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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number: 000-51251
 
 (LIFE POINT HOSPITALS, INC. LOGO)
 (Exact Name of Registrant as Specified in its Charter)
 Delaware(State or Other Jurisdiction of 
Incorporation or Organization)
    
    20-1538254(I.R.S. Employer
Identification No.)103 Powell Court, Suite 200
Brentwood, Tennessee(Address Of Principal Executive Offices)
    
    37027(Zip Code)
 (615) 372-8500  (Registrants Telephone Number, Including Area Code)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Exchange on Which RegisteredCommon Stock, par value $.01 per share
    
    NASDAQ Global Select MarketPreferred Stock Purchase Rights
    
    NASDAQ Global Select Market
 Securities registered pursuant to Section 12(g) of the Act: NONE
  þ o
  o þ
 þ o
 o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    19Item 1B.
    
    Unresolved Staff Comments
    
    
    29Item 2.
    
    Properties
    
    
    30Item 3.
    
    Legal Proceedings
    
    
    31Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    31PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    32Item 6.
    
    Selected Financial Data
    
    
    35Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    36Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    75Item 8.
    
    Financial Statements and Supplementary Data
    
    
    76Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    76Item 9A.
    
    Controls and Procedures
    
    
    76Item 9B.
    
    Other Information
    
    
    76PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    77Item 11.
    
    Executive Compensation
    
    
    77Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    78Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    78Item 14.
    
    Principal Accountant Fees and Services
    
    
    78PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    79SIGNATURES
    
    
    80Exhibit Index
    
    
    84EX-10.8EX-10.10EX-10.20EX-10.37EX-12.1EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2






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PART I
 
 Item 1.

    Business.
 Overview of Our Company
  ®
 Operations
    1




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Availability of Information
 www.lifepointhospitals.com .
 2




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Sources of Revenue
  2006
    
    2007
    
    2008Medicare
    
    
    34.8
    %
    
    
    32.6
    %
    
    
    31.2
    %Medicaid
    
    
    10.1
    
    
    
    9.7
    
    
    
    9.5HMOs, PPOs and other private insurers
    
    
    39.2
    
    
    
    42.7
    
    
    
    44.5Self-pay
    
    
    12.0
    
    
    
    11.7
    
    
    
    12.0Other
    
    
    3.9
    
    
    
    3.3
    
    
    
    2.8100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
   Medicare
   3




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Inpatient Acute Care Diagnosis Related Group Payments
   Medicare
    
    MedicareDRG
    
    CapitalPayments
    
    Payments2006
    
    $
    443.3
    
    
    $
    39.22007
    
    
    456.5
    
    
    
    40.52008
    
    
    453.7
    
    
    
    39.6
    4




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FFY 2009 Standard Rate for Hospitals with a Wage Index Greater than the National
Average  (69.7% Labor Share and 30.3% Nonlabor Share)
 Labor-Related
    
    Nonlabor-RelatedFull update (3.6%)
    
    $
    3,574.50
    
    
    $
    1,553.91Reduced update (1.6%)
    
    $
    3,505.49
    
    
    $
    1,523.91
 FFY 2009 Standard Rate for Hospitals with a Wage Index Less than or Equal to the
National Average  (62.0% Labor Share and 38.0% Percent Nonlabor Share)
 Labor-Related
    
    Nonlabor-RelatedFull update (3.6%)
    
    $
    3,179.61
    
    
    $
    1,948.80Reduced update (1.6%)
    
    $
    3,118.23
    
    
    $
    1,911.17
 Capital Standard  Federal Payment Rate
 Outlier Payments
  Disproportionate Share Payments
  5




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Wage Index and Geographic Reclassification
   Inpatient Rehabilitation and the 75% Rule
      6




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Inpatient Psychiatric
  Outpatient Payments
     MedicareOutpatient Payments2006
    
    $
    171.62007
    
    
    185.02008
    
    
    190.5
 7




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Home Health Payments
  Medicare Bad Debt Reimbursement
   
    
    the debt must be related to covered services and derived from deductible and
coinsurance amounts;
    
    the provider must be able to establish that reasonable collection efforts were made;
    
    the debt was actually uncollectible when claimed as worthless; and
    
    sound business judgment established that there was no likelihood of recovery at any
time in the future.
  Recovery Audit Contractors
  8




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Medicaid
      9




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Annual Cost Reports
   HMOs, PPOs and Other Private Insurers
  Self-Pay and Charity/Indigent Care
    Self-Pay
    
    Charity/Indigent Care
    
    CombinedRevenues
    
    Write-Offs
    
    Total2006
    
    $
    279.7
    
    
    $
    40.5
    
    
    $
    320.22007
    
    
    300.0
    
    
    
    50.5
    
    
    
    350.52008
    
    
    324.5
    
    
    
    53.7
    
    
    
    378.2
 Competition for Patients
  
    
    the scope, breadth and quality of services a hospital offers to its patients and
physicians;
    
    whether new, competitive services require the receipt of a certificate of need or
other similar authorization;
    
    the number, quality and specialties of the physicians who admit and refer patients to
the hospital;
    
    nurses and other health care professionals employed by the hospital or on the
hospitals staff;
    
    the hospitals reputation;
 10




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
    
    its managed care contracting relationships;
    
    its location and the location and number of competitive facilities and other
health care alternatives;
    
    the physical condition of its buildings and improvements;
    
    the quality, age and state-of-the-art of its medical equipment;
    
    its parking or proximity to public transportation;
    
    the length of time it has been a part of the community;
    
    the relative convenience of the manner in which care is provided (for example,
whether services are available on an outpatient basis and whether services can be
obtained quickly);
    
    the choices made by the physicians on the medical staffs of our hospitals; and
    
    the charges for its services.
   Competition for Professionals
   11




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Employees
  Government Regulation
 Overview.
  Utilization Review.
 12




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Fraud and Abuse Laws.
 
    
    making claims to Medicare and/or Medicaid for services not provided or misrepresenting
actual services provided in order to obtain higher payments;
    
    paying money to induce the referral of patients or purchase of items or services where
such items or services are reimbursable under a federal or state health program; or
    
    failing to provide appropriate emergency medical screening services to any individual
who comes to a hospitals campus or otherwise failing to properly treat and transfer
emergency patients.
    
    
    payment of any incentive by a hospital each time a physician refers a patient to the
hospital;
    
    use of free or significantly discounted office space or equipment;
    
    provision of free or significantly discounted billing, nursing or other staff services;
    
    free training (other than compliance training) for a physicians office staff,
including management and laboratory technique training;
    
    guarantees which provide that if a physicians income fails to reach a predetermined
level, the hospital will pay any portion of the remainder;
    
    low-interest or interest-free loans, or loans which may be forgiven if a physician
refers patients to the hospital;
    
    payment of the costs for a physicians travel and expenses for conferences;
    
    payment of services which require few, if any, substantive duties by the physician or
which are in excess of the fair market value of the services rendered; or
    
    purchasing goods or services from physicians at prices in excess of their fair market
value.
 13




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14




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Corporate Practice of Medicine and Fee-Splitting.
 Emergency Medical Treatment and Active Labor Act.
   Federal False Claims Act.
  15




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Healthcare Reform.
   Conversion Legislation.
 Certificates of Need.
 HIPAA Transaction, Privacy and Security Requirements.
 16




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Patient Safety and Quality Improvement Act of 2005.
 17




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State Hospital Rate-Setting Activity.
 Medical Malpractice Tort Law Reform.
 Environmental Regulation.
 Regulatory Compliance Program
   Risk Management and Insurance
   18




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Item 1A. Risk Factors.
 Managements Discussion and Analysis of Financial
Condition and Results of Operations
 If we do not effectively attract, recruit and retain qualified physicians, nurses, medical
technicians and other healthcare professionals, our ability to deliver healthcare services
efficiently will be adversely affected.
    19




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The loss of certain physicians can have a disproportionate impact on certain of our hospitals.
  The
failure of certain employers, or the closure of certain manufacturing
and other facilities, can have a disproportionate impact on our
hospitals.
  We may continue to see the growth of uninsured and patient due accounts; deterioration in
the collectability of these accounts could adversely affect our results of operations and cash
flows.
   20




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The current economic recession, along with difficult and volatile conditions in the capital
and credit markets, could materially adversely affect our financial position, results of operations
or cash flows, and we are unsure whether these conditions will improve in the near future.
  Our revenues will decline if federal or state programs reduce our Medicare or Medicaid
payments or if managed care companies reduce reimbursement amounts. In addition, the financial
condition of payors and healthcare cost containment initiatives may limit our revenues and
profitability.
     21




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We are subject to increasingly stringent governmental regulation, and may be subjected to
allegations that we have failed to comply with governmental regulations which could result in
sanctions and even greater scrutiny that reduce our revenues and profitability.
     22




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Other hospitals and outpatient facilities provide services similar to those which we offer. In
addition, physicians provide services in their offices that could be provided in our hospitals.
These factors increase the level of competition we face and may therefore adversely affect our
revenues, profitability and market share.
   23




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Our revenues are especially concentrated in a small number of states which will make us
particularly sensitive to regulatory and economic changes in those states.
  Revenue Concentration by StateAmount
    
    % of Total Revenues2006
    
    2007
    
    2008
    
    2006
    
    2007
    
    2008Kentucky
    
    $
    404.0
    
    
    $
    435.4
    
    
    $
    465.0
    
    
    
    17.3
    %
    
    
    17.0
    %
    
    
    17.2
    %Virginia
    
    
    341.9
    
    
    
    369.7
    
    
    
    381.6
    
    
    
    14.6
    
    
    
    14.4
    
    
    
    14.1New Mexico
    
    
    210.9
    
    
    
    225.0
    
    
    
    245.7
    
    
    
    9.0
    
    
    
    8.8
    
    
    
    9.1West Virginia
    
    
    151.7
    
    
    
    229.7
    
    
    
    243.4
    
    
    
    6.5
    
    
    
    8.9
    
    
    
    9.0Tennessee
    
    
    199.6
    
    
    
    209.8
    
    
    
    223.2
    
    
    
    8.5
    
    
    
    8.2
    
    
    
    8.3Alabama
    
    
    186.5
    
    
    
    191.0
    
    
    
    203.2
    
    
    
    8.0
    
    
    
    7.4
    
    
    
    7.5Louisiana
    
    
    170.5
    
    
    
    189.4
    
    
    
    194.6
    
    
    
    7.3
    
    
    
    7.4
    
    
    
    7.2Arizona
    
    
    133.0
    
    
    
    167.1
    
    
    
    173.8
    
    
    
    5.7
    
    
    
    6.5
    
    
    
    6.4Texas
    
    
    136.3
    
    
    
    135.3
    
    
    
    142.3
    
    
    
    5.8
    
    
    
    5.3
    
    
    
    5.3
  If our access to licensed information systems is interrupted or restricted, or if we are not
able to integrate changes to our existing information systems or information systems of acquired
hospitals, our operations could suffer.
    24




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We have substantial indebtedness and we may incur significant amounts of additional
indebtedness in the future which could affect our ability to finance operations and capital
expenditures, pursue desirable business opportunities or successfully operate our business in the
future.
   
    
    Under our credit facility, we are required to satisfy and maintain specified
financial ratios and tests. Failure to comply with these obligations may cause an event
of default which, if not cured or waived, could required us to repay substantial
indebtedness immediately. Moreover, if debt repayment is accelerated, we will be subject
to higher interest rates on our debt obligations as a result of these covenants and our
credit ratings may be adversely impacted.
    
    We may be vulnerable in the event of downturns and adverse changes in the general
economy or our industry. Specific examples of industry changes that could have an
adverse impact on our cash flow include the implementation by the government of further
limitations on reimbursement under Medicare and Medicaid.
    
    We may have difficulty obtaining additional financing at favorable interest rates
to meet our requirements for working capital, capital expenditures, acquisitions,
general corporate or other purposes.
    
    We will be required to dedicate a substantial portion of our cash flow to the
payment of principal and interest on indebtedness, which will reduce the amount of funds
available for operations, capital expenditures and future acquisitions.
    
    Any borrowings we incur at variable interest rates expose us to increases in
interest rates generally.
    
    A breach of any of the restrictions or covenants in our debt agreements could
cause a cross-default under other debt agreements. We may be required to pay our
indebtedness immediately if we default on any of the numerous financial or other
restrictive covenants contained in the debt agreements. It is not certain whether we
will have, or will be able to obtain, sufficient funds to make these accelerated
payments. If any senior debt is accelerated, our assets may not be sufficient to repay
such indebtedness and our other indebtedness.
 25




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
    
    In the event of a default, we may be forced to pursue one or more alternative
strategies, such as restructuring or refinancing our indebtedness, selling assets,
reducing or delaying capital expenditures or seeking additional equity capital. There
can be no assurances that any of these strategies could be effected on satisfactory
terms, if at all, or that sufficient funds could be obtained to make these accelerated
payments.
 We may be subject to liabilities because of malpractice and related legal claims brought
against our hospitals. If we become subject to these claims, we could be required to pay
significant damages, which may not be covered by insurance.
    Our revenues and volume trends may be adversely affected by certain factors over which we have
no control.
  If our fair value declines, a material non-cash charge to earnings from impairment of our
goodwill could result.
  26




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We may have difficulty acquiring hospitals on favorable terms and, because of regulatory
scrutiny, acquiring not-for-profit entities.
     We may encounter numerous business risks in acquiring additional hospitals and may have
difficulty operating and integrating those hospitals. As a result, we may be unable to achieve our
growth strategy.
   If we do not continually enhance our hospitals with the most recent technological advances in
diagnostic and surgical equipment, our ability to maintain and expand our markets may be adversely
affected.
  27




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We may be subjected to actions brought by the government under anti-fraud and abuse provisions
or by individuals on the governments behalf under the False Claims Acts qui tam or
whistleblower provisions.
  
    
    criminal penalties;
    
    civil monetary penalties; and/or
    
    exclusion from participation in Medicare, Medicaid or other federal healthcare
programs, any of which could impair our ability to operate one or more of our hospitals
profitably.
     Certificate of need laws and regulations regarding licenses, ownership and operation may
impair our future expansion in some states.
  28




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In states without certificate of need laws, competing providers of healthcare services are
able to expand and construct facilities without the need for significant regulatory approval.
  Different interpretations of accounting principles could have a material adverse effect on our
results of operations or financial condition.
  Our stock price has been and may continue to be volatile; any significant decline may result
in litigation.
   
    
    actual or anticipated quarterly variations in operating results, particularly if they
differ from investors expectations;
    
    changes in financial estimates and recommendations by securities analysts;
    
    changes in government regulations including those relating to reimbursement and
operational policies and procedures;
    
    the operating and stock price performance of other companies that investors may deem
comparable;
    
    changes in overall economic factors in our markets;
    
    news reports relating to trends or events in our markets; and
    
    issues associated with integration of the hospitals that we acquire.
   
 Item 1B.
    
    Unresolved Staff Comments.
  29




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Item 2.
    
    Properties.
  Acquisition/Opening/
    
    Licensed
    
    OperationalHospital
    
    City
    
    Lease Date
    
    Beds
    
    StatusAlabamaAndalusia Regional Hospital
    
    Andalusia
    
    HCA Spin-Off(a)
    
    
    100
    
    
    OwnLakeland Community Hospital
    
    Haleyville
    
    December 1, 2002
    
    
    50
    
    
    OwnNorthwest Medical Center
    
    Winfield
    
    December 1, 2002
    
    
    71
    
    
    OwnRussellville Hospital
    
    Russellville
    
    October 3, 2002
    
    
    100
    
    
    OwnVaughan Regional Medical Center
    
    Selma
    
    April 15, 2005
    
    
    175
    
    
    OwnArizonaHavasu Regional Medical Center
    
    Lake Havasu City
    
    April 15, 2005
    
    
    181
    
    
    OwnValley View Medical Center
    
    Ft. Mohave
    
    November 8, 2005
    
    
    66
    
    
    OwnColoradoColorado Plains Medical Center
    
    Fort Morgan
    
    April 15, 2005
    
    
    50
    
    
    LeaseFloridaPutnam Community Medical Center
    
    Palatka
    
    June 16, 2000
    
    
    141
    
    
    OwnIndianaStarke Memorial Hospital (Starke) (b)
    
    Knox
    
    April 15, 2005
    
    
    53
    
    
    LeaseKansasWestern Plains Medical Complex
    
    Dodge City
    
    HCA Spin-Off(a)
    
    
    99
    
    
    OwnKentuckyBluegrass Community Hospital
    
    Versailles
    
    January 2, 2001
    
    
    25
    
    
    OwnBourbon Community Hospital
    
    Paris
    
    HCA Spin-Off(a)
    
    
    58
    
    
    OwnGeorgetown Community Hospital
    
    Georgetown
    
    HCA Spin-Off(a)
    
    
    75
    
    
    OwnJackson Purchase Medical Center
    
    Mayfield
    
    HCA Spin-Off(a)
    
    
    107
    
    
    OwnLake Cumberland Regional Hospital
    
    Somerset
    
    HCA Spin-Off(a)
    
    
    259
    
    
    OwnLogan Memorial Hospital
    
    Russellville
    
    HCA Spin-Off(a)
    
    
    92
    
    
    OwnMeadowview Regional Medical Center
    
    Maysville
    
    HCA Spin-Off(a)
    
    
    101
    
    
    OwnSpring View Hospital
    
    Lebanon
    
    October 1, 2003
    
    
    75
    
    
    OwnLouisianaAcadian Medical Center
    
    Eunice
    
    April 15, 2005
    
    
    52
    
    
    OwnDoctors Hospital of Opelousas
(Opelousas) (b)
    
    Opelousas
    
    April 15, 2005
    
    
    171
    
    
    OwnMinden Medical Center
    
    Minden
    
    April 15, 2005
    
    
    159
    
    
    OwnRiver Parishes Hospital
    
    LaPlace
    
    July 1, 2004
    
    
    106
    
    
    OwnTeche Regional Medical Center
    
    Morgan City
    
    April 15, 2005
    
    
    149
    
    
    LeaseVille Platte Medical Center
    
    Ville Platte
    
    December 1, 2001
    
    
    95
    
    
    OwnMississippiBolivar Medical Center
    
    Cleveland
    
    April 15, 2005
    
    
    200
    
    
    LeaseNevadaNortheastern Nevada Regional Hospital
    
    Elko
    
    April 15, 2005
    
    
    75
    
    
    OwnNew MexicoLos Alamos Medical Center
    
    Los Alamos
    
    April 15, 2005
    
    
    47
    
    
    OwnMemorial Medical Center of Las Cruces
    
    Las Cruces
    
    April 15, 2005
    
    
    286
    
    
    LeaseTennesseeAthens Regional Medical Center
    
    Athens
    
    October 1, 2001
    
    
    118
    
    
    OwnCrockett Hospital
    
    Lawrenceburg
    
    HCA Spin-Off(a)
    
    
    107
    
    
    OwnEmerald-Hodgson Hospital
    
    Sewanee
    
    HCA Spin-Off(a)
    
    
    41
    
    
    OwnHillside Hospital
    
    Pulaski
    
    HCA Spin-Off(a)
    
    
    95
    
    
    OwnLivingston Regional Hospital
    
    Livingston
    
    HCA Spin-Off(a)
    
    
    114
    
    
    OwnSouthern Tennessee Medical Center
    
    Winchester
    
    HCA Spin-Off(a)
    
    
    157
    
    
    OwnTexasEnnis Regional Medical Center
    
    Ennis
    
    April 15, 2005
    
    
    60
    
    
    LeasePalestine Regional Medical Center
    
    Palestine
    
    April 15, 2005
    
    
    150
    
    
    OwnParkview Regional Hospital
    
    Mexia
    
    April 15, 2005
    
    
    59
    
    
    LeaseUtahAshley Regional Medical Center
    
    Vernal
    
    HCA Spin-Off(a)
    
    
    39
    
    
    OwnCastleview Hospital
    
    Price
    
    HCA Spin-Off(a)
    
    
    84
    
    
    Own
 30




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Acquisition/Opening/
    
    Licensed
    
    OperationalHospital
    
    City
    
    Lease Date
    
    Beds
    
    StatusVirginiaClinch Valley Medical Center
    
    Richlands
    
    July 1, 2006
    
    
    175
    
    
    OwnDanville Regional Medical Center
    
    Danville
    
    July 1, 2005
    
    
    350
    
    
    OwnMemorial Hospital of Martinsville and
Henry County
    
    Martinsville
    
    April 15, 2005
    
    
    220
    
    
    OwnWythe County Community Hospital
    
    Wytheville
    
    June 1, 2005
    
    
    100
    
    
    LeaseWest VirginiaLogan Regional Medical Center
    
    Logan
    
    December 1, 2002
    
    
    140
    
    
    OwnRaleigh General Hospital
    
    Beckley
    
    July 1, 2006
    
    
    300
    
    
    OwnWyomingLander Regional Hospital
    
    Lander
    
    July 1, 2000
    
    
    89
    
    
    OwnRiverton Memorial Hospital
    
    Riverton
    
    HCA Spin-Off(a)
    
    
    70
    
    
    Own5,686
 
 (a)
    
    We were formerly a division of HCA and were spun-off as an independent publicly-traded
company on May 11, 1999.(b)
    
    Held-for-sale hospital.  
 Item 3.
    
