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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-Q







|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2011

Or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------

For the transition period from              to
            .

Commission File Number 001-34583





Team Health Holdings, Inc.

(Exact name of registrant as specified in its charter)



|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Delaware                                       |  | 36-4276525                          
|(State or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)

265 Brookview Centre Way

Suite 400

Knoxville, Tennessee 37919

(865) 693-1000

(Address, zip code, and telephone number, including area code, of registrants principal executive office.)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  þ    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer or smaller reporting
company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                                              |  |                             
|-------------------------- |  | -------------------- |  | -------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer  þ |  | Non-accelerated filer   ̈                     |  | Smaller reporting company   ̈
|                           |  |                      |  | (Do not check if asmaller reporting company) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  þ

As of April 29, 2011, there were outstanding 64,863,220 shares of common stock of Team Health Holdings, Inc, with a par value of
$.01.









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FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical facts and that reflect the current view of Team Health Holdings, Inc. (the
Company) about future events and financial performance are hereby identified as forward looking statements. Some of these statements can be identified by terms and phrases such as anticipate, believe,
intend, estimate, expect, continue, could, should, may, plan, project, predict and similar expressions. The Company cautions
readers of this Form 10-Q that such forward looking statements, including without limitation, those relating to the Companys future business prospects, revenue, working capital, professional liability expense, liquidity, capital
needs, interest costs and income, wherever they occur in this Form 10-Q or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Companys senior management and involve a number of risks and
uncertainties that could cause actual results to differ materially from those suggested by the forward looking statements. Factors that could cause our actual results to differ materially from those expressed or implied in such
forward-looking statements, include, but are not limited to:



| |  |  | the current U.S. and global economic conditions;
| | - |  | ------------------------------------------------



| |  |  | the current U.S. and state healthcare reform legislative initiatives;
| | - |  | ---------------------------------------------------------------------



| |  |  | the effect and interpretation of current or future government regulation of the healthcare industry, and our ability to comply with these regulations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our exposure to billing investigations and audits by federal and state authorities, as well as non-governmental auditing contractors;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our exposure to professional liability lawsuits;
| | - |  | ------------------------------------------------



| |  |  | the adequacy of our insurance reserves;
| | - |  | ---------------------------------------



| |  |  | our reliance on reimbursements by third-party payers, as well as payments by individuals;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | change in rates or methods of government payments for our services;
| | - |  | -------------------------------------------------------------------



| |  |  | the general level of emergency department patient volumes at our clients facilities;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | our exposure to the financial risks associated with fee for service contracts;
| | - |  | ------------------------------------------------------------------------------



| |  |  | our ability to timely or accurately bill for services;
| | - |  | ------------------------------------------------------



| |  |  | our ability to timely enroll healthcare professionals in the Medicare program;
| | - |  | ------------------------------------------------------------------------------



| |  |  | a reclassification of independent contractor physicians by tax authorities;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the concentration of a significant number of our programs in certain states, particularly Florida and Tennessee;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | any loss of or failure to renew contracts within the Military Health System Program, which are subject to a competitive bidding process;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our exposure to litigation;
| | - |  | ---------------------------



| |  |  | fluctuations in our quarterly operating results which could affect our ability to raise new capital for our business;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | effect on our revenues if we experience a net loss of contracts;
| | - |  | ----------------------------------------------------------------



| |  |  | our ability to accurately assess the costs we will incur under new contracts;
| | - |  | -----------------------------------------------------------------------------



| |  |  | our ability to find suitable acquisition candidates or successfully integrate completed acquisitions;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | our ability to implement our business strategy and manage our growth effectively;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | our future capital needs and ability to raise capital when needed;
| | - |  | ------------------------------------------------------------------



2



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| |  |  | our ability to successfully recruit and retain qualified healthcare professionals;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | enforceability of our non-competition and non-solicitation contractual arrangements with some affiliated physicians and professional corporations;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the high level of competition in our industry;
| | - |  | ----------------------------------------------



| |  |  | our dependence on numerous complex information systems and our ability to maintain these systems or implement new systems;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to protect our proprietary technology and services;
| | - |  | ---------------------------------------------------------------



| |  |  | our loss of key personnel and/or ability to attract and retain highly qualified personnel;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | our ability to comply with federal or state anti-kickback laws;
| | - |  | ---------------------------------------------------------------



| |  |  | changes in existing laws or regulations, adverse judicial or administrative interpretations of these laws and regulations or enactment of new
legislation;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our exposure to a loss of contracts with our physicians or termination of relationships with our affiliated professional corporations in order to
comply with antitrust laws;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our substantial indebtedness and ability to incur substantially more debt;
| | - |  | --------------------------------------------------------------------------



| |  |  | our ability to generate sufficient cash to service our debt;
| | - |  | ------------------------------------------------------------



| |  |  | restrictive covenants in our debt agreements which may restrict our ability to pursue our business strategies and our ability to comply with them; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the interests of our sponsor may be in conflict with your interests.
| | - |  | --------------------------------------------------------------------

For a more detailed discussion of these factors, see the information under the caption Risk Factors in the Companys
most recent annual report on Form 10-K filed with the Securities and Exchange Commission and Managements Discussion and Analysis of Financial Condition and Results of Operations herein and in the Companys most recent
annual report on Form 10-K.

The Companys forward-looking statements speak only as of the date of this report or as
of the date they are made. The Company disclaims any intent or obligation to update any forward looking statement made in this Form 10-Q to reflect changed assumptions, the occurrence of unanticipated events or changes to future
operating results over time.



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TEAM HEALTH HOLDINGS, INC.

QUARTERLY REPORT FOR THE THREE MONTHS

ENDED MARCH 31, 2011



|                              |  |                                                                                       |    |      |    | 
|----------------------------- |  | ------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                              |  |                                                                                       |    | Page |   
|Part 1. Financial Information |  |                                                                                       |    |     
|Item 1.                       |  | Financial Statements (Unaudited)                                                      |    |      | 5  | 
|                              |  | Consolidated Balance SheetsDecember 31, 2010 and March 31, 2011                      |    |      | 5  | 
|                              |  | Consolidated Statements of OperationsThree months ended March 31, 2010 and 2011      |    |      | 6  | 
|                              |  | Consolidated Statements of Cash FlowsThree months ended March 31, 2010 and 2011      |    |      | 7  | 
|                              |  | Notes to Consolidated Financial Statements                                            |    |      | 8  | 
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |    |      | 20 | 
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                            |    |      | 35 | 
|Item 4.                       |  | Controls and Procedures                                                               |    |      | 36 | 
|                              | 
|Part 2. Other Information     |  |                                                                                       |    |     
|Item 1.                       |  | Legal Proceedings                                                                     |    |      | 37 | 
|Item 1A.                      |  | Risk Factors                                                                          |    |      | 37 | 
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |    |      | 37 | 
|Item 3.                       |  | Defaults Upon Senior Securities                                                       |    |      | 37 | 
|Item 4.                       |  | (Removed and Reserved)                                                                |    |      | 37 | 
|Item 5.                       |  | Other Information                                                                     |    |      | 37 | 
|Item 6.                       |  | Exhibits                                                                              |    |      | 38 | 
|Signatures                    |  |                                                                                       | 39 |     



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PART 1. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED BALANCE
SHEETS



|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | -------- | - | ------------- | - | -------- | -
|                                                                                                                                                                  |  | December 31,2010           |          |   | March 31,2011 |  
|                                                                                                                                                                  |  | (Unaudited) (In thousands) |         
|ASSETS                                                                                                                                                            |  |                            |          |   |               |   |          |  
|Current assets:                                                                                                                                                   |  |                            |          |   |               |   |          |  
|Cash and cash equivalents                                                                                                                                         |  | $                          | 30,337   |   |               | $ | 49,153   |  
|Accounts receivable, less allowance for uncollectibles of $194,833 and$220,481 in 2010 and 2011, respectively                                                     |  |                            | 241,238  |   |               |   | 258,490  |  
|Prepaid expenses and other current assets                                                                                                                         |  |                            | 21,211   |   |               |   | 20,024   |  
|Receivables under insured programs                                                                                                                                |  |                            | 15,492   |   |               |   | 15,812   |  
|Income tax receivable                                                                                                                                             |  |                            | 2,179    |   |               |   |         |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|Total current assets                                                                                                                                              |  |                            | 310,457  |   |               |   | 343,479  |  
|Investments of insurance subsidiary                                                                                                                               |  |                            | 87,781   |   |               |   | 89,507   |  
|Property and equipment, net                                                                                                                                       |  |                            | 35,159   |   |               |   | 34,177   |  
|Other intangibles, net                                                                                                                                            |  |                            | 63,739   |   |               |   | 59,891   |  
|Goodwill                                                                                                                                                          |  |                            | 207,782  |   |               |   | 207,782  |  
|Deferred income taxes                                                                                                                                             |  |                            | 35,474   |   |               |   | 31,537   |  
|Receivables under insured programs                                                                                                                                |  |                            | 28,639   |   |               |   | 27,848   |  
|Other                                                                                                                                                             |  |                            | 38,706   |   |               |   | 37,942   |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|                                                                                                                                                                  |  | $                          | 807,737  |   |               | $ | 832,163  |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)                                                                                                                    |  |                            |          |   |               |   |          |  
|Current liabilities:                                                                                                                                              |  |                            |          |   |               |   |          |  
|Accounts payable                                                                                                                                                  |  | $                          | 18,556   |   |               | $ | 14,897   |  
|Accrued compensation and physician payable                                                                                                                        |  |                            | 131,043  |   |               |   | 130,399  |  
|Other accrued liabilities                                                                                                                                         |  |                            | 100,318  |   |               |   | 103,002  |  
|Income tax payable                                                                                                                                                |  |                            |         |   |               |   | 5,174    |  
|Current maturities of long-term debt                                                                                                                              |  |                            | 4,250    |   |               |   | 4,250    |  
|Deferred income taxes                                                                                                                                             |  |                            | 38,438   |   |               |   | 40,975   |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|Total current liabilities                                                                                                                                         |  |                            | 292,605  |   |               |   | 298,697  |  
|Long-term debt, less current maturities                                                                                                                           |  |                            | 399,500  |   |               |   | 398,438  |  
|Other non-current liabilities                                                                                                                                     |  |                            | 166,985  |   |               |   | 160,686  |  
|Shareholders equity (deficit):                                                                                                                                   |  |                            |          |   |               |   |          |  
|Common stock, ($0.01 par value; 100,000 shares authorized, 64,489 and 64,743 shares issued and outstanding at December 31,
2010 and March 31, 2011, respectively) |  |                            | 645      |   |               |   | 647      |  
|Additional paid-in capital                                                                                                                                        |  |                            | 516,468  |   |               |   | 520,165  |  
|Accumulated deficit                                                                                                                                               |  |                            | (569,371 | ) |               |   | (547,734 | )
|Accumulated other comprehensive gain                                                                                                                              |  |                            | 905      |   |               |   | 1,264    |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|Shareholders deficit                                                                                                                                             |  |                            | (51,353  | ) |               |   | (25,658  | )
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  
|                                                                                                                                                                  |  | $                          | 807,737  |   |               | $ | 832,163  |  
|                                                                                                                                                                  |  |                            |          |   |               |   |          |  

See accompanying notes to consolidated financial statements.



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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                                              |  |                                       |         |   |      |   |         |  
|--------------------------------------------------------------------------------------------- |  | ------------------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                              |  | Three Months EndedMarch 31,           |        
|                                                                                              |  | 2010                                  |         |   | 2011 |  
|                                                                                              |  | (Unaudited)                           |        
|                                                                                              |  | (In thousands, except per share data) |        
|Net revenue                                                                                   |  | $                                     | 631,966 |   |      | $ | 719,134 |  
|Provision for uncollectibles                                                                  |  |                                       | 267,501 |   |      |   | 306,640 |  
|                                                                                              |  |                                       |         |   |      |   |         |  
|Net revenue less provision for uncollectibles                                                 |  |                                       | 364,465 |   |      |   | 412,494 |  
|Cost of services rendered (exclusive of depreciation and amortization shown separately below) |  |                                       |         |   |      |   |         |  
|Professional service expenses                                                                 |  |                                       | 282,824 |   |      |   | 313,650 |  
|Professional liability costs                                                                  |  |                                       | 5,937   |   |      |   | 14,739  |  
|General and administrative expenses                                                           |  |                                       | 30,801  |   |      |   | 38,137  |  
|Other income, net                                                                             |  |                                       | (62     | ) |      |   | (548    | )
|Depreciation and amortization                                                                 |  |                                       | 6,415   |   |      |   | 6,899   |  
|Interest expense, net                                                                         |  |                                       | 5,763   |   |      |   | 3,277   |  
|Transaction costs                                                                             |  |                                       | 65      |   |      |   | 154     |  
|Loss on extinguishment of debt                                                                |  |                                       | 14,862  |   |      |   |        |  
|                                                                                              |  |                                       |         |   |      |   |         |  
|Earnings before income taxes                                                                  |  |                                       | 17,860  |   |      |   | 36,186  |  
|Provision for income taxes                                                                    |  |                                       | 6,962   |   |      |   | 14,550  |  
|                                                                                              |  |                                       |         |   |      |   |         |  
|Net earnings                                                                                  |  | $                                     | 10,898  |   |      | $ | 21,636  |  
|                                                                                              |  |                                       |         |   |      |   |         |  
|Net earnings per share                                                                        |  |                                       |         |   |      |   |         |  
|Basic                                                                                         |  | $                                     | 0.17    |   |      | $ | 0.34    |  
|Diluted                                                                                       |  | $                                     | 0.17    |   |      | $ | 0.33    |  
|Weighted average shares outstanding                                                           |  |                                       |         |   |      |   |         |  
|Basic                                                                                         |  |                                       | 63,920  |   |      |   | 64,475  |  
|Diluted                                                                                       |  |                                       | 64,529  |   |      |   | 65,593  |  

See accompanying
notes to consolidated financial statements.



