##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

x  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2003

OR

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

For the transition period from _____________________________ to _____________________________ .

Commission File Number: 333-106612-09

JORDAN VALLEY HOSPITAL, LP

(Exact Name of Registrant as Specified in Its Certificate of Limited Partnership)


DELAWARE
    
    82-0588653(State or Other Jurisdiction
of Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)113 SEABOARD LANE, SUITE A-200
FRANKLIN, TENNESSEE
    
    37067(Address of Principal Executive Offices)
    
    (Zip Code)


Registrants Telephone Number, Including Area Code: (615) 844-2747

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act: None

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Exchange Act Rule 12b-2).  YES  o
NO  x

The Registrant meets the conditions set forth in General
Instruction I 1(a) and (b) of Form 10-K (as modified by grants of
no-action relief) and is therefore filing this form using the
reduced disclosure format specified therein.





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TABLE OF CONTENTS



|                                                |                                                                                                          |  |  |  |  |  |  | 
|----------------------------------------------- | -------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                         
|                                                | Item 1. Business.                                                                                       
|                                                | Item 2. Properties.                                                                                     
|                                                | Item 3. Legal Proceedings.                                                                              
|                                                | Item 4. Submission of Matters to a Vote of Security Holders.                                            
|PART II                                        
|                                                | Item 5. Market for Registrants Common Equity and Related Stockholder Matters.                          
|                                                | Item 6. Selected Financial Data.                                                                        
|                                                | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.          
|                                                | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                     
|                                                | 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.                                                                       
|PART III                                       
|                                                | Item 10. Directors and Executive Officers of the Registrant.                                            
|                                                | Item 11. Executive Compensation.                                                                        
|                                                | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|                                                | Item 13. Certain Relationships and Related Transactions.                                                
|                                                | Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.                              
|SIGNATURES                                     
|EXHIBIT INDEX                                  
|EX-10.3 JOINDER AGREEMENT                      
|EX-31.1  SECTION 302 CERTIFICATION OF THE CEO  
|EX-31.2  SECTION 302 CERTIFICATION OF THE CFO  
|EX-32.1  SECTION 906 CERTIFICATION OF CEO & CFO



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TABLE OFCONTENTSPART I
    
    
    1Item 1. Business
    
    
    1Item 2. Properties
    
    
    1Item 3. Legal Proceedings
    
    
    1Item 4. Submission of Matters to a Vote of Security Holders
    
    
    1PART II
    
    
    1Item 5. Market for Registrants Common Equity and Related Stockholder Matters
    
    
    1Item 6. Selected Financial Data
    
    
    2Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    2Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    4Item 8. Financial Statements and Supplementary Data
    
    
    5Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    20Item 9A. Controls and Procedures
    
    
    20PART III
    
    
    20Item 10. Directors and Executive Officers of the Registrant
    
    
    20Item 11. Executive Compensation
    
    
    20Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    20Item 13. Certain Relationships and Related Transactions
    
    
    20Item 15. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
    
    
    20


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JORDAN VALLEY HOSPITAL, LP




PART I




Item 1. Business.

Jordan Valley Hospital, LP, also referred to as the Partnership, was
formed on February 11, 2003 to own and operate Jordan Valley Hospital in West
Jordan, Utah. The hospital is a 50-bed acute care hospital that provides
inpatient, outpatient and emergency care services to residents in and around
the Salt Lake City, Utah area. The Partnerships 1% general partner is IASIS
Healthcare Holdings, Inc., which is a wholly-owned subsidiary of IASIS
Healthcare Corporation, also referred to as IASIS. IASIS is a for-profit
hospital management company that owns and operates 14 acute care hospitals in
four states. IASIS also owns and operates a behavioral health center in
Phoenix, Arizona and has an ownership interest in three ambulatory surgery
centers. In addition, IASIS owns and operates a Medicaid managed health plan in
Phoenix.

On
April 1, 2003, the Partnership sold 72 redeemable limited partner
units in the Partnership in a private placement offering. Prior to this transaction,
the hospital was owned and operated by Jordan Valley Hospital, Inc., also
referred to as the Predecessor, a wholly-owned subsidiary of IASIS. In
connection with this transaction, Jordan Valley Hospital, Inc. changed its name
to Jordan Valley Hospital Holdings, Inc. and contributed substantially all of
its assets to the Partnership in exchange for 2,652 redeemable limited partner
units. Jordan Valley Hospital Holdings, Inc. currently owns a 96.4% interest in the Partnership.

On June 6, 2003, IASIS issued $100.0 million of 8-1/2% senior subordinated
notes due 2009. On August 14, 2003, pursuant to an effective registration
statement on Form S-4 filed with the Securities and Exchange Commission, IASIS
completed the exchange of all of its outstanding 8-1/2% senior subordinated
notes due 2009 for an equivalent principal amount of 8-1/2% senior subordinated notes due 2009 that are
registered under the Securities Act of 1933, as amended. The notes are
guaranteed by all of IASISs material subsidiaries other than Health Choice
Arizona, Inc., including the Partnership.

The Partnership, along with all of IASISs material subsidiaries, also
guarantees IASISs 13% senior subordinated notes due 2009 in the amount of
$230.0 million. IASIS issued 13% senior subordinated notes due 2009 on October
13, 1999. On May 25, 2000, IASIS exchanged all of its outstanding 13% senior
subordinated notes due 2009 for an equivalent principal amount of 13% senior subordinated notes due 2009 that
have been registered under the Securities Act of 1933, as amended.

In
addition, substantially all of the Partnerships assets are
pledged as collateral under IASISs bank credit facility.




Item 2. Properties.

Information regarding the hospital owned and operated by the Partnership
can be found in Item 1 of this report under the caption, Business.




Item 3. Legal Proceedings.

The Partnership is involved in litigation and proceedings in the ordinary
course of business. The Partnership currently is not a party to any litigation
or proceeding that, in managements opinion, would have a material adverse
effect upon its business, financial condition or results of operations.




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

Omitted pursuant to General Instruction I to Form 10-K.




PART II




Item 5. Market for Registrants Common Equity and Related Stockholder Matters.

There is no established public trading market for the Partnerships equity
securities. IASIS, through IASIS Healthcare Holdings, Inc. and Jordan Valley
Hospital Holdings, Inc., currently owns a 97.4% interest in the Partnership.
The remaining 2.6% is owned by third-party investors.

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Item 6. Selected Financial Data.

Omitted pursuant to General Instruction I to Form 10-K.




Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.

Pursuant to General Instruction I of Form 10-K, the following analysis of
the results of operations is presented in lieu of Managements Discussion and
Analysis of Financial Condition and Results of Operations. The following
discussion should be read in conjunction with our audited financial statements,
the notes to our audited financial statements and the other financial
information appearing elsewhere in this report.

Overview

The Partnership was formed on February 11, 2003 to own and operate Jordan
Valley Hospital in West Jordan, Utah. The hospital is a 50-bed acute care
hospital that provides inpatient, outpatient and emergency care services to
residents in and around the Salt Lake City, Utah area. The
Partnerships 1%
general partner is IASIS Healthcare Holdings, Inc., which is a wholly-owned
subsidiary of IASIS Healthcare Corporation, also referred to as IASIS. IASIS is
a for-profit hospital management company that owns and operates 14 acute care
hospitals in four states. IASIS also owns and operates a behavioral health
center in Phoenix, Arizona and has an ownership interest in three ambulatory
surgery centers. In addition, IASIS owns and operates a Medicaid managed health
plan in Phoenix.

