##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  For the Fiscal Year Ended December 31, 2005
  Commission file
    No. 000-32837
  UNITED SURGICAL PARTNERS
    INTERNATIONAL, INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

75-2749762(State of
    Incorporation)

(I.R.S. Employer Identification
    No.)   15305 Dallas Parkway,
    Suite 1600
    Addison, Texas(Address of principal
    executive offices)

75001(Zip Code)   (972) 713-3500
 (Registrants telephone number, including area code)
  Securities Registered Pursuant to Section 12(b) of the
    Act:
 None
  Securities Registered Pursuant to Section 12(g) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which
    RegisteredCommon Stock, par value
    $.01 per share
    Rights to Purchase Series A Junior Participating
    Preferred Stock, par value $.01 per share

The Nasdaq Stock Market
    The Nasdaq Stock Market   þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
    As of February 24, 2006, 44,326,291 shares of the
    Registrants Common Stock, were outstanding
  Documents
    Incorporated by Reference




---



##### 



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    2005 ANNUAL REPORT ON
    FORM 10-K
    TABLE OF CONTENTS
  PART IItem 1.

Business


2Item 1A.

Risk Factors


22Item 1B.

Unresolved Staff
    Comments


32Item 2.

Properties


32Item 3.

Legal
    Proceedings


32Item 4.

Submission of
    Matters to a Vote of Security Holders


32PART IIItem 5.

Market for
    Registrants Common Equity and Related Stockholder
    Matters


32Item 6.

Selected
    Consolidated Financial Data


33Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


34Item 7A.

Quantitative and
    Qualitative Disclosures about Market Risk


51Item 8.

Financial
    Statements and Supplementary Data


51Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


51Item 9A.

Controls and
    Procedures


51Item 9B.

Other
    Information


53PART IIIItem 10.

Directors and
    Executive Officers of the Registrant


53Item 11.

Executive
    Compensation


53Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


53Item 13.

Certain
    Relationships and Related Transactions


53Item 14.

Principal
    Accountant Fees and Services


53PART IVItem 15

Exhibits, Financial
    Statement Schedules and Reports on
    Form 8-K


54   Note:
    The responses to Items 10 through 14 will be included in
    the Companys definitive proxy statement to be filed
    pursuant to Regulation 14A for the Annual Meeting of
    Stockholders to be held May 3, 2006. The required
    information is incorporated into this
    Form 10-K
    by reference to that document and is not repeated herein.List of the Company's SubsidiariesConsent of KPMG LLPPower of Attorney - Donald E. SteenPower of Attorney - Joel T. AllisonPower of Attorney - John C. Garrett, M.D.Power of Attorney - Thomas L. MillsPower of Attorney - James Ken NewmanPower of Attorney - Boone Powell, Jr.Power of Attorney - Paul B. QueallyPower of Attorney - Jerry P. WidmanCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906  1




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##### Table of Contents



FORWARD
    LOOKING STATEMENTS
  Form 10-K, Form 10-K. forward-looking
 PART I  Item 1.
    Business  General
  not-for-profit
    not-for-profit
 2




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##### Table of Contents



Available
    Information
  1-800-SEC-0330 http://www.sec.gov. http://www.unitedsurgical.com Form 10-K, Form 10-Q, Form 8-K Form 10-K.
  Industry
    Background
    United
    States
     3




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##### Table of Contents



not-for-profit not-for-profit not-for-profit
  United
    Kingdom
    Our
    Business Strategy
    
    attract and retain top quality surgeons and other physicians;
    pursue strategic relationships with
    not-for-profit
    healthcare systems;
    expand our presence in existing markets;
    expand selectively in new markets; and
    enhance operating efficiencies.  Attract
    and retain top quality surgeons and other
    physicians
    Pursue
    strategic relationships with
    not-for-profit
    healthcare systems
  not-for-profit not-for-profit not-for-profit
 4




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##### Table of Contents



Expand
    our presence in existing markets
  not-for-profit
  Expand
    selectively in new markets
      
    the potential to achieve strong increases in revenues and cash
    flows;
    whether the physicians, healthcare systems and payors in the
    market are receptive to surgery centers;
    the size of the market;
    the number of surgical facilities in the market;
    the number and nature of outpatient surgical procedures
    performed in the market;
    the case mix of the facilities to be acquired;
    whether the facility is well-positioned to negotiate agreements
    with insurers and other payors; and
    licensing and other regulatory considerations.    Enhance
    operating efficiencies
   5




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##### Table of Contents



Recent
    Developments
    not-for-profit
    Operations
  Operations
    in the United States
    day-to-day
     6




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##### Table of Contents



day-to-day
    Strategic
    Relationships
  not-for-profit not-for-profit
    not-for-profit not-for-profit not-for-profit not-for-profit
  Operations
    in the United Kingdom
  on-site on-site
 7




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##### Table of Contents



on-site
    Case
    Mix
    Specialty

U.S.


U.K.Orthopedic


23
%


25
%Pain management


19



1Gynecology


3



12
(1)General surgery


5



16Ear, nose and throat


6



2Gastrointestinal


17



1Plastic surgery


5



21Ophthalmology


10



2Other


12



20Total


100
%


100
%     (1)
    
    Also includes in vitro fertilization. 8




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##### Table of Contents



Payor
    Mix
    Payor

U.S.


U.K.Private insurance


66
%


55
%Self-pay


4



39Government


28
(1)


6Other


2



Total


100
%


100
%     (1)
    
    Based solely on case volume. Because government payors typically
    pay less than private insurance, the percentage of our
    U.S. revenue attributable to government payors is
    approximately 11% for Medicare and 1% for Medicaid.  not-for-profit
  Number ofFacilitiesHealthcare System

Geographical Focus

Operated with USPISingle Market
    Systems:Baylor Health Care System

Dallas/Fort Worth, Texas


22Memorial Hermann Healthcare System

Houston, Texas


6Evanston Northwestern Healthcare

Chicago, Illinois


4Meridian Health System

New Jersey


4INTEGRIS Health

Oklahoma


2Covenant Health:

Eastern Tennessee


1Fort Sanders Parkwest Medical
    Center

Knoxville, TennesseeDecatur General Hospital

Decatur, Alabama


1Mountain States Health Alliance:

Northeast Tennessee


1Johnson City Medical Center

Johnson City, TennesseeNorthside Cherokee Hospital

Canton, Georgia


1Robert Wood Johnson University
    Hospital

East Brunswick, New Jersey


1Sarasota Memorial Hospital

Sarasota, Florida


1McLaren Health Care Corporation

Michigan



(a)North Kansas City Hospital

Kansas City, Missouri


2 9




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##### Table of Contents



Number ofFacilitiesHealthcare System

Geographical Focus

Operated with USPIMulti-Market Systems:Adventist Health System:

12 states (b)



(a)Huguley Memorial Medical Center

Fort Worth, TexasAscension Health:

19 states and D.C. (c)


8Carondelet Health System (1
    facility)

Blue Springs, MissouriSt. Thomas Health Services System
    (5 facilities)

Middle TennesseeSt. Agnes Healthcare (1 facility)

Baltimore, MarylandSeton Healthcare Network (1
    facility)

Austin, TexasBon Secours Health System:

Nine eastern states (d)


2Mary Immaculate Hospital

Newport News, VirginiaMemorial Regional Medical Center

Richmond, VirginiaCatholic Healthcare West:

California, Arizona, Nevada


7Mercy Hospital of Folsom (1
    facility)

Sacramento, CaliforniaSan Gabriel Valley Medical
    Center (1 facility)

San Gabriel, CaliforniaSt. Johns Regional Medical
    Center (1 facility)

Oxnard, CaliforniaSt. Josephs Hospital and
    Medical Center (1 facility)
    and Arizona Orthopedic Surgical Hospital (2 facilities)

Phoenix, ArizonaSt. Rose Dominican Hospital (1
    facility)

Henderson, NevadaCHRISTUS Health:

Seven states (e)


2Christus Santa Rosa Health
    Corporation

San Antonio, TexasProvidence Health System:

Four western states (f)


1Providence Holy Cross Medical
    Center

Mission Hills, CaliforniaTotals




66     (a)
    
    A joint venture agreement has been signed and projects have been
    initiated, but no facilities in this joint venture are yet
    operational.(b)
    
    Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky,
    Michigan, North Carolina, Tennessee, Texas and Wisconsin.(c)
    
    Alabama, Arkansas, Arizona, Connecticut, District of Columbia,
    Florida, Georgia, Idaho, Illinois, Indiana, Louisiana, Maryland,
    Michigan, Missouri, New York, Pennsylvania, Tennessee, Texas,
    Washington, and Wisconsin.(d)
    
    Florida, Kentucky, Maryland, Michigan, New Jersey, New York,
    Pennsylvania, South Carolina, and Virginia.(e)
    
    Arkansas, Georgia, Louisiana, Missouri, Oklahoma, Texas, and
    Utah.(f)
    
    Alaska, California, Oregon, and Washington. 10




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##### Table of Contents



Facilities
    Date of


Number of


PercentageAcquisition or


Operating


Owned byFacility

Affiliation


Rooms


USPIUnited StatesAtlanta*Advanced Surgery Center of
    Georgia, Canton, Georgia (1)


3/27/02



3



31East West Surgery Center, Austell,
    Georgia


9/1/00
(2)


3



48Lawrenceville Surgery Center,
    Lawrenceville, Georgia


8/1/01



2



15Northwest Georgia Surgery Center,
    Marietta, Georgia


11/1/00
(2)


2



15Orthopaedic South Surgical Center,
    Morrow, Georgia


11/28/03



2



15Resurgens Surgical Center,
    Atlanta, Georgia


10/1/98
(2)


4



48Roswell Surgery Center, Roswell,
    Georgia


10/1/00
(2)


3



15Chicago*Same Day Surgery 25 East,
    Chicago, Illinois


10/15/04



4



74*Same Day Surgery Elmwood Park,
    Elmwood Park, Illinois


10/15/04



3



60*Same Day Surgery North Shore,
    Evanston, Illinois


10/15/04



2



72*Same Day Surgery River North,
    Chicago, Illinois


10/15/04



4



55Same Day Surgery Six
    Corners, Chicago, Illinois (5)


10/15/04



4



50Dallas/Fort Worth*Baylor Medical Center at Frisco,
    Frisco, Texas (3)


9/30/02



6



25*Baylor Surgicare, Dallas,
    Texas (1)


6/1/99



6



27*Baylor Surgicare at Denton,
    Denton, Texas (1)


2/1/99



4



27*Baylor Surgicare at Grapevine,
    Grapevine, Texas


2/16/02



4



29*Baylor Surgicare at Lewisville,
    Lewisville, Texas (1)


9/16/02



6



35*Bellaire Surgery Center,
    Fort Worth, Texas


10/15/02



4



25*Heath Surgicare, Rockwall, Texas


11/1/04



3



30*Irving-Coppell Surgical Hospital,
    Irving, Texas(3)


10/20/03



5



7*Mary Shiels Hospital, Dallas,
    Texas (3)


4/1/03



5



27*Medical Centre Surgical Hospital,
    Fort Worth, Texas (3)


12/18/98



8



43*Metroplex Surgicare, Bedford,
    Texas (1)


12/18/98



5



43*North Central Surgery Center,
    Dallas, Texas


12/12/05



5



14*North Garland Surgery Center,
    Garland, Texas


5/1/05



6



25*North Texas Surgery Center,
    Dallas, Texas (1)


12/18/98



4



44*Park Cities Surgery Center,
    Dallas, Texas (1)


6/9/03



4



41*Physicians Day Surgery Center,
    Dallas, Texas


10/12/00



4



27*Physicians Surgical Center of
    Fort Worth, Fort Worth, Texas


7/13/04



4



9*Premier Ambulatory Surgery Center
    of Garland, Garland, Texas


2/1/99



2



35*Surgery Center of Arlington,
    Arlington, Texas (1)


2/1/99



6



41*Texas Surgery Center, Dallas,
    Texas (1)


6/1/99



4



27*Trophy Club Medical Center,
    Trophy Club, Texas (3)


5/3/04



6



36*Valley View Surgery Center,
    Dallas, Texas


12/18/98



4



34 11




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##### Table of Contents



Date of


Number of


PercentageAcquisition or


Operating


Owned byFacility

Affiliation


Rooms


USPIHouston*Doctors Outpatient Surgicenter,
    Pasadena, Texas


9/1/99



5



46*Memorial Hermann Surgery Center
    Northwest, Houston, Texas


9/1/04



5



11*Memorial Hermann Surgery
    Center  The Woodlands, The Woodlands, Texas


8/9/05



4



10*Sugar Land Surgical Hospital,
    Sugar Land, Texas (3)


