ANNUAL REPORT REQUIRED UNDER MASTER CONTINUING DISCLOSURE AGREEMENT ADVOCATE HEALTH CARE NETWORK AND SUBSIDIARIES

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1 ANNUAL REPORT REQUIRED UNDER MASTER CONTINUING DISCLOSURE AGREEMENT ADVOCATE HEALTH CARE NETWORK AND SUBSIDIARIES For the Fiscal Year Ended December 31, Definitions. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Master Continuing Disclosure Agreement. 2. Financial Information. The audited consolidated financial statements of Advocate Health Care Network and Subsidiaries with unaudited consolidating financial information for the fiscal year ended December 31, 2014 are enclosed herewith under separate cover. 3. Operating Data. Following is an update of the material financial information and material operating data of the same general nature as that contained in the tables entitled Summary of Revenues and Expenses, Historical and Pro Forma Capitalization (historical information only), Historical and Pro Forma Coverage of Debt Service Requirements (historical information only) and Utilization Statistics and under the captions Sources of Net Patient Service Revenues, MEDICAL STAFFS and EMPLOYEES in APPENDIX A to the Official Statement relating to the $304,770,000 Illinois Finance Authority Revenue Bonds, Series 2014 (Advocate Health Care Network) ( Official Statement ). Revenues and Expenses of Advocate Health Care Network and Subsidiaries The following table sets forth revenue in excess of expenses of Advocate Health Care Network and Subsidiaries for each of the years ended December 31, 2014 and 2013, as derived from the unaudited consolidated financial statements of Advocate and its subsidiaries for such periods. This summary should be read in conjunction with the audited consolidated financial statements of Advocate Health Care Network and its subsidiaries as of December 31, 2014 and for the year then ended. The summary table represents only excerpts from the complete consolidated statement of operations and changes in net assets. Additionally, the audited consolidated financial statements of Advocate included in Attachment I, as well as the following table, include Restricted Affiliates and Excluded Affiliates. The Restricted Affiliates represent approximately 7% of the consolidated assets for both of the years ended December 31, 2014 and 2013, and approximately 3% of consolidated total operating revenues for both of the years ended December 31, 2014 and Excluded Affiliates represent approximately 1% and 7% of the consolidated assets as of the years ended December 31, 2014 and 2013, respectively, and less than 10% of consolidated total operating revenues for the years ended December 31, 2014 and 2013.

2 REVENUE AND EXPENSES OF ADVOCATE HEALTH CARE NETWORK AND SUBSIDIARIES Year Ended December 31, (In Thousands) Operating revenues: Patient service revenue $4,214,479 $4,496,600 Capitation revenue 389, ,508 Other operating revenue 334, ,285 Total operating revenues 4,938,002 5,231,393 Operating expenses 4,637,807 4,900,793 Operating income 300, ,600 Nonoperating income 465,125 39,007 Revenue in excess of expenses $765,320 $369,607 Historical Capitalization Total Long Term Indebtedness Total Debt Service Reserve Fund (1) Total Net Long-Term Indebtedness Unrestricted Net Assets As of December 31, 2014 (dollars in thousands) $1,609,052 5,733 1,603,319 5,284,721 Total Capitalization $6,888,040 Total Long Term Indebtedness as a Percentage of Total Capitalization 23.3% (1) Includes Debt Service Reserve Funds on Deposit with a Trustee.

3 Historical Debt Service Coverage The following table represents (i) actual coverage of Advocate s Debt Service Requirements for the fiscal year ended December 31, 2014 based on all Indebtedness (as defined in the Master Trust Indenture (Amended and Restated), including Indebtedness of the Restricted and Excluded Affiliates. Pursuant to the Master Trust Indenture (Amended and Restated), the Historical Debt Service Coverage calculation includes the revenues, expenses and Indebtedness of all entities consolidated with Advocate Health Care Network in its audited financial statements, regardless of whether such entities are Restricted or Excluded Affiliates under the Master Trust Indenture (Amended and Restated). Year Ended December 31, 2014 (in thousands) Revenues in Excess of Expenses $ 369,607 Adjustments: Interest on indebtedness 56,811 Depreciation and amortization 239,651 Loss on refunded debt 45,470 Unrealized losses on unrestricted investments 98,697 Unrealized losses on interest rate swap obligation 38,338 Asset impairment charges 15,041 Loss on pension settlement 903 Gains on sale of assets not in the ordinary course of business (73) Net Income Available for Debt Service $ 864,445 Debt Service Requirement (1) 92,445 Debt Service Coverage Ratio 9.4 times (1) Calculated as required by the terms of the Master Indenture (Amended and Restated). See APPENDIX D of the Official Statement SUMMARY OF CERTAIN PROVISIONS OF THE EXISTING MASTER INDENTURE Rates and Charges.

4 Sources of Net Patient Service Revenues In the years ended December 31, 2013 and 2014, net patient service revenues were generated from the following payment sources. 12/31/ /31/2014 Medicare 25% 24% Medicaid 11% 11% Managed Care 56% 57% Self-Pay, Workers Compensation and Other 8% 8% 100% 100% Utilization Statistics Hospital admissions for Advocate s acute care hospitals for the years ended December 31, 2013 and 2014 are set forth below. Also included are certain utilization statistics for Advocate s Home Health providers and physician practices for corresponding periods Acute Care Hospitals (1) Acute Care Admissions 164, ,930 Average Length of Stay (days) ,65 Observation Cases 47,683 54,993 Outpatient Visits 1,793,399 1,878,528 Home Health (1) Home Health Care Admissions 24,119 25,843 Physician Practices Physician Visits 2,870,055 3,142,350 Covered Lives Full Risk 26,154 31,615 Partial Risk 88,961 84,194 (1) Includes activity for Sherman Hospital after June 1, 2013, the effective date of the affiliation with Advocate.

5 Medical Staffs Each Advocate hospital has a separate medical staff. The members of each medical staff are appointed by the Governing Council of each hospital in accordance with the appointment procedures in the respective medical staff bylaws for each particular hospital. As of December 31, 2014, there were over 6,100 individuals on the active staffs of Advocate s acute care hospitals. The medical staffs include Active, Associate and other categories of physicians who admit and attend to patients at Advocate s acute care hospitals. As of December 31, 2014, ninety-three percent (93%) of the active staff are board certified specialists. Employees As of December 31, 2014, Advocate employed approximately 33,300 employees (approximately 28,700 FTEs). Management believes that the salary levels and benefit packages for its employees are competitive, and that Advocate s managers generally have good relationships with their employees. Less than one tenth of one percent (0.1%) of employees are represented by collective bargaining groups. Advocate, along with other healthcare providers, has been the target of unions attempting to organize associates. Unions have employed various tactics to either directly attract associates or engage in corporate campaign strategies that are designed to undermine the credibility and integrity of the targeted healthcare providers. Management cannot predict with any certainty whether union organizing related activities will have any material adverse effect on the financial condition or operations of the Advocate.