2012-05-15T10:09:18-05:00 2011-06-30 TURLINGTON AND COMPANY LLP 1338 WESTGATE CENTER DRIVE WINSTONSALEM NC 27103 990 2010-07-01 560543238 LEXINGTON MEMORIAL HOSPITAL INC LEXI 3362485161 PO BOX 1817 250 HOSPITAL DRIVE LEXINGTON NC 272931817 DANNY W SQUIRES 3362485161 2012-05-15 1 W BENNETT BRUFF 3367652410 2010 2016-02-24 21:20:13Z LEXINGTON MEDICAL CENTER DANNY W SQUIRES 250 HOSPITAL DRIVE LEXINGTON NC 27292 74809466 0 X WWW.LEXINGTONMEMORIAL.COM X 1954 NC TO MAINTAIN AND OPERATE HOSPITALS, CLINICS, AND OTHER RELATED FACILITIES TO PROVIDE FOR THE CARE AND TREATMENT OF PERSONS SUFFERING FROM ILLNESSES, INJURIES OR DISABILITIES WHICH REQUIRE HOSPITAL CARE, TO SUPPLY EQUIPMENT AND FACILITIES TO AID IN THE TREATMENT AND DIAGNOSIS OF DISEASE, TO CARRY ON EDUCATIONAL ACTIVITIES RELATED TO THE CARE OF THE SICK AND DISABLED AND THE PROMOTION OF HEALTH AND PREVENTIVE MEDICINES, TO AID IN THE INSTRUCTION AND PROMOTION OF RESEARCH AND SCIENTIFIC INVESTIGATION IN ALL BRANCHES OF MEDICINE AND SURGERY AND TO PARTICIPATE IN ANY ACTIVITY DESIGNED AND CARRIED ON TO PROMOTE THE GENERAL HEALTH OF THE COMMUNITY. 20 16 833 65 0 0 0 0 64822147 70456682 92210 423514 0 0 64914357 70880196 0 0 0 0 33109994 34776688 0 0 0 32698955 34976577 65808949 69753265 -894592 1126931 33516021 34319532 22163903 23669821 11352118 10649711 THE MISSION OF LEXINGTON MEMORIAL HOSPITAL IS TO PROVIDE AN APPROPRIATE LEVEL OF INPATIENT AND OUTPATIENT HEALTHCARE SERVICES IN A HIGH QUALITY, COMPASSIONATE AND COST-EFFECTIVE MANNER TO ANYONE WHO PRESENTS IN NEED. 0 0 65841241 70456682 OPERATION OF HOSPITAL, CLINICS AND OTHER RELATED FACILITIES TO EDUCATE, DIAGNOSE AND PROVIDE CARE AND TREATMENT FOR PERSONS WHO REQUIRE HOSPITAL CARE. 65841241 1 0 0 1 0 0 0 0 0 1 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 19 0 1 833 1 0 0 0 0 0 0 0 0 0 1 1 0 X 20 16 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 NC X DANNY W SQUIRES 3362485161 PO BOX 1817250 HOSPITAL DRIVE LEXINGTON NC 272931817 X STEVEN C SHULTZ 24.70 X X 307703 0 49372 CHARLES D MILLER JR 1.00 X 0 0 0 ROBERT B SMITH JR 1.00 X 0 0 0 DAN BRIGGS 1.00 X 0 0 0 TERRY L HALES JR 3.00 X 0 0 0 RAY N HOWELL III 1.00 X 0 0 0 GORDON C KAMMIRE MD 1.00 X 0 0 0 EVELYN KEPLEY 1.00 X 0 0 0 DONNY C LAMBETH 1.00 X 749092 0 408315 JEFF MAST 1.00 X 0 0 0 STALEY J NANCE 1.00 X 0 0 0 J SIMMMONS RIGGAN MD 1.00 X 0 0 0 PATRICIA SHOEMAKER 1.00 X 0 0 0 W LEON RIVES 1.00 X 0 0 0 MARK BREEDEN 1.00 X 0 0 0 DAVID WAGNER MD 1.00 X 0 0 0 JAMES HOEKSTRA MD 1.00 X 0 0 0 LARRY POTTS 1.00 X 0 0 0 WILLIAM W WOODRUFF MD 1.00 X 0 0 0 ROBERT CRAVEN 1.00 X 0 0 0 BARBARA B SMITH 34.00 X 176629 0 14509 DANNY W SQUIRES 26.00 X 162435 0 20201 CHRISTOPHER T WHITE 31.00 X 90831 0 18024 AMY F INMAN 40.00 X 171631 0 7182 JANICE K STEPHENS 40.00 X 167268 0 19416 CHRISTOPHER S WATTERS 40.00 X 156571 0 18734 SHEILA C CRUMB 40.00 X 152801 0 16795 ROD E KCUIK 40.00 X 127778 0 11950 REBECCA B DALEY 50.00 X 260035 0 20269 DENNIS R AYERS 50.00 X 1020473 0 16024 JOHN A CASHION 50.00 X 254647 0 19119 3797894 0 639910 17 1 1 1 HMP OF DAVIDSON COUNTY PLLC 4535 DRESSLER RD NW CANTON OH 44718 CONTRACT SERVICES 550000 DIVERSIFIED CLINICAL SERVICES 4500 SALISBURY ROAD SUITE 300 JACKSONVILLE FL 32216 CONTRACT SERVICES 363386 MEDSCRIBE 3325 HENDRICKS AVE SUITE A JACKSONVILLE FL 32207 CONTRACT SERVICES 246078 ARAMARK 1101 MARKET STREET PHILADELPHIA PA 19107 CONTRACT SERVICES 158801 EMP OF DAVIDSON COUNTY PLLC PO BOX 710785 COLUMBUS OH 43085 CONTRACT SERVICES 152000 57 NET PATIENT SERVICE RE 621990 70456682 