<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 --------------
                                    FORM 10-Q
                                 --------------

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001
                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                         Commission file number 0-29818
                         ------------------------------

                            LifePoint Hospitals, Inc.
             (Exact name of registrant as specified in its charter)

                      Delaware                              52-2165845
            (State or other jurisdiction                  (IRS Employer
          of incorporation or organization)             Identification No.)

                  103 Powell Court                            37027
                 Brentwood, Tennessee                       (Zip Code)
       (Address of principal executive offices)


                                 (615) 372-8500
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                               YES [X]     NO [ ]

<PAGE>   2

                        Commission file number 333-84755
                        --------------------------------

                       LifePoint Hospitals Holdings, Inc.
             (Exact name of registrant as specified in its charter)

                     Delaware                               52-2167869
            (State or other jurisdiction                  (IRS Employer
          of incorporation or organization)             Identification No.)

                  103 Powell Court                            37027
                 Brentwood, Tennessee                       (Zip Code)
       (Address of principal executive offices)

                                 (615) 372-8500
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.

                               YES [X]     NO [ ]

         As of July 31, 2001, the number of outstanding shares of Common Stock
of LifePoint Hospitals, Inc. was 38,568,000, and all of the shares of Common
Stock of LifePoint Hospitals Holdings, Inc. were owned by LifePoint Hospitals,
Inc.

================================================================================

<PAGE>   3

                          Part I: Financial Information

Item 1: Financial Statements

                            LIFEPOINT HOSPITALS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                    UNAUDITED
                 (Dollars in millions, except per share amounts)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                                             JUNE 30,                             JUNE 30,
                                                                  -----------------------------        -----------------------------
                                                                     2001               2000              2001               2000
                                                                  ----------         ----------        ----------         ----------
<S>                                                               <C>                <C>               <C>                <C>
Revenues .................................................        $    151.6         $    133.3        $    305.9         $    269.3

Salaries and benefits ....................................              59.4               54.4             119.7              110.1
Supplies .................................................              18.8               16.0              38.4               33.0
Other operating expenses .................................              31.0               28.5              59.4               58.2
Provision for doubtful accounts ..........................              10.6                9.8              22.6               18.9
Depreciation and amortization ............................               8.5                8.4              16.6               16.8
Interest expense, net ....................................               3.7                7.4              10.2               14.6
ESOP expense .............................................               2.4                1.3               5.0                2.4
Gain on previously impaired assets .......................                --                 --              (0.5)                --
                                                                  ----------         ----------        ----------         ----------
                                                                       134.4              125.8             271.4              254.0
                                                                  ----------         ----------        ----------         ----------
Income before minority interests,
 income taxes and extraordinary item .....................              17.2                7.5              34.5               15.3
Minority interests in earnings of consolidated
 entities ................................................               0.7                0.7               1.3                1.3
                                                                  ----------         ----------        ----------         ----------
Income before income taxes and extraordinary item ........              16.5                6.8              33.2               14.0
Provision for income taxes ...............................               8.0                3.1              16.1                6.3
                                                                  ----------         ----------        ----------         ----------
Income before extraordinary item .........................               8.5                3.7              17.1                7.7
Extraordinary loss on early retirement of bank debt,
 net of tax benefit of $1.0 ..............................               1.6                 --               1.6                 --
                                                                  ----------         ----------        ----------         ----------
 Net income ..............................................        $      6.9         $      3.7        $     15.5         $      7.7
                                                                  ==========         ==========        ==========         ==========

Basic earnings per share:

   Income before extraordinary item ......................        $     0.23         $     0.12        $     0.50         $     0.25
   Extraordinary loss on early retirement of bank debt ...             (0.04)                --             (0.05)                --
                                                                  ----------         ----------        ----------         ----------
   Net income ............................................        $     0.19         $     0.12        $     0.45         $     0.25
                                                                  ==========         ==========        ==========         ==========

Diluted earnings per share:

   Income before extraordinary item ......................        $     0.22         $     0.11        $     0.47         $     0.24
   Extraordinary loss on early retirement of bank debt ...             (0.04)                --             (0.04)                --
                                                                  ----------         ----------        ----------         ----------
   Net income ............................................        $     0.18         $     0.11        $     0.43         $     0.24
                                                                  ==========         ==========        ==========         ==========

Shares used in earnings per share calculations (000s):

   Basic .................................................            36,236             31,307            34,420             31,245
       Dilutive securities - stock options ...............             1,426              1,232             1,455              1,036
                                                                  ----------         ----------        ----------         ----------
   Diluted ...............................................            37,662             32,539            35,875             32,281
                                                                  ==========         ==========        ==========         ==========
</TABLE>

                             See accompanying notes.


                                        1
<PAGE>   4

                            LIFEPOINT HOSPITALS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (Dollars in millions, except per share amounts)

<TABLE>
<CAPTION>
                                                                                     JUNE 30,         DECEMBER 31,
                                                                                       2001               2000
                                                                                     --------         ------------
                                                                                    (unaudited)            (1)

<S>                                                                                  <C>              <C>
                                    ASSETS
Current assets:
   Cash and cash equivalents ..............................................          $   29.5           $   39.7
   Accounts receivable, less allowances for doubtful accounts of $54.7
    at June 30, 2001 and $52.3 at December 31, 2000 .......................              42.5               41.7
   Inventories ............................................................              14.2               13.9
   Deferred taxes and other current assets ................................              14.8               22.2
                                                                                     --------           --------
                                                                                        101.0              117.5
Property and equipment:
   Land ...................................................................               9.1                8.7
   Buildings and improvements .............................................             242.4              236.9
   Equipment ..............................................................             250.8              244.9
   Construction in progress (estimated cost to complete and equip
    after June 30, 2001 - $8.8) ...........................................              20.3                9.4
                                                                                     --------           --------
                                                                                        522.6              499.9
Accumulated depreciation ..................................................            (195.7)            (183.4)
                                                                                     --------           --------
                                                                                        326.9              316.5
Intangible assets, net of accumulated amortization of $11.5 at
   June 30, 2001 and $11.3 at December 31, 2000 ...........................              52.9               53.8
Other .....................................................................               0.1                0.2
                                                                                     --------           --------
                                                                                     $  480.9           $  488.0
                                                                                     ========           ========

                          LIABILITIES AND EQUITY

Current liabilities:
   Accounts payable .......................................................          $   13.7           $   16.1
   Accrued salaries .......................................................              14.9               13.8
   Other current liabilities ..............................................              15.2               11.1
   Current maturities of long-term debt ...................................                --               11.1
                                                                                     --------           --------
                                                                                         43.8               52.1

Long-term debt ............................................................             150.0              278.3
Deferred taxes ............................................................              16.3               15.2
Professional liability risks and other liabilities ........................              14.2                9.4
Minority interests in equity of consolidated entities .....................               4.4                4.6

Stockholders' equity:
   Preferred stock, $0.01 par value; 10,000,000 shares authorized;
    no shares issued ......................................................                --                 --
   Common stock, $0.01 par value; 90,000,000 shares authorized;
    38,534,329 shares and 34,709,504 shares issued and
    outstanding at June 30, 2001 and December 31, 2000,
    respectively ..........................................................               0.4                0.3
   Capital in excess of par value .........................................             263.1              156.5
   Unearned ESOP compensation .............................................             (24.1)             (25.7)
   Notes receivable for shares sold to employees ..........................              (7.2)              (7.2)
   Retained earnings ......................................................              20.0                4.5
                                                                                     --------           --------
                                                                                        252.2              128.4
                                                                                     --------           --------
                                                                                     $  480.9           $  488.0
                                                                                     ========           ========
(1)  Derived from audited financial statements

</TABLE>


                             See accompanying notes.


                                       2
<PAGE>   5

                            LIFEPOINT HOSPITALS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                                  (In millions)

<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED
                                                                               JUNE 30,
                                                                     ---------------------------
                                                                       2001               2000
                                                                     --------           --------
<S>                                                                  <C>                <C>
Cash flows from operating activities:
    Net income ............................................          $   15.5           $    7.7
    Adjustments to reconcile net income to
     net cash provided by operating activities:
        ESOP expense ......................................               5.0                2.4
        Provision for doubtful accounts ...................              22.6               18.9
        Depreciation and amortization .....................              16.6               16.8
        Minority interests in earnings of consolidated
          entities ........................................               1.3                1.3
        Deferred income taxes (benefit) ...................              (0.7)               8.7
        Reserve for professional liability risk ...........               4.1                2.5
        Gain on previously impaired assets ................              (0.5)                --
        Extraordinary loss on early retirement of
         bank debt ........................................               2.6                 --
        Increase (decrease) in cash from operating
         assets and liabilities, net of effects
         of acquisitions:
           Accounts receivable ............................             (23.2)             (12.9)
           Inventories and other current assets ...........               0.2               (2.3)
           Accounts payable and accrued expenses ..........               2.8              (11.4)
           Income taxes payable ...........................               3.1               (2.5)
        Other .............................................               1.2                1.4
                                                                     --------           --------
           Net cash provided by operating activities ......              50.6               30.6

Cash flows from investing activities:
    Purchases of property and equipment, net ..............             (22.6)             (15.0)
    Purchases of facilities ...............................              (5.7)             (50.3)
    Cash held for acquisitions ............................                --              (33.0)
    Other .................................................               4.8               (1.9)
                                                                     --------           --------
           Net cash used in investing activities ..........             (23.5)            (100.2)

Cash flows from financing activities:
    Proceeds from stock offering, net .....................             100.4                 --
    Repayments of bank debt ...............................            (139.3)              (2.1)
    Proceeds from bank debt borrowings ....................                --               65.0
    Proceeds from exercise of stock options ...............               1.5                0.8
    Other .................................................               0.1               (0.7)
                                                                     --------           --------
           Net cash (used in) provided by
            financing activities ..........................             (37.3)              63.0

Change in cash and cash equivalents .......................             (10.2)              (6.6)
Cash and cash equivalents at beginning of period ..........              39.7               12.5
                                                                     --------           --------
Cash and cash equivalents at end of period ................          $   29.5           $    5.9
                                                                     ========           ========

Interest payments .........................................          $   12.2           $   13.7
Income tax payments .......................................          $   11.8           $     --
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>   6

                            LIFEPOINT HOSPITALS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

                   At June 30, 2001, the Company was comprised of 21 general,
acute care hospitals and related health care entities. The entities are located
in non-urban areas in the states of Alabama, Florida, Kansas, Kentucky,
Tennessee, Utah and Wyoming.