    Legal Proceedings.
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders.
  31




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PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities.
 Market Information for Common Stock
  High
    
    Low2007First Quarter
    
    $
    38.49
    
    
    $
    32.74Second Quarter
    
    
    40.80
    
    
    
    35.91Third Quarter
    
    
    40.49
    
    
    
    27.38Fourth Quarter
    
    
    32.50
    
    
    
    28.102008First Quarter
    
    $
    30.75
    
    
    $
    23.76Second Quarter
    
    
    33.25
    
    
    
    27.28Third Quarter
    
    
    35.94
    
    
    
    27.85Fourth Quarter
    
    
    31.79
    
    
    
    16.922009First Quarter (through February 17, 2009)
    
    $
    25.06
    
    
    $
    21.20
  Stockholders
  Dividends
  Recent Sales of Unregistered Securities
  32




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##### Table of Contents



Recent Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    ApproximateTotal Number
    
    Dollar Valueof Shares
    
    of Shares thatPurchased as
    
    May Yet BeWeighted
    
    Part of a
    
    PurchasedTotal Number
    
    Average
    
    Publicly
    
    Under theof Shares
    
    Price Paid
    
    Announced
    
    ProgramPeriod
    
    Purchased
    
    per Share
    
    Program
    
    (In millions)December 1, 2007 to December 31, 2007
    
    
    1,356,487
    
    
    $
    30.35
    
    
    
    1,356,487
    
    
    $
    108.8January 1, 2008 to January 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    108.8February 1, 2008 to February 29, 2008
    
    
    1,865,280
    
    
    $
    25.12
    
    
    
    1,865,280
    
    
    $
    62.0March 1, 2008 to March 31, 2008
    
    
    1,132,500
    
    
    $
    25.20
    
    
    
    1,132,500
    
    
    $
    33.4April 1, 2008 to April 30, 2008
    
    
    77,532
    
    
    $
    28.37
    
    
    
    
    
    
    $
    33.4May 1, 2008 to May 31, 2008
    
    
    548,039
    
    
    $
    31.37
    
    
    
    548,039
    
    
    $
    16.2June 1, 2008 to June 30, 2008
    
    
    359,424
    
    
    $
    31.08
    
    
    
    359,424
    
    
    $
    5.1July 1, 2008 to July 31, 2008
    
    
    1,727
    
    
    $
    28.76
    
    
    
    
    
    
    $
    5.1August 1, 2008 to August 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    5.1September 1, 2008 to September 30, 2008
    
    
    556
    
    
    $
    33.28
    
    
    
    
    
    
    $
    5.1October 1, 2008 to October 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    5.1November 1, 2008 to November 30, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    December 1, 2008 to December 31, 2008
    
    
    4,611
    
    
    $
    21.22
    
    
    
    
    
    
    $
    Total
    
    
    5,346,156
    
    
    $
    27.56
    
    
    
    5,261,730
    
    
    $
    
 33




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##### Table of Contents



Equity Compensation Plan Information
  Number of SecuritiesNumber of Securities
    
    
    
    
    
    
    Available for Futureto be Issued Upon
    
    
    Weighted-Average
    
    
    Issuance Under EquityExercise of Outstanding
    
    
    Exercise Price of
    
    
    Compensation PlansOptions, Warrants and
    
    
    Outstanding Options,
    
    
    (Excluding SecuritiesRights
    
    
    Warrants and Rights
    
    
    Reflected in Column (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity Compensation
Plans Approved by
Security Holders
    
    
    4,807,142
    (1)
    
    $
    30.13
    (2)
    
    
    3,776,437
    (3)Equity Compensation
Plans not Approved
by Security Holders
    
    None
    
    None
    
    NoneTotal
    
    
    4,807,142
    
    
    $
    30.13
    
    
    
    3,776,437
 
 (1)
    
    Includes the following: 
    
    4,665,973 shares of common stock to be issued upon exercise of outstanding stock
options granted under the LTIP;
    
    131,587 shares of common stock to be issued upon exercise of outstanding stock options
granted under the ODSICP;
    
    9,582 shares of common stock to be issued upon the vesting of deferred stock units
outstanding under the ODSICP
 (2)
    
    Upon vesting, deferred stock units and restricted stock units are settled for shares of
common stock on a one-for-one basis. Accordingly, the deferred stock units and restricted
stock units have been excluded for purposes of computing the weighted-average exercise price.(3)
    
    Includes the following:
 
    
    3,591,770 shares of common stock available for issuance under the LTIP;
    
    97,893 shares of common stock available for issuance under the MSPP; and
    
    86,774 shares of common stock available for issuance under the ODSCIP.
 34




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##### Table of Contents



Item 6.
    
    Selected Financial Data.
 Managements Discussion and Analysis of Financial
Condition and Results of Operations.
 Years Ended December 31,2004
    
    
    2005

    
    

    2006
    
    
    2007
    
    
    2008(In millions, except per share amounts)Statement of Operations Data:Revenues
    
    $
    982.8
    
    
    $
    1,762.7
    
    
    $
    2,336.5
    
    
    $
    2,568.4
    
    
    $
    2,700.8Income from continuing operations
    
    
    85.9
    
    
    
    77.2
    
    
    
    144.2
    
    
    
    127.7
    
    
    
    138.2Income from continuing operations per share:Basic
    
    $
    2.32
    
    
    $
    1.54
    
    
    $
    2.59
    
    
    $
    2.27
    
    
    $
    2.63Diluted
    
    $
    2.18
    
    
    $
    1.51
    
    
    $
    2.56
    
    
    $
    2.23
    
    
    $
    2.58Weighted average shares outstanding:Basic
    
    
    37.0
    
    
    
    50.1
    
    
    
    55.6
    
    
    
    56.2
    
    
    
    52.5Diluted
    
    
    42.8
    
    
    
    53.2
    
    
    
    56.3
    
    
    
    57.2
    
    
    
    53.5Cash dividends declared per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance Sheet Data (as of end of year):Working capital
    
    $
    159.9
    
    
    $
    275.5
    
    
    $
    377.9
    
    
    $
    373.6
    
    
    $
    376.2Property and equipment, net
    
    
    495.5
    
    
    
    1,221.9
    
    
    
    1,305.4
    
    
    
    1,383.0
    
    
    
    1,416.0Total assets
    
    
    890.4
    
    
    
    3,224.6
    
    
    
    3,638.3
    
    
    
    3,635.9
    
    
    
    3,680.3Long-term debt, including amounts due within one year
    
    
    221.0
    
    
    
    1,514.1
    
    
    
    1,668.6
    
    
    
    1,517.2
    
    
    
    1,516.7Stockholders equity
    
    
    509.5
    
    
    
    1,287.8
    
    
    
    1,450.0
    
    
    
    1,544.2
    
    
    
    1,578.6
 35




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##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
     Risk
Factors Quantitative and Qualitative Disclosures
about Market Risk
 Overview
  36




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##### Table of Contents



Competitive and Regulatory Environment
      37




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##### Table of Contents



Business Strategy
 ®
     38




---



##### Table of Contents



Additional Growth
   Revenue Sources
     39




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##### Table of Contents



Results of Operations
 Managements Discussion
and Analysis of Financial Condition and Results of Operations:
 Admissions.
 bps.
 Continuing operations.
 Emergency room visits.
 Equivalent admissions.
 Net revenue days outstanding
 ESOP.
 Medicare case mix index.
 N/A. .
 N/M.
 Outpatient surgeries.
 40




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##### Table of Contents



Operating Results Summary
  Three Months Ended December 31,2007
    
    
    2008% of
    
    
    
    
    
    
    % ofAmount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesRevenues
    
    $
    643.4
    
    
    
    100.0
    %
    
    $
    674.9
    
    
    
    100.0
    %Salaries and benefits
    
    
    253.6
    
    
    
    39.4
    
    
    
    267.9
    
    
    
    39.7Supplies
    
    
    88.8
    
    
    
    13.8
    
    
    
    93.3
    
    
    
    13.8Other operating expenses
    
    
    117.9
    
    
    
    18.3
    
    
    
    127.6
    
    
    
    19.0Provision for doubtful accounts
    
    
    79.1
    
    
    
    12.3
    
    
    
    78.5
    
    
    
    11.6Depreciation and amortization
    
    
    32.2
    
    
    
    5.0
    
    
    
    34.3
    
    
    
    5.1Interest expense, net
    
    
    21.8
    
    
    
    3.4
    
    
    
    21.8
    
    
    
    3.2593.4
    
    
    
    92.2
    
    
    
    623.4
    
    
    
    92.4Income from continuing operations before minority
interests and income taxes
    
    
    50.0
    
    
    
    7.8
    
    
    
    51.5
    
    
    
    7.6Minority interests in earnings of consolidated entities
    
    
    0.2
    
    
    
    
    
    
    
    0.6
    
    
    
    0.1Income from continuing operations before income taxes
    
    
    49.8
    
    
    
    7.8
    
    
    
    50.9
    
    
    
    7.5Provision for income taxes
    
    
    18.1
    
    
    
    2.9
    
    
    
    17.7
    
    
    
    2.6Income from continuing operations
    
    $
    31.7
    
    
    
    4.9
    %
    
    $
    33.2
    
    
    
    4.9
    %
 Years Ended December 31,2006
    
    
    2007
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesRevenues
    
    $
    2,336.5
    
    
    
    100.0
    %
    
    $
    2,568.4
    
    
    
    100.0
    %
    
    $
    2,700.8
    
    
    
    100.0
    %Salaries and benefits
    
    
    918.0
    
    
    
    39.3
    
    
    
    1,006.1
    
    
    
    39.2
    
    
    
    1,065.4
    
    
    
    39.4Supplies
    
    
    326.1
    
    
    
    14.0
    
    
    
    352.2
    
    
    
    13.7
    
    
    
    372.6
    
    
    
    13.8Other operating expenses
    
    
    397.4
    
    
    
    17.0
    
    
    
    464.0
    
    
    
    18.0
    
    
    
    499.8
    
    
    
    18.5Provision for doubtful accounts
    
    
    250.0
    
    
    
    10.7
    
    
    
    307.0
    
    
    
    12.0
    
    
    
    313.2
    
    
    
    11.6Depreciation and amortization
    
    
    105.4
    
    
    
    4.5
    
    
    
    129.4
    
    
    
    5.0
    
    
    
    132.1
    
    
    
    4.9Interest expense, net
    
    
    100.8
    
    
    
    4.3
    
    
    
    94.5
    
    
    
    3.7
    
    
    
    88.0
    
    
    
    3.3Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    2,097.7
    
    
    
    89.8
    
    
    
    2,353.2
    
    
    
    91.6
    
    
    
    2,472.3
    
    
    
    91.5Income from continuing operations
before minority interests and
income taxes
    
    
    238.8
    
    
    
    10.2
    
    
    
    215.2
    
    
    
    8.4
    
    
    
    228.5
    
    
    
    8.5Minority interests in earnings of
consolidated entities
    
    
    1.4
    
    
    
    
    
    
    
    1.7
    
    
    
    0.1
    
    
    
    2.2
    
    
    
    0.1Income from continuing operations
before income taxes
    
    
    237.4
    
    
    
    10.2
    
    
    
    213.5
    
    
    
    8.3
    
    
    
    226.3
    
    
    
    8.4Provision for income taxes
    
    
    93.2
    
    
    
    4.0
    
    
    
    85.8
    
    
    
    3.3
    
    
    
    88.1
    
    
    
    3.3Income from continuing operations
    
    $
    144.2
    
    
    
    6.2
    %
    
    $
    127.7
    
    
    
    5.0
    %
    
    $
    138.2
    
    
    
    5.1
    %
 41




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##### Table of Contents



For the Three Months Ended December 31, 2007 and 2008
 Revenues
    Three Months Ended
    
    
    
    
    
    %December 31,
    
    Increase
    
    Increase2007
    
    2008
    
    (Decrease)
    
    (Decrease)Admissions
    
    
    46,756
    
    
    
    45,674
    
    
    
    (1,082
    )
    
    
    (2.3
    )%Equivalent admissions
    
    
    92,011
    
    
    
    91,321
    
    
    
    (690
    )
    
    
    (0.7
    )Revenues per equivalent admission
    
    $
    6,992
    
    
    $
    7,390
    
    
    $
    398
    
    
    
    5.7Medicare case mix index
    
    
    1.28
    
    
    
    1.28
    
    
    
    
    
    
    
    Average length of stay (days)
    
    
    4.3
    
    
    
    4.4
    
    
    
    0.1
    
    
    
    2.3Inpatient surgeries
    
    
    13,982
    
    
    
    13,312
    
    
    
    (670
    )
    
    
    (4.8
    )Outpatient surgeries
    
    
    35,525
    
    
    
    36,059
    
    
    
    534
    
    
    
    1.5Emergency room visits
    
    
    215,128
    
    
    
    210,159
    
    
    
    (4,969
    )
    
    
    (2.3
    )Outpatient factor
    
    
    1.97
    
    
    
    2.00
    
    
    
    0.03
    
    
    
    1.5
  Three MonthsEndedDecember 31,2007
    
    2008Medicare
    
    
    32.2
    %
    
    
    30.7
    %Medicaid
    
    
    9.5
    
    
    
    9.0HMOs, PPOs and other private insurers
    
    
    43.5
    
    
    
    45.4Self-Pay
    
    
    11.4
    
    
    
    12.1Other
    
    
    3.4
    
    
    
    2.8100.0
    %
    
    
    100.0
    %
  42




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##### Table of Contents



Expenses
 Salaries and Benefits
  Three Months Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2007
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Salaries and benefits:Salaries, wages, benefits and contract labor
    
    $
    247.3
    
    
    
    38.4
    %
    
    $
    262.0
    
    
    
    38.8
    %
    
    $
    14.7
    
    
    
    5.9
    %Stock-based compensation
    
    
    6.3
    
    
    
    1.0
    
    
    
    5.9
    
    
    
    0.9
    
    
    
    (0.4
    )
    
    
    (6.7
    )$
    253.6
    
    
    
    39.4
    %
    
    $
    267.9
    
    
    
    39.7
    %
    
    $
    14.3
    
    
    
    5.6
    %Man-hours per equivalent admission
    
    
    91.9
    
    
    
    N/A
    
    
    
    94.0
    
    
    
    N/A
    
    
    
    2.1
    
    
    
    2.3
    %Salaries and benefits per equivalent admission
    
    $
    2,612
    
    
    
    N/A
    
    
    $
    2,754
    
    
    
    N/A
    
    
    $
    142
    
    
    
    5.4
    %
  Supplies
  Three Months Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2007
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Supplies
    
    $
    88.8
    
    
    
    13.8
    %
    
    $
    93.3
    
    
    
    13.8
    %
    
    $
    4.5
    
    
    
    5.2
    %Supplies per equivalent admission
    
    $
    966
    
    
    
    N/A
    
    
    $
    1,022
    
    
    
    N/A
    
    
    $
    56
    
    
    
    5.8
    %
  43




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##### Table of Contents



Other Operating Expenses
  Three Months Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2007
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Professional fees
    
    $
    15.7
    
    
    
    2.4
    %
    
    $
    17.6
    
    
    
    2.6
    %
    
    $
    1.9
    
    
    
    12.4
    %Utilities
    
    
    11.7
    
    
    
    1.8
    
    
    
    12.9
    
    
    
    1.9
    
    
    
    1.2
    
    
    
    10.8Repairs and maintenance
    
    
    14.1
    
    
    
    2.2
    
    
    
    14.7
    
    
    
    2.2
    
    
    
    0.6
    
    
    
    3.8Rents and leases
    
    
    6.4
    
    
    
    1.0
    
    
    
    6.1
    
    
    
    0.9
    
    
    
    (0.3
    )
    
    
    (4.7
    )Insurance
    
    
    7.4
    
    
    
    1.2
    
    
    
    10.7
    
    
    
    1.6
    
    
    
    3.3
    
    
    
    44.8Physician recruiting
    
    
    4.7
    
    
    
    0.7
    
    
    
    5.8
    
    
    
    0.9
    
    
    
    1.1
    
    
    
    23.1Contract services
    
    
    34.7
    
    
    
    5.4
    
    
    
    34.9
    
    
    
    5.2
    
    
    
    0.2
    
    
    
    0.9Non-income taxes
    
    
    8.2
    
    
    
    1.3
    
    
    
    10.0
    
    
    
    1.5
    
    
    
    1.8
    
    
    
    19.1Other
    
    
    15.0
    
    
    
    2.3
    
    
    
    14.9
    
    
    
    2.2
    
    
    
    (0.1
    )
    
    
    (0.5
    )$
    117.9
    
    
    
    18.3
    %
    
    $
    127.6
    
    
    
    19.0
    %
    
    $
    9.7
    
    
    
    8.2
    %
       44




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##### Table of Contents



Provision for Doubtful Accounts
  Three Months Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2007
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Provision for doubtful accounts
    
    $
    79.1
    
    
    
    12.3
    %
    
    $
    78.5
    
    
    
    11.6
    %
    
    $
    (0.6
    )
    
    
    (0.8
    )%Related Key Indicators:Charity care write-offs
    
    $
    11.0
    
    
    
    0.7
    %
    
    $
    13.7
    
    
    
    0.8
    %
    
    $
    2.7
    
    
    
    23.5
    %Self-pay revenues, net of
charity care write-offs and
uninsured discounts
    
    $
    73.2
    
    
    
    11.4
    %
    
    $
    81.6
    
    
    
    12.1
    %
    
    $
    8.4
    
    
    
    11.5
    %Net revenue days outstanding
(at end of period)
    
    
    42.4
    
    
    
    N/A
    
    
    
    42.4
    
    
    
    N/A
    
    
    
    
    
    
    
    
    %
  Depreciation and Amortization
  Interest Expense
  Minority Interests in Earnings of Consolidated Entities
  45




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##### Table of Contents



Provision for Income Taxes
  For the Years Ended December 31, 2007 and 2008
 Revenues
    Years EndedDecember 31,Increase
    
    % Increase2007
    
    2008
    
    (Decrease)
    
    (Decrease)Admissions
    
    
    191,778
    
    
    
    188,713
    
    
    
    (3,065
    )
    
    
    (1.6
    )%Equivalent admissions
    
    
    377,994
    
    
    
    375,539
    
    
    