70456682 70456682 345554 345554 4006230 1000 3928605 665 77625 335 77960 77960 70880196 70456682 0 423514 482629 482629 26848374 24943703 1904671 613442 582211 31231 4823321 4717562 105759 2008922 1837502 171420 -49044 -49044 34168 34168 288734 284349 4385 1685715 1685715 112360 92838 19522 199164 199164 3712082 3712082 667781 667781 BAD DEBTS 12930950 12930950 SUPPLIES 8377398 8372639 4759 CONTRACT SERVICES 3123937 3037521 86416 REPAIRS AND MAINTENANCE 2078634 2077671 963 EQUIPMENT RENTAL AND MA 522224 518168 4056 1292474 849166 443308 69753265 65841241 3912024 0 2554 2654 2586333 1153903 10047132 11267511 896613 882768 699990 577884 75613326 57581710 16112143 18031616 2369126 1331421 673664 370487 419561 128466 281727 33516021 34319532 9350189 12479574 12534247 11190247 279467 0 22163903 23669821 X 11352118 10649711 11352118 10649711 33516021 34319532 X 1126931 -1829338 X X 0 1 1 X 0 X 0 0 0 0 0 0 0 0 1 9075 9075 0 EXPLANATION OF OTHER LOBBYING ACTIVITIES: PART II-B, LINE 1I: THE ORGANIZATION IS A MEMBER OF THE AMERICAN HOSPITAL ASSOCIATION (AHA) AND THE NORTH CAROLINA HOSPITAL ASSOCIAITON (NCHA). A PORTION OF THE MEMBERSHIP DUES PAID ARE ALLOCATED TO LOBBYING EFFORTS BY THOSE ORGANIZATIONS ON BEHALF OF THEIR MEMBERSHIP BODIES. FOR THE YEAR, THE PORTION OF MEMBERSHIP DUES ALLOCATED TO LOBBYING WAS 23.75% OF 38,210. 86349 86349 25912239 17997441 7914798 229466 229466 0 49385272 39354803 10030469 18031616 70880196 69753265 1126931 -1829338 -1829338 -702407 70741351 0 70741351 138845 138845 70880196 69753265 0 69753265 0 69753265 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: AS REQUIRED UNDER ACCOUNTING STANDARDS FOR INCOME TAXES, THE CORPORATION ADOPTED THE NEW STANDARD REGARDING UNCERTAIN INCOME TAX POSITIONS EFFECTIVE JULY 1, 2009. UNDER THIS NEW STANDARD, THE IMPACT OF AN UNCERTAIN INCOME TAX POSITION ON THE INCOME TAX RETURNS MUST BE RECOGNIZED AT THE LARGEST AMOUNT THAT IS MORE-LIKELY-THAN-NOT TO BE REQUIRED TO BE RECOGNIZED UPON AUDIT BY THE RELEVANT TAXING AUTHORITY. THE STANDARDS ALSO PROVIDE GUIDANCE ON DE-RECOGNITION, MEASUREMENTS, CLASSIFICATION, INTEREST AND PENALTIES, ACCOUNTING FOR INTERIM PERIODS, DISCLOSURE, AND TRANSITION ISSUES WITH RESPECT TO TAX POSITIONS. AS A RESULT OF ADOPTION OF THE NEW STANDARDS REGARDING UNCERTAIN INCOME TAX POSITIONS, THE CORPORATION HAS DETERMINED THAT THEY HAVE NO UNCERTAIN INCOME TAX POSITIONS AS OF JUNE 30, 2011. ALSO, THE CORPORATION DOES NOT ANTICIPATE ANY INCREASE OR DECREASE IN UNRECOGNIZED TAX BENEFITS DURING THE NEXT TWELVE MONTHS THAT WOULD RESULT IN A MATERIAL CHANGE IN THEIR FINANCIAL POSITION. THE CORPORATION'S INCOME TAX RETURNS FOR YEARS/PERIODS ENDED AFTER SEPTEMBER 30, 2008 REMAIN OPEN FOR EXAMINATION. THE CORPORATION INCLUDES INTEREST AND PENALTIES IN THE CONSOLIDATED FINANCIAL STATEMENTS AS A COMPONENT OF INCOME TAX EXPENSE. NO INTEREST OR PENALTIES ARE INCLUDED IN THE CORPORATION'S INCOME TAX EXPENSE FOR THE YEAR ENDED JUNE 30, 2011. PART XI, LINE 8 - OTHER ADJUSTMENTS: CONTRIBUTIONS TO AFFILIATES (NET) -1,576,118. MINORITY INTEREST IN SUBSIDIARY -35,716. UNREALIZED GAIN ON OTHER THAN TRADING SECURITIES 95,699. INCREASE IN UNFUNDED PORTION OF POSTRETIREMENT BENEFIT OBLIGATION -10,026. DECREASE IN EQUITY INVESTMENT -303,177. PART XII, LINE 4B - OTHER ADJUSTMENTS: INVESTMENT INCOME 138,845. 1 1 X 1 X 1 X 1 1 1 0 1 1 4461893 4461893 0.07850 11285987 9333088 1952899 0.03440 267475 267475 0.00470 16015355 9333088 6682267 0.11760 316845 316845 0.00560 32661 32661 0.00060 349506 349506 0.00620 16364861 9333088 7031773 0.12380 30000 30000 0.00050 3544 3544 0.00010 33544 33544 0.00060 1 4666823 4461893 24770187 23824877 945310 X 1 1 1 CANCER CENTER OF DAVIDSON COUNTY LLC PROVIDE ONCOLOGY SERVICES TO RESIDENTS OF DAVIDSON COUNTY, NC 0.33330 0.00000 0.00000 2 LEXPOINT LLC PROVIDE MEDICAL IMAGING SERVICES TO THE RESIDENTS OF DAVIDSON COUNTY, NC 1.00000 0.00000 0.00000 1 1 LEXINGTON MEMORIAL HOSPITAL INC

