r r f 1

Return of Organization Exempt From Income Tax UMdNO 1545-0047

Form 990- Under section 501(c), 527, or 4947(x)(1) of the Internal Revenue Code (except black lung 2003 % benefit trust or private foundation) Department oftheTreasury ̀ ~ Len Internal Revenue Service The Ur ganization may have to use a copy of this return to satisfy state reporting requirements o A For the 2003 calendar year, or tax year beg inning JUL 1 2003 and ending JUN 30, 2004

B Check If P~ ~e C Name of organization D Employer Identification number applicablx use IRS Address label or

J =Address P~~tor FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612 Ocn n~ ~ Number and street (or P .O. box if mail is not delivered to street address) Room/suite E Telephone number

Initi al Speafic ST 7TH STREET 301 698-3350 Flnal in

struo- =romm coos city ortown,stateorcountry,andZIP+4 F accaonr~m~moa 0 can ~ Accrual

~~~JJ,,,JJJ FREDERICK , MD 21701 ~ Amended ther Application 0 Section 501(c)(3) organizations and 4947(x)(1) nonexempt charitable trusts H and I are not applicable to section 527 organizations.

must attach a completed Schedule A (Form 990 or 990-EZ) . H(a) Is this a group return for affiliates? 0 Yes OX No 4- G Website : "WWW . FMH . ORG H(b) If "Yes ;' enter number of affiliates

J Organization type (cnxkonlvone) " OX 501(c) ( 0 3 ) 1 ansert no) 0 4947(x)(1) or = 527 H(c) Are all affiliates mcluded9 N/A ~ Yes 0 No K Check here " 0 if the organization's gross receipts are normally not more than $25,000 . The (If'No," attach a list )

H(d) Is this a separate return filed by an or- organization need not file a return with the IRS ; but if the organization received a Form 990 Package anization covered b a grou p rulin g? ~ Yes D No in the mail, it should file a return without financial data . Some states require a complete return . I Grou Exemption Number 10,

M Check " 0 if the organization is not required to attach L Gross recei pts . Add lines 6b, 8b, 9b, and tOb to line 12 . 249 , 613 , 895 . Sch B (Form 990, 990-EZ, or 990-PF) . pI Revenue Expenses, and Changes in Net Assets or Fund Balances

1 Contributions, gifts, grants, and similar amounts received- a Direct public support 1a 5 827, 461 . b Indirect public support . . . 1 b c Government contributions (grants) . . . . . . . . . 1c d Tote I (add lines 1 a through 1c) (cash $ 5,404,764 . noncash $ 422,697 . ) 1d 5,827 , 461 .

2 Program service revenue including government fees and contracts (from Part VII, line 93) 2 218,724 , 887 . 8 Membership dues and assessments 3 5 , 575 . 4 Interest on savings and temporary cash investments . . . . . . . . . . . 4 5 Dividends and interest from securities . . . . . . . . . . . . . . . . 5 2 , 406 , 328 . B a Gross rents Be b Less . rental expenses 6b c Net rental income or (loss) (subtract line 6b from line 6a) Bc

m 7 Other investment income (describe " 7 'c 8 a Gross amount from sales of assets other A Securities B Other d than inventory ._ 22,120,088 . 8a 13 , 939 .

b Hess : cost or other basis and saes expenses 21,406,792 . 8b 580, 119 . . .

c Gam or (loss) (attach schedule) . . . . . . . . 713 , 296 . 8c <366 , 180 .

d Net gain or (loss) (combine line 8c, columns (A) and (B)) . . STMT 1 . . . STMT 2 Sd 347,116 . 9 Special events and activities (attach schedule) . If any amount is from gaming, check here " . ~ .

a Gross revenue (not including $ 0 . of contributions reported on line 1a) 9a 128 , 729 .

b Hess : dir ~Qn fundr ismg expenses . . 9b 81 279 .

c t i t' s (subtract line 9b from line 9a) . . . . SEE_ STATEMENT 3 gc 47 , 450 . 10 a ros sales of inventory, less retu d allowances . . . . . . . . . 10a 386, 888 .

b . osi~fbd~a(~ ZQ~S ~ 1Ob 222,328 . c ros profit or (loss) from sales o tory (attach schedule) (subtract line 10b from line 10x) STMT 4 10c 164 , 560 .

15

215,036,680 . 12,486,697 . 140,892,270 . 2,518,318 .

155,897,285 . Form 990 (2003)

-l

11 her rev~~n~u~.;( ~ V I, 103) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 tai re VMiIL~' d1f c 7 8d 9c 10c and 11 h 13 Program services (from line 44, column (B)) 14 Management and general (from line 44, column (C)) 15 Fundraising (from line 44, column (D)) . . 16 Payments to affiliates (attach schedule) 17 Total expenses (add lines 16 and 44, column (A)) 18 Excess or (deficit) for the year (subtract line 17 from line 12) 19 Net assets or fund balances at beginning of year (from line 73, column (A)) 20 Other changes in net assets or fund balances (attach explanation) SEE STATEMENT 5 21 Net assets or fund balances at end of year (combine lines 18, 19, and 20) oa LHA For Paperwork Reduction Act Notice, see the separate instructions .

12 227,523,377 . 13 147,274,890 . 14 67,761,790 .

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612 Statement of All organizations must complete column (A) Columns (8), (C), and (D) are required for section 501(c)(3) Page 2 Functional Expenses and (4) organizations and section 4947(a)(1) nonexempt chantable trusts but optional for others

Do not include amounts reported on line gyp) Tolal (B) Program (C) Management (D) Fundraising 6b Sb 9b fOb or 16 of Part 1 services and eneral 22 Grants and allocations (attach schedule)

cash $nonpsh $ 22

23 Specific assistance to individuals (attach schedule) 23 24 Benefits paid to or for members (attach schedule) 24 25 Compensation of officers, directors, etc 25 485, 345 . 339,741 . 145, 604 . 0 . 26 Other salaries andwages 26 84, 852, 498 . 59 , 396,749 . 25,455,749 . 27 Pension pan contributions 27 3,275,404 . 2,292 , 783 . 982,621 . 28 other employee benefits 28 10, 784,424 . 7 , 549 , 097 . 3,235, 327 . 29 Payroll taxes 29 6, 257, 746 . 4,380,422 . 1,877,324 . 30 Professional fundraising fees 30 31 Accounting fees 31 168,000 . 168,000 . 32 Legal fees 32 33 Supplies 33 18, 045, 601 . 17 248, 628 . 796, 973 . 34 Telephone 34 641, 366 . 641,366 . 35 Postage and shipping 35 300,636 . 300,636 . 36 occupancy 36 1, 680, 396 . 1,680,396 . 37 Equipment rental and maintenance 37 5, 089, 249 . 5, 089,249 . 38 Panting and publications 38 660, 629 . 660,629 . 39 Travel 39 40 Conferences, conventions, and meetings 40 333, 791 . 333,791 . 41 Interest 41 2,569,161 . 1,284,581 . 1, 284, 580 . 42 Depreciation, depletion, etc (attach schedule) 42 8, 359, 000 . 4,179,500 . 4, 179,500 . 43 Other expenses not covered above (itemize)

a 43a b 43h c 43c d 43d e SEE STATEMENT 6 ~43e~71,533,434 . 50,603,389 . 20,930,045 .

as oroa ~rrabons c~ortpk7rp iolu mr s (B }(D}, ~ th ese to lines 13-15 44215,036,680 . 1147,274,890 .1 67,761,790 . 1 0 . Joint Costs . Check " = if you are following SOP 98-2 Are any point costs from a combined educational campaign and fundraising solicitation reported m (B) Program services ~ ~ Yes OX No It 'Yes,' enter (i) the aggregate amount of these point costs $ , (ii) the amount allocated to Program services $ Ili the amount allocated to Management and eneral b and Iv the amount allocated to Fundraising part iffStatement of Program Service Accomplishments What is the organization's primary exempt purposes 101, TO PROVIDE HOSPITAL SERVICES Pro am Service All organizations must describe their exempt purpose achievements in a clear and concise manner State the number of clients served, publications issued, ehc Discuss xp enses achievements that are not measurable Section 501 (c)(3)

(Req(Required for 501(cx3) and and (4) organizations and 4947(a)(1) nonexempt charitable trusts must also enter the amount of grants and (4) orgs , end 4947(aK1)

allocations to others ) trusts, but optional for others ~

a PROVIDES HOSPITAL SERVICES, WHICH INCLUDE INPATIENT, OUTPATIENT, EMERGENCY, SURGERY ETC .