12/28/02



4



13*TOPS Surgical Specialty Hospital,
    Houston, Texas (3)


7/1/99



7



46*United Surgery
    Center  Southeast, Houston, Texas (1)


9/1/99



3



37Kansas City*Briarcliff Surgery Center, Kansas
    City, Missouri


6/1/05



2



29Creekwood Surgery Center,
    Kansas City, Missouri (1)


7/29/98



4



62*Liberty Surgery Center, Liberty,
    Missouri


6/1/05



2



30*Saint Marys Surgical
    Center, Blue Springs, Missouri


5/1/05



4



21Los AngelesCoast Surgery Center of South Bay,
    Torrance, California (1)


12/18/01



3



61Pacific Endo-Surgical Center,
    Torrance, California


8/1/03



1



60*San Fernando Valley Surgery
    Center, Mission Hills, California


11/1/04



4



34*San Gabriel Ambulatory
    Surgery Center, San Gabriel, California


4/1/05



3



41San Gabriel Valley
    Surgical Center, West Covina, California


11/16/01



4



59The Center for Ambulatory
    Surgical Treatment, Los Angeles, California


11/14/02



4



63Nashville*Baptist Ambulatory Surgery
    Center, Nashville, Tennessee


3/1/98
(2)


6



22*Baptist Plaza Surgicare,
    Nashville, Tennessee


12/3/03



9



20*Middle Tennessee Ambulatory
    Surgery Center, Murfreesboro, Tennessee


7/29/98



4



38*Physicians Pavilion Surgery
    Center, Smyrna, Tennessee


7/29/98



4



50*Saint Thomas Surgicare,
    Nashville, Tennessee


7/15/02



5



22New Jersey*Central Jersey Surgery Center,
    Eatontown, New Jersey


11/1/04



3



47*Robert Wood Johnson Surgery
    Center, East Brunswick, New Jersey


6/26/02



5



44*Shore Outpatient Surgicenter,
    Lakewood, New Jersey


11/1/04



3



56*Shrewsbury Surgery Center,
    Shrewsbury, New Jersey


4/1/99



4



28*Toms River Surgery Center, Toms
    River, New Jersey


3/15/02



4



31Oklahoma CityOklahoma Center for
    Orthopedic MultiSpecialty Surgery, Oklahoma City,
    Oklahoma (3)


8/2/04



4



24*Southwest Orthopaedic Ambulatory
    Surgery Center, Oklahoma City, Oklahoma


8/2/04



2



24Specialists Surgery Center,
    Oklahoma City, Oklahoma (1)


3/27/02



4



49Phoenix*Arizona Orthopedic Surgical
    Hospital, Chandler, Arizona (3)


5/19/04



6



37*St. Josephs Outpatient
    Surgery Center, Phoenix, Arizona (1)


9/2/03



9



41*Warner Outpatient Surgery Center,
    Chandler, Arizona


7/1/99



4



28 12




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##### Table of Contents



Date of


Number of


PercentageAcquisition or


Operating


Owned byFacility

Affiliation


Rooms


USPISan Antonio*Alamo Heights Surgery Center,
    San Antonio, Texas


12/1/04



3



53*Christus Santa Rosa Surgery
    Center, San Antonio, Texas


5/3/04



5



21San Antonio Endoscopy Center,
    San Antonio, Texas


5/1/05



1



49Additional MarketsAustintown Ambulatory
    Surgery Center, Austintown, Ohio (1)


4/12/02



5



69*Cape Surgery Center, Sarasota,
    Florida


10/18/04



6



45*Cedar Park Surgery Center, Cedar
    Park (Austin), Texas


11/22/05



2



25Corpus Christi Outpatient
    Surgery Center, Corpus Christi, Texas (1)


5/1/02



5



67Day-Op Center of Long
    Island, Mineola, New York (4)


12/4/98



4



0*Decatur Ambulatory Surgery
    Center, Decatur, Alabama (1)


7/29/98



3



64Destin Surgery Center,
    Destin, Florida


9/25/02



2



31*Folsom Outpatient Surgery Center,
    Folsom, California


6/1/05



2



30Greater Baton Rouge Surgical
    Hospital, Baton Rouge, Louisiana (3)


10/11/05



4



40Las Cruces Surgical Center,
    Las Cruces, New Mexico


2/1/01



3



50*Mary Immaculate Ambulatory
    Surgical Center, Newport News, Virginia


7/19/04



3



20*Memorial Ambulatory Surgery
    Center, Mechanicsville (Richmond), Virginia


12/30/05



5



16*Mountain Empire Surgery Center,
    Johnson City, Tennessee


2/20/00
(2)


4



20New Mexico Orthopaedic
    Surgery Center, Albuquerque, New Mexico


2/29/00
(2)


5



51*Parkway Surgery Center, Henderson
    (Las Vegas), Nevada


8/3/98



5



45*Parkwest Surgery Center,
    Knoxville, Tennessee


7/26/01



5



22Reading Surgery Center,
    Spring Township, Pennsylvania


7/1/04



3



65*Saint Agnes Surgery Center,
    Ellicott City (Baltimore), Maryland


10/01/04



4



74*Saint Johns Outpatient
    Surgery Center, Oxnard, California


12/5/05



4



35The Surgery Center, Middleburg
    Heights, Ohio (1)


6/19/02



7



69Surgi-Center of Central Virginia,
    Fredericksburg, Virginia


11/29/01



4



74Surgery Center of
    Fort Lauderdale, Fort Lauderdale, Florida


11/1/04



4



61Teton Outpatient Services,
    Jackson, Wyoming


8/1/98
(2)


2



52Texan Surgery Center, Austin, Texas


6/1/03



3



60Tulsa Outpatient Surgery Center,
    Tulsa, Oklahoma


11/1/04



4



30University Surgical Center, Winter
    Park, Florida


10/15/98



3



40Zeeba Surgery Center, Lyndhurst,
    Ohio


10/11/02



5



80United KingdomParkside Hospital, Wimbledon


4/6/00



4



100Holly House Hospital, Essex


4/6/00



3



100Highgate Private Clinic, Highgate


4/29/03



3



100     *
    
    Facilities jointly owned with
    not-for-profit
    hospital systems.  (1)
    
    Certain of our surgery centers are licensed and equipped to
    accommodate
    23-hour
    stays.(2)
    
    Indicates date of acquisition by OrthoLink Physician
    Corporation. We acquired OrthoLink in February 2001.(3)
    
    Surgical hospitals, all of which are licensed and equipped for
    overnight stays.(4)
    
    Operated through a consulting and administrative agreement. 13




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##### Table of Contents



(5)
    
    During January 2006 we sold our ownership in this center and
    exited the management contract.          Acquisitions
    and Development
      Expected


Number ofHospital




Opening


OperatingFacility Location

Partner

Type


Date


RoomsSanta Clarita, California

Providence


Surgery Center



1Q06



3 ORsManalapan, New Jersey

Meridian


Surgery Center



2Q06



2 ORsHouston, Texas

Memorial Hermann


Surgery Center



3Q06



4 ORsDesert Ridge, Arizona

CHW


Surgery Center



4Q06



4 ORs     Marketing
    Competition
   14




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##### Table of Contents



not-for-profit
      Employees
    Professional
    and General Liability Insurance
    Government
    Regulation
  United
    States
     15




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Licensure
    and
    certificate-of-need
    regulations
           16




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##### Table of Contents



Medicare
    and Medicaid Participation in Surgery Centers
      on-site
      Federal
    Anti-Kickback Law
   17




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##### Table of Contents




    referring patients for services or items payable under a federal
    healthcare program, including Medicare or Medicaid, or
    purchasing, leasing, or ordering, or arranging for or
    recommending purchasing, leasing, or ordering any good,
    facility, service or item for which payment may be made in whole
    or in part by a federal healthcare program.               18




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##### Table of Contents



Federal
    Physician Self-Referral Law
     19




---



##### Table of Contents



18-month
  False
    and Other Improper Claims
        State
    Anti-Kickback and Physician Self-Referral Laws
   20




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##### Table of Contents



Health
    Information Security and Privacy Practices
    
    electronic transactions and code sets;
    unique identifiers for providers, employers, health plans and
    individuals;
    security and electronic signatures;
    privacy; and
    enforcement.       21




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##### Table of Contents



European
    Union and United Kingdom
         Item 1A.  Risk
    Factors  An investment in United Surgical Partners International, Inc.
    involves certain risks. You should carefully read the risks and
    uncertainties described below and the other information included
    or incorporated by reference in this report.
  We
    depend on payments from third party payors, including government
    healthcare programs. If these payments are reduced, our revenue
    will decrease.
   22




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##### Table of Contents



If we
    are unable to acquire and develop additional surgery centers or
    private surgical hospitals on favorable terms, we may be unable
    to execute our acquisition and development strategy, which could
    limit our future growth.
    If we
    are not successful in integrating the operations of Surgis,
    Inc., which we anticipate acquiring in April 2006, with our own,
    we may not realize the potential benefits of our acquisition of
    Surgis.
    If we
    incur material liabilities as a result of acquiring companies or
    surgical facilities, our operating results could be adversely
    affected.
    If we
    are unable to manage growth, we may be unable to achieve our
    growth strategy.
   23




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##### Table of Contents



We
    depend on our relationships with
    not-for-profit
    healthcare systems and their ability to assist in negotiating
    managed care contracts on behalf of the surgical facilities that
    we jointly own with healthcare systems. If we are not able to
    maintain our strategic alliances with these
    not-for-profit
    healthcare systems, or enter into new alliances, we may be
    unable to implement our business strategies
    successfully.
  not-for-profit not-for-profit not-for-profit
  If we
    and our
    not-for-profit
    healthcare system partners are unable to successfully negotiate
    contracts and maintain satisfactory relationships with managed
    care organizations or other third party payors, our revenues may
    decrease.
    not-for-profit
  We
    depend on our relationships with the physicians who use our
    facilities. Our ability to provide medical services at our
    facilities would be impaired and our revenues reduced if we are
    not able to maintain these relationships.
    Our
    United Kingdom operations are subject to unique risks, any of
    which, if they actually occur, could adversely affect our
    results.
   24




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##### Table of Contents




    competition with government sponsored healthcare systems;
    unforeseen changes in foreign regulatory requirements or
    domestic regulatory requirements affecting our foreign
    operations;
    identifying, attracting, retaining and working successfully with
    qualified local management;
    fluctuations in exchange rates;
    difficulties in staffing and managing geographically and
    culturally diverse, multinational operations; and
    the possibility of an economic downturn in the United Kingdom,
    which could adversely affect the ability or willingness of
    employers and individuals in these countries to purchase private
    health insurance.    Our
    significant indebtedness could limit our
    flexibility.
      
    we must dedicate a substantial portion of our cash flows from
    operations to the payment of principal and interest on our
    indebtedness, reducing the funds available for our operations;
    a portion of our borrowings are at variable rates of interest,
    making us vulnerable to increases in interest rates;
    we may be more highly leveraged than some of our competitors,
    which could place us at a competitive disadvantage;
    our degree of leverage may make us more vulnerable to a downturn
    in our business or the economy generally; and
    the terms of our existing credit arrangements contain numerous
    financial and other restrictive covenants, including
    restrictions on paying dividends, incurring additional
    indebtedness and selling assets.  Our
    revenues may be reduced by changes in payment methods or rates
    under the Medicare or Medicaid programs.
   25




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##### Table of Contents



Efforts
    to regulate the construction, acquisition or expansion of
    healthcare facilities could prevent us from acquiring additional
    surgery centers or private surgical hospitals, renovating our
    existing facilities or expanding the breadth of services we
    offer.
    New
    federal and state legislative and regulatory initiatives
    relating to patient privacy and electronic data security could
    require us to expend substantial sums acquiring and implementing
    new information and transaction systems, which could negatively
    impact our financial results.
            If we
    fail to comply with applicable laws and regulations, we could
    suffer penalties or be required to make significant changes to
    our operations.
    
    physician ownership of our domestic facilities;
    the adequacy of medical care, equipment, personnel, operating
    policies and procedures;
    building codes;
    licensure, certification and accreditation; 26




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##### Table of Contents




    billing for services;
    maintenance and protection of records; and
    environmental protection.      If a
    federal or state agency asserts a different position or enacts
    new laws or regulations regarding illegal remuneration under the
    Medicare or Medicaid programs, we may be subject to civil and
    criminal penalties, experience a significant reduction in our
    revenues or be excluded from participation in the Medicare and
    Medicaid programs.
       27




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##### Table of Contents



If
    physician self-referral laws are interpreted differently or if
    other legislative restrictions are issued, we could incur
    significant sanctions and loss of reimbursement
    revenues.
        Companies
    within the healthcare industry continue to be the subject of
    federal and state investigations, which increases the risk that
    we may become subject to investigations in the
    future.
    