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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                  |  |                             |          |   |      |   |          |  
|----------------------------------------------------------------- |  | --------------------------- | -------- | - | ---- | - | -------- | -
|                                                                  |  | Three months EndedMarch 31, |         
|                                                                  |  | 2010                        |          |   | 2011 |  
|                                                                  |  | (Unaudited)                 |         
|                                                                  |  | (In thousands)              |         
|Operating Activities                                              |  |                             |          |   |      |   |          |  
|Net earnings                                                      |  | $                           | 10,898   |   |      | $ | 21,636   |  
|Adjustments to reconcile net earnings:                            |  |                             |          |   |      |   |          |  
|Depreciation and amortization                                     |  |                             | 6,415    |   |      |   | 6,899    |  
|Amortization of deferred financing costs                          |  |                             | 537      |   |      |   | 456      |  
|Employee equity-based compensation expense                        |  |                             | 204      |   |      |   | 606      |  
|Provision for uncollectibles                                      |  |                             | 267,501  |   |      |   | 306,640  |  
|Deferred income taxes                                             |  |                             | 6,449    |   |      |   | 6,225    |  
|Loss on extinguishment of debt                                    |  |                             | 3,837    |   |      |   |         |  
|Loss on disposal of equipment                                     |  |                             | 3        |   |      |   | 18       |  
|Loss on assets held for sale                                      |  |                             |         |   |      |   | 20       |  
|Equity in joint venture income                                    |  |                             | (525     | ) |      |   | (540     | )
|Changes in operating assets and liabilities, net of acquisitions: |  |                             |          |   |      |   |          |  
|Accounts receivable                                               |  |                             | (280,117 | ) |      |   | (323,892 | )
|Prepaids and other assets                                         |  |                             | (1,771   | ) |      |   | 1,897    |  
|Income tax accounts                                               |  |                             | (24      | ) |      |   | 7,402    |  
|Accounts payable                                                  |  |                             | (4,643   | ) |      |   | (3,517   | )
|Accrued compensation and physician payable                        |  |                             | (18,306  | ) |      |   | 83       |  
|Other accrued liabilities                                         |  |                             | 1,534    |   |      |   | 1,174    |  
|Professional liability reserves                                   |  |                             | (2,676   | ) |      |   | 2,698    |  
|                                                                  |  |                             |          |   |      |   |          |  
|Net cash (used in) provided by operating activities               |  |                             | (10,684  | ) |      |   | 27,805   |  
|                                                                  |  |                            
|Investing Activities                                              |  |                             |          |   |      |   |          |  
|Purchases of property and equipment                               |  |                             | (1,189   | ) |      |   | (2,202   | )
|Sale of property and equipment                                    |  |                             |         |   |      |   | 90       |  
|Cash paid for acquisitions, net                                   |  |                             | (4,159   | ) |      |   | (6,870   | )
|Purchases of investments by insurance subsidiary                  |  |                             | (9,876   | ) |      |   | (16,215  | )
|Proceeds from investments by insurance subsidiary                 |  |                             | 8,052    |   |      |   | 14,177   |  
|                                                                  |  |                             |          |   |      |   |          |  
|Net cash used in investing activities                             |  |                             | (7,172   | ) |      |   | (11,020  | )
|                                                                  |  |                            
|Financing Activities                                              |  |                             |          |   |      |   |          |  
|Payments on notes payable                                         |  |                             | (1,062   | ) |      |   | (1,062   | )
|Payments on 11.25% senior subordinated notes                      |  |                             | (157,502 | ) |      |   |         |  
|Proceeds from revolving credit facility                           |  |                             | 56,000   |   |      |   |         |  
|Payments on revolving credit facility                             |  |                             | (56,000  | ) |      |   |         |  
|Proceeds from sale of common shares                               |  |                             | 21,769   |   |      |   |         |  
|Proceeds from exercise of stock options                           |  |                             |         |   |      |   | 3,559    |  
|Stock issuance costs                                              |  |                             |         |   |      |   | (466     | )
|                                                                  |  |                             |          |   |      |   |          |  
|Net cash (used in) provided by financing activities               |  |                             | (136,795 | ) |      |   | 2,031    |  
|                                                                  |  |                             |          |   |      |   |          |  
|Net (decrease) increase in cash                                   |  |                             | (154,651 | ) |      |   | 18,816   |  
|Cash and cash equivalents, beginning of period                    |  |                             | 170,331  |   |      |   | 30,337   |  
|                                                                  |  |                             |          |   |      |   |          |  
|Cash and cash equivalents, end of period                          |  | $                           | 15,680   |   |      | $ | 49,153   |  
|                                                                  |  |                             |          |   |      |   |          |  
|Interest paid                                                     |  | $                           | 6,551    |   |      | $ | 4,334    |  
|                                                                  |  |                             |          |   |      |   |          |  
|Taxes paid                                                        |  | $                           | 593      |   |      | $ | 968      |  
|                                                                  |  |                             |          |   |      |   |          |  

See accompanying notes to consolidated financial statements.



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TEAM HEALTH HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Team Health Holdings, Inc. (the Company)
and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items) necessary for a fair presentation of results for
the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet of the Company at December 31, 2010 has been derived from the audited
financial statements at that date, but does not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes
thereto should be read in conjunction with the December 31, 2010 audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for fiscal 2010 filed with the SEC.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates.

Note 2. Secondary Offering

The Company completed a secondary offering of common stock in March of 2011. The 8,830,000 secondary shares in aggregate were sold by the Companys principal shareholder, Ensemble Parent LLC, an
investment fund affiliated with The Blackstone Group L. P. and its chief financial officer. The Company did not receive any proceeds from the sale of shares in the offering.

Note 3. Recently Issued Accounting Standards

In January 2010, the
Financial Accounting Standards Board (FASB) issued Accounting Standards Update ASU No. 2010-06, Improving Disclosures about Fair Value Measurements(ASU 2010-06). ASU 2010-06 amends Accounting Standards
Codification (ASC) Topic 820, Fair Value Measurements and Disclosures (ASC Topic 820) to require a number of additional disclosures regarding fair value measurements, including the requirement that companies disclose
the amounts of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers. ASU 2010-06 also provided clarification on the requirement that companies are required to provide fair value
measurement disclosures for each class of assets and liabilities. In accordance with the first quarter 2010 effective date, the newly required disclosures have been reflected in the accompanying notes to these consolidated financial statements.

In December 2010, the FASB issued ASU 2010-28, Intangible Goodwill and Other (Topic 350): When to perform Step
2 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more
likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entitys ability to assert that such a reporting units goodwill is not impaired and additional testing is
not necessary despite the existence of qualitative factors that indicate otherwise. These changes became effective for the Company beginning January 1, 2011. The adoption of this ASU did not have a material impact on the Companys
financial statements.



8



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In December 2010, the FASB issued ASU 2010-29, Business Combinations (Topic 805):
Disclosure of supplementary pro forma information for business combinations. This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative
financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period
only. Also, the existing supplemental pro forma disclosure requirements were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the
reported pro forma revenue and earnings. These changes became effective for the Company beginning January 1, 2011. This update could have an impact on the Companys disclosures for future business combinations but the effect is dependent
upon acquisitions that are made in such periods.

Note 4. Acquisitions

In March 2010, the Company completed the acquisitions of certain assets and related business operations of two emergency medical staffing
businesses and clinics located in Virginia, Rhode Island and Florida. In August 2010, the Company completed the acquisition of certain assets and related business operations of an emergency medical staffing business located in Oklahoma and Kansas.
The purchase price for these acquisitions was allocated in accordance with the provisions of ASC Topic 805, Business Combinations to net assets acquired, including goodwill of $42.1 million (all of which is tax deductible
goodwill) and contract intangibles of approximately $22.2 million, based on managements estimates.

The results of
operations of the acquired businesses have been included in the Companys consolidated financial statements beginning on the respective acquisition dates.

In April 2011, the Company announced it had entered into an agreement to acquire certain assets of a medical staffing group that provides emergency department staffing services to a hospital located in
Alabama. Under the terms of the agreement, the Company began providing staffing services for this hospital that cares for approximately 70,000 patients annually in late April 2011. The results of operations for this acquisition will be included in
the Companys consolidated financial statements once services commence.

Note 5. Radiology Operations

During the fourth quarter of 2010, the Company completed a strategic review of its radiology operations, including past performance and
future growth opportunities and based upon the review, concluded that the existing business model of providing teleradiology and radiology staffing services was not a viable long term strategy and could not consistently meet internal growth targets.
As a result of this review, the Company made a decision to exit this non-core business line. This process was essentially completed during the first quarter of 2011 with the sale of its teleradiology business. For the three months ended
March 31, 2010 and 2011 the radiology division generated approximately $3.0 million and $2.2 million of net revenue less provision, respectively.

Note 6. Fair Value Measurements

The Company applies the provisions of FASB
ASC Topic 820, Fair Value Measurements and Disclosures, in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain
disclosures. This standard does not require any new fair value measurements but rather applies to all other accounting pronouncements that require or permit fair value measurements.

FASB ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy:



| | Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities;
| | ------- | ---------------------------------------------------------------------------------



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| | Level 2 | Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
| | ------- | ----------------------------------------------------------------------------------------------------------



| | Level 3 | Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market
participants would use in pricing.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table provides information on those assets and liabilities the
Company currently measures at fair value on a recurring basis (in thousands):



|                                                   |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 
|-------------------------------------------------- |  | -------------------------------------------------------- | ------ |  | ----------------------- | - | ------ | ----------------- |  | - | ----------------- |  |  | ----------------- | - |  |  | - | - | 
|                                                   |  | Carrying AmountIn ConsolidatedBalance SheetMarch 31,2011 |        |  | Fair ValueMarch 31,2011 |   |        | Fair ValueLevel 1 |  |   | Fair ValueLevel 2 |  |  | Fair ValueLevel 3 |  
|Investments of insurance subsidiary:               |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 
|Money market funds                                 |  | $                                                        | 6,960  |  |                         | $ | 6,960  |                   |  | $ | 6,960             |  |  | $                 |  |  |  | $ |  | 
|U. S. Treasury securities                          |  |                                                          | 13,544 |  |                         |   | 13,544 |                   |  |   | 13,544            |  |  |                   |  |  |  |   |  | 
|Municipal bonds                                    |  |                                                          | 53,188 |  |                         |   | 53,188 |                   |  |   | 53,188            |  |  |                   |  |  |  |   |  | 
|Agency notes                                       |  |                                                          | 15,815 |  |                         |   | 15,815 |                   |  |   | 15,815            |  |  |                   |  |  |  |   |  | 
|                                                   |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 
|Total investments of insurance subsidiary          |  | $                                                        | 89,507 |  |                         | $ | 89,507 |                   |  | $ | 89,507            |  |  | $                 |  |  |  | $ |  | 
|                                                   |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 
|Supplemental employee retirement plan investments: |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 
|Mutual funds                                       |  | $                                                        | 13,368 |  |                         | $ | 13,368 |                   |  | $ | 13,368            |  |  | $                 |  |  |  | $ |  | 
|                                                   |  |                                                          |        |  |                         |   |        |                   |  |   |                   |  |  |                   |   |  |  |   |   | 

The fair values of the Companys insurance subsidiary investments and the Companys supplemental
employee retirement investments are based on quoted prices. See Note 8 for more information regarding the Companys investments. The fair value of the Companys other financial instruments approximates their carrying values.

Note 7. Financial Derivative Instruments

The Company at times may utilize derivative financial instruments to reduce interest rate risks. The Company does not hold or issue derivative financial instruments for trading purposes. As of
December 31, 2010, the Company was a party to three separate forward interest rate swap agreements. These agreements which expired in the first quarter of 2011 were determined to be highly effective and qualified for hedge accounting;
therefore, the changes in fair value of the interest rate swaps, net of tax, were recorded as a component of other comprehensive earnings. Following the expiration of these agreements, no asset or liability existed as of March 31, 2011.

The following table presents the location of the liabilities associated with the Companys interest rate swap agreements
within the accompanying consolidated Balance Sheets (in thousands):



|                                   |  |                       |                               |  |                   |                            |   |                       |                               |   |   |                            |  |   |     |  |  |   |   | 
|---------------------------------- |  | --------------------- | ----------------------------- |  | ----------------- | -------------------------- | - | --------------------- | ----------------------------- | - | - | -------------------------- |  | - | --- |  |  | - | - | 
|                                   |  | Balance SheetLocation |                               |  | Asset Derivatives |                            |   | Liability Derivatives |                              
|                                   |  |                       | Fair Value atDecember 31,2010 |  |                   | Fair Value atMarch 31,2011 |   |                       | Fair Value atDecember 31,2010 |   |   | Fair Value atMarch 31,2011 | 
|Derivatives designated as hedging: |  |                       |                               |  |                   |                            |   |                       |                               |   |   |                            |  |   |     |  |  |   |   | 
|Interest rate swap contracts       |  |                       | Other current liabilities     |  |                   | $                          |  |                       |                               | $ |  |                            |  | $ | 921 |  |  | $ |  | 



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The following table presents the impact of the Companys interest rate swap agreements
and their location within the accompanying consolidated financial statements (in thousands):



|                             |  |                                                                                               |      |      |                                                                                                 |   |      |                                                                              |  |   |      |  |  |      |   |  |      |   |   |  |  |   |   | 
|---------------------------- |  | --------------------------------------------------------------------------------------------- | ---- | ---- | ----------------------------------------------------------------------------------------------- | - | ---- | ---------------------------------------------------------------------------- |  | - | ---- |  |  | ---- | - |  | ---- | - | - |  |  | - | - | 
|                             |  | Amount of (Gain)Loss Recognized inOther ComprehensiveIncome 
on Derivative(Effective Portion) |      |      | Amount of (Gain)Loss Reclassified fromOther ComprehensiveIncome 
into Income(Effective Portion) |   |      | Amount of (Gain)Loss Recognized inIncome on 
Derivative(Ineffective Portion) | 
|                             |  | Three months EndedMarch 31,                                                                   |      |      | Three months EndedMarch 31,                                                                     |   |      | Three months EndedMarch 31,                                                  | 
|                             |  | 2010                                                                                          |      |      | 2011                                                                                            |   |      | 2010                                                                         |  |   | 2011 |  |  | 2010 |   |  | 2011 |  
|Interest rate swap contracts |  | $                                                                                             | (271 | )(a) |                                                                                                 | $ | (562 | )(a)                                                                         |  | $ |     |  |  | $    |  |  |      | $ |  |  |  | $ |  | 



|(a) | Amount is net of tax.
|--- | ---------------------

Note 8. Investments

Investments are comprised of securities held by the Companys captive insurance subsidiary and by the Company in
connection with its participant directed supplemental employee retirement plan. Investments held by the Companys captive insurance subsidiary are classified as available-for-sale securities. The unrealized gains or losses of investments held
by the Companys captive insurance subsidiary are included in accumulated other comprehensive income as a separate component of shareholders equity, unless the decline in value is deemed to be other-than-temporary and the Company does not
have the intent and ability to hold such securities until their full cost can be recovered, in which case such securities are written down to fair value and the loss is charged to current period earnings.