Grants and allocations $ ) 147,274 , 890 . b

Grants and allocations $ C

Grants and allocations $ d

Grants and allocations e Other p ro g ram services attach schedule (Grants and allocations $ f Total of Program Service Expenses (should equal line 44, column (B), Program services) " 14 7 , 2 7 4 , 890 . a2ao~ ~ Form 990 (2003)

Form 990(2003) FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612 Page 3

11! Balance Sheets

Note : Where required, attached schedules and amounts within the description column (A) (B) should be forend-of-yearamounts only Beginning of year End of year

45 Cash - non-interest-bearing 1, 0 7 4 , 813 . 45 7,003,138 . 46 Sarongs and temporary cash investments 32,926,212 . 46 26,085,224 .

47 a Accounts receivable 47a 37,586,556 . b Hess allowance for doubtful accounts 47b 5 , 650,573 . 29,809,768 . a7c 31,935,983 .

48 a Pledges receivable 48a 5,876,742 . b Hess allowance for doubtful accounts 48h 4,226,395 . 48c 5,876,742 .

49 Grants receivable 49 50 Receivables from officers, directors, trustees,

and key employees 50 N d 51 a Other notes and loans receivable 51 a N Q b Less allowance for doubtful accounts 51b 51 c

52 inventories for sage or use 3,141,965 . 52 3 r 426,063 . 53 Prepaid expenses and deferred charges 549 ,325 . 53 695,309 . 54 investments -securities STMT 7 STMT 8 . =Cost MFMV 78,252,263 . 54 60,272,786 . 55 a Investments -land, buildings, and

equipment basis 55a

b Less accumulated depreciation 55b 56 investments - other SEA STATEMENT 9 22,609,477 . 57 a Land, buildings, and equipment basis 57a 215, 159,215 .

b less accumulated depreciation STMT 10 57b 80,896,961 . 106,306,935 . 58 Other assets (describe " SEE STATEMENT 11 ) 8 , 453 , 583 .

306,353,540 . 30,184 .521 .

287,350,736 . 23 .771,519 . 60 Accounts payable and accrued expenses

61 Grants payable 62 Deferred revenue

61

18,269,705 .

134,262,254 . 18,526 .336 .

N

wv 63 loans from officers, directors, trustees, and key employees 63 64 a lax-exempt bond liabilities 64a

b Mortgages and other notes payable 122,686,947 . 64b 120,271,734 . 65 Other liabilities (describe 1 ) 65

66 Total liabilities add lines so throu g h 65 146 , 458 , 466 . 66 150 , 456 , 255 . Organisations that follow SFAS 117, check here 1 D and complete lines 67 through

69 and lines 73 and 74 67 unrestricted 120 560, 256 . 67 136, 400, 194 . 6s Temporarily restricted 19,239,218 . 68 18,520,914 .

m 69 Permanently restricted 1,092,796 . 69 976,177 . Organizations that do not follow SFAS 117, check here 1 0 and complete lines

70 through 74 ,°~ 70 Capital stock, trust principal, or current funds 70

N 71 Paid-in or capital surplus, or land, building, and equipment fund 71 H a 72 Retained earnings, endowment, accumulated income, or other funds 72 Y

Z 73 Total net assets or fund balances (add lines 67 through 69 or lines 70 through 72, column (A) must equal pine 19, column (B) must equal line 21) 140 , 892 , 270 . 73 155 , B97 , 285 .

74 Total liabilities and net assets l fund balances (add lines 66 and 73) ~ 287,350,736 . ~ 74 ~ 306,353,540 . Form 990 is available for public inspection and, for some people, serves as the primary or sole source of information about a particular organization . How the public

perceives an organization m such cases may be determined by the information presented on its return Therefore, please make sure the return is complete and accurate and fully describes, in Part III, the organization's programs and accomplishments

323021 12-17-03

Form 990(2003) FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 a Pag e art N-B Reconciliation of Expenses per Audited

Financial Statements with Expenses per Return

a Total expenses and losses per audited financial statements " a 186017710 .

b Amounts included on line a but not on line 17, Form 990

(1) Donated services and use of facilities f

(2) Prior year adjustments reported on line 20, Form 990 $

(3) Losses reported on line 20, Form 990 $

(4) Other (specify) STMT 12 s 669,787 .

Add amounts on lines (1) through (4) " b 669,787 . c dine a minus line h " c 185347923 . d Amounts included on line 17, Form

990 but not on line a

(1) Investment expenses not included on line 6b, Form 990 $

(2) Other (specify) STMT 14 ; 29,688,757 .

Add amounts on lines (1) and (2) " d 9 , 688,757 . e Total expenses per line 17, Form 990

(pine c pus pine a) " e 215 0 3 6 6 8 0 . IployeeS (List each one even if not compensated .) I) Title and average hours (C) Compensation (D) Po~~u~efi`o (E) Expense per week devoted to (If not paid, enter P ~,s g dew account and

position 1 compensation other allowances (A) Name and address

SEE STATEMENT 17 ---------------------------------

0 .1 0 .1 0 .

0+ HRS WEEK 1485, 345 .1 22, 745 .1 0 . --------------------------------- ---------------------------------

--------------------------------- ---------------------------------

--------------------------------- ---------------------------------

--------------------------------- ---------------------------------

--------------------------------- ---------------------------------

--------------------------------- ---------------------------------

--------------------------------- ---------------------------------

75 Did any officer, director, trustee, or key employee receive aggregate compensation of more than $100,000 from your organization and all related organizations, of which more than $10,000 was provided by the related organizations If "Yes," attach schedule " 0 Yes OX No

323031 12_17_03 Form 990 (2003)

Reconciliation of Revenue per Audited Financial Statements with Revenue per Return

a Total revenue, gains, and other support per audited financial statements " a 200572132 .

b Amounts included on line a but not on line 12, Form 990

(1) Net unrealized gains on investments s - 2, 0 6 7 , 7 2 5 .

(2) Donated services and use of facilities $

(3) Recoveries of prior year grants $

(4) Other (specify) s

Add amounts on lines (1) through (4) " b 1 2,067,725 . c Line a minus line b " c 198504407 . d Amounts included on line 12, Form

990 but not on line a :

(1) Investment expenses not included on line 6b, Form 990 $

(2) Other (specify) STMT 13 2 29,018,970 .

Add amounts on lines (1) and (2) " d 29,018, 970 . e Total revenue per line 12, Form 990

(pine c pus pine d) " e 227523377 . Pa1rt Y List of Officers, Directors, Trustees, and Key I

JAMES KLUTTZ 400 WEST SEVENTH STREET FREDERICK, MD 21702

IDENT

92 Section 49470(1) nonexempt charitable trusts filing Form 990 m lieu of Form 1041- Check here 1 and enter the amount of tax-exempt interest received or accrued during the tax year " 1 92 ~ N /A

3230~ Form 990 (2003)

Form 990(2003) FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Pages Other Information Yes No

76 Did the organization engage in any activity not previously reported to the IRS? If 'Yes,' attach a detailed description of each activity 76 X 77 Were any changes made m the organizing or governing documents but not reported to the IRS _ _ 77 X

If 'Yes," attach a conformed copy of the changes 78 a Did the organization have unrelated business gross income of $1,000 or more during the year covered by this returns 78a X

b If 'Yes,' has it filed a tax return on Form 990-T for this year? _ 78b 79 Was there a liquidation, dissolution, termination, or substantial contraction during the year? _ 79 X

If "Yes,' attach a statement 80 a Is the organization related (other than by association with a statewide or nationwide organization) through common membership,

governing bodies, trustees, officers, etc , to any other exempt or nonexempt organization? 80a X b If "Yes," enter the name of the organization 1 '

and check whether it is D exempt or 0 nonexempt 81 a Enter direct or indirect political expenditures See line 81 instructions 81a 0 .

