,551
24	Unsecured notes and loans payable to unrelated third parties ....				24
25	Other liabilities. Complete Part X of Schedule D.....			54,742,663	25	43,210,110
26	Total liabilities. Add lines 17 through 25.....			212,977,202	26	199,493,255
	Organizations that follow SFAS 117, check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets .....			252,818,581	27	315,532,227
28	Temporarily restricted net assets .....				28
29	Permanently restricted net assets .....				29
	Organizations that do not follow SFAS 117, check here and complete lines 30 through 34.
30	Capital stock or trust principal, or current funds .....				30
31	Paid-in or capital surplus, or land, building or equipment fund .....				31
32	Retained earnings, endowment, accumulated income, or other funds				32
33	Total net assets or fund balances .....			252,818,581	33	315,532,227
34	Total liabilities and net assets/fund balances .....			465,795,783	34	515,025,482