    (2,455
    )
    
    
    (0.6
    )Revenues per equivalent admission
    
    $
    6,795
    
    
    $
    7,192
    
    
    $
    397
    
    
    
    5.8Medicare case mix index
    
    
    1.24
    
    
    
    1.27
    
    
    
    0.03
    
    
    
    2.4Average length of stay (days)
    
    
    4.3
    
    
    
    4.3
    
    
    
    
    
    
    
    Inpatient surgeries
    
    
    56,732
    
    
    
    54,775
    
    
    
    (1,957
    )
    
    
    (3.4
    )Outpatient surgeries
    
    
    144,438
    
    
    
    145,041
    
    
    
    603
    
    
    
    0.4Emergency room visits
    
    
    868,960
    
    
    
    873,862
    
    
    
    4,902
    
    
    
    0.6Outpatient factor
    
    
    1.97
    
    
    
    1.99
    
    
    
    0.02
    
    
    
    1.0
 46




---



##### Table of Contents



Years EndedDecember 31,2007
    
    2008Medicare
    
    
    32.6
    %
    
    
    31.2
    %Medicaid
    
    
    9.7
    
    
    
    9.5HMOs, PPOs and other private insurers
    
    
    42.7
    
    
    
    44.5Self-Pay
    
    
    11.7
    
    
    
    12.0Other
    
    
    3.3
    
    
    
    2.8100.0
    %
    
    
    100.0
    %
  Expenses
 Salaries and Benefits
  Years Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2007
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Salaries and benefits:Salaries, wages, benefits and contract labor
    
    $
    987.4
    
    
    
    38.5
    %
    
    $
    1,041.9
    
    
    
    38.5
    %
    
    $
    54.5
    
    
    
    5.5
    %Stock-based compensation
    
    
    18.7
    
    
    
    0.7
    
    
    
    23.5
    
    
    
    0.9
    
    
    
    4.8
    
    
    
    25.6$
    1,006.1
    
    
    
    39.2
    %
    
    $
    1,065.4
    
    
    
    39.4
    %
    
    $
    59.3
    
    
    
    5.9
    %Man-hours per equivalent admission
    
    
    89.5
    
    
    
    N/A
    
    
    
    90.9
    
    
    
    N/A
    
    
    
    1.4
    
    
    
    1.6
    %Salaries and benefits per equivalent
admission
    
    $
    2,529
    
    
    
    N/A
    
    
    $
    2,662
    
    
    
    N/A
    
    
    $
    133
    
    
    
    5.3
    %
  47




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##### Table of Contents



Supplies
  Year Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2007
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Supplies
    
    $
    352.2
    
    
    
    13.7
    %
    
    $
    372.6
    
    
    
    13.8
    %
    
    $
    20.4
    
    
    
    5.8
    %Supplies per equivalent admission
    
    $
    932
    
    
    
    N/A
    
    
    $
    992
    
    
    
    N/A
    
    
    $
    60
    
    
    
    6.4
    %
  Other Operating Expenses
  Years Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2007
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Professional fees
    
    $
    59.7
    
    
    
    2.3
    %
    
    $
    65.4
    
    
    
    2.4
    %
    
    $
    5.7
    
    
    
    9.5
    %Utilities
    
    
    47.0
    
    
    
    1.8
    
    
    
    51.5
    
    
    
    1.9
    
    
    
    4.5
    
    
    
    9.6Repairs and maintenance
    
    
    53.7
    
    
    
    2.1
    
    
    
    56.8
    
    
    
    2.1
    
    
    
    3.1
    
    
    
    5.7Rents and leases
    
    
    25.8
    
    
    
    1.0
    
    
    
    25.6
    
    
    
    1.0
    
    
    
    (0.2
    )
    
    
    (0.6
    )Insurance
    
    
    33.2
    
    
    
    1.3
    
    
    
    42.3
    
    
    
    1.6
    
    
    
    9.1
    
    
    
    27.7Physician recruiting
    
    
    14.4
    
    
    
    0.6
    
    
    
    22.0
    
    
    
    0.8
    
    
    
    7.6
    
    
    
    52.7Contract services
    
    
    135.0
    
    
    
    5.3
    
    
    
    136.3
    
    
    
    5.0
    
    
    
    1.3
    
    
    
    1.0Non-income taxes
    
    
    36.5
    
    
    
    1.4
    
    
    
    39.1
    
    
    
    1.5
    
    
    
    2.6
    
    
    
    7.0Other
    
    
    58.7
    
    
    
    2.2
    
    
    
    60.8
    
    
    
    2.2
    
    
    
    2.1
    
    
    
    3.4$
    464.0
    
    
    
    18.0
    %
    
    $
    499.8
    
    
    
    18.5
    %
    
    $
    35.8
    
    
    
    7.7
    %
    48




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##### Table of Contents



Provision for Doubtful Accounts
  Years Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2007
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Provision for doubtful accounts
    
    $
    307.0
    
    
    
    12.0
    %
    
    $
    313.2
    
    
    
    11.6
    %
    
    $
    6.2
    
    
    
    2.0
    %Related Key Indicators:Charity care write-offs
    
    $
    50.5
    
    
    
    0.8
    %
    
    $
    53.7
    
    
    
    0.8
    %
    
    $
    3.2
    
    
    
    6.1
    %Self-pay revenues, net of
charity care write-offs and
uninsured discounts
    
    $
    300.0
    
    
    
    11.7
    %
    
    $
    324.5
    
    
    
    12.0
    %
    
    $
    24.5
    
    
    
    8.2
    %Net revenue days outstanding
(at end of period)
    
    
    42.4
    
    
    
    N/A
    
    
    
    42.4
    
    
    
    N/A
    
    
    
    
    
    
    
    
    %
  Depreciation and Amortization
  49




---



##### Table of Contents



Interest Expense
 1 2 1 2
  Impairment of Long-Lived Assets
  Minority Interests in Earnings of Consolidated Entities
  Provision for Income Taxes
  For the Years Ended December 31, 2006 and 2007
 Revenues
  50




---



##### Table of Contents



Years EndedDecember 31,
    
    
    
    
    
    % Increase2006
    
    2007
    
    Increase
    
    (Decrease)Admissions
    
    
    184,339
    
    
    
    191,778
    
    
    
    7,439
    
    
    
    4.0
    %Equivalent admissions
    
    
    358,724
    
    
    
    377,994
    
    
    
    19,270
    
    
    
    5.4Revenues per equivalent admission
    
    $
    6,513
    
    
    $
    6,795
    
    
    $
    282
    
    
    
    4.3Medicare case mix index
    
    
    1.23
    
    
    
    1.24
    
    
    
    0.01
    
    
    
    0.1Average length of stay (days)
    
    
    4.2
    
    
    
    4.3
    
    
    
    0.1
    
    
    
    2.4Inpatient surgeries
    
    
    54,893
    
    
    
    56,732
    
    
    
    1,839
    
    
    
    3.4Outpatient surgeries
    
    
    138,013
    
    
    
    144,438
    
    
    
    6,425
    
    
    
    4.7Emergency room visits
    
    
    812,115
    
    
    
    868,960
    
    
    
    56,845
    
    
    
    7.0Outpatient factor
    
    
    1.95
    
    
    
    1.97
    
    
    
    0.02
    
    
    
    0.1
  2006
    
    2007Medicare
    
    
    34.8
    %
    
    
    32.6
    %Medicaid
    
    
    10.1
    
    
    
    9.7HMOs, PPOs and other private insurers
    
    
    39.2
    
    
    
    42.7Self-Pay
    
    
    12.0
    
    
    
    11.7Other
    
    
    3.9
    
    
    
    3.3100.0
    %
    
    
    100.0
    %
 Expenses
 Salaries and Benefits
  Years Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % Increase2006
    
    
    Revenues
    
    
    2007
    
    
    Revenues
    
    
    Increase
    
    
    (Decrease)Salaries and benefits:Salaries, wages, benefits and contract labor
    
    $
    904.9
    
    
    
    38.7
    %
    
    $
    987.4
    
    
    
    38.5
    %
    
    $
    82.5
    
    
    
    9.1
    %Stock-based compensation
    
    
    13.1
    
    
    
    0.6
    
    
    
    18.7
    
    
    
    0.7
    
    
    
    5.6
    
    
    
    42.6$
    918.0
    
    
    
    39.3
    %
    
    $
    1,006.1
    
    
    
    39.2
    %
    
    $
    88.1
    
    
    
    9.6Man-hours per equivalent admission
    
    
    89.9
    
    
    
    N/A
    
    
    
    89.5
    
    
    
    N/A
    
    
    
    (0.4
    )
    
    
    (0.4
    )Salaries and benefits per equivalent
admission
    
    $
    2,438
    
    
    
    N/A
    
    
    $
    2,529
    
    
    
    N/A
    
    
    $
    91
    
    
    
    3.7
 51




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##### Table of Contents



Supplies
  Year Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2006
    
    Revenues
    
    2007
    
    Revenues
    
    (Decrease)
    
    (Decrease)Supplies
    
    $
    326.1
    
    
    
    14.0
    %
    
    $
    352.2
    
    
    
    13.7
    %
    
    $
    26.1
    
    
    
    8.0
    %Supplies per equivalent admission
    
    $
    909
    
    
    
    N/A
    
    
    $
    932
    
    
    
    N/A
    
    
    $
    23
    
    
    
    2.5
    %
  52




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##### Table of Contents



Other Operating Expenses
  Years Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2006
    
    
    Revenues
    
    
    2007
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Other operating expenses:Professional fees
    
    $
    42.4
    
    
    
    1.8
    %
    
    $
    59.7
    
    
    
    2.3
    %
    
    $
    17.3
    
    
    
    40.8
    %Utilities
    
    
    44.7
    
    
    
    1.9
    
    
    
    47.0
    
    
    
    1.8
    
    
    
    2.3
    
    
    
    5.1Repairs and maintenance
    
    
    48.4
    
    
    
    2.1
    
    
    
    53.7
    
    
    
    2.0
    
    
    
    5.3
    
    
    
    11.1Rents and leases
    
    
    23.0
    
    
    
    1.0
    
    
    
    25.8
    
    
    
    1.0
    
    
    
    2.8
    
    
    
    12.0Insurance
    
    
    25.3
    
    
    
    1.1
    
    
    
    33.2
    
    
    
    1.3
    
    
    
    7.9
    
    
    
    31.0Physician recruiting
    
    
    16.5
    
    
    
    0.7
    
    
    
    14.4
    
    
    
    0.6
    
    
    
    (2.1
    )
    
    
    (12.5
    )Contract services
    
    
    117.1
    
    
    
    5.0
    
    
    
    135.0
    
    
    
    5.3
    
    
    
    17.9
    
    
    
    15.2Non-income taxes
    
    
    32.7
    
    
    
    1.4
    
    
    
    36.5
    
    
    
    1.4
    
    
    
    3.8
    
    
    
    11.8Other
    
    
    47.3
    
    
    
    2.0
    
    
    
    58.7
    
    
    
    2.3
    
    
    
    11.4
    
    
    
    24.2$
    397.4
    
    
    
    17.0
    %
    
    $
    464.0
    
    
    
    18.0
    %
    
    $
    66.6
    
    
    
    16.8
       53




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##### Table of Contents



Provision for Doubtful Accounts
  Years Ended December 31,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2006
    
    Revenues
    
    2007
    
    Revenues
    
    (Decrease)
    
    (Decrease)Provision for doubtful accounts
    
    $
    250.0
    
    
    
    10.7
    %
    
    $
    307.0
    
    
    
    12.0
    %
    
    $
    57.0
    
    
    
    22.8
    %Related Key Indicators:Charity care write-offs
    
    $
    40.5
    
    
    
    0.8
    %
    
    $
    50.5
    
    
    
    0.8
    %
    
    $
    10.0
    
    
    
    24.9
    %Self-pay revenues, net of
charity care write-offs and
uninsured discounts
    
    $
    279.7
    
    
    
    12.0
    %
    
    $
    300.0
    
    
    
    11.7
    %
    
    $
    20.3
    
    
    
    7.3
    %Net revenue days outstanding
(at end of period)
    
    
    43.0
    
    
    
    N/A
    
    
    
    42.4
    
    
    
    N/A
    
    
    
    (0.6
    )
    
    
    (1.4
    )%
  Depreciation and Amortization
  Interest Expense
 1 2 1 2
 Minority Interests in Earnings of Consolidated Entities
  54




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##### Table of Contents



Provision for Income Taxes
  Discontinued Operations
  2006
    
    
    2007
    
    
    2008Revenues
    
    $
    212.0
    
    
    $
    120.6
    
    
    $
    53.0Loss from discontinued operations
    
    $
    (2.9
    )
    
    $
    (8.6
    )
    
    $
    (6.3
    )Impairment charge
    
    
    
    
    
    
    (16.5
    )
    
    
    (17.1
    )Gain (loss) on sale of hospitals
    
    
    4.2
    
    
    
    (0.6
    )
    
    
    (0.3
    )Income (loss) from discontinued operations
    
    $
    1.3
    
    
    $
    (25.7
    )
    
    $
    (23.7
    )Diluted earnings (loss) per share from
discontinued operations
    
    $
    0.03
    
    
    $
    (0.44
    )
    
    $
    (0.44
    )
  For the Year Ended December 31, 2008
   For the year ended December 31, 2007
  55




---



##### Table of Contents



Liquidity and Capital Resources
 Liquidity
   2006
    
    
    2007
    
    
    2008Net cash flows provided by continuing operations
    
    $
    257.8
    
    
    $
    241.4
    
    
    $
    346.6Less: Purchase of property and equipment
    
    
    (194.0
    )
    
    
    (158.4
    )
    
    
    (157.6
    )Free operating cash flow
    
    
    63.8
    
    
    
    83.0
    
    
    
    189.0Acquisitions, net of cash acquired
    
    
    (281.3
    )
    
    
    
    
    
    
    (21.8
    )Proceeds from sale of hospitals
    
    
    69.0
    
    
    
    107.4
    
    
    
    Proceeds from borrowings
    
    
    260.0
    
    
    
    615.0
    
    
    
    10.4Payments on borrowings
    
    
    (110.0
    )
    
    
    (765.9
    )
    
    
    (10.1
    )Proceeds from exercise of stock options
    
    
    0.6
    
    
    
    12.7
    
    
    
    3.6Proceeds for the completion of a new hospital
    
    
    
    
    
    
    14.7
    
    
    
    Payment of debt issue costs
    
    
    (1.0
    )
    
    
    (14.2
    )
    
    
    Repurchase of common stock
    
    
    
    
    
    
    (29.0
    )
    
    
    (118.3
    )Other
    
    
    (1.9
    )
    
    
    1.2
    
    
    
    (11.9
    )Cash flows from operations (used in) provided by discontinued operations
    
    
    (11.9
    )
    
    
    21.7
    
    
    
    (12.5
    )Cash flows from investing activities used in discontinued operations
    
    
    (5.5
    )
    
    
    (5.7
    )
    
    
    (5.8
    )Net (decrease) increase in cash and cash equivalents
    
    $
    (18.2
    )
    
    $
    40.9
    
    
    $
    22.6
    56




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##### Table of Contents



Capital Expenditures
   2006
    
    
    2007
    
    
    2008Capital projects
    
    $
    118.7
    
    
    $
    112.1
    
    
    $
    102.3Routine
    
    
    59.3
    
    
    
    42.3
    
    
    
    51.5Information systems
    
    
    16.0
    
    
    
    4.0
    
    
    
    3.8$
    194.0
    
    
    $
    158.4
    
    
    $
    157.6Depreciation expense (excluding 2006 and 2007
purchase price allocation adjustments of $13.5
million and $3.2 million, respectively)
    
    $
    117.2
    
    
    $
    124.0
    
    
    $
    130.9Ratio of capital expenditures to depreciation expense
    
    
    166
    %
    
    
    128
    %
    
    
    120
    %
  Debt
  December 31,
    
    
    Proceeds from
    
    
    Payments of
    
    
    
    
    
    
    December 31,2007
    
    
    Borrowings
    
    
    Borrowings
    
    
    Other (a)
    
    
    2008Senior Secured Credit Facilities:Term B Loans
    
    $
    706.0
    
    
    $
    0.4
    
    
    $
    
    
    
    $
    
    
    
    $
    706.4Revolving Loans
    
    
    
    
    
    
    10.0
    
    
    
    (10.0
    )
    
    
    
    
    
    
    Province 71/2%
Senior Subordinated Notes
    
    
    6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.1Province 41/4%
Convertible Subordinated
Notes
    
    
    0.1
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    31/4% Debentures
    
    
    225.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    225.031/2% Notes
    
    
    575.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    575.0Capital leases
    
    
    5.0
    
    
    
    3.4
    
    
    
    (5.0
    )
    
    
    0.8
    
    
    
    4.2$
    1,517.2
    
    
    $
    13.8
    
    
    $
    (15.1
    )
    
    $
    0.8
    
    
    $
    1,516.7
 
 (a)
    
    Represents the assumption of capital leases obligations in connection with certain
acquisitions completed during the year ended December 31, 2008. 57




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##### Table of Contents



December 31,
    
    
    December 31,
    
    
    Increase2007
    
    
    2008
    
    
    (Decrease)Current portion of long-term debt
    
    $
    0.5
    
    
    $
    1.1
    
    
    $
    0.6Long-term debt
    
    
    1,516.7
    
    
    
    1,515.6
    
    
    
    (1.1
    )Total debt
    
    
    1,517.2
    
    
    
    1,516.7
    
    
    
    (0.5
    )Total stockholders equity
    
    
    1,544.2
    
    
    
    1,578.6
    
    
    
    34.4Total capitalization
    
    $
    3,061.4
    
    
    $
    3,095.3
    
    
    $
    33.9Total debt to total capitalization
    
    
    49.6
    %
    
    
    49.0
    %
    
    (60bps
    )Percentage of:Fixed rate debt
    
    
    
    
    
    
    53.5
    %
    
    
    53.4
    %Variable rate debt (a)
    
    
    
    
    
    
    46.5
    %
    
    
    46.6100.0
    %
    
    
    100.0
    %Percentage of:Senior debt
    
    
    
    
    
    
    46.9
    %
    
    
    46.8
    %Subordinated debt
    
    
    
    
    
    
    53.1
    
    
    
    53.2100.0
    %
    
    
    100.0
    %
 
 (a)
    
    The above calculation does not consider the effect of our interest rate swap. Our
interest rate swap mitigates our floating rate risk on our outstanding variable rate
borrowings which converts our variable rate debt to an annual fixed rate of 5.585%. Our
interest rate swap decreases our variable rate debt as a percentage of our outstanding debt
from 46.5% to zero as of December 31, 2007 and from 46.6% to 7.0% as of December 31, 2008.
Please refer to the Capital Resources-Interest Rate Swap section below for a discussion of
our interest rate swap agreement. Capital Resources
 Senior Secured Credit Facilities
 Terms
  Letters of Credit and Availability
  58




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##### Table of Contents



Interest Rates
   Covenants
   Level atRequirement
    
    December 31, 2008Minimum Interest Coverage Ratio
    
    ≥   3.50:1.00
    
    
    5.88Maximum Total Leverage Ratio
    
    ≤   4.25:1.00
    
    
    3.14Capital Expenditure Ratio
    
    ≤  10.0
    %
    
    5.8
    %
   3 1 / 2 % Convertible Senior Subordinated Notes due May 15, 2014
 1 2 1 2 1 2 1 2 1 2
 59




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##### Table of Contents



1 2 1 2
 1 2
 1 2 1 2 1 2
 1 2 1 2
 3 1 / 4 % Convertible Senior Subordinated Debentures due August 15, 2025
 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4
 1 4 1 4
 1 4 1 4 1 4 1 4
 60