On April 1, 2003, the Partnership sold 72 redeemable limited
partner units in the Partnership in a private placement offering. Prior to this
transaction, the hospital was owned and operated by the Predecessor. In
connection with this transaction, Jordan Valley Hospital, Inc. changed its name
to Jordan Valley Hospital Holdings, Inc. and contributed substantially all of
its assets to the Partnership in exchange for 2,652 redeemable limited partner
units. Jordan Valley Hospital Holdings, Inc. currently owns a 96.4%
interest in the Partnership.

On June 6, 2003, IASIS issued $100.0 million of 8-1/2% senior subordinated
notes due 2009. On August 14, 2003, pursuant to an effective registration
statement on Form S-4 filed with the Securities and Exchange Commission, IASIS
completed the exchange of all of its outstanding 8-1/2% senior subordinated
notes due 2009 for an equivalent principal amount of 8-1/2% senior subordinated notes due 2009 that are
registered under the Securities Act of 1933, as amended. The notes are
guaranteed by all of IASISs material subsidiaries other than Health Choice
Arizona, Inc., including the Partnership.

The Partnership, along with all of IASISs material subsidiaries, also
guarantees IASISs 13% senior subordinated notes due 2009 in the amount of
$230.0 million. IASIS issued 13% senior subordinated notes due 2009 on October
13, 1999. On May 25, 2000, IASIS exchanged all of its outstanding 13% senior
subordinated notes due 2009 for an equivalent principal amount of 13% senior subordinated notes due 2009 that
have been registered under the Securities Act of 1933, as amended.

In
addition, substantially all of the Partnerships assets are
pledged as collateral under IASISs bank credit facility.

Forward-Looking Statements

Some of the statements we make in this report are forward-looking within
the meaning of the federal securities laws, which are intended to be covered by
the safe harbors created thereby. Those forward-looking statements include all
statements that are not historical statements of fact and those regarding our
intent, belief or expectations. Forward-looking statements involve known and
unknown risks and uncertainties that may cause actual results in future periods
to differ materially from those anticipated in the forward-looking statements.
Those risks and uncertainties include, among others, our ability to negotiate
favorable contracts with managed care plans; the highly competitive nature of
the healthcare industry; possible changes in Medicare and Medicaid
reimbursement levels and other federal or state healthcare reforms; future cost
containment initiatives undertaken by purchasers of healthcare services; our
ability to attract and retain qualified management and personnel, including
physicians and nurses; the effect of existing and future governmental
regulations, including the Balanced Budget Act of 1997, the Balanced Budget
Refinement Act of 1999 and the Medicare, Medicaid and SCHIP Benefit Improvement
and Protection Act of 2000; the impact of possible governmental investigations;
our ability to use our information systems effectively; and general economic
and business conditions. Although we believe that the assumptions underlying
the forward-looking statements contained in this report are reasonable, any of
these assumptions could

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prove to be inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this report will prove to be accurate.
In light of the significant uncertainties inherent in the forward-looking
statements included in this report, you should not regard the inclusion of such
information as a representation by us or any other person that our objectives
and plans will be achieved. We undertake no obligation to publicly release any
revisions to any forward-looking statements contained herein to reflect events
and circumstances occurring after the date hereof or to reflect the occurrence
of unanticipated events.

Results of Operations

The following table presents, for the periods indicated, information
expressed as a percentage of net revenue. The Partnerships
results of operations for the six-month period ending September 30, 2003 have
been combined with the results of operations of the Predecessor for the
six-month period ended March 31, 2003, as separate discussions would not be
meaningful in terms of comparisons to other periods. Such information has been
derived from our audited statements of operations.

Year EndedSeptember 30,2003
    
    
    2002Net revenue
    
    100.0
    %
    
    100.0
    %Salaries and benefits
    
    32.8
    
    
    34.4Supplies
    
    11.5
    
    
    12.7Other operating expenses
    
    15.7
    
    
    15.5Provision for bad debts
    
    8.3
    
    
    7.8Interest, net
    
    8.1
    
    
    13.4Depreciation and amortization
    
    5.7
    
    
    6.1Management fees
    
    3.2
    
    
    3.8Net income
    
    14.7
    %
    
    6.3
    %


Year Ended September 30, 2003 (Combined Partnership and Predecessor) Compared to Year Ended September 30, 2002 (Predecessor)

Net revenue- Net revenue totaled $53.4 million for the year ended
September 30, 2003, compared to $44.3 million in the same period in 2002, an
increase of $9.1 million or 20.4%. Net patient revenue per adjusted admission
increased 6.4% for the year ended September 30, 2003, compared to the same
period in 2002. The increase in net patient revenue per adjusted admission was
due primarily to rate increases and increased acuity.

Admissions increased 5.8% from 4,844 for the year ended September 30, 2002
to 5,128 for the same period in 2003, and adjusted admissions increased 13.8%
from 10,746 for the year ended September 30, 2002, to 12,228 for the same
period in 2003. The increase in admissions and adjusted admissions
was primarily the result of
our focus on upgrading medical equipment and technology, as well as
recruiting additional physicians.

Salaries
and benefits  Salaries and benefits increased $2.2 million from
$15.3 million, or 34.4% of net revenue, for the year ended September 30, 2002 to
$17.5 million, or 32.8% of net revenue, for the year ended September 30, 2003.
The increase was due primarily to general wage inflation and an increase in
employee benefits. The 1.6% decrease in salaries and benefits as a percentage
of net revenue during the year ended September 30, 2003 over the prior year
resulted from continued staffing efficiencies achieved from leveraging costs
through the growth in net revenue.

Supplies Supplies expense increased $488,000 from $5.6 million, or 12.7%
of net revenue, in the year ended September 30, 2002 to $6.1 million, or 11.5%
of net revenue, in the year ended September 30, 2003. Supplies as a percentage
of net revenue decreased 1.2% during the year ended September 30, 2003 over the
prior year period as a result of improved compliance with IASISs group
purchasing contract. This contract has resulted in better pricing generally and
greater discounts on certain medical supplies.

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Other operating expenses Other operating expenses, consisting of medical
and clinical fees, other fees and services, repairs and maintenance, insurance,
rent expense, physician recruiting costs and other expenses
increased $1.5 million from $6.9 million, or 15.5% of net revenue, in the year
ended September 30, 2002 to $8.4 million, or 15.7% of net revenue, in the year
ended September 30, 2003. The increase in other operating expenses was
primarily the result of increases in insurance expense, repairs and maintenance
expense, and physician recruiting costs. We expect our other operating
expenses to continue to be negatively impacted for the near term by insurance
expense increases as a result of continued cost pressures on the professional
liability insurance market. As well, we expect physician recruiting costs to
continue to rise in the near term primarily as a result of increased recruiting
efforts driven by expansion projects to increase capacity at the facility.

Provision for bad debts Provision for bad debts increased $1.0 million
from $3.4 million in the year ended September 30, 2002 to $4.4 million in the
year ended September 30, 2003. As a percentage of net revenue, provision for
bad debts increased 0.5% during the year ended September 30, 2003 primarily due
to an increase in self-pay revenue as a result of the growth in the number of
uninsured patients and an increase in the amount of co-pays and deductibles
passed on by employers to employees.