b Did the organization file Form 1120-POL for this year? 81b X 82 a Did the organization receive donated services or the use of materials, equipment, or facilities at no charge or at substantially less than

fair rental values _ 82a X b If "Yes," you may indicate the value of these items here Do not include this amount as revenue in Part I or as an

expense m Part II (See instructions in Part III ) 82b 83 a Did the organization comply with the public inspection requirements for returns and exemption applications _ 83a X

b Did the organization comply with the disclosure requirements relating to quid pro quo contributions'? 83h X 84 a Did the organization solicit any contributions or gaits that were not tax deductibles N/A _ 84a

h If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not NBA eqb tax deductible

85 501(c)(4), (5), or (6) organizations. a Were substantially all dues nondeductible by members NBA 85a b Did the organization make only in-house lobbying expenditures of $2,000 or less NBA 85h

If "Yes" was answered to either 85a or 85b, do not complete 85c through 85h below unless the organization received a waiver for proxy tax owed far the prior year

c Dues, assessments, and similar amounts from members 85c N/A d Section 162(e) lobbying and political expenditures 85d N/A e Aggregate nondeductible amount of section 6033(e)(1)(A) dues notices 85e N/A t Taxable amount of lobbying and political expenditures (line 85d less 85e) 85f N/A g Does the organization elect to pay the section 6033(e) tax on the amount on line 85V N/A 850 h If section 6033(e)(1)(A) dues notices were sent, does the organization agree to add the amount on line 85f to its reasonable estimate of dues

allocable to nondeductible lobbying and political expenditures for the following tax year? N/A 85h 86 501(c)(7) organizations Enter a Initiation fees and capital contributions included on line 12 86a N/A

b Gross receipts, included on line 12, for public use of club facilities B6b N/A 87 501(c)(12) organizations. Enter a Gross income from members or shareholders 87a N/A

b Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them ) 87b N/A

88 At any time during the year, did the organization own a 50% or greater interest m a taxable corporation or partnership, or an entity disregarded as separate from the organization under Regulations sections 301 7701-2 and 301 7701-3? If "Yes," complete Part IX 88 X

89 a 501(c)(3) organisations . Enter Amount of tax imposed on the organization during the year under section 4911 . 0 . , section 4912 . 0 . , section 4955 . 0 .

b 501(c)(3) and 501(c)(4) organizations Did the organization engage in any section 4958 excess benefit transaction during the year or did d become aware of an excess benefit transaction from a prior year? If "Yes," attach a statement explaining each transaction 89b X

c Enter Amount of tax imposed on the organization managers or disqualified persons during the year under sections 4912, 4955, and 4958 . 0 .

d Enter Amount of tax on line 89c, above, reimbursed by the organization " 0 . 90 a List the states with which a copy of this return is filed " MARYLAND

b Number of employees employed m the pay period that includes March 12, 2003 ~ 90b T 212 7 91 The books are in care of " WILLIAM H . PUGH Telephone no " 301-698-3350

l.ocatedat " 400 WEST 7TH STREET, FREDERICK, MARYLAND zIP+4 .21701

4

Form 990(2003) FREDERICK pan y11 Analysis of Income-Producii Note: Enter gross amounts unless othenmse indicated. 93 Program service revenue :

s SEE STATEMENT 15 b c d e t Medicare/Medicaid payments . . ._ g Fees and contracts from government agencies . _

94 Membership dues and assessments . _ . . 95 Interest on sarongs and temporary cash investments 96 Dividends and interest from securities 97 Net rental income or (loss) from real estate

a debt-financed property b not debt-financed property

98 Net rental income or (loss) from personal property 99 Other investment income 100 Gain or (loss) from sales of assets . .

other than inventory 101 Net income or (loss) from special events 102 Gross profit or (loss) from sales of inventory 103 Other revenue

a b c d e

104 Subtotal (add columns (B), (D), and (E)) 105 Total (add line 104, columns (B), (D), and (E)) . Note : Line 105 Alus line 1d, Part l. should eoual the

TRIAL HOSPITAL, INC . 52-0591612 P tlvltles (See page 33 of the instructions )

Unrelated business income Excluded by section 512, 513, or 514 (E)

Bus (A)

~B~ ~~~- (~~ Related or exempt code Amount she Amount function income

2,326,394 . 1,066,559 . 215,331,9 :

337 _ `1 . L~3LO~ 37't .~ ~ 'f~ V3L~ V13 .~ L1

22 on line 12, Part l.

PWI V111Fielationship of Activities to the Accomplishment of Exempt Purposes (See page 34 of the instructions ) Line No . Explain how each activity for which income is reported in column (E) of Part VII contributed importantly to the accomplishment of the organization's

exempt purposes (other than by providing funds for such purposes). 93- ROVIDING ROUTINE AND ANCILLARY MEDICAL SERVICES TO MEMBERS OF THF

X Information Regarding Taxable Subsidiaries and DisreS A

Name, address, and~EIN of corporation, Percentage of Nature o~f}activities p artnershi p, or disre arded enti ty ownershi interest SEE STATEMENT 16

(See page 34 of the instructions .

'l D

otaincome Eric

I RX I Information Regarding Transfers Associated w (a) Did the organization, during the year, receive any funds, directly or indirectly, to (h) Did the organization, during the year, pay premiums, directly or indirectly, on a ~ Note: If "Yes" to (b) , file Form 8870 and Form 4720 see Instructions).

Please ~ der penalties of penury, I declare that 1 have examined this return, including accomp tract, and complete D Lo of preparer (other than offlcel Is based on all inform; Sign ~ Here ro of ~' Date

Paid Preparer's, signature l' <~t~

Prepare Use Only self-employed) . ,100 NORTH CHARLES STREEZ 323161 address, and 12-17-03 ZIP * a BALTIMORE, MARYLAND 2124

1 Y

6

406,328 .

18 347 116 . 01 47 , 450 . 03 164,560 .

5 .575 .

SCHEDULE A Organization Exempt Under Section 501(c)(3) (Form 990 or 990-EZ) (Except Private Foundation) and Section 501(e), 501(1), 501(k),

501 (n), or Section 4947(x)(1) Nonexempt Charitable Trust

DepartmentoftheTreasury Supplementary information-(See separate instructions.) internal Revenue sefvm lo. MUST 6e completed by the above organizations and attached to their Form 990 or 990-EZ

OMB No 1545-0047

2003 Name of the organization Employer identification number

FREDERICK MEMORIAL HOSPITAL, INC . 152~0591612 Compensation of the Five Highest Paid Employees Other Than Officers, Directors, and Trustees (See page 1 of the instructions . List each one If there are none, enter "None .')

a Name and address of each employee aid (b) Title and average hours (d) Conuitwtions to e) Expense per week devoted to (c) Compensation employee ~ ebenefit account and o

mote than $50,000 nesition mmoensaNon allowances

MORGAN-KELLER, INC .

14225 NEWHROOK DRIVE, C CES 1671 .572 .

MEDICAL CONTRACTING SERVICES PROFESSIONAL

10300 NORTH CENTRAL EXPRESSWAYS DALLAS TX 75231 SERVICES/STUDIES 1111849 . Total number of others receiving over $50,000 for professional services . " 2 3 + r ' ̀ 323101/12-OS-03 LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 and Form 990-EZ . Schedule A (Form 990 or 990-EZ) 2003

DR . BRIAN M . O'CONNOR HYSCIAN

WEST 7TH STREET . FREDERICK . MD 21701 FULL 256 .752 . 7 .703 .

DR . KWOK C . LEE HYSCIAN

WEST 7TH STREET, FREDERICK, MD 21701 ULL 592,065 . 17,762 .