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##### Table of Contents



1 4 1 4
 Interest Rate Swap
  Notional AmountDate
Range
    
    (In millions)November 30, 2006 to November 30, 2007
    
    $
    900.0November 30, 2007 to November 28, 2008
    
    
    750.0November 28, 2008 to November 30, 2009
    
    
    600.0November 30, 2009 to November 30, 2010
    
    
    450.0November 30, 2010 to May 30, 2011
    
    
    300.0
    Liquidity and Capital Resources Outlook
   61




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Contractual Obligations, Commitments and Off-Balance Sheet Arrangements
 Contractual Obligations
   Payment Due by PeriodContractual Obligations
    
    Total
    
    
    2009
    
    
    2010-2011
    
    
    2012-2013
    
    
    After 2013Long-term debt obligations(a)
    
    $
    1,861.2
    
    
    $
    74.8
    
    
    $
    653.5
    
    
    $
    240.3
    
    
    $
    892.6Capital lease obligations
    
    
    4.7
    
    
    
    1.3
    
    
    
    2.1
    
    
    
    1.3
    
    
    
    Operating lease obligations(b)
    
    
    46.5
    
    
    
    13.5
    
    
    
    15.4
    
    
    
    8.3
    
    
    
    9.3Other long-term liabilities(c)
    
    
    106.5
    
    
    
    23.4
    
    
    
    45.2
    
    
    
    21.2
    
    
    
    16.7Purchase obligations(d)
    
    
    443.5
    
    
    
    124.9
    
    
    
    117.3
    
    
    
    73.3
    
    
    
    128.0$
    2,462.4
    
    
    $
    237.9
    
    
    $
    833.5
    
    
    $
    344.4
    
    
    $
    1,046.6
 
 (a)
    
    Included in long-term debt obligations are principal and interest owed on our outstanding
debt obligations, giving consideration to our interest rate swap. These obligations are
explained further in Note 7 to our consolidated financial statements included elsewhere in
this report. We used the 3.82% effective interest rate at December 31, 2008 for our $706.4
million outstanding Term B Loans to estimate interest payments on this variable rate debt
instrument. Our interest rate swap requires us to make quarterly interest payments at an
annual fixed rate of 5.585% while the counterparty is obligated to make quarterly floating
payments to us based on the three-month LIBOR on a decreasing notional amount. Our calculation
for long-term debt obligations includes an estimate for the net result of these payments
between us and the counterparty using the difference between our required annual fixed rate of
5.585% and the three-month LIBOR in effect as of December 31, 2008 of 2.19% based on the
effective notional amounts for the indicated period. Holders of our $225.0 million outstanding
31/4% Debentures may require us to purchase for cash some or all of the
31/4% Debentures on February 15, 2013, February 15, 2015, and February
15, 2020. For purposes of the above table, we assumed that our 31/4%
Debentures would be outstanding during the entire term, which ends on August 15, 2025.(b)
    
    This reflects our future minimum operating lease payments. We enter into operating leases in
the normal course of business. Substantially all of our operating lease agreements have fixed
payment terms based on the passage of time. Some lease agreements provide us with the option
to renew the lease. Our future operating lease obligations would change if we exercised these
renewal options and if we entered into additional operating lease agreements. Please refer to
Note 10 to our consolidated financial statements included elsewhere in this report for more
information regarding our operating leases. 62




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##### Table of Contents



(c)
    
    Our professional and general liability claims and other liabilities balance was $146.2
million and our long-term income tax liability balance was $59.4 million in our consolidated
balance sheet as of December 31, 2008. The professional and general liability and other
liabilities balance reflected a $71.7 million long-term portion of our reserve for
professional and general liability claims, an interest rate swap liability balance of $45.0
million, a





$13.9 million deferred income liability, an $8.8 million long-term portion of our reserve for
workers compensation claims and $6.8 million related to other liabilities. Additionally, we
have included the current portion of our professional and general liability claims reserve of
$15.5 million and the current portion of our reserve for workers compensation claims of $7.1
million. The long-term income tax liability is a result of our adoption of FIN 48 effective
January 1, 2007. We excluded the $59.4 million long-term income tax liability and the $6.8
million of other liabilities because of the uncertainty of the dollar amounts to be ultimately
paid as well as the timing of such amounts. We excluded both the $13.9 million deferred income
liability and the $45.0 million interest rate swap liability as they are non-cash liabilities.
Please refer to Critical Accounting Estimates  Professional and General Liability Claims in
this report for more information on our reserve for professional and general liability claims.(d)
    
    The following table summarizes our significant purchase obligations as of December 31, 2008
and the future periods in which such obligations are expected to be settled in cash (in
millions): Payment Due by PeriodPurchase Obligations
    
    Total
    
    
    2009
    
    
    2010-2011
    
    
    2012-2013
    
    
    After 2013HCA-IT services(e)
    
    $
    245.5
    
    
    $
    25.2
    
    
    $
    49.2
    
    
    $
    52.4
    
    
    $
    118.7Capital expenditure obligations(f)
    
    
    24.4
    
    
    
    23.2
    
    
    
    1.2
    
    
    
    
    
    
    
    Physician commitments(g)
    
    
    22.1
    
    
    
    22.1
    
    
    
    
    
    
    
    
    
    
    
    GEMS obligations(h)
    
    
    93.8
    
    
    
    26.8
    
    
    
    53.6
    
    
    
    13.4
    
    
    
    Other purchase obligations(i)
    
    
    57.7
    
    
    
    27.6
    
    
    
    13.3
    
    
    
    7.5
    
    
    
    9.3$
    443.5
    
    
    $
    124.9
    
    
    $
    117.3
    
    
    $
    73.3
    
    
    $
    128.0
 
 (e)
    
    HCA-IT provides various information systems services, including, but not limited to,
financial, clinical, patient accounting and network information services to us under a
contract that expires on December 31, 2017, including a wind-down period. The amounts are
based on estimated fees that will be charged to our hospitals as of October 1, 2008 with
an annual fee increase that is capped by the consumer price index increase. We used a 5.0%
annual rate increase as the estimated consumer price index increase for the contract
period. These fees will increase if we acquire additional hospitals and use HCA-IT for
information system conversion services at the acquired hospitals.(f)
    
    We had projects under construction with an estimated additional cost to complete and
equip of approximately $169.8 million as of December 31, 2008. Because we can terminate
substantially all of the related construction contracts at any time without paying a
termination fee, these costs are excluded from the above table except for amounts
contractually committed by us.(g)
    
    In consideration for a physician relocating to one of the communities in which our
hospitals are located and agreeing to engage in private practice for the benefit of the
respective community, we may advance certain amounts of money to that physician, normally
over a period of one year, to assist in establishing the physicians practice. Our
liability balance for contract-based physician minimum revenue guarantees was $22.2
million at December 31, 2008 and depends upon the cash collections of a physicians
private practice during the guarantee period.(h)
    
    General Electric Medical Services (GEMS) provides diagnostic imaging equipment
maintenance and bio-medical services to us pursuant to a contract that expires on June 30,
2012.(i)
    
    Reflects our minimum commitments to purchase goods or services under non-cancelable
contracts as of December 31, 2008. Off-Balance Sheet Arrangements
  63




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Recently Issued Accounting Pronouncements
     64




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Critical Accounting Estimates
  
    
    it requires assumptions to be made that were uncertain at the time the estimate was
made; and
    
    changes in the estimate or different estimates that could have been made could have
a material impact on our consolidated results of operations or financial condition.
  
    
    Revenue recognition/Allowance for contractual discounts;
    
    Allowance for doubtful accounts and provision for doubtful accounts;
    
    Goodwill impairment analysis;
    
    Professional and general liability claims;
    
    Accounting for stock-based compensation; and
    
    Accounting for income taxes.
  65




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Revenue Recognition/Allowance for Contractual Discounts
   2006
    
    2007
    
    2008Medicare
    
    
    34.8
    %
    
    
    32.6
    %
    
    
    31.2
    %Medicaid
    
    
    10.1
    
    
    
    9.7
    
    
    
    9.5HMOs, PPOs and other private insurers
    
    
    39.2
    
    
    
    42.7
    
    
    
    44.5
   
    
    review of payment discrepancy reports for logged payors;
    
    analysis of historical contractual allowance trends based on actual claims paid by
HMOs, PPOs and other private insurers;
    
    review of contractual allowance information reflecting current contract terms;
    
    consideration and analysis of changes in charge rates and payor mix reimbursement
levels; and
    
    other issues that may impact contractual allowances.
 Medicare and Medicaid
    66




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HMOs, PPOs and Other Private Insurers
   Allowance for Doubtful Accounts and Provision for Doubtful Accounts
     December 31, 2008Insured Receivables
    
    
    Uninsured Receivables
    
    
    CombinedPercent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofAmount
    
    
    Receivables
    
    
    Amount
    
    
    Receivables
    
    
    Amount
    
    
    Receivables0 to 90 days
    
    $
    350.8
    
    
    
    87.7
    %
    
    $
    110.3
    
    
    
    24.9
    %
    
    $
    461.1
    
    
    
    54.7
    %91 to 150 days
    
    
    24.8
    
    
    
    6.2
    
    
    
    69.5
    
    
    
    15.7
    
    
    
    94.3
    
    
    
    11.2151 to 360 days
    
    
    19.1
    
    
    
    4.8
    
    
    
    180.3
    
    
    
    40.6
    
    
    
    199.4
    
    
    
    23.6Over 361
    
    
    5.1
    
    
    
    1.3
    
    
    
    83.7
    
    
    
    18.8
    
    
    
    88.8
    
    
    
    10.5$
    399.8
    
    
    
    100.0
    %
    
    $
    443.8
    
    
    
    100.0
    %
    
    $
    843.6
    
    
    
    100.0
    %
 67




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##### Table of Contents



December 31, 2007Insured Receivables
    
    
    Uninsured Receivables
    
    
    CombinedPercent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofAmount
    
    
    Receivables
    
    
    Amount
    
    
    Receivables
    
    
    Amount
    
    
    Receivables0 to 90 days
    
    $
    355.1
    
    
    
    86.5
    %
    
    $
    106.9
    
    
    
    23.9
    %
    
    $
    462.0
    
    
    
    53.8
    %91 to 150 days
    
    
    29.5
    
    
    
    7.2
    
    
    
    67.0
    
    
    
    15.0
    
    
    
    96.5
    
    
    
    11.2151 to 360 days
    
    
    22.5
    
    
    
    5.5
    
    
    
    213.4
    
    
    
    47.6
    
    
    
    235.9
    
    
    
    27.5Over 361
    
    
    3.6
    
    
    
    0.8
    
    
    
    60.7
    
    
    
    13.5
    
    
    
    64.3
    
    
    
    7.5$
    410.7
    
    
    
    100.0
    %
    
    $
    448.0
    
    
    
    100.0
    %
    
    $
    858.7
    
    
    
    100.0
    %
   
    
    if possible, cash collection of deductibles, co-payments and self-pay accounts
prior to or at the time service is provided;
    
    billing and follow-up with third party payors;
    
    collection calls;
    
    utilization of collection agencies; and
    
    if collection efforts are unsuccessful, write-off of the accounts.
    68




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Goodwill Impairment Analysis
    Professional and General Liability Claims
   69




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December 31, 2007
    
    December 31, 2008Undiscounted
    
    $
    77.6
    
    
    $
    97.1Discounted (as reported)
    
    $
    69.4
    
    
    $
    87.2
  2006
    
    
    2007
    
    
    2008Reserve at the beginning of the period
    
    $
    55.8
    
    
    $
    62.4
    
    
    $
    69.4Increase for the provision of current year
claims, including discontinued operations
    
    
    29.3
    
    
    
    26.0
    
    
    
    29.5Increase (decrease) for the provision of
prior year claims, including discontinued
operations
    
    
    (11.8
    )
    
    
    1.2
    
    
    
    7.8Payments related to current year claims
    
    
    (0.4
    )
    
    
    (2.2
    )
    
    
    (1.2
    )Payments related to prior year claims
    
    
    (10.5
    )
    
    
    (18.0
    )
    
    
    (20.7
    )Provision for the change in discount rate
    
    
    
    
    
    
    
    
    
    
    2.4Reserve at the end of the period
    
    $
    62.4
    
    
    $
    69.4
    
    
    $
    87.2
      December 31, 2007 reserve:As reported
    
    $
    69.4With 70% Confidence Level
    
    $
    79.1With 80% Confidence Level
    
    $
    84.1With 90% Confidence Level
    
    $
    98.6
 70




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##### Table of Contents



December 31, 2008 reserve:As reported
    
    $
    87.2With 70% Confidence Level
    
    $
    88.4With 80% Confidence Level
    
    $
    93.9With 90% Confidence Level
    
    $
    110.2
   Accounting for Stock-Based Compensation
    71




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##### Table of Contents



2006
    
    2007
    
    2008Expected volatility
    
    
    32.8
    %
    
    
    27.2
    %
    
    
    31.9
    %Risk free interest rate (range)
    
    
    4.38% - 5.21
    %
    
    
    3.34% - 5.21
    %
    
    
    0.09% - 3.89
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    Average expected term (years)
    
    
    5.4
    
    
    
    4.7
    
    
    
    5.3Fair value per share of stock options granted
    
    $
    11.15
    
    
    $
    10.24
    
    
    $
    8.14
 Population Stratification
  Expected Volatility
  Risk-Free Interest Rate
  Expected Dividends
  Pre-Vesting Forfeitures
  72




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##### Table of Contents



Post-Vesting Cancellations
  Expected Term
   Accounting for Income Taxes
    73




---



##### Table of Contents



Segment Reporting
   
    
    the treatment of patients in a hospital setting is the only material source of revenues
for each of our six operating divisions;
    
    the healthcare services provided by each of our operating divisions are generally the
same;
    
    the healthcare services provided by each of our operating divisions are generally
provided to similar types of patients, which is patients in a hospital setting;
    
    the healthcare services are primarily provided by the direction of affiliated or
employed physicians and by the nurses, lab technicians, and others employed or contracted
at each of our hospitals; and
    
    the healthcare regulatory environment is generally similar for each of our six
operating divisions.
 74




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##### Table of Contents




    
    the way we manage our operations and extent to which our acquired facilities are
integrated into our existing operations as a single reporting unit;
    
    our goodwill is recoverable from the collective operations of our six operating
divisions and not individually from one single operating division;
    
    our operating divisions are frequently realigned based upon changing circumstances,
including acquisition and divestiture activity; and
    
    because of the collective size of its six operating divisions, each division benefits
from its participation in a group purchasing organization.
 Inflation
  
 Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk.
  Outstanding Debt
   1 2 1 4
 Carrying Amount
    
    Fair Value2007
    
    2008
    
    2007
    
    2008Term B Loans
    
    $
    706.0
    
    
    $
    706.4
    
    
    $
    670.7
    
    
    $
    586.331/2% Notes
    
    
    575.0
    
    
    
    575.0
    
    
    
    513.2
    
    
    
    387.331/4% Debentures
    
    
    225.0
    
    
    
    225.0
    
    
    
    194.1
    
    
    
    162.0
 1 4 1 2
 Cash Balances
  75




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data.
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A.
    
    Controls and Procedures.
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  
 Item 9B.
    
    Other Information.
  76




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance.
 Executive Officers
  Code of Ethics
 www.lifepointhospitals.com
 Directors
  Compliance with Section 16(a) of the Exchange Act
  Stockholder Nominees
  Audit and Compliance Committee
  
 Item 11.
    
    Executive Compensation.
  77




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##### Table of Contents



Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
   
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14.
    
    Principal Accountant Fees and Services.
  78




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##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules.
  Consolidated Financial Statements:
 See Item 8 in this report.The consolidated financial statements required to be included in Part II, Item 8,
Financial Statements and Supplementary Data, begin on Page F-1 and are submitted as a
separate section of this report.
 Consolidated Financial Statement Schedules:
 All schedules are omitted because they are not applicable or not required, or because
the required information is included in the consolidated financial statements or notes
in this report.
 Exhibits:
 ExhibitNumber
    
    
    
    Description of Exhibits3.1
    
    
    
    Amended and Restated Certificate of Incorporation (incorporated by reference
from exhibits to the Registration Statement on Form S-8 filed by LifePoint
Hospitals, Inc. on April 19, 2005, File No. 333-124151).3.2
    
    
    
    Second Amended and Restated Bylaws of LifePoint Hospitals, Inc. (incorporated
by reference from exhibits to the LifePoint Hospitals, Inc. Current Report on
Form 8-K dated October 16, 2006, File No. 000-51251).3.3
    
    
    
    Amendment No. 1 to the Second Amended and Restated Bylaws of LifePoint
Hospitals, Inc. (incorporated by reference from exhibits to the LifePoint
Hospitals, Inc. Current Report on Form 8-K dated May 20, 2008, File No.
000-51251).4.1
    
    
    
    Form of Specimen Stock Certificate (incorporated by reference from exhibits to
the Registration Statement on Form S-4, as amended, filed by LifePoint
Hospitals, Inc. on October 25, 2004, File No. 333-119929).4.2
    
    
    
    Form of 3.25% Convertible Senior Subordinated Debenture due 2025 (incorporated
by reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated August 10, 2005, File No. 000-51251).4.3
    
    
    
    Registration Rights Agreement, dated August 10, 2005, between LifePoint
Hospitals, Inc. and Citigroup Global Markets Inc. as Representatives of the
Initial Purchasers (incorporated by reference from exhibits to LifePoint
Hospitals Current Report on Form 8-K dated August 10, 2005, File No.
000-51251).4.4
    
    
    
    Rights Agreement, dated as of April 15, 2005, by and between LifePoint
Hospitals, Inc. and National City Bank, as Rights Agent (incorporated by
reference from exhibits to the Registration Statement on Form S-8 filed by
Historic LifePoint Hospitals, Inc. on April 15, 2005, File No. 333-124093).4.5
    
    
    
    Subordinated Indenture, dated as of May 27, 2003, between Province Healthcare
Company and U.S. Bank Trust National Association, as Trustee (incorporated by
reference from exhibits to Province Healthcare Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2003, File No. 001-31320).4.6
    
    
    
    First Supplemental Indenture to Subordinated Indenture, dated as of May 27,
2003, by and among Province Healthcare Company and U.S. Bank National
Association, as Trustee, relating to Province Healthcare Companys
71/2% Senior Subordinated Notes due 2013 (incorporated by
reference from exhibits to Province Healthcare Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2003, File No. 001-31320).
 79




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits4.7
    
    
    
    Second Supplemental Indenture to Subordinated Indenture, dated as of April 1,
2005, by and among Province Healthcare Company and U.S. Bank National
Association, as Trustee (incorporated by reference from exhibits to Province
Healthcare Companys Current Report on Form 8-K dated April 1, 2005, File No.
001-31320).4.8
    
    
    
    Indenture, dated as of October 10, 2001, between Province Healthcare Company
and National City Bank, including the forms of Province Healthcare Companys
41/4% Convertible Subordinated Notes due 2008
(incorporated by reference from exhibits to the Registration Statement on Form
S-3, filed by Province Healthcare Company on December 20, 2001, File No.
333-75646).4.9
    
    
    
    First Supplemental Indenture, dated as of April 15, 2005, by and among Province
Healthcare Company, LifePoint Hospitals, Inc. and U.S. Bank National
Association (as successor in interest to National City Bank), as trustee to the
Indenture dated as of October 10, 2001, relating to Province Healthcare
Companys 41/4% Convertible Subordinated Notes due 2008
(incorporated by reference from exhibits to the Historic LifePoint Hospitals,
Inc. Current Report on Form 8-K dated April 15, 2005, File No. 000-29818.4.10
    
    
    
    Indenture, dated August 10, 2005, between LifePoint Hospitals, Inc. and
Citibank, N.A., as Trustee (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K dated August 10, 2005, File No.
000-51251).4.11
    