Depreciation and amortization Depreciation and amortization expense
increased $314,000 from $2.7 million in the year ended September 30, 2002 to
$3.0 in the year ended September 30, 2003. The increase in depreciation and
amortization was primarily the result of additions to property and equipment
during 2002 and 2003.

Interest, net Interest expense decreased $1.6 from $5.9 million in the
year ended September 30, 2002 to $4.3 million in the year ended September 30,
2003. The decrease in interest expense is due to the reduction in debt
associated with a new promissory note entered into with the predecessor company
in April 2003, along with a reduction in the interest rate on the promissory
note from 13% to 9.3%

Management fees Management fees remained unchanged at $1.7 million for
each of the years ended September 30, 2002 and 2003. Management fees represent
an allocation of IASISs corporate overhead costs and are
allocated based on the Partnerships net revenue.

Net
income Net income was $2.8 million for the year ended September 30,
2002 as compared to $7.9 million for the year ended September 30, 2003.




Item 7A. Quantitative and Qualitative
Disclosures About Market Risk.

Not applicable.

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Item 8. Financial Statements and Supplementary Data.

JORDAN VALLEY HOSPITAL, LP

Index to Financial Statements

CONTENTS

Report of Independent Auditors
    
    
    6Financial Statements:Balance Sheets at September 30, 2003 and 2002
    
    
    7Statements
of Operations for the Six Months Ended September 30, 2003 and
March 31, 2003 and the Years Ended
September 30, 2002 and 2001
    
    
    8Statements
of Cash Flows for the Six Months Ended September 30, 2003 and
March 31, 2003 and the Years Ended
September 30, 2002 and 2001
    
    
    9Statement of Changes in Partners
Capital for the Six Months Ended September 30, 2003
    
    
    10Statements of Changes in Stockholders Equity for the Six
Months Ended March 31, 2003 and the Years Ended September
30, 2002 and 2001
    
    
    11Notes to Financial Statements
    
    
    12


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Report of Independent Auditors

The Partners
Jordan Valley Hospital, LP

We have audited the accompanying balance sheets of Jordan Valley Hospital, LP
(the Partnership) (a Delaware limited partnership) as of September 30, 2003
and its predecessor, Jordan Valley Hospital, Inc. (the Predecessor) (a
Delaware corporation) (currently known as Jordan Valley Hospital Holdings,
Inc.) as of September 30, 2002, the related statements of operations, changes
in partners capital, and cash flows of the Partnership for the six-month
period ended September 30, 2003, and the related statements of operations,
changes in stockholders equity and cash flows of the Predecessor for the years
ended September 30, 2002 and 2001 and the six-month period ended March 31,
2003. These financial statements are the responsibility of the Partnerships
and the Predecessors management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership at September
30, 2003 and the Predecessor at September 30, 2002, the results of operations
and cash flows of the Partnership for the six-month period ended September 30,
2003 and the results of operations and cash flows of the Predecessor for the
six-month period ended March 31, 2003 and the years ended September 30, 2002
and 2001 in conformity with accounting principles generally accepted in the
United States.

As discussed in Note 3 to the financial statements, effective October 1, 2001,
the Predecessor changed its method of accounting for goodwill and other
intangible assets.

/s/ ERNST & YOUNG LLPNashville, Tennessee
November 10, 2003


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JORDAN VALLEY HOSPITAL, LP

Balance Sheets(in thousands, except share and unit amounts)

September 30,2003
    
    2002(Predecessor  See Note 1)AssetsCurrent assets:Cash
    
    $
    189
    
    
    $
    226Accounts receivable, net of allowance for doubtful accounts
of $2,507 and $2,134, respectively
    
    
    6,938
    
    
    
    7,602Inventories
    
    
    1,210
    
    
    
    1,116Prepaid expenses and other current assets
    
    
    429
    
    
    
    650Total current assets
    
    
    8,766
    
    
    
    9,594Property and equipment, net
    
    
    36,670
    
    
    
    32,881Goodwill
    
    
    8,925
    
    
    
    8,925Due from affiliate
    
    
    4,396
    
    
    
    Other assets, net
    
    
    1,165
    
    
    
    944Total assets
    
    $
    59,922
    
    
    $
    52,344Liabilities and partners capital and stockholders deficitCurrent liabilities:Accounts payable
    
    $
    2,431
    
    
    $
    2,533Salaries and benefits payable
    
    
    1,496
    
    
    
    978Accrued expenses and other current liabilities
    
    
    242
    
    
    
    193Current portion of capital lease obligations
    
    
    346
    
    
    
    319Current portion of debt allocated from IASIS
    
    
    611
    
    
    
    Total current liabilities
    
    
    5,126
    
    
    
    4,023Debt allocated from IASIS
    
    
    31,406
    
    
    
    45,080Due to affiliate
    
    
    
    
    
    
    3,055Capital lease obligations
    
    
    1,029
    
    
    
    1,396Redeemable
limited partnership units  $20,000 per unit; 2,724 units
issued and outstanding at September 30, 2003
    
    
    21,726
    
    
    
    Partners capital:General partner  1% ownership interest at September 30, 2003
    
    
    635
    
    
    
    Stockholders deficit:Common stock  $0.01 par value, authorized 1,000 shares;
100 shares issued and outstanding at September 30, 2002
    
    
    
    
    
    
    Accumulated deficit
    
    
    
    
    
    
    (1,210
    )Total partners capital and stockholders deficit
    
    
    635
    
    
    
    (1,210
    )Total liabilities and partners capital and stockholders
deficit
    
    $
    59,922
    
    
    $
    52,344


See accompanying notes

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JORDAN VALLEY HOSPITAL, LP

Statements of Operations(in thousands, except per unit amounts)

Predecessor (See Note 1)Six Months Ended
    
    
    Six Months Ended
    
    Year Ended
    
    Year EndedSeptember 30, 2003
    
    
    March 31, 2003
    
    September 30, 2002
    
    September 30, 2001Net revenue
    
    $
    28,117
    
    
    
    $
    25,275
    
    
    $
    44,328
    
    
    $
    36,808Costs and expenses:Salaries and benefits
    
    
    8,757
    
    
    
    
    8,754
    
    
    
    15,262
    
    
    
    13,702Supplies
    
    
    3,083
    
    
    
    
    3,051
    
    
    
    5,646
    
    
    
    4,980Other operating expenses
    
    
    4,472
    
    
    
    
    3,908
    
    
    
    6,890
    
    
    
    6,104Provision for bad debts
    
    
    2,257
    
    
    
    
    2,180
    
    
    
    3,434
    
    
    
    4,149Interest, net
    
    
    1,313
    
    
    
    
    3,001
    
    
    
    5,930
    
    
    
    5,846Depreciation and amortization
    
    
    1,471
    
    
    
    
    1,554
    
    
    
    2,711
    
    
    
    2,840Management fees
    
    
    562
    
    
    
    
    1,159
    
    
    
    1,661
    
    
    
    1,524Total costs and expenses
    
    
    21,915
    
    
    
    
    23,607
    
    
    
    41,534
    
    
    
    39,145Net income (loss)
    
    $
    6,202
    
    
    