    cost reporting and billing practices;
    quality of care;
    financial reporting;
    financial relationships with referral sources; and
    medical necessity of services provided.   28




---



##### Table of Contents



If
    laws governing the corporate practice of medicine change, we may
    be required to restructure some of our domestic relationships
    which may result in significant costs to us and divert other
    resources.
      If
    domestic regulations change, we may be obligated to purchase
    some or all of the ownership interests of the physicians
    affiliated with us.
    
    make illegal the referral of Medicare or other patients to our
    surgical facilities by physicians affiliated with us;
    create the substantial likelihood that cash distributions from
    the limited partnerships or limited liability companies through
    which we operate our surgical facilities to physicians
    affiliated with us would be illegal; or
    make illegal the ownership by the physicians affiliated with us
    of interests in the partnerships or limited liability companies
    through which we own and operate our surgical facilities.   29




---



##### Table of Contents



Recently
    adopted legislation could restrict our ability to operate our
    domestic surgical hospitals.
  18-month
    If we
    become subject to significant legal actions, we could be subject
    to substantial uninsured liabilities.
    If we
    are unable to effectively compete for physicians, strategic
    relationships, acquisitions and managed care contracts, our
    business could be adversely affected.
  not-for-profit
  Because
    our senior management has been key to our growth and success, we
    may be adversely affected if we lose any member of our senior
    management.
   30




---



##### Table of Contents



We may
    have a special legal responsibility to the holders of ownership
    interests in the entities through which we own surgical
    facilities, and that responsibility may prevent us from acting
    solely in our own best interests or the interests of our
    stockholders.
    We do
    not have exclusive control over the distribution of revenues
    from some of our domestic operating entities and may be unable
    to cause all or a portion of the revenues of these entities to
    be distributed.
    Provisions
    of our charter documents, Delaware law and our stockholder
    rights plan could discourage a takeover you may consider
    favorable or the removal of our current
    management.
    
    authorize the issuance of blank check preferred
    stock;
    provide for a classified board of directors with staggered,
    three-year terms;
    prohibit cumulative voting in the election of directors;
    prohibit our stockholders from acting by written consent without
    the approval of our board of directors; 31




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##### Table of Contents




    limit the persons who may call special meetings of
    stockholders; and
    establish advance notice requirements for nominations for
    election to the board of directors or for proposing matters to
    be approved by stockholders at stockholder meetings.      Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity and Related Stockholder
    Matters  Market for Common Stock.
  High(1)


Low(1)Year Ended December 31,
    2004:First Quarter

$
26.58


$
21.34Second Quarter


27.43



22.27Third Quarter


26.67



21.71Fourth Quarter


28.52



21.09Year Ended December 31,
    2005:First Quarter

$
31.17


$
24.72Second Quarter


35.99



28.50Third Quarter


40.07



32.25Fourth Quarter


39.72



31.57     (1)
    
    Restated to reflect the 3 for 2 stock split, which was effective
    July 15, 2005.    
    any applicable contractual restrictions limiting our ability to
    pay dividends; 32




---



##### Table of Contents




    our earnings;
    our financial condition;
    our ability to fund our capital requirements; and
    other factors our board deems relevant.    Recent Sales of Unregistered
    Securities.
  Item 6.
    Selected
    Consolidated Financial Data      Years Ended
    December 31,2005


2004


2003


2002


2001(In thousands, except number of
    facilities and per share data)Consolidated Statement of
    Income Data:Total revenues

$
474,741


$
389,530


$
310,564


$
243,814


$
167,043Equity in earnings of
    unconsolidated affiliates


23,998



18,626



15,074



9,454



5,879Operating expenses excluding
    depreciation and amortization


(332,466
)


(273,614
)


(216,213
)


(170,193
)


(123,030
)Depreciation and amortization


(31,406
)


(27,209
)


(22,700
)


(19,123
)


(18,042
)Operating income


134,867



107,333



86,725



63,952



31,851Other income (expense):Interest income


4,455



1,591



1,015



774



758Interest expense


(27,708
)


(26,720
)


(24,863
)


(23,307
)


(14,834
)Loss on early retirement of debt






(1,635
)










(5,166
)Other


533



247



733



(11
)


133Income before minority interests


112,147



80,816



63,610



41,408



12,742Minority interests in income of
    consolidated subsidiaries


(38,835
)


(30,441
)


(23,959
)


(14,809
)


(7,339
)Income tax (expense) benefit


(26,173
)


(17,867
)


(14,934
)


(9,923
)


1,446Income from continuing operations


47,139



32,508



24,717



16,676



6,850Earnings (loss) from discontinued
    operations, net of tax


155



53,667



5,159



2,924



(4,100
)Net income

$
47,294


$
86,175


$
29,876


$
19,600


$
2,750Net income attributable to common
    stockholders (a)

$
47,294


$
86,175


$
29,876


$
19,600


$
66 33




---



##### Table of Contents



Years Ended
    December 31,2005


2004


2003


2002


2001(In thousands, except number of
    facilities and per share data)Share Data (c):Net income (loss) per share
    attributable to common stockholders:Basic:Continuing operations

$
1.10


$
0.78


$
0.61


$
0.45


$
0.15Discontinued operations






1.28



0.12



0.07



(0.15
)Total

$
1.10


$
2.06


$
0.73


$
0.52


$
Diluted:Continuing operations

$
1.05


$
0.74


$
0.58


$
0.43


$
0.14Discontinued operations






1.22



0.12



0.07



(0.14
)Total

$
1.05


$
1.96


$
0.70


$
0.50


$
Weighted average number of common
    sharesBasic shares


42,994



41,913



40,699



37,387



27,570Diluted shares


44,977



43,948



42,366



39,085



28,936Other Data:Number of facilities operated as
    of the end of period (b)


99



87



65



56



41Cash flows from operating
    activities

$
107,905


$
81,751


$
66,206


$
46,725


$
35,478   As of
    December 31,2005


2004


2003


2002


2001(Dollars in thousands)Consolidated Balance Sheet
    Data:Working capital

$
90,946


$
87,178


$
29,957


$
51,412


$
40,285Cash and cash equivalents


130,440



93,467



28,519



47,571



33,881Total assets


1,028,841



922,304



870,509



728,758



556,857Total debt


286,486



288,485



304,744



276,703



238,681Total stockholders equity


531,050



474,609



390,655



322,261



226,527     (a)
    
    Includes preferred stock dividends of $2,684 for the year ended
    December 31, 2001. No preferred stock dividends were
    declared in 2005, 2004, 2003, or 2002. No common stock dividends
    were declared or paid in any period.(b)
    
    Does not include Spanish facilities. Not derived from audited
    financial statements.(c)
    
    Share and per share data are adjusted and restated to give
    effect to a
    three-for-two
    stock split effected during 2005.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation    Overview
  not-for-profit
 34




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##### Table of Contents



not-for-profit
      Critical
    Accounting Policies and Estimates
    Consolidation
  not-for-profit
   35




---



##### Table of Contents



Revenue
    Recognition and Accounts Receivable
  Revenue Recognition in Financial
    Statements
  
    Existence of persuasive evidence that an arrangement exists;
    Delivery has occurred or services have been rendered;
    The sellers price to the buyer is fixed and
    determinable; and
    Collectibility is reasonably assured.         36




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##### Table of Contents



Income
    Taxes
    Goodwill
    and Intangible Assets
  Accounting for Goodwill
    and Intangible Assets
  Discontinued
    Operations
    Acquisitions,
    Equity Investments and Development Projects
          
    $34.0 million was paid to acquire additional ownership in
    nine facilities we operate in the Dallas/Fort Worth market,
    net of proceeds from the sale of a portion of three other
    facilities in this same market,
    $5.2 million was paid for equity method investments in two
    surgery centers near Kansas City, Missouri,
    $4.7 million was paid for an equity method investment in a
    surgery center in the Sacramento, California area,
    $5.5 million was paid to acquire additional ownership in a
    facility the we operate in New Jersey, and
    $12.0 million was received from three
    not-for-profit
    healthcare systems for noncontrolling interests in six
    facilities we already operated. Included in these transactions
    are call options allowing the healthcare systems to acquire
    additional noncontrolling ownership interests in each facility
    in 2006. With respect to four of the facilities, the approximate
    sales price is $10.2 million and we have a put option with
    the same terms. With 37




---



##### Table of Contents



respect to the other two facilities, the systems have call
    options that, for one facility, fix the price at
    $2.0 million and in the other case base the price on a
    multiple of earnings when the option is exercised. We have no
    put options with respect to these two facilities, and  
    $1.3 million of other net purchases of equity interests.                            Sources
    of Revenue
    
    net patient service revenue for the facilities that we
    consolidate for financial reporting purposes, which are those in
    which we have ownership interests of greater than 50% or
    otherwise maintain effective control;
    management and administrative services revenue, consisting of
    the fees that we earn from managing the facilities that we do
    not consolidate for financial reporting purposes and the fees we
    earn from providing certain consulting and administrative
    services to physicians. Our consolidated revenues and expenses
    do not 38




---



##### Table of Contents



include the management fees we earn from operating the
    facilities that we consolidate for financial reporting purposes
    as those fees are charged to subsidiaries and thus eliminate in
    consolidation.    Years Ended
    December 31,2005


2004


2003Net patient service revenue


92
%


90
%


88
%Management and administrative
    services revenue


8



10



12Total revenue


100
%


100
%


100
%       Years EndedDecember 31,2005


2004


2003Management of surgical facilities

$
20,069


$
18,115


$
15,169Consulting and other services
    provided to physicians and related entities


15,835



19,527



21,036Total management and
    administrative service revenues

$
35,904


$
37,642


$
36,205     Years Ended
    December 31,2005


2004


2003United States


81
%


78
%


80
%United Kingdom


19



22



20Total


100
%


100
%


100
%    39




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##### Table of Contents



Equity in
    Earnings of Unconsolidated Affiliates
    Years Ended
    December 31,2005


2004


2003Revenues

$
443,292


$
339,109


$
240,848Equity in earnings of
    unconsolidated affiliates


27







Operating expenses:Salaries, benefits, and other
    employee costs


109,734



79,917



55,480Medical services and supplies


86,573



62,213



43,079Other operating expenses


111,140



77,820



54,499Depreciation and amortization


20,287



15,480



11,538Total operating expenses


327,734



235,430



164,596Operating income


115,585



103,679



76,252Interest expense, net


(10,560
)


(9,297
)


(7,246
)Other


772



826



(64
)Income before income taxes

$
105,797


$
95,208


$
68,942Long-term debt


118,458



100,443



77,899USPIs equity in earnings of
    unconsolidated affiliates


23,998



18,626



15,074USPIs implied weighted
    average ownership percentage based on affiliates pre-tax
    income(1)


22.7
%


19.6
%


21.9
%USPIs implied weighted
    average ownership percentage based on affiliates debt(2)


28.1
%


24.0
%


23.9
%Unconsolidated facilities operated
    at period end


57



44



33     (1)
    
    Our weighted average percentage ownership in our unconsolidated
    affiliates is calculated as USPIs equity in earnings of
    unconsolidated affiliates divided by the total net income of
    unconsolidated affiliates for each respective period. This
    percentage is higher in 2005 due primarily to our acquisition of
    additional ownership in facilities we account for under the
    equity method. For the twelve months ended December 31,
    2004, this percentage is lower as compared to the previous
    twelve months primarily as a result of losses incurred at
    facilities that were recently opened or under development.(2)
    
    Our weighted average percentage ownership in our unconsolidated
    affiliates is calculated as the total debt of each
    unconsolidated affiliate, multiplied by the percentage ownership
    USPI held in the affiliate as of the end of each respective
    period, divided by the total debt of all of the unconsolidated
    affiliates as of the end of each respective period. This
    percentage is higher in 2005 due primarily to our acquisition of
    additional ownership in facilities we account for under the
    equity method. 40




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##### Table of Contents



Results
    of Operations
    Years Ended
    December 31,2005


2004


2003Total revenues


100.0
%


100.0
%


100.0
%Equity in earnings of
    unconsolidated affiliates


5.1



4.8



4.9Operating expenses, excluding
    depreciation and amortization


(70.1
)


(70.2
)


(69.6
)Depreciation and amortization (7)


(6.6
)


(7.0
)


(7.4
)Operating income


28.4



27.6



27.9Minority interests in income of
    consolidated subsidiaries


(8.2
)


(7.8
)


(7.7
)Interest and other expense, net


(4.7
)


(6.9
)


(7.5
)Income from continuing operations
    before income taxes


15.5



12.9



12.7Income tax expense


(5.5
)


(4.6
)