                  The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three months and six months ended June 30, 2001 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2001. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2000.

                  Certain prior year amounts have been reclassified to conform
to the current year presentation.

NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

                  In July 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, effective
for fiscal years beginning after December 15, 2001. Under the new rules,
goodwill will no longer be amortized but will be subject to annual impairment
tests. Other intangible assets will continue to be amortized over their useful
lives.

                  The Company will apply the new rules on accounting for
goodwill and other intangible assets beginning in the first quarter of 2002.
Application of the nonamortization provisions of SFAS No. 142 is expected to
result in an increase in net income of approximately $1.6 million per year
($0.02 per diluted share), based upon the Company's 2001 projected net income
and diluted shares. During 2002, the Company will perform the first of the
required impairment tests of goodwill as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and financial
position of the Company.

NOTE 3 - SECONDARY OFFERING AND AMENDED AND RESTATED CREDIT AGREEMENT

                  In March 2001, the Company completed a public offering of
3,680,000 shares of common stock. The net proceeds from the offering were
approximately $100.4 million. During April and May of 2001, the Company used the
proceeds, along with existing cash, to repay approximately $117.1 million of
bank debt which represented the remaining borrowings outstanding under its
existing bank credit agreement.

                  In June 2001, the Company completed a $200 million, five-year
amended and restated credit agreement with a syndicate of banks, which increased
the Company's available credit under its revolving credit agreement from $65
million to $200 million. Upon consummation of this amended and restated
agreement, the Company wrote off $2.6 million of deferred loan costs related to
the original credit agreement, which resulted in an extraordinary charge of $1.6
million, net of a tax benefit of $1.0 million.

NOTE 4 - CONTINGENCIES

         HCA Investigations, Litigation and Indemnification Rights

                  HCA Inc. ("HCA") is currently the subject of various federal
and state investigations, qui tam actions, shareholder derivative and class
action suits, patient/payer actions and general liability claims. HCA is also
the subject of a formal order of investigation by the SEC. HCA understands that
the SEC's investigation includes the anti-fraud, insider trading, periodic
reporting and internal accounting control provisions of the federal securities
laws. These investigations, actions and claims relate to HCA and its
subsidiaries, including subsidiaries that, before the Company's formation as an
independent company, owned the facilities the Company now owns.

                  HCA is a defendant in several qui tam actions, or actions
brought by private parties, known as relators, on behalf of the United States of
America, which have been unsealed and served on HCA. The actions allege, in
general, that HCA and certain subsidiaries and/or affiliated partnerships
violated the False Claims Act, 31 U.S.C. ss. 3729 et seq., by submitting
improper claims to the government for reimbursement. The lawsuits seek three
times the amount of damages caused to the United States by the submission of any
Medicare or Medicaid false claims presented by the defendants to the federal
government, civil penalties of not less than $5,000 nor more than $10,000 for
each such Medicare or Medicaid claim, attorneys' fees and costs. HCA has
disclosed that, on


                                       4
<PAGE>   7

March 15, 2001, the Department of Justice filed a status report setting forth
the government's decisions regarding intervention in existing qui tam actions
against HCA and filed formal complaints for those suits in which the government
has intervened. HCA stated that, of the original 30 qui tam actions, the
Department of Justice remains active and has elected to intervene in eight
actions. HCA has also disclosed that it is aware of additional qui tam actions
that remain under seal and believes that there may be other sealed qui tam cases
of which it is unaware.

                  On December 14, 2000, HCA announced that it signed an
agreement with the Department of Justice and four U.S. attorneys' offices
resolving all pending federal criminal issues in the government's investigation.
The criminal agreement has been accepted by the federal district courts. The
criminal agreement provided that HCA pay the government $95 million, which
payment was made during the first quarter of 2001, and that two non-operating
subsidiaries enter certain criminal pleas, which pleas were entered in January
2001.

                  HCA also announced that it signed a civil settlement agreement
with the Department of Justice resolving civil false claims issues related to
DRG coding, outpatient laboratory and home health. The civil settlement
agreement provides that in return for releases on these issues, HCA will pay the
government $745 million, with interest accruing from May 18, 2000 to the payment
date at a rate of 6.5%. Court approval of this settlement was received on August
7, 2001 and the civil payment is to be made by HCA on or before the fifth day
following such court approval. The civil issues that are not covered by the
civil agreement include claims related to cost reports and physician relations
issues.

                  The agreements announced on December 14, 2000 relate only to
conduct that was the subject of the federal investigations resolved in the
agreements, and HCA has stated publicly that it continues to discuss civil
claims relating to cost reporting and physician relations with the government.
These agreements with the government do not resolve various qui tam actions
filed by private parties against HCA, or any pending state actions. In addition
to other claims not covered by these agreements, the government also reserved
its rights under these agreements to pursue any claims it may have for:

         -        any civil, criminal or administrative liability under the
                  Internal Revenue code;

         -        any other criminal liability;

         -        any administrative liability, including mandatory exclusion
                  from federal health care programs;

         -        any liability to the United States (or its agencies) for any
                  conduct other than the conduct covered in the government's
                  investigation;

         -        any express or implied warranty claims or other claims for
                  defective or deficient products or services, including quality
                  of goods and services, provided by HCA;

         -        any claims for personal injury or property damage or for other
                  similar consequential damages arising from the conduct subject
                  to the investigation; and

         -        any civil or administrative claims of the United States
                  against individuals.

                  In addition, five of the Company's current and former
hospitals received notices in early 2001 from the Centers for Medicare and
Medicaid Services ("CMS"), formerly known as the Health Care Financing
Administration, a United States government agency that runs the Medicare and
Medicaid programs. The notices stated that CMS was re-opening, for examination,
cost reports for Medicare and Medicaid reimbursement filed by these hospitals
for periods between 1993 and 1998, which pre-dates the Company's spin-off from
HCA.

                  HCA has agreed to indemnify the Company for any losses, other
than consequential damages, arising from the pending governmental investigations
of HCA's business practices prior to the date of the distribution and losses
arising from legal proceedings, present or future, related to the investigation
or actions engaged in before the distribution that


                                       5
<PAGE>   8
relate to the investigation. HCA has also agreed that, in the event that any
hospital owned by the Company at the time of the spin-off is permanently
excluded from participation in the Medicare and Medicaid programs as a result of
the proceedings described above, then HCA will make a cash payment to the
Company, in an amount (if positive) equal to five times the excluded hospital's
1998 income from continuing operations before depreciation and amortization,
interest expense, management fees, minority interests and income taxes, as set
forth on a schedule to the distribution agreement, less the net proceeds of the
sale or other disposition of the excluded hospital. However, the Company could
be held responsible for any claims that are not covered by the agreements
reached with the federal government or for which HCA is not required to, or
fails to, indemnify the Company. If indemnified matters were asserted
successfully against the Company or any of the Company's facilities, and HCA
failed to meet its indemnification obligations, then this event could have a
material adverse effect on the Company's business, financial condition, results
of operations or prospects.

                  The extent to which the Company may or may not continue to be
affected by the ongoing investigations of HCA and the initiation of additional
investigations, if any, cannot be predicted. These matters could have a material
adverse effect on the Company's business, financial condition, results of
operations or prospects in future periods.

         Americans with Disabilities Act Claim

                  On January 12, 2001, Access Now, Inc., a disability rights
organization, filed a class action lawsuit against each of the Company's
hospitals alleging non-compliance with the accessibility guidelines under the
Americans with Disabilities Act. The lawsuit, filed in the United States
District Court for the Eastern District of Tennessee, seeks injunctive relief
requiring facility modification, where necessary, to meet the Americans with
Disabilities Act guidelines, along with attorneys' fees and costs. The Company
is working with Access Now, Inc. to determine the scope of facility modification
needed to comply with the Act.

         Corporate Integrity Agreement

                  In December 2000, the Company entered into a corporate
integrity agreement with the Office of Inspector General and agreed to maintain
its compliance program in accordance with the corporate integrity agreement.
Complying with the compliance measures and reporting and auditing requirements
of the corporate integrity agreement requires additional efforts and costs.
Failure to comply with the terms of the corporate integrity agreement could
subject the Company to significant monetary penalties.

         General Liability Claims

                  The Company is, from time to time, subject to claims and suits
arising in the ordinary course of business, including claims for damages for
personal injuries, breach of management contracts, for wrongful restriction of,
or interference with, physicians' staff privileges and employment related
claims. In some of these actions, plaintiffs request punitive or other damages
against the Company which may not be covered by insurance. The Company is
currently not a party to any proceeding which, in management's opinion, would
have a material adverse effect on the Company's business, financial condition or
results of operations.

         Physician Commitments

                  The Company has committed to provide certain financial
assistance pursuant to recruiting agreements with various physicians practicing
in the communities it serves. In consideration for a physician relocating to one
of its communities and agreeing to engage in private practice for the benefit of
the respective community, the Company may loan certain amounts of money to a
physician, normally over a period of one year, to assist in establishing his or
her practice. The Company has committed to advance amounts of approximately
$10.5 million at June 30, 2001. The actual amount of such commitments to be
subsequently advanced to physicians often depends upon the financial results of
a physician's private practice during the guaranteed period. Generally, amounts
advanced under the recruiting agreements may be forgiven pro rata over a period
of 48 months


                                       6
<PAGE>   9

contingent upon the physician continuing to practice in the respective
community. It is management's opinion that amounts actually advanced and not
repaid will not have a material adverse effect on the Company's results of
operations or financial position.

         Acquisitions

                  The Company has acquired and will continue to acquire
businesses with prior operating histories. Acquired companies may have unknown
or contingent liabilities, including liabilities for failure to comply with
health care laws and regulations, such as billing and reimbursement, fraud and
abuse and similar anti-referral laws. Although the Company institutes policies
intended to conform practices to its standards following completion of
acquisitions, there can be no assurance that the Company will not become liable
for past activities that may later be asserted to be improper by private
plaintiffs or government agencies. Although the Company generally seeks to
obtain indemnification from prospective sellers covering such matters, there can
be no assurance that any such matter will be covered by indemnification, or if
covered, that such indemnification will be adequate to cover potential losses
and fines.

NOTE 5 - SENIOR SUBORDINATED NOTES

                  The Company's senior subordinated notes (the "Notes") are
guaranteed jointly and severally on a full and unconditional basis by all of the
Company's operating subsidiaries ("Subsidiary Guarantors"). The Company is a
holding company with no operations apart from its ownership of the Subsidiary
Guarantors. The aggregate assets, liabilities, equity and earnings of the
Subsidiary Guarantors are substantially equivalent to the total assets,
liabilities, equity and earnings of the Company and its subsidiaries on a
consolidated basis.