    $
    1,668
    
    
    $
    2,794
    
    
    $
    (2,337
    )Net income attributable to general partner
    
    $
    62Net income attributable to limited partners
    
    $
    6,140Net income per limited partnership unit
    
    $
    2,253.63


See accompanying notes

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JORDAN VALLEY HOSPITAL, LP

Statements of Cash Flows(in thousands)

Predecessor (See Note 1)Six Months Ended
    
    
    Six Months Ended
    
    Year Ended
    
    Year EndedSeptember 30, 2003
    
    
    March 31, 2003
    
    September 30, 2002
    
    September 30, 2001Cash flows from operating activitiesNet income (loss)
    
    $
    6,202
    
    
    
    $
    1,668
    
    
    $
    2,794
    
    
    $
    (2,337
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,471
    
    
    
    
    1,554
    
    
    
    2,711
    
    
    
    2,840Changes in operating assets and liabilities:Accounts receivable
    
    
    169
    
    
    
    
    495
    
    
    
    (1,940
    )
    
    
    300Inventories, prepaid expenses and other current assets
    
    
    (127
    )
    
    
    
    102
    
    
    
    (505
    )
    
    
    (597
    )Accounts payable, salaries and benefits payable,
accrued expenses, and other current liabilities
    
    
    593
    
    
    
    
    (128
    )
    
    
    344
    
    
    
    331Net cash provided by operating activities
    
    
    8,308
    
    
    
    
    3,691
    
    
    
    3,404
    
    
    
    537Cash flows from investing activitiesPurchases of property and equipment, net
    
    
    (5,457
    )
    
    
    
    (1,357
    )
    
    
    (2,275
    )
    
    
    (54
    )Change in other assets
    
    
    103
    
    
    
    
    (324
    )
    
    
    (498
    )
    
    
    (208
    )Net cash used in investing activities
    
    
    (5,354
    )
    
    
    
    (1,681
    )
    
    
    (2,773
    )
    
    
    (262
    )Cash flows from financing activitiesPayment of debt allocated from IASIS
    
    
    (285
    )
    
    
    
    
    
    
    
    
    
    
    
    Payment of capital lease obligations
    
    
    (163
    )
    
    
    
    (177
    )
    
    
    (113
    )
    
    
    Change in due to/from affiliate, net
    
    
    (2,136
    )
    
    
    
    (2,059
    )
    
    
    (292
    )
    
    
    (275
    )Proceeds
from syndication
    
    
    1,440
    
    
    
    
    
    
    
    
    
    
    
    
    Syndication costs
    
    
    (195
    )
    
    
    
    
    
    
    
    
    
    
    
    Distribution to partners
    
    
    (1,426
    )
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (2,765
    )
    
    
    
    (2,236
    )
    
    
    (405
    )
    
    
    (275
    )Change in cash
    
    
    189
    
    
    
    
    (226
    )
    
    
    226
    
    
    
    Cash at beginning of period
    
    
    
    
    
    
    
    226
    
    
    
    
    
    
    
    Cash at end of period
    
    $
    189
    
    
    
    $
    
    
    
    $
    226
    
    
    $
    Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    1,313
    
    
    
    $
    3,001
    
    
    $
    5,930
    
    
    $
    5,846Non-cash transactions:Capital lease obligations incurred to acquire equipment
    
    $
    
    
    
    
    $
    
    
    
    $
    1,827
    
    
    $
    Effects
of partnership capitalization:Accounts receivable
    
    $
    7,107Inventories, prepaid expenses and other current assets
    
    
    1,664Property and equipment
    
    
    32,684Other assets
    
    
    10,194Due from affiliate
    
    
    1,899Accounts payable and other current liabilities
    
    
    (3,576
    )Capital lease obligations
    
    
    (1,538
    )Promissory note
    
    
    (32,301
    )Capital
contribution from IASIS for general and limited partner interests
    
    $
    16,133


See accompanying notes

9



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##### Table of Contents



JORDAN VALLEY HOSPITAL, LP

Statement of Changes in Partners Capital(in thousands)

General
    
    Allocated NetPartner
    
    Earnings
    
    TotalBalance
at March 31, 2003
    
    $
    
    
    
    $
    
    
    
    $
    Capital contribution from general
partner, net of offering costs
of $6  April 1, 2003 (date of
capitalization)
    
    
    587
    
    
    
    
    
    
    
    587Net
income
    
    
    
    
    
    
    6,202
    
    
    
    6,202Allocation
of net income to general partner
    
    
    62
    
    
    
    (62
    )
    
    
    Allocation
of net income to redeemable
limited partnership interests
    
    
    
    
    
    
    (6,140
    )
    
    
    (6,140
    )Distribution to general partner
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )Balance at September 30, 2003
    
    $
    635
    
    
    $
    
    
    
    $
    635


See accompanying notes

10



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##### Table of Contents



JORDAN VALLEY HOSPITAL, LP

Statements of Changes in Stockholders Equity (Predecessor)(in thousands, except share amounts)

Common StockRetained Earnings/Par
    
    AccumulatedShares
    
    Value
    
    Deficit
    
    TotalBalance at September 30, 2000
    
    
    100
    
    
    $
    
    
    
    $
    (1,667
    )
    
    $
    (1,667
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (2,337
    )
    
    
    (2,337
    )Balance at September 30, 2001
    
    
    100
    
    
    
    
    
    
    
    (4,004
    )
    
    
    (4,004
    )Net
income
    
    
    
    
    
    
    
    
    
    
    2,794
    
    
    
    2,794Balance at September 30, 2002
    
    
    100
    
    
    
    
    
    
    
    (1,210
    )
    
    
    (1,210
    )Net
income
    
    
    
    
    
    
    
    
    
    
    1,668
    
    
    
    1,668Balance at March 31, 2003
    
    
    100
    
    
    $
    
    
    
    $
    458
    
    
    $
    458


See accompanying notes

11



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##### Table of Contents



JORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Basis of Presentation

Jordan Valley Hospital, LP, a Delaware limited partnership (the Partnership)
was formed on February 11, 2003 to own and operate Jordan Valley Hospital (the
Hospital). The Hospital is a 50-bed acute care hospital that provides
inpatient, outpatient and emergency care services to residents in and around
the Salt Lake City, Utah area. The Partnerships general partner is IASIS
Healthcare Holdings, Inc. (General Partner) and the limited partners consist
of Jordan Valley Hospital Holdings, Inc., a wholly-owned subsidiary of IASIS
Healthcare Corporation (IASIS), and other third-party investors. The General
Partner is a wholly-owned subsidiary of IASIS. IASIS is a for-profit hospital
management company that owns and operates 14 acute care hospitals in four
states. IASIS also owns and operates a behavioral health center in Phoenix,
Arizona and has an ownership interest in three ambulatory surgery centers. In
addition, IASIS owns and operates a Medicaid managed health plan in
Phoenix.

On
April 1, 2003, the Partnership sold 72 redeemable limited partner units in the
Partnership in a private placement offering. Prior to this transaction, the Hospital
was owned and operated by Jordan Valley Hospital, Inc. In connection with the
transaction, Jordan Valley Hospital, Inc. changed its name to Jordan Valley
Hospital Holdings, Inc. and contributed substantially all of its assets to the
Partnership in exchange for 2,652 redeemable limited partner units. Jordan
Valley Hospital Holdings, Inc. currently owns a 96.4% interest
in the Partnership.