(4.8
)Income from continuing operations


10.0



8.3



7.9Earnings from discontinued
    operations






13.8



1.7Net income


10.0
%


22.1
%


9.6
%   Executive
    Summary
    not-for-profit not-for-profit
    Revenues
   41




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##### Table of Contents



2003-2004,
      Years Ended
    December 31,2005


2004


2003United States facilities:Net revenue


9%



17%



19%Surgical cases


4%



7%



9%Net revenue per case(1)


5%



9%



10%United Kingdom facilities:Net revenue using actual exchange
    rates


6%



32%



19%Net revenue using constant
    exchange rates(2)


7%



18%



9%All same store facilities:Net revenue using actual exchange
    rates


9%



19%



19%     (1)
    
    Our overall domestic same store growth in net revenue per case
    was favorably impacted by the growth at our nine same store
    surgical hospitals, which on average perform more complex cases
    than ambulatory surgery centers. For the year ended 2005, the
    net revenue per case of our same store ambulatory surgery
    centers (excluding surgical hospitals) increased 1% compared to
    the corresponding prior year period. This rate of growth was
    slower than in prior years largely as a result of the workers
    compensation reimbursement changes and lapse of the managed care
    contract described above.(2)
    
    Measures current year using prior year exchange rates. 42




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##### Table of Contents



Joint
    Ventures with
    Not-for-Profit
    Hospitals
    2005


2004


2003United States facilities(1):With a hospital partner


66



48



35Without a hospital partner(2)


30



36



27Total U.S. facilities


96



84



62United Kingdom facilities


3



3



3Total facilities operated


99



87



65Change from prior year-end:De novo (newly constructed)


9



9Acquisition


4



13Disposals(3)


(1
)


Total increase in number of
    facilities


12



22     (1)
    
    At December 31, 2005, physicians own a portion of all of
    these facilities.(2)
    
    We acquired 11 facilities without a hospital partner in 2004.
    Seven of these had a hospital partner by December 31, 2005
    as a result of our selling a portion of the equity interests we
    had acquired in 2004.(3)
    
    We sold our ownership interest in a facility in Cottonwood,
    Arizona during the first quarter of 2005.  Facility
    Operating Margins
  not-for-profit
   43




---



##### Table of Contents



Year Ended
    December 31,2005


2004


2003United States facilities:With a hospital partner


(270
)bps


250
bps


420
bpsWithout a hospital partner


(20
)


30



170Total U.S. facilities


(200
)


230



310United Kingdom facilities


(90
)bps


(10
)bps


260
bps     (1)
    
    Operating margin is calculated as operating income divided by
    total revenues. This table aggregates all of the same store
    facilities we operate using 100% of their results. This does not
    represent the overall margin for USPIs operations in
    either the U.S. or U.K. because we have a variety of
    ownership levels in the facilities we operate, and facilities
    open for less than a year are excluded from same store
    calculations.  Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
             44




---



##### Table of Contents



Year
    Ended December 31, 2004 Compared to Year Ended
    December 31, 2003
         45




---



##### Table of Contents



Liquidity
    and Capital Resources
    follow-up and/or
 46




---



##### Table of Contents




    $34.0 million was paid to acquire additional ownership in
    nine facilities the Company operates in the
    Dallas/Fort Worth market, net of proceeds from the sale of
    a portion of three other facilities in this same market,
    $10.9 million was paid to acquire a controlling interest in
    an ambulatory surgery center in San Antonio, Texas,
    $7.4 million was paid to acquire a controlling interest in
    an ambulatory surgery center in Westwood, California in which we
    previously owned a noncontrolling interest,
    $5.5 million was paid to acquire additional ownership in a
    facility the Company operates in New Jersey,
    $5.2 million was paid for equity method investments in two
    surgery centers near Kansas City, Missouri,
    $4.7 million was paid for an equity method investment in a
    surgery center in the Sacramento, California area,
    $12.0 million was received from three
    not-for-profit
    healthcare systems for noncontrolling interests in facilities
    already operated by the Company. Included in these transactions
    are call options allowing the healthcare systems to acquire
    additional noncontrolling ownership interests in each facility
    in 2006. With respect to four of the facilities, the approximate
    sales price is $10.2 million and the Company has a put
    option with the same terms. With respect to the other two
    facilities, the systems have call options that, for one
    facility, fix the price at $2.0 million and in the other
    case base the price on a multiple of earnings when the option is
    exercised. The Company has no put options with respect to these
    two facilities, and
    $4.9 million of other transactions.       47




---



##### Table of Contents



12-month
  Period

Redemption Price2006


105.000
%2007


103.333
%2008


101.667
%2009


100.000
%2010


100.000
%       Payments Due by PeriodContractual Cash
    Obligations

Total


Within 1 Year


Years 2 and 3


Years 4 and 5


Beyond 5 Years(In Thousands)Long term debt obligations
    (principal plus interest)(1):Senior Subordinated Notes

$
240,000


$
15,000


$
30,000


$
30,000


$
165,000U.K. credit facility


78,163



8,175



23,560



46,428



Other debt at operating
    subsidiaries


25,848



5,988



11,039



6,600



2,221Capitalized lease obligations


104,317



9,626



16,376



12,547



65,768Operating lease obligations


54,832



10,491



17,735



12,149



14,457Total contractual cash obligations

$
503,160


$
49,280


$
98,710


$
107,724


$
247,446     (1)
    
    Amounts shown for long-term debt obligations and capital lease
    obligations include the associated interest. For variable rate
    debt, the interest is calculated using the December 31,
    2005 rates applicable to each debt instrument. 48




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  not-for-profit
 49




---



##### Table of Contents



non-recourse wholly-owned wholly-owned
    New
    Accounting Pronouncements
  Share-Based Payment Accounting for Stock
    Issued to Employees
    Accounting for Conditional Asset Retirement
    Obligations
  No. 04-5 (EITF 04-5), Determining Whether a General Partner or the General Partners
    as a Group, Controls a Limited Partnership or
 50




---



##### Table of Contents



Similar Entity When the Limited Partners Have Certain
    Rights. No. 04-5 No. 04-5 EITF 04-5 No. 04-5 EITF 04-5
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  variable-to-fixed
        Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Form 10-K,
 51




---



##### Table of Contents



Form 10-K.
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f).
    
    Pertain to the maintenance of records that in reasonable detail,
    accurately and fairly reflect the transactions and dispositions
    of our assets.
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and board of
    directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on the financial
    statements.  Internal Control  Integrated
    Framework.
  
    USP San Antonio, Inc. (Investment in San Antonio
    Endoscopy, L.P.)
    USP North Kansas City, Inc. (Investments in Briarcliff
    Ambulatory Surgery Center, L.P., and Liberty Ambulatory Surgery
    Center, L.P.)
    USP Kansas City, Inc. (Investment in St. Marys Surgical
    Center, L.L.C.)
    USP Sacramento, Inc. (Investment in Folsom Outpatient Surgery
    Center, L.P.)
    USP Cedar Park, Inc. (Investment in Cedar Park Surgery Center,
    L.P.)      Limitations
    on the Effectiveness of Controls
   52




---



##### Table of Contents



Changes
    in internal control over financial reporting
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   53




---



##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules and Reports on
    Form 8-K  (a) 1. Financial Statements
  Form 10-K:
  Reports of
    Independent Registered Public Accounting Firm


F-1Consolidated
    Balance Sheets as of December 31, 2005 and 2004


F-4Consolidated
    Statements of Income for the years ended December 31, 2005,
    2004 and 2003


F-5Consolidated
    Statements of Comprehensive Income for the years ended
    December 31, 2005, 2004 and 2003


F-6Consolidated
    Statements of Stockholders Equity for the years ended
    December 31, 2005, 2004 and 2003


F-7Consolidated
    Statements of Cash Flows for the years ended December 31,
    2005, 2004 and 2003


F-8Notes to
    Consolidated Financial Statements


F-9  54




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           Internal Control  Integrated Framework
  KPMG LLP
    F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
     , Internal Control  Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated Framework
   F-2




---



##### Table of Contents




    USP San Antonio, Inc. (Investment in San Antonio
    Endoscopy, L.P.)
    USP North Kansas City, Inc. (Investments in Briarcliff
    Ambulatory Surgery Center, L.P., and Liberty Ambulatory Surgery
    Center, L.P.)
    USP Kansas City, Inc. (Investment in St. Marys Surgical
    Center, L.L.C.)
    USP Sacramento, Inc. (Investment in Folsom Outpatient Surgery
    Center, L.P.)
    USP Cedar Park, Inc. (Investment in Cedar Park Surgery Center,
    L.P.)    KPMG LLP
    F-3




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##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIES
    Consolidated Balance Sheets
    December 31, 2005 and 2004  2005


2004(In thousands, except per share
    amounts)ASSETSCash and cash equivalents

$
130,440


$
93,467Patient receivables, net of
    allowance for doubtful accounts of $6,656 and $7,277,
    respectively


44,501



43,591Other receivables (Note 4)


10,253



20,293Inventories of supplies


7,819



7,188Deferred tax asset, net


11,654



7,393Prepaids and other current assets


8,443



7,035Total current assets


213,110



178,967Property and equipment, net
    (Note 5)


259,016



265,889Investments in affiliates
    (Note 3)


100,500



43,402Goodwill and intangible assets, net
    (Note 6)


422,556



402,355Other assets (Note 2)


33,659



31,691Total assets

$
1,028,841


$
922,304LIABILITIES AND
    STOCKHOLDERS EQUITYAccounts payable

$
19,095


$
18,048Accrued salaries and benefits


19,572



20,582Due to affiliates


34,997



12,805Accrued interest


1,506



1,856Current portion of long-term debt
    (Note 7)


15,922



15,316Other accrued expenses


31,072



23,182Total current liabilities


122,164



91,789Long-term debt, less current
    portion (Note 7)


270,564



273,169Other long-term liabilities


4,474



2,624Deferred tax liability, net


36,591



31,846Total liabilities


433,793



399,428Minority interests (Note 3)


63,998



48,267Commitments and contingencies
    (Notes 8 and 15)Stockholders equity
    (Note 9)Common stock, $0.01 par value;
    200,000 shares authorized; 44,320 and 42,990 shares
    issued at December 31, 2005 and 2004, respectively


443



430Additional paid-in capital


375,656



349,048Treasury stock, at cost, 37 and
    21 shares at December 31, 2005 and 2004, respectively


(831
)


(320
)Deferred compensation


(14,128
)


(7,689
)Accumulated other comprehensive
    income, net of tax


3,896



14,420Retained earnings


166,014



118,720Total stockholders equity


531,050



474,609Total liabilities and
    stockholders equity

$
1,028,841


$
922,304    F-4




---



##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIESConsolidated Statements of Income
  Years Ended
    December 31,2005


2004


2003(In thousands, except per share
    amounts)Revenues:Net patient service revenue

$
437,867


$
351,071


$
272,952Management and administrative
    services revenue


35,904



37,642



36,205Other income


970



817



1,407Total revenues


474,741



389,530



310,564Equity in earnings of
    unconsolidated affiliates


23,998



18,626



15,074Operating expenses:Salaries, benefits, and other
    employee costs


121,733



100,333



75,051Medical services and supplies


84,695



64,671



49,055Other operating expenses


86,245



72,958



59,429General and administrative expenses


30,275



27,493



25,819Provision for doubtful accounts


9,518



8,159



6,859Depreciation and amortization


31,406



27,209



22,700Total operating expenses


363,872



300,823



238,913Operating income


134,867



107,333



86,725Interest income


4,455



1,591



1,015Interest expense


(27,708
)


(26,720
)


(24,863
)Loss on early termination of credit
    facility (Note 7)






(1,635
)


Other


533



247



733Total other expense, net


(22,720
)


(26,517
)


(23,115
)Income before minority interests


112,147



80,816



63,610Minority interests in income of
    consolidated subsidiaries


(38,835
)


(30,441
)


(23,959
)Income from continuing operations
    before income taxes


73,312



50,375



39,651Income tax expense


(26,173
)


(17,867
)


(14,934
)Income from continuing operations


47,139



32,508



24,717Discontinued operations, net of tax
    (Note 2):Income from discontinued operations






3,329



5,159Net gain on disposal of Spanish
    operations


155



50,338



Total earnings from discontinued
    operations


155



53,667



5,159Net income

$
47,294


$
86,175


$
29,876Net income per share attributable
    to common stockholdersBasic:Continuing operations

$
1.10


$
0.78


$
0.61Discontinued operations






1.28



0.12Total

$
1.10


$
2.06


$
0.73Diluted:Continuing operations

$
1.05


$
0.74


$
0.58Discontinued operations






1.22



0.12Total

$
1.05


$
1.96


$
0.70Weighted average number of common
    sharesBasic


42,994



41,913



40,699Diluted


44,977



43,948



42,366    F-5




---



##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIES
  Consolidated Statements of Comprehensive
    Income
  Years Ended
    December 31,2005