    
    
    Indenture, dated May 29, 2007, by and between LifePoint Hospitals, Inc. as
Issuer and The Bank of New York Trust Company, N.A., as Trustee (incorporated
by reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated May 31, 2007, File No. 000-51251).10.1
    
    
    
    Tax Sharing and Indemnification Agreement, dated May 11, 1999, by and among
Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc. (incorporated
by reference from exhibits to Historic LifePoint Hospitals Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999, File No. 000-29818).10.2
    
    
    
    Benefits and Employment Matters Agreement, dated May 11, 1999 by and among
Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc. (incorporated
by reference from exhibits to Historic LifePoint Hospitals Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999, File No. 000-29818).10.3
    
    
    
    Insurance Allocation and Administration Agreement, dated May 11, 1999, by and
among Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc.
(incorporated by reference from exhibits to Historic LifePoint Hospitals
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, File No.
000-29818).10.4
    
    
    
    Computer and Data Processing Services Agreement, dated May 19, 2008, by and
between HCA Information Technology Services, Inc. and LifePoint Hospitals, Inc.
(incorporated by reference from exhibits to the LifePoint Hospitals, Inc.
Current Report on Form 8-K dated May 21, 2008, File No. 000-51251).10.5
    
    
    
    Comprehensive Service Agreement for Diagnostic Imaging and Biomedical Services,
executed on January 7, 2005, between LifePoint Hospital Holdings, Inc. and GE
Healthcare Technologies (incorporated by reference from exhibits to Historic
LifePoint Hospitals Annual Report on Form 10-K for the year ended December 31,
2004, File No. 000-29818).10.6
    
    
    
    Amended and Restated 1998 Long Term Incentive Plan (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated July 7,
2005, File No. 000-51251).*10.7
    
    
    
    First Amendment, dated May 13, 2008, to the LifePoint Hospitals, Inc. Amended
and Restated 1998 Long-Term Incentive Plan (incorporated by reference from
Appendix A to the LifePoint Hospitals, Inc. Proxy Statement filed March 31,
2008, File No. 000-51251).*10.8
    
    
    
    Second Amendment, dated December 10, 2008, to the to the LifePoint Hospitals,
Inc. Amended and Restated 1998 Long-Term Incentive Plan (filed herewith).*
 80




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits10.9
    
    
    
    LifePoint Hospitals, Inc. Executive Performance Incentive Plan (incorporated by
reference from Appendix C to Historic LifePoint Hospitals Proxy Statement
dated April 28, 2004, File No. 000-29818).*10.10
    
    
    
    First Amendment, dated December 10, 2008, to the LifePoint Hospitals, Inc.
Executive Performance Incentive Plan (filed herewith).*10.11
    
    
    
    Form of LifePoint Hospitals, Inc. Nonqualified Stock Option Agreement
(incorporated by reference from exhibits to LifePoint Hospitals Quarterly
Report on Form 10-Q for the quarter ended March 31, 2007, File No. 000-51251).*10.12
    
    
    
    Form of LifePoint Hospitals, Inc. Restricted Stock Award Agreement
(incorporated by reference from exhibits to LifePoint Hospitals Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005, File No. 000-51251).*10.13
    
    
    
    Form of LifePoint Hospitals, Inc. Deferred Restricted Stock Award (incorporated
by reference from exhibits to LifePoint Hospitals Quarterly Report on Form
10-Q for the quarter ended June 30, 2008, File No. 000-51251).*10.14
    
    
    
    LifePoint Hospitals, Inc. Employee Stock Purchase Plan (incorporated by
reference from exhibits to Historic LifePoint Hospitals Annual Report on Form
10-K for the year ended December 31, 2001, File No. 000-29818).*10.15
    
    
    
    First Amendment to the LifePoint Hospitals, Inc. Employee Stock Purchase Plan
(incorporated by reference from exhibits to the Registration Statement on Form
S-8 filed by Historic LifePoint Hospitals, Inc. on June 2, 2003, File No.
333-105775).*10.16
    
    
    
    Second Amendment To Employee Stock Purchase Plan (incorporated by reference
from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, File No. 000-51251).*10.17
    
    
    
    LifePoint Hospitals, Inc. Change in Control Severance Plan, as amended and
restated December 10, 2008 (incorporated by reference from exhibits to the
LifePoint Hospitals, Inc. Current Report on Form 8-K dated December 10/16,
2008, File No. 000-51251).*10.18
    
    
    
    LifePoint Hospitals, Inc. Management Stock Purchase Plan, as amended and
restated (incorporated by reference from exhibits to Historic LifePoint
Hospitals Annual Report on Form 10-K for the year ended December 31, 2002,
File No. 000-29818).*10.19
    
    
    
    First Amendment, dated May 13, 2008, to the LifePoint Hospitals, Inc.
Management Stock Purchase Plan (incorporated by reference from Appendix B to
the LifePoint Hospitals, Inc. Proxy Statement filed March 31, 2008, File No.
000-51251). *10.20
    
    
    
    Second Amendment, dated December 10, 2008, to the LifePoint Hospitals, Inc.
Management Stock Purchase Plan (filed herewith).*10.21
    
    
    
    Form of Outside Directors Restricted Stock Agreement (incorporated by reference
from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, File No. 000-51251).*10.22
    
    
    
    Amended and Restated LifePoint Hospitals, Inc. Outside Directors Stock and
Incentive Compensation Plan, dated May 14, 2008 (incorporated by reference from
exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the quarter
ended June 30, 2008, File No. 000-51251).*10.25
    
    
    
    Credit Agreement, dated as of April 15, 2005, by and among LifePoint Hospitals,
Inc., as borrower, the lenders referred to therein, Citicorp North America,
Inc. as administrative agent, Bank of America, N.A., CIBC World Markets Corp.,
SunTrust Bank, UBS Securities LLC, as co syndication agents and Citigroup
Global Markets, Inc., as sole lead arranger and sole bookrunner (incorporated
by reference from exhibits to Historic LifePoint Hospitals Current Report on
Form 8-K dated April 15, 2005, File No. 000-29818).
 81




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits10.26
    
    
    
    Incremental Facility Amendment dated August 23, 2005, among LifePoint
Hospitals, Inc., as borrower, Citicorp North America, Inc., as administrative
agent and the lenders party thereto (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K dated August 23, 2005, File No.
000-51251).10.27
    
    
    
    Amendment No. 2 to the Credit Agreement, dated October 14, 2005, among
LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc., as
administrative agent and the lenders party thereto (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated October
18, 2005, File No. 000-51251).10.28
    
    
    
    Incremental Facility Amendment No. 3 to the Credit Agreement, dated June 30,
2006 among LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc.
as administrative agent and the lenders party thereto. (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated June 30, 2006, File No. 000-51251).10.29
    
    
    
    Incremental Facility Amendment No. 4 to the Credit Agreement, dated September
8, 2006, among LifePoint Hospitals, Inc. as borrower, Citicorp North America,
Inc. as administrative agent and the lenders party thereto (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated September 12, 2006, File No. 000-51251).10.30
    
    
    
    Amendment No. 5 to the Credit Agreement, dated as of May 11, 2007, among
LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc., as
administrative agent and the lenders party thereto (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated May 24,
2007, File No. 000-51251).10.31
    
    
    
    ISDA 2002 Master Agreement, dated as of June 1, 2006, between Citibank, N.A.
and LifePoint Hospitals, Inc. (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K/A dated September 8, 2006, File
No. 000-51251).10.32
    
    
    
    Schedule to the ISDA 2002 Master Agreement (incorporated by reference from
exhibits to LifePoint Hospitals Current Report on Form 8-K/A dated September
8, 2006, File No. 000-51251).10.33
    
    
    
    Confirmation, dated as of June 2, 2006, between LifePoint Hospitals, Inc. and
Citibank, N.A. (incorporated by reference from exhibits to LifePoint Hospitals
Current Report on Form 8-K/A dated September 8, 2006, File No. 000-51251).10.34
    
    
    
    Stock Purchase Agreement, dated July 14, 2005, by HCA Inc. and LifePoint
Hospitals, Inc. (incorporated by reference from exhibits to LifePoint
Hospitals Quarterly Report on Form 10-Q for the quarter ended June 30, 2006,
File No. 000-51251).10.35
    
    
    
    Amendment to the Stock Purchase Agreement, dated June 2, 2006 (incorporated by
reference from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q
for the quarter ended June 30, 2006, File No. 000-51251).10.36
    
    
    
    Repurchase Agreement, dated June 30, 2006, by and between HCA Inc. and
LifePoint Hospitals, Inc. (incorporated by reference from exhibits to LifePoint
Hospitals Quarterly Report on Form 10-Q for the quarter ended June 30, 2006,
File No. 000-51251).10.37
    
    
    
    Executive Severance and Restrictive Covenant Agreement, dated December 11,
2008, by and between LifePoint CSGP, LLC and William F. Carpenter III
(filed herewith).*10.38
    
    
    
    Agreement to Cooperate and General Release, entered into on May 4, 2007, by and
between LifePoint Hospitals, CSGP, LLC and Michael J. Culotta (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated May 10, 2007, File No. 000-51251).*10.39
    
    
    
    Retirement Agreement and General Release, dated August 21, 2008, by and between
LifePoint CSGP, LLC and William M. Gracey . (incorporated by reference from
exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the quarter
ended September 30, 2008, File No. 000-51251).*
 82




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits10.40
    
    
    
    Form of Indemnification Agreement (incorporated by reference from exhibits to
the LifePoint Hospitals, Inc. Current Report on Form 8-K dated August 29, 2008,
File No. 000-51251).10.41
    
    
    
    Recoupment Policy Relating to Unearned Incentive Compensation of Executive
Officers (incorporated by reference from exhibits to the LifePoint Hospitals,
Inc. Current Report on Form 8-K dated May 20, 2008, File No. 000-51251).12.1
    
    
    
    Ratio of Earnings to Fixed Charges21.1
    
    
    
    List of Subsidiaries23.1
    
    
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    
    
    Certification of the Chief Executive Officer of LifePoint Hospitals, Inc.
pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    
    Certification of the Chief Financial Officer of LifePoint Hospitals, Inc.
pursuant to Section 302 of the Sarbanes Oxley Act of 200232.1
    
    
    
    Certification of the Chief Executive Officer of LifePoint Hospitals, Inc.
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    
    Certification of the Chief Financial Officer of LifePoint Hospitals, Inc.
pursuant to Section 906 of the Sarbanes Oxley Act of 2002
 
 *
    
    - Management Compensation Plan or Arrangement 83




---



INDEX TO FINANCIAL STATEMENTS
 PageManagements Report on Internal Control Over Financial Reporting
    
    
    F-2Report of Independent Registered Public Accounting Firm
    
    
    F-3Report of Independent Registered Public Accounting Firm
    
    
    F-4Consolidated Balance Sheets  December 31, 2007 and 2008
    
    
    F-5Consolidated Statements of Operations  for the years ended December 31, 2006, 2007 and 2008
    
    
    F-6Consolidated Statements of Cash Flows  for the years ended December 31, 2006, 2007 and 2008
    
    
    F-7Consolidated Statements of Stockholders Equity  for the years ended December 31, 2006, 2007 and 2008
    
    
    F-8Notes to Consolidated Financial Statements  December 31, 2008
    
    
    F-9
 F-1




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
       /s/ William F. Carpenter III
    
    /s/ David M. DillPresident and Chief Executive Officer
    
    Executive Vice President and Chief Financial OfficerBrentwood, Tennessee
February 18, 2009
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      .
  /s/Ernst & Young LLP 
 F-3




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      /s/Ernst & Young LLP 
 F-4




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 
 CONSOLIDATED BALANCE SHEETS
December 31, 2007 and 2008
(Dollars in millions, except per share amounts)
 2007
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    53.1
    
    
    $
    75.7Accounts receivable, less allowances for doubtful accounts of $376.3 and $374.4
at December 31, 2007 and 2008, respectively
    
    
    304.5
    
    
    
    315.9Inventories
    
    
    67.1
    
    
    
    69.6Assets held for sale
    
    
    37.0
    
    
    
    21.6Prepaid expenses
    
    
    12.3
    
    
    
    12.0Income taxes receivable
    
    
    27.9
    
    
    
    19.9Deferred tax assets
    
    
    123.0
    
    
    
    103.4Other current assets
    
    
    20.6
    
    
    
    19.2645.5
    
    
    
    637.3Property and equipment:
    
    
    70.4
    
    
    
    71.1Land
    
    
    1,195.3
    
    
    
    1,257.2Buildings and improvements
    
    
    659.6
    
    
    
    737.9Equipment
Construction in progress (estimated cost to complete and equip after December
31, 2008 is $169.8)
    
    
    32.6
    
    
    
    39.71,957.9
    
    
    
    2,105.9Accumulated depreciation
    
    
    (574.9
    )
    
    
    (689.9
    )1,383.0
    
    
    
    1,416.0Deferred loan costs, net
    
    
    38.6
    
    
    
    31.3Intangible assets, net
    
    
    52.4
    
    
    
    68.8Other
    
    
    4.4
    
    
    
    10.4Goodwill
    
    
    1,512.0
    
    
    
    1,516.5Total assets
    
    $
    3,635.9
    
    
    $
    3,680.3LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    95.6
    
    
    $
    92.3Accrued salaries
    
    
    66.0
    
    
    
    73.2Other current liabilities
    
    
    109.8
    
    
    
    94.5Current maturities of long-term debt
    
    
    0.5
    
    
    
    1.1271.9
    
    
    
    261.1Long-term debt
    
    
    1,516.7
    
    
    
    1,515.6Deferred income taxes
    
    
    113.2
    
    
    
    103.1Professional and general liability claims and other liabilities
    
    
    109.8
    
    
    
    146.2Long-term income tax liability
    
    
    64.9
    
    
    
    59.4Minority interests in equity of consolidated entities
    
    
    15.2
    
    
    
    16.3Total liabilities
    
    
    2,091.7
    
    
    
    2,101.7Stockholders equity:Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value; 90,000,000 shares authorized; 58,101,477 and
58,787,009 shares issued at December 31, 2007 and 2008, respectively
    
    
    0.6
    
    
    
    0.6Capital in excess of par value
    
    
    1,084.9
    
    
    
    1,116.3Unearned ESOP compensation
    
    
    (3.1
    )
    
    
    Accumulated other comprehensive loss
    
    
    (19.8
    )
    
    
    (28.3
    )Retained earnings
    
    
    522.8
    
    
    
    637.3Common stock in treasury, at cost, 1,356,487 and 5,346,156 shares at December
31, 2007 and 2008, respectively
    
    
    (41.2
    )
    
    
    (147.3
    )Total stockholders equity
    
    
    1,544.2
    
    
    
    1,578.6Total liabilities and stockholders equity
    
    $
    3,635.9
    
    
    $
    3,680.3
 F-5




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2006, 2007 and 2008
(In millions, except per share amounts)
 2006
    
    
    2007
    
    
    2008Revenues
    
    $
    2,336.5
    
    
    $
    2,568.4
    
    
    $
    2,700.8Salaries and benefits
    
    
    918.0
    
    
    
    1,006.1
    
    
    
    1,065.4Supplies
    
    
    326.1
    
    
    
    352.2
    
    
    
    372.6Other operating expenses
    
    
    397.4
    
    
    
    464.0
    
    
    
    499.8Provision for doubtful accounts
    
    
    250.0
    
    
    
    307.0
    
    
    
    313.2Depreciation and amortization
    
    
    105.4
    
    
    
    129.4
    
    
    
    132.1Interest expense, net
    
    
    100.8
    
    
    
    94.5
    
    
    
    88.0Impairment loss
    
    
    
    
    
    
    
    
    
    
    1.22,097.7
    
    
    
    2,353.2
    
    
    
    2,472.3Income from continuing operations before minority interests and income
taxes
    
    
    238.8
    
    
    
    215.2
    
    
    
    228.5Minority interests in earnings of consolidated entities
    
    
    1.4
    
    
    
    1.7
    
    
    
    2.2Income from continuing operations before income taxes
    
    
    237.4
    
    
    
    213.5
    
    
    
    226.3Provision for income taxes
    
    
    93.2
    
    
    
    85.8
    
    
    
    88.1Income from continuing operations
    
    
    144.2
    
    
    
    127.7
    
    
    
    138.2Discontinued operations, net of income taxes:Loss from discontinued operations
    
    
    (2.9
    )
    
    
    (8.6
    )
    
    
    (6.3
    )Impairment charge
    
    
    
    
    
    
    (16.5
    )
    
    
    (17.1
    )Gain (loss) on sale of hospitals
    
    
    4.2
    
    
    
    (0.6
    )
    
    
    (0.3
    )Income (loss) from discontinued operations
    
    
    1.3
    
    
    
    (25.7
    )
    
    
    (23.7
    )Cumulative effect of change in accounting principle, net of income taxes
    
    
    0.7
    
    
    
    
    
    
    
    Net income
    
    $
    146.2
    
    
    $
    102.0
    
    
    $
    114.5Basic earnings (loss) per share:Continuing operations
    
    $
    2.59
    
    
    $
    2.27
    
    
    $
    2.63Discontinued operations
    
    
    0.03
    
    
    
    (0.45
    )
    
    
    (0.45
    )Cumulative effect of change in accounting principle
    
    
    0.01
    
    
    
    
    
    
    
    Net income
    
    $
    2.63
    
    
    $
    1.82
    
    
    $
    2.18Diluted earnings (loss) per share:Continuing operations
    
    $
    2.56
    
    
    $
    2.23
    
    
    $
    2.58Discontinued operations
    
    
    0.03
    
    
    
    (0.44
    )
    
    
    (0.44
    )Cumulative effect of change in accounting principle
    
    
    0.01
    
    
    
    
    
    
    
    Net income
    
    $
    2.60
    
    
    $
    1.79
    
    
    $
    2.14Weighted average shares and dilutive securities outstanding:Basic
    
    
    55.6
    
    
    
    56.2
    
    
    
    52.5Diluted
    
    
    56.3
    
    
    
    57.2
    
    
    
    53.5
 F-6




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2006, 2007 and 2008
(In millions)
 2006
    
    
    2007
    
    
    2008Cash flows from operating activities:Net income
    
    $
    146.2
    
    
    $
    102.0
    
    
    $
    114.5Adjustments to reconcile net income to net cash provided by operating
activities:(Income) loss from discontinued operations
    
    
    (1.3
    )
    
    
    25.7
    
    
    
    23.7Cumulative effect of change in accounting principle, net of income taxes
    
    
    (0.7
    )
    
    
    
    
    
    
    Stock-based compensation
    
    
    13.1
    
    
    
    18.7
    
    
    
    23.4ESOP expense (non-cash portion)
    
    
    8.7
    
    
    
    8.6
    
    
    
    7.6Depreciation and amortization
    
    
    105.4
    
    
    
    129.4
    
    
    
    132.1Amortization of physician minimum revenue guarantees
    
    
    1.6
    
    
    
    5.4
    
    
    
    9.3Amortization of deferred loan costs
    
    
    5.3
    
    
    
    6.7
    
    
    
    7.3Minority interests in earnings of consolidated entities
    
    
    1.4
    
    
    
    1.7
    
    
    
    2.2Deferred income taxes (benefit)
    
    
    45.2
    
    
    
    (14.9
    )
    
    
    3.7Reserve for professional and general liability claims, net
    
    
    5.1
    
    
    
    8.2
    
    
    
    17.6Increase (decrease) in cash from operating assets and liabilities, net
of effects from acquisitions and divestitures:Accounts receivable
    
    
    (51.7
    )
    
    
    (13.7
    )
    
    
    (11.2
    )Inventories and other current assets
    
    
    (11.4
    )
    
    
    (6.2
    )
    