The financial statements for all periods prior to April 1, 2003 reflect the
financial position, result of operations and cash flows of Jordan Valley
Hospital, Inc., the Partnerships predecessor entity (the Predecessor). The
financial statements for all periods subsequent to April 1, 2003, reflect the
financial position, results of operations and cash flows for the Hospital as
operated by the Partnership. Unless stated otherwise as the Predecessor or the
Partnership, all references to the Hospital include the operations of both the
Predecessor and the Partnership.

The Partnerships Limited Partnership Agreement (the Partnership Agreement)
provides that income, losses and distributions will be shared pro rata among
the partners.

Recently Issued Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (the FASB), issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees(FIN 45). FIN 45 requires a guarantor to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation it
has undertaken in issuing the guarantee. The Partnership will apply FIN 45 to
guarantees, if any, issued or modified after December 31, 2002. The adoption
of FIN 45 did not have a material effect on the Partnerships financial
position or results of operations.

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

In May 2003, the FASB Issued Statement of Financial Accounting Standards No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities(SFAS 149). SFAS 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. Most provisions of SFAS 149 are effective
for contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. SFAS 149 is not expected to have
a material effect on the Partnerships financial position or results of
operations.

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity(SFAS 150). SFAS 150 establishes

12Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTSstandards for how an issuer classifies and measures in its statement of
financial position certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances) because that financial instrument embodies an obligation of the
issuer. SFAS 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The adoption of SFAS 150
did not have a material effect on the Partnerships financial position or
results of operations.Net RevenueThe Partnership has entered into agreements with third-party payors, including
government programs and managed care health plans, under which the Partnership
is paid based upon established charges, the cost of providing services,
predetermined rates per diagnosis, fixed per diem rates or discounts from
established charges.Net patient service revenue is reported at the estimated net realizable amounts
from third-party payors and others for services rendered, including estimated
retroactive adjustments under reimbursement agreements with third-party payors.
Retroactive adjustments are accrued on an estimated basis in the period the
related services are rendered and are adjusted, if necessary, in future periods
when final settlements are determined.The calculation of appropriate payments from the Medicare and Medicaid programs
as well as terms governing agreements with other third-party payors are complex
and subject to interpretation. As a result, there is at least a reasonable
possibility that recorded estimates will change by a material amount in the
near term. The Partnership believes that it is in material compliance with all
applicable laws and regulations and is not aware of any pending or threatened
investigations involving allegations of potential wrongdoing that would have a
material effect on the Partnerships financial position or results of
operations. Compliance with such laws and regulations can be subject to future
government review and interpretation as well as significant regulatory action
including fines, penalties, and exclusion from the Medicare and Medicaid
programs.The Partnership provides care without charge to patients who are financially
unable to pay for the healthcare services they receive. Because the
Partnership does not pursue collection of amounts determined to qualify as
charity care, they are not reported as net revenue.Accounts ReceivableThe Partnership receives payment for services rendered from federal and state
agencies (under Medicare and Medicaid programs), managed care health plans,
commercial insurance companies, employers and patients. During the six months
ended September 30, 2003, approximately 14% of the
Partnerships net patient revenue related to patients participating in the
Medicare and Medicaid programs (exclusive of Medicare program revenues
administered by third-party managed care payors). During the six months ended
March 31, 2003 and the
years ended September 30, 2002 and 2001, approximately 10%, 13%
and 13%,
respectively, of the Predecessors net patient revenue related to patients
participating in the Medicare and Medicaid programs (exclusive of Medicare
program revenues administered by third-party managed care payors). The
Partnership recognizes that revenues and receivables from government agencies
are significant to the Partnerships operations, but does not believe that
there are significant credit risks associated with these governmental agencies.
The Partnership believes that the number of patients and payors limits
concentration of credit risk from other payors.Net Medicare settlement payables of approximately $183,000 and $226,000 at
September 30, 2003 and 2002, respectively, are included in accounts receivable
in the accompanying balance sheets.InventoriesInventories, principally medical supplies, implants and pharmaceuticals, are
stated at the lower of cost or market.13Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTSLong-lived Assets(a) Property and EquipmentProperty and equipment are stated at cost. Routine maintenance and repairs are
charged to expense as incurred. Expenditures that increase capacities or extend
useful lives are capitalized. Depreciation expense, including amortization of
assets capitalized under capital leases, is computed using the straight-line
method and was approximately $1,471,000, $1,554,000, $2,711,000 and $2,268,000
for the six months ended September 30, 2003 and March 31, 2003 and the years
ended September 30, 2002 and 2001, respectively. Buildings and improvements are
depreciated over estimated useful lives ranging generally from 25 to 40 years.
Estimated useful lives of equipment vary generally from 5 to 10 years.(b) GoodwillThe Predecessor adopted SFAS No. 142 effective October 1, 2001 and completed
the required transitional impairment test in the 2002 fiscal year, which
resulted in no impairment. Pursuant to the provisions of SFAS No. 142, goodwill
is no longer amortized but is subject to annual impairment reviews (see Note
3).(c) Other AssetsOther assets consist primarily of costs to recruit physicians to the
Partnerships market, which are deferred and generally amortized over 24
months, after one year of completed service. Amortization of physician
recruiting costs is included in other operating expenses.Income TaxesNo provision for income taxes has been reflected in the accompanying financial
statements for the Partnership because the tax effect of the Partnerships
activities accrues to the individual partners. The Partnerships tax returns
and the amounts of distributable Partnership income or loss are subject to
examination by the federal and state taxing authorities. In the event of an
examination of the Partnerships tax return, the tax liability of the partners
could be changed if any adjustment to the Partnership taxable income or loss is
ultimately sustained by the taxing authorities.For all periods prior to April 1, 2003, the Predecessors operating results
were included in consolidated Federal and state income tax returns filed by
IASIS. IASIS allocated taxes to the Predecessor pursuant to the asset and
liability method, as if the Predecessor were a separate taxpayer.Fair Value of Financial InstrumentsCash, accounts receivable, accounts
payable and accrued expenses are
reflected in the accompanying financial statements at fair value because of the
short-term nature of these instruments. The carrying amounts of the
Partnerships long-term debt and capital lease obligations approximate their
fair value. The fair value of the Partnerships long-term debt and capital
lease obligations is estimated using discounted cash flow analysis, based on
the Partnerships current incremental borrowing rates for similar types of
borrowing arrangements.ReclassificationsCertain prior period amounts have been reclassified to conform to current
period presentation. Such reclassifications had no material effect on the
financial position and results of operations as previously reported.Use of EstimatesThe preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the accompanying
financial statements and notes. Actual results could differ from those
estimates.14Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTS2. Property and EquipmentProperty and equipment consist of the following (in thousands):September 30,2003
    
    2002(Predecessor)Land
    
    $
    3,000
    
    
    $
    3,000Buildings and improvements
    
    
    18,425
    
    
    
    18,409Equipment
    
    
    21,970
    
    
    
    21,11543,395
    
    
    
    42,524Less accumulated depreciation and amortization
    
    
    13,430
    
    
    
    10,35929,965
    
    
    
    32,165Construction-in-progress
    
    
    6,705
    
    
    
