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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|                                                                                             
|---------------------------------------------------------------------------------------------
|(Mark One)                                                                                   
|x    QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                                                                             
|For the quarterly period ended June 30, 2003                                                 
|                                                                                             
|or                                                                                           
|                                                                                             
|o    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
(State or other jurisdiction
of incorporation or organization)                   |  | 52-2165845
(I.R.S. Employer Identification No.)
|                                                                                          |  |                                                
|103 Powell Court, Suite 200
Brentwood, Tennessee
(Address of principal executive offices) |  | 37027
(Zip Code)                               

(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.

Yesx   No   
o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yesx   No   
o

As of July 21, 2003, the number of outstanding shares of Common Stock of
LifePoint Hospitals, Inc. was 38,801,217.



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TABLE OF CONTENTS



|                                                     |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I-FINANCIAL INFORMATION                        
|                                                     | Item 1. Financial Statements.                                                                 
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|CONDENSED CONSOLIDATED BALANCE SHEETS               
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                                     | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                     | Item 3. Quantitative and Qualitative Disclosures about Market Risk.                           
|                                                     | Item 4. Controls and Procedures.                                                              
|PART II-OTHER INFORMATION                           
|                                                     | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|                                                     | Item 6. Exhibits and Reports on Form 8-K.                                                     
|SIGNATURES                                          
|Certification of CEO                                
|Certification of CFO                                
|Certification Section 906 of CEO                    
|Certification Section 906 of CFO                    



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##### Table of Contents






PART I-FINANCIAL INFORMATION




Item 1. Financial Statements.

LIFEPOINT HOSPITALS, INC.




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED
(Dollars in millions, except per share amounts)


|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |        | 
|--------------------------------------------------------------------------- | ----------------- | - | ------------------ | ------ | ---------------- | - | ----- | ------ | ---- | - | ----- | ------ |  | - | ----- | ------ | 
|                                                                            |                   |   | Three Months Ended |        | Six Months Ended
|                                                                            |                   |   | June 30,           |        | June 30,        
|                                                                            |                   |   |                    |        |                 
|                                                                            |                   |   | 2003               |        | 2002             |   | 2003  |        | 2002
|                                                                            |                   |   |                    |        |                  |   |       |        |     
|Revenues                                                                    |                   | $ | 221.6              |        |                  | $ | 177.9 |        |      | $ | 442.5 |        |  | $ | 359.5 |       
|                                                                           
|Salaries and benefits                                                       |                   |   | 90.8               |        |                  |   | 70.9  |        |      |   | 181.1 |        |  |   | 141.6 |       
|Supplies                                                                    |                   |   | 28.7               |        |                  |   | 21.9  |        |      |   | 57.2  |        |  |   | 44.8  |       
|Other operating expenses                                                    |                   |   | 43.1               |        |                  |   | 33.3  |        |      |   | 81.7  |        |  |   | 65.5  |       
|Provision for doubtful accounts                                             |                   |   | 16.9               |        |                  |   | 13.1  |        |      |   | 34.4  |        |  |   | 26.3  |       
|Depreciation and amortization                                               |                   |   | 11.4               |        |                  |   | 9.7   |        |      |   | 22.6  |        |  |   | 19.1  |       
|Interest expense, net                                                       |                   |   | 3.3                |        |                  |   | 2.8   |        |      |   | 6.6   |        |  |   | 6.9   |       
|Debt retirement costs                                                       |                   |   |                   |        |                  |   | 25.0  |        |      |   |      |        |  |   | 26.3  |       
|ESOP expense                                                                |                   |   | 1.5                |        |                  |   | 2.7   |        |      |   | 3.1   |        |  |   | 5.2   |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|                                                                            |                   |   | 195.7              |        |                  |   | 179.4 |        |      |   | 386.7 |        |  |   | 335.7 |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|Income (loss) before minority interest and income
taxes                     |                   |   | 25.9               |        |                  |   | (1.5  | )      |      |   | 55.8  |        |  |   | 23.8  |       
|Minority interest in earnings of consolidated entity                        |                   |   | 0.2                |        |                  |   | 0.8   |        |      |   | 0.2   |        |  |   | 1.5   |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|Income (loss) before income taxes                                           |                   |   | 25.7               |        |                  |   | (2.3  | )      |      |   | 55.6  |        |  |   | 22.3  |       
|Provision for income taxes                                                  |                   |   | 10.4               |        |                  |   | 0.2   |        |      |   | 22.6  |        |  |   | 11.1  |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|                                                                            | Net income (loss) |   | $                  | 15.3   |                  |   | $     | (2.5   | )    |   | $     | 33.0   |  |   | $     | 11.2   | 
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|Basic earnings (loss) per share                                             |                   | $ | 0.41               |        |                  | $ | (0.07 | )      |      | $ | 0.88  |        |  | $ | 0.30  |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|Diluted earnings (loss) per share                                           |                   | $ | 0.40               |        |                  | $ | (0.07 | )      |      | $ | 0.85  |        |  | $ | 0.29  |       
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|Weighted average shares and dilutive securities
outstanding (in thousands): |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|                                                                            | Basic             |   |                    | 37,402 |                  |   |       | 37,485 |      |   |       | 37,639 |  |   |       | 37,394 | 
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       
|                                                                            | Diluted           |   |                    | 43,345 |                  |   |       | 37,485 |      |   |       | 43,628 |  |   |       | 38,561 | 
|                                                                            |                   |   |                    |        |                  |   |       |        |      |   |       |        |  |   |       |       

See accompanying notes.

2



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LIFEPOINT HOSPITALS, INC.




CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except per share amounts)


|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |              |   |  |  | 
|-------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------------------- | ------ | - | ----------- | ----- | ------------ | - |  |  | 
|                                                               |                                                                                                                                                                                  |   |                        |        |   | June 30,    |       | December 31,
|                                                               |                                                                                                                                                                                  |   |                        |        |   | 2003        |       | 2002        
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   |                        |        |   | (unaudited) |       | (1)         
|                                                               |                                                                                                                                                                                  |   |                        | ASSETS |   |             |       |              |   |  |  | 
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|Current assets:                                                |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               | Cash and cash equivalents                                                                                                                                                        |   | $                      | 19.5   |   |             | $     | 23.0         |  
|                                                               | Accounts receivable, less allowances for doubtful accounts of $109.1 at June
30, 2003 and $109.1 at December 31, 2002                                                            |   |                        | 94.2   |   |             |       | 85.0         |  
|                                                               | Inventories                                                                                                                                                                      |   |                        | 21.1   |   |             |       | 20.5         |  
|                                                               | Deferred income taxes and other current assets                                                                                                                                   |   |                        | 21.1   |   |             |       | 14.8         |  
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | 155.9                  |        |   |             | 143.3 |             
|Property and equipment:                                        |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               | Land                                                                                                                                                                             |   |                        | 11.4   |   |             |       | 11.3         |  
|                                                               | Buildings and improvements                                                                                                                                                       |   |                        | 291.3  |   |             |       | 285.3        |  
|                                                               | Equipment                                                                                                                                                                        |   |                        | 309.2  |   |             |       | 295.5        |  
|                                                               | Construction in progress (estimated cost to complete and equip after June 30,
2003 is $45.7)                                                                                     |   |                        | 33.1   |   |             |       | 18.1         |  
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | 645.0                  |        |   |             | 610.2 |             
|                                                               | Accumulated depreciation                                                                                                                                                         |   |                        | (257.7 | ) |             |       | (238.0       | )
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | 387.3                  |        |   |             | 372.2 |             
|Deferred loan costs, net                                       |                                                                                                                                                                                  |   | 7.8                    |        |   |             | 8.6   |             
|Unallocated purchase price                                     |                                                                                                                                                                                  |   | 135.3                  |        |   |             | 136.1 |             
|Intangible assets, net                                         |                                                                                                                                                                                  |   | 3.5                    |        |   |             | 3.8   |             
|Goodwill                                                       |                                                                                                                                                                                  |   | 69.2                   |        |   |             | 69.2  |             
|Other                                                          |                                                                                                                                                                                  |   |                       |        |   |             | 0.3   |             
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  | $ | 759.0                  |        |   | $           | 733.5 |             
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | LIABILITIES AND EQUITY |        |   |             |       |              |   |  | 
|                                                              
|Current liabilities:                                           |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               | Accounts payable                                                                                                                                                                 |   | $                      | 29.2   |   |             | $     | 28.5         |  
|                                                               | Accrued salaries                                                                                                                                                                 |   |                        | 21.4   |   |             |       | 24.4         |  
|                                                               | Other current liabilities                                                                                                                                                        |   |                        | 17.4   |   |             |       | 14.3         |  
|                                                               | Estimated third-party payor settlements                                                                                                                                          |   |                        | 5.9    |   |             |       | 8.2          |  
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | 73.9                   |        |   |             | 75.4  |             
|                                                              
|Long-term debt                                                 |                                                                                                                                                                                  |   | 250.0                  |        |   |             | 250.0 |             
|Deferred income taxes                                          |                                                                                                                                                                                  |   | 26.4                   |        |   |             | 24.9  |             
|Professional and general liability risks and other liabilities |                                                                                                                                                                                  |   | 29.6                   |        |   |             | 25.6  |             
|                                                              
|Minority interest in equity of consolidated entity             |                                                                                                                                                                                  |   | 1.2                    |        |   |             |      |             
|                                                              
|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; 38,743,246
shares and 39,550,540 shares issued and outstanding at June 30, 2003 and
December 31, 2002, respectively |   |                        | 0.4    |   |             |       | 0.4          |  
|                                                               | Capital in excess of par value                                                                                                                                                   |   |                        | 293.6  |   |             |       | 297.2        |  
|                                                               | Unearned ESOP compensation                                                                                                                                                       |   |                        | (17.7  | ) |             |       | (19.3        | )
|                                                               | Retained earnings                                                                                                                                                                |   |                        | 101.6  |   |             |       | 79.3         |  
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  |   | 377.9                  |        |   |             | 357.6 |             
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             
|                                                               |                                                                                                                                                                                  | $ | 759.0                  |        |   | $           | 733.5 |             
|                                                               |                                                                                                                                                                                  |   |                        |        |   |             |       |             



---

|(1) |  | Derived from audited financial statements.
|--- |  | ------------------------------------------

See accompanying notes.

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LIFEPOINT HOSPITALS, INC.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED
(In millions)