The investments held by the Company in connection with its participant directed supplemental employee retirement plan are classified as
trading securities; therefore, changes in fair value associated with these investments are recognized as a component of earnings.

At December 31, 2010 and March 31, 2011, amortized cost basis and aggregate fair value of the Companys available-for-sale securities by investment type were as follows (in thousands):



|                          |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|------------------------- |  | --------- | ------ |  | -------------------- | - | ----- | --------------------- |  | - | --------- | - |  | - | ------ | 
|                          |  | CostBasis |        |  | GrossUnrealizedGains |   |       | GrossUnrealizedLosses |  |   | FairValue |  
|December 31, 2010         |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Money market funds        |  | $         | 1,931  |  |                      | $ |      |                       |  | $ |          |   |  | $ | 1,931  | 
|Treasury                  |  |           | 14,226 |  |                      |   | 151   |                       |  |   | (51       | ) |  |   | 14,326 | 
|Municipal bonds           |  |           | 50,957 |  |                      |   | 2,225 |                       |  |   | (228      | ) |  |   | 52,954 | 
|Agency notes              |  |           | 18,415 |  |                      |   | 214   |                       |  |   | (59       | ) |  |   | 18,570 | 
|                          |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|                          |  | $         | 85,529 |  |                      | $ | 2,590 |                       |  | $ | (338      | ) |  | $ | 87,781 | 
|                          |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|March 31, 2011            |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Money market funds        |  | $         | 6,960  |  |                      | $ |      |                       |  | $ |          |   |  | $ | 6,960  | 
|U. S. Treasury securities |  |           | 13,529 |  |                      |   | 111   |                       |  |   | (96       | ) |  |   | 13,544 | 
|Municipal bonds           |  |           | 51,338 |  |                      |   | 2,092 |                       |  |   | (242      | ) |  |   | 53,188 | 
|Agency notes              |  |           | 15,738 |  |                      |   | 141   |                       |  |   | (64       | ) |  |   | 15,815 | 
|                          |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|                          |  | $         | 87,565 |  |                      | $ | 2,344 |                       |  | $ | (402      | ) |  | $ | 89,507 | 
|                          |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 



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At December 31, 2010 and March 31, 2011, the amortized cost basis and aggregate
fair value of the Companys available-for-sale securities by contractual maturities were as follows (in thousands):



|                                       |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|-------------------------------------- |  | --------- | ------ |  | -------------------- | - | ----- | --------------------- |  | - | --------- | - |  | - | ------ | 
|                                       |  | CostBasis |        |  | GrossUnrealizedGains |   |       | GrossUnrealizedLosses |  |   | FairValue |  
|December 31, 2010                      |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Due in less than one year              |  | $         | 15,867 |  |                      | $ | 179   |                       |  | $ | (18       | ) |  | $ | 16,028 | 
|Due after one year through five years  |  |           | 29,045 |  |                      |   | 691   |                       |  |   | (90       | ) |  |   | 29,646 | 
|Due after five years through ten years |  |           | 40,617 |  |                      |   | 1,720 |                       |  |   | (230      | ) |  |   | 42,107 | 
|                                       |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Total                                  |  | $         | 85,529 |  |                      | $ | 2,590 |                       |  | $ | (338      | ) |  | $ | 87,781 | 
|                                       |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|March 31, 2011                         |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Due in less than one year              |  | $         | 17,184 |  |                      | $ | 97    |                       |  | $ | (21       | ) |  | $ | 17,260 | 
|Due after one year through five years  |  |           | 29,311 |  |                      |   | 662   |                       |  |   | (96       | ) |  |   | 29,877 | 
|Due after five years through ten years |  |           | 41,070 |  |                      |   | 1,585 |                       |  |   | (285      | ) |  |   | 42,370 | 
|                                       |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Total                                  |  | $         | 87,565 |  |                      | $ | 2,344 |                       |  | $ | (402      | ) |  | $ | 89,507 | 
|                                       |  |           |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 

A summary of the Companys temporarily impaired available-for-sale investment securities as of
March 31, 2011 follows (in thousands):



|                          |  |                             |        |  |                        |   |      |           |  |   |                  |  |  |           |     |   |                  |   |        |  |  |   |      |  
|------------------------- |  | --------------------------- | ------ |  | ---------------------- | - | ---- | --------- |  | - | ---------------- |  |  | --------- | --- | - | ---------------- | - | ------ |  |  | - | ---- | -
|                          |  | Impaired LessThan 12 Months |        |  | ImpairedOver 12 Months |   |      | Total     | 
|                          |  | FairValue                   |        |  | UnrealizedLosses       |   |      | FairValue |  |   | UnrealizedLosses |  |  | FairValue |     |   | UnrealizedLosses |  
|March 31, 2011            |  |                             |        |  |                        |   |      |           |  |   |                  |  |  |           |     |   |                  |   |        |  |  |   |      |  
|Money market funds        |  | $                           |       |  |                        | $ |     |           |  | $ |                 |  |  | $         |    |   |                  | $ |       |  |  | $ |     |  
|U. S. Treasury securities |  |                             | 3,887  |  |                        |   | (96  | )         |  |   |                 |  |  |           |    |   |                  |   | 3,887  |  |  |   | (96  | )
|Municipal bonds           |  |                             | 10,315 |  |                        |   | (216 | )         |  |   | 562              |  |  |           | (26 | ) |                  |   | 10,877 |  |  |   | (242 | )
|Agency notes              |  |                             | 6,125  |  |                        |   | (64  | )         |  |   |                 |  |  |           |    |   |                  |   | 6,125  |  |  |   | (64  | )
|                          |  |                             |        |  |                        |   |      |           |  |   |                  |  |  |           |     |   |                  |   |        |  |  |   |      |  
|Total investment          |  | $                           | 20,327 |  |                        | $ | (376 | )         |  | $ | 562              |  |  | $         | (26 | ) |                  | $ | 20,889 |  |  | $ | (402 | )
|                          |  |                             |        |  |                        |   |      |           |  |   |                  |  |  |           |     |   |                  |   |        |  |  |   |      |  

The unrealized losses resulted from changes in market interest rates, not from changes in the probability of
contractual cash flows. Because the Company has the ability and intent to hold the investments until a recovery of carrying value and full collection of the amounts due according to the contractual terms of the investments is expected, the Company
does not consider these investments to be other-than-temporarily impaired at March 31, 2011.

During the three months
ended March 31, 2011, there was no recorded gain or loss on the sale of these investments.

As of March 31, 2011,
the investments related to the participant directed supplemental employee retirement plan totaled $13.4 million and are included in other assets in the accompanying consolidated balance sheet. The trading gains and losses on those investments for
the three months ended on March 31, 2011 that are still held by the Company as of March 31, 2011 are as follows (in thousands):



|                                                                                                                                |  |   |     | 
|------------------------------------------------------------------------------------------------------------------------------- |  | - | --- | 
|Net gains and losses recognized during the three months ended March 31, 2011 on trading securities                              |  | $ | 488 | 
|Less: net gains and losses recognized during the period on trading securities sold during the three months ended March 31,
2011 |  |   | 26  | 
|                                                                                                                                |  |   |     | 
|Unrealized gains and losses recognized on trading securities still held at March 31, 2011                                       |  | $ | 462 | 
|                                                                                                                                |  |   |     | 



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Note 9. Net Revenue

Net revenue for the three months ended March 31, 2010 and 2011 consisted of the following (in thousands):



|                        |  |                             |         |  |      |   |         | 
|----------------------- |  | --------------------------- | ------- |  | ---- | - | ------- | 
|                        |  | Three Months EndedMarch 31, |        
|                        |  | 2010                        |         |  | 2011 |  
|Fee-for-service revenue |  | $                           | 518,252 |  |      | $ | 603,733 | 
|Contract revenue        |  |                             | 106,940 |  |      |   | 108,477 | 
|Other revenue           |  |                             | 6,774   |  |      |   | 6,924   | 
|                        |  |                             |         |  |      |   |         | 
|                        |  | $                           | 631,966 |  |      | $ | 719,134 | 
|                        |  |                             |         |  |      |   |         | 

Note 10. Other Intangible Assets

The following is a summary of intangible assets and related amortization as of December 31, 2010 and March 31, 2011 (in thousands):



|                                                      |  |                      |         |        |                         |   |        | 
|----------------------------------------------------- |  | -------------------- | ------- | ------ | ----------------------- | - | ------ | 
|                                                      |  | Gross CarryingAmount |         |        | AccumulatedAmortization |  
|As of December 31, 2010:                              |  |                      |         |        |                         |   |        | 
|Contracts                                             |  | $                    | 99,394  |        |                         | $ | 36,327 | 
|Other                                                 |  |                      | 840     |        |                         |   | 168    | 
|                                                      |  |                      |         |        |                         |   |        | 
|Total                                                 |  | $                    | 100,234 |        |                         | $ | 36,495 | 
|                                                      |  |                      |         |        |                         |   |        | 
|As of March 31, 2011:                                 |  |                      |         |        |                         |   |        | 
|Contracts                                             |  | $                    | 92,814  |        |                         | $ | 33,553 | 
|Other                                                 |  |                      | 840     |        |                         |   | 210    | 
|                                                      |  |                      |         |        |                         |   |        | 
|Total                                                 |  | $                    | 93,654  |        |                         | $ | 33,763 | 
|                                                      |  |                      |         |        |                         |   |        | 
|Aggregate amortization expense:                       |  |                      |         |        |                         |   |        | 
|For the three months ended March 31, 2011             |  |                      | $       | 3,848  |                        
|                                                      |  |                      |         |        |                         |   |        | 
|Estimated amortization expense:                       |  |                      |         |        |                         |   |        | 
|For the remainder of the year ended December 31, 2011 |  |                      | $       | 11,544 |                        
|For the year ended December 31, 2012                  |  |                      |         | 14,961 |                        
|For the year ended December 31, 2013                  |  |                      |         | 13,347 |                        
|For the year ended December 31, 2014                  |  |                      |         | 10,922 |                        
|For the year ended December 31, 2015                  |  |                      |         | 7,146  |                        

Note 11. Long-Term Debt

Long-term debt as of March 31, 2011 consisted of the following (in thousands):



|                         |  |   |         |  
|------------------------ |  | - | ------- | -
|Term Loan Facility       |  | $ | 402,688 |  
|Revolving line of credit |  |   |        |  
|                         |  |   |         |  
|Less current portion     |  |   | (4,250  | )
|                         |  |   |         |  
|                         |  | $ | 398,438 |  
|                         |  |   |         |  

Outstanding term loan borrowings under the senior credit term loan facility mature on November 23,
2012. The interest rate on the Companys outstanding term loan facility is equal to the euro dollar rate plus 2.0% or the agent banks base rate plus 1.0%. The interest rate at March 31, 2011 was 2.31% for amounts outstanding under
the term loan facility.





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The commitments under the revolving line of credit expire on August 23, 2012. The
interest rate for any revolving credit facility borrowings is based on a grid that is based on the consolidated ratio of total funded debt less unrestricted cash on the balance sheet to earnings before interest, taxes, depreciation and amortization,
all as set forth in the credit agreement. As of March 31, 2011, the interest rate for borrowings under the revolving credit facility was equal to the euro dollar rate plus 2.0% or the agent banks base rate plus 1.0%. In addition, the
Company pays a commitment fee for the revolving credit facility which is equal to 0.5% of the commitment at March 31, 2011. The total available borrowings under the revolving credit facility was $125.0 million as of March 31, 2011,
excluding $7.1 million of standby letters of credit. No borrowings under the revolving credit facility were outstanding as of March 31, 2011.

Aggregate annual maturities of long-term debt as of March 31, 2011 are as follows (in thousands):



|     |  |   |         | 
|---- |  | - | ------- | 
|2011 |  | $ | 4,250   | 
|2012 |  |   | 398,438 | 

The fair value of the
Companys debt is estimated using quoted market prices when available. When quoted market prices are not available, fair value is estimated based on current market interest rates for debt with similar maturities.

The fair value of the Companys debt was $400.2 million and $403.2 million at December 31, 2010 and March 31, 2011,
respectively. The financial statement carrying value was $403.8 million and $402.7 million at December 31, 2010 and March 31, 2011, respectively.