    716$
    36,670
    
    
    $
    32,881

The construction-in-progress consists of an addition to the Hospital (expected
to be completed in early 2004) with an estimated cost to complete of
approximately $4.6 million at September 30, 2003. The Partnership has
capitalized interest of approximately $224,000 at September 30, 2003 related to
this construction project.Assets under capital leases were
approximately $1,463,000 and $1,714,000, net of accumulated
amortization of approximately $380,000 and $113,000, at September 30, 2003 and 2002,
respectively.3. GoodwillEffective October 1, 2001, the Predecessor adopted the provisions of SFAS No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets. Under the provisions of SFAS No. 142, amortization of goodwill ceased as
of October 1, 2001. The following table presents the net income (loss) for the
six months ended September 30, 2003 and March 31, 2003, and the years ended
September 30, 2002 and 2001 assuming SFAS No. 142 had been adopted October 1,
2000 (in thousands):PredecessorSix Months Ended

    Six Months Ended
    
    Year ended September 30,September 30,

    March 31,2003

    2003
    
    2002
    
    2001Reported net income (loss)
    
    $
    6,202
    

    $
    1,668
    
    
    $
    2,794
    
    
    $
    (2,337
    )Add back: Goodwill
amortization
    
    
    
    

    
    
    
    
    
    
    
    
    
    572Adjusted net income
(loss)
    
    $
    6,202
    

    $
    1,668
    
    
    $
    2,794
    
    
    $
    (1,765
    )

The Partnership has completed its annual impairment test for the 2003 fiscal
year, which resulted in no impairment.4. Debt Allocated from IASISIn conjunction with the acquisition of the Hospital, the Predecessor entered
into a promissory note (the Note) with IASIS in the amount of $45,080,000.
Under provisions of the Note, interest of 13% per annum is due and payable on
October 1, of each year until October 1, 2004, at which time the entire
outstanding principal balance, together with all accrued and unpaid interest,
is immediately due and payable in full. The Note can be prepaid in15Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTSwhole or in part without premium or penalty and reborrowed up to the stated
principal amount. The Predecessor remains obligated to IASIS under
the Note, while the Partnership has no obligation to
IASIS or the Predecessor under the Note.In connection with its initial
capitalization on April 1, 2003, the Partnership entered into a new promissory note (the New
Note) with the Predecessor in the amount of $32,301,000. The New Note is a
five-year note bearing interest at 9.3% per annum on a twenty-year amortization
schedule. Future maturities of the Partnership at September 30, 2003, by
fiscal year and in the aggregate, are as follows (in thousands):2004
    
    $
    6112005
    
    
    6702006
    
    
    7352007
    
    
    8062008
    
    
    29,195Total
    
    $
    32,017

5. Due to/from AffiliateDue to/from affiliate balances represent the net excess of funds transferred to
the centralized cash management account of IASIS over funds transferred to or
paid on behalf of the Partnership. Generally, this balance is
increased or decreased by
automatic cash transfers from the account to reimburse the Partnerships bank
accounts for operating expenses and to pay the Partnerships debt, completed
construction project additions, fees and services provided by IASIS, including
information systems services, and other operating expenses, such as payroll,
interest and insurance. Additionally, the balance is increased or
decreased through daily cash
deposits by the Partnership to the centralized cash management account.
Management fees represent an allocation of corporate overhead costs of IASIS.The Partnership is charged interest on due to affiliate balances at a rate
equal to the prime commercial lending rate as quoted in The Wall Street Journal
(4.0% at September 30, 2003) plus 2.5% pursuant to a borrowing agreement with
IASIS. The Partnership is credited interest on due from affiliate balances at
a rate equal to the 30-day Treasury Bill rate on the first day of the month as quoted
in The Wall Street Journal(0.96% at September 30, 2003).6. Redeemable Limited Partnership UnitsPursuant to the Partnership Agreement, each redeemable limited partnership
interest is denominated in partnership units or fractions thereof, with each
unit representing an initial capital contribution valued at $20,000. The
Partnership has issued 2,724 limited
partner units as of September 30, 2003. IASIS and other
third-party investors own 2,652 and 72 limited partner units, respectively. The General
Partner may issue additional redeemable limited partnership units, as it deems
appropriate.The redeemable limited partnership units include certain put rights which allow
the units to be sold back to the Partnership, subject to certain limitations,
at the fair market value of the units. The put rights require an initial
holding period of six years after purchase, at which point the holder of the
redeemable limited partnership unit may put back to the Partnership 20% of
their units. Each succeeding year, the number of vested redeemable limited
partnership units will increase by 20% until the end of the tenth year after
the initial investment, at which point 100% of the units may be put back to the
Partnership. Under no circumstance shall the Partnership be required to
repurchase more than 25% of the total outstanding redeemable limited partnership units in any
fiscal year. The carrying amount of the redeemable limited
partnership units reflects estimated fair market value at
September 30, 2003.Upon death, disability, retirement or termination of a partner, the Partnership
may elect to redeem the units, if such units are not otherwise put to the
Partnership. The sale or other transfer of units to a third party is permitted
with prior written consent of the General Partner. At this time, the General
Partner has the right of first refusal, thereby, giving the ability to purchase
the units on the same terms and conditions of the original offer.16Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTS7. ContingenciesNet RevenueThe calculation of appropriate payments from the Medicare and Medicaid programs
as well as terms governing agreements with other third-party payors are complex
and subject to interpretation. Final determination of amounts earned under the
Medicare and Medicaid programs often occurs subsequent to the year in which
services are rendered because of audits by the programs, rights of appeal and
the application of numerous technical provisions. As a result, there is at
least a reasonable possibility that recorded estimates will change by a
material amount in the near term. In the opinion of management, adequate
provision has been made for adjustments that may result from such routine
audits and appeals.Professional, General and Workers Compensation Liability RisksIASIS, on behalf of the Partnership, maintains general and professional
liability insurance as well as workers compensation insurance in excess of
self-insured retentions through a commercial insurance carrier in amounts that
IASIS believes to be sufficient for the Partnership, although, potentially,
some claims may exceed the scope of coverage in effect. The cost of general
and professional liability and workers compensation coverage including the
full self-insured retention exposure is allocated by IASIS to the Partnership
based upon adjusted patient days. IASIS maintains reserves for general and
professional liability and workers compensation. Accordingly, no reserve for
liability risks is recorded on the accompanying balance sheets. The cost
allocated for the six months ended September 30, 2003 and March 31, 2003 and
the years ended September 30, 2002 and 2001, was approximately $564,000,
$579,000, $781,000 and $327,000, respectively, for general and professional
liability. Workers compensation expense allocated for the six months ended
September 30, 2003 and March 31, 2003 and the years ended September 30, 2002
and 2001, was approximately $144,000, $123,000, $161,000 and $145,000,
respectively. The Partnership is currently not a party to any such proceedings
that, in the Partnerships opinion, would have a material adverse effect on its
business, financial condition or results of operations.Employee Health Insurance RisksThe Partnership participates in a self-insured program for health insurance
administered by IASIS. IASIS allocates costs of the program based upon the
number of program participants employed by the Partnership. The cost allocated
to the Partnership represents claims paid and an estimate of claims incurred
but not paid and totaled approximately $832,000, $845,000, $1,551,000 and
$973,000 for the six months ended September 30, 2003 and March 31, 2003 and the
years ended September 30, 2002 and 2001, respectively.OtherThe Partnership is subject to claims and legal actions arising in the ordinary
course of business. The Partnership is currently not a party to any such
proceedings that, in the Partnerships opinion, would have a material adverse
effect on its business, financial condition or results of operations.The Partnerships assets and equity interests are pledged as a full and
unconditional guarantee of certain debt of IASIS, which totaled approximately
$652.9 million at September 30, 2003.In order to recruit and retain physicians to the communities it serves, the
Partnership has committed to provide certain financial assistance in the form
of recruiting agreements with various physicians. Amounts advanced under the
recruiting agreements are generally forgiven pro rata over a period of 24
months after one year of completed service and contingent upon the physician
continuing to practice in the respective community. The amounts advanced and
not repaid, in managements opinion, will not have a material adverse effect on
the Partnerships financial condition or results of operations.17Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTS8. LeasesOperating lease rental expense relating primarily to the rental of buildings
and equipment for the six months ended September 30, 2003 and March 31, 2003
and the years ended September 30, 2002 and 2001, was approximately $426,000,
$457,000, $880,000 and $467,000, respectively. These leases expire at various
times and have various renewal options.Future minimum payments at September 30, 2003, by fiscal year and in the
aggregate, under capital leases and noncancelable operating leases, with
initial terms of one year or more consist of the following (in thousands):Capital Leases
    