250 HOSPITAL DRIVE LEXINGTON NC 27292

X X X NOT REQUIRED 1 PART I, LINE 7: COSTING METHODOLOGY - ANDI METHODOLOGY: FACILITY-WIDE RATIO OF COST TO CHARGES AS PER NCHA COMMUNITY BENEFITS GUIDELINES PART I, LINE 7, COLUMN (F): THE BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 25, COLUMN (A), BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGE IN THIS COLUMN IS $ 12930950. PART II: WFBH - LEXINGTON MEDICAL CENTER IS COMMITTED TO IMPROVING THE HEALTH OF THE INDIGENT AND MEDICALLY UNDERSERVED IN DAVIDSON COUNTY. IT PARTNERS WITH DAVIDSON MEDICAL MINISTRIES, A FREE CLINIC FOR THE INDIGENT, AND THE DAVIDSON COUNTY HEALTH DEPARTMENT TO ADDRESS THE GROWING HEALTH NEEDS OF THE UNINSURED AND THE UNDERINSURED. THE HOSPITAL PROVIDES ALL DIAGNOSTIC TESTING AT NO COST FOR MEDICAL MINISTRIES CLIENTS, PROVIDES STAFF FOR A HISPANIC CLINIC, AND AS CONDUCTED VARIOUS HEALTH SCREENINGS AT NO COST FOR THE CLINIC. THE HOSPITAL WORKS CLOSELY WITH THE LOCAL HEALTH DEPARTMENT IN DEVELOPING A COMMUNITY HEALTH NEEDS ASSESSMENT AND PROVIDING ASSISTANCE IN FULFILLING UNMET MEDICAL NEEDS. THE HOSPITAL HAS LAUNCHED AN AGGRESSIVE HEALTH EDUCATION AND WELLNESS PROGRAM FOR THE COMMUNITY AIMED AT CHRONIC DISEASE PREVENTION. FREE HEALTH SCREENINGS FOR THE MEDICALLY UNDERSERVED ARE HELD ALMOST MONTHLY TO ASSIST IN THE EARLY DETECTION AND TREATMENT OF DISEASE. IN ADDITION, LMC PROVIDES A FREE CHILDHOOD OBESITY PROGRAM FOR DISADVANTAGED YOUTHS, PLUS ONSITE HEALTH EDUCATION PROGRAMS IN AREA SCHOOLS. PART III, LINE 4: ACCOUNTS RECEIVABLE ARE STATED AT THE AMOUNT MANAGEMENT EXPECTS TO COLLECT FROM OUTSTANDING BALANCES. MANAGEMENT PROVIDES FOR PROBABLE UNCOLLECTED AMOUNTS THROUGH A PROVISION FOR BAD DEBT EXPENSE AND AN ADJUSTMENT TO THE VALUATION ALLOWANCE BASED ON ITS ASSESSMENT OF THE CURRENT STATUS OF INDIVIDUAL RECEIVABLES FROM CONTRACTS, MEDICARE/MEDICAID, AND OTHERS. BALANCES THAT ARE STILL OUTSTANDING AFTER MANAGEMENT HAS USED REASONABLE COLLECTION EFFORTS ARE WRITTEN OFF THROUGH A CHARGE TO THE VALUATION ALLOWANCE AND A CREDIT TO THE APPLICABLE ACCOUNTS RECEIVABLE. THE ALLOWANCE FOR UNCOLLECTIBLE PATIENT ACCOUNTS RECEIVABLE WAS DETERMINED BASED ON THE AGE OF THE ACCOUNTS AND ON THE HISTORICAL COLLECTION EXPERIENCE. COSTING METHODOLOGY - ANDI METHODOLOGY: FACILITY-WIDE RATIO OF COST TO CHARGES AS PER NCHA COMMUNITY BENEFITS GUIDELINES PART III, LINE 9B: LMC UNDERSTANDS THAT SOME PATIENTS IN OUR SERVICE AREA ARE UNABLE TO PAY FOR MEDICAL SERVICES. THE HOSPITAL WILL ALLOCATE AN AMOUNT OF ITS REVENUES EACH YEAR TO BE PROVIDED AS FREE OR REDUCED COST (CHARITY) CARE. TO INSURE EQUITY IN THE DISTRIBUTION OF THESE FUNDS, EACH APPLICANT WILL APPLY TO THIS PATIENT ASSISTANCE PROGRAM BY SUBMITTING INCOME AND ASSET LISTINGS AS WELL AS TAX RETURNS, ETC. INCOME LEVELS WILL BE COMPARED TO FEDERAL GUIDELINES TO DETERMINE THE AMOUNT OF ASSISTANCE PROVIDED. APPLICANTS FOR FINANCIAL ASSISTANCE ARE GIVEN 60 DAYS TO PROVIDE ALL REQUIRED INFORMATION NEEDED TO COMPLETE THE ELIGIBILITY DETERMINATION. COLLECTION EFFORTS ARE SUSPENDED DURING THE ELIGIBILITY DETERMINATION PROCESS. PART VI, LINE 2: LMC WORKS