DR . KIMANH T . LE HYSCIAN

WEST 7TH STREET, FREDERICK . MD 21701 ULL 1 259 .971 . 1 7,799 .

DR . P . GREG RAUSCH HYSCIAN

WEST 7TH STREET, FREDERICK MD 21701 FULL 258 104 . 7 , 743 .

DR . EUGENE H . CASAGRANDE HYSCIAN

WEST 7TH STREET FREDERICK MD 21701 FULL 239 384 . 7 1! 181 . 1 Total number of other employees paid over $50,000 . 546

it Compensation of the Five Highest Paid Independent Contractors for Professional Services (See page 2 of the instructions . List each one (whether individuals or firms) . If there are none, enter 'None .')

(a) Name and address of each independent contractor paid more than $50,000 (b) Type of service (c) Compensation

P .O . BOX 433, HAGERSTOWN, MD 21741

COMMERICAL CONSTRUCTION SERVICES

621 LIGANORE AVENUE

RADIOLOGY ASSOCIATES OF FREDERICK

198 THOMAS JOHNSON DR . FREDERICK, MD 21702

QUEST COMING NICHOLS INSTT .

TION 122147947 .

ONSTRUCTION I 527,013 .

DIOLOGY RVICES I 910,025 .

C

13 = An organization that is not controlled by any disqualified persons (other than foundation managers) and supports organizations described in : (1) lines 5 through 12 above : or (2) section 501(c)(4), (5), or (6), if they meet the test of section 509(a)(2). (See section 509(a)(3) .1

Provide the following information about the supported organizations. (See page 5 of the instructions.)

(h) Line number from above (a) Name(s) of supported organization(s)

and operated to test for public safety Se ction 509(a)(4). (See page 6 of the 14 I I An Schedule A (Form 990 or 990-EZ) 2003

323111 12-05-03

Schedule A (Form 990 or 990-EZ) 2003 FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Page 2

~~ Statements About Activities (See page 2 of the instructions .) Yes NO

1 During the year, has the organization attempted to influence national, state, or local legislation, including any attempt to influence public opinion on a legislative matter or referendum? If "Yes ; enter the total expenses paid or incurred in connection with the lobbying activities 1 $ $ (Must equal amounts an line 38, Part VI-A, or line i of Part VI-B .) 1 X Organizations that made an election under section 501(h) by filing Form 5768 must complete Part VI-A. Other organizations checking 'Yes,' must complete Part VI-B AND attach a statement giving a detailed description of the lobbying activities .

2 During the year, has the organization, either directly or indirectly, engaged m any of the following acts with any substantial contributors, trustees, directors, officers, creators, key employees, or members of their families, or with any taxable organization with which any such person is affiliated as an officer, director, trustee, majority owner, or principal beneficiary? (If the answer to any question is "Yes," r attach a detailed statement explaining the transactions)

a Sale, exchange, or leasing of property? , . . . . . . . . . . . . . . . . . . . 28 x

b Lending of money or other extension of credit? . . . . . . . . . . . . . . . 2b

c Furnishing of goods, services, or facilities? ..~. .EE,.Y J.1~.,~'.W. . ~ ~ " . . . . . . . . . 2c X . . . . . . . .

d Payment of compensation (or payment or reimbursement of expenses if more than $1,000)? . SEE. . PART. V, , FORM,. 990 , pd X

e Transfer of any part of its income or assets? . . . . . . . . . . . . . 2e X

3 a Do you make grants for scholarships, fellowships, student loans, etc .? (If'Yes,' attach an explanation of how . . $a X you determine that recipients quality to receive payments .) b Do you have a section 403(b) annuity plan for your employees? , . . . . . . . 3b K

4 Did you maintain any separate account for participating donors where donors have the right to provide advice on the use or distribution of funds? . . . 4 X

Reason for Non-Private Foundation Status (see pages 3 through 6 of the instructions .) The organization is not a private foundation because it is . (Please check only ONE applicable box ) 5 [~ A church, convention of churches, or association of churches . Section 170(b)(1)(A)(i) . B [~ A school. Section 170(b)(t)(A)(ii) (Also complete Part V .) 7 OX A hospital or a cooperative hospital service organization . Section 170(6)(1)(A)(iii) . 8 ~ A Federal, state, or local government or governmental unit . Section 170(b)(1)(A)(v) . 9 ~ A medical research organization operated in conjunction with a hospital . Section 170(b)(1)(A)(if1) Enter the hospital's name, city,

and state 011, 10 0 An organization operated for the benefit of a college or university owned or operated by a governmental unit Section 170(b)(1)(A)(iv) .

(Also complete the Support Schedule in Part IV-A .) 11a 0 An organization that normally receives a substantial part of its support from a governmental unit or from the general public.

Section 170(b)(1)(A)(vi). (Also complete the Support Schedule in Part IV-A .) 1111 0 A community trust . Section 170(b)(1)(A)(vi) . (Also complete the Support Schedule in Pan IV-A .) 12 ~ 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 charitable, etc ., 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) (Also complete the Support Schedule m Part IV-A )

Schedule A(Form990or990-EZ)2003 FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Page 3 support Schedule (Complete only if you checked a box on line 10, 11, or 12 .) Use cash method of accounting . NBA Note: You ma use the worksheet in the instructions for convertin g from the accrual to the cash method of accounbn .

Calendar year (or fiscal year be innin in 1 (a) 2002 (h) 2001 (c) 2000 (d) 1999 (e) Total 15 Gifts, grants, and contributions

received . (Do not include unusual rants See line 28 .

16 Membership fees received 17 Gross receipts from admissions,

merchandise sold or services performed, or furnishing of facilities in any activity that is related to the organization's charitable, etc ., purpose . .

18 Gross income from interest, dividends, amounts received from payments on securities loans (sec- tion 512(a)(5)}, rents, royalties, and unrelated business taxable income (less section 511 taxes) from businesses acquired by the organization after June 30, 1975

19 Net income from unrelated business activities not included in line 18

20 Tax revenues levied for the organization's benefit and either paid to it or expended on its behalf

21 The value of services or facilities famished to the organization by a governmental unit without charge . Do not include the value of services or facilities generally furnished to the public without charge

pp Other income . Attach a schedule . Do not include gain or floss) from sale of capital assets

23 Total of lines 15 through 22 0 . 0 . 0 . 0 . 0 . 24 line 23 minus line 17 25 Enter 1°/a of line 23 25 Organizations described on lines 10 or 11 : a Enter 2% of amount in column (e), line 24 _ . . . , . 1 2Ba N/A . . .,. b Prepare a list for your records to show the name of and amount contributed by each person (other than a governmental

unit or publicly supported organization) whose total gifts for 1999 through 2002 exceeded the amount shown in line 26a . Do not file this list with your return . Enter the total of all these excess amounts . . _ _ . . . , . 1 26h N/A

c Total support for section 509(a)(1) test . Enter line 24, column (e) . . . . . . . . . . . . . . . " 28c N / A d Add : Amounts from column (e) for lines: 18 19 " `

22 26b . . " 26d N / A e Public support (line 26c minus line 26d total) . . . . . . . . . . _ 1 26e N/A f Public support percentage (line 26e (numerator) divided by line 28c (denominator)) . III-, 26f N/A %

27 Organizations described on line 12 : a For amounts included in lines 15,16, and 17 that were received from a "disqualified person; prepare a list for your records to show the name of, and total amounts received in each year tram, each 'disqualified person! Do not file this list with your return . Enter the sum of such amounts for each year : (2002) . . . . (2001) . . , . . _ . ._ . . . . . . . (2000) . . . . . _ . . . (1999)

b For any amount included m line 17 that was received from each person (other than "disqualified persons'), prepare a list for your records to show the name of, and amount received for each year, that was more than the larger of (1) the amount on fine 25 for the year or (2) $5,000. (include in the list organizations described in lines 5 through 11, as well as individuals .) Do not file this list with your return . After computing the difference between the amount received and the larger amount described in (1) or (2), enter the sum of these differences (the excess amounts) for each year : (2002) . . . . . . . , , . (2001) (2000) . . . . . . . (1999)

c Add' Amounts from column (e) for lines 15 16 --~T ~~- 17 20 21 00-- 27c

d Add : Line 27a total . - --ancLline-27b4otal -- ------------- 10, 27d N/A ----Public sappofT-(line 27c total minus line 27d total) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 27e N/A

" . ; ( Total support for section 509(a)(2) test Enter amount on brie 23, column (e) . _ 1 27t N /A g Public support percentage (line 27e (numerator) divided by line 27f (denominator)) 1 27 N/A q, h Investment income percentage line 18 column e numerator divided by line 27f denominator . ~ 27h N/A

28 Unusual Grants: For an organization described in line 10, 11, or 12 that received any unusual grants during 1999 through 2002, prepare a list for your records to show, for each year, the name of the contributor, the date and amount of the grant, and a brief description of the nature of the grant . Do not file this list with your return . Do not include these grants in line 15 .