                  Separate financial statements and other disclosures of the
wholly owned Subsidiary Guarantors are not presented because management believes
that such separate financial statements and disclosures would not provide
additional material information to investors.

                  At June 30, 2001, only one of the Company's subsidiaries,
Dodge City Healthcare Group, L.P., was not wholly owned, although all assets,
liabilities, equity and earnings of this entity fully and unconditionally,
jointly and severally, guarantee the Notes. The Company owns approximately 70%
of the partnership interests in this mostly owned guarantor subsidiary.

                  Presented below is summarized condensed unaudited
consolidating financial information for the Company and its subsidiaries as of
June 30, 2001 and December 31, 2000, and for the three months and six months
ended June 30, 2001 and 2000 segregating the parent company, the issuer of the
Notes (LifePoint Hospitals Holdings, Inc.), the combined wholly owned Subsidiary
Guarantors, the mostly owned Subsidiary Guarantor and eliminations.


                                       7
<PAGE>   10

                            LIFEPOINT HOSPITALS, INC.
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                    FOR THE THREE MONTHS ENDED JUNE 30, 2001
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>

Revenues ..............................        $   --    $   --       $143.3         $  8.3        $   --         $151.6

Salaries and benefits .................            --        --         56.8            2.6            --           59.4
Supplies ..............................            --        --         17.8            1.0            --           18.8
Other operating expenses ..............            --        --         29.7            1.3            --           31.0
Provision for doubtful accounts .......            --        --         10.3            0.3            --           10.6
Depreciation and amortization .........            --        --          8.0            0.5            --            8.5
Management fees .......................            --        --         (0.1)           0.1            --             --
Interest expense, net .................            --       4.6         (0.9)            --            --            3.7
ESOP expense ..........................            --        --          2.3            0.1            --            2.4
Equity in earnings of affiliates ......          (6.9)    (12.3)          --             --          19.2             --
                                               ------    ------       ------         ------        ------         ------
                                                 (6.9)     (7.7)       123.9            5.9          19.2          134.4
                                               ------    ------       ------         ------        ------         ------
Income before minority
  interests, income taxes and
  extraordinary item ..................           6.9       7.7         19.4            2.4         (19.2)          17.2
Minority interests in earnings of
  consolidated entities ...............            --       0.7           --             --            --            0.7
                                               ------    ------       ------         ------        ------         ------
Income before income taxes and
  extraordinary item ..................           6.9       7.0         19.4            2.4         (19.2)          16.5
Provision for income taxes ............            --      (1.5)         9.5             --            --            8.0
                                               ------    ------       ------         ------        ------         ------
Income before extraordinary item ......           6.9       8.5          9.9            2.4         (19.2)           8.5
Extraordinary loss on early
  retirement of debt, net .............            --       1.6           --             --            --            1.6
                                               ------    ------       ------         ------        ------         ------
     Net income .......................        $  6.9    $  6.9       $  9.9         $  2.4        $(19.2)        $  6.9
                                               ======    ======       ======         ======        ======         ======
</TABLE>


                                       8
<PAGE>   11

                            LIFEPOINT HOSPITALS, INC.
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                    FOR THE THREE MONTHS ENDED JUNE 30, 2000
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>

Revenues ..............................        $   --    $   --       $125.3         $  8.0        $   --         $133.3

Salaries and benefits .................            --        --         51.7            2.7            --           54.4
Supplies ..............................            --        --         15.0            1.0            --           16.0
Other operating expenses ..............            --        --         27.2            1.3            --           28.5
Provision for doubtful accounts .......            --        --          9.3            0.5            --            9.8
Depreciation and amortization .........            --        --          7.9            0.5            --            8.4
Management fees .......................            --        --         (0.1)           0.1            --             --
Interest expense, net .................            --       7.4         (0.1)           0.1            --            7.4
ESOP expense ..........................            --        --          1.3             --            --            1.3
Equity in earnings of affiliates ......          (3.7)     (8.9)          --             --          12.6             --
                                               ------    ------       ------         ------        ------         ------
                                                 (3.7)     (1.5)       112.2            6.2          12.6          125.8
                                               ------    ------       ------         ------        ------         ------
Income before minority
  interests and income taxes ..........           3.7       1.5         13.1            1.8         (12.6)           7.5
Minority interests in earnings of
  consolidated entities ...............            --       0.7           --             --            --            0.7
                                               ------    ------       ------         ------        ------         ------
Income before income taxes ............           3.7       0.8         13.1            1.8         (12.6)           6.8
Provision for income taxes ............            --      (2.9)         6.0             --            --            3.1
                                               ------    ------       ------         ------        ------         ------

     Net income .......................        $  3.7    $  3.7       $  7.1         $  1.8        $(12.6)        $  3.7
                                               ======    ======       ======         ======        ======         ======
</TABLE>


                                       9
<PAGE>   12

                            LIFEPOINT HOSPITALS, INC.
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>
Revenues ..............................        $   --    $   --       $289.7         $ 16.2        $   --         $305.9

Salaries and benefits .................            --        --        114.6            5.1            --          119.7
Supplies ..............................            --        --         36.4            2.0            --           38.4
Other operating expenses ..............            --        --         57.1            2.3            --           59.4
Provision for doubtful accounts .......            --        --         21.7            0.9            --           22.6
Depreciation and amortization .........            --        --         15.7            0.9            --           16.6
Management fees .......................            --        --         (0.3)           0.3            --             --
Interest expense, net .................            --      12.2         (2.0)            --            --           10.2
ESOP expense ..........................            --        --          4.8            0.2            --            5.0
Gain on previously impaired assets ....            --        --         (0.5)            --            --           (0.5)
Equity in earnings of affiliates ......         (15.5)    (26.2)          --             --          41.7             --
                                               ------    ------       ------         ------        ------         ------
                                                (15.5)    (14.0)       247.5           11.7          41.7          271.4
                                               ------    ------       ------         ------        ------         ------
Income before minority interests,
  income taxes and extraordinary
  item ................................          15.5      14.0         42.2            4.5         (41.7)          34.5
Minority interests in earnings of
  consolidated entities ...............            --       1.3           --             --            --            1.3
                                               ------    ------       ------         ------        ------         ------
Income before income taxes and
  extraordinary item ..................          15.5      12.7         42.2            4.5         (41.7)          33.2
Provision for income taxes ............            --      (4.4)        20.5             --            --           16.1
                                               ------    ------       ------         ------        ------         ------
Income before extraordinary item ......          15.5      17.1         21.7            4.5         (41.7)          17.1
Extraordinary loss on early
  retirement of debt, net .............            --       1.6           --             --            --            1.6
                                               ------    ------       ------         ------        ------         ------
     Net income .......................        $ 15.5    $ 15.5       $ 21.7         $  4.5        $(41.7)        $ 15.5
                                               ======    ======       ======         ======        ======         ======
</TABLE>


                                       10
<PAGE>   13

                            LIFEPOINT HOSPITALS, INC.
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>

Revenues ..............................        $   --    $   --       $253.1         $ 16.2        $   --         $269.3

Salaries and benefits .................            --        --        104.8            5.3            --          110.1
Supplies ..............................            --        --         30.9            2.1            --           33.0
Other operating expenses ..............            --        --         55.8            2.4            --           58.2
Provision for doubtful accounts .......            --        --         17.8            1.1            --           18.9
Depreciation and amortization .........            --        --         15.9            0.9            --           16.8
Interest expense, net .................            --      14.6         (0.2)           0.2            --           14.6
Management fees .......................            --        --         (0.3)           0.3            --             --
ESOP expense ..........................            --        --          2.3            0.1            --            2.4
Equity in earnings of
  affiliates ..........................          (7.7)    (18.2)          --             --          25.9             --
                                               ------    ------       ------         ------        ------         ------
                                                 (7.7)     (3.6)       227.0           12.4          25.9          254.0
                                               ------    ------       ------         ------        ------         ------
Income before minority interests
  and income taxes ....................           7.7       3.6         26.1            3.8         (25.9)          15.3
Minority interests in earnings of
  consolidated entities ...............            --       1.3           --             --            --            1.3
                                               ------    ------       ------         ------        ------         ------
Income before income taxes ............           7.7       2.3         26.1            3.8         (25.9)          14.0
Provision for income taxes ............            --      (5.4)        11.7             --            --            6.3
                                               ------    ------       ------         ------        ------         ------

     Net income .......................        $  7.7    $  7.7       $ 14.4         $  3.8        $(25.9)        $  7.7
                                               ======    ======       ======         ======        ======         ======
</TABLE>


                                       11
<PAGE>   14

                            LIFEPOINT HOSPITALS, INC.
                      CONDENSED CONSOLIDATING BALANCE SHEET
                                  JUNE 30, 2001
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>

              ASSETS

Current assets:
    Cash and cash equivalents .........        $   --   $   --       $ 29.5          $   --       $    --         $ 29.5
    Accounts receivable, net ..........            --       --         37.5             5.0            --           42.5
    Inventories .......................            --       --         13.2             1.0            --           14.2
    Deferred taxes and other
      current assets ..................            --       --         14.7             0.1            --           14.8
                                               ------   ------       ------          ------       -------         ------
                                                   --       --         94.9             6.1            --          101.0
Property and equipment:
    Land ..............................            --       --          8.8             0.3            --            9.1
    Buildings and improvements ........            --       --        232.5             9.9            --          242.4
    Equipment .........................            --       --        240.0            10.8            --          250.8
    Construction in progress ..........            --       --         20.3              --            --           20.3
                                               ------   ------       ------          ------       -------         ------
                                                   --       --        501.6            21.0            --          522.6
Accumulated depreciation ..............                              (182.7)          (13.0)           --         (195.7)
                                               ------   ------       ------          ------       -------         ------
                                                   --       --        318.9             8.0            --          326.9
Net investment in and advances to
  subsidiaries ........................         252.2    436.8           --              --        (689.0)            --
Intangible assets, net ................            --      7.2         35.7            10.0            --           52.9
Other .................................            --       --          0.1              --            --            0.1
                                               ------   ------       ------          ------       -------         ------
                                               $252.2   $444.0       $449.6          $ 24.1       $(689.0)        $480.9
                                               ======   ======       ======          ======       =======         ======