CLOSELY WITH THE DAVIDSON COUNTY HEALTH DEPARTMENT TO CONDUCT PERIODIC HEALTH NEEDS ASSESSMENTS. THE HOSPITAL NOT ONLY SUPPORTS THIS EFFORT FINANCIALLY, BUT ALSO SERVES ON A MULTIDISCIPLINARY COMMITTEE CONVENED TO DEVELOP STRATEGIES TO ADDRESS IDENTIFIED NEEDS. THE PROCESS OF COMPILING AN UPDATED COMMUNITY HEALTH NEEDS ASSESSMENT IS CURRENTLY UNDERWAY. PART VI, LINE 3: LMC HAS CREATED A PATIENT BROCHURE "ABOUT YOUR HOSPITAL BILL"THAT IS AVAILABLE TO PATIENTS PRIOR TO SERVICE, AS A PART OF THE ADMISSIONS PACKET, AT ALL POINTS OF REGISTRATION AND IN THE BUSINESS OFFICE. UNINSURED AS WELL AS UNDERINSURED PATIENTS RECEIVE FINANCIAL COUNSELING ASSISTANCE DURING THE DISCHARGE PROCESS IN THE EMERGENCY DEPARTMENT, AS WELL AS UPON REFERRAL IN THE OUTPATIENT AND INPATIENT AREAS. PATIENTS ARE PROVIDED EDUCATION AND ELIGIBILITY SCREENING FOR ANY FEDERAL, STATE AND LOCAL ASSISTANCE PROGRAMS THEY MAY BE ELIGIBLE FOR, AS WELL AS THE LMC FINANCIAL ASSISTANCE PROGRAM (CHARITY CARE). INFORMATION ABOUT ASSISTANCE OPTIONS CONTINUE TO BE DISCUSSED WITH PATIENTS AND PUBLISHED ON PATIENT STATEMENTS DURING THE BILLING PERIOD FOR OUTSTANDING PATIENT BALANCES. PART VI, LINE 4: LMC'S PRIMARY MARKET AREA IS COMPRISED OF THOSE LIVING WITHIN AN EIGHT MILE RADIUS OF THE HOSPITAL WHICH INCLUDES THE CITY OF LEXINGTON AND ADJACENT AREAS. THE HOSPITAL'S SERVICE AREA OF DAVIDSON COUNTY REFLECTS A POPULATION OF 162,878 WITH APPROXIMATELY 14.40% OF THAT TOTAL AGED 65 AND OLDER. THE MEDIAN HOUSEHOLD INCOME FOR THIS AREA IS $43,420.LEXINGTON, N.C. IS LOCATED IN THE HEART OF NORTH CAROLINA'S PIEDMONT SECTION, FEATURING A SMALL TOWN ATMOSPHERE YET WITHIN CONVENIENT ACCESS TO METROPOLITAN AREAS INCLUDING WINSTON-SALEM, GREENSBORO, AND CHARLOTTE. LEXINGTON IS HISTORICALLY KNOWN AS A FURNITURE AND TEXTILE CENTER AND ALSO FOR ITS FAMOUS "LEXINGTON STYLE" BARBECUE. IT IS HOME EACH OCTOBER TO ONE OF THE STATE'S LARGEST AND MOST SUCCESSFUL STREET FESTIVALS WITH 100,000 PLUS PEOPLE ATTENDING ITS ANNUAL "BARBECUE FESTIVAL".IN DISCUSSING DEMOGRAPHICS, THE FOLLOWING FIGURES REFLECT THE POPULATION BREAKDOWN FOR DAVIDSON COUNTY. APPROXIMATELY 51% OF THE POPULATION IS FEMALE AND 49% MALE. - BELOW 18 YEARS: 23.9% - AGE 65 AND OLDER: 14.4% THE COUNTY POPULATION BREAKDOWN BY RACE IS: - WHITE NON-HISPANIC (84.3%) - BLACK (8.9%) - HISPANIC (6.4%) - TWO OR MORE RACES (1.5%) - OTHER ASIAN (1.2%) - AMERICAN INDIAN (.5%) (TOTAL CAN BE GREATER THAN 100% BECAUSE HISPANICS COULD BE COUNTED IN OTHER RACES.)THE MAJORITY OF THE WORKFORCE WORKS IN EDUCATION, HEALTH, RETAIL AND SOCIAL SERVICE JOBS.ONCE A FURNITURE MANUFACTURING CENTER, LEXINGTON HAS EXPERIENCED THE LOSS OF A MAJORITY OF ITS FURNITURE MANUFACTURING JOBS OVER THE COURSE OF THE PAST TWELVE YEARS. LEXINGTON HOME BRANDS, FORMERLY LEXINGTON FURNITURE INDUSTRIES, BOASTED AN EMPLOYEE POPULATION OF AROUND 6,000 IN THE MID-1990'S. CURRENTLY, APPROXIMATELY 200 FURNITURE JOBS REMAIN LOCALLY WHILE ALL OTHERS HAVE RELOCATED TO OVERSEAS OPERATIONS. THE DAVIDSON COUNTY UNEMPLOYMENT RATE AS REPORTED IN SEPTEMBER 2011 IS 10.9%.A COMPARISON OF LEXINGTON TO NORTH CAROLINA STATE AVERAGES REVEALS: - MEDIAN HOUSEHOLD INCOME BELOW STATE AVERAGE. - MEDIAN HOUSE VALUE BELOW STATE AVERAGE.THERE ARE TWO COMMUNITY HOSPITALS IN DAVIDSON COUNTY. LMC IN LEXINGTON, NC OPERATES 94-BEDS. THOMASVILLE MEDICAL CENTER IN THOMASVILLE HAS 150 LICENSED BEDS.THERE ARE NO FEDERALLY DESIGNATED MEDICALLY UNDERSERVED AREAS OF POPULATIONS IN THE SERVICE AREA. PART VI, LINE 6: HOSPITALS NATIONWIDE HAVE EXPERIENCED