323121 12-05-03 Schedule A (Forth 990 or 990-EZ) 2003

Schedule A(Form990or990-EZ)2003 FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Page4 pan V Private School Questionnaire (see page 7 of the instructions) N/A

' (To be completed ONLY by schools that checked the box on line 6 in Part 11)

Yes No

29

80

31 .

29 Does the organization have a racially nondiscriminatory policy toward students by statement in its charter, bylaws, other governing instrument, or in a resolution of its governing body? _ . ., . . . . . . , .,

30 Does the organization include a statement of its racially nondiscriminatory policy toward students in all its brochures, catalogues, and other written communications with the public dealing with student admissions, programs, and scholarships? . .

31 Has the organization publicized its racially nondiscriminatory policy through newspaper or broadcast media during the period of solicitation for students, or during the registration period if it has no solicitation program, in a way that makes the policy known to all parts of the general community it serves? _ . If'Yes ; please describe ; if "No," please explain . (If you need more space, attach a separate statement.)

. . 338 336 33c

_ . 33d . . 83s

3311 . . 83

93h

83 Does the organization discriminate by race in any way with respect to : a Students' rights or privileges? . . . _ . . , . . . . _ . . b Admissions policies? . . . c Employment of faculty or administrative staff? ., . d Scholarships or other financial assistance? . . . . . . . . . . . . . . . e Educational policies? t Use of facilities? . . . ., . . . g Athletic programs? . . . . . h Other extracurricular activities? . . . . . . . . . . . .

If you answered ̀ Yes" to any of the above, please explain . (If you need more space, attach a separate statement .)

323131 12-OS03

32 Does the organization maintain the following - a Records indicating the racial composition of the student body, faculty, and administrative staff? . b Records documenting that scholarships and other financial assistance are awarded on a racially nondiscriminatory basis? c Copies of all catalogues, brochures, announcements, and other written communications to the public dealing with student

admissions, programs, and scholarships? _ . d Copies of all material used by the organization or on its behalf to solicit contnbutions7 . . . . .

If you answered "No" to any of the above, please explain . (If you need more space, attach a separate statement )

34 a Does the organization receive any financial aid or assistance from a governmental agency? . . , . b Has the organization's right to such aid ever been revoked or suspended?

If you answered "Yes" to either 34a or b, please explain using an attached statement 35 Does the organization certify that it has complied with the applicable requirements of sections 4 .01 through 4 05 of Rev Proc . 75-50,

1975-2 C .B . 587, covering racial nondiscrimination? If "No ; attach an explanation . . , .

Schedule A (Form 990 or 990-Et) 2008

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 45 through 50 on Me 11 of the instructions .)

N/A (e) Total

0 .

0 .

0 .

0 .

0 .

0 .

Amount

Calendar year (or fiscal year beginning in) 1

45 Lobbying nontaxable amount .

45 Lobbying ceiling amount 150% of line 45 ( e))

47 Total lobbying exp enditures

48 Grassroots nontaxable amount

49 Grassroots ceiling amount 150% of line 48 (e)) .

50 Grassroots lobbying

,a .

PV-£3 Lobbying Activity by Nonelecting Public Charities (For reporting only by organizations that did not complete Part VI-A) (See page 12 of the instructions .)

During the year, did the organization attempt to influence national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of: a Volunteers b Paid staff or management (Include compensation m expenses reported on lines c through h .) X c Media advertisements K

X d Mailings to members, Isfators,u the~ubli~-- :- ~ - - . ._ . . . . . . . , . e Publications, or published or broadcast statements . . . . . ._ . , . . . . . . _ . . . X

t Grants to other organizations for lobbying purposes X g Direct contact with legislators, their staffs, government officials, or a legislative body K h Rallies, demonstrations, seminars, conventions, speeches, lectures, or any other means . . . ._ . _ X i Total lobbying expenditures (Add lines c through h .) __ . . . , . . . . . ._ _ . . 0 .

If "Yes" to any of the above, also attach a statement giving a detailed description of the lobbying activities . 323141 12-06-03 Schedule A (Form 990 or 990-EZ) 2003

Schedule A(Form990or990-EZ)2003 FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Page 5 F2rrt Y1 -A Lobbying Expenditures by Electing Public Charities (see page 9 ottne instructions ) N/A

(To be completed ONLY by an eligible organization that fled Form 5768) Check " a El if the org anization belon s to an affiliated rou Check " b El if ou checked "a" and "limited control" provisions a

Limits on Lobbying Expenditures Affiliated group To be completed for ALL (The term 'expenditures' means amounts paid or incurred .) totals electing organizations

N/A 36 Total lobbying expenditures to influence public opinion (grassroots lobbying) ., _ ._ . . . . . . . 36 37 Total lobbying expenditures to influence a legislative body (direct lobbying) . . . . . . 97 38 Total lobbying expenditures (add lines 36 and 37) 38 39 Other exempt purpose expenditures . . . . . . . . . . . . ._ . . _ . . . . . , 39 40 Total exempt purpose expenditures (add lines 38 and 39) 40 41 Lobbying nontaxable amount Enter the amount from the following table -

If the amount on line 40 Is - The lobbying nontaxable amount Is - Not over $500,000 , 20% of the amount on line 40 , , � , , , _ + + , � Over $500,000 but not ova $1,000,000 $100,000 plus 15% of the excess over $500,000 Over $7,000,000 but not over $1,500,000 $175,000 plus 10% of the excess over $1,000,000 _ 41 Over $1,500,000 but not over $77,000,000 , . , $225,000 plus 5% of the excess over $1,500,000 ovxan,ooo,ooo . . . . . $1,0001000

42 Grassroots nontaxable amount (enter 25°l0 of fine 41) . . . . , . 42 48 Subtract line 42 from line 36 . Enter -0- If line 42 is more than line 36 43 44 Subtract line 41 from line 38 Enter -0- it line 41 is more than line 38 . , . . . . . . . . _ 44

Caution : if there is an amount on either line 43 or line 44, you must file Form 4720 .