|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |        |      |   |       |  
|------------------------------------------------ | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ----- | --------------------------------------------------- | ---- | ------------------ | ----- | ---------------- | ---- | ---- | ----- | ----- | ---- | - | ----- | ------ | ---- | - | ----- | -
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      | Three Months Ended |       | Six Months Ended
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      | June 30,           |       | June 30,        
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                 
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      | 2003               |       | 2002             |      | 2003 |       | 2002 
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |      
|Cash flows from operating activities:            |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 | Net income (loss)                                                                        |                                                                                                      | $     | 15.3                                                |      |                    | $     | (2.5             | )    |      | $     | 33.0  |      |   | $     | 11.2   |     
|                                                 | Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |        |     
|                                                 |                                                                                          | Depreciation and amortization                                                                        |       |                                                     | 11.4 |                    |       |                  | 9.7  |      |       |       | 22.6 |   |       |        | 19.1 |  
|                                                 |                                                                                          | Debt retirement costs                                                                                |       |                                                     |     |                    |       |                  | 25.0 |      |       |       |     |   |       |        | 26.3 |  
|                                                 |                                                                                          | ESOP expense                                                                                         |       |                                                     | 1.5  |                    |       |                  | 2.7  |      |       |       | 3.1  |   |       |        | 5.2  |  
|                                                 |                                                                                          | Minority interest in earnings of consolidated entity                                                 |       |                                                     | 0.2  |                    |       |                  | 0.8  |      |       |       | 0.2  |   |       |        | 1.5  |  
|                                                 |                                                                                          | Deferred income taxes (benefit)                                                                      |       |                                                     | 2.2  |                    |       |                  | (1.2 | )    |       |       | 2.1  |   |       |        | (0.8 | )
|                                                 |                                                                                          | Reserve for professional and general liability risks,
net                                            |       |                                                     | 2.6  |                    |       |                  | 2.0  |      |       |       | 3.8  |   |       |        | 5.1  |  
|                                                 |                                                                                          | Tax benefit from stock option exercises                                                              |       |                                                     | 0.2  |                    |       |                  | 0.3  |      |       |       | 0.2  |   |       |        | 1.0  |  
|                                                 |                                                                                          | Increase (decrease) in cash from operating assets and
liabilities, net of effects from acquisitions: |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |        |      |  
|                                                 |                                                                                          |                                                                                                      |       | Accounts receivable                                 |      |                    | 3.2   |                  |      |      | 2.6   |       |      |   | (7.9  | )      |      |   | (18.2 | )
|                                                 |                                                                                          |                                                                                                      |       | Inventories and other current assets                |      |                    | (0.6  | )                |      |      | (1.7  | )     |      |   | (3.4  | )      |      |   | (3.1  | )
|                                                 |                                                                                          |                                                                                                      |       | Accounts payable and accrued expenses               |      |                    | (0.4  | )                |      |      | 2.6   |       |      |   | 2.0   |        |      |   | 4.1   |  
|                                                 |                                                                                          |                                                                                                      |       | Income taxes payable                                |      |                    | (16.1 | )                |      |      | (14.5 | )     |      |   | (4.3  | )      |      |   | (2.5  | )
|                                                 |                                                                                          |                                                                                                      |       | Estimated third-party payor settlements             |      |                    | (3.7  | )                |      |      | (6.9  | )     |      |   | (2.3  | )      |      |   | 4.4   |  
|                                                 |                                                                                          | Other                                                                                                |       |                                                     | 0.1  |                    |       |                  | (0.5 | )    |       |       | 1.0  |   |       |        | (0.7 | )
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 |                                                                                          |                                                                                                      |       | Net cash provided by operating activities           |      |                    | 15.9  |                  |      |      | 18.4  |       |      |   | 50.1  |        |      |   | 52.6  |  
|Cash flows from investing activities:            |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 | Purchases of property and equipment, net                                                 |                                                                                                      |       | (20.8                                               | )    |                    |       | (16.8            | )    |      |       | (38.0 | )    |   |       | (26.8  | )   
|                                                 | Purchases of short-term investments                                                      |                                                                                                      |       |                                                    |      |                    |       | (21.5            | )    |      |       |      |      |   |       | (21.5  | )   
|                                                 | Other                                                                                    |                                                                                                      |       | 0.6                                                 |      |                    |       | (1.2             | )    |      |       | 0.4   |      |   |       | (1.3   | )   
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 |                                                                                          |                                                                                                      |       | Net cash used in investing activities               |      |                    | (20.2 | )                |      |      | (39.5 | )     |      |   | (37.6 | )      |      |   | (49.6 | )
|Cash flows from financing activities:            |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 | Repurchases of common stock                                                              |                                                                                                      |       | (17.0                                               | )    |                    |       |                 |      |      |       | (17.0 | )    |   |       |       |     
|                                                 | Repurchases of senior subordinated notes                                                 |                                                                                                      |       |                                                    |      |                    |       | (141.7           | )    |      |       |      |      |   |       | (150.3 | )   
|                                                 | Proceeds from issuance of convertible notes, net                                         |                                                                                                      |       |                                                    |      |                    |       | 242.7            |      |      |       |      |      |   |       | 242.7  |     
|                                                 | Proceeds from exercise of stock options                                                  |                                                                                                      |       | 0.3                                                 |      |                    |       | 1.0              |      |      |       | 0.5   |      |   |       | 2.2    |     
|                                                 | Other                                                                                    |                                                                                                      |       | 0.2                                                 |      |                    |       | 0.4              |      |      |       | 0.5   |      |   |       | 0.3    |     
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 |                                                                                          |                                                                                                      |       | Net cash (used in) provided by financing activities |      |                    | (16.5 | )                |      |      | 102.4 |       |      |   | (16.0 | )      |      |   | 94.9  |  
|Change
in cash and cash equivalents              |                                                                                          |                                                                                                      | (20.8 | )                                                   |      |                    | 81.3  |                  |      |      | (3.5  | )     |      |   | 97.9  |       
|Cash and cash equivalents at beginning of period |                                                                                          |                                                                                                      | 40.3  |                                                     |      |                    | 73.8  |                  |      |      | 23.0  |       |      |   | 57.2  |       
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|Cash and cash equivalents at end of period       |                                                                                          | $                                                                                                    | 19.5  |                                                     |      | $                  | 155.1 |                  |      | $    | 19.5  |       |      | $ | 155.1 |       
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|                                                 |                                                                                          |                                                                                                      |       |                                                     |      |                    |       |                  |      |      |       |       |      |   |       |       
|Interest payments                                |                                                                                          | $                                                                                                    | 6.1   |                                                     |      | $                  | 7.8   |                  |      | $    | 6.3   |       |      | $ | 8.4   |       
|Income taxes paid, net                           |                                                                                          | $                                                                                                    | 24.3  |                                                     |      | $                  | 15.4  |                  |      | $    | 24.7  |       |      | $ | 13.2  |       

See accompanying notes.

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##### Table of Contents



LIFEPOINT HOSPITALS, INC.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003
(UNAUDITED)

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

At June 30, 2003, LifePoint Hospitals, Inc. (the Company) was comprised
of 28 general, acute care hospitals and related healthcare entities located in
non-urban communities in the states of Alabama, Florida, Kansas, Kentucky,
Louisiana, Tennessee, Utah, West Virginia 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) and disclosures considered necessary for a fair presentation have
been included. Operating results for the three months and six months ended June
30, 2003 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2003. 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, 2002.

Certain prior year amounts have been reclassified to conform to the
current year presentation. These reclassifications have no impact on total
assets, liabilities, stockholders equity, net income or cash flows.

As of January 1, 2003, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 145, a standard that addresses the
classification of gains or losses from early retirement of debt. Prior to the
adoption of SFAS No. 145, the Company reported losses from the early retirement
of debt as extraordinary items, net of tax benefits in the consolidated
statement of income. During the three months and six months ended June 30,
2002, the Company recorded a $15.6 million and $16.4 million extraordinary
loss, net of tax benefits of $9.4 million and $9.9 million, respectively, that
resulted from the early retirement of debt. These charges were reclassified to
comply with SFAS No. 145 by reducing previously reported income before minority
interest and income taxes by $25.0 million and $26.3 million and reducing
income taxes by $9.4 million and $9.9 million for the three months and six
months ended June 30, 2002, respectively, in the accompanying condensed
consolidated statements of operations. This reclassification had no impact on
reported net income.

NOTE 2  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings (loss) per share (dollars in millions, except per share
amounts, and shares in thousands):

|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |       | 
|------------------------------------------------------------------------------------ | ---------------------- | - | ------------------ | ----- | ---------------- | - | ------ | - | -------- | - | ------ | ----- |  | - | ------ | ----- | 
|                                                                                     |                        |   | Three Months Ended |       | Six Months Ended
|                                                                                     |                        |   | June 30,           |       | June 30,        
|                                                                                     |                        |   |                    |       |                 
|                                                                                     |                        |   | 2003               |       | 2002 (a)         |   | 2003   |   | 2002 (b)
|                                                                                     |                        |   |                    |       |                  |   |        |   |         
|Numerator:                                                                           |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Numerator for basic earnings (loss) per share                                        |                        | $ | 15.3               |       |                  | $ | (2.5   | ) |          | $ | 33.0   |       |  | $ | 11.2   |      
|Effect of convertible notes                                                          |                        |   | 2.0                |       |                  |   |       |   |          |   | 3.9    |       |  |   |       |      
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Numerator for diluted earnings (loss) per share                                      |                        | $ | 17.3               |       |                  | $ | (2.5   | ) |          | $ | 36.9   |       |  | $ | 11.2   |      
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Denominator:                                                                         |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Denominator for basic earnings (loss) per share-weighted
average shares              |                        |   | 37,402             |       |                  |   | 37,485 |   |          |   | 37,639 |       |  |   | 37,394 |      
|Effect of dilutive securities:                                                       |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|                                                                                     | Employee stock options |   |                    | 602   |                  |   |        |  |          |   |        | 646   |  |   |        | 1,079 | 
|                                                                                     | Convertible notes      |   |                    | 5,279 |                  |   |        |  |          |   |        | 5,279 |  |   |        |      | 
|                                                                                     | Other                  |   |                    | 62    |                  |   |        |  |          |   |        | 64    |  |   |        | 88    | 
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Denominator for diluted earnings (loss) per share -
adjusted
weighted average shares |                        |   | 43,345             |       |                  |   | 37,485 |   |          |   | 43,628 |       |  |   | 38,561 |      
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Basic earnings (loss) per share                                                      |                        | $ | 0.41               |       |                  | $ | (0.07  | ) |          | $ | 0.88   |       |  | $ | 0.30   |      
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      
|Diluted earnings (loss) per share                                                    |                        | $ | 0.40               |       |                  | $ | (0.07  | ) |          | $ | 0.85   |       |  | $ | 0.29   |      
|                                                                                     |                        |   |                    |       |                  |   |        |   |          |   |        |       |  |   |        |      



---

|(a) |  | The impact of the 2.3 million potential weighted average shares of
common stock, if converted, and interest expense related to the
convertible notes was not included in the computation of diluted
earnings per share because the effect would have been anti-dilutive.
In addition, the impact of the 1.2 million potential weighted average
shares of common stock related to outstanding stock options was not
included in the computation of diluted earnings per share because the
effect would have been anti-dilutive.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The impact of the 1.2 million potential weighted average shares of
common stock, if converted, and interest expense related to the
convertible notes was not included in the computation of diluted
earnings per share because the effect would have been anti-dilutive.                                                                                                                                                                                                                                                      

5



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##### Table of Contents



NOTE 3  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51 (FIN 46). FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. The Company does not expect this new
interpretation to have a material effect on its future results of operations or
financial position.

NOTE 4  STOCK BENEFIT PLANS

The Company issues stock options and other stock-based awards to key
employees and directors. SFAS No. 123, Accounting for Stock-Based Compensation,
encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen
to continue to account for employee stock-based compensation using the
intrinsic value method as prescribed in Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, and related Interpretations,
under which no compensation cost related to stock options has been recognized
in net income (loss) for the three months and six months ended June 30, 2003
and 2002.

Pro forma information regarding interim net income (loss) and earnings
(loss) per share is required by SFAS No. 148 and has been determined as if the
Company had accounted for its employee stock options under the fair value
method. The fair value for these options was estimated at the date of grant
using a Black-Scholes option valuation model with the following range of
weighted-average assumptions: risk-free interest rates of 1.59% to 7.60%;
expected dividend yield of 0.0%; volatility factors of the expected market
price of the Companys common stock of 35.0% to 53.0%; and an expected life of
the options of 3.0 to 4.7 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. Option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. The
Companys employee stock options have characteristics significantly different
from those of traded options. Changes in the subjective input assumptions can
materially affect the fair value estimate. Other option valuation models may
produce significantly different fair values of the Companys employee stock
options.

6



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##### Table of Contents



The following table
illustrates the effect on net income (loss) and earnings (loss) per
share if the Company had applied the fair value recognition provisions of SFAS
No. 123 to stock-based compensation (dollars in millions, except per share
amounts):

|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---- | -------------- |  | ---- | ----- | ---- |  | - | ---- | - |  | - | ---- | -
|                                                                                                                          |  | Three Months   |      | Six Months    
|                                                                                                                          |  | Ended June 30, |      | Ended June 30,
|                                                                                                                          |  |                |      |               
|                                                                                                                          |  | 2003           |      | 2002           |  | 2003 |       | 2002
|                                                                                                                          |  |                |      |                |  |      |       |     
|Net income (loss), as reported                                                                                            |  | $              | 15.3 |                |  | $    | (2.5  | )    |  | $ | 33.0 |   |  | $ | 11.2 |  
|Less stock-based compensation expense determined under fair
value based method for all awards, net of related tax effects |  |                | (2.4 | )              |  |      | (2.0  | )    |  |   | (4.7 | ) |  |   | (3.8 | )
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Pro forma net income (loss)                                                                                               |  | $              | 12.9 |                |  | $    | (4.5  | )    |  | $ | 28.3 |   |  | $ | 7.4  |  
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Earnings (loss) per share:                                                                                                |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Basic  as reported                                                                                                       |  | $              | 0.41 |                |  | $    | (0.07 | )    |  | $ | 0.88 |   |  | $ | 0.30 |  
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Basic  pro forma                                                                                                         |  | $              | 0.35 |                |  | $    | (0.12 | )    |  | $ | 0.75 |   |  | $ | 0.20 |  
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Diluted  as reported                                                                                                     |  | $              | 0.40 |                |  | $    | (0.07 | )    |  | $ | 0.85 |   |  | $ | 0.29 |  
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  
|Diluted  pro forma                                                                                                       |  | $              | 0.34 |                |  | $    | (0.12 | )    |  | $ | 0.74 |   |  | $ | 0.19 |  
|                                                                                                                          |  |                |      |                |  |      |       |      |  |   |      |   |  |   |      |  

In the six months ended June 30, 2003, the Company granted options to
purchase an additional 979,350 shares of common stock at a weighted average
exercise price of $21.05 per share and an estimated weighted-average fair value
of $7.82 per share. These options become exercisable beginning in part from
the date of grant to three years after the date of grant and expire 10 years
after grant. The above table includes these additional stock options for the
period subsequent to their grant.