    Net Operating Leases2004
    
    $
    437
    
    
    $
    5482005
    
    
    437
    
    
    
    4832006
    
    
    436
    
    
    
    1842007
    
    
    291
    
    
    
    272008
    
    
    
    
    
    
    52Thereafter
    
    
    
    
    
    
    473Total minimum lease payments
    
    $
    1,601
    
    
    $
    1,767Amount representing interest (at a rate of 7.2%)
    
    
    226Present value of net minimum lease payments
(including $346 classified as current)
    
    $
    1,375

Aggregate future minimum rentals to be received under non-cancelable subleases
as of September 30, 2003 were approximately $308,000.9. Retirement PlanThe Partnership participates in IASISs defined contribution 401(k) plan (the
Retirement Plan) which covers, upon qualification, substantially all
employees. Employees who elect to participate generally make contributions
from 1% to 20% of their eligible compensation, and the Partnership matches, at
its discretion, such contributions up to a maximum percentage. Generally,
employees immediately vest 100% in their own contributions and vest in the
employer portion of contributions over a period not to exceed five years.
Contributions to the Retirement Plan were approximately $77,000, $75,000,
$157,000 and $161,000 for the six months ended September 30,
2003 and March 31, 2003 and the years ended September 30, 2002 and 2001,
respectively.10. Income TaxesThe Predecessor operated as a taxable corporation, whereas the Partnership is a
nontaxable entity. No provision for income taxes has been reflected in the
accompanying financial statements for the Partnership, because the tax effect
of the Partnerships activities accrues to the individual partners for all
periods subsequent to March 31, 2003.The provision for income taxes for the Predecessor differs from the amount
computed by applying the statutory federal income tax rate to net income.
The sources and tax effects of the differences are as follows (in thousands):Six Months Ended
    
    Year Ended
    
    Year EndedMarch 31,
    
    September 30,
    
    September 30,2003
    
    2002
    
    2001Federal income taxes
    
    $
    567
    
    
    $
    950
    
    
    $
    (795
    )State income taxes,
net of federal
benefit
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    (4
    )
    
    
    7
    
    
    
    4Valuation allowance
    
    
    (563
    )
    
    
    (957
    )
    
    
    791$
    
    
    
    $
    
    
    
    $
    


18Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTSThe components of the Predecessors deferred tax assets and liabilities at
September 30, 2002 are as follows (in thousands):Deferred tax assets:Amortization and intangible asset basis differences
    
    $
    4,261Allowance for doubtful accounts
    
    
    579Vacation pay
    
    
    138Net operating loss carryforward
    
    
    3,782Total deferred tax assets
    
    
    8,760Less valuation allowance
    
    $
    (5,659
    )Deferred tax assets
    
    
    3,101Deferred tax liabilities:Depreciation and fixed asset basis differences
    
    $
    3,101Deferred tax liabilities
    
    $
    3,101

As of March 31, 2003, the Predecessor had generated approximately $10.4 million
of net operating losses that are reflected in the IASIS tax returns. These
losses are available to offset future taxable income of IASIS and its
subsidiaries and begin to expire in 2021.The Predecessor maintained a valuation allowance for deferred tax assets it
believed more likely than not would not be realized. There were no net deferred
income tax assets or liabilities at March 31, 2003 or September 30, 2002. The
Partnership does not maintain deferred tax assets or liabilities subsequent to
March 31, 2003, because the tax effect of its operations accrues directly to
the individual partners.11. Allowance for Doubtful AccountsA summary of activity in the Hospitals allowance for doubtful accounts follows
(in thousands):AccountsBeginning
    
    Provision for
    
    Written Off,
    
    EndingBalance
    
    Bad Debts
    
    Net of Recoveries
    
    BalanceAllowance for doubtful accounts:Year ended September 30, 2001
    
    $
    1,859
    
    
    $
    4,149
    
    
    $
    (4,088
    )
    
    $
    1,920Year ended September 30, 2002
    
    
    1,920
    
    
    
    3,434
    
    
    
    (3,220
    )
    
    
    2,134Six months ended March 31, 2003
    
    
    2,134
    
    
    
    2,180
    
    
    
    (1,798
    )
    
    
    2,516Six months ended September 30,
2003
    
    
    2,516
    
    
    
    2,257
    
    
    
    (2,266
    )
    
    
    2,507


19Table of ContentsJORDAN VALLEY HOSPITAL, LP
NOTES TO FINANCIAL STATEMENTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.None.
Item 9A. Controls and Procedures.Under the supervision and with the participation of our management team,
including the persons performing the functions of principal executive officer
and principal financial officer, we conducted an evaluation of our disclosure
controls and procedures, as such term is defined under Rule 13a-15(e) and
15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as
of September 30, 2003. Based on this evaluation, the persons performing the
functions of principal executive officer and principal financial officer,
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic
reports.
PART III
Item 10. Directors and Executive Officers of the Registrant.Omitted pursuant to General Instruction I to Form 10-K.
Item 11. Executive Compensation.Omitted pursuant to General Instruction I to Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Omitted pursuant to General Instruction I to Form 10-K.
Item 13. Certain Relationships and Related Transactions.Omitted pursuant to General Instruction I to Form 10-K.
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.(a)
    
    
    1.
    
    
    Financial Statements: See Item 82.
    
    
    Financial Statement Schedules: Not Applicable3.
    
    
    Management Contracts and Compensatory Plans and Arrangements: Not Applicable4.
    
    
    Exhibits:

Exhibit No.
    
    Description3.1
    
    Certificate of Limited Partnership of Jordan Valley Hospital, LP,
as filed with the Secretary of State of the State of Delaware on
February 11, 2003 (1)3.2
    
    Limited Partnership Agreement of Jordan Valley Hospital, LP (1)4.1
    
    Indenture, dated as of June 6, 2003, among IASIS Healthcare
Corporation, the Subsidiary Guarantors and The Bank of New York,
as Trustee (1)4.2
    
    Form of Subsidiary Guarantee dated as of June 6, 2003, executed by
each of the Subsidiary Guarantors (1)


20Table of ContentsExhibit No.
    