Note 12. Professional Liability Insurance

The Companys professional
liability loss reserves consisted of the following (in thousands):



|                                                     |  |                  |         |  |               |   |         | 
|---------------------------------------------------- |  | ---------------- | ------- |  | ------------- | - | ------- | 
|                                                     |  | December 31,2010 |         |  | March 31,2011 |  
|Estimated losses under self-insured programs         |  | $                | 150,306 |  |               | $ | 153,003 | 
|Estimated losses under commercial insurance programs |  |                  | 44,131  |  |               |   | 43,660  | 
|                                                     |  |                  |         |  |               |   |         | 
|                                                     |  |                  | 194,437 |  |               |   | 196,663 | 
|Less estimated payable within one year               |  |                  | 59,779  |  |               |   | 64,425  | 
|                                                     |  |                  |         |  |               |   |         | 
|                                                     |  | $                | 134,658 |  |               | $ | 132,238 | 
|                                                     |  |                  |         |  |               |   |         | 

The changes to the Companys estimated losses under self-insured programs as of March 31, 2011
were as follows (in thousands):



|                                       |  |   |         |  
|-------------------------------------- |  | - | ------- | -
|Balance, December 31, 2010             |  | $ | 150,306 |  
|Reserves related to current period     |  |   | 9,836   |  
|Changes related to prior year reserves |  |   |        |  
|Payments for current period reserves   |  |   | (4      | )
|Payments for prior period reserves     |  |   | (7,135  | )
|                                       |  |   |         |  
|Balance, March 31, 2011                |  | $ | 153,003 |  
|                                       |  |   |         |  

The Company provides for its estimated professional liability losses through a combination of self-insurance
and commercial insurance programs. During the period March 12, 1999 through March 11, 2003, the primary source of the Companys coverage for such risks was a professional liability insurance policy provided through one insurance
carrier. The commercial insurance carrier policy initially included an insured loss limit of $130.0 million. In April 2006, the Company amended the policy with its commercial insurance carrier to provide for an increase in the aggregate limit
of coverage based upon certain premium funding levels. As of March 31,



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##### Table of Contents

2011, the insured loss limit under the policy was $158.6 million. Losses in excess of the limit of coverage remain as a self-insured obligation of the Company. Beginning March 12, 2003,
professional liability loss risks are principally being provided for through self-insurance with a portion of such risks (claims-made basis) transferred to and funded into a captive insurance company. The accounts of the captive
insurance company are fully consolidated with those of the other operations of the Company in the accompanying consolidated financial statements.

The self-insurance components of our risk management program include reserves for future claims incurred but not reported (IBNR). As of December 31, 2010, of the $150.3 million of
estimated losses under self-insured programs, approximately $78.3 million represents an estimate of IBNR claims and expenses and additional loss development, with the remaining $72.0 million representing specific case reserves. Of the existing case
reserves as of December 31, 2010, $2.6 million represent case reserves that have settled but not yet funded, and $69.4 million reflects unsettled case reserves.

As of March 31, 2011, of the $153.0 million of estimated losses under self insurance programs, approximately $83.0 million represents an estimate of IBNR claims and expenses and additional loss
development, with the remaining $70.0 million representing specific case reserves. Of the existing case reserves as of March 31, 2011, $4.7 million represents case reserves that have been settled but not yet funded, and $65.3 million reflects
unsettled case reserves.

The Companys provisions for losses under its self-insurance components are estimated using the
results of periodic actuarial studies. Such actuarial studies include numerous underlying estimates and assumptions, including assumptions as to future claim losses, the severity and frequency of such projected losses, loss development factors and
others. The Companys provisions for losses under its self-insured components are subject to subsequent adjustment should future actuarial projected results for such periods indicate projected losses greater or less than previously projected.
The Companys estimated loss reserves under such programs are discounted at approximately 3.3% and 3.6% at December 31, 2010 and March 31, 2011, respectively, which was the current ten year U.S. Treasury rate at each of those dates,
which reflects the risk free interest rate over the expected period of claims payments.

The Companys most recent
actuarial valuation was completed in April 2011. As a result of such actuarial valuation, the Company determined that no change was necessary in its reserves for professional liability losses as of March 31, 2011 related to prior year loss
estimates. During the first quarter of 2010, the Company realized a $7.2 million reduction in its reserves for professional liability losses associated with prior year loss estimates. Factors contributing to the change in prior year loss estimates
included favorable loss development on historical periods between actuarial studies as well as favorable trends in the frequency and severity of claims reported compared to historical trends.

Note 13. Share-based Compensation

2009 Stock Incentive Plan

Purpose.The purpose of the Team Health Holdings, Inc. 2009 Stock Incentive Plan (2009 Stock Plan) is to aid in
recruiting and retaining key employees, directors, consultants, and other service providers of outstanding ability and to motivate those employees, directors, consultants, and other service providers to exert their best efforts on the behalf the
Company and its affiliates by providing incentives through the granting of options, stock appreciation rights and other stock-based awards.

Shares Subject to the Plan. The 2009 Stock Plan provides that the total number of shares of common stock that may be issued under the 2009 Stock Plan is 15,100,000, and the maximum number of
shares for which incentive stock options may be granted is 10,000,000. Shares of the Companys common stock covered by awards that terminate or lapse without the payment of consideration may be granted again under the 2009 Stock Plan.



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The following table summarizes the status of options under the 2009 Stock Plan as of
March 31, 2011:



|                                 |  |                      |       |   |                                |   |       |                                        |  |   |                                        |  |  |  |     | 
|-------------------------------- |  | -------------------- | ----- | - | ------------------------------ | - | ----- | -------------------------------------- |  | - | -------------------------------------- |  |  |  | --- | 
|                                 |  | Shares(in thousands) |       |   | Weighted AverageExercise Price |   |       | AggregateIntrinsic Value(in thousands) |  |   | Weighted AverageRemaining Lifein Years | 
|Outstanding at beginning of year |  |                      | 6,947 |   |                                | $ | 13.80 |                                        |  |   |                                        |  |  |  |     | 
|Granted                          |  |                      | 20    |   |                                |   | 15.94 |                                        |  |   |                                        |  |  |  |     | 
|Exercised                        |  |                      | (254  | ) |                                |   | 14.01 |                                        |  |   |                                        |  |  |  |     | 
|Expired or forfeited             |  |                      | (25   | ) |                                |   | 12.81 |                                        |  |   |                                        |  |  |  |     | 
|                                 |  |                      |       |   |                                |   |       |                                        |  |   |                                        |  |  |  |     | 
|Outstanding at end of period     |  |                      | 6,688 |   |                                | $ | 13.80 |                                        |  | $ | 24,570                                 |  |  |  | 8.8 | 
|                                 |  |                      |       |   |                                |   |       |                                        |  |   |                                        |  |  |  |     | 
|Exercisable at end of period     |  |                      | 4,848 |   |                                | $ | 13.86 |                                        |  | $ | 17,533                                 |  |  |  | 8.7 | 
|                                 |  |                      |       |   |                                |   |       |                                        |  |   |                                        |  |  |  |     | 

Intrinsic value is the amount by which the stock price as of March 31, 2011 exceeds the exercise price
of the options. As of March 31, 2011, the Company had approximately $7.2 million of unrecognized compensation expense, net of estimated forfeitures related to unvested options which will be recognized over the remaining requisite service
period. Fair value of the options granted in 2011 was based on the grant date fair value as calculated by the Black-Sholes option pricing formula with the following weighted average assumptions: risk-free interest rate of 2.6%, implied volatility of
42.9% and an expected life of the options of 6.25 years. Forfeitures of employee equity-based awards have been historically immaterial to the Company.

The Company has outstanding 18,750 shares of restricted stock which were granted to certain board members during 2010. The issued shares vest annually over a three-year period from the initial grant date.
The Company recorded restricted stock expense of $20,000 during the three months ended March 31, 2011 and has $0.2 million of expense remaining to be recognized over the requisite service period for these awards.

A summary of changes in unvested shares of restricted stock for the three months ended March 31, 2011 is as follows:



|                                 |  |                      |     |  
|-------------------------------- |  | -------------------- | --- | -
|                                 |  | Shares(in thousands) |    
|Outstanding at beginning of year |  |                      | 115 |  
|Granted                          |  |                      |    |  
|Vested                           |  |                      | (10 | )
|Forfeited and expired            |  |                      |    |  
|                                 |  |                      |     |  
|Outstanding at March 31, 2011    |  |                      | 105 |  
|                                 |  |                      |     |  

Stock Purchase Plans

In May 2010, the Companys Board of Directors adopted the 2010 Employee Stock Purchase Plan (ESPP) and the 2010 Nonqualified Stock Purchase Plan (NQSPP).

The ESPP provides for the issuance of up to 600,000 shares to our employees. All eligible employees are granted identical rights to
purchase common stock in each Board authorized offering under the ESPP. Rights granted pursuant to any offering under the ESPP terminate immediately upon cessation of an employees employment for any reason. In general, an employee may reduce
his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Employees receive a 5% discount on shares purchased under the ESPP. Rights granted under the plan are not transferable
and may be exercised only by the person to whom such rights are granted. Offerings will occur every six months in October and April. As of March 31, 2011, contributions under the ESPP totaled $0.4 million. In April 2011, approximately
26,000 shares of the Companys common stock were issued to plan participants.



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The NQSPP provides for the issuance of up to 800,000 shares to our independent contractors.
All eligible contractors are granted identical rights to purchase common stock in each Board authorized offering under the NQSPP. Rights granted pursuant to any offering under the NQSPP terminate immediately upon cessation of a contractors
relationship with the Company for any reason. In general, a contractor may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Contractors receive a 5% discount on
shares purchased under the NQSPP. Rights granted under the NQSPP are not transferable and may be exercised only by the person to whom such rights are granted. Offerings will occur every six months in October and April. As of March 31,
2011, contributions under the NQSPP totaled $0.5 million. In April 2011, approximately 26,000 shares of the Companys common stock were issued to plan participants.

Note 14. Contingencies

Litigation

We are currently a party to various legal proceedings. While we currently believe that the ultimate outcome of such proceedings,
individually and in the aggregate, will not have a material adverse effect on our financial position or results of operations, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a
material adverse impact on our net earnings in the period in which a ruling occurs. The estimate of the potential impact of such legal proceedings on our financial position or results of operations could change in the future.

Healthcare Regulatory Matters

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and
interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies will conduct inquiries and audits of the Companys practices. It is the Companys current practice and future intent to cooperate
fully with such inquiries.

In addition to laws and regulations governing the Medicare and Medicaid programs, there are a
number of federal and state laws and regulations governing such matters as the corporate practice of medicine and fee splitting arrangements, anti-kickback statutes, physician self-referral laws, false or fraudulent claims filing and patient privacy
requirements. The failure to comply with any of such laws or regulations could have an adverse impact on our operations and financial results. It is managements belief that the Company is in substantial compliance in all material respects with
such laws and regulations.

Healthcare Reform

The President of the United States and members of the U.S. Congress have enacted significant reforms to the U.S. health care system. On
March 23, 2010, the President signed into law The Patient Protection and Affordable Care Act, and on March 30, 2010, the President signed into law The Health Care and Education Reconciliation Act of 2010 (referred to collectively as the
Health Reform Laws). The Health Reform Laws include a number of provisions that may affect the Company, although the impact of many of the changes will be unknown until they are implemented, which in some cases will not occur for several
years. The impact of some of these provisions may be positive, such as increasing access to health benefits for the uninsured and underinsured populations, while other provisions, such as Medicare payment reforms and reductions that could reduce
provider payments, may have an adverse effect on the reimbursement rates the Company receives for services provided by affiliated healthcare professionals.



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Acquisition Payments

As of March 31, 2011, the Company may have to pay up to $25.3 million in future contingent payments as additional consideration for
acquisitions made prior to March 31, 2011. These payments will be made and recorded as additional purchase price or will reduce existing liabilities should the acquired operations achieve the financial targets or certain contract terms as
agreed to in the respective acquisition agreements. During the three months ended March 31, 2011, $6.9 million of contingent consideration was paid. No payments were made in the corresponding period of 2010.

Note 15. Comprehensive Earnings

The components of comprehensive earnings, net of related taxes, are as follows (in thousands):



|                                                      |  |                             |        |   |      |   |        |  
|----------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                      |  | Three Months EndedMarch 31, |       
|                                                      |  | 2010                        |        |   | 2011 |  
|Net earnings                                          |  | $                           | 10,898 |   |      | $ | 21,636 |  
|Net change in fair market value of investments        |  |                             | (88    | ) |      |   | (203   | )
|Net change in fair market value of interest rate swap |  |                             | 271    |   |      |   | 562    |  
|                                                      |  |                             |        |   |      |   |        |  
|Comprehensive earnings                                |  | $                           | 11,081 |   |      | $ | 21,995 |  
|                                                      |  |                             |        |   |      |   |        |  

Note 16. Segment Reporting

The Company provides services through four operating segments which are aggregated into two reportable segments, Healthcare Services and Billing Services. The Healthcare Services segment, which is an
aggregation of healthcare staffing, clinics and occupational health, provides comprehensive healthcare service programs to users and providers of healthcare services on a fee-for-service as well as a cost plus basis. The Billing Services segment
provides a range of external billing, collection and consulting services on a fee basis to outside third-party customers.

Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net revenue, where
intercompany charges have been eliminated. Certain expenses are not allocated to the segments. These unallocated expenses are corporate expenses, net interest expense, depreciation and amortization, transaction costs and income taxes. The Company
evaluates segment performance based on profit and loss before the aforementioned expenses.



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The following table presents financial information for each reportable segment.
Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the operating earnings of each segment in each period below (in thousands):



|                                                      |  |                             |         |   |      |   |         |  
|----------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                      |  | Three Months EndedMarch 31, |        
|                                                      |  | 2010                        |         |   | 2011 |  
|Net Revenues less Provision for Uncollectibles:       |  |                             |         |   |      |   |         |  
|Healthcare Services                                   |  | $                           | 361,574 |   |      | $ | 409,452 |  
|Billing Services                                      |  |                             | 2,891   |   |      |   | 3,042   |  
|                                                      |  |                             |         |   |      |   |         |  
|                                                      |  | $                           | 364,465 |   |      | $ | 412,494 |  
|                                                      |  |                             |         |   |      |   |         |  
|Operating Earnings:                                   |  |                             |         |   |      |   |         |  
|Healthcare Services                                   |  | $                           | 49,874  |   |      | $ | 53,530  |  
|Billing Services                                      |  |                             | 627     |   |      |   | 782     |  
|General Corporate                                     |  |                             | (26,878 | ) |      |   | (14,849 | )
|                                                      |  |                             |         |   |      |   |         |  
|                                                      |  | $                           | 23,623  |   |      | $ | 39,463  |  
|                                                      |  |                             |         |   |      |   |         |  
|Reconciliation of Operating Earnings to Net Earnings: |  |                             |         |   |      |   |         |  
|Operating earnings                                    |  | $                           | 23,623  |   |      | $ | 39,463  |  
|Interest expense, net                                 |  |                             | 5,763   |   |      |   | 3,277   |  
|Provision for income taxes                            |  |                             | 6,962   |   |      |   | 14,550  |  
|                                                      |  |                             |         |   |      |   |         |  
|Net earnings                                          |  | $                           | 10,898  |   |      | $ | 21,636  |  
|                                                      |  |                             |         |   |      |   |         |  



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Introduction

We believe
we are one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, based upon revenues and patient visits. Our regional operating models
also include comprehensive programs for inpatient care, anesthesiology, pediatrics and other healthcare services, principally within hospital departments and other healthcare treatment facilities. We have historically focused, however, primarily on
providing outsourced services to hospital emergency departments, or EDs, which accounts for the majority of our net revenues.