Lobbying Expenditures During 4-Year Averaging Period

(a) (b) (c) (d) 2003 2002 2001 2000

52 a Is the organization directly or indirectly affiliated with, or related to, one or more tax-exempt organizations described in section 501(c) of the Code (other than section 501(c)(3)) or in section 527? _ . . . . . . . . . . . . " Yes EXI No

p If "Yes,' complete the following schedule : N/A (a) (b) M

Name of organization Type of organization Description of relationship

Schedule A (Form 990 or 990-EZ) 2003 z-a5-oa

Schedule A (Form 990 or 990-EZ) 2003 FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 Page 6 Part Yet Information Regarding Transfers To and Transactions and Relationships With Noncharitable

Exempt Organizations (See page 12 of the instructions) 51 Did the reporting organization directly or indirectly engage m any of the following with any other organization described in section

501(c) of the Code (other than section 501(c)(3) organizations) or in section 527, relating to political organizations? a Transfers from the reporting organization to a noncharitable exempt organization of : Yes No

(I) Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51a(1) X (ii) Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a(II) X

b Other transactions : (I) Sales or exchanges of assets with a nonchaMable exempt organization _ _ . . . _ . _ . . . . . . . . , . . . . � .� . . . . . _ . . . b(l) X (ii) Purchases of assets from a nonchantable exempt organization __ . ._ , ., . . . . . . . . ., _ . ._ . . . . . . . . . . ., b(ii) X (ili) Rental of facilities, equipment, or other assets . . _, . . , . , . . . . . . . . . . . , . . . _ . _ , . . . b(iii) X (Iv) Reimbursement arrangements . . . . , . . . . . . . . . . . . . b(iv) X (v) roans or loan guarantees b(v) X (vi) Performance of services or membership or fundraising solicitations . . . _ . ._ . . . . . b(vi) X

c Sharing of facilities, equipment, mailing lists, other assets, or paid employees . . . . . . . . . . . . . . . . . c X d If the answer to any of the above is'Yes; complete the following schedule . Column (b) should always show the fair market value of the

goods, other assets, or services given by the reporting organization If the organization received less than fair market value m any transaction or sharing arrangement, show in column (d) the value of the goods, other assets, or services received : N/A

7 a) (b) (c) (d)

L e

in(no Amount involved Name of noncharitable exempt organization Description of transfers, transactions, and sharing arrangements

328102 05-01-Q3 (D) - Asset disposed " ITC, Section 179, Salvage, HR 3090, Commercial Revitalization Deduction

2003 DEPRECIATION 71D AMOR7IZATION REPORT FORM 990 PAGE 2 990

Noel Description Date

Method Life No` Unadjusted Bus °~ Reduction In Basis For Accumulated Current Amount Of Acquired Cost Or Basis Excl Basis Deprecation Depreciation Sec 179 Depreciation

1 AND VARIES .000 16 2421745 . 2421745 . 0 .

2 LEASER01 J) DWROVEMENTS 7A KI KS .000 14 99366121 9936612-4 :2579902 . 591t 479

3 UILDIN S I .000 16 80146417 . 80146417 .15472664 . 1818177 .

582t 157

5 MOVABLE EQUIPMENT I S .000 16 72535592 . 72535592 .42343360 . 5367187 .

r 1,T.A.{ .1 ZED rURlrMk3FJS VA - 1 Es .000 6 is 1~ 0,222 1 21 7,r221 . :: fi J. / t 2G.iG R

7 ENOVATIONS I .000 16 34654317 . 34654317 . 0 . 'TOTAL + 90 PA49~ .2

IDEPR ~151592 0,.015159215172537961 .1 0 .1 8.35900D .,

STATEMENT S) 1

FREDERICK MEMORIAL 'HOSPITAL, INC . F 52-0591612

FORM 990 GAIN (LOSS) FROM PUBLICLY TRADED SECURITIES STATEMENT 1

GROSS COST OR EXPENSE NET GAIN DESCRIPTION SALES PRICE OTHER BASIS OF SALE OR (LOSS)

SALE OF INVESTMENTS 22,120,088 . 21,406,792 . 0 . 713,296 .

TO FORM 990, PART I, LINE 8 22,120,088 . 21,406,792 . 0 . 713,296 .

! t

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

FORM 990 GAIN (LOSS) FROM SALE OF OTHER ASSETS STATEMENT 2

DATE DATE METHOD ACQUIRED SOLD ACQUIRED DESCRIPTION

STATEMENT S) 2, 3

SALE OF PROPERTY & EQUIPMENT PURCHASED

GROSS COST OR EXPENSE NET GAIN NAME OF BUYER SALES PRICE OTHER BASIS OF SALE DEPREC OR (LOSS)

13,939 . 380,119 . 0 . 0 . <366,180 .>

TO FM 990, PART I, LN 8 13,939 . 380,119 . 0 . 0 . <366,180 .>

FORM 990 SPECIAL EVENTS AND ACTIVITIES STATEMENT 3

GROSS CONTRIBUT . GROSS DIRECT NET DESCRIPTION OF EVENT RECEIPTS INCLUDED REVENUE EXPENSES INCOME

CHRISTMAS BAZAAR 7,538 . 7,538 . 1,200 . 6,338 . SNOWBALL DANCE 53,514 . 53,514 . 24,417 . 29,097 . TREE OF LIGHTS 11,710 . 11,710 . 11,710 . 0 . OTHER EVENTS 55,967 . 55,967 . 43,952 . 12,015 .

TO FM 990, PART I, LINE 9 128,729 . 128,729 . 81,279 . 47,450 .

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

STATEMENT S) 4

FORM 990 INCOME AND COST OF GOODS SOLD STATEMENT 4 INCLUDED ON PART I, LINE 10

INCOME

1 . GROSS RECEIPTS . . . . . . . . . . . . . . . 386,888 2 . RETURNS AND ALLOWANCES . . . . . . . . . . . 3 . LINE 1 LESS LINE 2 . . . . . . . . . . . . . 386,888

4 . COST OF GOODS SOLD (LINE 13) . . . . . . . . 222,328 5 . GROSS PROFIT (LINE 3 LESS LINE 4) . . . . . 164,560

COST OF GOODS SOLD

6 . INVENTORY AT BEGINNING OF YEAR . . . . . . . 3,141,965 7 . MERCHANDISE PURCHASED . . . . . . . . . . . 506,426 8 . COST OF LABOR . . . . . 9 . MATERIALS AND SUPPLIES . . . . . . . . . . .

10 . OTHER COSTS . . . . . . 11 . ADD LINES 6 THROUGH 10 . . . . . . . . . . . 3,648,391

12 . INVENTORY AT END OF YEAR . . . . . . . . . . 3,426,063 13 . COST OF GOODS SOLD (LINE 11 LESS LINE 12) . . 222,328

52-0591612 FREDERICK MEMORIAL HOSPITAL, INC .

FORM 990 OTHER CHANGES IN NET ASSETS OR FUND BALANCES STATEMENT 5

DESCRIPTION AMOUNT

STATEMENT(S) 5, 6

UNREALIZED APPRECIATION OF INVESTMENTS 2,067,725 . FUND BALANCE ADDITION FOR SELF INSURANCE - NOT SEPARATE LEGAL ENTITY 450,593 .

TOTAL TO FORM 990, PART I, LINE 20 2,518,318 .

FORM 990 OTHER EXPENSES STATEMENT 6

(A) (B) (C) (D) PROGRAM MANAGEMENT

DESCRIPTION TOTAL SERVICES AND GENERAL FUNDRAISING

PROFESSIONAL FEES-M .D . 3,071,985 . 3,071,985 . INSURANCE 1,239,735 . 1,239,735 . MEDICAL EQUIPMENT 430,302 . 430,302 . DUES AND LICENSES 308,786 . 308,786 . DRUGS 16,120,560 . 16,120,560 . X-RAYS 348,922 . 348,922 . FOOD AND CATERING 1,226,335 . 1,226,335 . BLOOD PROCESSING 1,273,169 . 1,273,169 . LINEN AND BEDDING 167,037 . 167,037 . CLEANING 335,204 . 335,204 . AUTO 294,053 . 294,053 . BOND AMORTIZATION 213,900 . 213,900 . MISCELLANEOUS 496,267 . 496,267 . ALLOWANCE FOR UNCOLLECTIBLES 6,242,174 . 6,242,174 . TREASURER'S FUND 18,733 . 18,733 . RECRUITMENT 565,502 . 565,502 . PROMOTION 607,196 . 607,196 . CONTRACT SERVICES 13,703,022 . 1,413,301 . 12,289,721 . CONTRACTUAL AND OTHER ALLOWANCES 29,688,757 . 29,688,757 . PROFESSIONAL FEES 116,760 . 116,760 . PAGER RENTAL EXPENSE 14,099 . 14,099 . ADDITIONAL PENSION ADJUSTMENT <6,918,554 .> <6,918,554 .> UNCOLLECTABLE PROMISES TO GIVE 903,142 . 903,142 . IMPAIRMENT OF ASSETS 1,066,348 . 1,066,348 .

-P6~IX),--FM-99~,ZIT43--X533, 434 . 50, 603, 389 . 20,930,045 .