NOTE 5  CONTINGENCIES

HCA Investigations, Litigation and Indemnification Rights

HCA Inc.
(HCA) has been the subject of various federal and state
investigations, qui tamactions, shareholder derivative and class action suits,
patient/payor actions and general liability claims. HCA has been the subject of
a formal order of investigation by the SEC concerning violations of 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 many of the facilities that the
Company now owns. The description of the matters
below is based on the Companys review of HCAs public filings.

HCA has been a defendant in several qui tamactions brought on behalf of the
United States by private parties, known as relators, which have been unsealed
and served on HCA. The actions alleged, in general, that HCA and certain
subsidiaries and/or affiliated partnerships violated the False Claims Act, 31
U.S.C. § 3729, et seq. by submitting improper claims for reimbursement to the
government. The lawsuits generally have sought: a) restitution of amounts paid to HCA
entities as a result of any Medicare or Medicaid false claims, b) a penalty in
the amount of three times the restitution amount, c) civil fines of not less
than $5,500 nor more than $11,000 for each such claim, and d) attorneys fees
and costs. HCA has disclosed that, on March 15, 2001, the Department of Justice
announced its decision to intervene in certain of the qui tamactions against
HCA. HCA stated that, of the original 30 qui tamactions, the Department of
Justice elected to intervene in eight actions. HCA has disclosed that it is
aware of additional qui tamactions that remain under seal and that it also
believes there may be other sealed qui tamcases of which it is unaware.

In December 2000, HCA entered into a series of agreements with the
Criminal Division of the Department of Justice and various U.S. Attorneys
Offices and with the Civil Division of the Department of Justice which resolved
all federal criminal issues outstanding against HCA and certain issues
involving federal civil claims by or on behalf of the government against HCA
relating to DRG coding, outpatient laboratory billing and home health issues.
These December 2000 agreements related only to conduct that was the subject of
the various federal investigations and did not resolve various qui tamactions
filed by private parties against HCA or pending state actions.

On July 1, 2003, HCA announced that the U.S. District Court of the
District of Columbia has approved a settlement agreement signed by HCA and the
Department of Justice which settled litigation brought by the Department of
Justice against HCA with respect to cost reports and physician relations.
Additionally, HCA has made payments to the Centers for Medicare and
Medicaid Services in accordance with an agreement to resolve all Medicare cost
report, home office cost statement and appeal issues. As a result of this
settlement, the remaining outstanding qui tamactions include only those
actions in which the Department of Justice has not intervened.

7



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HCA has agreed to indemnify the Company for any losses, other than
consequential damages, arising from the 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 relate to the investigation.
HCA has also agreed to make specified payments to the Company if 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. 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. In addition, should HCA be unable to fulfill its obligations to the
federal government, the Company could ultimately be held responsible for any
settlement related to the former HCA hospitals operated by the Company. If
indemnified matters were asserted successfully against the Company or any of
its facilities, and HCA failed to meet its indemnification obligations, such an
event could have a material adverse effect on the Companys business, financial
condition, results of operations or prospects.

The Company cannot predict with accuracy the extent to which it may or may
not continue to be affected by the investigations of HCA and the
initiation of additional investigations, if any. These matters, if resulting in
a successful claim against the Company, 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 ADA). 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. In January 2002, the
District Court certified the class action and issued a scheduling order that
requires the parties to complete discovery and inspection for approximately six
facilities per year. The Company intends to vigorously defend the lawsuit,
recognizing the Companys obligation to correct any deficiencies in order to
comply with the ADA.

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. This agreement
was amended in April 2002. Complying with the compliance measures and reporting
and auditing requirements of the corporate integrity agreement will require
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, medical malpractice, breach of management contracts, 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 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 had committed to advance amounts of approximately
$22.6 million at June 30, 2003. 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 contingent upon the physician continuing to practice in the
respective community.

8



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##### Table of Contents



Capital Expenditure Commitments

The Company is reconfiguring some of its facilities to accommodate more
effectively inpatient and outpatient services and restructuring existing
surgical capacity in some of its hospitals to permit additional patient volume
and a greater variety of services. The Company had incurred approximately $33.1
million in uncompleted projects as of June 30, 2003, which is included in
construction in progress in its accompanying condensed consolidated balance
sheet. At June 30, 2003, the Company had projects under construction with an
estimated additional cost to complete and equip of approximately $45.7 million.

Pursuant to the asset purchase agreement for Ville Platte Medical Center,
the Company has agreed to make certain capital improvements, the cost of which,
together with the initial cash payment, defeasement of certain bonds and
liabilities assumed, is not required to exceed $25.0 million. The capital
improvements must be completed by December 1, 2004. The initial cash payment
and liabilities assumed totaled $15.1 million, which leaves $9.9 million
required for capital improvements. The Company had incurred approximately $2.7
million of the required capital improvements as of June 30, 2003.

Pursuant to the asset purchase agreement for Logan Regional Medical
Center, the Company has agreed to expend, regardless of the results of the
hospitals operations, at least $20.0 million in the aggregate for capital
expenditures and improvements during the ten-year period following the date of
acquisition of December 1, 2002. The Company had incurred approximately $0.2
million of the required capital improvements as of June 30, 2003.

Prior Period Cost Report Settlements

Hospitals participating in the Medicare and some Medicaid programs,
whether paid on a reasonable cost basis or under a Prospective Payment System,
are required to meet certain financial reporting requirements. Federal and,
where applicable, state regulations require submission of annual cost reports
identifying medical costs and expenses associated with the services provided by
each hospital to Medicare beneficiaries and Medicaid recipients. The Company
is current in filing its Medicare cost reports.

Net adjustments to estimated third-party payor settlements resulted in an
increase to the Companys revenues of $4.3 million for the six months ended
June 30, 2003 compared to $2.1 million for the same period last year. The
Company had net adjustments to estimated third-party payor settlements that
increased revenues by $1.4 million and $2.1 million during the three months
ended June 30, 2003 and 2002, respectively. The adjustments had a favorable
diluted earnings per share effect of $0.06 and $0.03 for the six months ended
June 30, 2003 and 2002, respectively. The adjustments had a favorable diluted
earnings per share effect of $0.02 and $0.03 for the three months ended June
30, 2003 and 2002, respectively.

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 healthcare laws
and regulations, such as billing and reimbursement, fraud and abuse and similar
anti-referral laws. Although the Company institutes policies designed 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 6  STOCK REPURCHASE PROGRAM

On April 28, 2003, the Company announced that its Board of Directors
authorized the repurchase of up to $100 million of its outstanding shares
of common stock either in the open market or through privately negotiated
transactions, subject to market conditions, regulatory constraints and
other factors. The Company, which had approximately 38.7 million shares of
common stock outstanding as of June 30, 2003, is not obligated to
repurchase any specific number of shares under the program. The Company
expects its purchases to be

9



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##### Table of Contents



funded with a portion of the Companys available cash and funds available
under the Companys amended and restated credit facility. The Company
intends to seek approvals under the credit facility, as necessary.

During the three months ended June 30, 2003, the Company used available
cash to purchase 873,800 shares for an aggregate of approximately $17.0
million.

10



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##### Table of Contents






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, 2003, we operated 28 general, acute care hospitals and related
healthcare entities located in non-urban communities in the states of Alabama,
Florida, Kansas, Kentucky, Louisiana, Tennessee, Utah, West Virginia 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, results of operations and cash flows. These
factors include, but are not limited to:

|  |  |                                                                                                                                                                                                                                                                                                                          
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reduction in payments to healthcare providers by government and
commercial third-party payors, as well as cost-containment efforts of
insurers and other payors;                                                                                                                                                         
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | failure to comply, or allegations of lack of compliance with,
applicable laws and regulations;                                                                                                                                                                                                                           
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the possibility of adverse changes in federal, state or local
regulations affecting the healthcare industry, including the uncertain
impact on payment for services and supplies by the Medicare program
contained in the Prescription Drug Bill presently being considered by
the House and Senate Conference Committee;
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | our ability to manage healthcare risks resulting from the delivery of
patient care, claims and legal actions relating to professional
liabilities and the lack of state and federal tort reform;                                                                                                                         
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | uncertainty associated with compliance with the Health Insurance
Portability and Accountability Act of 1996 regulations;                                                                                                                                                                                                 
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the ability to enter into and renew payor arrangements on acceptable
terms;                                                                                                                                                                                                                                              
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the ability to maintain and increase patient volumes and control the
costs of providing services and supply costs;                                                                                                                                                                                                       
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the availability, cost and terms of insurance coverage for us, our
hospitals and physicians who practice at our hospitals;                                                                                                                                                                                               
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the highly competitive nature of the healthcare business, including
competition to recruit and retain general and specialized physicians
as well as competition from other specialized providers and
competing services rendered in physician offices;                                                                   
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the ability to attract and retain qualified management and personnel,
including physicians, nurses and clinical support personnel, consistent
with our expectations and targets;                                                                                                                                         
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | the geographic concentration of our operations;                                                                                                                                                                                                                                                                          
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | our ability to acquire hospitals on favorable terms and to complete
budgeted capital improvements of our existing facilities successfully;                                                                                                                                                                               
|  |  |                                                                                                                                                                                                                                                                                                                          
| |  | our ability to integrate newly acquired facilities successfully;                                                                                                                                                                                                                                                         

11



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##### Table of Contents



|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | the availability and terms of capital to fund our business strategy;                                                                                                                                                                                                                                                                                                                                                                             
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | the potential adverse impact of government investigations and
litigation involving the business practices of HCA (to the extent
relating to periods prior to our formation) and of other healthcare
providers (to the extent such investigations and litigation may affect
us or our industry segment);                                                                                                                                          
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | the financial viability of third-party payors;                                                                                                                                                                                                                                                                                                                                                                                                   
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | 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, and amended in April 2002, and those that,
if violated, could cause any of our facilities to lose its state license
or its ability to receive payments under the Medicare, Medicaid and
TRICARE programs;
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | successful development or license of software and management
information systems used for effective claims processing;                                                                                                                                                                                                                                                                                                                           
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | changes in accounting practices as required under generally accepted
accounting principles in the United States;                                                                                                                                                                                                                                                                                                                                 
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | volatility in the market value of our common stock and resulting
costs to us to administer our Employee Stock Ownership Plan (ESOP);                                                                                                                                                                                                                                                                                                           
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | changes in general economic conditions in the markets where our
facilities are located and changes in the manner in which employers
provide healthcare coverage to their employees;                                                                                                                                                                                                                                                              
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | inflationary pressures;                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | changes in our liquidity or indebtedness; 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 rely
unduly on such forward-looking statements when evaluating the information
presented in this report.

Results of Operations

The key metrics we use internally to evaluate our revenues are equivalent
admissions, which equates to volume, and revenues per equivalent admission,
which relates to pricing and acuity. The growth in outpatient revenues lowers
our growth in revenues per equivalent admission, as revenues from outpatient
services are generally lower than inpatient revenues. We continue to receive
pressures from payors to shift to more outpatient procedures.