Factors and
Trends that Affect Our Results of Operations

In reading our financial statements, you should be aware of the following
factors and trends we believe are important in understanding our financial performance.

General Economic Conditions

The continuation of the current economic conditions may adversely impact our ability to collect for the services we provide as higher
unemployment and reductions in commercial managed care and governmental healthcare enrollment may increase the number of uninsured and underinsured patients seeking healthcare at one of our staffed EDs. We could be negatively affected if the federal
government or the states reduce funding of Medicare, Medicaid or other federal and state healthcare programs in response to increasing deficits in their budgets. Also, patient volume trends in our hospital EDs could be adversely affected as
individuals potentially defer or forego seeking care in such departments due to the loss or reduction of coverage previously available to such individuals under commercial insurance or governmental healthcare programs.

Healthcare Reform

The President of the United States and members of the U.S. Congress have enacted significant reforms to the U.S. healthcare system. On
March 23, 2010, the President signed into law The Patient Protection and Affordable Care Act, and on March 30, 2010, the President signed into law The Health Care and Education Reconciliation Act of 2010 (referred to collectively as the
Health Reform Laws). The Health Reform Laws include a number of provisions that may affect us, although the impact of many of the changes will be unknown until they are implemented, which in some cases will not occur for several years.
The impact of some of these provisions may be positive, such as increasing access to health benefits for the uninsured and underinsured populations, while other provisions such as Medicare payment reforms and reductions that could reduce provider
payments may have an adverse effect on the reimbursement rates we receive for services provided by affiliated healthcare professionals.

2011 Medicare Fee Schedule Changes

The Medicare program reimburses for our services based upon the rates in its Physician Fee Schedule, and each year the Medicare program updates the Physician Fee Schedule reimbursement rates based on a
formula approved by Congress in the Balanced Budget Act of 1997. Many private payers use the Medicare fee schedule to determine their own reimbursement rates.

The Medicare law requires the Centers for Medicare and Medicaid Services (CMS) to adjust the Medicare Physician Fee Schedule (MPFS) payment rates annually based on an updated formula which includes
application of the Sustainable Growth Rate (SGR) that was adopted in the Balanced Budget Act of 1997. This formula has yielded negative updates every year beginning in 2002, although CMS was able to take administrative steps to avoid a reduction in
2003 and Congress took a series of legislative actions to prevent reductions each year from 2004 to 2010.



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In December 2010, President Obama signed into law a one-year delay of the SGR reductions
that were scheduled to reduce Medicare reimbursement by 25% effective January 1, 2011. Also included in the law is a one-year extension of the geographic practice cost indices (GPCI) floor that has allowed locations with lower cost indices to
remain at the base of 1.000. Recent CMS regulations released in November 2010 to update the 2011 Medicare physician fee schedule included a rebasing of the Medical Economic Index (MEI) that redistributes payments between different specialties. We
estimate that these changes to the fee schedule will reduce 2011 reimbursement rates to ED providers by approximately 2.5% with the impact on our ED revenue estimated to be an approximate $4.4 million decline.

Also included in the CMS regulations is a 1% reduction in the 2011 Physician Quality Reporting Initiative (PQRI) bonus payments. The
impact on our revenue is estimated to be a $1.6 million decline as compared to 2010 revenue.

If further Congressional action
is not taken regarding SGR, payments will be reduced on January 1, 2012. It is not clear what, if anything, will occur in the long term. Any future reductions in amounts paid by government programs for physician services or changes in methods
or regulations governing payment amounts or practices could cause our revenues to decline and we may not be able to offset reduced operating margins through cost reductions, increased volume or otherwise.

Military Healthcare Staffing

We are a provider of healthcare professionals serving military personnel and their dependents in military treatment facilities nationwide administered by the U.S. Department of Defense. Our revenues
derived from military healthcare staffing totaled $27.8 million and $19.6 million for the three months ended March 31, 2010 and 2011, respectively. These revenues are generated from contracts that are subject to a competitive bidding process
which primarily takes place during the third quarter of each year. A portion of the contracts awarded during the third quarter of 2010 will expire during the course of 2011 and will be subject to a competitive re-bidding and award process. In the
event we are unable to retain these expiring contracts, the operations and financial position of our military staffing business could be further negatively impacted.

In addition, the process of awarding military healthcare staffing contracts by the government has shifted in recent years toward an increased bias to award certain contracts to qualified small and
minority owned businesses. Although we participate in such small and minority owned business awards to the extent we can serve as a sub-contractor, our revenues from these arrangements are limited compared to an outright contract award, which has
been a large contributing factor in the financial performance decline. Approximately 28% and 40% of our military staffing revenue for each of the three months ended March 31, 2010 and 2011, respectively, was derived through subcontracting
agreements with small business prime contractors.

In addition, we have been awarded two separate governmental healthcare
staffing contracts with estimated annual revenues of $63.0 million that have been under stop work orders. One of the protests has been concluded favorably, and we have been directed by the government to begin staffing services in May 2011.This represents approximately $20.0 million in annualized revenue. The second contract under protest with estimated revenue of $43.0 million continues to be delayed by a stop work order that has remained in place during the governments
re-evaluation of proposals as corrective action. We believe we have provided a very competitive bid and are in a position to resume services under the contract following a new award decision, and, if filed, resolution of any subsequent bid protests
challenging that new award decision.

Radiology Operations

During the fourth quarter of 2010, after an analysis of our teleradiology and radiology staffing operations, including past performance
and future growth opportunities, we made a decision to exit this non-core business line. This process was essentially completed during the first quarter of 2011 with the sale of the teleradiology practice.



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Critical Accounting Policies and Estimates

The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the
United States, which requires us to make estimates and assumptions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of the Companys
consolidated financial statements.

There have been no changes to these critical accounting policies or their application
during the three months ended March 31, 2011.

Revenue Recognition

Net Revenue.Net revenue consists of fee-for-service revenue, contract revenue and other revenue. Net revenue is recorded in the
period in which services are rendered. Our net revenue is principally derived from the provision of healthcare staffing services to patients within healthcare facilities. The form of billing and related risk of collection for such services may vary
by customer. The following is a summary of the principal forms of our billing arrangements and how net revenue is recognized for each.

A significant portion (84% of our net revenue in the three months ended March 31, 2011 and 83% for the year ended December 31, 2010) resulted from fee-for-service patient visits. Fee-for-service
revenue represents revenue earned under contracts in which we bill and collect the professional component of charges for medical services rendered by our contracted and employed physicians. Under the fee-for-service arrangements, we bill patients
for services provided and receive payment from patients or their third-party payers. Fee-for-service revenue is reported net of contractual allowances and policy discounts. All services provided are expected to result in cash flows and are therefore
reflected as net revenue in the financial statements. Fee-for-service revenue is recognized in the period in which the services are rendered to specific patients and reduced immediately for the estimated impact of contractual allowances in the case
of those patients having third-party payer coverage. The recognition of net revenue (gross charges less contractual allowances) from such visits is dependent on such factors as proper completion of medical charts following a patient visit, the
forwarding of such charts to one of our billing centers for medical coding and entering into our billing systems and the verification of each patients submission or representation at the time services are rendered as to the payer(s)
responsible for payment of such services. Net revenue is recorded based on the information known at the time of entering of such information into our billing systems as well as an estimate of the net revenue associated with medical charts for a
given service period that have not been processed yet into our billing systems. The above factors and estimates are subject to change. For example, patient payer information may change following an initial attempt to bill for services due to a
change in payer status. Such changes in payer status have an impact on recorded net revenue due to different payers being subject to different contractual allowance amounts. Such changes in net revenue are recognized in the period that such changes
in payer become known. Similarly, the actual volume of medical charts not processed into our billing systems may be different from the amounts estimated. Such differences in net revenue are adjusted in the following month based on actual chart
volumes processed.

Contract revenue represents revenue generated under contracts in which we provide physician and other
healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed-to hourly rates. Revenue in such cases is
recognized as the hours are worked by our staff and contractors. Additionally, contract revenue also includes supplemental revenue from hospitals where we may have a fee-for-service contract arrangement. Contract revenue for the supplemental billing
in such cases is recognized based on the terms of each individual contract. Such contract terms generally either provide for a fixed monthly dollar amount or a variable amount based upon measurable monthly activity, such as hours staffed, patient
visits or collections per visit compared to a minimum activity threshold. Such supplemental revenues based on variable arrangements are usually contractually fixed on a monthly, quarterly or annual calculation basis considering the variable factors
negotiated in each such arrangement. Such supplemental revenues are recognized as revenue in the period when such



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amounts are determined to be fixed and therefore contractually obligated as payable by the customer under the terms of the respective agreement.

Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for
such services pursuant to the terms of the contracts with customers. Generally, such contracts consist of fixed monthly amounts with revenue recognized in the month services are rendered or as hourly consulting fees recognized as revenue as hours
are worked in accordance with such arrangements. Additionally, we derive a portion of our revenues from providing billing services that are contingent upon the collection of third-party physician billings by us on behalf of such customers. Revenues
are not considered earned and therefore not recognized as revenue until actual cash collections are achieved in accordance with the contractual arrangements for such services.

Net Revenue Less Provision for Uncollectibles.Net revenue less provision for uncollectibles reflects managements estimate of billed amounts to ultimately be collected. Management, in
estimating the amounts to be collected resulting from approximately eight million annual fee-for-service patient visits and procedures, considers such factors as prior contract collection experience, current period changes in payer mix and
patient acuity indicators, reimbursement rate trends in governmental and private sector insurance programs, resolution of overprovision account balances, the estimated impact of billing system effectiveness improvement initiatives, and trends in
collections from self-pay patients and external collection agencies. In developing our estimate of collections per visit or procedure, we consider the amount of outstanding gross accounts receivable by period of service, but do not use an accounts
receivable aging schedule to establish estimated collection valuations. Individual estimates of net revenue less provision by contractual location are monitored and refreshed each month as cash receipts are applied to existing accounts receivable
and other current trends that have an impact upon the estimated collections per visit are observed. Such estimates are substantially formulaic in nature. In the ordinary course of business we experience changes in our initial estimates of net
revenues less provision for uncollectibles during the year following commencement of services. Such provisions and any subsequent changes in estimates may result in adjustments to our operating results with a corresponding adjustment to our accounts
receivable allowance for uncollectibles on our balance sheet.

Net revenue less provision for uncollectibles for the three
months ended March 31, 2010 and 2011, respectively, consisted of the following (in thousands):



|                                              |  |                             |           |   |      |   |           |  
|--------------------------------------------- |  | --------------------------- | --------- | - | ---- | - | --------- | -
|                                              |  | Three Months EndedMarch 31, |          
|                                              |  | 2010                        |           |   | 2011 |  
|Gross fee-for-service charges                 |  | $                           | 1,178,760 |   |      | $ | 1,460,601 |  
|Unbilled revenue                              |  |                             | 2,152     |   |      |   | 4,556     |  
|Less: Contractual adjustments                 |  |                             | (662,660  | ) |      |   | (861,424  | )
|                                              |  |                             |           |   |      |   |           |  
|Fee-for-service revenue                       |  |                             | 518,252   |   |      |   | 603,733   |  
|Contract revenue                              |  |                             | 106,940   |   |      |   | 108,477   |  
|Other revenue                                 |  |                             | 6,774     |   |      |   | 6,924     |  
|                                              |  |                             |           |   |      |   |           |  
|Net revenue                                   |  |                             | 631,966   |   |      |   | 719,134   |  
|Provision for uncollectibles                  |  |                             | (267,501  | ) |      |   | (306,640  | )
|                                              |  |                             |           |   |      |   |           |  
|Net revenue less provision for uncollectibles |  | $                           | 364,465   |   |      | $ | 412,494   |  
|                                              |  |                             |           |   |      |   |           |  

Contractual adjustments represent the Companys estimate of discounts and other adjustments to be
recognized from gross fee-for-service charges under contractual payment arrangements, primarily with commercial, managed care, and governmental payment plans such as Medicare and Medicaid when the Companys providers participate in such plans.
The increase in contractual adjustments noted above is due to the overall increase in gross fee-for-service charges resulting from annual increases in the gross billing fee schedules and increases in patient visits and procedures between periods.
Contractual adjustments increased at a faster pace



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than the increase in gross fee-for-service charges as the annual reimbursement increases under contracts with managed care plans and government payers that are subject to contractual adjustments
tend to be less than the overall annual increase in the Companys gross billing fee schedules.