    
    (2.0
    )Accounts payable and accrued expenses
    
    
    21.7
    
    
    
    (28.1
    )
    
    
    (11.1
    )Income taxes payable /receivable
    
    
    (32.1
    )
    
    
    (2.8
    )
    
    
    26.2Other
    
    
    1.3
    
    
    
    0.7
    
    
    
    3.3Net cash provided by operating activities-continuing operations
    
    
    257.8
    
    
    
    241.4
    
    
    
    346.6Net cash (used in) provided by operating activities-discontinued operations
    
    
    (11.9
    )
    
    
    21.7
    
    
    
    (12.5
    )Net cash provided by operating activities
    
    
    245.9
    
    
    
    263.1
    
    
    
    334.1Cash flows from investing activities:Purchase of property and equipment
    
    
    (194.0
    )
    
    
    (158.4
    )
    
    
    (157.6
    )Acquisitions, net of cash acquired
    
    
    (281.3
    )
    
    
    
    
    
    
    (21.8
    )Other
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    (5.9
    )Net cash used in investing activities-continuing operations
    
    
    (475.8
    )
    
    
    (158.3
    )
    
    
    (185.3
    )Net cash provided by (used in) investing activities-discontinued operations
    
    
    63.5
    
    
    
    101.7
    
    
    
    (5.8
    )Net cash used in investing activities
    
    
    (412.3
    )
    
    
    (56.6
    )
    
    
    (191.1
    )Cash flows from financing activities:Proceeds from borrowings
    
    
    260.0
    
    
    
    615.0
    
    
    
    10.4Payments of borrowings
    
    
    (110.0
    )
    
    
    (765.9
    )
    
    
    (10.1
    )Proceeds from exercise of stock options
    
    
    0.6
    
    
    
    12.7
    
    
    
    3.6Proceeds from employee stock purchase plans
    
    
    3.0
    
    
    
    1.3
    
    
    
    0.8Proceeds for the completion of a new hospital
    
    
    
    
    
    
    14.7
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    (29.0
    )
    
    
    (118.3
    )Payment of debt issue costs
    
    
    (1.0
    )
    
    
    (14.2
    )
    
    
    (Distributions to) proceeds from minority investors in joint ventures
    
    
    (3.1
    )
    
    
    0.4
    
    
    
    (0.7
    )Capital lease payments and other
    
    
    (1.0
    )
    
    
    (0.6
    )
    
    
    (5.0
    )Net cash provided by (used in) financing activities  continuing operations
    
    
    148.5
    
    
    
    (165.6
    )
    
    
    (119.3
    )Net cash used in financing activities-discontinued operations
    
    
    (0.3
    )
    
    
    
    
    
    
    (1.1
    )Net cash provided by (used in) financing activities
    
    
    148.2
    
    
    
    (165.6
    )
    
    
    (120.4
    )Change in cash and cash equivalents
    
    
    (18.2
    )
    
    
    40.9
    
    
    
    22.6Cash and cash equivalents at beginning of year
    
    
    30.4
    
    
    
    12.2
    
    
    
    53.1Cash and cash equivalents at end of year
    
    $
    12.2
    
    
    $
    53.1
    
    
    $
    75.7Supplemental disclosure of cash flow information:Interest payments
    
    $
    107.2
    
    
    $
    95.6
    
    
    $
    82.6Capitalized interest
    
    $
    1.2
    
    
    $
    1.7
    
    
    $
    0.9Income taxes paid, net
    
    $
    75.8
    
    
    $
    103.2
    
    
    $
    59.2
 F-7




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
For the Years Ended December 31, 2006, 2007 and 2008
(In millions)
 Unearned
    
    
    AccumulatedCapital in
    
    
    Unearned
    
    
    Compensation
    
    
    OtherCommon Stock
    
    
    Excess of
    
    
    ESOP
    
    
    on Nonvested
    
    
    Comprehensive
    
    
    Retained
    
    
    TreasuryShares
    
    
    Amount
    
    
    Par Value
    
    
    Compensation
    
    
    Stock
    
    
    Loss
    
    
    Earnings
    
    
    Stock
    
    
    TotalBalance at December 31, 2005
    
    
    57.1
    
    
    $
    0.6
    
    
    $
    1,053.1
    
    
    $
    (9.7
    )
    
    $
    (31.0
    )
    
    $
    
    
    
    $
    274.8
    
    
    $
    
    
    
    $
    1,287.8Comprehensive income:
Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146.2
    
    
    
    
    
    
    
    146.2Net change in fair value
of interest rate swap,
net of tax benefit of
$5.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9.6
    )
    
    
    
    
    
    
    
    
    
    
    (9.6
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136.6Reclassification of
unearned compensation on
nonvested stock balance
upon adoption of SFAS No.
123(R)
    
    
    
    
    
    
    
    
    
    
    (31.0
    )
    
    
    
    
    
    
    31.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-cash ESOP compensation
earned
    
    
    
    
    
    
    
    
    
    
    6.4
    
    
    
    3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.7Exercise of stock options,
including tax benefits and
other
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6Stock activity in
connection with employee
stock purchase plans
    
    
    
    
    
    
    
    
    
    
    3.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.0Stock-based compensation
    
    
    0.3
    
    
    
    
    
    
    
    12.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12.3Balance at December 31, 2006
    
    
    57.4
    
    
    
    0.6
    
    
    
    1,044.4
    
    
    
    (6.4
    )
    
    
    
    
    
    
    (9.6
    )
    
    
    421.0
    
    
    
    
    
    
    
    1,450.0Comprehensive income:
Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102.0
    
    
    
    
    
    
    
    102.0Net change in fair value
of interest rate swap,
net of tax benefit of
$5.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.2
    )
    
    
    
    
    
    
    
    
    
    
    (10.2
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91.8Cumulative impact of change
in accounting for
uncertainties in income
taxes (FIN 48)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Non-cash ESOP compensation
earned
    
    
    
    
    
    
    
    
    
    
    6.2
    
    
    
    3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.5Exercise of stock options,
including tax benefits and
other
    
    
    0.4
    
    
    
    
    
    
    
    13.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13.9Stock activity in
connection with employee
stock purchase plans
    
    
    
    
    
    
    
    
    
    
    1.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.6Stock-based compensation
    
    
    0.3
    
    
    
    
    
    
    
    18.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18.8Repurchases of common
stock, at cost
    
    
    (1.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41.2
    )
    
    
    (41.2
    )Balance at December 31, 2007
    
    
    56.7
    
    
    
    0.6
    
    
    
    1,084.9
    
    
    
    (3.1
    )
    
    
    
    
    
    
    (19.8
    )
    
    
    522.8
    
    
    
    (41.2
    )
    
    
    1,544.2Comprehensive income:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114.5
    
    
    
    
    
    
    
    114.5Net change in fair value
of interest rate swap,
net of tax benefit of
$4.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.5
    )
    
    
    
    
    
    
    
    
    
    
    (8.5
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106.0Non-cash ESOP compensation
earned
    
    
    
    
    
    
    
    
    
    
    4.7
    
    
    
    3.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.8Exercise of stock options,
including tax benefits and
other
    
    
    0.2
    
    
    
    
    
    
    
    2.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.5Stock activity in
connection with employee
stock purchase plan
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8Stock-based compensation
    
    
    0.4
    
    
    
    
    
    
    
    23.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.4Repurchases of common
stock, at cost
    
    
    (3.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106.1
    )
    
    
    (106.1
    )Balance at December 31, 2008
    
    
    53.4
    
    
    $
    0.6
    
    
    $
    1,116.3
    
    
    $
    
    
    
    $
    
    
    
    $
    (28.3
    )
    
    $
    637.3
    
    
    $
    (147.3
    )
    
    $
    1,578.6
 F-8




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##### Table of Contents



LIFEPOINT HOSPITALS, INC
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
 Note 1. Organization and Summary of Significant Accounting Policies
 Organization
  Principles of Consolidation
  Use of Estimates
  Reclassifications
  
 
 
  As
Previously
Reported
    
    

Adjustments
    
    

RevisedOther current
liabilities
    
    $
    99.6
    
    
    $
    10.2
    
    
    $
    109.8Total current
liabilities
    
    $
    261.7
    
    
    $
    10.2
    
    
    $
    271.9Professional
and general liability claims and other liabilities
    
    $
    120.0
    
    
    $
    (10.2
    )
    
    $
    109.8
  F-9




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##### Table of Contents



Discontinued Operations
  General and Administrative Costs
  Fair Value of Financial Instruments
  Cash and Cash Equivalents, Accounts Receivable and Accounts Payable
 LongTerm Debt. 1 2 1 2 1 4 1 4
 Carrying Amount
    
    Fair Value2007
    
    2008
    
    2007
    
    2008Term B Loans
    
    $
    706.0
    
    
    $
    706.4
    
    
    $
    670.7
    
    
    $
    586.331/2% Notes
    
    
    575.0
    
    
    
    575.0
    
    
    
    513.2
    
    
    
    387.331/4% Debentures
    
    
    225.0
    
    
    
    225.0
    
    
    
    194.1
    
    
    
    162.0
 1 4 1 2
 F-10




---



##### Table of Contents



Interest Rate Swap.
  Revenue Recognition and Allowance for Contractual Discounts
     F-11




---



##### Table of Contents



Concentration of Revenues
   Hospitals
    
    Percentage ofin State as of
    
    Total RevenuesState
    
    December 31, 2008
    
    2006
    
    2007
    
    2008Kentucky
    
    
    8
    
    
    
    17.3
    %
    
    
    17.0
    %
    
    
    17.2
    %Virginia
    
    
    4
    
    
    
    14.6
    
    
    
    14.4
    
    
    
    14.1New Mexico
    
    
    2
    
    
    
    9.0
    
    
    
    8.8
    
    
    
    9.1West Virginia
    
    
    2
    
    
    
    6.5
    
    
    
    8.9
    
    
    
    9.0Tennessee
    
    
    6
    
    
    
    8.5
    
    
    
    8.2
    
    
    
    8.3Alabama
    
    
    5
    
    
    
    8.0
    
    
    
    7.4
    
    
    
    7.5Louisiana
    
    
    5
    
    
    
    7.3
    
    
    
    7.4
    
    
    
    7.2Arizona
    
    
    2
    
    
    
    5.7
    
    
    
    6.5
    
    
    
    6.4Texas
    
    
    3
    
    
    
    5.8
    
    
    
    5.3
    
    
    
    5.3
 Cash and Cash Equivalents
  Accounts Receivable and Allowance for Doubtful Accounts
   F-12




---



##### Table of Contents



Balances
    
    Additions
    
    Accountsat
    
    Charged to
    
    Written Off,
    
    BalancesBeginning
    
    Costs and
    
    Net of
    
    at Endof Year
    
    Expenses(a)
    
    Recoveries
    
    of YearYear ended December 31, 2006
    
    $
    251.4
    
    
    $
    273.9
    
    
    $
    (199.1
    )
    
    $
    326.2Year ended December 31, 2007
    
    
    326.2
    
    
    
    324.0
    
    
    
    (273.9
    )
    
    
    376.3Year ended December 31, 2008
    
    
    376.3
    
    
    
    318.3
    
    
    
    (320.2
    )
    
    
    374.4
 
 (a)
    
    Additions charged to costs and expenses include amounts related to the Companys continuing
and discontinued operations in the Companys accompanying consolidated financial statements. Inventories
  Long-Lived Assets
 Property and Equipment
   YearsBuildings and improvements (including those under capital leases)
    
    
    10 - 40Equipment
    
    
    3 - 10Equipment under capital leases
    
    
    3 - 5
   2007
    
    
    2008Buildings and improvements
    
    $
    198.3
    
    
    $
    205.3Equipment
    
    
    34.6
    
    
    
    37.6232.9
    
    
    
    242.9Accumulated amortization
    
    
    (33.5
    )
    
    
    (48.9
    )$
    199.4
    
    
    $
    194.0
 F-13




---



##### Table of Contents



Deferred Loan Costs
  Goodwill and Intangible Assets
    Income Taxes
  F-14




---



##### Table of Contents



Point of Life Indemnity, Ltd.
  Professional and General Liability Claims
    2007
    
    
    2008Current
portion
    
    $
    17.4
    
    
    $
    15.5Long-term
portion
    
    
    52.0
    
    
    
    71.7$
    69.4
    
    
    $
    87.2
   F-15




---



##### Table of Contents



Workers Compensation Reserves
   2007
    
    
    2008Current
portion
    
    $
    6.6
    
    
    $
    7.1Long-term
portion
    
    
    6.4
    
    
    
    8.8$
    13.0
    
    
    $
    15.9
  Self-Insured Medical Benefits
  Minority Interests in Consolidated Entities
  Segment Reporting
  F-16




---



##### Table of Contents




    
    the treatment of patients in a hospital setting is the only material source of revenues
for each of the Companys six operating divisions;
    
    the healthcare services provided by each of the Companys operating divisions are
generally the same;
    
    the healthcare services provided by each of the Companys operating divisions are
generally provided to similar types of patients, which is patients in a hospital setting;
    
    the healthcare services are primarily provided by the direction of affiliated or
employed physicians and by the nurses, lab technicians, and others employed or contracted
at each of the Companys hospitals; and
    
    the healthcare regulatory environment is generally similar for each of the Companys
six operating divisions.
  
    
    the way the Company manages its operations and extent to which its acquired facilities
are integrated into its existing operations as a single reporting unit;
    
    the Companys goodwill is recoverable from the collective operations of its six
operating divisions and not individually from one single operating division;
    
    its operating divisions are frequently realigned based upon changing circumstances,
including acquisition and divestiture activity; and
    
    because of the collective size of its six operating divisions, each division benefits
from its participation in a group purchasing organization.
 Stock-Based Compensation
  Earnings (Loss) Per Share
  F-17




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##### Table of Contents



Recently Issued Accounting Pronouncements
     F-18




---



##### Table of Contents



Note 2. Acquisitions
 Acquisitions  2007 and 2008
  Acquisitions  2006
 Four Former HCA Hospitals
    Inventories
    
    $
    13.0Prepaid expenses
    
    
    1.6Other current assets
    
    
    0.8Property and equipment
    
    
    198.0Intangible assets:Certificates of need
    
    
    4.3Non-competition agreements
    
    
    0.7Goodwill
    
    
    47.5Total assets acquired, excluding cash
    
    
    265.9Accounts payable
    
    
    0.2Accrued salaries
    
    
    5.6Other current liabilities
    
    
    2.4Total liabilities assumed
    
    
    8.2Net assets acquired
    
    $
    257.7
 F-19




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##### Table of Contents



Havasu Joint Venture
  Impact of Final Valuations of Fixed Assets
   Note 3. Discontinued Operations
 Facilities
Identified as Discontinued Operations  2008
  Facilities
Identified as Discontinued Operations  2007
   F-20




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##### Table of Contents



Facilities
Identified as Discontinued Operations  2006
   Impact of Discontinued Operations
    2006
    
    2007
    
    2008Revenues
    
    $
    212.0
    
    
    $
    120.6
    
    
    $
    53.0Loss before income taxes
    
    $
    (3.1
    )
    
    $
    (12.9
    )
    
    $
    (12.2
    )Loss net of income taxes
    
    $
    (2.9
    )
    
    $
    (8.6
    )
    
    $
    (6.3
    )
  Current
    
    
    Property andAssets
    
    
    Equipment
    
    
    TotalBalance at December 31, 2007
    
    $
    2.3
    
    
    $
    34.7
    
    
    $
    37.0Impairment of Opelousas
    
    
    (0.6
    )
    
    
    (10.0
    )
    
    
    (10.6
    )Impairment of Starke
    
    
    
    
    
    
    (4.4
    )
    
    
    (4.4
    )Other
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Balance at December 31, 2008
    
    $
    1.3
    
    
    $
    20.3
    
    
    $
    21.6
 F-21




---



##### Table of Contents



Impairment Charges
  Impairment  Opelousas
   Property and equipment
    
    $
    10.0Goodwill
    
    
    8.7Inventory
    
    
    0.6Intangible assets
    
    
    0.519.8Income tax benefit
    
    
    (5.9
    )$
    13.9
 Impairment  Starke
   Property and equipment
    
    $
    4.4Goodwill
    
    
    2.9Intangible assets
    
    
    0.37.6Income tax benefit
    
    
    (2.1
    )$
    5.5
 F-22




---



##### Table of Contents



Impairment  Colorado River
   2007
    
    
    2008Property and equipment
    
    $
    4.9
    
    
    $
    Net working capital
    
    
    4.7
    
    
    
    (3.6
    )Goodwill
    
    
    3.1
    
    
    
    12.7
    
    
    
    (3.6
    )Income tax (benefit) provision
    
    
    (4.0
    )
    
    
    1.3$
    8.7
    
    
    $
    (2.3
    )
 Impairment  Coastal
   Goodwill
    
    $
    7.2Intangible assets
    
    
    0.47.6Income tax provision
    
    
    0.2$
    7.8
 F-23




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##### Table of Contents



Note 4. Goodwill and Intangible Assets
  Balance at December 31, 2006
    
    $
    1,581.3Impairment related to Colorado River
    
    
    (3.1
    )Sale of
Coastal (including impairment of $7.2 million)
    
    
    (14.1
    )Consideration and purchase price adjustments  for acquisitions
    
    
    (52.1
    )Balance at December 31, 2007
    
    
    1,512.0Impairment related to Starke
    
    
    (2.9
    )Impairment related to Opelousas
    
    
    (8.7
    )Consideration
for acquisitions
    
    
    16.1Balance at December 31, 2008
    
    $
    1,516.5
  2007
    
    
    2008Amortized intangible assets:Contract-based physician minimum revenue guaranteesGross carrying amount
    
    $
    44.0
    
    
    $
    66.4Accumulated amortization
    
    
    (8.8
    )
    
    
    (16.2
    )Net total
    
    
    35.2
    
    
    
    50.2Non-competition agreementsGross carrying amount
    
    
    17.3
    
    
    
    20.2Accumulated amortization
    
    
    (7.0
    )
    
    
    (8.1
    )Net total
    
    
    10.3
    
    
    
    12.1Total amortized intangible assetsGross carrying amount
    
    
    61.3
    
    
    
    86.6Accumulated amortization
    
    
    (15.8
    )
    
    
    (24.3
    )Net total
    
    
    45.5
    
    
    
    62.3Indefinite-lived intangible assets:Certificates of need
    
    
    6.9
    
    
    
    6.5Total intangible assets:Gross carrying amount
    
    
    68.2
    
    
    
    93.1Accumulated amortization
    
    
    (15.8
    )
    
    
    (24.3
    )Net total
    
    $
    52.4
    
    
    $
    68.8
 Contract-Based Physician Minimum Revenue Guarantees
   F-24




---



##### Table of Contents



Non-Competition Agreements
  Certificates of Need
  Amortization Expense
   2009
    
    $
    15.62010
    
    
    15.12011
    
    
    13.12012
    
    
    9.52013
    
    
    3.5Thereafter
    
    
    5.5$
    62.3
 Note 5. Accounting for Income Taxes
  2006
    
    
    2007
    
    
    2008Current:Federal
    
    $
    53.2
    
    
    $
    77.8
    
    
    $
    69.0State
    
    
    5.4
    
    
    
    6.7
    
    
    
    4.358.6
    
    
    
    84.5
    
    
    
    73.3Deferred:Federal
    
    
    32.0
    
    
    
    0.9
    
    
    
    10.6State
    
    
    (0.8
    )
    
    
    (3.9
    )
    
    
    (0.9
    )31.2
    
    
    
    (3.0
    )
    
    
    9.7Increase in valuation allowance
    
    
    3.4
    
    
    
    4.3
    
    
    
    5.1Total
    
    $
    93.2
    
    
    $
    85.8
    
    
    $
    88.1
  F-25




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##### Table of Contents



2006
    
    
    2007
    
    
    2008Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal income tax benefit
    
    
    2.0
    
    
    
