##### Table of Contents



UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    ______ to ______   Commission file number:
    000-51251
   
 (Exact name of registrant as
    specified in its charter)
   Delaware

20-1538254(State or other jurisdiction
    of incorporation or organization)

(I.R.S. Employer Identification
    No.)103 Powell Court,
    Suite 200
    Brentwood, Tennessee(Address of principal
    executive offices)

37027(Zip Code)   (615) 372-8500
 (Registrants telephone number, including area code)
   Not Applicable
    (Former name, former address and former fiscal year,
    if changed since last report)
    þ o
  Rule 12b-2
  Large
    accelerated filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o  Rule 12b-2
  o þ




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##### 



TABLE
    OF CONTENTS
  PART
    I  FINANCIAL INFORMATIONItem 1.

Financial Statements


2Item 2.

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


25Item 3.

Quantitative and Qualitative
    Disclosures about Market Risk


51Item 4.

Controls and Procedures


52PART II  OTHER
    INFORMATIONItem 1.

Legal Proceedings


52Item 6.

Exhibits


52EX-10.1  SECOND AMENDMENT TO EMPLOYEE STOCK PURCHASE PLANEX-10.2  SECOND AMENDMENT TO OUTSIDE DIRECTORS STOCK AND INCENTIVE COMPENSATIONEX-10.3  FORM OF OUTSIDE DIRECTORS RESTRICTED STOCK AGREEMENTEX-31.1  SECTION 302 CERTIFICATION OF THE CEOEX-31.2  SECTION 302 CERTIFICATION OF THE CFOEX-32.1  SECTION 906 CERTIFICATION OF THE CEOEX-32.2  SECTION 906 CERTIFICATION OF THE CFO   1




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##### Table of Contents



PART I  FINANCIAL
    INFORMATION  Item 1.
    Financial
    Statements.  LIFEPOINT
    HOSPITALS, INC.
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    UNAUDITED
    (In millions, except per share amounts)
  Three Months Ended
    March 31,2005


2006Revenues

$
272.0


$
589.6Salaries and benefits


109.6



231.1Supplies


35.9



82.7Other operating expenses


44.8



95.7Provision for doubtful accounts


22.9



68.4Depreciation and amortization


13.2



31.9Interest expense, net


2.4



23.2228.8



533.0Income from continuing operations
    before minority interests and income taxes


43.2



56.6Minority interests in earnings of
    consolidated entities


0.3



0.3Income from continuing operations
    before income taxes


42.9



56.3Provision for income taxes


17.1



22.5Income from continuing operations


25.8



33.8Discontinued operations, net of
    income taxes:Income (loss) from discontinued
    operations


0.8



(0.2
)Gain (loss) on sale of hospitals


(0.8
)


3.8Income from discontinued operations






3.6Cumulative effect of change in
    accounting principle, net of income taxes






0.7Net income

$
25.8


$
38.1Basic earnings per share:Continuing operations

$
0.68


$
0.61Discontinued operations






0.07Cumulative effect of change in
    accounting principle






0.01Net income

$
0.68


$
0.69Diluted earnings per share:Continuing operations

$
0.63


$
0.60Discontinued operations






0.07Cumulative effect of change in
    accounting principle






0.01Net income

$
0.63


$
0.68Weighted average shares and
    dilutive securities outstanding:Basic


37.8



55.5Diluted


43.4



56.1    2




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in millions, except per share amounts)
  December 31,


March 31,2005


2006(Unaudited)(1)ASSETSCurrent assets:Cash and cash equivalents

$
30.4


$
53.1Accounts receivable, less
    allowances for doubtful accounts of $252.9 at December 31,
    2005 and $261.5 at March 31, 2006


256.8



264.1Inventories


56.9



57.1Assets held for sale


22.0



10.0Prepaid expenses


12.0



11.7Deferred tax assets


44.2



50.2Other current assets


11.0



13.8433.3



460.0Property and equipment:Land


64.4



70.8Buildings and improvements


986.9



1,023.5Equipment


540.3



528.5Construction in progress (estimated
    cost to complete and equip after March 31, 2006 is $91.3)


77.8



59.61,669.4



1,682.4Accumulated depreciation


(373.1
)


(402.3
)1,296.3



1,280.1Deferred loan costs, net


35.4



34.5Intangible assets, net


4.2



6.9Other


5.5



5.8Goodwill


1,449.9



1,478.7$
3,224.6


$
3,266.0LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
85.6


$
75.8Accrued salaries


58.7



55.5Other current liabilities


85.3



91.9Current maturities of long-term debt


0.5



0.5230.1



223.7Long-term debt


1,515.8



1,515.7Deferred income taxes


124.0



125.0Professional and general liability
    claims and other liabilities


60.3



62.6Minority interests in equity of
    consolidated entities


6.6



6.6Stockholders 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; 57,102,882 shares and
    57,487,946 shares issued and outstanding at
    December 31, 2005 and March 31, 2006, respectively