The table below
summarizes our approximate payer mix as a percentage of fee-for-service volume for the periods indicated:



|                            |  |                             |       |   |      |  |       |  
|--------------------------- |  | --------------------------- | ----- | - | ---- |  | ----- | -
|                            |  | Three Months EndedMarch 31, |      
|                            |  | 2010                        |       |   | 2011 | 
|Payer:                      |  |                             |       |   |      |  |       |  
|Medicare                    |  |                             | 22.9  | % |      |  | 22.7  | %
|Medicaid                    |  |                             | 26.2  |   |      |  | 27.6  |  
|Commercial and managed care |  |                             | 28.1  |   |      |  | 26.9  |  
|Self pay                    |  |                             | 20.8  |   |      |  | 20.9  |  
|Other                       |  |                             | 2.0   |   |      |  | 1.9   |  
|                            |  |                             |       |   |      |  |       |  
|Total                       |  |                             | 100.0 | % |      |  | 100.0 | %
|                            |  |                             |       |   |      |  |       |  

Accounts Receivable.As described above and below, we determine the estimated value of our accounts
receivable based on estimated cash collection run rates of estimated future collections by contract for patient visits under our fee-for-service revenue. Accordingly, we are unable to report the payer mix composition on a dollar basis of our
outstanding net accounts receivable. However, a 1% change in the estimated carrying value of our net fee-for-service patient accounts receivable before consideration of the allowance for uncollectible accounts at March 31, 2011 could have an
after tax effect of approximately $2.5 million on our financial position and results of operations. Our days revenue outstanding at December 31, 2010 and March 31, 2011 were 56.9 days in both periods. The number of days outstanding will
fluctuate over time due to a number of factors. Although there was no net change in days outstanding between periods, a decrease of 4.1 days resulting from an increase in average revenue per day was offset by an increase of 0.3 days associated with
an increase in estimated value of contract accounts receivable and an increase of 3.8 days related to the increase in estimated value of fee-for-service accounts. The increase in average revenue per day is primarily attributed to an increase in
gross charges, increased pricing with managed care plans and increases in average patient acuity levels. The increase of 3.8 days related to fee-for-service accounts receivable and the increase of 0.3 days associated with the increase of contract
accounts receivable are primarily due to timing of cash collections and valuation adjustments recorded in the period. Our allowance for doubtful accounts totaled $220.5 million as of March 31, 2011.

Approximately 99% of our allowance for doubtful accounts is related to gross fees for fee-for-service patient visits. Our principal
exposure for uncollectible fee-for-service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While we do not specifically allocate the allowance for doubtful accounts to
individual accounts or specific payer classifications, the portion of the allowance associated with fee-for-service charges as of March 31, 2011, was equal to approximately 92% of outstanding self-pay fee-for-service patient accounts.

The majority of our fee-for-service patient visits are for the provision of emergency care in hospital settings. Due to
federal government regulations governing the provision of such care, we are obligated to provide emergency care regardless of the patients ability to pay or whether or not the patient has insurance or other third-party coverage for the cost of
the services rendered. While we attempt to obtain all relevant billing information at the time emergency care services are rendered, there are numerous patient encounters where such information is not available at time of discharge. In such cases
where detailed billing information relative to insurance or other third-party coverage is not available at discharge, we attempt to obtain such information from the patient or client hospital billing record information subsequent to discharge to
facilitate the collections process. Collections at the time of rendering such services (emergency room discharge) are not significant.



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Primary responsibility for collection of fee-for-service accounts receivable resides within our internal billing operations. Once a claim has been submitted to a payer or an individual patient,
employees within our billing operations have responsibility for the follow up collection efforts. The protocol for follow up differs by payer classification. For self-pay patients, our billing system will automatically send a series of dunning
letters on a prescribed time frame requesting payment or the provision of information reflecting that the balance due is covered by another payer, such as Medicare or a third-party insurance plan. Generally, the dunning cycle on a self pay account
will run from 90 to 120 days. At the end of this period, if no collections or additional information is obtained from the patient, the account is no longer considered an active account and is transferred to a collection agency. Upon transfer to a
collection agency, the patient account is written-off as a bad debt. Any subsequent cash receipts on accounts previously written off are recorded as a recovery. For non-self pay accounts, billing personnel will follow up and respond to any
communication from payers such as requests for additional information or denials until collection of the account is obtained or other resolution has occurred. At the completion of our active collection cycle, we transfer selected patient accounts to
external and internal collection agencies under a contingent collection basis. The projected value of future contingent collection proceeds are considered in the estimation of our overall accounts receivable valuation. For contract accounts
receivable, invoices for services are prepared in the various operating areas of the Company and mailed to our customers, generally on a monthly basis. Contract terms under such arrangements generally require payment within thirty days of receipt of
the invoice. Outstanding invoices are periodically reviewed and operations personnel with responsibility for the customer relationship will contact the customer to follow up on any delinquent invoices. Contract accounts receivable will be considered
as bad debt and written-off based upon the individual circumstances of the customer situation after all collection efforts have been exhausted, including legal action if warranted, and it is the judgment of management that the account is not
expected to be collected.

Methodology for Computing Allowance for Doubtful Accounts.We employ several methodologies
for determining our allowance for doubtful accounts depending on the nature of the net revenue recognized. We initially determine gross revenue for our fee-for-service patient visits based upon established fee schedule prices. Such gross revenue is
reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in net revenue. Net revenue is then reduced for our estimate of uncollectible amounts. Fee-for-service net revenue less
provision for uncollectibles represents our estimated cash to be collected from such patient visits and is net of our estimate of account balances estimated to be uncollectible. The provision for uncollectible fee-for-service patient visits is based
on historical experience resulting from approximately eight million annual fee-for-service patient visits. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement
policies relating to governmental healthcare programs do not make it feasible to evaluate fee-for-service accounts receivable on a specific account basis. Fee-for-service accounts receivable collection estimates are reviewed on a quarterly basis for
each of our fee-for-service contracts by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition,
when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by our billing operations to determine whether there are
facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contracts accounts receivable from the estimate resulting from using the historical collection experience. Contract-related
net revenue is billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances prepared. Allowances for estimated uncollectible amounts related to such
contract billings are made based upon specific accounts and invoice periodic reviews once it is concluded that such amounts are not likely to be collected. The methodologies employed to compute allowances for doubtful accounts were unchanged between
2010 and 2011.

Insurance Reserves.

The nature of our business is such that it is subject to professional liability claims and lawsuits. Historically, to mitigate a portion of this risk, we have maintained insurance for individual
professional liability claims with



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per incident and annual aggregate limits per physician for all incidents. Prior to March 12, 2003, we obtained such insurance coverage from commercial insurance providers. Subsequent to
March 11, 2003, we have provided for a significant portion of our professional liability loss exposures through the use of a captive insurance company and through greater utilization of self-insurance reserves. Since March 12, 2003, the
most significant cost element within our professional liability program has consisted of the actuarial estimates of losses by occurrence period. In addition to the estimated actuarial losses, other costs that are considered by management in the
estimation of professional liability costs include program costs such as brokerage fees, claims management expenses, program premiums and taxes, and other administrative costs of operating the program, such as the costs to operate the captive
insurance subsidiary. Net costs in any period reflect our estimate of net losses to be incurred in that period as well as any changes to our estimates of the reserves established for net losses of prior periods.

Our commercial insurance policy for professional liability losses for the period March 12, 1999 through March 11, 2003 included
insured limits applicable to such coverage in the period. Effective April 2006, we executed an agreement with the commercial insurance provider that issued the policy that ended March 11, 2003 to increase the existing $130.0 million aggregate
limit of coverage. Under the terms of the agreement, we will make periodic premium payments to the commercial insurance company and the total aggregate limit of coverage under the policy will be increased by a portion of the premiums paid. We have
committed to fund premiums such that the total aggregate limit of coverage under the program remains greater than the paid losses at any point in time. During fiscal year 2010, we funded a total of $2.0 million under this agreement. For the three
months ended March 31, 2011, we funded a total of $0.5 million and have agreed to fund additional payments which will be based upon the level of incurred losses relative to the aggregate limit of coverage at that time.

As of March 31, 2011, the current aggregate limit of coverage under this policy is $158.6 million and the estimated loss reserve for
claim losses and expenses in excess of the current aggregate limit recorded by the Company was $5.5 million.

The accounts of
the captive insurance company are fully consolidated with those of our other operations in the accompanying financial statements.

The estimation of medical professional liability losses is inherently complex. Medical professional liability claims are typically resolved over an extended period of time, often as long as ten years or
more. The combination of changing conditions and the extended time required for claim resolution results in a loss estimation process that requires actuarial skill and the application of judgment, and such estimates require periodic revision. A
report of actuarial loss estimates is prepared at least semi-annually. Managements estimate of our professional liability costs resulting from such actuarial studies is significantly influenced by assumptions and assessments regarding
expectations of several factors. These factors include, but are not limited to: historical paid and incurred loss development trends; hours of exposure as measured by hours of physician and related professional staff services; trends in the
frequency and severity of claims, which can differ significantly by jurisdiction due to the legislative and judicial climate in such jurisdictions; coverage limits of third-party insurance; the effectiveness of our claims management process; and the
outcome of litigation. As a result of the variety of factors that must be considered by management, there is a risk that actual incurred losses may develop differently from estimates.

The underlying information that serves as the foundational basis for making our actuarial estimates of professional liability losses is
our internal database of incurred professional liability losses. The Company has captured extensive professional liability loss data going back, in some cases, over twenty years, that is maintained and updated on an ongoing basis by our internal
claims management personnel. Our database contains comprehensive incurred loss information for our existing operations as far back as fiscal 1997 (reflecting the initial timeframe in which we migrated to a consolidated professional liability program
concurrent with the consummation of several significant acquisitions), and we also possess additional loss data that predates



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1997 dates of occurrence for certain of our operations. Loss information reflects both paid and reserved losses incurred when we were covered by outside commercial insurance programs as well as
paid and reserved losses incurred under our self insurance program. Because of the comprehensive nature of the loss data and our comfort with the completeness and reliability of the loss data, this is the information that is used in the development
of our actuarial loss estimates. We believe this database is one of the largest repositories of physician professional liability loss information available in our industry and provides us and our actuarial consultants with sufficient data to develop
reasonable estimates of the ultimate losses under our self insurance program. In addition to the estimated losses, as part of the actuarial process, we obtain revised payment pattern assumptions that are based upon our historical loss and related
claims payment experience. Such payment patterns reflect estimated cash outflows for aggregate incurred losses by period based upon the occurrence date of the loss as well as the report date of the loss. Although variances have been observed in the
actuarial estimate of ultimate losses by occurrence period between actuarial studies, the estimated payment patterns have shown much more limited variability. We use these payment patterns to develop our estimate of the discounted reserve amounts.
The relative consistency of the payment pattern estimates provides us with a foundation in which to develop a reasonable estimate of the discount value of the professional liability reserves based upon the most current estimate of ultimate losses to
be paid and the reasonable likelihood of the related cash flows over the payment period. As of December 31, 2010 and March 31, 2011, our estimated loss reserves were discounted at approximately 3.3% and 3.6%, respectively, which was the
current ten year U.S. Treasury rate at each of those dates, and which reflects the risk free interest rate over the expected period of claims payments.

In establishing our initial reserves for a given loss period, management considers the results of the actuarial loss estimates for such periods as well as assumptions regarding loss retention levels and
other program costs to be incurred. On a semi-annual basis, we will review our professional liability reserves considering not only the reserves and loss estimates associated with the current period but also the reserves established in prior periods
based upon revised actuarial loss estimates. The actuarial estimation process employed utilizes a frequency severity simulation model to estimate the ultimate cost of claims for each loss period. The results of the simulation model are then
validated by a comparison to the results from several different actuarial methods (paid loss development, incurred loss development, incurred Bornhuetter-Ferguson method, paid Bornhuetter-Ferguson method) for reasonableness. Each method contains
assumptions regarding the underlying claims process. Actuarial loss estimates at various confidence levels capture the variability in the loss estimates for process risk but assume that the underlying model and assumptions are correct. Adjustments
to professional liability loss reserves will be made as needed to reflect revised assumptions and emerging trends and data. Any adjustments to reserves are reflected in the current operations. Due to the size of our reserve for professional
liability losses, even a small percentage adjustment to these estimates can have a material effect on the results of operations for the period in which the adjustment is made. Given the number of factors considered in establishing the reserves for
professional liability losses, it is neither practical nor meaningful to isolate a particular assumption or parameter of the process and calculate the impact of changing that single item. The actuarial reports provide a variety of loss estimates
based upon statistical confidence levels reflecting the inherent uncertainty of the medical professional liability claims environment in which we operate. Initial year loss estimates are generally recorded using the actuarial expected loss estimate,
but aggregate professional liability loss reserves may be carried at amounts in excess of the expected loss estimates provided by the actuarial reports due to the relatively short time period in which the Company has provided for its losses on a
self insured basis and the expectation that we believe additional adjustments to prior year estimates may occur as our reporting history and loss portfolio matures. In addition, the Company is subject to the risk of claims in excess of insured
limits as well as unlimited aggregate risk of loss in certain loss periods. As the Companys self insurance program continues to mature and additional stability is noted in the loss development trends in the initial years of the program, we
expect to continue to review and evaluate the carried level of reserves and make adjustments as needed.

Based on the results
of the actuarial study completed in April 2011, management determined no additional change was necessary in our consolidated reserves for professional liability losses as of March 31, 2011 related to prior year loss estimates.



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The following reflects the current reserves for professional liability costs as of
March 31, 2011 (in millions) as well as the sensitivity of the reserve estimates at a 75% and 90% confidence level:



|                        |  |   |       | 
|----------------------- |  | - | ----- | 
|As reported             |  | $ | 153.0 | 
|At 75% confidence level |  | $ | 159.0 | 
|At 90% confidence level |  | $ | 172.1 | 

It is not possible to
quantify the amount of the change in our estimate of prior year losses by individual fiscal period due to the nature of the professional liability loss estimates that are provided to us on an occurrence period basis and the nature of the coverage
that is obtained in the commercial insurance market which is generally underwritten on a claims made or report period basis. Even though we are self insured for a significant portion of our risk, due to customer contracting requirements and state
insurance regulations, we still, at times, must place coverage on a claims made or report period basis with commercial insurance carriers. When evaluating the appropriate carrying level of our self insured professional liability reserves, management
considers the current estimates of occurrence period loss estimates as well as how such loss estimates and related future claims will interact with previous or current commercial insurance programs when projecting future cash flows. However, the
complexity that is associated with multiple occurrence periods interacting with multiple report periods that contain risks and related reserves retained by us, as well as transferred to commercial insurance carriers, makes it impossible to allocate
the change in prior year loss estimates to individual occurrence periods. Instead, we evaluate the future expected cash flows for all historical loss periods in the aggregate and compare such estimates to the current carrying value of our
professional liability reserves. This process provides the basis for us to conclude that our reserves for professional liability losses are reasonable and properly stated. Management considers the results of actuarial studies when estimating the
appropriate level of professional liability reserves and no adjustments to prior year loss estimates were made in periods where updated actuarial loss estimates were not available. The April 2011 actuarial report did not reflect a significant
change, at various confidence levels, in the estimated ultimate undiscounted losses by occurrence period for the self-insured loss period from March 12, 2003 through December 31, 2010 or our exposure in excess of the aggregate limit of
coverage in place on the commercial insurance program that ended March 12, 2003.