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

OTHER PUBLICLY TOTAL

CORPORATE CORPORATE TRADED OTHER NON-GOV'T SECURITY DESCRIPTION STOCKS BONDS SECURITIES SECURITIES SECURITIES

808,931 . 808,931 .

0 . 12,782,733 .

25,167,475 .

12,782,733 .

25,167,475 .

8,111 . 8,111 .

25,175,586 . 12,782,733 . 808,931 . 38,767,250 . TO 990, LN 54 COL B

FORM 990 GOVERNMENT SECURITIES STATEMENT 8

STATE AND TOTAL GOV T LOCAL GOVT SECURITIES

21,505,536 . TOTAL TO FORM 990, LINE 54, COL B 21,505,536 .

FORM 990 OTHER INVESTMENTS STATEMENT 9

VALUATION DESCRIPTION METHOD AMOUNT

INVESTMENT IN SUBSIDIARY COST 18,269,705 .

TOTAL TO FORM 990, PART IV, LINE 56, COLUMN B 18,269,705 .

STATEMENT S) 7, 8, 9

FORM 990 NON-GOVERNMENT SECURITIES STATEMENT 7

ASSET BACKED SECURITIES CONSTRUCTION INVESTMENTS CORPORATE BONDS MARKETABLE EQUITY SECURITIES MARKETABLE SECURITIES

U .S . DESCRIPTION GOVERNMENT

U . S . GOV T OBLIGATIONS 21,505,536 . 21,505,536 .

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

FORM 990 DEPRECIATION OF ASSETS NOT HELD FOR INVESTMENT STATEMENT 10

9,936,612 . 3,171,381 . 6,765,231 . 80,146,417 . 17,290,841 . 62,855,576 . 15,247,310 . 12,506,970 . 2,740,340 . 72,535,592 . 47,710,547 . 24,825,045 .

217,222 . 217,222 . 0 . 34,654,317 . 0 . 34,654,317 .

215,159,215 . 80,896,961 . 134,262,254 . TOTAL TO FORM 990, PART IV, LN 57

FORM 990 OTHER EXPENSES NOT INCLUDED ON FORM 990 STATEMENT 12

TOTAL TO FORM 990, PART IV-B

STATEMENT S) 10, 11, 12

DESCRIPTION

LAND LAND IMPROVEMENTS & LEASEHOLD IMPROVEMENTS BUILDINGS FIXED EQUIPMENT MOVABLE EQUIPMENT CAPITALIZED PURCHASES RENOVATIONS

COST OR ACCUMULATED OTHER BASIS DEPRECIATION BOOK VALUE

2,421,745 . 0 . 2,421,745 .

FORM 990 OTHER ASSETS STATEMENT 11

DESCRIPTION AMOUNT

DUE FROM AFFILIATES 8,538,882 . INTANGIBLE ASSETS 5,$72,547 . BOND ISSUANCE COSTS 2,866,686 . OTHER RECEIVABLES 1,248,221 .

TOTAL TO FORM 990, PART IV, LINE 58, COLUMN B 18,526,336 .

DESCRIPTION

SPECIAL EVENT EXPENSES - NETTED ON LINE COST OF GOODS SOLD - NETTED ON LINE lOB LOSS OF DISPOSAL OF PPP - NETTED ON LINE

AMOUNT

9B 81,279 . 222,328 .

8B 366,180 .

669,787 .

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

FORM 990 PROGRAM SERVICE REVENUE STATEMENT 15

BUS UNRELATED EXCL EXCLUDED CODE BUSINESS INC CODE AMOUNT

OUTPATIENT REVENUE INPATIENT REVENUE CAFETERIA & COFFEE SHOP OTHER PATIENT SERVICES PROFESSIONAL FEES STAFF SERVICES DISCOUNTS ON PURCHASES BABY PHOTOS LIFE MEMBERS MISCELLANEOUS RECRUITING & RETENTION MEMBERSHIP MEETING RETAIL PHARMACY PREMIUM REVENUE PARTNERSHIP INCOME RELATED TO PROGRAM SERV

03 1,066,559 . 350,252 . 559,339 .

1,061,821 . 14,422 . 6,462 . 1,824 .

16,470 . 4,070 . 2,323 .

1,813,229 . 127,789 .

541900 <25,689 .>

FORM 990 OTHER REVENUE INCLUDED ON FORM 990 STATEMENT 13

DESCRIPTION AMOUNT

ALLOWANCE NETTED AGAINST REVENUE ON FINANCIAL STATEMENTS 29,688,757 . SPECIAL EVENT EXPENSES - NETTED ON LINE 9B <81,279 .> COST OF GOODS SOLD - NETTED ON LINE lOB <222,328 .> LOSS ON DISPOSAL OF PPE- NETTED ON LINE 8B <366,180 .>

TOTAL TO FORM 990, PART IV-A 29,018,970 .

FORM 990 OTHER EXPENSES INCLUDED ON FORM 990 STATEMENT 14

DESCRIPTION AMOUNT

ALLOWANCES NETTED AGAINST REVENUE ON FINANCIAL STATEMENTS 29,688,757 .

TOTAL TO FORM 990, PART IV-B 29,688,757 .

DESCRIPTION

446110 2,352,083 .

RELATED OR EXEMPT FUNC-TION INCOME

107,044,077 . 104,329,856 .

ro FORM 990, PART VII, LINE 93 2,326,394 . 1, 06655_9- -

STATEMENT S) 13, 14, 15

FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612

FORM 990 PART IX STATEMENT 16 INFORMATION REGARDING TAXABLE SUBSIDIARIES

NAME, ADDRESS & ID NUMBER OF CORP OR PARTNERSHIP

FREDERICK SURGICAL SERVICES CORP, 915 TOLLHOUSE AVE ., EIN 52-1642334 FREDERICK HEALTH SERVICES CORP ., W . 7TH ST ., FREDERICK, MD . 21701 EIN 52-1851661 EMMITSBURG PROPERTIES, LLC, W 7TH ST ., FREDERICK, MD 21701 EIN 52-1910823

PCT NATURE OF TOTAL END-OF-YEAR OWN BUSINESS INCOME ASSETS

6,553,095 . 4,046,997 .

5,544,369 . 12,099,109 .

99 .00 -r

74,120 . 1,920,506 .

STATEMENT S) 16

100 .00$ HEALTH SERVICES

100 .00$ HEALTH SERVICES

STATEMENT

PHIL HAMMOND Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

CHARLES R. ZIMMERMAN Frederick Memorial Hospital, Inc. West 7th Street

NONE OF THE ABOVE ARE COMPENSATED IN ANY WAY.

FREDERICK MEMORIAL HOSPITAL, INC. EIN:52-0591612 ATTACHMENT TO JUNE 30, 2004 FORM 990, PART V, LIST OF OFFICERS, DIRECTORS AND KEY EMPLOYEES

GENE ASHE, M.D . Chief of Staff Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

DARLENE AULLS FMH Auxiliary President Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

STEVE BRAND, M.D . Past Chief of Staff Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

FAYE CANNON Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

MANUEL CASIANO, M.D . Vice Chief of Staff Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

J . BRIAN GAENG Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

EARL MACKINTOSH, III Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

A. WADE MANNING Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

PETER H. PLAMONDON, SR. Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

GREG POWELL, PH.D . Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

J. RAY RAMSBURG, III Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

PATRICIA STANLEY Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

SEYMOUR B. STERN Frederick Memorial Hospital, Inc. West 7th Street Frederick, MD 21701

N 1455806-512003 Tax1BODHEADER doc

FREDERICK MEMORIAL HOSPITAL, INC. EIN:52.0591612 ATTACHMENT TO JUNE 30, 2004 FORM 990, SCHEDULE A, PART III, AFFILIATIONS WITH BOARD MEMBERS

STATEMENT I $

J. Brian Gaeng, Board Member, is employed with Fidelity Bank, Mercantile-Safe Deposit & Trust Company, and Farmers & Mechanics Banks, which have general banking affiliations with Frederick Memorial Hospital, Inc.