2004


2003(In thousands)Net income

$
47,294


$
86,175


$
29,876Other comprehensive income (loss):Foreign currency translation
    adjustments


(9,975
)


2,515



28,964Minimum pension liability
    adjustment, net of tax


(549
)


(235
)


496Net unrealized gains on
    securities, net of tax






70



102Reclassifications due to sale of
    Spanish operations:Foreign currency translation
    adjustments






(20,563
)


Net unrealized gains on
    securities, net of tax






(219
)


Other comprehensive income (loss)


(10,524
)


(18,432
)


29,562Comprehensive income

$
36,770


$
67,743


$
59,438    F-6




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##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIES
  Consolidated Statements of Stockholders
    Equity
    For the years ended December 31, 2005, 2004 and 2003
  Receivables


AccumulatedCommon Stock


Additional








from Sales


OtherOutstanding





Paid-in


Treasury


Deferred


of Common


Comprehensive


RetainedShares


Par Value


Capital


Stock


Compensation


Stock


Income (Loss)


Earnings


Total(In thousands)Balance, December 31, 2002


40,656


$
410


$
320,613


$
(3,733
)

$
(1,226
)

$
(191
)

$
3,290


$
3,098


$
322,261Issuance of common stock and
    exercise of stock options


828



5



9,655



2,864



(4,137
)


190







(432
)


8,145Repurchases of common stock


(5
)






113



(117
)


















(4
)Amortization of deferred
    compensation


















815















815Net income






























29,876



29,876Foreign currency translation
    adjustments


























28,964







28,964Unrealized gains on securities


























102







102Minimum pension liability
    adjustment, net of tax


























496







496Balance, December 31, 2003


41,479



415



330,381



(986
)


(4,548
)


(1
)


32,852



32,542



390,655Issuance of common stock and
    exercise of stock options


1,508



15



18,674



1,077



(5,113
)


1







3



14,657Repurchases of common stock


(18
)






(7
)


(411
)


















(418
)Amortization of deferred
    compensation


















1,972















1,972Net income






























86,175



86,175Foreign currency translation
    adjustments


























2,515







2,515Unrealized gains on securities


























70







70Minimum pension liability
    adjustment, net of tax


























(235
)






(235
)Reclassifications due to sale of
    Spanish operations


























(20,782
)






(20,782
)Balance, December 31, 2004


42,969



430



349,048



(320
)


(7,689
)






14,420



118,720



474,609Issuance of common stock and
    exercise of stock options


1,346



13



26,608



363



(10,454
)














16,530Repurchases of common stock


(32
)










(874
)


















(874
)Amortization of deferred
    compensation


















4,015















4,015Net income






























47,294



47,294Foreign currency translation
    adjustments


























(9,975
)






(9,975
)Minimum pension liability
    adjustment, net of tax


























(549
)






(549
)Balance, December 31, 2005


44,283


$
443


$
375,656


$
(831
)

$
(14,128
)

$



$
3,896


$
166,014


$
531,050    F-7




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##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIES
  Consolidated Statements of Cash Flows
  Years Ended
    December 31,2005


2004


2003(Revised  Note 1)


(Revised  Note 1)(In thousands)Cash flows from operating
    activities:Net income

$
47,294


$
86,175


$
29,876Adjustments to reconcile net income
    to net cash provided by operating activities:Earnings from discontinued
    operations


(155
)


(53,667
)


(5,159
)Provision for doubtful accounts


9,518



8,159



6,859Depreciation and amortization


31,406



27,209



22,700Amortization of debt issue costs
    and discount


775



1,771



1,814Deferred income taxes


2,041



4,619



9,290Loss on early termination of credit
    agreement






1,635



Equity in earnings of
    unconsolidated affiliates, net of distributions received


(3,958
)


(3,248
)


(5,175
)Minority interests in income of
    consolidated subsidiaries, net of distributions paid


1,537



5,012



5,863Equity-based compensation


4,514



3,299



2,970Increases (decreases) in cash from
    changes in operating assets and liabilities, net of effects from
    purchases of new businesses:Patient receivables


(10,239
)


(13,729
)


(13,891
)Other receivables


9,319



(518
)


15,380Inventories of supplies, prepaids
    and other assets


(677
)


(2,080
)


(351
)Accounts payable and other current
    liabilities


10,365



14,908



(3,883
)Other long-term liabilities


6,165



2,206



(87
)Net cash provided by operating
    activities


107,905



81,751



66,206Cash flows from investing
    activities:Purchases of new businesses and
    equity interests, net of cash received


(60,612
)


(131,123
)


(43,939
)Proceeds from sale of Spanish
    operations






141,132



Purchases of property and equipment


(30,905
)


(23,869
)


(22,274
)Returns of capital from
    unconsolidated affiliates


201



9



682Increase in deposits and notes
    receivable


(11,117
)


(5,517
)


(13,937
)Net cash used in investing
    activities


(102,433
)


(19,368
)


(79,468
)Cash flows from financing
    activities:Proceeds from long-term debt


17,114



18,341



40,309Payments on long-term debt


(18,642
)


(26,368
)


(42,721
)Proceeds from issuance of common
    stock


10,954



9,598



4,311Payments to repurchase common stock










(4
)Increase in cash held on behalf of
    unconsolidated affiliates


23,541







Returns of capital to minority
    interest holders


(1,389
)


(536
)


(83
)Net cash provided by financing
    activities


31,578



1,035



1,812Cash flows of discontinued
    operations:Operating cash flows






3,520



12,458Investing cash flows






(9,471
)


(30,588
)Financing cash flows






7,225



10,184Effect of exchange rate changes






(2
)


573Net cash provided by (used in)
    discontinued operations






1,272



(7,373
)Effect of exchange rate changes on
    cash


(77
)


258



(229
)Net increase (decrease) in cash and
    cash equivalents


36,973



64,948



(19,052
)Cash and cash equivalents at
    beginning of year


93,467



28,519



47,571Cash and cash equivalents at end of
    year

$
130,440


$
93,467


$
28,519Supplemental information:Interest paid, net of amounts
    capitalized

$
27,822


$
25,050


$
23,249Income taxes paid


17,553



30,927



5,889Non-cash transactions:Issuance of common stock for
    service contracts

$



$



$
254Issuance of common stock to
    employees


10,609



5,250



6,291Sale of noncontrolling interests
    for notes receivable










2,492Assets acquired under capital lease
    obligations


4,086



27,691



586Note receivable for remaining
    proceeds of sale of Spanish operations






18,035



    F-8




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##### Table of Contents



UNITED
    SURGICAL PARTNERS INTERNATIONAL, INC.
    AND SUBSIDIARIES
  Notes to Consolidated Financial Statements
    December 31, 2004 and 2003
  (1)
    Summary
    of Significant Accounting Policies and Practices  (a) Description
    of Business
  not-for-profit not-for-profit
          (b) Stock
    Split
  three-for-two
  (c) Translation
    of Foreign Currencies
    (d) Principles
    of Consolidation
   F-9




---



##### Table of Contents



(e) Use
    of Estimates
    (f) Revisions
    to Cash Flow Statements
        Year Ended December 31,
    2004


Year Ended December 31,
    2003Net Cash Provided by (Used
    in)


Net Cash Provided by (Used
    in)Operating


Investing


Financing


Operating


Investing


FinancingActivities


Activities


Activities


Activities


Activities


ActivitiesPreviously reported

$
91,540


$
(19,377
)

$
(8,745
)

$
74,375


$
(80,150
)

$
(5,675
)Distributions received from equity
    method investees


15,378







(15,378
)


9,899







(9,899
)Distributions paid to minority
    interest holders


(25,167
)






25,167



(18,068
)






18,068Returns of investees capital






9



(9
)






682



(682
)As revised

$
81,751


$
(19,368
)

$
1,035


$
66,206


$
(79,468
)

$
1,812     (g) Cash
    Equivalents and Investments
   F-10




---



##### Table of Contents



(h) Inventories
    of Supplies
    (i) Property
    and Equipment
    (j) Intangible
    Assets
    (k) Impairment
    of Long-lived Assets
    (l) Fair
    Value of Financial Instruments
   F-11




---



##### Table of Contents



(m) Revenue
    Recognition
    (n) Equity
    in Earnings of Unconsolidated Affiliates
    (o) Income
    Taxes
    (p) Equity-Based
    Compensation
    Accounting for Stock Issued to
    Employees Accounting for Stock-Based
    Compensation Accounting for Stock-Based
    Compensation  Transition and Disclosure
 F-12




---



##### Table of Contents



Years Ended
    December 31,2005


2004


2003Net income:As reported

$
47,294


$
86,175


$
29,876Add: Total stock-based employee
    compensation expense included in reported net income, net of
    taxes


2,934



2,145



1,930Less: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards, net of taxes


(6,015
)


(6,072
)


(6,030
)Pro forma

$
44,213


$
82,248


$
25,776Basic earnings per shareAs reported

$
1.10


$
2.06


$
0.73Pro forma


1.03



1.96



0.63Diluted earnings per shareAs reported

$
1.05


$
1.96


$
0.70Pro forma

$
0.98



1.87



0.61       No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services.
  (q) Commitments
    and Contingencies
    (2)
    Discontinued
    Operations     F-13




---



##### Table of Contents



(3)
    Acquisitions
    and Equity Investments            Years Ended
    December 31,2005


2004(Unaudited)Net revenues

$
476,483


$
404,357Income from continuing operations


47,511



34,462Diluted earnings per share from
    continuing operations

$
1.06


$
0.78       
    $34.0 million was paid to acquire additional ownership in
    nine facilities the Company operates in the
    Dallas/Fort Worth market, net of proceeds from the sale of
    a portion of three other facilities in this same market,
    $5.2 million was paid for equity method investments in two
    surgery centers near Kansas City, Missouri,
    $4.7 million was paid for an equity method investment in a
    surgery center in the Sacramento, California area,
    $5.5 million was paid to acquire additional ownership in a
    facility the Company operates in New Jersey,
    $12.0 million was received from three
    not-for-profit
    healthcare systems for noncontrolling interests in facilities
    already operated by the Company. Included in these transactions
    are call options allowing the F-14




---



##### Table of Contents



healthcare systems to acquire additional noncontrolling
    ownership interests in each facility in 2006. With respect to
    four of the facilities, the approximate future sales price is
    $10.2 million and the Company has a put option with the
    same terms. With respect to the other two facilities, the
    systems have call options that, for one facility, fix the price
    at $2.0 million and in the other case base the price on a
    multiple of earnings when the option is exercised. The Company
    has no put options with respect to these two facilities.
    Consistent with the Companys policy regarding sales of
    noncontrolling interests, no gain or loss was recognized on
    these transactions; and  
    $1.3 million was paid for other net purchases of equity
    interests.    2005


2004


2003Unconsolidated facilities operated
    at year-end


57



44



33Income statement information:Revenues

$
443,292


$
339,109


$
240,848Equity in earnings of
    unconsolidated affiliates


27







Operating expenses:Salaries, benefits, and other
    employee costs


109,734



79,917



55,480Medical services and supplies


86,573



62,213



43,079Other operating expenses


111,140



77,820



54,499Depreciation and amortization


20,287



15,480



11,538Total operating expenses


327,734



235,430



164,596Operating income


115,585



103,679



76,252Interest expense, net


(10,560
)


(9,297
)


(7,246
)Other


772



826



(64
)Income before income taxes

$
105,797


$
95,208


$
68,942Balance sheet information:Current assets

$
119,461


$
96,006


$
69,659Noncurrent assets


203,463



163,410



132,380Current liabilities


65,487



51,027



38,234Noncurrent liabilities


112,926



96,415



73,414   (4)
    Other
    Receivables   F-15




---



##### Table of Contents



(5)
    Property
    and Equipment    EstimatedUseful Lives

2005


2004Land and land improvements



$
19,856


$
21,973Buildings and leasehold
    improvements

7-50 years


209,334



202,668Equipment

3-12 years


155,595



149,174Furniture and fixtures

4-20 years


9,485



8,625Construction in progress




924



1,307395,194



383,747Less accumulated depreciation




(136,178
)


(117,858
)Net property and equipment



$
259,016


$
265,889     2005


2004Land and buildings

$
47,521


$
48,199Equipment and furniture


32,576



29,70180,097



77,900Less accumulated amortization


(29,942
)


(24,196
)Net property and equipment under
    capital leases

$
50,155


$
53,704   (6)
    Goodwill
    and Intangible Assets  Accounting for Goodwill
    and Other Intangible Assets
    December 31,2005


2004Goodwill

$
338,270


$
319,355Other intangible assets


84,286



83,000Total

$
422,556


$
402,355  F-16




---



##### Table of Contents



UnitedU.S.