SHARP LOSSES DUE TO THE ECONOMIC DOWNTURN. LMC IS NO EXCEPTION. AS A SMALL, COMMUNITY HOSPITAL IN AN AREA SHARPLY IMPACTED BY THE LOSS OF MANUFACTURING JOBS, LMC HAS STRUGGLED TO BREAK EVEN OVER THE PAST SEVERAL YEARS. CONTINUED NEGATIVE PROFIT MARGINS COUPLED WITH THE INCREASE IN CHARITY CARE AND BAD DEBT LED THE HOSPITAL TO SEEK A PARTNERSHIP WITH WFUBMC. PRESENTLY, THE UNEMPLOYMENT RATE IN DAVIDSON COUNTY IS 10.9% AND HAS BEEN ABOVE 10% SINCE 2009. LMC HAS MAINTAINED A STRONG COMMITMENT TO CONTINUE CAPITAL EQUIPMENT PURCHASES WITH AN AVERAGE OF $3 MILLION ALLOCATED EACH YEAR. ADDITIONALLY, FUNDS ARE ALLOCATED TO COMMUNITY OUTREACH EFFORTS. PART VI, LINE 7: LMC BECAME A PART OF THE WAKE FOREST UNIVERSITY BAPTIST MEDICAL CENTER (WFUBMC) SYSTEM OCTOBER 1, 2008. THROUGH AN INTEGRATION AGREEMENT WHEREUNDER WFUBMC, THROUGH WFUHS AND NCBH, CONTROLS DAVIDSON HEALTHCARE, INC. WHICH IN TURN CONTROLS LEXINGTON MEMORIAL HOSPITAL, INC., LMC OPERATES AS A STAND ALONE COMMUNITY HOSPITAL AND IS GOVERNED BY A SIXTEEN MEMBER BOARD COMPRISED OF THIRTEEN COMMUNITY RESIDENTS AND THREE WFUBMC REPRESENTATIVES. WAKE FOREST UNIVERSITY BAPTIST MEDICAL CENTER IS AN ACADEMIC HEALTH SYSTEM COMPRISED OF NORTH CAROLINA BAPTIST HOSPITAL (NCBH) AND WAKE FOREST UNIVERSITY HEALTH SCIENCES (WFUHS). WFUHS OPERATES THE UNIVERSITY'S SCHOOL OF MEDICINE AND PIEDMONT TRIAD RESEARCH PARK. THE SYSTEM COMPRISES 1,154 ACUTE CARE, REHABILITATION AND LONG-TERM CARE BEDS AND HAS BEEN RANKED AS ONE OF "AMERICA'S BEST HOSPITALS" BY U.S. NEWS & WORLD REPORT SINCE 1993. WAKE FOREST BAPTIST IS RANKED 32ND IN THE NATION BY AMERICA'S TOP DOCTORS FOR THE NUMBER OF ITS DOCTORS CONSIDERED BEST BY THEIR PEERS. THE INSTITUTION RANKS IN THE TOP THIRD IN FUNDING BY THE NATIONAL INSTITUTES OF HEALTH AND 4TH IN THE SOUTHEASTERN UNIED STATES IN REVENUES FROM ITS LICENSED INTELLECTUAL PROPERTY. REPORTS FILED WITH STATES PART VI, LINE 7 NC X X X X 1 1 0 0 0 0 0 0 0 STEVEN C SHULTZ 305300 0 0 0 2403 0 18700 0 30672 0 357075 0 0 0 DONNY C LAMBETH 537997 0 186261 0 24834 0 388496 0 19819 0 1157407 0 0 0 BARBARA B SMITH 167204 0 9425 0 0 0 6342 0 8167 0 191138 0 0 0 DANNY W SQUIRES 153660 0 8775 0 0 0 5810 0 14391 0 182636 0 0 0 AMY F INMAN 166631 0 5000 0 0 0 1391 0 5791 0 178813 0 0 0 JANICE K STEPHENS 167268 0 0 0 0 0 5025 0 14391 0 186684 0 0 0 CHRISTOPHER S WATTERS 156571 0 0 0 0 0 4343 0 14391 0 175305 0 0 0 SHEILA C CRUMB 152801 0 0 0 0 0 4960 0 11835 0 169596 0 0 0 REBECCA B DALEY 175100 0 3375 0 81560 0 5976 0 14293 0 280304 0 0 0 DENNIS R AYERS 224179 0 5250 0 791044 0 7746 0 8278 0 1036497 0 0 0 JOHN A CASHION 254647 0 0 0 0 0 5050 0 14069 0 273766 0 0 0 PART I, LINES 4A-B EXECUTIVES OF THE FILING ORGANIZATION DURING THE TAX PERIOD, PARTICIPATE IN SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS AND EXECUTIVE BONUS PLANS (ALL OF WHICH IS PAID BY UNRELATED ORGANIZATIONS, WFUHS AND NCBH, AS PART OF THE EXECUTIVE'S COMPENSATION FROM THE UNRELATED ORGANIZATIONS). THE FOLLOWING EXECUTIVE POSITIONS PARTICIPATE IN THIS PROGRAM: CEO, CFO, COO, CNO, PRESIDENT AND VICE PRESIDENTS. PART I, LINES 4A-B THE FOLLOWING INDIVIDUALS RECEIVED SEVERANCE PACKAGES: DENNIS R. AYERS - $245,453 REBECCA B. DALEY - 198,744 JOHN A. CASHION - 273,766 SUPPLEMENTAL INFORMATION PART III THE FOLLOWING INDIVIDUALS RECEIVED COMPENSATION FROM UNRELATED ORGANIZATIONS, WFUHS AND NCBH, FOR SERVICES RENDERED TO THIS ORGANIZATION IN THEIR ROLES AS EMPLOYEES, OFFICER AND DIRECTOR: DONNY C. LAMBETH - $1,157,407 STEVEN C. SHULTZ - 357,075 FORM 990, PART