   LIABILITIES AND EQUITY

Current liabilities
    Accounts payable ..................        $   --   $   --       $ 13.0          $  0.7       $    --         $ 13.7
    Accrued salaries ..................            --       --         14.9              --            --           14.9
    Other current liabilities .........            --      2.0         13.1             0.1            --           15.2
    Current maturities of
      long-term debt ..................            --       --           --              --            --             --
                                               ------   ------       ------          ------       -------         ------
                                                   --      2.0         41.0             0.8            --           43.8

Intercompany balances to affiliates ...            --     35.4        (42.7)            7.3            --             --

Long-term debt ........................            --    150.0           --              --            --          150.0
Deferred taxes ........................            --       --         16.3              --            --           16.3
Professional liability risks and
  other liabilities ...................            --       --         14.2              --            --           14.2

Minority interests in equity of
  consolidated entities ...............            --      4.4           --              --            --            4.4

Stockholders' equity ..................         252.2    252.2        420.8            16.0        (689.0)         252.2
                                               ------   ------       ------          ------       -------         ------
                                               $252.2   $444.0       $449.6          $ 24.1       $(689.0)        $480.9
                                               ======   ======       ======          ======       =======         ======
</TABLE>


                                       12
<PAGE>   15

                            LIFEPOINT HOSPITALS, INC.
                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2000
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>
              ASSETS

Current assets:
    Cash and cash equivalents .........        $   --   $   --       $ 39.7          $   --        $    --        $ 39.7
    Accounts receivable, net ..........            --       --         36.4             5.3             --          41.7
    Inventories .......................            --       --         12.9             1.0             --          13.9
    Deferred taxes and other
      current assets ..................            --       --         22.1             0.1             --          22.2
                                               ------   ------       ------          ------        -------        ------
                                                   --       --        111.1             6.4             --         117.5
Property and equipment:
    Land ..............................            --       --          8.4             0.3             --           8.7
    Buildings and improvements ........            --       --        227.0             9.9             --         236.9
    Equipment .........................            --       --        234.4            10.5             --         244.9
    Construction in progress ..........            --       --          9.4              --             --           9.4
                                               ------   ------       ------          ------        -------        ------
                                                   --       --        479.2            20.7             --         499.9
Accumulated depreciation ..............            --       --       (170.9)          (12.5)            --        (183.4)
                                               ------   ------       ------          ------        -------        ------
                                                   --       --        308.3             8.2             --         316.5
Net investment in and advances to
  subsidiaries ........................         128.4    401.5           --              --         (529.9)           --
Intangible assets, net ................            --      9.1         34.5            10.2             --          53.8
Other .................................            --       --          0.2              --             --           0.2
                                               ------   ------       ------          ------        -------        ------
                                               $128.4   $410.6       $454.1          $ 24.8        $(529.9)       $488.0
                                               ======   ======       ======          ======        =======        ======

        LIABILITIES AND EQUITY

Current liabilities:
    Accounts payable ..................        $   --   $   --       $ 15.6          $  0.5        $    --        $ 16.1
    Accrued salaries ..................            --       --         13.8              --             --          13.8
    Other current liabilities .........            --      2.6          8.2             0.3             --          11.1
    Current maturities of long-term
      debt ............................            --     11.0          0.1              --             --          11.1
                                               ------   ------       ------          ------        -------        ------
                                                   --     13.6         37.7             0.8             --          52.1

Intercompany balances to affiliates ...            --    (14.3)         6.4             7.9             --            --

Long-term debt ........................            --    278.3           --              --             --         278.3
Deferred taxes ........................            --       --         15.2              --             --          15.2
Professional liability risks and
  other liabilities ...................            --       --          9.4              --             --           9.4

Minority interests in equity of
  consolidated entities ...............            --      4.6           --              --             --           4.6

Stockholders' equity ..................         128.4    128.4        385.4            16.1         (529.9)        128.4
                                               ------   ------       ------          ------        -------        ------
                                               $128.4   $410.6       $454.1          $ 24.8        $(529.9)       $488.0
                                               ======   ======       ======          ======        =======        ======

</TABLE>


                                       13
<PAGE>   16

                            LIFEPOINT HOSPITALS, INC.
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>

Cash flows from operating activities:
   Net income ...........................      $ 15.5   $ 15.5       $ 21.7          $  4.5        $ (41.7)       $ 15.5
   Adjustments to reconcile net
     income to net cash provided
     by (used in) operating activities:
      ESOP expense ......................          --       --          4.8             0.2             --           5.0
      Equity in earnings of
        affiliates ......................       (15.5)   (26.2)          --              --           41.7            --
      Provision for doubtful accounts ...          --       --         21.7             0.9             --          22.6
      Depreciation and amortization .....          --       --         15.7             0.9             --          16.6
      Minority interests in earnings
        of consolidated entities ........          --      1.3           --              --             --           1.3
      Deferred income taxes (benefit) ...          --       --         (0.7)             --             --          (0.7)
      Reserve for professional
         liability risk .................          --       --          4.1              --             --           4.1
      Gain on previously impaired
        assets ..........................          --       --         (0.5)             --             --          (0.5)
      Extraordinary loss on early
        retirement of bank debt .........          --      2.6           --              --             --           2.6
      Increase (decrease) in cash
        from operating assets and
        liabilities, net of effects
        of acquisitions:
        Accounts receivable .............          --       --        (22.6)           (0.6)            --         (23.2)
        Inventories and other current
          assets ........................          --       --          0.2              --             --           0.2
        Accounts payable and
          accrued expenses ..............          --     (0.6)         3.4              --             --           2.8
        Income taxes payable ............          --       --          3.1              --             --           3.1
      Other .............................          --      1.0          0.2              --             --           1.2
                                               ------   ------       ------          ------        -------        ------
        Net cash provided by (used
          in) operating activities ......          --     (6.4)        51.1             5.9             --          50.6

Cash flows from investing activities:
   Purchases of property and equipment,
     net ................................          --       --        (22.1)           (0.5)            --         (22.6)
   Purchases of facilities ..............          --       --         (5.7)             --             --          (5.7)
   Cash held for acquisitions ...........          --       --           --              --             --            --
   Other ................................          --     (1.5)         6.3              --             --           4.8
                                               ------   ------       ------          ------        -------        ------
        Net cash used in investing
          activities ....................          --     (1.5)       (21.5)           (0.5)            --         (23.5)

Cash flows from financing activities:
   Proceeds from stock offering, net ....          --    100.4           --              --             --         100.4
   Repayments of bank debt ..............          --   (139.3)          --              --             --        (139.3)
   Proceeds from bank debt borrowings ...          --       --           --              --             --            --
   Distributions ........................          --       --          4.8            (4.8)            --            --
   Proceeds from exercise of stock
     options ............................          --       --          1.5              --             --           1.5
   Increase (decrease) in
     intercompany balances with
     affiliates, net ....................          --     46.7        (46.1)           (0.6)            --            --
   Other ................................          --      0.1           --              --             --           0.1
                                               ------   ------       ------          ------        -------        ------
        Net cash provided by (used
          in) financing activities ......          --      7.9        (39.8)           (5.4)            --         (37.3)

Change in cash and cash equivalents .....          --       --        (10.2)             --             --         (10.2)
Cash and cash equivalents at
  beginning of period ...................          --       --         39.7              --             --          39.7
                                               ------   ------       ------          ------        -------        ------
Cash and cash equivalents at end
  of period .............................      $   --   $   --       $ 29.5          $   --        $    --        $ 29.5
                                               ======   ======       ======          ======        =======        ======
</TABLE>


                                       14
<PAGE>   17

                            LIFEPOINT HOSPITALS, INC.
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                   WHOLLY OWNED   MOSTLY OWNED
                                                       ISSUER OF    SUBSIDIARY     SUBSIDIARY                  CONSOLIDATED
                                               PARENT    NOTES      GUARANTORS     GUARANTOR    ELIMINATIONS      TOTAL
                                               ------  ---------   ------------   ------------  ------------   ------------
<S>                                            <C>     <C>         <C>            <C>           <C>            <C>
Cash flows from operating activities:
   Net income ...........................      $  7.7   $  7.7       $ 14.4          $  3.8        $ (25.9)       $   7.7
   Adjustments to reconcile net
     income to net cash provided by
     (used in) operating activities:
      ESOP expense ......................          --       --          2.3             0.1             --            2.4
      Equity in earnings of affiliates ..        (7.7)   (18.2)          --              --           25.9             --
      Provision for doubtful accounts ...          --       --         17.8             1.1             --           18.9
      Depreciation and amortization .....          --       --         15.9             0.9             --           16.8
      Minority interests in earnings
        of consolidated entities ........          --      1.3           --              --             --            1.3
      Deferred income taxes .............          --       --          8.7              --             --            8.7
      Reserve for professional
        liability risk ..................          --       --          2.5              --             --            2.5
      Increase (decrease) in cash
        from operating assets and
        liabilities, net of effects
        of acquisitions:
        Accounts receivable .............          --       --        (11.9)           (1.0)            --          (12.9)
        Inventories and other current
          assets ........................          --       --         (2.4)            0.1             --           (2.3)
        Accounts payable and accrued
          expenses ......................          --      0.1        (11.5)             --             --          (11.4)
        Income taxes payable ............                   --           --            (2.5)            --           (2.5)
      Other .............................          --      0.1          1.3              --             --            1.4
                                               ------   ------       ------          ------        -------        -------
        Net cash provided by (used
          in) operating activities ......          --     (9.0)        34.6             5.0             --           30.6

Cash flows from investing activities:
   Purchases of property and
     equipment, net .....................          --       --        (14.8)           (0.2)            --          (15.0)
   Purchases of facilities ..............          --       --        (50.3)             --             --          (50.3)
   Cash held for acquisitions ...........          --       --        (33.0)             --             --          (33.0)
   Other ................................          --     (1.7)        (0.2)             --             --           (1.9)
                                               ------   ------       ------          ------        -------        -------
        Net cash used in investing
          activities ....................          --     (1.7)       (98.3)           (0.2)             --        (100.2)

Cash flows from financing activities:
   Repayments of bank debt ..............          --     (2.1)          --              --             --           (2.1)
   Proceeds from bank debt borrowings ...          --     65.0           --              --             --           65.0
   Distributions ........................          --       --          5.2            (5.2)            --             --
   Proceeds from exercise of stock
     options ............................          --       --          0.8              --             --            0.8
   Other ................................          --     (0.7)          --              --             --           (0.7)
   Increase (decrease) in intercompany
     balances with affiliates, net ......          --    (51.5)        51.1             0.4             --             --
                                               ------   ------       ------          ------        -------        -------
        Net cash provided by (used in)
         financing activities ...........          --     10.7         57.1            (4.8)            --           63.0

Change in cash and cash equivalents .....          --       --         (6.6)             --             --           (6.6)
Cash and cash equivalents at
  beginning of period ...................          --       --         12.5              --             --           12.5
                                               ------   ------       ------          ------        -------        -------
Cash and cash equivalents at end
  of period .............................      $   --   $   --       $  5.9          $   --        $    --        $   5.9
                                               ======   ======       ======          ======        =======        =======
</TABLE>


                                       15
<PAGE>   18

NOTE 6 - BLUEGRASS COMMUNITY HOSPITAL

         Effective January 2, 2001, the Company entered into a two-year lease to
operate Bluegrass Community Hospital, a 25-bed critical access hospital located
in Versailles, Kentucky. The Company has an option to extend the term of the
lease until December 31, 2014 and a separate option to purchase the hospital
between January 1, 2004 and January 1, 2007.