    Description4.3
    
    Indenture, dated as of October 15, 1999, among IASIS Healthcare
Corporation, the Delaware and Limited Partnership Subsidiary
Guarantors and The Bank of New York, as Trustee (2)4.4
    
    Senior Subordinated Guarantee, dated October 15, 1999 by the
Delaware and Limited Partnership Subsidiary Guarantors in favor of
(i) the holders of IASIS Healthcare Corporations 13% Senior
Subordinated Exchange Notes due 2009 and (ii) The Bank of New
York, as Trustee under the Indenture governing the
above-referenced notes (2)4.5
    
    Supplemental Indenture dated April 1, 2003, between Jordan Valley
Hospital, LP, as Subsidiary Guarantor, and The Bank of New York,
as Trustee (1)10.1
    
    Amended and Restated Credit Agreement dated as of February 7,
2003, among IASIS Healthcare Corporation, as Borrower, Certain
Subsidiaries of the Borrower, as Guarantors, Various Lenders,
CitiCorp North America, Inc. and UBS AG, Stamford Branch, as
Co-Syndication Agents, General Electric Capital Corporation and
Residential Funding Corporation dba GMAC-RFC Health Capital, as
Co-Documentation Agents, Bank of America, N.A., as Administrative
Agent and Banc of America Securities, LLC and Salomon Smith Barney
Inc., as Joint Lead Arrangers and Joint Book Managers (3)10.2
    
    First Amendment to Credit Agreement dated as of May 21, 2003, by
and among IASIS Healthcare Corporation, the Subsidiary Guarantors,
the Lenders party thereto and Bank of America, N.A., as
Administrative Agent (1)10.3
    
    Joinder Agreement dated as of April 30, 2003, by and between
Jordan Valley Hospital, LP, and Bank of America, N.A., in its
capacities as Administrative Agent and Collateral Agent under the
Amended and Restated Credit Agreement dated as of February 7,
2003, by and among IASIS Healthcare Corporation, the Guarantors
party thereto, the Lenders party thereto and Bank of America,
N.A., as Administrative Agent31.1
    
    Certification of Person Performing Functions of Principal
Executive Officer pursuant to Rule 15d-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Person Performing Functions of Principal
Financial Officer pursuant to Rule 15d-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)
    
    Incorporated by reference to the Partnerships Registration
Statement on Form S-4 (Registration No. 333-106612-09).(2)
    
    Incorporated by reference to IASIS Healthcare Corporations
Registration Statement on Form S-4 (Registration No. 333-94521).(3)
    
    Incorporated by reference to IASIS Healthcare Corporations
Current Report on Form 8-K filed on February 11, 2003.(b)
 
 Reports on Form 8-K:None.21Table of Contents
SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.JORDAN VALLEY HOSPITAL, LPBy:
    
    IASIS Healthcare
Holdings, Inc.
General PartnerDate: December 24, 2003
    
    By:
    
    /s/ Bryanie SwilleyBryanie Swilley
Vice President and Chief Executive Officer 
Jordan Valley Hospital, LP

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.Signature
    
    Title
    
    Date/s/ Bryanie Swilley
Bryanie Swilley
    
    Vice President and Chief Executive
Officer  Jordan Valley Hospital,
LP of IASIS Healthcare Holdings,
Inc. (Principal Executive Officer)
    
    December 24, 2003/s/ Benjamin Cluff
Benjamin Cluff
    
    Vice President and Chief Financial
Officer  Jordan Valley Hospital,
LP of IASIS Healthcare Holdings,
Inc. (Principal Financial and
Accounting Officer)
    
    December 24, 2003/s/ Ramsey A. Frank
Ramsey A. Frank
    
    Director of IASIS
Healthcare Holdings, Inc.
    
    December 24, 2003/s/ Paul S. Levy
Paul S. Levy
    
    Director of IASIS
Healthcare Holdings, Inc.
    
    December 24, 2003/s/ Jeffrey L. Lightcap
Jeffrey L. Lightcap
    
    Director of IASIS
Healthcare Holdings, Inc.
    
    December 24, 2003


22Table of ContentsSUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT
TO SECTION 12 OF THE ACTNo annual report or proxy material has been sent to security holders.23Table of Contents
EXHIBIT INDEXExhibit No.
    
    Description3.1
    
    Certificate of Limited Partnership of Jordan Valley Hospital, LP,
as filed with the Secretary of State of the State of Delaware on
February 11, 2003 (1)3.2
    
    Limited Partnership Agreement of Jordan Valley Hospital, LP (1)4.1
    
    Indenture, dated as of June 6, 2003, among IASIS Healthcare
Corporation, the Subsidiary Guarantors and The Bank of New York,
as Trustee (1)4.2
    
    Form of Subsidiary Guarantee dated as of June 6, 2003, executed by
each of the Subsidiary Guarantors (1)4.3
    
    Indenture, dated as of October 15, 1999, among IASIS Healthcare
Corporation, the Delaware and Limited Partnership Subsidiary
Guarantors and The Bank of New York, as Trustee (2)4.4
    
    Senior Subordinated Guarantee, dated October 15, 1999 by the
Delaware and Limited Partnership Subsidiary Guarantors in favor of
(i) the holders of IASIS Healthcare Corporations 13% Senior
Subordinated Exchange Notes due 2009 and (ii) The Bank of New
York, as Trustee under the Indenture governing the
above-referenced notes (2)4.5
    
    Supplemental Indenture dated April 1, 2003, between Jordan Valley
Hospital, LP, as Subsidiary Guarantor, and The Bank of New York,
as Trustee (1)10.1
    
    Amended and Restated Credit Agreement dated as of February 7,
2003, among IASIS Healthcare Corporation, as Borrower, Certain
Subsidiaries of the Borrower, as Guarantors, Various Lenders,
CitiCorp North America, Inc. and UBS AG, Stamford Branch, as
Co-Syndication Agents, General Electric Capital Corporation and
Residential Funding Corporation dba GMAC-RFC Health Capital, as
Co-Documentation Agents, Bank of America, N.A., as Administrative
Agent and Banc of America Securities, LLC and Salomon Smith Barney
Inc., as Joint Lead Arrangers and Joint Book Managers (3)10.2
    
    First Amendment to Credit Agreement dated as of May 21, 2003, by
and among IASIS Healthcare Corporation, the Subsidiary Guarantors,
the Lenders party thereto and Bank of America, N.A., as
Administrative Agent (1)10.3
    
    Joinder Agreement dated as of April 30, 2003, by and between
Jordan Valley Hospital, LP, and Bank of America, N.A., in its
capacities as Administrative Agent and Collateral Agent under the
Amended and Restated Credit Agreement dated as of February 7,
2003, by and among IASIS Healthcare Corporation, the Guarantors
party thereto, the Lenders party thereto and Bank of America,
N.A., as Administrative Agent31.1
    
    Certification of Person Performing Functions of Principal
Executive Officer pursuant to Rule 15d-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Person Performing Functions of Principal
Financial Officer pursuant to Rule 15d-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)
    
    Incorporated by reference to the Partnerships Registration
Statement on Form S-4 (Registration No. 333-106612-09).24Table of Contents(2)
    
    Incorporated by reference to IASIS Healthcare Corporations
Registration Statement on Form S-4 (Registration No. 333-94521).(3)
    
    Incorporated by reference to IASIS Healthcare Corporations
Current Report on Form 8-K filed on February 11, 2003.25