Peter H. Plamondon, Sr ., Board Member and owner of Plamondon Enterprises, operates hotel and restaurant chains that are routinely used by Frederick Memorial Hospital, Inc.

J Ray Ramsburg, III, Board Member, is an insurance Agent with BB&T Insurance Services which has an LLC insurance affiliation with Frederick Memorial Hospital, Inc.

Patricia Stanley, Board Member, is the President of Frederick Community College which provides education services to some employees of Frederick Memorial Hospital, Inc .

Seymour B . Stem, Board Member, is an Partner in Stern 8 Thorton, P.A. which provides legal advice to Frederick Memorial Hospital, Inc . on minor legal transactions.

NONE OF THE ABOVE ARE COMPENSATED IN ANY WAY.

Application for Extension of Time To File an Exempt Organization Return

Form 8868, (December 2000) Department of the Treasury Internal Revenue Service

OMB No. 1545-1709

" File a for each return .

" If you are filing for an Automatic 3-Month Extension, complete only Part 1 and check this box . . ., ., . . . . . . . ., ., ., . . ., . . . ., . ., ., . . . . . ., . ., " If you are filing for an Additional (not automatic) 3-Month Extension, complete only Part 11 (on page 2 of this form) . Note: Do not complete Part II unless you have already been granted an automatic 3-month extension on a previously filed Form 8868 .

=Part ~ Automatic 3-Month Extension of Time - Only submit original (no copies needed)

Note: Form 990-T corporations requesting an automatic 6-month extension - check this box and complete Pert I only �� , .��� , � , ., ., .,1 [ All other corporations Including Form 990-C filers) muss use Fomt 7004 to request an extension o1 lime to file income lax returns. Partnerships, REhMCs and trusts must use Form 8736 to request an extension of time to file Form 1065, 1066, or 1047 .

Type or Name of Exempt Organization Employer identification number print

FREDERICK MEMORIAL HOSPITAL INC . 52-0591612 File by th

ro Number, street, and room or suite no . If a P.O . box, see instructions. dull ace e

filing your WEST 7TH STREET return . See instructions City, town or post once, state, and ZIP code . For a foreign address, see instructions.

FREDERICK MD 21701

Check type of return to be filed file a separate application for each return) :

Form 990 D Form 990"T (corporation) ~ Form 4720 Form 990-BL ~ Form 990~T (sec. 4010 or 408(a) trust) D Form 5227 Form 990"EZ 0 Form 990~T (trust other than above) ~ Form 6069

D Form 990-PF C] Form 1041 "A ~ Form 8870

" If the organization does not have an office or place of business in the United States, check this box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 0 " If this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) . If this is for the whole group, check this box " D . If it is for part of the group, check this box " 0 and attach a list with the names and EINs of all members the extension will cover.

1 I request an automatic 3-month (6-month, for 990-T corporation) extension of time until FEBRUARY 15, 2 005 . to file the exempt organization return for the organization named above . The extension is for the organization's return for: " E:1 calendar year or " OX tax year beginning JUL 1, 2003 , and ending JUN 30, 2004

2 If this tax year is for less than 12 months, check reason : 0 Initial return 0 Final return [~ Change in accounting period

3a If this application is for Form 990-BL, 990-PF, 990 "T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits . See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b If this application Is for Form 990"PF or 990 "7, enter any refundable credits and estimated lax payments made . Include any prior year overpayment allowed as a credit . . . . . . . . ., . . . . . . . . . . . ., . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . $

c Balance Due . Subtract line 3b from line 3a. Include your payment with this form, or, if required, deposit with FTD coupon or, If required, by using EFtPS (Electronic Federal Tax Payment System) . See instructions . . . . . . . . . . . . . . . . . ., , , $ N/A

Signature and Verification

Under penalties of perjury, I declare that I have examined this form, including accompanying schedules and statements, and to the best of my knowledge and belief, ft is true, correct, and complete, and that I am authorized to prepare this form.

Signature " Title " Date LHA For Paperwork Reduction Act Notice, see instruction ------------ FoTm-8Wf12-20W

323831 05-01-03

. , a

Fom '12-2Q00) Page 2

0 If y. " -iling for an Additional (not automatic) 3-Month Extension, complete only Part II and check this box _ ., , . , . . . . . , ._ " 0 Note : l -plate Pan 11 if you have already been granted an automatic 3-month extension on a previously filed Form 8888. 0 If you .,d filing for an Automatic 3-Month Extension, complete only Part 1 (on page 1).

t it ] Additional (not automatic) 3-Month Extension of Time - Must fife Original and One Coov.

Type or Name of Exempt Organization `I Employer identification number

b If this application is for Form 990-PF, 990-T, 4720, or 6069, enter any refundable credits and estimated tax payments made . Include any prior year overpayment allowed as a credit and any amount paid previously with Form 8888 , .

c Balance Due . Subtract line 8b from line 8a. Include your payment with this form, or, if required, deposit with FTD coupon or, if required, by using EFTPS (Electronic Federal Tax Payment System). See instructions . . . . ., . , . . . . .� ., ., $ N/A

Signature and Verification Under penalties of perjury, I declare that ! have examined this form, including accompanying schedules and statements, and to the best of my knowledge and belief, ft is true, correct, and complete, and that I a authorized to prepare this form .

pJ Signature " ~ Tv Title " "0 ~'`r Date " ~ ~ I ̀ r°

By : Director Date

Alternate Mailing Address - Enter the address if to an address

Name RSM MCGLADREY, INC . (SPK) Number and street (include suite, room, or apt. no.) Or a P.O . box number 100 NORTH CHARLES STREET, SUITE 1300

Type or print

City or town, province or state, and country Including postal or ZIP code) BALTIMORE, MD 21201

Form 8868 (12-2000)

pnnt. FREDERICK MEMORIAL HOSPITAL, INC . 52-0591612 File by the extended Number, street, and room or suite no . If a P.O. box, see instructions . - . , For IRS use only du.deteror ST 7TH STREET ` +' filing the return see City, town or post office, state, and ZIP code . For a foreign address, see instructions . "S'""°°"° REDERICK MD 21701 -- " ` <

Check type of return to be filed (File a separate application for each return): 0 Form 990 EDForm 990-EZ =Form 990"T (sec . 401(a) or 408(a) trust) =Form 1041-A ~ Form 5227 ~ Form 8870 = Form 990-BL 0 Form 990-PF = Form 990"T (trust other than above) [] Form 4720 ~ Form 6069

STOP: Do not complete Part II H you were not already granted an automatic 3-month extension on a previously filed Form 8868 .

" If the organization does not have an office or place of business in the United States, check this box . . . . . . . . . .�� .� .� , . ., ., . . .�� , . � No- = " If this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) . If this is for the whole group, check this box " = . If it is for part of the group, check this box 1 = and attach a list with the names and EINs of all members the extension is for.

4 I request an additional 3-month extension of time until MAY 16 5 For calendar year_, or other tax year beginning JUL 1, 200 3 and ending JUN 30 , 2004 8 If this tax year is for less than 12 months, check reason : [:1 Initial return EJ Final return Change in accounting period 7 State in detail why you need the extension

ADDITIONAL TIME IS NEEDED IN ORDER TO GATHER THE INFORMATION NECESSARY TO FILE A COMPLETE AND ACCURATE RETURN .

8a If this application is for Form 990-BL, 990~PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits . See instructions $

Notice to Applicant - To Be Completed by the IRS We have approved this application . Please attach this form to the organization's return .

0 We have not approved this application . However, we have granted a 10-day grace period from the later of the date shown below or the due date of the organization's return (including any prior extensions) . This grace period is considered to

b~~Y r elections

otherwise required to be made on a timely return . Please attach this form to the organization's return . We have not approved this application . After considering the reasons stated in item 7, we cannot grant your request for an extension of time to file . We are not granting the 10-day grace period. FEB 1 7 2005 We cannot consider this application because it was filed after the due date of the return for which an extension was requested .

0 Other $ 10APFiOMM1