                                       16
<PAGE>   19

ITEM 2: Management's Discussion and Analysis of Financial Condition and Results
        of Operations

         You should read this discussion together with our unaudited condensed
consolidated financial statements and related notes included elsewhere in this
report.

Overview

         At June 30, 2001, we operated 21 general, acute care hospitals in the
states of Alabama, Florida, Kansas, Kentucky, Tennessee, Utah and Wyoming.

Forward-Looking Statements

         This report and other materials we have filed or may file with the
Securities and Exchange Commission, as well as information included in oral
statements or other written statements made, or to be made, by us, contain, or
will contain, disclosures which are "forward-looking statements."
Forward-looking statements include all statements that do not relate solely to
historical or current facts and can be identified by the use of words such as
"may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan"
or "continue." These forward-looking statements are based on the current plans
and expectations of our management and are subject to a number of uncertainties
and risks that could significantly affect our current plans and expectations and
future financial condition and results. These factors include, but are not
limited to:

-                 the highly competitive nature of the healthcare business
                  including the competition to recruit general and specialized
                  physicians;

-                 the efforts of insurers, healthcare providers and others to
                  contain healthcare costs;

-                 possible changes in the Medicare program that may further
                  limit reimbursements to healthcare providers and insurers;

-                 changes in federal, state or local regulation affecting the
                  healthcare industry;

-                 the possible enactment of federal or state healthcare reform;

-                 the ability to attract and retain qualified management and
                  personnel, including physicians and nurses, consistent with
                  our expectations and targets;

-                 our ability to acquire hospitals on favorable terms;

-                 liabilities and other claims asserted against us;

-                 uncertainty associated with the newly issued HIPAA
                  regulations;

-                 the ability to enter into, renegotiate and renew payor
                  arrangements on acceptable terms;

-                 the availability and terms of capital to fund our business
                  strategy;

-                 implementation of our business strategy and development plans;

-                 our ongoing efforts to monitor, maintain and comply with
                  applicable laws, regulations, policies and procedures
                  including those required by the corporate integrity agreement
                  that we entered into with the government in December, 2000;

-                 the ability to increase patient volumes and control the costs
                  of providing services and supply costs;


                                       17
<PAGE>   20

-                 claims and legal actions relating to professional liabilities
                  and other matters;

-                 successful development or license, performance and use of
                  management information systems, including software for
                  efficient claims processing;

-                 limitations placed on us to preserve the tax treatment of the
                  distribution of our common stock from HCA;

-                 fluctuations in the market value of our common stock;

-                 changes in accounting practices;

-                 changes in general economic conditions; and

-                 other risk factors described in this report.

                  As a consequence, current plans, anticipated actions and
future financial conditions and results may differ from those expressed in any
forward-looking statements made by or on behalf of our company. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. You are cautioned
not to unduly rely on such forward-looking statements when evaluating the
information presented in this report.

Results of Operations

         Revenue/Volume Trends

                  We expect our patient volumes and related revenues to continue
to increase as a result of the following factors:

-                 Expanding Service Offerings. We believe our efforts to improve
                  the quality and broaden the scope of healthcare services
                  available at our facilities will lead to increased patient
                  volumes. Recruiting and retaining both general practitioners
                  and specialists for our non-urban communities is a key to the
                  success of these efforts. Between January 1, 1998 and June 30,
                  2001, we recruited 198 physicians, of which approximately 59%
                  are specialists. Adding new physicians should help increase
                  patient volumes which, in turn, should increase revenues.
                  Continuing to add specialists should also allow us to grow by
                  offering new services.

-                 Improving Managed Care Position. We believe we have been able
                  to negotiate contract terms that are generally more favorable
                  for our facilities than terms available in urban markets.

-                 Aging U.S. Population. In general, the population of the
                  United States and of the communities that we serve is aging.
                  At the end of 2000, approximately 13% of the U.S. population
                  was 65 years old or older compared to 11% of the population at
                  the end of 1980. This aging trend is projected to continue so
                  that by 2025, approximately 18% of the U.S. population is
                  expected to be older than 65.

-                 Medicare Rate Increases. The Medicare, Medicaid and SCHIP
                  Benefit Improvement and Protection Act of 2000 (BIPA) was
                  enacted in December 2000. Under BIPA, we have experienced
                  Medicare rate increases that began in April 2001.

                  Although we expect our patient volumes to increase, the
resulting revenue will likely be offset in part by the following factors:

-                 Revenues from Medicare, Medicaid and Managed Care Plans. We
                  derive a significant portion of our revenues from Medicare,
                  Medicaid and managed care plans. Admissions related to
                  Medicare, Medicaid and managed care plan patients were 91.1%
                  and 90.5% of total admissions for the six months ended June
                  30, 2001 and 2000, respectively. These payors receive
                  significant discounts compared to other payors.



                                       18
<PAGE>   21

-                 Efforts to Reduce Payments. Other third-party payors also
                  negotiate discounted fees rather than paying standard prices.
                  Hospitals generally receive lower payments per patient under
                  managed care plans than under traditional indemnity insurance
                  plans. In addition, an increasing proportion of our services
                  are reimbursed under prospective payment amounts regardless of
                  the cost incurred.

-                 Growth in Outpatient Services. We expect the growth trend in
                  outpatient services to continue. A number of procedures once
                  performed only on an inpatient basis have been, and will
                  likely continue to be, converted to outpatient procedures.
                  This conversion has occurred through continuing advances in
                  pharmaceutical and medical technologies and as a result of
                  efforts made by payors to control costs. Generally, the
                  payments we receive for outpatient procedures are less than
                  for similar procedures performed in an inpatient setting.

                  Pressure on payment levels, the increase in outpatient
services and the patient volume being related to patients participating in
managed care plans will present ongoing challenges for us. These challenges are
exacerbated by our inability to control these trends and the associated risks.
To maintain or improve operating margins in the future, we must, among other
things, increase patient volumes while controlling the costs of providing
services. If we are not able to achieve these improvements and the trend toward
declining reimbursements and payments continues, results of operations and cash
flow will deteriorate.


                                       19
<PAGE>   22

Operating Results Summary

         The following is a summary of results of operations for the three
months and six months ended June 30, 2001 and 2000 (dollars in millions):

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED JUNE 30,
                                                          --------------------------------------------------
                                                                  2001                        2000
                                                          ---------------------        ---------------------
                                                                         % OF                         % OF
                                                          AMOUNT       REVENUES        AMOUNT       REVENUES
                                                          ------       --------        ------       --------
<S>                                                       <C>          <C>             <C>          <C>
Revenues .........................................        $151.6         100.0%        $133.3         100.0%

Salaries and benefits ............................          59.4          39.2           54.4          40.8
Supplies .........................................          18.8          12.4           16.0          12.0
Other operating expenses .........................          31.0          20.4           28.5          21.3
Provision for doubtful accounts ..................          10.6           7.0            9.8           7.4
                                                          ------        ------         ------        ------
                                                           119.8          79.0          108.7          81.5
                                                          ------        ------         ------        ------

EBITDA (a) .......................................          31.8          21.0           24.6          18.5

Depreciation and amortization ....................           8.5           5.7            8.4           6.4
Interest expense, net ............................           3.7           2.4            7.4           5.6
ESOP expense .....................................           2.4           1.6            1.3           1.0
                                                          ------        ------         ------        ------
Income before minority interests,
 income taxes and extraordinary
 item ............................................          17.2          11.3            7.5           5.5
Minority interests in earnings of
 consolidated entities ...........................           0.7           0.4            0.7           0.4
                                                          ------        ------         ------        ------
Income before income taxes and
 extraordinary item ..............................          16.5          10.9            6.8           5.1
Provision for income taxes .......................           8.0           5.3            3.1           2.3
                                                          ------        ------         ------        ------
Income before extraordinary item .................           8.5           5.6            3.7           2.8
Extraordinary loss on early
 retirement of bank debt, net ....................           1.6           1.0             --            --
                                                          ------        ------         ------        ------
Net income .......................................        $  6.9           4.6%        $  3.7           2.8%
                                                          ======        ======         ======        ======

% changes from prior year:
Revenues ..........................................                       13.8%
Income before income taxes and
 extraordinary item ...............................                      140.6
Income before extraordinary item ..................                      130.3
Net income ........................................                       86.9
Admissions (b) ....................................                       12.1
Equivalent admissions (c) .........................                        9.0
Revenues per equivalent admission .................                        4.3

Same hospital % changes from prior year (d):
Revenues ..........................................                       10.0%
Admissions (b) ....................................                        6.3
Equivalent admissions (c) .........................                        6.8
Revenues per equivalent admission .................                        3.0
</TABLE>


                                       20
<PAGE>   23

<TABLE>
<CAPTION>
                                                                      SIX MONTHS ENDED JUNE 30,
                                                          --------------------------------------------------
                                                                  2001                        2000
                                                          ---------------------        ---------------------
                                                                         % OF                         % OF
                                                          AMOUNT       REVENUES        AMOUNT       REVENUES
                                                          ------       --------        ------       --------
<S>                                                       <C>          <C>             <C>          <C>

Revenues .........................................        $305.9         100.0%        $269.3         100.0%

Salaries and benefits ............................         119.7          39.1          110.1          40.9
Supplies .........................................          38.4          12.5           33.0          12.2
Other operating expenses .........................          59.4          19.5           58.2          21.7
Provision for doubtful accounts ..................          22.6           7.4           18.9           7.0
                                                          ------        ------         ------        ------
                                                           240.1          78.5          220.2          81.8
                                                          ------        ------         ------        ------