Revenue/Volume Trends

We anticipate that our patient volumes and related revenues will 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, 2003, we recruited 412 physicians, of which 296 have
been retained by us. Adding new physicians should help increase both
inpatient and outpatient volumes which, in turn, should increase
revenues. Approximately 57% of our retained physicians are specialists.
Continuing to add specialists should also allow us to grow by offering
new services. In addition, increases in capital

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|  |  |                                                                                                                                                                                                                                  
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  | expenditures at our hospitals should increase local market share and help
persuade patients to obtain healthcare services within their communities.                                                                              
|  |  |                                                                                                                                                                                                                                  
| |  | 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 anticipate our patient volumes to increase, the resulting
revenues will likely be offset in part by the following factors:

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Discounts received by Medicare, Medicaid and Managed Care Plans.
We derive a significant portion of our business from Medicare, Medicaid
and managed care plans. Admissions related to Medicare, Medicaid and
managed care plan patients were 91.7% and 92.2% of total admissions for
the six months ended June 30, 2003 and 2002, respectively. These payors
receive significant discounts.                                                                                                                                                                                                                                                                                                                                            
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Efforts to Reduce Payments. Other third-party payors also negotiate
discounted fees rather than paying standard prices. In addition, an
increasing proportion of our services are reimbursed under predetermined
payment amounts regardless of the cost incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Growth in Outpatient Services. We anticipate that the growth trend in
outpatient services will 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 those for
similar procedures performed in an inpatient setting. Net outpatient
revenues as a percentage of total revenues increased from 49.4% in the
six months ended June 30, 2002 to 50.5% in the six months ended June 30,
2003.

Cost Containment

We seek to control costs by, among other things, reducing labor costs by
improving labor productivity and attempting to decrease the use of contract
labor, when appropriate, controlling supply expenses through the use of a group
purchasing organization and reducing uncollectible revenues. We have
implemented cost control initiatives including adjusting staffing levels
according to patient volumes, modifying supply purchases according to usage
patterns and providing training to hospital staff in more efficient billing and
collection processes. We believe that as our company grows, we will likely
benefit from our ability to spread fixed administrative costs over a larger
base of operations.

There is no assurance that we can contain certain costs in the future. As
a result of the general shortage of nurses and medical technicians in the
healthcare industry, we may experience an increase in salaries and benefits
expense as we may be forced to hire additional contract health professionals or
increase salaries to attract and retain our clinical employees.

In addition, the healthcare industry has recently experienced an increase
in the cost of all insurance lines, especially professional and general
liability insurance. We currently have no information that would lead us to
believe that this trend is only temporary in nature. Accordingly, there is no
assurance that these costs will not have a material adverse effect on our
future operating results.

Pressure on payment levels, the increase in outpatient services and the
large number of our patients who participate in discounted plans will present
ongoing challenges for us. These challenges are intensified 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.

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Impact of Acquisitions

Because of the relatively small number of hospitals we own, each hospital
acquisition can materially affect our overall operating margin. We typically
take a number of steps to lower operating costs when we acquire a hospital. The
impact of our actions may be offset by other cost increases to expand services,
strengthen medical staff and attract additional patients to our facilities. The
benefits of our investments and of other activities to improve operating
margins generally do not occur immediately. Consequently, the financial
performance of a newly acquired hospital may adversely affect our overall
operating margins in the short term. As we acquire additional hospitals, this
effect may be mitigated by the expanded financial base of our existing
hospitals and the allocation of corporate overhead among a larger number of
hospitals.

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Operating Results Summary

The following is a summary of results of operations for the three months
and six months ended June 30, 2003 and 2002 (dollars in millions, except for
revenues per equivalent admission):

|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   
|------------------------------------------------------- |  | ------ | ----- | -------- |  | --------------------------- | ----- | -------- |  | - | ----- | ---- |  |  | ----- | --
|                                                        |  |        |       |          |  | Three Months Ended June 30, |       |          |  |  
|                                                        |  |       
|                                                        |  | 2003   |       | 2002    
|                                                        |  |        |       |         
|                                                        |  |        |       |          |  | % of                        |       |          |  |   |       | % of
|                                                        |  | Amount |       | Revenues |  | Amount                      |       | Revenues
|                                                        |  |        |       |          |  |                             |       |         
|Revenues                                                |  | $      | 221.6 |          |  |                             | 100.0 | %        |  | $ | 177.9 |      |  |  | 100.0 | % 
|Salaries and benefits (a)                               |  |        | 90.8  |          |  |                             | 41.0  |          |  |   | 70.9  |      |  |  | 39.8  |   
|Supplies (b)                                            |  |        | 28.7  |          |  |                             | 13.0  |          |  |   | 21.9  |      |  |  | 12.3  |   
|Other operating expenses (c)                            |  |        | 43.1  |          |  |                             | 19.4  |          |  |   | 33.3  |      |  |  | 18.7  |   
|Provision for doubtful accounts                         |  |        | 16.9  |          |  |                             | 7.6   |          |  |   | 13.1  |      |  |  | 7.4   |   
|Depreciation and amortization                           |  |        | 11.4  |          |  |                             | 5.1   |          |  |   | 9.7   |      |  |  | 5.5   |   
|Interest expense, net                                   |  |        | 3.3   |          |  |                             | 1.5   |          |  |   | 2.8   |      |  |  | 1.6   |   
|Debt retirement costs                                   |  |        |      |          |  |                             |      |          |  |   | 25.0  |      |  |  | 14.0  |   
|ESOP expense                                            |  |        | 1.5   |          |  |                             | 0.7   |          |  |   | 2.7   |      |  |  | 1.5   |   
|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   
|                                                        |  |        | 195.7 |          |  |                             | 88.3  |          |  |   | 179.4 |      |  |  | 100.8 |   
|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   
|Income (loss) before minority interest and income taxes |  |        | 25.9  |          |  |                             | 11.7  |          |  |   | (1.5  | )    |  |  | (0.8  | ) 
|Minority interest in earnings of consolidated
entity    |  |        | 0.2   |          |  |                             | 0.1   |          |  |   | 0.8   |      |  |  | 0.4   |   
|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   
|Income (loss) before income taxes                       |  |        | 25.7  |          |  |                             | 11.6  |          |  |   | (2.3  | )    |  |  | (1.2  | ) 
|Provision for income taxes                              |  |        | 10.4  |          |  |                             | 4.7   |          |  |   | 0.2   |      |  |  | 0.2   |   
|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   
|Net income
(loss)                                       |  | $      | 15.3  |          |  |                             | 6.9   | %        |  | $ | (2.5  | )    |  |  | (1.4  | )%
|                                                        |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |   

|                                                        |  |                             |         |        |  |                 |        |   |  |  |      |  
|------------------------------------------------------- |  | --------------------------- | ------- | ------ |  | --------------- | ------ | - |  |  | ---- | -
|                                                        |  | Three Months Ended June 30,
|                                                        |  |                            
|                                                        |  | 2003                        |         | 2002   |  | % Changes      
|                                                        |  | Amount                      |         | Amount |  | From Prior Year
|                                                        |  |                             |         |        |  |                
|Consolidated:                                           |  |                             |         |        |  |                 |        |   |  |  |      |  
|Revenues                                                |  | $                           | 221.6   |        |  | $               | 177.9  |   |  |  | 24.6 | %
|Number of hospitals at end of period                    |  |                             | 28      |        |  |                 | 23     |   |  |  | 21.7 |  
|Admissions (d)                                          |  |                             | 22,337  |        |  |                 | 18,548 |   |  |  | 20.4 |  
|Equivalent admissions (e)                               |  |                             | 44,654  |        |  |                 | 36,114 |   |  |  | 23.6 |  
|Revenues per equivalent admission                       |  | $                           | 4,962   |        |  | $               | 4,924  |   |  |  | 0.8  |  
|Outpatient factor (e)                                   |  |                             | 2.0     |        |  |                 | 1.95   |   |  |  | 2.7  |  
|Emergency room visits (f)                               |  |                             | 106,305 |        |  |                 | 88,103 |   |  |  | 20.7 |  
|Inpatient surgeries                                     |  |                             | 6,691   |        |  |                 | 5,732  |   |  |  | 16.7 |  
|Outpatient surgeries (g)                                |  |                             | 19,225  |        |  |                 | 16,079 |   |  |  | 19.6 |  
|Total surgeries                                         |  |                             | 25,916  |        |  |                 | 21,811 |   |  |  | 18.8 |  
|Licensed beds at end of period                          |  |                             | 2,624   |        |  |                 | 2,197  |   |  |  | 19.4 |  
|Weighted average licensed beds                          |  |                             | 2,624   |        |  |                 | 2,197  |   |  |  | 19.4 |  
|Average daily census                                    |  |                             | 997     |        |  |                 | 826    |   |  |  | 20.7 |  
|Average length of stay (days)                           |  |                             | 4.1     |        |  |                 | 4.1    |   |  |  |     |  
|Medicare case mix index                                 |  |                             | 1.18    |        |  |                 | 1.17   |   |  |  | 0.9  |  
|Net outpatient revenues as a percentage of net
revenues |  |                             | 50.9    | %      |  |                 | 51.1   | % |  |  | N/A  |  
|Same Hospital (h):                                      |  |                             |         |        |  |                 |        |   |  |  |      |  
|Revenues                                                |  | $                           | 187.1   |        |  | $               | 177.9  |   |  |  | 5.2  | %
|Number of hospitals at end of period                    |  |                             | 23      |        |  |                 | 23     |   |  |  |     |  
|Admissions (d)                                          |  |                             | 18,539  |        |  |                 | 18,548 |   |  |  |     |  
|Equivalent admissions (e)                               |  |                             | 36,101  |        |  |                 | 36,114 |   |  |  |     |  
|Revenues per equivalent admission                       |  | $                           | 5,184   |        |  | $               | 4,924  |   |  |  | 5.3  |  
|Outpatient factor (e)                                   |  |                             | 1.95    |        |  |                 | 1.95   |   |  |  |     |  
|Emergency room visits (f)                               |  |                             | 86,161  |        |  |                 | 88,103 |   |  |  | (2.2 | )
|Inpatient surgeries                                     |  |                             | 5,690   |        |  |                 | 5,732  |   |  |  | (0.7 | )
|Outpatient surgeries (g)                                |  |                             | 16,238  |        |  |                 | 16,079 |   |  |  | 1.0  |  
|Total surgeries                                         |  |                             | 21,928  |        |  |                 | 21,811 |   |  |  | 0.5  |  
|Licensed beds at end of period                          |  |                             | 2,203   |        |  |                 | 2,197  |   |  |  | 0.3  |  
|Weighted average licensed beds                          |  |                             | 2,203   |        |  |                 | 2,197  |   |  |  | 0.3  |  
|Average daily census                                    |  |                             | 832     |        |  |                 | 826    |   |  |  | 0.7  |  
|Average length of stay (days)                           |  |                             | 4.1     |        |  |                 | 4.1    |   |  |  |     |  
|Medicare case mix index                                 |  |                             | 1.20    |        |  |                 | 1.17   |   |  |  | 2.6  |  
|Net outpatient revenues as a percentage of net
revenues |  |                             | 49.6    | %      |  |                 | 51.1   | % |  |  | N/A  |  

15



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|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 
|---------------------------------------------------- |  | ------ | ----- | -------- |  | ------------------------- | ----- | -------- |  | - | ----- | ---- |  |  | ----- | - |  |  |  | 
|                                                     |  |        |       |          |  | Six Months Ended June 30, |       |          |  |   |       |      |  | 
|                                                     |  |       
|                                                     |  | 2003   |       | 2002     |  |                           |       |         
|                                                     |  |        |       |          |  |                           |       |         
|                                                     |  |        |       |          |  | % of                      |       |          |  |   |       | % of |  |  |       |  
|                                                     |  | Amount |       | Revenues |  | Amount                    |       | Revenues |  |   |       |     
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |     
|Revenues                                             |  | $      | 442.5 |          |  |                           | 100.0 | %        |  | $ | 359.5 |      |  |  | 100.0 | % |  |  |  | 
|Salaries and benefits (a)                            |  |        | 181.1 |          |  |                           | 40.9  |          |  |   | 141.6 |      |  |  | 39.4  |   |  |  |  | 
|Supplies (b)                                         |  |        | 57.2  |          |  |                           | 12.9  |          |  |   | 44.8  |      |  |  | 12.5  |   |  |  |  | 
|Other operating expenses (c)                         |  |        | 81.7  |          |  |                           | 18.5  |          |  |   | 65.5  |      |  |  | 18.2  |   |  |  |  | 
|Provision for doubtful accounts                      |  |        | 34.4  |          |  |                           | 7.8   |          |  |   | 26.3  |      |  |  | 7.3   |   |  |  |  | 
|Depreciation and amortization                        |  |        | 22.6  |          |  |                           | 5.1   |          |  |   | 19.1  |      |  |  | 5.4   |   |  |  |  | 
|Interest expense, net                                |  |        | 6.6   |          |  |                           | 1.5   |          |  |   | 6.9   |      |  |  | 1.9   |   |  |  |  | 
|Debt retirement costs                                |  |        |      |          |  |                           |      |          |  |   | 26.3  |      |  |  | 7.3   |   |  |  |  | 
|ESOP expense                                         |  |        | 3.1   |          |  |                           | 0.7   |          |  |   | 5.2   |      |  |  | 1.4   |   |  |  |  | 
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 
|                                                     |  |        | 386.7 |          |  |                           | 87.4  |          |  |   | 335.7 |      |  |  | 93.4  |   |  |  |  | 
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 
|Income before minority interest and income taxes     |  |        | 55.8  |          |  |                           | 12.6  |          |  |   | 23.8  |      |  |  | 6.6   |   |  |  |  | 
|Minority interest in earnings of consolidated entity |  |        | 0.2   |          |  |                           |      |          |  |   | 1.5   |      |  |  | 0.4   |   |  |  |  | 
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 
|Income before income taxes                           |  |        | 55.6  |          |  |                           | 12.6  |          |  |   | 22.3  |      |  |  | 6.2   |   |  |  |  | 
|Provision for income taxes                           |  |        | 22.6  |          |  |                           | 5.1   |          |  |   | 11.1  |      |  |  | 3.1   |   |  |  |  | 
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 
|Net income                                           |  | $      | 33.0  |          |  |                           | 7.5   | %        |  | $ | 11.2  |      |  |  | 3.1   | % |  |  |  | 
|                                                     |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |   |  |  |  | 