VI, SECTION A, LINE 6 THE SOLE MEMBER OF THE CORPORATION IS DAVIDSON HEALTHCARE, INC. FORM 990, PART VI, SECTION A, LINE 7A DECISIONS OF THE ORGANIZATION'S GOVERNING BODY WHICH REQUIRE APPROVAL BY THE SOLE MEMBER, DAVIDSON HEALTHCARE, INC., INCLUDED AMENDMENTS TO CERTAIN FUNDAMENTAL DOCUMENTS (ARTICLES OF INCORPORATION AND BYLAWS) AND ELECTION AND REMOVAL OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7B DECISIONS OF THE ORGANIZATION'S GOVERNING BODY WHICH REQUIRE APPROVAL BY THE SOLE MEMBER, DAVIDSON HEALTHCARE, INC., INCLUDED AMENDMENTS TO CERTAIN FUNDAMENTAL DOCUMENTS (ARTICLES OF INCORPORATION AND BYLAWS) AND ELECTION AND REMOVAL OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION DISTRIBUTES A DRAFT COPY OF THE FORM 990 TO ALL MEMBERS OF THE BOARD IN ADEQUATE TIME FOR FEEDBACK PRIOR TO FILING A FINALIZED FORM 990 WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE SOLE MEMBER OF THE ORGANIZATION, DAVIDSON HEALTHCARE, INC., THE BOARD OF WHICH IS IDENTICAL TO THE BOARD OF THE FILING ORGANIZATION, HAS A CONFLICT OF INTEREST POLICY WHICH IS REVIEWED, ACCEPTED, AND SIGNED BY EACH OFFICER AND VOTING BOARD MEMBER ON AN ANNUAL BASIS. PURSUANT TO THIS POLICY EACH OFFICER AND BOARD MEMBER WILL RECUSE THEMSELVES FROM ANY DISCUSSION AND VOTE FOR WHICH A CONFLICT EXISTS FOR THEMSELVES OR THEIR FAMILY. DETERMINATIONS OF WHETHER A CONFLICT EXISTS ARE MADE AT A MANAGEMENT, BOARD MEMBER, OFFICER, AND INDIVIDUAL LEVEL. ACTUAL CONFLICTS ARE REVIEWED WITHOUT THE PRESENCE OF THE INTERESTED PARTY. FORM 990, PART VI, SECTION B, LINE 15 THE ORGANIZATION FOLLOWS THE PROCESS DESCRIBED IN TREASURY REGULATION 4958(6)(C) FOR ESTABLISHING THE REBUTTABLE PRESUMPTION OF REASONABLENESS IN THE REVIEW, APPROVAL, AND DOCUMENTATION OF OFFICER, KEY MANAGEMENT, AND DIRECTOR COMPENSATION. AS PART OF THE ANNUAL BUDGETING PROCESS THE GOVERNING BOARD REVIEWS AND APPROVES THE COMPENSATION AND BENEFITS IN THE ANNUAL BUDGET. THIS IS BASED ON COMPARABILITY FACTORS INCLUDING BUT NOT LIMITED TO THE SIZE OF THE ORGANIZATION, THE GEOGRAPHICAL LOCATION OF THE ORGANIZATION, AND THE EMPLOYEE'S LENGTH OF SERVICE. THIS PROCESS IS CONDUCTED ON AN ANNUAL BASIS FOR THE FOLLOWING POSITIONS: CEO, CFO, COO, CNO, PRESIDENT AND VICE PRESIDENTS. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES THESE DOCUMENTS AVAILABLE UPON REQUEST AT THE ADMINISTRATION OFFICES. FORM 990, PART VI, SECTION A, LINE 3: EFFECTIVE JULY 1, 2010, THE GOVERNING BOARDS OF FOUR NORTH CAROLINA NONPROFIT CORPORATIONS (WAKE FOREST UNIVERSITY, NORTH CAROLINA BAPTIST HOSPITAL, WAKE FOREST UNIVERSITY HEALTH SCIENCES, AND WAKE FOREST UNIVERSITY BAPTIST MEDICAL CENTER) ENTERED INTO AN AGREEMENT (THE "MEDICAL CENTER INTEGRATION AGREEMENT" OR "MCIA") UNDER WHICH THE POWER TO OPERATE EACH OF NORTH CAROLINA BAPTIST HOSPITAL ("NCBH") AND WAKE FOREST UNIVERSITY HEALTH SCIENCES("WFUHS"), INCLUDING THEIR RESPECTIVE "SUBSIDIARIES, AFFILIATES, AND JOINT VENTURES", WAS DELEGATED TO WAKE FOREST UNIVERSITY BAPTIST MEDICAL CENTER ("WFUBMC"). WFUHS IS A WHOLLY-CONTROLLED SUBSIDIARY OF WAKE FOREST UNIVERSITY ("WFU"). WFUBMC IS NOW A MEMBERSHIP NONPROFIT CORPORATION WHOSE TWO EQUAL MEMBERS ARE NCBH (WHICH ENTITY IS UNRELATED TO WFU) AND WFU. THIS CONSOLIDATION OF MANAGEMENT IN WFUBMC OF THE VARIOUS ACADEMIC MEDICAL CENTER OPERATIONS, SUBJECT TO SUBSTANTIAL RESERVED POWERS IN EACH OF THE WFU AND NCBH CONSTITUENT MEMBERS' (OR IN WFUHS') BOARDS, MANDATED CHANGES IN THE GOVERNANCE DOCUMENTS OF EACH ORGANIZATION (WFUHS, NCBH, AND WFU), WHICH CHANGES