EBITDA (a) .......................................          65.8          21.5           49.1          18.2

Depreciation and amortization ....................          16.6           5.4           16.8           6.3
Interest expense, net ............................          10.2           3.3           14.6           5.4
ESOP expense .....................................           5.0           1.7            2.4           0.9
Gain on previously impaired assets ...............          (0.5)         (0.2)            --            --
                                                          ------        ------         ------        ------
Income before minority interests,
 income taxes and extraordinary
 item ............................................          34.5          11.3           15.3           5.6
Minority interests in earnings of
 consolidated entities ...........................           1.3           0.5            1.3           0.4
                                                          ------        ------         ------        ------
Income before income taxes and
 extraordinary item ..............................          33.2          10.8           14.0           5.2
Provision for income taxes .......................          16.1           5.2            6.3           2.3
                                                          ------        ------         ------        ------
Income before extraordinary item .................          17.1           5.6            7.7           2.9
Extraordinary loss on early
 retirement of bank debt, net ....................           1.6           0.5             --            --
                                                          ------        ------         ------        ------
Net income .......................................        $ 15.5           5.1%        $  7.7           2.9%
                                                          ======        ======         ======        ======

% changes from prior year:
Revenues ..........................................                       13.6%
Income before income taxes
 and extraordinary item ...........................                      136.5
Income before extraordinary item ..................                      121.9
Net income ........................................                      101.1
Admissions (b) ....................................                       10.9
Equivalent admissions (c) .........................                        8.7
Revenues per equivalent admission .................                        4.5

Same hospital % changes from prior year (d):
Revenues ..........................................                       10.5%
Admissions (b) ....................................                        6.0
Equivalent admissions (c) .........................                        7.9
Revenues per equivalent admission .................                        2.4
</TABLE>


                                       21
<PAGE>   24

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

(a)               EBITDA is defined as income before depreciation and
                  amortization, interest expense, gain on previously impaired
                  assets, ESOP expense, minority interests in earnings of
                  consolidated entities, extraordinary items and income taxes.
                  EBITDA is commonly used as an analytical indicator within the
                  healthcare industry and also serves as a measure of leverage
                  capacity and debt service ability. EBITDA should not be
                  considered as a measure of financial performance under
                  accounting principles generally accepted in the United States
                  and the items excluded from EBITDA are significant components
                  in understanding and assessing financial performance. EBITDA
                  should not be considered in isolation or as an alternative to
                  net income, cash flows generated by operating, investing or
                  financing activities or other financial statement data
                  presented in the condensed consolidated financial statements
                  as an indicator of financial performance or liquidity. Because
                  EBITDA is not a measurement determined in accordance with
                  accounting principles generally accepted in the United States
                  and is susceptible to varying calculations, EBITDA as
                  presented may not be comparable to other similarly titled
                  measures of other companies.

(b)               Represents the total number of patients admitted (in the
                  facility for a period in excess of 23 hours) to our hospitals
                  and is used by management and investors as a general measure
                  of inpatient volume.

(c)               Management and investors use equivalent admissions as a
                  general measure of combined inpatient and outpatient volume.
                  We compute equivalent admissions by multiplying admissions
                  (inpatient volume) by the sum of gross inpatient revenue and
                  gross outpatient revenue and then dividing the resulting
                  amount by gross inpatient revenue. The equivalent admissions
                  computation "equates" outpatient revenue to the volume measure
                  (admissions) used to measure inpatient volume resulting in a
                  general measure of combined inpatient and outpatient volume.

(d)               Same hospital information excludes the operations of hospitals
                  which we either acquired or divested during the periods
                  presented.

For the Three Months Ended June 30, 2001 and 2000

                  Revenues increased 13.8% to $151.6 million for the three
months ended June 30, 2001 compared to $133.3 million for the three months ended
June 30, 2000 primarily as a result of a 9.0% increase in equivalent admissions,
a 4.3% increase in revenues per equivalent admission and an increase in services
offered. The increase in equivalent admissions was primarily the result of a
6.8% increase in same hospital equivalent admissions. In addition, equivalent
admissions increased as a result of our acquisition of two hospitals and were
partially offset by our sale of five hospitals during fiscal 2000.

                  Our costs did not increase at the same rate as our revenues.
The increase in volumes and revenues per equivalent admission contributed to the
reduction of our operating expenses as a percentage of revenues because we were
able to spread our operating costs over an increased base of revenues.


                                       22
<PAGE>   25

                  Salaries and benefits decreased as a percentage of revenues to
39.2% for the three months ended June 30, 2001 from 40.8% for the three months
ended June 30, 2000 primarily as a result of improvements in labor productivity
and an increase in revenues per equivalent admission, as discussed above.
Man-hours per equivalent admission decreased 5.1% over the same period last
year. The decrease in salaries and benefits as a percentage of revenues was
partially offset by a 5.6% increase in salaries and benefits per man-hour for
the three months ended June 30, 2001 compared to the three months ended June 30,
2000.

                  Supply costs increased as a percentage of revenues to 12.4%
for the three months ended June 30, 2001 from 12.0% for the three months ended
June 30, 2000. The cost of supplies per equivalent admission increased 7.9%
primarily as a result of increases in the number of surgeries performed by us
during the three months ended June 30, 2001 compared to the three months ended
June 30, 2000 as supply costs incurred in connection with surgeries are higher
than supply costs incurred for other procedures. In addition, the increase is
partially due to increases in pharmaceutical costs and new product development
costs as well as general inflation.

                  Other operating expenses decreased as a percentage of revenues
to 20.4% for the three months ended June 30, 2001 from 21.3% for the three
months ended June 30, 2000. Other operating expenses consist primarily of
contract services, physician recruitment, professional fees, repairs and
maintenance, rents and leases, utilities, insurance, marketing and non-income
taxes. The decrease was primarily the result of an increase in volumes and
revenues per equivalent admission as discussed above and a decrease in
professional fees and contract services as a percentage of revenues.

                  Provision for doubtful accounts decreased as a percentage of
revenues to 7.0% for the three months ended June 30, 2001 from 7.4% for the
three months ended June 30, 2000 primarily due to the effect of two of our
fiscal 2000 dispositions. The provision for doubtful accounts as a percentage of
revenues at these hospitals was significantly higher than our average.

                  Depreciation and amortization expense increased slightly to
$8.5 million for the three months ended June 30, 2001 compared to $8.4 million
for the three months ended June 30, 2000.

                  Net interest expense decreased to $3.7 million for the three
months ended June 30, 2001 from $7.4 million for the three months ended June 30,
2000. This decrease was primarily due to our repayment of the remaining bank
debt borrowings outstanding during April and May 2001 and $1.1 million in
interest income for the three months ended June 30, 2001 resulting from higher
cash balances during the three months ended June 30, 2001 compared to the three
months ended June 30, 2000.

                  ESOP expense increased to $2.4 million for the three months
ended June 30, 2001 from $1.3 million for the three months ended June 30, 2000.
This increase was primarily because of a higher average fair market value of our
common stock for the three months ended June 30, 2001 compared to the same
period last year. We recognize ESOP expense based on the average fair market
value of the shares committed to be released during the period.

                  Minority interests in earnings of consolidated entities
remained constant at $0.7 million for the three months ended June 30, 2001 and
2000.

                  The provision for income taxes increased to $8.0 million for
the three months ended June 30, 2001 compared to $3.1 million for the three
months ended June 30, 2000 primarily as a result of higher pre-tax income for
the three months ended June 30, 2001 compared to the three months ended June 30,
2000. These provisions reflect effective income tax rates of 48.4% for the three
months ended June 30, 2001 compared to 46.0% for the three months ended June 30,
2000. The increase in the effective rate results from the increase in the
nondeductible portion of ESOP expense.

                  In June 2001, we completed a $200 million, five-year amended
and restated credit agreement with a syndicate of banks, which increased our
available credit under our revolving credit agreement from $65 million to $200
million. Upon consummation of this amended and restated agreement, we wrote off
$2.6 million of deferred loan costs related to our original credit agreement,
which resulted in an extraordinary charge of $1.6 million, net of a tax benefit
of $1.0 million.


                                       23
<PAGE>   26

                  Net income increased to $6.9 million for the three months
ended June 30, 2001 compared to $3.7 million for the three months ended June 30,
2000 because of the reasons described above.

For the Six Months Ended June 30, 2001 and 2000

                  Revenues increased 13.6% to $305.9 million for the six months
ended June 30, 2001 compared to $269.3 million for the six months ended June 30,
2000 primarily as a result of an 8.7% increase in equivalent admissions, a 4.5%
increase in revenues per equivalent admission and an increase in services
offered. The increase in equivalent admissions was primarily the result of a
7.9% increase in same hospital equivalent admissions. In addition, equivalent
admissions increased as a result of our acquisition of two hospitals and were
partially offset by our sale of five hospitals during fiscal 2000.

                  Our costs did not increase at the same rate as our revenues.
The increase in volumes and revenues per equivalent admission contributed to the
reduction of our operating expenses as a percentage of revenues because we were
able to spread our operating costs over an increased base of revenues.

                  Salaries and benefits decreased as a percentage of revenues to
39.1% for the six months ended June 30, 2001 from 40.9% for the six months ended
June 30, 2000 primarily as a result of improvements in labor productivity and an
increase in revenues per equivalent admission, as discussed above. Man-hours per
equivalent admission decreased 6.4% over the same period last year. The decrease
in salaries and benefits as a percentage of revenue was partially offset by a
7.0% increase in salaries and benefits per man-hour for the six months ended
June 30, 2001 compared to the six months ended June 30, 2000.

                  Supply costs increased as a percentage of revenues to 12.5%
for the six months ended June 30, 2001 from 12.2% for the six months ended June
30, 2000. The cost of supplies per equivalent admission increased 7.0% primarily
as a result of increases in the number of surgeries performed by us during the
six months ended June 30, 2001 compared to the six months ended June 30, 2000 as
supply costs incurred in connection with surgeries are higher than supply costs
incurred for other procedures. In addition, the increase is partially due to
increases in pharmaceutical costs and new product development costs as well as
general inflation.

                  Other operating expenses decreased as a percentage of revenues
to 19.5% for the six months ended June 30, 2001 from 21.7% for the six months
ended June 30, 2000. Other operating expenses consist primarily of contract
services, physician recruitment, professional fees, repairs and maintenance,
rents and leases, utilities, insurance, marketing and non-income taxes. The
decrease was primarily the result of an increase in volumes and revenues per
equivalent admission as discussed above and a decrease in professional fees and
contract services as a percentage of revenues.