|                                                        |  |        |         |        |  |                           |         |   |  |  |      |  
|------------------------------------------------------- |  | ------ | ------- | ------ |  | ------------------------- | ------- | - |  |  | ---- | -
|                                                        |  |        |         |        |  | Six Months Ended June 30, |         |   |  | 
|                                                        |  |       
|                                                        |  | 2003   |         | 2002   |  | % Changes                
|                                                        |  | Amount |         | Amount |  | From Prior Year          
|                                                        |  |        |         |        |  |                          
|Consolidated:                                           |  |        |         |        |  |                           |         |   |  |  |      |  
|Revenues                                                |  | $      | 442.5   |        |  | $                         | 359.5   |   |  |  | 23.1 | %
|Number of hospitals at end of period                    |  |        | 28      |        |  |                           | 23      |   |  |  | 21.7 |  
|Admissions (d)                                          |  |        | 45,814  |        |  |                           | 39,099  |   |  |  | 17.2 |  
|Equivalent admissions (e)                               |  |        | 89,566  |        |  |                           | 73,702  |   |  |  | 21.5 |  
|Revenues per equivalent admission                       |  | $      | 4,940   |        |  | $                         | 4,877   |   |  |  | 1.3  |  
|Outpatient factor (e)                                   |  |        | 1.96    |        |  |                           | 1.89    |   |  |  | 3.7  |  
|Emergency room visits (f)                               |  |        | 206,043 |        |  |                           | 173,090 |   |  |  | 19.0 |  
|Inpatient surgeries                                     |  |        | 13,354  |        |  |                           | 11,384  |   |  |  | 17.3 |  
|Outpatient surgeries (g)                                |  |        | 38,084  |        |  |                           | 32,245  |   |  |  | 18.1 |  
|Total surgeries                                         |  |        | 51,438  |        |  |                           | 43,629  |   |  |  | 17.9 |  
|Licensed beds at end of period                          |  |        | 2,624   |        |  |                           | 2,197   |   |  |  | 19.4 |  
|Weighted average licensed beds                          |  |        | 2,622   |        |  |                           | 2,197   |   |  |  | 19.3 |  
|Average daily census                                    |  |        | 1,026   |        |  |                           | 880     |   |  |  | 16.6 |  
|Average length of stay (days)                           |  |        | 4.1     |        |  |                           | 4.1     |   |  |  |     |  
|Medicare case mix index                                 |  |        | 1.19    |        |  |                           | 1.16    |   |  |  | 2.6  |  
|Net outpatient revenues as a percentage of net
revenues |  |        | 50.5    | %      |  |                           | 49.4    | % |  |  | N/A  |  
|Same Hospital (h):                                      |  |        |         |        |  |                           |         |   |  |  |      |  
|Revenues                                                |  | $      | 373.3   |        |  | $                         | 359.5   |   |  |  | 3.9  | %
|Number of hospitals at end of period                    |  |        | 23      |        |  |                           | 23      |   |  |  |     |  
|Admissions (d)                                          |  |        | 38,028  |        |  |                           | 39,099  |   |  |  | (2.7 | )
|Equivalent admissions (e)                               |  |        | 73,052  |        |  |                           | 73,702  |   |  |  | (0.9 | )
|Revenues per equivalent admission                       |  | $      | 5,110   |        |  | $                         | 4,877   |   |  |  | 4.8  |  
|Outpatient factor (e)                                   |  |        | 1.92    |        |  |                           | 1.89    |   |  |  | 1.9  |  
|Emergency room visits (f)                               |  |        | 170,653 |        |  |                           | 173,090 |   |  |  | (1.4 | )
|Inpatient surgeries                                     |  |        | 11,349  |        |  |                           | 11,384  |   |  |  | (0.3 | )
|Outpatient surgeries (g)                                |  |        | 32,148  |        |  |                           | 32,245  |   |  |  | (0.3 | )
|Total surgeries                                         |  |        | 43,497  |        |  |                           | 43,629  |   |  |  | (0.3 | )
|Licensed beds at end of period                          |  |        | 2,203   |        |  |                           | 2,197   |   |  |  | 0.3  |  
|Weighted average licensed beds                          |  |        | 2,201   |        |  |                           | 2,197   |   |  |  | 0.2  |  
|Average daily census                                    |  |        | 861     |        |  |                           | 880     |   |  |  | (2.2 | )
|Average length of stay (days)                           |  |        | 4.1     |        |  |                           | 4.1     |   |  |  |     |  
|Medicare case mix index                                 |  |        | 1.20    |        |  |                           | 1.16    |   |  |  | 3.4  |  
|Net outpatient revenues as a percentage of net
revenues |  |        | 49.7    | %      |  |                           | 49.4    | % |  |  | N/A  |  

16



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---

|(a) |  | Represents our cost of salaries and benefits, including employee health
benefits and workers compensation insurance, for all hospital and
corporate employees and contract labor.                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Includes our hospitals costs for pharmaceuticals, blood, surgical
instruments and all general supply items, including the cost of freight.                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(c) |  | Consists primarily of contract services, physician recruitment,
professional fees, repairs and maintenance, rents and leases, utilities,
insurance, marketing and non-income taxes.                                                                                                                                                                                                                                                                                                                                                                 
|   
|(d) |  | 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.                                                                                                                                                                                                                                                                                                                                            
|   
|(e) |  | 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 outpatient
factor (the sum of gross inpatient revenue and gross outpatient revenue
divided 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.
|   
|(f) |  | Represents the total number of hospital-based emergency room visits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(g) |  | Outpatient surgeries are those surgeries that do not require admission to
our hospitals.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(h) |  | Same hospital information excludes the operations of hospitals which we
acquired during the periods presented. The costs of
corporate overhead are included in same hospital information.                                                                                                                                                                                                                                                                                                                                                           

The following tables present adjusted EBITDA for the periods presented
(dollars in millions):

|                                |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |  
|------------------------------- |  | ------ | ----- | -------- |  | --------------------------- | ----- | -------- |  | - | ----- | ---- |  |  | ----- | -
|                                |  |        |       |          |  | Three Months Ended June 30, |       |          |  |  
|                                |  |       
|                                |  | 2003   |       | 2002    
|                                |  |        |       |         
|                                |  |        |       |          |  | % of                        |       |          |  |   |       | % of
|                                |  | Amount |       | Revenues |  | Amount                      |       | Revenues
|                                |  |        |       |          |  |                             |       |         
|Revenues                        |  | $      | 221.6 |          |  |                             | 100.0 | %        |  | $ | 177.9 |      |  |  | 100.0 | %
|Salaries and benefits           |  |        | 90.8  |          |  |                             | 41.0  |          |  |   | 70.9  |      |  |  | 39.8  |  
|Supplies                        |  |        | 28.7  |          |  |                             | 13.0  |          |  |   | 21.9  |      |  |  | 12.3  |  
|Other operating expenses        |  |        | 43.1  |          |  |                             | 19.4  |          |  |   | 33.3  |      |  |  | 18.7  |  
|Provision for doubtful accounts |  |        | 16.9  |          |  |                             | 7.6   |          |  |   | 13.1  |      |  |  | 7.4   |  
|                                |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |  
|                                |  |        | 179.5 |          |  |                             | 81.0  |          |  |   | 139.2 |      |  |  | 78.2  |  
|                                |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |  
|Adjusted EBITDA*                |  | $      | 42.1  |          |  |                             | 19.0  | %        |  | $ | 38.7  |      |  |  | 21.8  | %
|                                |  |        |       |          |  |                             |       |          |  |   |       |      |  |  |       |  

|                                |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |  
|------------------------------- |  | ------ | ----- | -------- |  | ------------------------- | ----- | -------- |  | - | ----- | ---- |  |  | ----- | -
|                                |  |        |       |          |  | Six Months Ended June 30, |       |          |  |  
|                                |  |       
|                                |  | 2003   |       | 2002    
|                                |  |        |       |         
|                                |  |        |       |          |  | % of                      |       |          |  |   |       | % of
|                                |  | Amount |       | Revenues |  | Amount                    |       | Revenues
|                                |  |        |       |          |  |                           |       |         
|Revenues                        |  | $      | 442.5 |          |  |                           | 100.0 | %        |  | $ | 359.5 |      |  |  | 100.0 | %
|Salaries and benefits           |  |        | 181.1 |          |  |                           | 40.9  |          |  |   | 141.6 |      |  |  | 39.4  |  
|Supplies                        |  |        | 57.2  |          |  |                           | 12.9  |          |  |   | 44.8  |      |  |  | 12.5  |  
|Other operating expenses        |  |        | 81.7  |          |  |                           | 18.5  |          |  |   | 65.5  |      |  |  | 18.2  |  
|Provision for doubtful accounts |  |        | 34.4  |          |  |                           | 7.8   |          |  |   | 26.3  |      |  |  | 7.3   |  
|                                |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |  
|                                |  |        | 354.4 |          |  |                           | 80.1  |          |  |   | 278.2 |      |  |  | 77.4  |  
|                                |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |  
|Adjusted EBITDA*                |  | $      | 88.1  |          |  |                           | 19.9  | %        |  | $ | 81.3  |      |  |  | 22.6  | %
|                                |  |        |       |          |  |                           |       |          |  |   |       |      |  |  |       |  

---

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|* |  | Adjusted EBITDA is defined as income before depreciation and amortization, interest expense, debt retirement costs, ESOP
expense, minority interest in earnings of consolidated entity and income taxes. Our management uses adjusted EBITDA to
evaluate our operating performance and as a measure of performance for incentive compensation purposes. We believe adjusted
EBITDA is a measure of performance used by some investors, equity analysts and others to make informed investment decisions.
In addition, multiples of current or projected adjusted EBITDA are used to estimate current or prospective enterprise value.
Adjusted 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 adjusted EBITDA are significant components in understanding and assessing
financial performance. Adjusted 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 consolidated
financial statements as an indicator of financial performance or liquidity. Because adjusted EBITDA is not a measurement
determined in accordance with accounting principles generally accepted in the United States and is susceptible to varying
calculations, adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following tables reconcile adjusted EBITDA, as presented above, to net
income (loss) as reflected in our condensed consolidated statements of
operations and in accordance with generally accepted accounting principles
(dollars in millions):

|                                                     |  |                    |       |      |  |   |       |  
|---------------------------------------------------- |  | ------------------ | ----- | ---- |  | - | ----- | -
|                                                     |  | Three Months Ended
|                                                     |  | June 30,          
|                                                     |  |                   
|                                                     |  | 2003               |       | 2002
|                                                     |  |                    |       |     
|Adjusted EBITDA                                      |  | $                  | 42.1  |      |  | $ | 38.7  |  
|Depreciation and amortization                        |  |                    | (11.4 | )    |  |   | (9.7  | )
|Interest expense, net                                |  |                    | (3.3  | )    |  |   | (2.8  | )
|Debt retirement costs                                |  |                    |      |      |  |   | (25.0 | )
|ESOP expense                                         |  |                    | (1.5  | )    |  |   | (2.7  | )
|Minority interest in earnings of consolidated entity |  |                    | (0.2  | )    |  |   | (0.8  | )
|Provision for income taxes                           |  |                    | (10.4 | )    |  |   | (0.2  | )
|                                                     |  |                    |       |      |  |   |       |  
|Net income (loss)                                    |  | $                  | 15.3  |      |  | $ | (2.5  | )
|                                                     |  |                    |       |      |  |   |       |  

|                                                     |  |                  |       |      |  |   |       |  
|---------------------------------------------------- |  | ---------------- | ----- | ---- |  | - | ----- | -
|                                                     |  | Six Months Ended
|                                                     |  | June 30,        
|                                                     |  |                 
|                                                     |  | 2003             |       | 2002
|                                                     |  |                  |       |     
|Adjusted EBITDA                                      |  | $                | 88.1  |      |  | $ | 81.3  |  
|Depreciation and amortization                        |  |                  | (22.6 | )    |  |   | (19.1 | )
|Interest expense, net                                |  |                  | (6.6  | )    |  |   | (6.9  | )
|Debt retirement costs                                |  |                  |      |      |  |   | (26.3 | )
|ESOP expense                                         |  |                  | (3.1  | )    |  |   | (5.2  | )
|Minority interest in earnings of consolidated entity |  |                  | (0.2  | )    |  |   | (1.5  | )
|Provision for income taxes                           |  |                  | (22.6 | )    |  |   | (11.1 | )
|                                                     |  |                  |       |      |  |   |       |  
|Net income                                           |  | $                | 33.0  |      |  | $ | 11.2  |  
|                                                     |  |                  |       |      |  |   |       |  