    1.3
    
    
    
    2.0ESOP expense
    
    
    0.8
    
    
    
    0.9
    
    
    
    0.7Valuation allowance
    
    
    1.4
    
    
    
    2.0
    
    
    
    2.2Other items, net
    
    
    
    
    
    
    1.0
    
    
    
    (1.0
    )Effective income tax rate
    
    
    39.2
    %
    
    
    40.2
    %
    
    
    38.9
    %
  2007
    
    
    2008Deferred income tax liabilities:Depreciation and amortization
    
    $
    (155.2
    )
    
    $
    (157.2
    )Prepaid expenses
    
    
    (2.4
    )
    
    
    (1.2
    )Other
    
    
    (0.1
    )
    
    
    (2.6
    )Total deferred income tax liabilities
    
    
    (157.7
    )
    
    
    (161.0
    )Deferred income tax assets:Provision for doubtful accounts
    
    
    84.5
    
    
    
    68.4Employee compensation
    
    
    33.7
    
    
    
    43.8Professional liability claims
    
    
    26.3
    
    
    
    31.0Interest rate swap
    
    
    10.9
    
    
    
    15.8Other
    
    
    51.5
    
    
    
    48.8Total deferred income tax assets
    
    
    206.9
    
    
    
    207.8Valuation allowance
    
    
    (39.4
    )
    
    
    (46.5
    )Net deferred income tax assets
    
    
    167.5
    
    
    
    161.3Net deferred income tax assets (liabilities)
    
    $
    9.8
    
    
    $
    0.3
  2007
    
    
    2008Current
    
    $
    123.0
    
    
    $
    103.4Long-term
    
    
    (113.2
    )
    
    
    (103.1
    )Total
    
    $
    9.8
    
    
    $
    0.3
   F-26




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##### Table of Contents



2007
    
    
    2008Balance at
beginning of year
    
    $
    51.9
    
    
    $
    52.2Additions for tax positions of prior years
    
    
    3.3
    
    
    
    2.4Reductions for tax positions of prior years
    
    
    
    
    
    
    (0.9
    )Reductions for settlements with taxing authorities
    
    
    (0.9
    )
    
    
    (1.3
    )Reductions for lapse of statutes of limitations
    
    
    (2.1
    )
    
    
    (4.2
    )Balance at
end of year
    
    $
    52.2
    
    
    $
    48.2
  2007
    
    
    2008Unrecognized tax benefits
    
    $
    52.2
    
    
    $
    48.2Accrued interest and penalties
    
    
    12.7
    
    
    
    11.2$
    64.9
    
    
    $
    59.4
     F-27




---



##### Table of Contents



Note 6. Other Current Liabilities
  2007
    
    
    2008Accrued interest
    
    $
    10.6
    
    
    $
    10.6Short-term portion of professional and general liability claims
    
    
    17.4
    
    
    
    15.5Short-term portion of workers compensation reserves
    
    
    6.6
    
    
    
    7.1Medical benefits liability
    
    
    14.3
    
    
    
    12.9Physician minimum revenue guarantee liability
    
    
    15.3
    
    
    
    22.2Share repurchase payable
    
    
    12.2
    
    
    
    Other
    
    
    33.4
    
    
    
    26.2$
    109.8
    
    
    $
    94.5
 Note 7. Long-Term Debt
  2007
    
    
    2008Senior Borrowings:Credit Agreement:Term B Loans
    
    $
    706.0
    
    
    $
    706.4Revolving Loans
    
    
    
    
    
    
    706.0
    
    
    
    706.4Subordinated Borrowings:31/2% Notes
    
    
    575.0
    
    
    
    575.031/4% Debentures
    
    
    225.0
    
    
    
    225.0Province 71/2% Notes
    
    
    6.1
    
    
    
    6.1Province 41/4% Notes
    
    
    0.1
    
    
    
    806.2
    
    
    
    806.1Capital leases
    
    
    5.0
    
    
    
    4.2Total long-term debt
    
    
    1,517.2
    
    
    
    1,516.7Less: current portion
    
    
    0.5
    
    
    
    1.1$
    1,516.7
    
    
    $
    1,515.6
 F-28




---



##### Table of Contents



2009
    
    $
    1.12010
    
    
    1.02011
    
    
    530.62012
    
    
    177.52013
    
    
    6.5Thereafter
    
    
    800.0$
    1,516.7
 Senior Secured Credit Agreement
 Terms
 1 2
  Borrowings and Payments
  1 2
 Letters of Credit and Availability
  F-29




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##### Table of Contents



Interest Rates
   Covenants
   Level atRequirement
    
    December 31, 2008Minimum Interest Coverage Ratio
    
    ≥ 3.50:1.00
    
    
    5.88Maximum Total Leverage Ratio
    
    ≤ 4.25:1.00
    
    
    3.14Capital Expenditure Ratio
    
    ≤ 10.0%
    
    
    5.8
    %
   3 1 / 2 % Convertible Senior Subordinated Notes due May 15, 2014
 1 2 1 2 1 2
 1 2 1 2 1 2
 F-30




---



##### Table of Contents



1 2 1 2
 1 2
 1 2 1 2 1 2
 1 2 1 2
 3 1 / 4 % Convertible Senior Subordinated Debentures due August 15, 2025
 1 4 1 4 1 4
 1 4 1 4 1 4 1 4 1 4 1 4 1 4
 1 4 1 4
 F-31




---



##### Table of Contents



1 4 1 4 1 4 1 4
 1 4 1 4
 Province 7 1 / 2 % Senior Subordinated Notes
 1 2 1 2 1 2
 1 2 1 2 1 2 1 2 1 2 1 2 1 2
 Province 4 1 / 4 % Convertible Subordinated Notes
 1 4 1 4 1 4 1 4
 Interest Rate Swap
  Notional AmountDate
Range
    
    (In millions)November 30, 2006 to November 30, 2007
    
    $
    900.0November 30, 2007 to November 28, 2008
    
    
    750.0November 28, 2008 to November 30, 2009
    
    
    600.0November 30, 2009 to November 30, 2010
    
    
    450.0November 30, 2010 to May 30, 2011
    
    
    300.0
 F-32




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##### Table of Contents



Note 8. Stockholders Equity
 Preferred Stock
  Preferred Stock Purchase Rights
    F-33




---



##### Table of Contents



Common Stock
  Repurchases of Common Stock
   Comprehensive Income (Loss)
   ESOP Compensation
  F-34




---



##### Table of Contents



Note 9. Stock-Based Compensation
   Description of Stock-Based Compensation Plans
 1998 Long-Term Incentive Plan
  F-35




---



##### Table of Contents



Outside Directors Stock and Incentive Compensation Plan
    ESPP
   Shares Availablefor IssuanceDecember 31, 2005
    
    
    107,977Issuances
    
    
    (71,847
    )December 31, 2006
    
    
    36,130Issuances
    
    
    (36,130
    )December 31, 2007
    
    
    
 F-36




---



##### Table of Contents



MSPP
   Stock Options
 Valuation
   2006
    
    2007
    
    2008Expected volatility
    
    
    32.8
    %
    
    
    27.2
    %
    
    
    31.9
    %Risk free interest rate (range)
    
    
    4.38% - 5.21
    %
    
    
    3.34% - 5.21
    %
    
    
    0.09% - 3.89
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    Average expected term (years)
    
    
    5.4
    
    
    
    4.7
    
    
    
    5.3Fair value per share of stock options granted
    
    $
    11.15
    
    
    $
    10.24
    
    
    $
    8.14
 Population Stratification
  F-37




---



##### Table of Contents



Expected Volatility
  Risk-Free Interest Rate
  Expected Dividends
  Pre-Vesting Forfeitures
    Post-Vesting Cancellations
  F-38




---



##### Table of Contents



Expected Term
  Stock Option Activity
  WeightedWeighted
    
    

    Weighted
    

    
    
    
    
    
    
    
    
    
    AverageAverage
    

    
    Average
    

    
    
    
    
    
    Aggregate
    

    
    RemainingNumber
    

    
    Exercise
    

    
    Fair
    

    
    Total
    

    
    Intrinsic
    

    
    ContractualStock Options
    
    of Shares
    

    
    Price
    

    
    Value
    

    
    Fair Value
    

    
    Value(a)
    

    
    Term(In millions)
    

    
    (In millions)
    

    
    (In years)Outstanding
at December 31, 2007
    
    
    4,128,563
    
    
    $
    30.65
    
    
    $
    11.25
    
    
    $
    46.5
    
    
    $
    17.7
    
    
    
    5.68Exercisable at December 31, 2007
    
    
    2,915,406
    
    
    $
    28.47
    
    
    $
    11.20
    
    
    $
    32.7
    
    
    $
    17.6
    
    
    
    4.43Unvested at December 31, 2007
    
    
    1,213,157
    
    
    $
    35.90
    
    
    $
    11.31
    
    
    $
    13.8
    
    
    $
    0.1
    
    
    
    8.67Granted
    
    
    1,134,125
    
    
    $
    26.10
    
    
    $
    8.14
    
    
    $
    9.2
    
    
    
    N/A
    
    
    
    N/AForfeited (pre-vest cancellation)
    
    
    (127,268
    )
    
    $
    30.83
    
    
    $
    9.21
    
    
    $
    (1.2
    )
    
    
    N/A
    
    
    
    N/AExercised
    
    
    (230,210
    )
    
    $
    15.77
    
    
    $
    5.61
    
    
    $
    (1.3
    )
    
    $
    3.9
    
    
    
    N/AExpired (post-vest cancellation)
    
    
    (107,650
    )
    
    $
    38.18
    
    
    $
    14.81
    
    
    $
    (1.6
    )
    
    
    N/A
    
    
    
    N/AVested
    
    
    564,277
    
    
    $
    36.72
    
    
    $
    12.71
    
    
    $
    7.2
    
    
    
    N/A
    
    
    
    N/AOutstanding at December 31, 2008
    
    
    4,797,560
    
    
    $
    30.13
    
    
    $
    10.77
    
    
    $
    51.6
    
    
    $
    7.8
    
    
    
    5.76Exercisable at December 31, 2008
    
    
    3,141,823
    
    
    $
    30.56
    
    
    $
    11.76
    
    
    $
    37.0
    
    
    $
    7.8
    
    
    
    4.19Unvested at December 31, 2008
    
    
    1,655,737
    
    
    $
    29.30
    
    
    $
    8.83
    
    
    $
    14.6
    
    
    $
    
    
    
    
    8.74
 
 (a)
    
    The aggregate intrinsic value represents the difference between the underlying stocks market
price and the stock options exercise price.    F-39




---



##### Table of Contents



Other Stock-Based Awards
   WeightedNumber
    

    
    Average
    

    
    Total
    

    
    AggregateOther Stock-Based Awards
    
    of Shares
    

    
    Fair Value
    

    
    Fair Value
    

    
    Intrinsic Value(In millions)
    

    
    (In millions)Outstanding at December 31, 2007
    
    
    1,341,998
    
    
    $
    37.17
    
    
    $
    49.8
    
    
    
    37.4Granted
    
    
    546,411
    
    
    
    24.96
    
    
    
    13.6
    
    
    
    N/AVested and exercised
    
    
    (324,134
    )
    
    
    42.37
    
    
    
    (13.7
    )
    
    
    9.0Forfeited (pre-vest cancellation)
    
    
    (102,454
    )
    
    
    33.72
    
    
    
    (3.4
    )
    
    
    N/AOutstanding at December 31, 2008
    
    
    1,461,821
    
    
    $
    31.68
    
    
    $
    46.3
    
    
    $
    31.6Unvested at December 31, 2008
    
    
    1,395,320
    
    
    $
    31.60
    
    
    $
    44.1
    
    
    $
    30.5
   F-40




---



##### Table of Contents



Summary of Stock-Based Compensation
  Deferred StockStock Options
    
    Other Stock-Based Awards
    
    UnitsOutstanding
    
    Outstanding
    
    OutstandingWeighted
    
    
    
    
    
    WeightedShares
    
    
    
    
    
    Average
    
    
    
    
    
    AverageAvailable
    
    Number of
    
    Exercise
    
    Number of
    
    Grant Date
    
    Number offor Grant
    
    Shares
    
    Price
    
    Shares
    
    Price
    
    SharesDecember 31, 2005
    
    
    4,434,113
    
    
    
    3,559,674
    
    
    $
    29.98
    
    
    
    874,801
    
    
    $
    42.51
    
    
    
    11,168Stock option grants
    
    
    (918,245
    )
    
    
    918,245
    
    
    
    33.24
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards grants
    
    
    (449,523
    )
    
    
    
    
    
    
    
    
    
    
    449,523
    
    
    
    31.90
    
    
    
    Deferred stock unit grants
    
    
    (6,255
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,255Stock option exercises
    
    
    
    
    
    
    (30,327
    )
    
    
    17.62
    
    
    
    
    
    
    
    
    
    
    
    Deferred stock units vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (799
    )Stock option cancellations
    
    
    326,068
    
    
    
    (326,068
    )
    
    
    37.68
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards cancellations
    
    
    270,820
    
    
    
    
    
    
    
    
    
    
    
    (270,820
    )
    
    
    40.23
    
    
    
    December 31, 2006
    
    
    3,656,998
    
    
    
    4,121,524
    
    
    
    30.19
    
    
    
    1,053,504
    
    
    
    38.62
    
    
    
    16,624Stock option grants
    
    
    (1,056,811
    )
    
    
    1,056,811
    
    
    
    36.32
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards grants
    
    
    (513,314
    )
    
    
    
    
    
    
    
    
    
    
    513,314
    
    
    
    34.98
    
    
    
    Deferred stock unit grants
    
    
    (3,979
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,979Stock option exercises
    
    
    
    
    
    
    (400,639
    )
    
    
    30.64
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,500
    )
    
    
    40.60
    
    
    
    Deferred stock units vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,784
    )Stock option cancellations
    
    
    649,133
    
    
    
    (649,133
    )
    
    
    36.93
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards cancellations
    
    
    214,320
    
    
    
    
    
    
    
    
    
    
    
    (214,320
    )
    
    
    38.97
    
    
    
    December 31, 2007
    
    
    2,946,347
    
    
    
    4,128,563
    
    
    
    30.65
    
    
    
    1,341,998
    
    
    
    37.17
    
    
    
    9,819Increase in shares available for grant
    
    
    2,175,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option grants
    
    
    (1,134,125
    )
    
    
    1,134,125
    
    
    
    26.10
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards grants
    
    
    (546,411
    )
    
    
    
    
    
    
    
    
    
    
    546,411
    
    
    
    24.96
    
    
    
    Deferred stock unit grants
    
    
    (1,746
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,746Stock option exercises
    
    
    
    
    
    
    (230,210
    )
    
    
    15.77
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (324,134
    )
    
    
    42.37
    
    
    
    Deferred stock units vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,983
    )Stock option cancellations
    
    
    234,918
    
    
    
    (234,918
    )
    
    
    34.20
    
    
    
    
    
    
    
    
    
    
    
    Other stock-based awards cancellations
    
    
    102,454
    
    
    
    
    
    
    
    
    
    
    
    (102,454
    )
    
    
    33.72
    
    
    
    December 31, 2008
    
    
    3,776,437
    
    
    
    4,797,560
    
    
    $
    30.13
    
    
    
    1,461,821
    
    
    $
    31.68
    
    
    
    9,582
  2006
    
    

    2007
    

    
    2008Other stock-based awards
    
    $
    7.4
    
    
    $
    11.8
    
    
    $
    16.1Stock options
    
    
    5.7
    
    
    
    6.9
    
    
    
    7.3Total stock-based compensation expense
    
    $
    13.1
    
    
    $
    18.7
    
    
    $
    23.4Tax benefits on stock-based compensation expense
    
    $
    5.2
    
    
    $
    7.8
    
    
    $
    9.3
  F-41




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##### Table of Contents



Note 10. Commitments and Contingencies
 Legal Proceedings and General Liability Claims
  Physician Commitments
  Capital Expenditure Commitments
  Development Agreement with the City of Ennis
  F-42




---



##### Table of Contents



Acquisitions
  Leases
   Operating
    
    
    Capital LeaseLeases
    
    
    Obligations
    
    
    Total2009
    
    $
    13.5
    
    
    $
    1.3
    
    
    $
    14.82010
    
    
    8.7
    
    
    
    1.1
    
    
    
    9.82011
    
    
    6.7
    
    
    
    1.0
    
    
    
    7.72012
    
    
    5.0
    
    
    
    0.9
    
    
    
    5.92013
    
    
    3.3
    
    
    
    0.4
    
    
    
    3.7Thereafter
    
    
    9.3
    
    
    
    
    
    
    
    9.3$
    46.5
    
    
    
    4.7
    
    
    $
    51.2Less: interest portion
    
    
    
    
    
    
    (0.5
    )Long-term obligations under capital leases
    
    
    
    
    
    $
    4.2
 Tax Matters
  F-43




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##### Table of Contents



Note 11. Earnings (Loss) Per Share
  2006
    
    
    2007
    
    
    2008Numerator:Numerator for basic and diluted earnings per share  income from
continuing operations
    
    $
    144.2
    
    
    $
    127.7
    
    
    $
    138.2Income (loss) from discontinued operations, net of income taxes
    
    
    1.3
    
    
    
    (25.7
    )
    
    
    (23.7
    )Cumulative effect of change in accounting principle
    
    
    0.7
    
    
    
    
    
    
    
    $
    146.2
    
    
    $
    102.0
    
    
    $
    114.5Denominator:Denominator for basic earnings (loss) per share  weighted average shares
outstanding
    
    
    55.6
    
    
    
    56.2
    
    
    
    52.5Effect of dilutive securities:Employee stock benefit plans
    
    
    0.7
    
    
    
    1.0
    
    
    
    1.0Denominator for diluted earnings (loss) per share  weighted average shares
    
    
    56.3
    
    
    
    57.2
    
    
    
    53.5Basic earnings (loss) per share:Continuing operations
    
    $
    2.59
    
    
    $
    2.27
    
    
    $
    2.63Discontinued operations
    
    
    0.03
    
    
    
    (0.45
    )
    
    
    (0.45
    )Cumulative effect of change in accounting principle
    
    
    0.01
    
    
    
    
    
    
    
    Net income
    
    $
    2.63
    
    
    $
    1.82
    
    
    $
    2.18Diluted earnings (loss) per share:Continuing operations
    
    $
    2.56
    
    
    $
    2.23
    
    
    $
    2.58Discontinued operations
    
    
    0.03
    
    
    
    (0.44
    )
    
    
    (0.44
    )Cumulative effect of change in accounting principle
    
    
    0.01
    
    
    
    
    
    
    
    Net income
    
    $
    2.60
    
    
    $
    1.79
    
    
    $
    2.14
 1 2 1 4 1 4 1 2
 Note 12. Financial Impact of Changes in the Companys Executives
  F-44




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##### Table of Contents



F-45




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##### Table of Contents



Note 13. Unaudited Quarterly Financial Information
  2007First
    
    
    Second
    
    
    Third
    
    
    FourthRevenues
    
    $
    645.8
    
    
    $
    638.2
    
    
    $
    641.0
    
    
    $
    643.4Income from continuing operations
    
    $
    38.9
    
    
    $
    25.0
    
    
    $
    32.1
    
    
    $
    31.7Discontinued operations:Loss from discontinued operations
    
    
    (1.1
    )
    
    
    (3.0
    )
    
    
    (3.8
    )
    
    
    (0.7
    )Impairment (charge) adjustment
    
    
    (7.9
    )
    
    
    (8.5
    )
    
    
    0.3
    
    
    
    (0.4
    )Loss on sale of hospitals
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.4
    )
    