Due to the complexity of the actuarial
estimation process, there are many factors, trends and assumptions that must be considered in the development of the actuarial loss estimates, and we are not able to quantify and disclose which specific elements are primarily contributing to the
overall favorable development in the revised loss estimates of historical occurrence periods. However, we believe that our internal investments in enhanced risk management and claims management resources and initiatives, such as the employment of
additional claims and litigation management personnel and practices, and an expansion of programs such as root cause loss analysis, early claim evaluation, and litigation support for insured providers, as well as the improved legal environment
resulting from professional liability tort reform efforts in certain key jurisdictions such as Florida and Texas, have contributed to the favorable trend in loss development estimates noted during the prior year occurrence periods.

Impairment of Intangible Assets

In assessing the recoverability of the Companys intangibles, we must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If
these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets.

Results of Operations

The following discussion provides an analysis of our results of operations and should be read in conjunction with our unaudited
consolidated financial statements. The operating results of the periods presented were not significantly affected by general inflation in the U.S. economy. Net revenue less the provision for uncollectibles



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is an estimate of future cash collections and as such it is a key measurement by which management evaluates performance of individual contracts as well as the Company as a whole. The following
table sets forth the components of net earnings as a percentage of net revenue less provision for uncollectibles for the periods indicated:



|                                              |  |                             |       |   |      |  |       |  
|--------------------------------------------- |  | --------------------------- | ----- | - | ---- |  | ----- | -
|                                              |  | Three Months EndedMarch 31, |      
|                                              |  | 2010                        |       |   | 2011 | 
|Net revenue less provision for uncollectibles |  |                             | 100.0 | % |      |  | 100.0 | %
|Professional service expenses                 |  |                             | 77.6  |   |      |  | 76.0  |  
|Professional liability costs                  |  |                             | 1.6   |   |      |  | 3.6   |  
|General and administrative expenses           |  |                             | 8.5   |   |      |  | 9.2   |  
|Other income, net                             |  |                             |      |   |      |  | (0.1  | )
|Depreciation and amortization                 |  |                             | 1.8   |   |      |  | 1.7   |  
|Interest expense, net                         |  |                             | 1.6   |   |      |  | 0.8   |  
|Transaction costs                             |  |                             |      |   |      |  |      |  
|Loss on extinguishment of debt                |  |                             | 4.1   |   |      |  |      |  
|                                              |  |                             |       |   |      |  |       |  
|Earnings before income taxes                  |  |                             | 4.9   |   |      |  | 8.8   |  
|Provision for income taxes                    |  |                             | 1.9   |   |      |  | 3.5   |  
|                                              |  |                             |       |   |      |  |       |  
|Net earnings                                  |  |                             | 3.0   | % |      |  | 5.2   | %
|                                              |  |                             |       |   |      |  |       |  

Three Months Ended March 31, 2011 Compared to the Three Months Ended March 31, 2010

Net Revenue. Net revenue in the three months ended March 31, 2011 increased $87.2 million, or 13.8%, to $719.1 million from
$632.0 million in the three months ended March 31, 2010. The increase in net revenue resulted primarily from increases in fee-for-service revenue of $85.5 million, contract revenue of $1.5 million and other revenue of $0.2 million. In the three
months ended March 31, 2011, fee-for-service revenue was 84.0% of net revenue compared to 82.0% in the same period of 2010, contract revenue was 15.1% of net revenue in 2011 compared to 16.9% in 2010 and other revenue was 1.0% in 2011 compared
to 1.1% in 2010. The increase in fee-for-service revenue was primarily a result of a 13.9% increase in total fee-for-service visits and procedures and, to a lesser extent, an increase in estimated collections per visit and procedure. Estimated
collections increased due to annual increases in gross charges, managed care pricing, increases in average patient acuity levels, and revenue cycle improvements. The increase in contract revenue was due primarily to the impact of new and acquired
contracts, partially offset by declines in our military operations resulting from contracting changes within the military.

Provision for Uncollectibles. The provision for uncollectibles increased $39.1 million, or 14.6%, to $306.6 million in the three
months ended March 31, 2011 from $267.5 million in the corresponding period in 2010. The provision for uncollectibles as a percentage of net revenue was 42.6% in the three months ended March 31, 2011 compared with 42.3% in the
corresponding period of 2010. The provision for uncollectibles is primarily related to revenue generated under fee-for-service contracts that is not expected to be fully collected. The period over period increase in the provision for uncollectibles
is due primarily to annual increases in gross fee schedules and increases in patient volumes and procedures. Changes in payer mix, particularly the level of self pay fee-for-service visits, also have an impact on the provision for uncollectibles.
For the three months ended March 31, 2011, self pay fee-for-service visits were approximately 20.9% of the total fee-for-service visits compared to approximately 20.8% in the same period of 2010.

Net Revenue Less Provision for Uncollectibles. Net revenue less provision for uncollectibles in the three months ended
March 31, 2011 increased $48.0 million, or 13.2%, to $412.5 million from $364.5 million in the three months ended March 31, 2010. Same contract revenue (excluding the military division) contributed 7.9% of the growth. Same contract revenue
associated with the military division reduced growth by 0.7%. Acquisitions



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contributed 4.4% of the growth in net revenue less provision for uncollectibles between quarters. New contracts, net of terminations (excluding the military division), contributed 3.1% of the
growth. Net contract changes within our military division reduced quarter-over-quarter net revenue growth by 1.6%. Overall, the military division reduced quarter-over-quarter revenue growth by 2.2% while all other areas contributed a 15.4% increase
in net revenue less provision.

Total same contract revenue less provision for uncollectibles, which consists of contracts
under management in both periods, increased $26.4 million, or 8.0%, to $358.2 million in the three months ended March 31, 2011 compared to $331.8 million in the three months ended March 31, 2010. In the first quarter of 2011, same contract
revenue less provision for uncollectibles benefited from an increase in fee-for-service volume of 7.6% which resulted in growth of 5.6%. Also contributing to the increase in same contract revenue growth between quarters were increases in estimated
collections on fee-for-service visits in the amount of 4.2% which contributed approximately 3.0% of same contract growth between quarters. The increase in the estimated collections per visit is attributable to annual increases in gross charges,
managed care pricing improvements, increases in average patient acuity levels and ongoing improvements in revenue cycle processes, partially offset by changes in payer mix between periods. These increases were partially offset by declines in
contract revenue, primarily associated with our military operations which constrained same contract revenue growth by 0.6%. Acquisitions contributed $16.2 million of growth between quarters. Excluding the impact of contracting changes within the
military division, net new contract revenue increased $11.2 million while changes within military staffing contracts resulted in a decline of $5.8 million between quarters. Total declines in military revenue, inclusive of changes in same contract
revenue, were $8.2 million between quarters. We typically gain new contracts by replacing competitors at hospitals that currently outsource such services, obtaining new contracts from facilities that do not currently outsource and responding to
contracting opportunities within the military healthcare system. Factors influencing new contracting opportunities include the depth and breadth of our service offerings, our reputation and experience, our ability to recruit and retain qualified
clinicians, and pricing considerations when a subsidy or contract payment is required. Contracts are typically terminated due to economic considerations, a change in hospital administration or ownership, dissatisfaction with our service offerings
or, primarily relating to our military staffing arrangements, at the end of the contract term.



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The components of net revenue less provision for uncollectibles includes revenue from
contracts that have been in effect for prior periods (same contracts) and from net, new and acquired contracts during the periods, as set forth in the table below:



|                                                    |  |                             |         |  |      |   |         | 
|--------------------------------------------------- |  | --------------------------- | ------- |  | ---- | - | ------- | 
|                                                    |  | Three Months EndedMarch 31, |        
|                                                    |  | 2010                        |         |  | 2011 |  
|                                                    |  | (in thousands)              |        
|Same contracts:                                     |  |                             |         |  |      |   |         | 
|Fee-for-service revenue                             |  | $                           | 234,844 |  |      | $ | 263,311 | 
|Contract and other revenue                          |  |                             | 96,938  |  |      |   | 94,889  | 
|                                                    |  |                             |         |  |      |   |         | 
|Total same contracts                                |  |                             | 331,782 |  |      |   | 358,200 | 
|New contracts, net of terminations:                 |  |                             |         |  |      |   |         | 
|Fee-for-service revenue                             |  |                             | 14,519  |  |      |   | 21,405  | 
|Contract and other revenue                          |  |                             | 17,204  |  |      |   | 15,735  | 
|                                                    |  |                             |         |  |      |   |         | 
|Total new contracts, net of terminations            |  |                             | 31,723  |  |      |   | 37,140  | 
|Acquired contracts:                                 |  |                             |         |  |      |   |         | 
|Fee-for-service revenue                             |  |                             | 943     |  |      |   | 13,111  | 
|Contract and other revenue                          |  |                             | 17      |  |      |   | 4,043   | 
|                                                    |  |                             |         |  |      |   |         | 
|Total acquired contracts                            |  |                             | 960     |  |      |   | 17,154  | 
|Consolidated:                                       |  |                             |         |  |      |   |         | 
|Fee-for-service revenue                             |  |                             | 250,306 |  |      |   | 297,827 | 
|Contract and other revenue                          |  |                             | 114,159 |  |      |   | 114,667 | 
|                                                    |  |                             |         |  |      |   |         | 
|Total net revenue less provision for uncollectibles |  | $                           | 364,465 |  |      | $ | 412,494 | 
|                                                    |  |                             |         |  |      |   |         | 

The following table reflects the visits and procedures included within fee-for-service revenues described in
the table above:



|                                                |  |                             |       |  |      |  |       | 
|----------------------------------------------- |  | --------------------------- | ----- |  | ---- |  | ----- | 
|                                                |  | Three Months EndedMarch 31, |      
|                                                |  | 2010                        |       |  | 2011 | 
|                                                |  | (in thousands)              |      
|Fee-for-service visits and procedures:          |  |                             |       |  |      |  |       | 
|Same contract                                   |  |                             | 1,777 |  |      |  | 1,912 | 
|New and acquired contracts, net of terminations |  |                             | 139   |  |      |  | 271   | 
|                                                |  |                             |       |  |      |  |       | 
|Total fee-for-service visits and procedures     |  |                             | 1,916 |  |      |  | 2,183 | 
|                                                |  |                             |       |  |      |  |       | 

Professional Service Expenses. Professional service expenses, which include physician and provider
costs, billing and collection expenses, and other professional expenses, totaled $313.6 million in the three months ended March 31, 2011 compared to $282.8 million in the three months ended March 31, 2010, an increase of $30.8 million, or
10.9%. The higher cost between quarters included an increase of approximately $13.0 million associated with increases in the average rates paid per hour of provider service and number of provider hours staffed on a same contract basis. Increases in
average rates paid reflect period over period wage and benefit increases associated with the provision of clinical services. Also contributing to the increase in expense was $17.8 million related to our acquisitions and net growth. The increases in
professional service costs were largely offset by reductions in provider costs within our military operations due to net contract terminations. Professional service expenses as a percentage of net revenue less provision for uncollectibles was 76.0%
in the three months ended March 31, 2011 compared to 77.6% in the three months ended March 31, 2010.

Professional Liability Costs. Professional liability costs were $14.7 million in the three months ended March 31, 2011
compared to $5.9 million in the three months ended March 31, 2010. Professional liability costs



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for the three months ended March 31, 2010 included a reduction in professional liability reserves of $7.2 million related to prior years resulting from the actuarial study completed during
that period. Excluding the benefit of the prior year reserve adjustment in 2010, professional liability costs increased $1.6 million, or 12.0%, between periods. The increase was primarily attributable to an increase in provider hours and an increase
in the average cost per hour of coverage. Excluding the benefit of prior year reserve adjustments in 2010, professional liability costs as a percentage of net revenue less provisions for uncollectibles was 3.6% in both the first quarter of 2011 and
2010.

General and Administrative Expenses. General and administrative expenses increased $7.3 million, or 23.8%, to
$38.1 million for the three months ended March 31, 2011 from $30.8 million in the three months ended March 31, 2010. The increase in general and administrative expenses is due primarily to the impact of recent acquisitions, including the
development of infrastructure to support growth in these operations, additional investments in marketing and sales development functions, increases in performance-based incentive plan costs, and increased severance and restructuring costs between
quarters. Total general and administrative expenses as a percentage of net revenue less provision for uncollectibles were 9.2% in 2011 compared to 8.5% in 2010.

Other Income, net.In the three months ended March 31, 2011, we recognized other income of $0.5 million primarily related to the change in the fair value of assets related to our non-qualified
deferred compensation plan compared to $0.1 million of other income for the same period in 2010.

Depreciation and
Amortization. Depreciation and amortization expense was $6.9 million in the three months ended March 31, 2011 compared to $6.4 million for the three months ended March 31, 2010. The increase of $0.5 million was primarily due to higher
amortization expense related to our acquisitions in 2010 and 2011.

Net Interest Expense. Net interest expense
decreased $2.5 million to $3.3 million in the three months ended March 31, 2011, compared to $5.8 million in the corresponding period in 2010, primarily due to reduced levels of outstanding debt as well as lower borrowing rates on our term loan
facility.