Kingdom


Spain


TotalBalance at December 31, 2003

$
179,599


$
25,475


$
50,913


$
255,987Additions


116,688



57







116,745Disposals


(2,398
)






(50,913
)


(53,311
)Other


(1,948
)


1,882







(66
)Balance at December 31, 2004


291,941



27,414







319,355Additions


29,243











29,243Disposals


(7,449
)










(7,449
)Other






(2,879
)






(2,879
)Balance at December 31, 2005

$
313,735


$
24,535


$



$
338,270         December 31, 2005GrossCarrying


AccumulatedAmount


Amortization


TotalDefinite Useful LivesManagement Contracts

$
25,234


$
(10,767
)

$
14,467Other


7,892



(2,644
)


5,248Total

$
33,126


$
(13,411
)


19,715Indefinite Useful
    LivesManagement Contracts










63,859Other










712Total










64,571Total intangible assets









$
84,286   F-17




---



##### Table of Contents



December 31, 2004GrossCarrying


AccumulatedAmount


Amortization


TotalDefinite Useful LivesManagement Contracts

$
25,506


$
(9,168
)

$
16,338Other


7,892



(1,942
)


5,950Total

$
33,398


$
(11,110
)


22,288Indefinite Useful
    LivesManagement Contracts










59,908Other










804Total










60,712Total intangible assets









$
83,000       2006

$
2,0262007


2,0262008


1,5942009


1,2152010


1,215$
8,076   (7)
    Long-term
    Debt    2005


2004Senior credit agreements

$
64,370


$
65,918Senior subordinated notes


149,174



149,077Notes payable to financial
    institutions


21,326



20,698Capital lease obligations


51,616



52,792Total long-term debt


286,486



288,485Less current portion


(15,922
)


(15,316
)Long-term debt, less current
    portion

$
270,564


$
273,169   (a) Lines
    of Credit
   F-18




---



##### Table of Contents



(b) Subordinated
    Debt
    12-month
  Period

Redemption Price2006


105.000
%2007


103.333
%2008


101.667
%2009


100.000
%2010


100.000
%      F-19




---



##### Table of Contents



(c) Other
    Long-term Debt
        (8)
    Leases      Capital


OperatingLeases


LeasesYear ending December 31,2006

$
9,626


$
10,4912007


8,534



9,2452008


7,842



8,4902009


6,573



6,8062010


5,974



5,343Thereafter


65,768



14,457Total minimum lease payments


104,317


$
54,832Amount representing interest


(52,701
)Present value of minimum lease
    payments

$
51,616     (9)
    Preferred
    Stock    Series A Redeemable Preferred
    Stock, $0.01 par value


31,200Series B Convertible
    Redeemable Preferred Stock, $0.01 par value


2,716Series C Convertible
    Preferred Stock, $0.01 par value


20,000Series D Redeemable Preferred
    Stock, $0.01 par value


40,000Series A Junior Participating
    Preferred Stock, $0.01 par value


500,000Not designated


9,460,000Total authorized shares of
    Preferred Stock


10,053,916    F-20




---



##### Table of Contents



(10)
    Related
    Party Transactions        (11)
    Income
    Taxes    2005


2004


2003Domestic

$
62,190


$
40,426


$
32,180Foreign


11,122



9,949



7,471$
73,312


$
50,375


$
39,651  F-21




---



##### Table of Contents



Current


Deferred


TotalYear ended December 31, 2005:U.S. federal

$
18,713


$
2,407


$
21,120State and local


2,213



206



2,419Foreign


3,206



(572
)


2,634Net income tax expense

$
24,132


$
2,041


$
26,173   Current


Deferred


TotalYear ended December 31, 2004:U.S. federal

$
8,686


$
4,638


$
13,324State and local


1,517



791



2,308Foreign


3,045



(810
)


2,235Net income tax expense

$
13,248


$
4,619


$
17,867   Current


Deferred


TotalYear ended December 31, 2003:U.S. federal

$
1,919


$
9,196


$
11,115State and local


1,300



729



2,029Foreign


2,425



(635
)


1,790Net income tax expense

$
5,644


$
9,290


$
14,934     Years Ended
    December 31,2005


2004


2003Computed expected tax
    expense

$
25,659


$
17,631


$
13,884Increase (reduction) in income
    taxes resulting from:Differences between
    U.S. financial reporting and foreign statutory reporting


(603
)


(631
)


(369
)State tax expense, net of federal
    benefit


1,550



1,582



1,614Removal of foreign tax rate
    differential


(656
)


(612
)


(481
)Intangible assets






22



165Other


223



(125
)


121Total

$
26,173


$
17,867


$
14,934  F-22




---



##### Table of Contents



December 31,2005


2004Deferred tax assets:Net operating loss carryforwards

$
2,502


$
2,495Accrued expenses


10,335



6,631Bad debts/reserves


1,318



762Capitalized costs and other


654



450Total deferred tax assets

$
14,809


$
10,338Deferred tax liabilities:Basis difference of acquisitions

$
30,654


$
23,814Accelerated depreciation


8,324



9,860Capitalized interest and other


768



1,117Total deferred tax liabilities

$
39,746


$
34,791     (12)
    Equity-Based
    Compensation     F-23




---



##### Table of Contents



Years Ended
    December 31,2005


2004


2003Expected life in years


3.0



3.0



3.0Weighted average interest rate


3.7
%


2.7
%


2.8
%Dividend yield


0.0
%


0.0
%


0.0
%Volatility


30.0
%


40.0
%


40.0
%     WeightedAverageNumber of


ExerciseShares


PriceBalance at December 31, 2002


4,865,385


$
11.49Granted


583,500



13.15Exercised


(323,485
)


9.54Forfeited


(148,871
)


14.35Expired






Balance at December 31, 2003


4,976,529


$
11.73Granted


179,250



24.80Exercised


(812,765
)


9.94Forfeited


(177,058
)


14.27Expired






Balance at December 31, 2004


4,165,956


$
12.54Granted


222,250


$
30.79Exercised


(842,708
)


10.30Forfeited


(75,569
)


20.73Expired






Balance at December 31, 2005


3,469,929


$
14.09Shares exercisable at
    December 31, 2003


2,428,316


$
9.76Shares exercisable at
    December 31, 2004


2,658,950


$
10.89Shares exercisable at
    December 31, 2005


2,642,268


$
12.18  F-24




---



##### Table of Contents



WeightedWeighted


AverageStock


Average


RemainingOptions


Exercise


ContractualRange of Exercise
    Prices

Outstanding


Price


Life (Years)$ 1.70 - $ 9.00


984,652


$
8.05



4.02$ 9.33 - $13.77


1,094,295



12.25



4.72$13.84 - $17.19


960,957



16.84



5.92$17.97 - $37.06


430,025



26.44



3.893,469,929


$
14.09



4.75     Stock Options


Weighted AverageRange of Exercise
    Prices

Exercisable


Exercise Price$ 1.70 - $ 9.00


984,652


$
8.05$ 9.33 - $13.77


926,486



12.47$13.84 - $17.19


665,850



16.99$17.97 - $37.06


65,280



21.112,642,268


$
12.18   Employee
    Stock Purchase Plan
   F-25




---



##### Table of Contents



(13)
    Earnings
    Per Share    Years Ended
    December 31,2005


2004


2003Net income attributable to common
    shareholders:Continuing operations

$
47,139


$
32,508


$
24,717Discontinued operations


155



53,667



5,159Total

$
47,294


$
86,175


$
29,876Weighted average common shares
    outstanding


42,994



41,913



40,699Effect of dilutive securities:Stock options


1,703



1,849



1,205Warrants and restricted stock


280



186



462Shares used for diluted earnings
    per share


44,977



43,948



42,366Basic earnings per share:Continuing operations

$
1.10


$
0.78


$
0.61Discontinued operations






1.28



0.12Total

$
1.10


$
2.06


$
0.73Diluted earnings per share:Continuing operations

$
1.05


$
0.74


$
0.58Discontinued operations






1.22



0.12Total

$
1.05


$
1.96


$
0.70   (14)
    Segment
    Disclosures  Disclosures About Segments of an Enterprise and Related
    Information non-U.S. segment
  F-26




---



##### Table of Contents



United2005 (In thousands)

U.S.


Kingdom


TotalNet patient service revenue

$
348,401


$
89,466


$
437,867Other revenue


36,874







36,874Total revenues

$
385,275


$
89,466


$
474,741Depreciation and amortization

$
24,214


$
7,192


$
31,406Operating income


120,233



14,634



134,867Net interest expense


(20,522
)


(2,731
)


(23,253
)Income tax expense


(23,539
)


(2,634
)


(26,173
)Total assets


833,476



195,365



1,028,841Capital expenditures


14,149



20,842



34,991   United2004 (In thousands)

U.S.


Kingdom


TotalNet patient service revenue

$
266,617


$
84,454


$
351,071Other revenue


38,459







38,459Total revenues

$
305,076


$
84,454


$
389,530Depreciation and amortization

$
20,373


$
6,836


$
27,209Operating income


92,818



14,515



107,333Net interest expense


(21,267
)


(3,862
)


(25,129
)Income tax expense


(15,632
)


(2,235
)


(17,867
)Total assets


721,830



200,474



922,304Capital expenditures


40,978



10,582



51,560   United2003 (In thousands)

U.S.


Kingdom


TotalNet patient service revenue

$
212,176


$
60,776


$
272,952Other revenue


37,612







37,612Total revenues

$
249,788


$
60,776


$
310,564Depreciation and amortization

$
17,697


$
5,003


$
22,700Operating income


76,786



9,939



86,725Net interest expense


(20,883
)


(2,965
)


(23,848
)Income tax expense


(13,143
)


(1,791
)


(14,934
)Total assets


468,326



163,265



631,591Capital expenditures


11,226



11,634



22,860   (15)
    Commitments
    and Contingencies  (a) Financial
    Guarantees
  Guarantors Accounting
    and Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness of Others
 F-27




---



##### Table of Contents



(b) Litigation
    and Professional Liability Claims
    (c) Self
    Insurance
    (d) Employee
    Benefit Plans
      (e) Employment
    Agreements
    two-year
 F-28




---



##### Table of Contents



(f) Spanish
    Tax Indemnification
  Accounting for Contingencies
  (16)
    Subsequent
    Events    Nashville-based
      (17)
    Condensed
    Consolidating Financial Statements   F-29




---



##### Table of Contents



Form S-4
  Condensed
    Consolidating Balance Sheets:
  Non-Participating


Consolidation


ConsolidatedAs of December 31,
    2005

Guarantors


Investees


Adjustments


TotalAssets:Current assets:Cash and cash equivalents

$
123,071


$
7,369


$



$
130,440Patient receivables, net


170



44,331







44,501Other receivables


1,584



15,431



(6,762
)


10,253Inventories


167



7,652







7,819Other


18,569



1,528







20,097Total current assets


143,561



76,311



(6,762
)


213,110Property and equipment, net


25,358



233,658







259,016Investments in affiliates


104,153



15,747



(19,400
)


100,500Intangible assets, net


332,795



105,797



(16,036
)


422,556Other


103,434



20,086



(89,861
)


33,659Total assets

$
709,301


$
451,599


$
(132,059
)

$
1,028,841Liabilities and
    Stockholders EquityCurrent liabilities:Accounts payable

$
1,833


$
17,406


$
(144
)

$
19,095Accrued expenses


83,860



2,416



871



87,147Current portion of long-term debt


354



17,408



(1,840
)


15,922Total current liabilities


86,047



37,230



(1,113
)


122,164Long-term debt


153,717



142,770



(25,923
)


270,564Other liabilities


32,668



8,397







41,065Minority interests






15,229



48,769



63,998Stockholders equity


436,869



247,973



(153,792
)


531,050Total liabilities and
    stockholders equity

$
709,301


$
451,599


$
(132,059
)

$
1,028,841   F-30




---



##### Table of Contents



Non-participating


Consolidation


ConsolidatedAs of December 31,
    2004

Guarantors


Investees


Adjustments


TotalAssets:Current assets:Cash and cash equivalents

$
83,905


$
9,562


$



$
93,467Patient receivables, net


186



43,405







43,591Other receivables


5,549



22,028



(7,284
)


20,293Inventories


206



6,982







7,188Other


12,620



1,808







14,428Total current assets


102,466



83,785



(7,284
)


178,967Property and equipment, net


30,104



235,785







265,889Investments in affiliates


107,570



608



(64,776
)


43,402Intangible assets, net


304,764



112,500



(14,909
)


402,355Other


96,321



25,192



(89,822
)