For the Three Months Ended June 30, 2003 and 2002

Revenues increased 24.6% to $221.6 million for the three months ended June
30, 2003 compared to $177.9 million for the three months ended June 30, 2002.
Of this increase, $34.5 million, or 19.4%, was from our
fourth quarter 2002 acquisitions and $9.2 million, or 5.2%, was from
same-hospital revenues. Net adjustments to estimated third-party payor
settlements (prior year contractuals) resulted in an increase to revenues
of $1.4 million for the three months ended June 30, 2003 compared to $2.1
million for the same period last year.

On a same-hospital
basis, outpatient revenues grew 2.1% from $91.0
million to $92.8 million, and inpatient revenues increased 9.5% from $83.9 million to $91.8 million for the three months ended

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June 30, 2003 compared to the same period in 2002. On a same-hospital basis,
admissions remained relatively unchanged, with 9 fewer admissions over the same
period last year. We are continuing to experience the shifting of patients to
an outpatient setting. Same-hospital inpatient surgeries were down
42, or 0.7%,
over the same period in 2002, though revenues increased as a result of
a higher acuity mix. Our same-hospital Medicare case mix increased
from 1.17 for the three months ended June 30, 2002 to 1.20 for the three months
ended June 30, 2003. A primary driver in the case mix increase was our
open-heart program at Lake Cumberland Regional Hospital that opened in the
fourth quarter of 2002. The Medicare case mix of 1.20 was consistent with
our first quarter 2003 Medicare case mix of 1.20.

As it relates to our
same-hospital outpatient revenues, our
outpatient surgeries for the three months ended June 30, 2003
were up 159 surgeries, or 1.0% higher than last years second quarter.
We experienced increases in revenues in radiology, surgery, lab and
emergency services. Our same-hospital outpatient revenues were
approximately 49.6% of our total revenues. The decrease in the percentage from
the prior years 51.1% relates primarily to the increase in inpatient intensity
as a result of the open-heart program at Lake Cumberland Regional Hospital
mentioned above.

After factoring all of the above, our equivalent admissions were flat on a
same-hospital basis. As it relates to pricing and acuity, our same-hospital
revenues per equivalent admission were up 5.3%, or $260 per equivalent
admission, over the same period last year. Revenues per equivalent admission on
our 2002 acquisitions were approximately $1,200 less than our
same-hospital
revenues per equivalent admission during the three months ended June 30, 2003.

Our breakdown of revenues, on a consolidated basis, is as follows:

|                        |  |                    |      |                    |  |  |      |  
|----------------------- |  | ------------------ | ---- | ------------------ |  |  | ---- | -
|                        |  | Three Months Ended |      | Three Months Ended
|                        |  | June 30, 2003      |      | June 30, 2002     
|                        |  |                    |      |                   
|Medicare                |  |                    | 36.8 | %                  |  |  | 33.8 | %
|Medicaid                |  |                    | 14.7 | %                  |  |  | 15.6 | %
|Discount and Commercial |  |                    | 36.0 | %                  |  |  | 39.1 | %
|Self Pay & Other        |  |                    | 12.5 | %                  |  |  | 11.5 | %

Our breakdown of
revenues, on a same-hospital basis, is as follows:

|                        |  |                    |      |                    |  |  |      |  
|----------------------- |  | ------------------ | ---- | ------------------ |  |  | ---- | -
|                        |  | Three Months Ended |      | Three Months Ended
|                        |  | June 30, 2003      |      | June 30, 2002     
|                        |  |                    |      |                   
|Medicare                |  |                    | 36.5 | %                  |  |  | 33.8 | %
|Medicaid                |  |                    | 16.7 | %                  |  |  | 15.6 | %
|Discount and Commercial |  |                    | 36.7 | %                  |  |  | 39.1 | %
|Self Pay & Other        |  |                    | 10.1 | %                  |  |  | 11.5 | %

Salaries and benefits increased as a percentage of revenues to 41.0% for
the three months ended June 30, 2003 from 39.8% for the three months ended June
30, 2002, primarily as a result of the hospitals acquired during the fourth
quarter of 2002 which had higher than average salaries and benefits as a
percentage of our revenues. Salaries and benefits were approximately 44.7% as a
percentage of revenues for our hospitals acquired in 2002. On a
same-hospital basis, salaries and
benefits increased as a percentage of revenues to
40.3% for the three months ended June 30, 2003 compared to 39.8% for the same
period in 2002. In addition, on a same-hospital basis, salaries and benefits
per man-hour increased 5.8% and man-hours per equivalent admission increased
0.8% for these periods. On a same-hospital basis, our salaries and benefits
per equivalent admission grew 6.6% for the three months ended June 30, 2003
compared to the same period in 2002.

Supply costs as a percentage of revenues increased to 13.0% for the three
months ended June 30, 2003 from 12.3% for the three months ended June 30, 2002.
Outfitting the hospitals acquired in 2002 primarily contributed to this
increase, as supplies expense as a percentage of revenues for the hospitals
acquired in 2002 was 14.7%. On a same-hospital basis, supply costs increased
as a percentage of revenues to 12.6% for the three months ended June 30, 2003
from 12.3% over the same period in 2002 primarily due to our new open-heart unit at Lake
Cumberland Regional Hospital, which opened during the fourth quarter
of 2002 and increases in surgical and pharmaceutical supply costs.

Other operating expenses increased as a percentage of revenues to 19.4%
for the three months ended June 30, 2003

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from 18.7% for the three months ended June 30, 2002. Other operating expenses as a percentage of revenues
for the hospitals acquired in 2002 was approximately 21.7%. On a
same-hospital basis, other operating
expenses increased as a percentage of revenues to
19.1% for the three months ended June 30, 2003 from 18.7% for the three months
ended June 30, 2002.

Provision for doubtful accounts increased as a percentage of revenues to
7.6% for the three months ended June 30, 2003 from 7.4% for the three months
ended June 30, 2002, primarily as a result of the hospitals acquired in 2002
which have a higher than average provision for doubtful accounts as a
percentage of our revenues. Provision for doubtful accounts as a percentage of
revenues for the hospitals acquired in 2002 was 13.2%. On a same-hospital
basis, the provision for doubtful accounts decreased as a percentage of
revenues to 6.6% for the three months ended June 30, 2003 from 7.4% over the
same period in 2002.

Adjusted EBITDA increased 8.4% to $42.1 million for the three months ended
June 30, 2003 compared to $38.7 million for the three months ended June 30,
2002. Of this increase, approximately $2.0 million was from the hospitals
acquired in 2002 and $1.4 million was from same-hospital adjusted EBITDA.

Depreciation and amortization expense increased to $11.4 million for the
three months ended June 30, 2003 from $9.7 million for the three months ended
June 30, 2002, primarily as a result of the hospitals acquired in 2002.
Depreciation expense associated with the hospitals acquired in 2002 was $1.7
million for the three months ended June 30, 2003. Same-hospital depreciation
expense was $9.5 million for the three months ended June 30, 2003.

Net interest expense increased to $3.3 million for the three months ended
June 30, 2003 from $2.8 million for the three months ended June 30, 2002
because of lower interest income earned on invested cash and cash equivalents.
During the three months ended June 30, 2002, we repurchased $120.5 million of
our $150.0 million 10 3/4% Senior Subordinated Notes due 2009. In connection
with these repurchases, we incurred debt retirement costs of $25.0 million
which consisted of $21.2 million in premiums, commissions and fees paid for the
repurchases and $3.8 million in non-cash net deferred loan cost write-offs
related to our original credit agreement.

ESOP expense decreased to $1.5 million for the three months ended June 30,
2003 from $2.7 million for the three months ended June 30, 2002. This decrease
was a result of a lower average fair market value of our common stock during
the three months ended June 30, 2003 compared to the same period in 2002. We
recognize ESOP expense based on the average fair market value of the shares
committed to be released during the period.

Minority interest in earnings of consolidated entity was $0.2 million for
the three months ended June 30, 2003 compared to $0.8 million for the three
months ended June 30, 2002. We purchased the 30% limited partnership interest
in Dodge City Healthcare Group, L.P., the entity that owns and operates the
110-bed Western Plains Regional Hospital and affiliated surgery center in Dodge
City, Kansas, for $25 million in October 2002. Minority interest in earnings of
consolidated entity related solely to this entity in 2002. Minority interest
in earnings of consolidated entity in 2003 relates to a minority equity
interest owned by physicians in an ambulatory surgery center, which was
syndicated during the second quarter of 2003. The physician partners
contributed approximately $1.0 million and have a 43% minority interest in the
surgery center. Although the syndication of surgery centers or hospitals is
not our overall strategy, we will review these opportunities on a case-by-case
basis.

The provision for income taxes increased to $10.4 million for the three
months ended June 30, 2003 compared to $0.2 million for the three months ended
June 30, 2002. The income tax provision reflects an effective income tax rate
of 40.3% for the three months ended June 30, 2003. The provision for income
taxes for the three months ended June 30, 2002 was reduced by an income tax
benefit of $9.4 million as a result of the debt retirement costs incurred in
the same period.

For the Six Months Ended June 30, 2003 and 2002

Revenues increased 23.1% to $442.5 million for the six months ended June
30, 2003 compared to $359.5 million for the six months ended June 30, 2002. Of
this increase, $69.2 million, or 19.2%, was from our
acquisitions during the fourth quarter of 2002 and
$13.8 million, or 3.9%, was from same-hospital revenues. Prior year contractuals
resulted in an increase to revenues of $4.3 million for the six months
ended June 30, 2003 compared to an increase to revenues of $2.1 for the six
months ended June 30, 2002.

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On a same-hospital
basis, outpatient revenues grew 4.4% from $177.7
million to $185.5 million, and inpatient revenues increased 4.2% from $175.7 million to $183.0 million for the six months ended
June 30, 2003 compared to the same period in 2002. On a same-hospital basis,
admissions decreased 2.7% for the six months ended June 30, 2003 compared to
the six months ended June 30, 2002. We are continuing to experience the
shifting of patients to an outpatient setting. Same-hospital inpatient
surgeries were down 35, or 0.3%, over the same period last year,
though revenues increased as a result of a higher acuity mix. Our
same-hospital Medicare case mix increased from 1.16 for the six months ended
June 30, 2002 to 1.20 for the six months ended June 30, 2003. A primary driver
in the case mix increase was our open-heart program at Lake Cumberland Regional
Hospital that opened in the fourth quarter of 2002.

As it relates to our
same-hospital outpatient revenues, our outpatient
surgeries for the six months ended June 30, 2003 were down 97
surgeries, or 0.3%
lower than the same period last year. Our same-hospital outpatient
revenues were approximately 49.7% of our total revenues compared to 49.4% in the
same period last year. The increase in the percentage from the prior year was
partially offset by the increase in inpatient intensity as a result of the
open-heart program at Lake Cumberland Regional Hospital mentioned above.