    
    Loss from discontinued operations
    
    
    (9.1
    )
    
    
    (11.6
    )
    
    
    (3.9
    )
    
    
    (1.1
    )Net income
    
    $
    29.8
    
    
    $
    13.4
    
    
    $
    28.2
    
    
    $
    30.6Basic earnings (loss) per share:Continuing operations
    
    $
    0.70
    
    
    $
    0.44
    
    
    $
    0.57
    
    
    $
    0.56Discontinued operations
    
    
    (0.17
    )
    
    
    (0.20
    )
    
    
    (0.07
    )
    
    
    (0.02
    )Net income
    
    $
    0.53
    
    
    $
    0.24
    
    
    $
    0.50
    
    
    $
    0.54Diluted earnings (loss) per share:Continuing operations
    
    $
    0.69
    
    
    $
    0.43
    
    
    $
    0.56
    
    
    $
    0.55Discontinued operations
    
    
    (0.16
    )
    
    
    (0.20
    )
    
    
    (0.07
    )
    
    
    (0.02
    )Net income
    
    $
    0.53
    
    
    $
    0.23
    
    
    $
    0.49
    
    
    $
    0.53
 2008First
    
    
    Second
    
    
    Third
    
    
    FourthRevenues
    
    $
    685.1
    
    
    $
    665.7
    
    
    $
    675.1
    
    
    $
    674.9Income from continuing operations
    
    $
    41.3
    
    
    $
    32.2
    
    
    $
    31.5
    
    
    $
    33.2Discontinued operations:(Loss) income from discontinued operations
    
    
    (1.8
    )
    
    
    (1.4
    )
    
    
    (3.3
    )
    
    
    0.2Impairment adjustment (charge)
    
    
    2.3
    
    
    
    
    
    
    
    (16.8
    )
    
    
    (2.6
    )Loss on sale of hospitals
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    Income (loss) from discontinued operations
    
    
    0.5
    
    
    
    (1.7
    )
    
    
    (20.1
    )
    
    
    (2.4
    )Net income
    
    $
    41.8
    
    
    $
    30.5
    
    
    $
    11.4
    
    
    $
    30.8Basic earnings (loss) per share:Continuing operations
    
    $
    0.76
    
    
    $
    0.62
    
    
    $
    0.61
    
    
    $
    0.64Discontinued operations
    
    
    0.01
    
    
    
    (0.04
    )
    
    
    (0.39
    )
    
    
    (0.05
    )Net income
    
    $
    0.77
    
    
    $
    0.58
    
    
    $
    0.22
    
    
    $
    0.59Diluted earnings (loss) per share:Continuing operations
    
    $
    0.75
    
    
    $
    0.60
    
    
    $
    0.60
    
    
    $
    0.63Discontinued operations
    
    
    0.01
    
    
    
    (0.03
    )
    
    
    (0.38
    )
    
    
    (0.05
    )Net income
    
    $
    0.76
    
    
    $
    0.57
    
    
    $
    0.22
    
    
    $
    0.58
 F-46




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##### Table of Contents



Note 14. Subsequent Event
  F-47




---



##### Table of Contents



SIGNATURES
  LIFEPOINT HOSPITALS, INC.By:
    /s/ WILLIAM F. CARPENTER IIIWilliam F. Carpenter IIIPresident and Chief Executive Officer  Name
    
    Title
    
    Date/s/ OWEN G. SHELL, JR.
    
    Chairman of the Board of Directors
    
    February 20, 2009

Owen G. Shell, Jr./s/ WILLIAM F. CARPENTER III

William F. Carpenter III
    
    President, Chief Executive
Officer, and Director (Principal
Executive Officer)
    
    February 20, 2009/s/ DAVID M. DILL

David M. Dill
    
    Chief Financial Officer
(Principal Financial Officer)
    
    February 20, 2009/s/ MICHAEL S. COGGIN

Michael S. Coggin
    
    Chief Accounting Officer
(Principal Accounting Officer)
    
    February 20, 2009/s/ GREGORY T. BIER

Gregory T. Bier
    
    Director
    
    February 20, 2009/s/ RICHARD H. EVANS

Richard H. Evans
    
    Director
    
    February 20, 2009/s/ DEWITT EZELL, JR

DeWitt Ezell, Jr
    
    Director
    
    February 20, 2009/s/ MICHAEL P. HALEY

Michael P. Haley
    
    Director
    
    February 20, 2009/s/ MARGUERITE W. KONDRACKE

Marguerite W. Kondracke
    
    Director
    
    February 20, 2009/s/ JOHN E. MAUPIN, JR., D.D.S

John E. Maupin, Jr., D.D.S
    
    Director
    
    February 20, 2009
 84




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits3.1
    
    
    
    
    
    Amended and Restated Certificate of Incorporation (incorporated by reference
from exhibits to the Registration Statement on Form S-8 filed by LifePoint
Hospitals, Inc. on April 19, 2005, File No. 333-124151).3.2
    
    
    
    
    
    Second Amended and Restated Bylaws of LifePoint Hospitals, Inc. (incorporated
by reference from exhibits to the LifePoint Hospitals, Inc. Current Report on
Form 8-K dated October 16, 2006, File No. 000-51251).3.3
    
    
    
    
    
    Amendment No. 1 to the Second Amended and Restated Bylaws of LifePoint
Hospitals, Inc. (incorporated by reference from exhibits to the LifePoint
Hospitals, Inc. Current Report on Form 8-K dated May 20, 2008, File No.
000-51251).4.1
    
    
    
    
    
    Form of Specimen Stock Certificate (incorporated by reference from exhibits to
the Registration Statement on Form S-4, as amended, filed by LifePoint
Hospitals, Inc. on October 25, 2004, File No. 333-119929).4.2
    
    
    
    
    
    Form of 3.25% Convertible Senior Subordinated Debenture due 2025 (incorporated
by reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated August 10, 2005, File No. 000-51251).4.3
    
    
    
    
    
    Registration Rights Agreement, dated August 10, 2005, between LifePoint
Hospitals, Inc. and Citigroup Global Markets Inc. as Representatives of the
Initial Purchasers (incorporated by reference from exhibits to LifePoint
Hospitals Current Report on Form 8-K dated August 10, 2005, File No.
000-51251).4.4
    
    
    
    
    
    Rights Agreement, dated as of April 15, 2005, by and between LifePoint
Hospitals, Inc. and National City Bank, as Rights Agent (incorporated by
reference from exhibits to the Registration Statement on Form S-8 filed by
Historic LifePoint Hospitals, Inc. on April 15, 2005, File No. 333-124093).4.5
    
    
    
    
    
    Subordinated Indenture, dated as of May 27, 2003, between Province Healthcare
Company and U.S. Bank Trust National Association, as Trustee (incorporated by
reference from exhibits to Province Healthcare Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2003, File No. 001-31320).4.6
    
    
    
    
    
    First Supplemental Indenture to Subordinated Indenture, dated as of May 27,
2003, by and among Province Healthcare Company and U.S. Bank National
Association, as Trustee, relating to Province Healthcare Companys
71/2% Senior Subordinated Notes due 2013 (incorporated by
reference from exhibits to Province Healthcare Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2003, File No. 001-31320).4.7
    
    
    
    
    
    Second Supplemental Indenture to Subordinated Indenture, dated as of April 1,
2005, by and among Province Healthcare Company and U.S. Bank National
Association, as Trustee (incorporated by reference from exhibits to Province
Healthcare Companys Current Report on Form 8-K dated April 1, 2005, File No.
001-31320).4.8
    
    
    
    
    
    Indenture, dated as of October 10, 2001, between Province Healthcare Company
and National City Bank, including the forms of Province Healthcare Companys
41/4% Convertible Subordinated Notes due 2008
(incorporated by reference from exhibits to the Registration Statement on Form
S-3, filed by Province Healthcare Company on December 20, 2001, File No.
333-75646).4.9
    
    
    
    
    
    First Supplemental Indenture, dated as of April 15, 2005, by and among Province
Healthcare Company, LifePoint Hospitals, Inc. and U.S. Bank National
Association (as successor in interest to National City Bank), as trustee to the
Indenture dated as of October 10, 2001, relating to Province Healthcare
Companys 41/4% Convertible Subordinated Notes due 2008
(incorporated by reference from exhibits to the Historic LifePoint Hospitals,
Inc. Current Report on Form 8-K dated April 15, 2005, File No. 000-29818.
 85




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits4.10
    
    
    
    
    
    Indenture, dated August 10, 2005, between LifePoint Hospitals, Inc. and
Citibank, N.A., as Trustee (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K dated August 10, 2005, File No.
000-51251).4.11
    
    
    
    
    
    Indenture, dated May 29, 2007, by and between LifePoint Hospitals, Inc. as
Issuer and The Bank of New York Trust Company, N.A., as Trustee (incorporated
by reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated May 31, 2007, File No. 000-51251).10.1
    
    
    
    
    
    Tax Sharing and Indemnification Agreement, dated May 11, 1999, by and among
Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc. (incorporated
by reference from exhibits to Historic LifePoint Hospitals Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999, File No. 000-29818).10.2
    
    
    
    
    
    Benefits and Employment Matters Agreement, dated May 11, 1999 by and among
Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc. (incorporated
by reference from exhibits to Historic LifePoint Hospitals Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999, File No. 000-29818).10.3
    
    
    
    
    
    Insurance Allocation and Administration Agreement, dated May 11, 1999, by and
among Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals, Inc.
(incorporated by reference from exhibits to Historic LifePoint Hospitals
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, File No.
000-29818).10.4
    
    
    
    
    
    Computer and Data Processing Services Agreement, dated May 19, 2008, by and
between HCA Information Technology Services, Inc. and LifePoint Hospitals, Inc.
(incorporated by reference from exhibits to the LifePoint Hospitals, Inc.
Current Report on Form 8-K dated May 21, 2008, File No. 000-51251).10.5
    
    
    
    
    
    Comprehensive Service Agreement for Diagnostic Imaging and Biomedical Services,
executed on January 7, 2005, between LifePoint Hospital Holdings, Inc. and GE
Healthcare Technologies (incorporated by reference from exhibits to Historic
LifePoint Hospitals Annual Report on Form 10-K for the year ended December 31,
2004, File No. 000-29818).10.6
    
    
    
    
    
    Amended and Restated 1998 Long Term Incentive Plan (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated July 7,
2005, File No. 000-51251).*10.7
    
    
    
    
    
    First Amendment, dated May 13, 2008, to the LifePoint Hospitals, Inc. Amended
and Restated 1998 Long-Term Incentive Plan (incorporated by reference from
Appendix A to the LifePoint Hospitals, Inc. Proxy Statement filed March 31,
2008, File No. 000-51251).*10.8
    
    
    
    
    
    Second Amendment, dated December 10, 2008, to the to the LifePoint Hospitals,
Inc. Amended and Restated 1998 Long-Term Incentive Plan (filed herewith).*10.9
    
    
    
    
    
    LifePoint Hospitals, Inc. Executive Performance Incentive Plan (incorporated by
reference from Appendix C to Historic LifePoint Hospitals Proxy Statement
dated April 28, 2004, File No. 000-29818).*10.10
    
    
    
    
    
    First Amendment, dated December 10, 2008, to the LifePoint Hospitals, Inc.
Executive Performance Incentive Plan (filed herewith).*10.11
    
    
    
    
    
    Form of LifePoint Hospitals, Inc. Nonqualified Stock Option Agreement
(incorporated by reference from exhibits to LifePoint Hospitals Quarterly
Report on Form 10-Q for the quarter ended March 31, 2007, File No. 000-51251).*10.12
    
    
    
    
    
    Form of LifePoint Hospitals, Inc. Restricted Stock Award Agreement
(incorporated by reference from exhibits to LifePoint Hospitals Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005, File No. 000-51251).*10.13
    
    
    
    
    
    Form of LifePoint Hospitals, Inc. Deferred Restricted Stock Award (incorporated
by reference from exhibits to LifePoint Hospitals Quarterly Report on Form
10-Q for the quarter ended June 30, 2008, File No. 000-51251).*
 86




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits10.14
    
    
    
    
    
    LifePoint Hospitals, Inc. Employee Stock Purchase Plan (incorporated by
reference from exhibits to Historic LifePoint Hospitals Annual Report on Form
10-K for the year ended December 31, 2001, File No. 000-29818).*10.15
    
    
    
    
    
    First Amendment to the LifePoint Hospitals, Inc. Employee Stock Purchase Plan
(incorporated by reference from exhibits to the Registration Statement on Form
S-8 filed by Historic LifePoint Hospitals, Inc. on June 2, 2003, File No.
333-105775).*10.16
    
    
    
    
    
    Second Amendment To Employee Stock Purchase Plan (incorporated by reference
from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, File No. 000-51251).*10.17
    
    
    
    
    
    LifePoint Hospitals, Inc. Change in Control Severance Plan, as amended and
restated December 10, 2008 (incorporated by reference from exhibits to the
LifePoint Hospitals, Inc. Current Report on Form 8-K dated December 10/16,
2008, File No. 000-51251).*10.18
    
    
    
    
    
    LifePoint Hospitals, Inc. Management Stock Purchase Plan, as amended and
restated (incorporated by reference from exhibits to Historic LifePoint
Hospitals Annual Report on Form 10-K for the year ended December 31, 2002,
File No. 000-29818).*10.19
    
    
    
    
    
    First Amendment, dated May 13, 2008, to the LifePoint Hospitals, Inc.
Management Stock Purchase Plan (incorporated by reference from Appendix B to
the LifePoint Hospitals, Inc. Proxy Statement filed March 31, 2008, File No.
000-51251). *10.20
    
    
    
    
    
    Second Amendment, dated December 10, 2008, to the LifePoint Hospitals, Inc.
Management Stock Purchase Plan (filed herewith).*10.21
    
    
    
    
    
    Form of Outside Directors Restricted Stock Agreement (incorporated by reference
from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, File No. 000-51251).*10.22
    
    
    
    
    
    Amended and Restated LifePoint Hospitals, Inc. Outside Directors Stock and
Incentive Compensation Plan, dated May 14, 2008 (incorporated by reference from
exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the quarter
ended June 30, 2008, File No. 000-51251).*10.25
    
    
    
    
    
    Credit Agreement, dated as of April 15, 2005, by and among LifePoint Hospitals,
Inc., as borrower, the lenders referred to therein, Citicorp North America,
Inc. as administrative agent, Bank of America, N.A., CIBC World Markets Corp.,
SunTrust Bank, UBS Securities LLC, as co syndication agents and Citigroup
Global Markets, Inc., as sole lead arranger and sole bookrunner (incorporated
by reference from exhibits to Historic LifePoint Hospitals Current Report on
Form 8-K dated April 15, 2005, File No. 000-29818).10.26
    
    
    
    
    
    Incremental Facility Amendment dated August 23, 2005, among LifePoint
Hospitals, Inc., as borrower, Citicorp North America, Inc., as administrative
agent and the lenders party thereto (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K dated August 23, 2005, File No.
000-51251).10.27
    
    
    
    
    
    Amendment No. 2 to the Credit Agreement, dated October 14, 2005, among
LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc., as
administrative agent and the lenders party thereto (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated October
18, 2005, File No. 000-51251).10.28
    
    
    
    
    
    Incremental Facility Amendment No. 3 to the Credit Agreement, dated June 30,
2006 among LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc.
as administrative agent and the lenders party thereto. (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated June 30, 2006, File No. 000-51251).10.29
    
    
    
    
    
    Incremental Facility Amendment No. 4 to the Credit Agreement, dated September
8, 2006, among LifePoint Hospitals, Inc. as borrower, Citicorp North America,
Inc. as administrative agent and the lenders party thereto (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated September 12, 2006, File No. 000-51251).
 87




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits10.30
    
    
    
    
    
    Amendment No. 5 to the Credit Agreement, dated as of May 11, 2007, among
LifePoint Hospitals, Inc. as borrower, Citicorp North America, Inc., as
administrative agent and the lenders party thereto (incorporated by reference
from exhibits to LifePoint Hospitals Current Report on Form 8-K dated May 24,
2007, File No. 000-51251).10.31
    
    
    
    
    
    ISDA 2002 Master Agreement, dated as of June 1, 2006, between Citibank, N.A.
and LifePoint Hospitals, Inc. (incorporated by reference from exhibits to
LifePoint Hospitals Current Report on Form 8-K/A dated September 8, 2006, File
No. 000-51251).10.32
    
    
    
    
    
    Schedule to the ISDA 2002 Master Agreement (incorporated by reference from
exhibits to LifePoint Hospitals Current Report on Form 8-K/A dated September
8, 2006, File No. 000-51251).10.33
    
    
    
    
    
    Confirmation, dated as of June 2, 2006, between LifePoint Hospitals, Inc. and
Citibank, N.A. (incorporated by reference from exhibits to LifePoint Hospitals
Current Report on Form 8-K/A dated September 8, 2006, File No. 000-51251).10.34
    
    
    
    
    
    Stock Purchase Agreement, dated July 14, 2005, by HCA Inc. and LifePoint
Hospitals, Inc. (incorporated by reference from exhibits to LifePoint
Hospitals Quarterly Report on Form 10-Q for the quarter ended June 30, 2006,
File No. 000-51251).10.35
    
    
    
    
    
    Amendment to the Stock Purchase Agreement, dated June 2, 2006 (incorporated by
reference from exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q
for the quarter ended June 30, 2006, File No. 000-51251).10.36
    
    
    
    
    
    Repurchase Agreement, dated June 30, 2006, by and between HCA Inc. and
LifePoint Hospitals, Inc. (incorporated by reference from exhibits to LifePoint
Hospitals Quarterly Report on Form 10-Q for the quarter ended June 30, 2006,
File No. 000-51251).10.37
    
    
    
    
    
    Executive Severance and Restrictive Covenant Agreement, dated December 11,
2008, by and between LifePoint CSGP, LLC and William F. Carpenter III
(filed herewith).*10.38
    
    
    
    
    
    Agreement to Cooperate and General Release, entered into on May 4, 2007, by and
between LifePoint Hospitals, CSGP, LLC and Michael J. Culotta (incorporated by
reference from exhibits to LifePoint Hospitals Current Report on Form 8-K
dated May 10, 2007, File No. 000-51251).*10.39
    
    
    
    
    
    Retirement Agreement and General Release, dated August 21, 2008, by and between
LifePoint CSGP, LLC and William M. Gracey . (incorporated by reference from
exhibits to LifePoint Hospitals Quarterly Report on Form 10-Q for the quarter
ended September 30, 2008, File No. 000-51251).*10.40
    
    
    
    
    
    Form of Indemnification Agreement (incorporated by reference from exhibits to
the LifePoint Hospitals, Inc. Current Report on Form 8-K dated August 29, 2008,
File No. 000-51251).10.41
    
    
    
    
    
    Recoupment Policy Relating to Unearned Incentive Compensation of Executive
Officers (incorporated by reference from exhibits to the LifePoint Hospitals,
Inc. Current Report on Form 8-K dated May 20, 2008, File No. 000-51251).12.1
    
    
    
    
    
    Ratio of Earnings to Fixed Charges21.1
    
    
    
    
    
    List of Subsidiaries23.1
    
    
    
    
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    
    
    
    
    Certification of the Chief Executive Officer of LifePoint Hospitals, Inc.
pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    
    
    
    Certification of the Chief Financial Officer of LifePoint Hospitals, Inc.
pursuant to Section 302 of the Sarbanes Oxley Act of 200232.1
    
    
    
    
    
    Certification of the Chief Executive Officer of LifePoint Hospitals, Inc.
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 88




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits32.2
    
    
    
    
    
    Certification of the Chief Financial Officer of LifePoint Hospitals, Inc.
pursuant to Section 906 of the Sarbanes Oxley Act of 2002
 
  89