31,691Total assets

$
641,225


$
457,870


$
(176,791
)

$
922,304Liabilities and
    Stockholders EquityCurrent liabilities:Accounts payable

$
1,741


$
16,307


$



$
18,048Accrued expenses


89,148



35,076



(65,799
)


58,425Current portion of long-term debt


1,302



15,409



(1,395
)


15,316Total current liabilities


92,191



66,792



(67,194
)


91,789Long-term debt


153,675



145,264



(25,770
)


273,169Other liabilities


25,081



9,389







34,470Minority interests






11,444



36,823



48,267Stockholders equity


370,278



224,981



(120,650
)


474,609Total liabilities and
    stockholders equity

$
641,225


$
457,870


$
(176,791
)

$
922,304  F-31




---



##### Table of Contents



Condensed
    Consolidating Statements of Income:
  Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2005

Guarantors


Investees


Adjustments


TotalRevenues

$
75,139


$
422,953


$
(23,351
)

$
474,741Equity in earnings of
    unconsolidated affiliates


23,600



1,014



(616
)


23,998Operating expenses, excluding
    depreciation and amortization


59,312



297,429



(24,275
)


332,466Depreciation and amortization


9,717



21,689







31,406Operating income


29,710



104,849



308



134,867Interest expense, net


(11,854
)


(11,400
)


1



(23,253
)Other income (expense)


(343
)


1,188



(312
)


533Income (loss) before minority
    interests


17,513



94,637



(3
)


112,147Minority interests in income of
    consolidated subsidiaries






(15,146
)


(23,689
)


(38,835
)Income (loss) from continuing
    operations before income taxes


17,513



79,491



(23,692
)


73,312Income tax expense


(22,974
)


(3,199
)






(26,173
)Income (loss) from continuing
    operations


(5,461
)


76,292



(23,692
)


47,139Earnings from discontinued
    operations, net of tax






155







155Net income (loss)

$
(5,461
)

$
76,447


$
(23,692
)

$
47,294   Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2004

Guarantors


Investees


Adjustments


TotalRevenues

$
73,101


$
336,243


$
(19,814
)

$
389,530Equity in earnings of
    unconsolidated affiliates


18,626











18,626Operating expenses, excluding
    depreciation and amortization


57,755



236,046



(20,187
)


273,614Depreciation and amortization


10,459



16,750







27,209Operating income


23,513



83,447



373



107,333Interest expense, net


(14,843
)


(10,286
)






(25,129
)Other expense


(767
)


(311
)


(310
)


(1,388
)Income before minority interests


7,903



72,850



63



80,816Minority interests in income of
    consolidated subsidiaries






(12,805
)


(17,636
)


(30,441
)Income (loss) from continuing
    operations before income taxes


7,903



60,045



(17,573
)


50,375Income tax expense


(15,636
)


(2,231
)






(17,867
)Income (loss) from continuing
    operations


(7,733
)


57,814



(17,573
)


32,508Earnings from discontinued
    operations, net of tax


2,145



51,522







53,667Net income (loss)

$
(5,588
)

$
109,336


$
(17,573
)

$
86,175   F-32




---



##### Table of Contents



Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2003

Guarantors


Investees


Adjustments


TotalRevenues

$
69,078


$
256,996


$
(15,510
)

$
310,564Equity in earnings of
    unconsolidated affiliates


15,074











15,074Operating expenses, excluding
    depreciation and amortization


54,107



177,925



(15,819
)


216,213Depreciation and amortization


10,369



12,355



(24
)


22,700Operating income


19,676



66,716



333



86,725Interest expense, net


(16,285
)


(7,563
)






(23,848
)Other income (expense)


316



726



(309
)


733Income before minority interests


3,707



59,879



24



63,610Minority interests in income of
    consolidated subsidiaries






(10,600
)


(13,359
)


(23,959
)Income (loss) from continuing
    operations before income taxes


3,707



49,279



(13,335
)


39,651Income tax expense


(12,834
)


(2,100
)






(14,934
)Income (loss) from continuing
    operations


(9,127
)


47,179



(13,335
)


24,717Earnings (loss) from discontinued
    operations, net of tax


2,983



2,189



(13
)


5,159Net income (loss)

$
(6,144
)

$
49,368


$
(13,348
)

$
29,876  F-33




---



##### Table of Contents



Condensed
    Consolidating Statements of Cash Flows:
  Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2005

Guarantors


Investees


Adjustments


TotalCash flows from operating
    activities:Income (loss) from continuing
    operations

$
(5,461
)

$
76,292


$
(23,692
)

$
47,139Changes in operating and
    intercompany assets and liabilities and noncash items included
    in income (loss) from continuing operations


91,157



(53,792
)


23,401



60,766Net cash provided by (used in)
    operating activities


85,696



22,500



(291
)


107,905Cash flows from investing
    activities:Purchases of property and
    equipment, net


(6,231
)


(24,674
)






(30,905
)Purchases of new businesses


(60,612
)










(60,612
)Other items


(12,415
)


1,499







(10,916
)Net cash used in investing
    activities


(79,258
)


(23,175
)






(102,433
)Cash flows from financing
    activities:Long-term borrowings, net


(1,766
)


238







(1,528
)Proceeds from issuance of common
    stock


10,954











10,954Other items


23,541



(1,680
)


291



22,152Net cash provided by (used in)
    financing activities


32,729



(1,442
)


291



31,578Effect of exchange rate changes on
    cash






(77
)






(77
)Net increase in cash


39,167



(2,194
)






36,973Cash at the beginning of the year


83,904



9,563







93,467Cash at the end of the year

$
123,071


$
7,369


$



$
130,440   F-34




---



##### Table of Contents



Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2004

Guarantors


Investees


Adjustments


TotalCash flows from operating
    activities:Income (loss) from continuing
    operations

$
(7,733
)

$
57,814


$
(17,573
)

$
32,508Changes in operating and
    intercompany assets and liabilities and noncash items included
    in income (loss) from continuing operations


210,694



(83,501
)


(77,950
)


49,243Net cash provided by (used in)
    operating activities


202,961



(25,687
)


(95,523
)


81,751Cash flows from investing
    activities:Purchases of property and
    equipment, net


(6,922
)


(16,947
)






(23,869
)Purchases of new businesses, net


(131,092
)


(31
)






(131,123
)Proceeds from sale of Spanish
    operations






207,203



(66,071
)


141,132Other items


(4,117
)


(1,391
)






(5,508
)Net cash provided by (used in)
    investing activities


(142,131
)


188,834



(66,071
)


(19,368
)Cash flows from financing
    activities:Long-term borrowings, net


(2,508
)


(5,519
)






(8,027
)Proceeds from issuance of common
    stock


9,598











9,598Other items






(162,130
)


161,594



(536
)Net cash provided by (used in)
    financing activities


7,090



(167,649
)


161,594



1,035Net cash provided by discontinued
    operations






1,272







1,272Effect of exchange rate changes on
    cash






258







258Net increase (decrease) in cash


67,920



(2,972
)






64,948Cash at the beginning of the year


15,147



13,372







28,519Cash at the end of the year

$
83,067


$
10,400


$



$
93,467   F-35




---



##### Table of Contents



Non-Participating


Consolidation


ConsolidatedYear Ended December 31,
    2003

Guarantors


Investees


Adjustments


TotalCash flows from operating
    activities:Income (loss) from continuing
    operations

$
(9,127
)

$
47,192


$
(13,348
)

$
24,717Changes in operating and
    intercompany assets and liabilities and noncash items included
    in income (loss) from continuing operations


45,464



(39,968
)


35,993



41,489Net cash provided by (used in)
    operating activities


36,337



7,224



22,645



66,206Cash flows from investing
    activities:Purchases of property and
    equipment, net


(4,586
)


(17,688
)






(22,274
)Purchases of new businesses


(30,038
)


(13,901
)






(43,939
)Other items


(13,255
)










(13,255
)Net cash used in investing
    activities


(47,879
)


(31,589
)






(79,468
)Cash flows from financing
    activities:Long-term borrowings, net


(2,330
)


22,563



(22,645
)


(2,412
)Proceeds from issuance of common
    stock


4,307











4,307Other items






(83
)






(83
)Net cash provided by (used in)
    financing activities


1,977



22,480



(22,645
)


1,812Net cash used in discontinued
    operations






(7,373
)






(7,373
)Effect of exchange rate changes on
    cash






(229
)






(229
)Net increase (decrease) in cash


(9,565
)


(9,487
)






(19,052
)Cash at the beginning of the year


24,712



22,859







47,571Cash at the end of the year

$
15,147


$
13,372


$



$
28,519   (18)
    New
    Accounting Pronouncements  Share-Based Payment Accounting for Stock
    Issued to Employees
   F-36




---



##### Table of Contents



Accounting for Conditional Asset Retirement
    Obligations
  Determining
    Whether a General Partner of the General Partners as a Group,
    Controls a Limited Partnership or Similar Entity When the
    Limited Partners Have Certain Rights
  (19)
    Selected
    Quarterly Financial Data (Unaudited)  2004 Quarters


2005 QuartersFirst


Second


Third


Fourth


First


Second


Third


Fourth(In thousands, except per share
    amounts)


(In thousands, except per share
    amounts)Net revenues

$
90,372


$
93,966


$
96,557


$
108,635


$
115,686


$
124,347


$
117,412


$
117,297Income from continuing operations


7,848



8,574



6,735



9,351



10,758



12,381



11,676



12,324Basic earnings per share from
    continuing operations

$
0.19


$
0.21


$
0.16


$
0.22


$
0.25


$
0.29


$
0.27


$
0.28Diluted earnings per share from
    continuing operations

$
0.18


$
0.20


$
0.15


$
0.21


$
0.24


$
0.28


$
0.26


$
0.27    F-37




---



##### Table of Contents



Financial Statement Schedules
  Form 10-K:
  Schedule II  Valuation
    and Qualifying Accounts  F-38




---



##### Table of Contents



SCHEDULE II:
    VALUATION AND QUALIFYING ACCOUNTS   FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
  Allowance
    for Doubtful Accounts
  Balance at


Additions Charged to:Beginning of


Costs and











Balance atPeriod


Expenses


Other Accounts


Deductions(2)


Other Items(3)


End of Period(In thousands)2003 (1)

$
7,154


$
7,772






$
(7,222
)

$
1,134



8,8382004 (1)


8,838
(1)


8,159







(7,592
)


(2,128
)


7,2772005


7,277



9,518







(13,637
)


3,498



6,656     (1)
    
    Includes Spanish operations, which the Company disposed of
    during 2004.(2)
    
    Accounts written off.(3)
    
    Primarily beginning balances for purchased businesses. For 2004,
    these amounts are offset by $3.8 million of deductions due
    to the sale of the Spanish operations.   S-1




---



##### Table of Contents



Exhibits :
  ExhibitNumber

Description2
.1#

Agreement and Plan of Merger,
    dated as of December 6, 2000, among the Company, OPC
    Acquisition Corporation and OrthoLink Physicians Corporation
    (previously filed as Exhibit 2.1 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)2
.2#

Agreement for the Sale and
    Purchase of Shares and Loan Notes in Aspen Healthcare Holdings
    Limited, dated April  6, 2000, between Electra Private
    Equity Partners 1995 and others and Global Healthcare Partners
    Limited (previously filed as Exhibit 2.2 to Amendment
    No. 1 to the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)2
.3#

Agreement and Plan of
    Reorganization, dated as of March  26, 2002, by and
    among the Company, USP Acquisition Corporation, Surgicoe
    Corporation and each of the shareholders of Surgicoe named in
    the agreement (previously filed as Exhibit 2.1 to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on April 16, 2002 and
    incorporated herein by reference)2
.4#

Sale and Purchase Agreement, dated
    July 29, 2004, between USPE Holdings Limited, United
    Surgical Partners International, Inc., Jenebe International
    S.a.r.l., Delphirica Investments S.a.r.l., Alosem Sociedad
    Civil, Tesalia Sociedad Civil and Capital Stock S.C.R., S.A.
    (previously filed as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on September 15, 2004 and
    incorporated herein by reference)2
.5#

Agreement and Plan of Merger dated
    as of January 27, 2006, by and among United Surgical
    Partners International, Inc., Peak ASC Acquisition Corp. and
    Surgis, Inc. (previously filed as Exhibit 10.1 to the
    Companys Current Report on From
    8-K filed
    with the Commission on January 31, 2006 and incorporated
    herein by reference)3
.1#

Second Amended and Restated
    Certificate of Incorporation (previously filed as
    Exhibit 3.1 to Amendment No. 4 to the Companys
    Registration Statement on
    Form S-1
    (No.
    333-55442)
    and incorporated herein by reference)3
.2#