After factoring all of the above, our equivalent admissions decreased by
0.9% on a same-hospital basis. As it relates to pricing and acuity, our
same-hospital revenues per equivalent admission were up 4.8%, or $233 per
equivalent admission, over the same period last year. Revenues per equivalent
admission on our 2002 acquisitions were approximately $958 less than
our same-hospital revenues per equivalent admission during the six months ended June 30,
2003.

Our breakdown of revenues, on a consolidated basis, is as follows:

|                        |  |                  |      |                  |  |  |      |  
|----------------------- |  | ---------------- | ---- | ---------------- |  |  | ---- | -
|                        |  | Six Months Ended |      | Six Months Ended
|                        |  | June 30, 2003    |      | June 30, 2002   
|                        |  |                  |      |                 
|Medicare                |  |                  | 36.7 | %                |  |  | 34.6 | %
|Medicaid                |  |                  | 14.7 | %                |  |  | 15.8 | %
|Discount and Commercial |  |                  | 36.3 | %                |  |  | 38.7 | %
|Self Pay & Other        |  |                  | 12.3 | %                |  |  | 10.9 | %

Our breakdown of revenues, on a same hospital basis, is as follows:

|                        |  |                  |      |                  |  |  |      |  
|----------------------- |  | ---------------- | ---- | ---------------- |  |  | ---- | -
|                        |  | Six Months Ended |      | Six Months Ended
|                        |  | June 30, 2003    |      | June 30, 2002   
|                        |  |                  |      |                 
|Medicare                |  |                  | 36.7 | %                |  |  | 34.6 | %
|Medicaid                |  |                  | 16.2 | %                |  |  | 15.8 | %
|Discount and Commercial |  |                  | 37.1 | %                |  |  | 38.7 | %
|Self Pay & Other        |  |                  | 10.0 | %                |  |  | 10.9 | %

Salaries and benefits increased as a percentage of revenues to 40.9% for
the six months ended June 30, 2003 from 39.4% for the six months ended June 30,
2002, primarily as a result of our hospitals acquired during the fourth quarter
of 2002 which had higher than average salaries and benefits as a percentage of
our revenues. Salaries and benefits were approximately 46.9% as a percentage of
revenues for our hospitals acquired in 2002. On a
same-hospital basis, salaries and benefits increased as a percentage of revenues to 39.8% for the six
months ended June 30, 2003 compared to 39.4% for the same period in 2002. In
addition, on a same-hospital basis, salaries and benefits per man-hour
increased 4.8% and man-hours per equivalent admission increased 1.2% for these
periods. On a same-hospital basis, our salaries and benefits per equivalent
admission grew 6.0% for the six months ended June 30, 2003 compared to the same
period in 2002.

Supply costs as a percentage of revenues increased to 12.9% for the six
months ended June 30, 2003 from 12.5% for the six months ended June 30, 2002.
Outfitting the hospitals acquired in 2002 primarily contributed to this
increase, as supplies expense as a percentage of revenues for our hospitals
acquired in 2002 was approximately 14.7%. On a same-hospital
basis, supply costs increased as a percentage of revenues to 12.6% for the six months ended
June 30, 2003 from 12.5% over the same period in 2002.

Other operating expenses increased as a percentage of revenues to 18.5%
for the six months ended June 30, 2003

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from 18.2% for the six months ended June 30, 2002. Other operating expenses as
a percentage of revenues for the hospitals acquired in 2002 was approximately
19.6%. On a same-hospital basis, other operating expenses increased as a
percentage of revenues to 18.3% for the six months ended June 30, 2003 from
18.2% for the six months ended June 30, 2002.

Provision for doubtful accounts increased as a percentage of revenues to
7.8% for the six months ended June 30, 2003 from 7.3% for the six months ended
June 30, 2002, primarily as a result of the hospitals acquired in 2002 which
have a higher than average provision for doubtful accounts as a percentage of
our revenues. Provision for doubtful accounts as a percentage of revenues for
our hospitals acquired in 2002 was 12.9%. On a same-hospital basis, the
provision for doubtful accounts decreased as a percentage of revenues to 6.8%
for the six months ended June 30, 2003 from 7.3% over the same period in 2002.

Adjusted EBITDA increased 8.3% to $88.1 million for the six months ended
June 30, 2003 compared to $81.3 million for the six months ended June 30, 2002.
Of this increase, $2.6 million was related to same-hospital, of which $2.2
million was from prior year contractuals, and $4.2 million was adjusted EBITDA
from our hospitals acquired in 2002.

Depreciation and amortization expense increased to $22.6 million for the
six months ended June 30, 2003 from $19.1 million for the six months ended June
30, 2002, primarily as a result of the hospitals acquired in 2002.
Depreciation expense associated with the hospitals acquired in 2002 was $3.3
million for the six months ended June 30, 2003. Same-hospital depreciation
expense was $18.9 million for the six months ended June 30, 2003.

Net interest expense decreased to $6.6 million for the six months ended
June 30, 2003 from $6.9 million for the six months ended June 30, 2002 because
of lower interest expense on our $250 million 4 1/2% Convertible Subordinated
Notes due 2009 compared to the interest expense on our $150 million 10 3/4%
Senior Subordinated Notes due 2009, which were repurchased during 2002. During the
six months ended June 30, 2002, we repurchased $128.0 million of our $150.0
million 10 3/4% Senior Subordinated Notes due 2009. In connection with these
repurchases, we incurred debt retirement costs of $26.3 million in the six
months ended June 30, 2002 which consisted of $22.3 million in premiums,
commissions and fees paid for the repurchases and $4.0 million in non-cash net
deferred loan cost write-offs related to our original credit agreement.

ESOP expense decreased to $3.1 million for the six months ended June 30,
2003 from $5.2 million for the six months ended June 30, 2002. This decrease
was a result of a lower average fair market value of our common stock during
the six months ended June 30, 2003 compared to the same period in 2002. We
recognize ESOP expense based on the average fair market value of the shares
committed to be released during the period.

Minority interest in earnings of consolidated entity was $0.2 million for
the six months ended June 30, 2003 compared to $1.5 million for the six months
ended June 30, 2002. We purchased the 30% limited partnership interest in Dodge
City Healthcare Group, L.P., the entity that owns and operates the 110-bed
Western Plains Regional Hospital and affiliated surgery center in Dodge City,
Kansas, for $25 million in October 2002. Minority interest in earnings of
consolidated entity related solely to this entity in 2002. Minority interest
in earnings of consolidated entity in 2003 relates to a minority equity
interest owned by physicians in an ambulatory surgery center, which was
syndicated during the second quarter of 2003. The physician partners
contributed approximately $1.0 million and have a 43% minority interest in the
surgery center. Although the syndication of surgery centers or hospitals is
not our overall strategy, we will review these opportunities on a case-by-case
basis.

The provision for income taxes increased to $22.6 million for the six
months ended June 30, 2003 compared to $11.1 million for the six months ended
June 30, 2002. These income tax provisions reflect effective income tax rates
of 40.6% for the six months ended June 30, 2003 compared to 49.8% for the six
months ended June 30, 2002. The provision for income taxes for the three
months ended June 30, 2002 was reduced by an income tax benefit of $9.9 million
as a result of the debt retirement costs incurred in the same period.

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Liquidity and Capital Resources

Our primary sources of liquidity are cash flow provided by our operations
and our revolving credit facility. Our liquidity for the six-month period
ended June 30, 2003 was derived primarily from net cash provided by operating
activities. In the six months ended June 30, 2003, our operations provided
approximately $50.1 million in cash flows compared to $52.6 million in the same
period of 2002.

Our revolving credit facility is guaranteed by substantially all of our
current and future subsidiaries and is secured by substantially all of our
assets. The facility requires that we comply with certain financial covenants,
including:

|                                                       |  |                 |  |                        |  |  |  | 
|------------------------------------------------------ |  | --------------- |  | ---------------------- |  |  |  | 
|                                                       |  | Requirement     |  | Level at June 30, 2003
|                                                       |  |                 |  |                       
|Maximum permitted consolidated leverage ratio          |  | <3.50 to 1.00   |  | 1.62 to 1.00          
|Maximum permitted consolidated senior leverage ratio   |  | <2.50 to 1.00   |  | 0.16 to 1.00          
|Minimum permitted consolidated interest coverage ratio |  | >3.50 to 1.00   |  | 11.72 to 1.00         
|Minimum permitted consolidated net worth               |  | >$252.1 million |  | $377.9 million        
|Maximum capital expenditures  last twelve months      |  | <$124.0 million |  | $71.9 million         

The credit facility also requires that we comply with other various
covenants, including, but not limited to, restrictions on new indebtedness, the
ability to merge or consolidate, asset sales, capital expenditures,
acquisitions and
dividends, with which we were in compliance as of June 30, 2003. As of June
30, 2003, we had letters of credit in the aggregate amount of $26.3 million
outstanding, which reduced the amount available under our revolving credit
facility to $173.7 million.

Our revolving credit facility does not contain provisions that would
accelerate the maturity dates of our debt upon a downgrade in our credit
rating. However, a downgrade in our credit rating could adversely affect our
ability to renew our existing credit facility or obtain access to new credit
facilities in the future and could increase the cost of such facilities. We do
not have any relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance, special
purpose or variable interest entities, established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. Accordingly, we are not materially exposed to any financing,
liquidity, market or credit risk that could arise if we had engaged in such
relationships. We believe that future cash provided by operating activities and
amounts available under our revolving credit facility will provide sufficient
liquidity for the next twelve months.

On May 22, 2002, we sold $250 million of 4 1/2% Convertible Subordinated
Notes due 2009 (the Convertible Notes). The net proceeds of approximately
$242.5 million were used for acquisitions, capital improvements at our existing
facilities, repurchases of our 10 3/4% Senior Subordinated Notes, working
capital and general corporate purposes. The Convertible Notes bear interest at
the rate of 4 1/2% per year, payable semi-annually on June 1 and December 1.
The Convertible Notes are convertible at the option of the holder at any time
on or prior to maturity into shares of our common stock at a conversion price
of $47.36 per share. The conversion price is subject to adjustment in certain
circumstances. We may redeem all or a portion of the Convertible Notes on or
after June 3, 2005, at the then current redemption prices, plus accrued and
unpaid interest. Holders of the Convertible Notes may require us to repurchase
all of the holders Convertible Notes at 100% of their principal amount plus
accrued and unpaid interest in some circumstances involving a change of
control. The Convertible Notes are unsecured and subordinated to our existing
and future senior indebtedness and senior subordinated indebtedness. The
Convertible Notes rank junior to our other liabilities. The indenture governing
the Convertible Notes does not contain any financial covenants. A total of
5,278,825 shares of common stock have been reserved for issuance upon
conversion of the Convertible Notes.

Our capital expenditures were $38.0 million in the six months ended June
30, 2003, compared to $26.8 million in the corresponding period in 2002.
Capital expenditures for the twelve months ended June 30, 2003 were $71.9
million. We expect the level of capital expenditures in the near-term future to
be somewhat higher. We have some large projects in process at a number of our
facilities. We are reconfiguring some of our hospitals to accommodate more
effectively inpatient and outpatient services and restructuring existing
surgical capacity in some of our hospitals to permit additional patient volume
and a greater variety of services. At June 30, 2003, we had projects under
construction with an estimated additional cost to complete and equip of
approximately $45.7 million. We anticipate that these projects will be
completed over the next three years. We anticipate that our total capital
expenditures in 2003 will range from $75 million to $85 million, excluding
acquisitions. We anticipate funding

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##### Table of Contents



these expenditures through cash provided by operating activities, available
cash and borrowings under our revolving credit facility.

Our business strategy contemplates the acquisition of additional
hospitals, and we regularly review potential acquisitions. These acquisitions
may, however, require additional financing. We regularly evaluate opportunities
to sell additional equity or debt securities, obtain credit facilities from
lenders, or restructure our long-term debt or equity for strategic reasons or
to further strengthen our financial position. The sale of additional equity or
convertible debt securities could result in additional dilution to our
stockholders.

We have never declared or paid dividends on our common stock. We intend to
retain future earnings to finance the growth and development of our business
and, accordingly, do not currently intend to declare or pay any dividends on
our common stock. Our board of directors will evaluate our future earnings,
results of operations, financial condition and capital requirements in
determining whether to declare or pay cash dividends. Delaware law prohibits us
from paying any dividends unless we have capital surplus or net profits
available for this purpose. In addition, our credit facilities impose
restrictions on our ability to pay dividends.