Transaction Costs.Transaction costs were $0.2 million for the three months ended March 31, 2011 and
$0.1 million for the three months ended March 31, 2010. These costs relate to advisory, legal, accounting and other fees incurred related to acquisition activity during the respective periods.

Loss on Extinguishment of Debt.In 2010, we recognized a loss of $14.9 million in connection with the redemption of $157.5 million
of our 11.25% Senior Subordinated Notes.

Earnings before Income Taxes. Earnings before income taxes in the three
months ended March 31, 2011 were $36.2 million compared to $17.9 million in the three months ended March 31, 2010.

Provision for Income Taxes. The provision for income taxes was $14.6 million in the three months ended March 31, 2011
compared to $7.0 million in the corresponding period in 2010.

Net Earnings. Net earnings were $21.6 million in the
three months ended March 31, 2011 compared to $10.9 million in the three months ended March 31, 2010.

Liquidity and Capital
Resources

Our principal ongoing uses of cash are to meet working capital requirements, fund debt obligations and to
finance our capital expenditures and acquisitions. We believe that our cash needs, other than for significant acquisitions, will continue to be met through the use of existing available cash, cash flows derived from future operating results and
borrowings under our senior secured revolving credit facility.



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Cash provided by operating activities in the three months ended March 31, 2011 was
$27.8 million compared to cash used in operating activities of $10.7 million in the corresponding period in 2010. The $38.5 million increase in operating cash flow was principally the result of improved profitability in 2011, absence of cash costs
of $13.8 million associated with the 11.25% Senior Subordinated Note redemption in 2010, and a reduction in the funding of current liabilities, including prior year incentive plan liabilities, and interest payments during the first three months of
2011 compared to the same period in 2010. Cash used in investing activities in the three months ended March 31, 2011 was $11.0 million compared to $7.2 million in the same period of 2010. The $3.8 million increase in cash used in investing
activities was principally due to an increase in cash payments related to acquisitions, an increase in net purchases of investments between periods at the captive insurance subsidiary and an increase in capital expenditures. Cash provided by
financing activities in the three months ended March 31, 2011 was $2.0 million compared to cash used in financing activities of $136.8 million in the three months ended March 31, 2010. The change in cash associated with financing
activities was due to $3.6 million of proceeds from the exercise of stock options in 2011 compared to the $157.5 million payment made in connection with the redemption of our 11.25% Notes, partially offset by the $21.8 million net proceeds received
in connection with the exercise of the underwriters over-allotment option relating to our initial public offering during the three months ended March 31, 2010.

We spent $2.2 million in the first three months of 2011 and $1.2 million in the first three months of 2010 for capital expenditures. These expenditures were primarily for billing and information
technology investments and related development projects along with projects in support of operational initiatives.

As of
March 31, 2011, we had $402.7 million in aggregate indebtedness consisting of our term loan with an additional $125.0 million of borrowing capacity available under our senior secured revolving credit facility (without giving effect to $7.1
million of undrawn letters of credit). Outstanding term loan borrowings under the senior credit facility mature on November 23, 2012.

The senior credit facility agreement, as amended, contains both affirmative and negative covenants, including limitations on our ability to incur additional indebtedness, sell material assets, retire,
redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, pay dividends, and require us to comply with certain coverage and leverage ratios. The amendment also provides additional flexibility under
certain of our covenants, including permitting us to make additional investments, loans and advances and to incur additional earn-out obligations in connection with permitted acquisitions. The senior credit agreement also includes a provision for
the prepayment of a portion of the outstanding term loan amounts at any year-end if we generate excess cash flow, as defined in the agreement.

As of December 31, 2010, we were a party to three separate forward interest rate swap agreements. These agreements expired in the first quarter of 2011. The change in value during the three months
ended March 31, 2011 of approximately $0.6 million, net of tax, was recorded as a component of other comprehensive earnings.

Subject to any contractual restrictions, the Company and its subsidiaries, affiliates or significant shareholders (including The Blackstone Group L.P. and its affiliates) may from time to time, in their
sole discretion, purchase, repay, redeem or retire any of the Companys outstanding debt or equity securities in privately negotiated or open market transactions, by tender offer or otherwise.

As of March 31, 2011, we had total cash and cash equivalents of approximately $49.2 million. There are no known liquidity
restrictions or impairments on our cash and cash equivalents as of March 31, 2011. Our ongoing cash needs for the three months ended March 31, 2011 were met from internally generated operating sources. As of March 31, 2011, there were
no amounts outstanding under the revolving credit facility.

We have historically been an acquirer of other physician staffing
businesses and related interests. In April 2011, we entered into an agreement to acquire an emergency medical staffing group that provides staffing services to a hospital located in Alabama, which we began staffing in late April. During the first
quarter of 2011, $6.9 million of contingent consideration was paid on prior year acquisitions. Maximum future contingent payment obligations are approximately $25.3 million.



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We are in discussions with certain physician staffing businesses regarding potential
acquisition opportunities. If we consummate these potential acquisitions, we would expect to fund such acquisitions using our existing cash or through borrowings under our revolving credit facility.

Effective March 12, 2003, we began providing for professional liability risks in part through a captive insurance company. Prior to
such date, we insured such risks principally through the commercial insurance market. The change in the professional liability insurance program initially resulted in increased cash flow due to the retention of cash formerly paid out in the form of
insurance premiums to a commercial insurance company coupled with a long period (typically 2-4 years or longer on average) before cash payout of such losses occurs. A portion of such cash retained is retained within our captive insurance company and
therefore not immediately available for general corporate purposes. As of March 31, 2011, the current value of cash or cash equivalents and related investments held within the captive insurance company totaled approximately $89.5 million.
Investments of the captive insurance subsidiary are carried at fair market value and as of March 31, 2011 reflected $1.9 million of net unrealized gains. See Note 8 of the accompanying consolidated financial statements for a discussion of the
investments held by our captive insurance subsidiary. Effective June 1, 2010, we renewed our fronting carrier program with a commercial insurance carrier through May 31, 2011. In connection with this renewal, we have paid cash premiums of
approximately $10.0 million to the commercial insurance carrier. For the three months ended March 31, 2011, we funded approximately $9.2 million of premiums to the captive subsidiary. For the three months ended March 31, 2011, we also
funded a total of $0.5 million to a commercial insurance provider in order to meet our obligation for incurred costs in excess of the aggregate limits of coverage in place on the commercial insurance policy that ended March 11, 2003. We will
fund additional payments which will be based upon the level of incurred losses relative to the aggregate limit of the coverage at that time as additional claims are processed.

The following table sets forth a reconciliation of net earnings to Adjusted EBITDA. Adjusted EBITDA is defined as net earnings before interest expense, taxes, depreciation and amortization, as further
adjusted to exclude the non-cash items and the other adjustments shown in the table below. We believe that the disclosure of the calculation of Adjusted EBITDA provides information that is useful to an investors understanding of our financial
flexibility and performance. Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles. It should not be considered in isolation or as a substitute for net income, operating income,
cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles.



|                                                                            |  |                             |        |   |      |   |        |  
|--------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                            |  | Three Months EndedMarch 31, |       
|                                                                            |  | 2010                        |        |   | 2011 |  
|                                                                            |  | (in thousands)              |       
|Net earnings                                                                |  | $                           | 10,898 |   |      | $ | 21,636 |  
|Interest expense, net                                                       |  |                             | 5,763  |   |      |   | 3,277  |  
|Provision for income taxes                                                  |  |                             | 6,962  |   |      |   | 14,550 |  
|Depreciation and amortization                                               |  |                             | 6,415  |   |      |   | 6,899  |  
|Other income, net(a)                                                        |  |                             | (62    | ) |      |   | (548   | )
|Loss on extinguishment of debt(b)                                           |  |                             | 14,862 |   |      |   |       |  
|Transaction costs(c)                                                        |  |                             | 65     |   |      |   | 154    |  
|Stock based compensation expense(d)                                         |  |                             | 204    |   |      |   | 606    |  
|Insurance subsidiary interest income                                        |  |                             | 684    |   |      |   | 598    |  
|Professional liability loss reserve adjustments associated with prior years |  |                             | (7,219 | ) |      |   |       |  
|Severance and other charges                                                 |  |                             | 12     |   |      |   | 792    |  
|                                                                            |  |                             |        |   |      |   |        |  
|Adjusted EBITDA                                                             |  | $                           | 38,584 |   |      | $ | 47,964 |  
|                                                                            |  |                             |        |   |      |   |        |  



|(a) | Reflects gain or loss on sale of assets, realized gains on investments, and changes in fair value of investments associated with the Companys non-qualified
retirement plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(b) | Reflects the loss on the redemption of a portion of the Companys 11.25% Senior Subordinated Notes, including the write-off of deferred financing costs of $3,837.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Reflects expenses associated with acquisition transaction fees.
|--- | ---------------------------------------------------------------

|(d) | Reflects costs related to options and restricted shares granted under the Team Health Holdings, Inc. 2009 Stock Incentive Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------

Inflation

We do not
believe that general inflation in the U.S. economy has had a material impact on our financial position or results of operations.

Seasonality

Historically, our revenues and operating results have reflected minimal seasonal variation due to the significance of revenues derived
from patient visits to emergency departments, which are generally open on a year-round basis, and also due to our geographic diversification. Revenue from our non-emergency department staffing lines is dependent on a healthcare facility being open
during selected time periods. Revenue in such instances will fluctuate depending upon such factors as the number of holidays in the period.

Recently Issued Accounting Standards

See Note 3 of the accompanying consolidated financial statements for a discussion of recently issued accounting standards.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

The Company is exposed to market risk related to changes in interest rates. The Company does not use derivative financial instruments for
speculative or trading purposes.

The Companys earnings are affected by changes in short-term interest rates as a result
of its borrowings under its term loan facility.

At March 31, 2011, the fair value of the Companys total debt,
which had a carrying value of $402.7 million, was approximately $403.2 million. The Company had $402.7 million of variable debt outstanding at March 31, 2011. If the market interest rates for the Companys variable rate borrowings had
averaged 1% more subsequent to December 31, 2010, the Companys interest expense (excluding the impact of our interest rate swap agreements) would have increased, and earnings before income taxes would have decreased, by approximately $1.0
million for the three months ended March 31, 2011. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude,
management could take actions in an attempt to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in the
Companys financial structure. This level of interest rate exposure is consistent with the overall interest rate exposure at December 31, 2010.



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|Item 4. | Controls and Procedures
|------- | -----------------------

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), that are designed to
ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and that such
information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired objectives. As of March 31, 2011, we conducted an evaluation under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that as of March 31, 2011, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting:There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) that occurred during the quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART 2. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We are currently a party to various legal proceedings. While we currently believe that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect
on our financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our net earnings in the
period in which the ruling occurs. The estimate of the potential impact from such legal proceedings on our financial position or overall results of operations could change in the future.



|Item 1A. | Risk Factors
|-------- | ------------

There are no material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on
February 8, 2011.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | (Removed and Reserved)
|------- | ----------------------



|Item 5. | Other Information
|------- | -----------------

Members of the Companys board of directors and certain employees, including senior executives and others who regularly have access to material non-public information, may enter into trading plans
designed to comply with the Companys Securities Trading Policy and the requirements of Rule 10b5-1 promulgated by the Securities and Exchange Commission under Section 10(b) of the Securities Exchange Act of 1934, as amended.

During the quarter ended March 31, 2011, Dr. Lynn Massingale, our Executive Chairman and Director, his wife and trusts
controlled by him and his wife entered into such trading plans (collectively, the Plans) for the purpose of long-term asset diversification and estate planning. The Plans extend through June 4, 2012.

The Company does not undertake to report other Rule 10b5-1 plans that may be adopted by any officers or directors of the Company in the
future, or to report any modifications or termination of any publicly announced plan or to report any plan adopted by an employee who is not an executive officer.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                                        
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|3.1  |  | Certificate of Incorporation of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed on December 18, 2009: File No.
001-34583)
|     | 
|3.2  |  | By-laws of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K, filed on December 18, 2009: File No. 001-34583)                     
|     | 
|10.1 |  | First Amendment, dated February 11, 2011, to Amended and Restated Employment Agreement, dated November 29, 2009, between Team Health, Inc. and Gregory S. Roth (filed
herewith)*       
|     | 
|31.1 |  | Certification by Greg Roth for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)                             
|     | 
|31.2 |  | Certification by David Jones for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)                           
|     | 
|32.1 |  | Certification by Greg Roth for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)                             
|     | 
|32.2 |  | Certification by David Jones for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)                           



|* | Management contracts or compensatory plans or arrangements
|- | ----------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed
on its behalf by the undersigned thereunto duly authorized.



|            |  |                                                                    
|----------- |  | -------------------------------------------------------------------
|            |  | TEAM HEALTH HOLDINGS, INC.                                         
|            | 
|May 3, 2011 |  | /S/    GREG
ROTH                                                   
|            |  | Greg Roth Chief Executive Officer                                  
|            | 
|May 3, 2011 |  | /S/    DAVID P.
JONES                                              
|            |  | David P. Jones Executive Vice President and Chief Financial Officer



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EXHIBIT INDEX



|     |  |                                                                                                                                                                                        
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|3.1  |  | Certificate of Incorporation of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed on December 18, 2009: File No.
001-34583)
|     | 
|3.2  |  | By-laws of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K, filed on December 18, 2009: File No. 001-34583)                     
|     | 
|10.1 |  | First Amendment, dated February 11, 2011, to Amended and Restated Employment Agreement, dated November 29, 2009, between Team Health, Inc. and Gregory S. Roth (filed
herewith)*       
|     | 
|31.1 |  | Certification by Greg Roth for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)                             
|     | 
|31.2 |  | Certification by David Jones for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)                           
|     | 
|32.1 |  | Certification by Greg Roth for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)                             
|     | 
|32.2 |  | Certification by David Jones for Team Health Holdings, Inc. dated May 3, 2011 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)                           



|* | Management contracts or compensatory plans or arrangements
|- | ----------------------------------------------------------



40