Amended and Restated Bylaws
    (previously filed as Exhibit 3.2 to the Companys
    Registration Statement on
    Form S-3
    (No. 333-99309)
    and incorporated herein by reference)4
.1#

Form of Common Stock Certificate
    (previously filed as Exhibit 4.1 to Amendment No. 4 to
    the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)4
.2#

Indenture, dated as of
    December 19, 2001, among United Surgical Partners Holdings,
    Inc., the guarantor parties thereto and U.S. Trust Company
    of Texas, N.A. (previously filed as Exhibit 4.2 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference)4
.3#

Global Security, dated as of
    December 19, 2001, governing United Surgical Partners
    Holdings, Inc.s outstanding 10% Senior Subordinated Notes
    due 2011 (previously filed as Exhibit 4.3 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference)4
.4#

Rights Agreement between the
    Company and First Union National Bank as Rights Agent dated
    June 13, 2001 (previously filed as Exhibit 4.1 to the
    Companys
    Form 8-A
    filed with the Commission on June 13, 2001 and incorporated
    herein by reference)10
.1#

Credit Agreement, dated
    April 6, 2000, by and among Global Healthcare Partners
    Limited and the Governor and Company of the Bank of Scotland
    (previously filed as Exhibit 10.3 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.2#

Contribution and Purchase
    Agreement, dated as of May 11, 1999, by and among USP North
    Texas, Inc., Baylor Health Services, Texas Health Ventures Group
    LLC and THVG/Health First L.L.C. (previously filed as
    Exhibit 10.11 to Amendment No. 2 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.3#

Common Stock Purchase Warrant,
    dated June 1, 1999 (previously filed as Exhibit 10.15
    to the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.4#

Stock Purchase Warrant, dated
    March 27, 2000 (previously filed as Exhibit 10.16 to
    the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference) IV-1




---



##### Table of Contents



ExhibitNumber

Description10
.5#

Employment Agreement, dated as of
    November 15, 2002, by and between the Company and Donald E.
    Steen (previously filed as Exhibit 10.6 to the
    Companys Annual Report on
    Form 10-K
    filed with the Commission on March 25, 2003 and
    incorporated herein by reference)10
.5.1#

Amendment of Employment Agreement,
    dated as of February  18, 2004 (previously filed as
    Exhibit 10.6.1 to the Companys Annual Report on
    Form 10-K
    filed with the Commission on March 12, 2004 and
    incorporated herein by reference)10
.6#

Employment Agreement, dated as of
    November 15, 2002, by and between the Company and William
    H. Wilcox (previously filed as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    filed with the Commission on March 25, 2003 and
    incorporated herein by reference)10
.7#

Stock Option and Restricted Stock
    Purchase Plan (previously filed as Exhibit 10.19 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.8#

2001 Equity-Based Compensation
    Plan (previously filed as Exhibit 10.20 to Amendment
    No. 1 to the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.9#

Employee Stock Purchase Plan
    (previously filed as Exhibit 10.21 to Amendment No. 1
    to the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.10#

Deferred Compensation Plan,
    effective as of January 1, 2005 (previously filed as
    Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    dated January 6, 2005 and incorporated herein by reference)10
.11#

Supplemental Retirement Plan,
    effective as of February  12, 2002 (previously filed
    as Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2002 and
    incorporated herein by reference)10
.12#

Form of Indemnification Agreement
    between the Company and its directors and officers (previously
    filed as Exhibit 10.22 to Amendment No. 1 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.13#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Brett P.
    Brodnax (previously filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.14#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Mark C. Garvin
    (previously filed as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.15#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Mark A. Kopser
    (previously filed as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.16#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and John J. Wellik
    (previously filed as Exhibit 10.4 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.17#

Credit Agreement, dated as of
    February 21, 2006, among USP Domestic Holdings, Inc., the
    lenders from time to time party thereto and Sun Trust Bank
    (previously filed as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on February 21, 2006 and
    incorporated herein by reference)21
.1*

List of the Companys
    subsidiaries.23
.1*

Consent of KPMG LLP24
.1*

Power of
    Attorney  Donald E. Steen24
.2*

Power of
    Attorney  Joel T. Allison24
.3*

Power of
    Attorney  John C. Garrett, M.D.24
.4*

Power of
    Attorney  Thomas L. Mills24
.5*

Power of
    Attorney  James Ken Newman24
.6*

Power of
    Attorney  Boone Powell, Jr.24
.7*

Power of
    Attorney  Paul B. Queally24
.8*

Power of
    Attorney  Jerry P. Widman IV-2




---



##### Table of Contents



ExhibitNumber

Description31
.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2*

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232
.1*

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232
.2*

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002     *
    
    Filed herewith.#
    
    Previously filed.  (b) Reports
    on
    Form 8-K
  Form 8-K Form 8-K,
  Form 8-K Form 8-K,
 IV-3




---



##### Table of Contents



SIGNATURES
    United Surgical Partners
    International, Inc.
  By:
    /s/  William H. Wilcox    President, Chief Executive Officer and
  Director
      Signature

Title

Date/s/  Donald E. SteenDonald
    E. Steen

Chairman of the Board

February 28, 2006/s/  William H.
    WilcoxWilliam
    H. Wilcox

President, Chief Executive Officer
    and Director (Principal Executive Officer)

February 28, 2006/s/  Mark A. KopserMark
    A. Kopser

Senior Vice President and Chief
    Financial Officer (Principal Financial Officer)

February 28, 2006/s/  John J. WellikJohn
    J. Wellik

Senior Vice President, Accounting
    and Administration, and Secretary (Principal Accounting Officer)

February 28, 2006*Joel
    T. Allison

Director

February 28, 2006*Thomas
    L. Mills

Director

February 28, 2006*Boone
    Powell, Jr.

Director

February 28, 2006*Jerry
    P. Widman

Director

February 28, 2006  IV-4




---



##### Table of Contents



Form 10-K
  By:
    /s/  John J. Wellik    Attorney-in-fact
   IV-5




---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber

Description2
.1#

Agreement and Plan of Merger,
    dated as of December 6, 2000, among the Company, OPC
    Acquisition Corporation and OrthoLink Physicians Corporation
    (previously filed as Exhibit 2.1 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)2
.2#

Agreement for the Sale and
    Purchase of Shares and Loan Notes in Aspen Healthcare Holdings
    Limited, dated April  6, 2000, between Electra Private
    Equity Partners 1995 and others and Global Healthcare Partners
    Limited (previously filed as Exhibit 2.2 to Amendment
    No. 1 to the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)2
.3#

Agreement and Plan of
    Reorganization, dated as of March  26, 2002, by and
    among the Company, USP Acquisition Corporation, Surgicoe
    Corporation and each of the shareholders of Surgicoe named in
    the agreement (previously filed as Exhibit 2.1 to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on April 16, 2002 and
    incorporated herein by reference)2
.4#

Sale and Purchase Agreement, dated
    July 29, 2004, between USPE Holdings Limited, United
    Surgical Partners International, Inc., Jenebe International
    S.a.r.l., Delphirica Investments S.a.r.l., Alosem Sociedad
    Civil, Tesalia Sociedad Civil and Capital Stock S.C.R., S.A.
    (previously filed as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on September 15, 2004 and
    incorporated herein by reference)2
.5#

Agreement and Plan of Merger dated
    as of January 27, 2006, by and among United Surgical
    Partners International, Inc., Peak ASC Acquisition Corp. and
    Surgis, Inc. (previously filed as Exhibit 10.1 to the
    Companys Current Report on From
    8-K filed
    with the Commission on January 31, 2006 and incorporated
    herein by reference)3
.1#

Second Amended and Restated
    Certificate of Incorporation (previously filed as
    Exhibit 3.1 to Amendment No. 4 to the Companys
    Registration Statement on
    Form S-1
    (No.
    333-55442)
    and incorporated herein by reference)3
.2#

Amended and Restated Bylaws
    (previously filed as Exhibit 3.2 to the Companys
    Registration Statement on
    Form S-3
    (No. 333-99309)
    and incorporated herein by reference)4
.1#

Form of Common Stock Certificate
    (previously filed as Exhibit 4.1 to Amendment No. 4 to
    the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)4
.2#

Indenture, dated as of
    December 19, 2001, among United Surgical Partners Holdings,
    Inc., the guarantor parties thereto and U.S. Trust Company
    of Texas, N.A. (previously filed as Exhibit 4.2 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference)4
.3#

Global Security, dated as of
    December 19, 2001, governing United Surgical Partners
    Holdings, Inc.s outstanding 10% Senior Subordinated Notes
    due 2011 (previously filed as Exhibit 4.3 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference)4
.4#

Rights Agreement between the
    Company and First Union National Bank as Rights Agent dated
    June 13, 2001 (previously filed as Exhibit 4.1 to the
    Companys
    Form 8-A
    filed with the Commission on June 13, 2001 and incorporated
    herein by reference)10
.1#

Credit Agreement, dated
    April 6, 2000, by and among Global Healthcare Partners
    Limited and the Governor and Company of the Bank of Scotland
    (previously filed as Exhibit 10.3 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.2#

Contribution and Purchase
    Agreement, dated as of May 11, 1999, by and among USP North
    Texas, Inc., Baylor Health Services, Texas Health Ventures Group
    LLC and THVG/Health First L.L.C. (previously filed as
    Exhibit 10.11 to Amendment No. 2 to the Companys
    Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.3#

Common Stock Purchase Warrant,
    dated June 1, 1999 (previously filed as Exhibit 10.15
    to the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.4#

Stock Purchase Warrant, dated
    March 27, 2000 (previously filed as Exhibit 10.16 to
    the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.5#

Employment Agreement, dated as of
    November 15, 2002, by and between the Company and Donald E.
    Steen (previously filed as Exhibit 10.6 to the
    Companys Annual Report on
    Form 10-K
    filed with the Commission on March 25, 2003 and
    incorporated herein by reference) IV-6




---



##### Table of Contents



ExhibitNumber

Description10
.5.1#

Amendment of Employment Agreement,
    dated as of February 18, 2004 (previously filed as
    Exhibit 10.6.1 to the Companys Annual Report on
    Form 10-K
    filed with the Commission on March 12, 2004 and
    incorporated herein by reference)10
.6#

Employment Agreement, dated as of
    November 15, 2002, by and between the Company and William
    H. Wilcox (previously filed as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    filed with the Commission on March 25, 2003 and
    incorporated herein by reference)10
.7#

Stock Option and Restricted Stock
    Purchase Plan (previously filed as Exhibit 10.19 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.8#

2001 Equity-Based Compensation
    Plan (previously filed as Exhibit 10.20 to Amendment
    No. 1 to the Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.9#

Employee Stock Purchase Plan
    (previously filed as Exhibit 10.21 to Amendment No. 1
    to the Companys Registration Statement on
    Form S-1
    (No. 333-
    55442) and incorporated herein by reference)10
.10#

Deferred Compensation Plan,
    effective as of January 1, 2005 (previously filed as
    Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    dated January 6, 2005 and incorporated herein by reference)10
.11#

Supplemental Retirement Plan,
    effective as of February  12, 2002 (previously filed
    as Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2002 and
    incorporated herein by reference)10
.12#

Form of Indemnification Agreement
    between the Company and its directors and officers (previously
    filed as Exhibit 10.22 to Amendment No. 1 to the
    Companys Registration Statement on
    Form S-1
    (No. 333-55442)
    and incorporated herein by reference)10
.13#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Brett P.
    Brodnax (previously filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.14#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Mark C. Garvin
    (previously filed as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.15#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and Mark A. Kopser
    (previously filed as Exhibit 10.3 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.16#

Employment Agreement, dated as of
    July 1, 2005, by and between the Company and John J. Wellik
    (previously filed as Exhibit 10.4 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on July 29, 2005 and incorporated
    herein by reference)10
.17#

Credit Agreement, dated as of
    February 21, 2006, among USP Domestic Holdings, Inc., the
    lenders from time to time party thereto and Sun Trust Bank
    (previously filed as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    filed with the Commission on February 21, 2006 and
    incorporated herein by reference)21
.1*

List of the Companys
    subsidiaries.23
.1*

Consent of KPMG LLP24
.1*

Power of
    Attorney  Donald E. Steen24
.2*

Power of
    Attorney  Joel T. Allison24
.3*

Power of
    Attorney  John C. Garrett, M.D.24
.4*

Power of
    Attorney  Thomas L. Mills24
.5*

Power of
    Attorney  James Ken Newman24
.6*

Power of
    Attorney  Boone Powell, Jr.24
.7*

Power of
    Attorney  Paul B. Queally24
.8*

Power of
    Attorney  Jerry P. Widman31
.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2*

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232
.1*

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232
.2*

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002     *
    
    Filed herewith.#
    
    Previously filed. IV-7