On April 28, 2003, we announced that our Board of Directors authorized the
repurchase of up to $100 million of our outstanding shares of common stock
either in the open market or through privately negotiated transactions, subject
to market conditions, regulatory constraints and other factors, to enable us to
take advantage of opportunistic market conditions. We had approximately 38.7
million shares of common stock outstanding as of June 30, 2003 and are not
obligated to repurchase any specific number of shares under the program. During
the three months ended June 30, 2003, we used available cash to purchase
873,800 shares for an aggregate of approximately $17.0 million.

Impact of Recently Issued Accounting Pronouncements

Please refer to Note 3 of our condensed consolidated financial statements
included elsewhere herein for a discussion of the impact of recently issued
accounting pronouncements.

Contingencies

Please refer to Note 5 of our condensed consolidated financial statements
included elsewhere herein for a discussion of our material financial
contingencies, including:

| |  |   |  |                                                           
| |  | - |  | ----------------------------------------------------------
| |  |  |  | HCA investigations, litigation and indemnification rights;
|
| |  |  |  | An Americans with Disabilities Act claim;                 
| |  |   |  |                                                           
| |  |  |  | Our Corporate Integrity Agreement;                        
| |  |   |  |                                                           
| |  |  |  | General liability claims;                                 
| |  |   |  |                                                           
| |  |  |  | Physician commitments;                                    
| |  |   |  |                                                           
| |  |  |  | Capital expenditure commitments;                          
| |  |   |  |                                                           
| |  |  |  | Prior period cost report settlements; and                 
| |  |   |  |                                                           
| |  |  |  | Acquisitions.                                             

Inflation

The healthcare industry is labor intensive. Wages and other expenses
increase during periods of inflation and when labor shortages in marketplaces
occur. In addition, suppliers and insurers 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, as discussed above.
In the event we experience inflationary pressures, results of operations may be
materially affected.

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##### Table of Contents



Healthcare 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 healthcare reform will be
adopted, there can be no assurance that proposals adverse to our business will
not be adopted.




Item 3. Quantitative and Qualitative Disclosures about Market Risk.

During the six months ended June 30, 2003, 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, 2002.




Item 4. Controls and Procedures.

We carried out an evaluation, under the supervision and with the
participation of management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this
report pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective in timely alerting them to
material information relating to our company (including its consolidated
subsidiaries) required to be included in our periodic SEC filings. There has
been no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting subsequent to the date of our most recent
evaluation.

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##### Table of Contents






PART II-OTHER INFORMATION




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

We held our annual meeting of stockholders on May 21, 2003. At the annual
meeting, votes were cast as follows:

|    |  |                                                              |  |  |            |          |  |           |           |         |  |       |           |  |  | 
|--- |  | ------------------------------------------------------------ |  |  | ---------- | -------- |  | --------- | --------- | ------- |  | ----- | --------- |  |  | 
|    |  |                                                              |  |  |            | VOTES IN |  |           |           |         |  | VOTES
|    |  |                                                              |  |  |            | FAVOR    |  | ABSTAINED |           | AGAINST
|    |  |                                                              |  |  |            |          |  |           |           |        
|(a) |  | Election of Class I Directors                                |  |  |            |          |  |           |           |         |  |       |           | 
|    |  | Ricki Tigert Helfer                                          |  |  | 35,244,062 |          |  |           | 1,910,248 |         |  |       |          | 
|    |  | John E. Maupin, Jr., D.D.S                                   |  |  | 35,243,252 |          |  |           | 1,911,058 |         |  |       |          | 
|    |  | Owen G. Shell, Jr.;                                          |  |  | 35,243,922 |          |  |           | 1,910,388 |         |  |       |          | 
|(b) |  | Approval of an amendment to the LifePoint Hospitals, Inc.    |  |  |            |          |  |           |           |         |  |       |           | 
|    |  | Employee Stock Purchase Plan to increase the number of       |  |  |            |          |  |           |           |         |  |       |           | 
|    |  | shares available under the Plan from 100,000 to 300,000; and |  |  | 35,187,646 |          |  |           | 213,829   |         |  |       | 1,752,835 | 
|(c) |  | Ratification of the appointment of Ernst & Young LLP as      |  |  |            |          |  |           |           |         |  |       |           | 
|    |  | independent auditors of our company for the year ending      |  |  |            |          |  |           |           |         |  |       |           | 
|    |  | December 31, 2003                                            |  |  | 33,262,545 |          |  |           | 13,934    |         |  |       | 3,877,831 | 

As indicated in the above table, Ricki Tigert Helfer, John E. Maupin, Jr.,
D.D.S. and Owen G. Shell, Jr. were elected as Class I directors. The terms of
the Class I directors will expire at the annual meeting of stockholders in
2006, but not before their respective successors are elected and qualified. The
terms of the following Class II directors will continue until the annual
meeting in 2004: DeWitt Ezell, Jr. and William V. Lapham. The terms of the
following Class III directors will continue until the annual meeting in 2005:
Kenneth C. Donahey and Richard H. Evans.




Item 6. Exhibits and Reports on Form 8-K.

(a)  List of Exhibits:

|               |  |                                                                                                                                                                                                                                                                                                   
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NUMBER |  | DESCRIPTION                                                                                                                                                                                                                                                                                       
|               |  |                                                                                                                                                                                                                                                                                                   
|2.1            |  | Distribution Agreement dated May 11, 1999 by and among Columbia/HCA, Triad Hospitals,
Inc. and LifePoint Hospitals, Inc. (a)                                                                                                                                                                      
|               |  |                                                                                                                                                                                                                                                                                                   
|3.1            |  | Certificate of Incorporation (a)                                                                                                                                                                                                                                                                  
|               |  |                                                                                                                                                                                                                                                                                                   
|3.2            |  | Bylaws (a)                                                                                                                                                                                                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                   
|4.1            |  | Form of Specimen Stock Certificate (b)                                                                                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|4.2            |  | Rights Agreement dated as of May 11, 1999 between LifePoint Hospitals, Inc. and
National City Bank as Rights Agent (a)                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|4.3            |  | Indenture, dated as of May 22, 2002, between LifePoint Hospitals, Inc. and National
City Bank, as trustee, relating to the 4 1/2% Convertible Subordinated Notes due 2009
(c)                                                                                                                     
|               |  |                                                                                                                                                                                                                                                                                                   
|4.4            |  | Registration Rights Agreement, dated as of May 22, 2002, among LifePoint Hospitals,
Inc., UBS Warburg LLC, Credit Suisse First Boston Corporation, Deutsche Bank
Securities, Inc., Lehman Brothers Inc., Salomon Smith Barney Inc., Banc of America
Securities LLC, and Fleet Securities, Inc. (c)
|               |  |                                                                                                                                                                                                                                                                                                   
|4.5            |  | Form of 4 1/2% Convertible Subordinated Note due 2009 of LifePoint Hospitals, Inc. (c)                                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|10.1           |  | First Amendment to the LifePoint Hospitals, Inc. Employee Stock Purchase Plan (d)                                                                                                                                                                                                                 

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##### Table of Contents



|     |  |                                                                                                                                                                                                                           
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer of LifePoint Hospitals, Inc. Pursuant to
Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|     |  |                                                                                                                                                                                                                           
|31.2 |  | Certification of the Chief Financial Officer of LifePoint Hospitals, Inc. Pursuant to
Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|     |  |                                                                                                                                                                                                                           
|32.1 |  | Certification of the Chief Executive Officer of LifePoint Hospitals, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (e)                                    
|     |  |                                                                                                                                                                                                                           
|32.2 |  | Certification of the Chief Financial Officer of LifePoint Hospitals, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (e)                                    



---

|(a) |  | Incorporated by reference from the LifePoint Hospitals, Inc. Quarterly
Report on Form 10-Q for the quarter ended March 31, 1999, File Number
0-29818.                                                                                                                                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form 10 under the Securities Exchange Act of
1934, as amended, File Number 0-29818.                                                                                                                                                                                                                                                                                      
|   
|(c) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, File Number 333-90536.                                                                                                                                                                                                                                                                                            
|   
|(d) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form S-8 under the Securities Act of 1933, as
amended, File Number 333-105775.                                                                                                                                                                                                                                                                                           
|   
|(e) |  | This certification shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise subject
to liability pursuant to that section. Such certification shall not be
deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically
incorporates it by reference.

(b)  Reports on Form 8-K filed during the three months ended June 30, 2003:

On April 29, 2003, we furnished pursuant to Item 9 of Form 8-K a copy of
our press release issued on April 28, 2003, containing our 2003 first quarter
earnings results.

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##### Table of Contents






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.

|                    |  |                           |  |                                                                                                                  
|------------------- |  | ------------------------- |  | -----------------------------------------------------------------------------------------------------------------
|Date: July 29, 2003 |  | LifePoint Hospitals, Inc.
|                    |  |                           |  |                                                                                                                  
|                    |  | By:                       |  | /s/ Michael J. Culotta                                                                                           
|                    |  |                           |  |                                                                                                                  
|                    |  |                           |  | Michael J. Culotta
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

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##### Table of Contents



EXHIBIT INDEX

|               |  |                                                                                                                                                                                                                                                                                                   
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NUMBER |  | DESCRIPTION                                                                                                                                                                                                                                                                                       
|               |  |                                                                                                                                                                                                                                                                                                   
|2.1            |  | Distribution Agreement dated May 11, 1999 by and among Columbia/HCA, Triad Hospitals,
Inc. and LifePoint Hospitals, Inc. (a)                                                                                                                                                                      
|               |  |                                                                                                                                                                                                                                                                                                   
|3.1            |  | Certificate of Incorporation (a)                                                                                                                                                                                                                                                                  
|               |  |                                                                                                                                                                                                                                                                                                   
|3.2            |  | Bylaws (a)                                                                                                                                                                                                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                   
|4.1            |  | Form of Specimen Stock Certificate (b)                                                                                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|4.2            |  | Rights Agreement dated as of May 11, 1999 between LifePoint Hospitals, Inc. and
National City Bank as Rights Agent (a)                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|4.3            |  | Indenture, dated as of May 22, 2002, between LifePoint Hospitals, Inc. and National
City Bank, as trustee, relating to the 4 1/2% Convertible Subordinated Notes due 2009
(c)                                                                                                                     
|               |  |                                                                                                                                                                                                                                                                                                   
|4.4            |  | Registration Rights Agreement, dated as of May 22, 2002, among LifePoint Hospitals,
Inc., UBS Warburg LLC, Credit Suisse First Boston Corporation, Deutsche Bank
Securities, Inc., Lehman Brothers Inc., Salomon Smith Barney Inc., Banc of America
Securities LLC, and Fleet Securities, Inc. (c)
|               |  |                                                                                                                                                                                                                                                                                                   
|4.5            |  | Form of 4 1/2% Convertible Subordinated Note due 2009 of LifePoint Hospitals, Inc. (c)                                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|10.1           |  | First Amendment to the LifePoint Hospitals, Inc. Employee Stock Purchase Plan (d)                                                                                                                                                                                                                 
|               |  |                                                                                                                                                                                                                                                                                                   
|31.1           |  | Certification of the Chief Executive Officer of LifePoint Hospitals, Inc. Pursuant to
Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002                                                                        
|               |  |                                                                                                                                                                                                                                                                                                   
|31.2           |  | Certification of the Chief Financial Officer of LifePoint Hospitals, Inc. Pursuant to
Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002                                                                        
|               |  |                                                                                                                                                                                                                                                                                                   
|32.1           |  | Certification of the Chief Executive Officer of LifePoint Hospitals, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (e)                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                   
|32.2           |  | Certification of the Chief Financial Officer of LifePoint Hospitals, Inc. Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (e)                                                                                                            



---

|(a) |  | Incorporated by reference from the LifePoint Hospitals, Inc. Quarterly
Report on Form 10-Q for the quarter ended March 31, 1999, File Number
0-29818.                                                                                                                                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form 10 under the Securities Exchange Act of
1934, as amended, File Number 0-29818.                                                                                                                                                                                                                                                                                      
|   
|(c) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, File Number 333-90536.                                                                                                                                                                                                                                                                                            
|   
|(d) |  | Incorporated by reference from exhibits to LifePoint Hospitals
Registration Statement on Form S-8 under the Securities Act of 1933, as
amended, File Number 333-105775.                                                                                                                                                                                                                                                                                           
|   
|(e) |  | This certification shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise subject
to liability pursuant to that section. Such certification shall not be
deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates it by reference.

29