WERE MADE DURING THE TAX YEAR. THE FILING ORGANIZATION IS CONTROLLED BY WFUBMC THROUGH WFUHS AND NCBH, WHICH ARE THE MEMBERS OF DAVIDSON HEALTHCARE, INC. THE SOLE MEMBER OF THE FILING ORGANIZATION. WHILE NO CONFORMING CHANGES TO THE FILING ORGANIZATION'S GOVERNANCE DOCUMENTS WERE MADE DURING THE TAX YEAR, THE FILING ORGANIZATION'S MANAGEMENT HAS BEEN DIRECTLY IMPACTED BY THE MCIA, AS REFLECTED IN THE CHANGES MADE TO THE GOVERNANCE DOCUMENTS OF ITS PARENT, WFUBMC, WFUHS AND NCBH. FORM 990, PART VII, COLUMN (B) THE FOLLOWING PERSONS WERE COMPENSATED DIRECTLY BY DAVIDSON HEALTHCARE, INC., THE FILING ORGANIZATION, LEXINGTON MEMORIAL HOSPITAL, INC., NORTH CAROLINA BAPTIST HOSPITAL, AN UNRELATED ORGANIZATION, OR WAKE FOREST UNIVERSITY HEALTH SCIENCES, AN UNRELATED ORGANIZATION, FOR SERVICES PERFORMED FOR THE FILING ORGANIZATION. EACH PERSON;S POSITION IN EACH ORGANIZATION, AND THE AVERAGE HOURS PER WEEK THAT THEY DEVOTE TO EACH ENTITY, ARE SHOWN BELOW. STEVEN C. SHULTZ CEO, FILING ORGANIZATION 24.7 HOURS PER WEEK PRESIDENT/CEO, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK PRESIDENT / CEO, LEXINGTON MEMORIAL HOSPITAL, FOUNDATION INC. 0.1 HOUR PER WEEK PRESIDENT / CHAIR, LEXMEDICAL, INC. 14.0 HOURS PER WEEK CHAIR, LEXHEALTH, INC. 0.1 HOUR PER WEEK PRESIDENT / CHAIR, LEXPROPERTIES, INC. 0.1 HOUR PER WEEK TERRY L. HALES, JR. DIRECTOR, FILING ORGANIZATION 3.0 HOURS PER WEEK ASSISTANT TREASURER, WFUHS 24.6 HOURS PER WEEK VICE PRESIDENT, TREASURER, PIEDMONT TRIAD RESEARCH PARK 4.0 HOURS PER WEEK TREASURER, PTRP DEVELOPMENT CORPORATION 2.0 HOURS PER WEEK DIRECTOR, TREASURER, IDEALLIANCE 0.2 HOUR PER WEEK DIRECTOR, TREASURER, IDEALLIANCE FOUNDATION 0.2 HOUR PER WEEK ASSISTANT TREASURER, DIALYSIS ACCESS GROUP OF WAKE FOREST UNIVERSITY, LLC 1.0 HOUR PER WEEK DIRECTOR/ASSISTANT TREASURER, DIALYSIS CENTERS (GROUP RETURN) 2.0 HOURS PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 3.0 HOURS PER WEEK DONNY LAMBETH DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK CHAIRMAN, DAVIE COUNTY EMERGENCY HEALTH CORPORATION 1.0 HOUR PER WEEK SECRETARY, NORTH CAROLINA BAPTIST HOSPITAL FOUNDATION (7/1-12/31) 0.1 HOUR PER WEEK TRUSTEE, CARENET, INC. 0.1 HOUR PER WEEK PRESIDENT, NCBH 36.0 HOURS PER WEEK PRESIDENT, WFUBMC COMMUNITY PHYSICIANS 1.0 HOUR PER WEEK DIRECTOR, LEXMEDICAL, INC. 1.0 HOUR PER WEEK CHAIRMAN, HAWTHORNE INN & CONFERENCE CENTER 0.1 HOUR PER WEEK SECRETARY, THE NURSING CENTER AT OAK SUMMIT (7/1-12/31) 0.1 HOUR PER WEEK MEMBER, NORTHWEST COMMUNITY CARE NETWORK, INC. 0.1 HOUR PER WEEK TRUSTEE, SECRETARY, TREASURER, THE MEDICAL FOUNDATION OF WFUHS AND NCBH 0.1 HOUR PER WEEK DANNY SQUIRES VP / CFO, FILING ORGANIZATION 26.0 HOURS PER WEEK CFO, DAVIE COUNTY EMERGENCY HEALTH CORPORATION 2.0 HOURS PER WEEK VP / CFO, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK VP / CFO, LEXINGTON MEMORIAL HOSPITAL FOUNDATION, INC. 2.0 HOURS PER WEEK VP / CFO, LEXMEDICAL, INC. 7.0 HOURS PER WEEK VP / CFO, LEXPROPERTIES, INC. 1.0 HOUR PER WEEK VP / CFO, LEXHEALTH, INC. 1.0 HOUR PER WEEK BARBARA B. SMITH SECRETARY, FILING ORGANIZATION 34.0 HOURS PER WEEK SECRETARY, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK SECRETARY, LEXINGTON MEMORIAL HOSPITAL FOUNDATION, INC. 2.0 HOURS PER WEEK SECRETARY, LEXMEDICAL, INC. 1.0 HOUR PER WEEK SECRETARY, LEXPROPERTIES, INC. 1.0 HOUR PER WEEK SECRETARY, LEXHEALTH, INC. 1.0 HOUR PER WEEK CHRISTOPHER T. WHITE ASSISTANT TREASURER, FILING ORGANIZATION 31.0 HOURS PER WEEK ASSISTANT TREASURER, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK ASSISTANT TREASURER, LEXINGTON MEMORIAL HOPITAL FOUNDATION, INC. 2.0 HOURS PER WEEK ASSISTANT TREASURER, LEXMEDICAL, INC. 5.0 HOURS PER WEEK ASSISTANT TREASURER, LEXPROPERTIES, INC. 1.0 HOUR PER WEEK CHARLES MILLER, JR. CHAIR, FILING ORGANIZATION 1.0 HOUR PER WEEK CHAIR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK DIRECTOR, LEXMEDICAL, INC. 1.0 HOUR PER WEEK DIRECTOR, LEXPROPERTIES, INC. 1.0 HOUR PER WEEK ROBERT B. SMITH, JR. VICE CHAIR, FILING ORGANIZATION 1.0 HOUR PER WEEK VICE CHAIR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK DAN BRIGGS DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK RAY N. HOWELL, III, PHD DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK GORDON C. KAMMIRE, M.D. DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK EVELYN KEPLEY DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK DIRECTOR, LEXINGTON MEMORIAL HOSPITAL FOUNDATION, INC. 1.0 HOUR PER WEEK JEFF MAST DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK STALEY J. NANCE DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK J. SIMMONS RIGGAN, M.D. DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK PATRICIA SHOEMAKER DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK ROBERT CRAVEN DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK MARK BREEDEN DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK DAVID WAGNER, M.D. DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK JAMES HOEKSTRA, M.D. DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK LARRY POTTS DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK W. LEON RIVES DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK WILLIAM W. WOODRUFF, M.D. DIRECTOR, FILING ORGANIZATION 1.0 HOUR PER WEEK DIRECTOR, DAVIDSON HEALTHCARE, INC. 1.0 HOUR PER WEEK CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: CONTRIBUTIONS TO AFFILIATES (NET) -1,576,118. MINORITY INTEREST IN SUBSIDIARY -35,716. UNREALIZED GAIN ON OTHER THAN TRADING SECURITIES 95,699. INCREASE IN UNFUNDED PORTION OF POSTRETIREMENT BENEFIT OBLIGATION -10,026. DECREASE IN EQUITY INVESTMENT -303,177. TOTAL TO FORM 990, PART XI, LINE 5: -1,829,338. FORM 990, PART XI, LINE 2C NO CHANGES FROM PRIOR YEAR METHOD OF OVERSIGHT. LEXPOINT LLC 250 HOSPITAL DRIVE LEXINGTON NC 27292 PROVIDE MEDICAL IMAGING SERVICES TO THE RESIDENTS OF DAVIDSON COUNTY, NC NC N/A DAVIDSON HEALTHCARE INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 561474399 SUPPORT OF LEXINGTON MEMORIAL HOSPITAL, INC. NC 501(C)(3) LINE 11B, II N/A 0 LEXPROPERTIES INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 561474401 HOLD REAL ESTATE NC 501(C)(2) N/A 0 LEXHEALTH INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 561474400 PROMOTED AND SUPPORTED COST-EFFECTIVE HEALTH CARE FOR RESIDENTS OF THE TRIAD NC 501(C)(3) LINE 11B, II N/A 0 LEXMEDICAL INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 561941380 PHYSICIAN PRACTICES NC 501(C)(3) LINE 3 N/A 0 LEXINGTON MEMORIAL HOSPITAL FOUNDATION INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 581876553 FUNDRAISING NC 501(C)(3) LINE 11B, II N/A 0 CANCER CENTER OF DAVIDSON COUNTY LLC 101 N CHESTNUT STREET SUITE 111 WINSTONSALEM NC 27101 264239870 PROVIDE ONCOLOGY SERVCIES TO RESIDENTS OF DAVIDSON COUNTY, NC NC N/A RELATED -303177 370486 0 0 LEXCARE INC 250 HOSPITAL DRIVE LEXINGTON NC 27292 561474407 PHARMACY NC N/A C MEDICAL PARK OFFICES UNIT OWNERS ASSOCIATION 250 HOSPITAL DRIVE LEXINGTON NC 27292 561685147 CONDO OWNERS ASSOCIATION NC N/A C 0 1 1 0 0 0 0 0 0 1 0 0 1 1 1 1 0 0