                  Provision for doubtful accounts increased as a percentage of
revenues to 7.4% for the six months ended June 30, 2001 from 7.0% for the six
months ended June 30, 2000 primarily due to the effect of one of our fiscal 2000
acquisitions. The provision for doubtful accounts as a percentage of revenues at
this hospital was significantly higher than our average.


                                       24
<PAGE>   27

                  Depreciation and amortization expense decreased to $16.6
million for the six months ended June 30, 2001 from $16.8 million for the six
months ended June 30, 2000 primarily due to certain equipment which was fully
depreciated in fiscal 2000 and the sale of five hospitals during fiscal 2000.
This decrease was partially offset by an increase in depreciation and
amortization expense related to two hospitals we acquired during fiscal 2000.

                  Net interest expense decreased to $10.2 million for the six
months ended June 30, 2001 from $14.6 million for the six months ended June 30,
2000. This decrease was primarily due to our repayment of the remaining bank
debt borrowings outstanding during April and May 2001 and $2.0 million in
interest income for the six months ended June 30, 2001 resulting from higher
cash balances during the six months ended June 30, 2001 compared to the six
months ended June 30, 2000.

                  ESOP expense increased to $5.0 million for the six months
ended June 30, 2001 from $2.4 million for the six months ended June 30, 2000.
This increase was due to a higher average fair market value of our common stock
for the six months ended June 30, 2001 compared to the same period last year. We
recognize ESOP expense based on the average fair market value of the shares
committed to be released during the period.

                  During the six months ended June 30, 2001, we recorded a $0.5
million pre-tax gain related to the favorable settlement on the sale of a
facility that we previously recorded an impairment charge.

                  Minority interests in earnings of consolidated entities
remained constant at $1.3 million for the six months ended June 30, 2001 and
2000.

                  The provision for income taxes increased to $16.1 million for
the six months ended June 30, 2001 compared to $6.3 million for the six months
ended June 30, 2000 primarily as a result of higher pre-tax income for the six
months ended June 30, 2001 compared to the six months ended June 30, 2000. These
provisions reflect effective income tax rates of 48.4% for 2001 compared to
45.0% for 2000. The increase in the effective rate is due to the increase in the
nondeductible portion of ESOP expense.

                  In June 2001, we completed a $200 million, five-year amended
and restated credit agreement with a syndicate of banks, which increased our
available credit under our revolving credit agreement from $65 million to $200
million. Upon consummation of this amended and restated agreement, we wrote off
$2.6 million of deferred loan costs related to our original credit agreement,
which resulted in an extraordinary charge of $1.6 million, net of a tax benefit
of $1.0 million.

                  Net income increased to $15.5 million for the six months ended
June 30, 2001 compared to $7.7 million for the six months ended June 30, 2000
because of the reasons described above.

Liquidity and Capital Resources

                  We rely on our bank credit facilities and other traditional
funding sources to supplement any cash needs not met by operations. At June 30,
2001, we had working capital of $57.2 million compared to $65.4 million at
December 31, 2000. This decrease was primarily due to a $3.1 million income tax
receivable decrease and the purchase of an imaging center using $5.7 million
held in a trust previously classified as a current asset.

                  Cash provided by operating activities increased to $50.6
million for the six months ended June 30, 2001 compared to $30.6 million for the
six months ended June 30, 2000. This increase was primarily due to improved
operations in 2001 compared to 2000 and increases in current liabilities for the
six months ended June 30, 2001 compared to decreases in accounts payable and
accrued expenses during the six months ended June 30, 2000 from payments made to
HCA and payments of accrued interest. This was partially offset by a larger
increase in accounts receivable in the six months ended June 30, 2001 compared
to the six months ended June 30, 2000 primarily as a result of higher revenues
during 2001.

                  Cash used in investing activities decreased to $23.5 million
during the six months ended June 30, 2001 compared to $100.2 million in the six
months ended June 30, 2000. The decrease was primarily due to our acquisition of
Putnam Community Medical Center


                                       25
<PAGE>   28

and the funding of the acquisition of Lander Valley Medical Center during the
six months ended June 30, 2000. The decrease was partially offset by increased
capital expenditures of $22.6 million during the six months ended June 30, 2001
compared to $15.0 million during the six months ended June 30, 2000. At June 30,
2001, there were projects under construction that had an estimated additional
cost to complete and equip of approximately $8.8 million. We anticipate that
these projects will be completed over the next twelve months. We believe our
capital expenditure program is adequate to expand, improve and equip our
existing healthcare facilities. We expect to make total capital expenditures in
2001 of approximately $40 to $45 million, excluding acquisitions.

                  Cash used in financing activities was $37.3 million for the
six months ended June 30, 2001 compared to cash provided by financing activities
of $63.0 million for the six months ended June 30, 2000. This was primarily from
the $139.4 million full repayment of bank debt and was partially offset from the
net proceeds of $100.4 million from our public offering of common stock. In
addition, we borrowed $65.0 million during the six months ended June 30, 2000 to
fund acquisitions of two hospitals.

                  In June 2001, we completed a $200 million, five-year amended
and restated credit agreement with a syndicate of banks. The agreement increased
our available credit under our revolving credit agreement from $65 million to
$200 million and extended the current agreement to five years.

                  Management does not consider the sale of any assets to be
necessary to repay our indebtedness or to provide working capital. However, for
other reasons, we may sell facilities in the future from time to time.
Management expects that operations and amounts available under our bank credit
agreement will provide sufficient liquidity for the next twelve months.

                  We intend to acquire additional hospitals and are actively
seeking acquisitions. These acquisitions may, however, require additional
financing. We also continually review our capital needs and financing
opportunities and may seek additional financing for our acquisition program or
other needs.

                  We do not expect to pay dividends on our common stock in the
foreseeable future.

Impact of Recently Issued Accounting Standards

                  In July 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, effective
for fiscal years beginning after December 15, 2001. Under the new rules,
goodwill will no longer be amortized but will be subject to annual impairment
tests. Other intangible assets will continue to be amortized over their useful
lives.

                  We will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the nonamortization provisions of SFAS No. 142 is expected to result in an
increase in net income of approximately $1.6 million per year ($0.02 per diluted
share), based upon our 2001 projected net income and diluted shares. During
2002, we will perform the first of the required impairment tests of goodwill as
of January 1, 2002 and have not yet determined what the effect of these tests
will be on our earnings and financial position.

Contingencies

         HCA Investigations, Litigation and Indemnification Rights

                  HCA is currently the subject of various federal and state
investigations, qui tam actions, shareholder derivative and class action suits,
patient/payer actions and general liability claims. HCA is also the subject of a
formal order of investigation by the SEC. HCA understands that the SEC's
investigation includes the anti-fraud, insider trading, periodic reporting and
internal accounting control provisions of the federal securities laws. These
investigations, actions and claims relate to HCA and its subsidiaries, including
subsidiaries that, before our formation as an independent company, owned the
facilities we now own.

                  HCA is a defendant in several qui tam actions, or actions
brought by private parties, known as relators, on behalf of the United States of
America, which have been unsealed and served on HCA. The actions allege, in
general, that HCA and certain subsidiaries and/or affiliated partnerships
violated the False Claims Act, 31 U.S.C. ss. 3729 et seq., by submitting
improper claims to the government for reimbursement. The lawsuits seek three
times the amount of damages caused to the United States by the submission of any
Medicare or Medicaid false claims presented by the defendants to the federal
government, civil penalties of not less than $5,000 nor more than $10,000 for
each such Medicare or Medicaid claim, attorneys' fees and costs. HCA has
disclosed that, on March 15, 2001, the Department of Justice filed a status
report setting forth the government's decisions regarding intervention in
existing qui tam actions against HCA and filed formal complaints for those suits
in which the government has intervened. HCA stated that, of the original 30 qui
tam actions, the Department of Justice remains active and has elected to
intervene in eight actions. HCA has also disclosed that is it aware of


                                       26
<PAGE>   29

additional qui tam actions that remain under seal and believes that there may be
other sealed qui tam cases of which it is unaware.

                  On December 14, 2000, HCA announced that it signed an
agreement with the Department of Justice and four U.S. attorneys' offices
resolving all pending federal criminal issues in the government's investigation.
The criminal agreement has been accepted by the federal district courts. The
criminal agreement provided that HCA pay the government $95 million, which
payment was made during the first quarter of 2001, and that two non-operating
subsidiaries enter certain criminal pleas, which pleas were entered in January
2001.

                  HCA also announced that it signed a civil settlement agreement
with the Department of Justice resolving civil false claims issues related to
DRG coding, outpatient laboratory and home health. The civil settlement provides
that in return for releases on these issues, HCA will pay the government $745
million, with interest accruing from May 18, 2000 to the payment date at a rate
of 6.5%. Court approval of this settlement was received on August 7, 2001 and
the civil payment is to be made by HCA on or before the fifth day following such
court approval. The civil issues that are not covered by the civil agreement
include claims related to cost reports and physician relations issues.

                  The agreements announced on December 14, 2000 relate only to
conduct that was the subject of the federal investigations resolved in the
agreements, and HCA has stated publicly that it continues to discuss civil
claims relating to cost reporting and physician relations with the government.
These agreements with the government do not resolve various qui tam actions
filed by private parties against HCA, or any pending state actions. In addition
to other claims not covered by these agreements, the government also reserved
its rights under these agreements to pursue any claims it may have for:

         -        any civil, criminal or administrative liability under the
                  Internal Revenue Code;

         -        any other criminal liability;

         -        any administrative liability, including mandatory exclusion
                  from federal health care programs;

         -        any liability to the United States (or its agencies) for any
                  conduct other than the conduct covered in the government's
                  investigation;

         -        any express or implied warranty claims or other claims for
                  defective or deficient products or services, including quality
                  of goods and services, provided by HCA;

         -        any claims for personal injury or property damage or for other
                  similar consequential damages arising from the conduct subject
                  to the investigation; and

         -        any civil or administrative claims of the United States
                  against individuals.

                  In addition, five of our current and former hospitals received
notices in early 2001 from the Centers for Medicare and Medicaid Services
("CMS"), formerly known as the Health Care Financing Administration, a United
States government agency that runs the Medicare and Medicaid programs. The
notices stated that CMS was re-opening, for examination, cost reports for
Medicare and Medicaid reimbursement filed by these hospitals for periods between
1993 and 1998, which pre-dates our spin-off from HCA.

                  HCA has agreed to indemnify us for any losses, other than
consequential damages, arising from the pending governmental investigations of
HCA's business practice prior to the date of the distribution and losses arising
from legal proceedings, present or future, related to the investigation or
actions engaged in before the distribution that relate to the investigation. HCA
has also agreed that, in the event that any hospital owned by us at the time of
the spin-off is permanently excluded from participation in the Medicare and
Medicaid programs as a result of the proceedings described above, then HCA will
make a cash payment to us, in an amount (if positive) equal to five times the
excluded hospital's 1998


                                       27
<PAGE>   30
income from continuing operations before depreciation and amortization,
interest expense, management fees, minority interests and income taxes, as set
forth on a schedule to the distribution agreement, less the net proceeds of the
sale or other disposition of the excluded hospital. However, we could be held
responsible for any claims that are not covered by the agreements reached with
the federal government or for which HCA is not required to, or fails to,
indemnify us. If indemnified matters were asserted successfully against us or
any of our facilities, and HCA failed to meet its indemnification obligations,
then this event could have a material adverse effect on our business, financial
condition, results of operations or prospects.

                  The extent to which we may or may not continue to be affected
by the ongoing investigations of HCA and the initiation of additional
investigations, if any, cannot be predicted. These matters could have a material
adverse effect on our business, financial condition, results of operations or
prospects in future periods.

         Americans With Disabilities Act Claim

                  On January 12, 2001, Access Now, Inc., a disability rights
organization, filed a class action lawsuit against each of our hospitals
alleging non-compliance with the accessibility guidelines under the Americans
with Disabilities Act. The lawsuit, filed in the United States District Court
for the Eastern District of Tennessee, seeks injunctive relief requiring
facility modification, where necessary, to meet the ADA guidelines, along with
attorneys' fees and costs. We are working with Access Now to determine the scope
of facility modification needed to comply with the Act.

         Corporate Integrity Agreement

                  In December 2000, we entered into a corporate integrity
agreement with the Office of Inspector General and agreed to maintain our
compliance program in accordance with the corporate integrity agreement.
Complying with the compliance measures and reporting and auditing requirements
of the corporate integrity agreement requires additional efforts and costs.
Failure to comply with the terms of the corporate integrity agreement could
subject us to significant monetary penalties.

         General Liability Claims

                  We are, from time to time, subject to claims and suits arising
in the ordinary course of business, including claims for damages for personal
injuries, breach of management contracts, for wrongful restriction of, or
interference with, physicians' staff privileges and employment related claims.
In certain of these actions, plaintiffs request punitive or other damages
against us which may not be covered by insurance. We are currently not a party
to any proceeding which, in management's opinion, would have a material adverse
effect on our business, financial condition or results of operations.

         Physician Commitments

                  We have committed to provide financial assistance pursuant to
recruiting agreements with various physicians practicing in the communities in
which we serve. In consideration for a physician relocating to one of our
communities and agreeing to engage in private practice for the benefit of the
respective community, we may loan money to a physician, normally over a period
of one year, to assist in establishing his or her practice. We have committed to
advance amounts of approximately $10.5 million at June 30, 2001. The actual
amount of commitments to be subsequently advanced to physicians often depends on
the financial results of a physician's private practice during the guaranteed
period. Generally, amounts advanced under the recruiting agreements may be
forgiven pro rata over a period of 48 months contingent on the physician
continuing to practice in the respective community. It is management's opinion
that amounts actually advanced and not repaid will not have a material adverse
effect on our results of operations or financial position.

         Acquisitions

                  We have acquired and will continue to acquire businesses with
prior operating histories. Acquired companies may have unknown or contingent
liabilities, including


                                       28
<PAGE>   31

liabilities for failure to comply with health care laws and regulations, such as
billing and reimbursement, fraud and abuse and similar anti-referral laws.
Although we institute policies intended to conform practices to its standards
following completion of acquisitions, there can be no assurance that we will not
become liable for past activities that may later be asserted to be improper by
private plaintiffs or government agencies. Although we generally seek to obtain
indemnification from prospective sellers covering these matters, there can be no
assurance that any matter will be covered by indemnification, or if covered,
that the indemnification will be adequate to cover potential losses and fines.

Inflation

                  The health care industry is labor intensive. Wages and other
expenses increase during periods of inflation and when shortages in marketplaces
occur. In addition, suppliers pass along rising costs to us in the form of
higher prices. Our ability to pass on these increased costs is limited because
of increasing regulatory and competitive pressures. In the event we experience
inflationary pressures, results of operations may be materially affected.

Health Care Reform

                  In recent years, an increasing number of legislative proposals
have been introduced or proposed to Congress and in some state legislatures.
While we are unable to predict which, if any, proposals for health care reform
will be adopted, there can be no assurance that proposals adverse to our
business will not be adopted.


                                       29
<PAGE>   32

Item 3: Quantitative and Qualitative Disclosures about Market Risk

         During the six months ended June 30, 2001 there were no material
changes in the quantitative and qualitative disclosures about market risks
presented in our Annual Report on Form 10-K for the year ended December 31,
2000.

                           Part II: Other Information

Item 4: Submission of Matters to a Vote of Security Holders

         We held the LifePoint Hospitals, Inc. annual meeting of stockholders on
May 14, 2001. The following matters were voted upon at the meeting:

<TABLE>
<CAPTION>
                                                           VOTES IN                    VOTES
                                                             FAVOR      ABSTAINED     AGAINST
                                                          ----------    ---------     --------
         <S>      <C>                                     <C>           <C>           <C>
         (a)      Election of Class II Directors

                  DeWitt Ezell, Jr.                       29,492,124      28,666            --
                  William V. Lapham                       29,492,127      28,663            --

         (b)      Approval of the LifePoint Hospitals,
                  Inc. 1998 Long-Term Incentive Plan      23,477,900      10,391     6,032,869

         (c)      Approval of the proposed amendment
                  to the LifePoint Hospitals, Inc.
                  1998 Long-Term Incentive Plan           21,764,282      17,187     7,739,691

         (d)      Ratification of Ernst & Young LLP as
                  independent auditors of our company
                  for the year ending December 31, 2001   29,436,863       6,935        77,390
</TABLE>


                                       30
<PAGE>   33

Item 6: Exhibits and Reports on Form 8-K

         (a)      List of Exhibits:

<TABLE>
<CAPTION>
EXHIBIT NUMBER                  DESCRIPTION
--------------                  -----------
<S>               <C>
  3.1             Certificate of Incorporation of LifePoint Hospitals, Inc. (i)

  3.2             Bylaws of LifePoint Hospitals, Inc. (i)

  3.3             Certificate of Incorporation of LifePoint Hospitals
                  Holdings, Inc. (ii)

  3.4             Bylaws of LifePoint Hospitals Holdings, Inc. (ii)

 10               Amended and Restated Credit Agreement, dated as of June 19, 2001, among
                  LifePoint Hospitals Holdings, Inc., as borrower, the several lenders
                  from time to time parties thereto, Fleet National Bank as administrative
                  agent, Bank of America, N.A. and Deutsche Banc Alex. Brown Inc. as co-
                  syndication agents, Credit Lyonnais New York Branch and SunTrust Bank
                  as co-documentation agents, and Fleet Securities, Inc. as arranger.
</TABLE>

------------------------
                  (i)      Incorporated by reference from the LifePoint
                           Hospitals, Inc. Quarterly Report on Form 10-Q for the
                           quarter ended March 31, 1999.

                  (ii)     Incorporated by reference from the LifePoint
                           Hospitals Holdings, Inc. Annual Report on Form 10-K
                           for the year ended December 31, 1999.

         (b)      Reports on Form 8-K filed during the three months ended June
                  30, 2001:

                  On April 18, 2001, we furnished information pursuant to Item 9
of Form 8-K announcing our intention to issue a press release containing our
first quarter 2001 earnings results on Monday, April 23, 2001.

                  On April 25, 2001, we furnished pursuant to Item 9 of Form 8-K
a copy of our press release on April 23, 2001 containing first quarter 2001
earnings results.

                  On June 4, 2001, we furnished pursuant to Item 9 of Form 8-K a
copy of our press release on June 3, 2001 regarding the death of our Chairman
and Chief Executive Officer, James M. Fleetwood, Jr.

                  On June 20, 2001, we furnished pursuant to Item 9 of Form 8-K
a copy of our press release on June 19, 2001 announcing the completion of a $200
million, five-year amended and restated credit agreement with a syndicate of
banks led by Fleet National Bank.

                  On June 26, 2001, we furnished pursuant to Item 9 of Form 8-K
a copy of our press release on June 25, 2001 announcing that our Board of
Directors unanimously elected Kenneth C. Donahey to serve as our Chairman and
Chief Executive Officer.


                                       31
<PAGE>   34

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    LifePoint Hospitals, Inc.


Date: August 14, 2001               /s/ Kenneth C. Donahey
                                    --------------------------------------------
                                    Kenneth C. Donahey
                                    Chairman and Chief Executive Officer
                                    (Principal Executive and Financial Officer)



                                    LifePoint Hospitals Holdings, Inc.


Date: August 14, 2001               /s/ Kenneth C. Donahey
                                    --------------------------------------------
                                    Kenneth C. Donahey
                                    Chairman and Chief Executive Officer
                                    (Principal Executive and Financial Officer)



                                       32
<PAGE>   35

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER                         DESCRIPTION
--------------                         -----------
<S>               <C>
  3.1             Certificate of Incorporation of LifePoint Hospitals, Inc. (i)

  3.2             Bylaws of LifePoint Hospitals, Inc. (i)

  3.3             Certificate of Incorporation of LifePoint Hospitals
                  Holdings, Inc. (ii)

  3.4             Bylaws of LifePoint Hospitals Holdings, Inc. (ii)

 10               Amended and Restated Credit Agreement, dated as of June 19, 2001, among
                  LifePoint Hospitals Holdings, Inc., as borrower, the several lenders
                  from time to time parties thereto, Fleet National Bank as administrative
                  agent, Bank of America, N.A. and Deutsche Banc Alex. Brown Inc. as co-
                  syndication agents, Credit Lyonnais New York Branch and SunTrust Bank
                  as co-documentation agents, and Fleet Securities, Inc. as arranger.
</TABLE>

---------------------------
                  (i)      Incorporated by reference from the LifePoint
                           Hospitals, Inc. Quarterly Report on Form 10-Q for the
                           quarter ended March 31, 1999.

                  (ii)     Incorporated by reference from the LifePoint
                           Hospitals Holdings, Inc. Annual Report on Form 10-K
                           for the year ended December 31, 1999.


                                       33