0.6



0.6Capital in excess of par value


1,053.1



1,027.9Unearned ESOP compensation


(9.7
)


(9.0
)Unearned compensation on nonvested
    stock


(31.0
)


Retained earnings


274.8



312.91,287.8



1,332.4$
3,224.6


$
3,266.0     (1)
    
    Derived from audited financial statements.   3




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    UNAUDITED
    (In millions)
  Three Months EndedMarch 31,2005


2006Cash flows from operating
    activities:Net income

$
25.8


$
38.1Adjustments to reconcile net income
    to net cash provided by operating activities:Income from discontinued operations






(3.6
)Cumulative effect of change in
    accounting principle, net of income taxes






(0.7
)Stock-based compensation


0.5



3.2ESOP expense (non-cash portion)


2.6



2.4Depreciation and amortization


13.2



31.9Amortization of deferred loan costs


0.4



1.3Minority interests in earnings of
    consolidated entities


0.3



0.3Deferred income taxes (benefit)


0.9



(3.1
)Reserve for professional and
    general liability claims, net


0.4



1.8Excess tax benefits from employee
    stock plans


2.3



Increase (decrease) in cash from
    operating assets and liabilities, net of effects from
    acquisitions and divestitures:Accounts receivable


(4.8
)


(9.4
)Inventories and other current assets


2.9



(3.2
)Accounts payable and accrued
    expenses


2.5



(16.6
)Income taxes payable


14.1



12.7Other


(0.1
)


0.5Net cash provided by operating
    activities  continuing operations


61.0



55.6Net cash provided by (used in)
    operating activities  discontinued operations


0.1



(0.4
)Net cash provided by operating
    activities


61.1



55.2Cash flows from investing
    activities:Purchase of property and equipment


(27.1
)


(50.1
)Acquisitions, net of cash acquired


(2.0
)


(3.5
)Other


(0.4
)


(0.3
)Net cash used in investing
    activities  continuing operations


(29.5
)


(53.9
)Net cash provided by investing
    activities  discontinued operations (Proceeds
    from sale of hospitals)


32.5



19.9Net cash provided by (used in)
    investing activities


3.0



(34.0
)Cash flows from financing
    activities:Proceeds from borrowings






10.0Payments of borrowings






(10.0
)Proceeds from employee stock
    purchase plans


0.8



1.7Proceeds from exercise of stock
    options


10.6



0.3Other


0.1



(0.5
)Net cash provided by financing
    activities


11.5



1.5Change in cash and cash equivalents


75.6



22.7Cash and cash equivalents at
    beginning of period


18.6



30.4Cash and cash equivalents at end of
    period

$
94.2


$
53.1Supplemental disclosure of cash
    flow information:Interest payments

$
0.5


$
25.1Capitalized interest

$
0.4


$
0.1Income taxes paid, net

$
0.6


$
12.7    4




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY
 For the Three Months Ended March 31, 2006
 (Amounts in millions)
  UnearnedCapital in


Unearned


CompensationCommon Stock


Excess of


ESOP


on Nonvested


RetainedShares


Amount


Par Value


Compensation


Stock


Earnings


TotalBalance at December 31, 2005


57.1


$
0.6


$
1,053.1


$
(9.7
)

$
(31.0
)

$
274.8


$
1,287.8Reclassification of unearned
    compensation on nonvested stock balance upon adoption of
    SFAS No. 123(R)










(31.0
)






31.0







Net income






















38.1



38.1ESOP compensation earned










1.7



0.7











2.4Exercise of stock options,
    including tax benefits and other










0.2















0.2Stock activity in connection with
    employee stock purchase plans










1.7















1.7Stock-based
    compensation  nonvested stock










0.9















0.9Stock-based
    compensation  stock options










1.3















1.3Nonvested stock issued to key
    employees


0.4























Balance at March 31, 2006


57.5


$
0.6


$
1,027.9


$
(9.0
)

$



$
312.9


$
1,332.4  5




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2006
 Unaudited
  Note 1.
    Basis of
    Presentation  and/or
    Form 10-Q Regulation S-X. Form 10-K
      Note 2.
    Acquisitions  Business
    Combination with Province Healthcare Company   6




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    one-for-one
  Rule 12g-3(c)
      20-day
    Fair value of LifePoint Common
    Stock issued

$
596.0Cash


586.3Fair value of assumed Province
    debt obligations


511.6Severance and Province stock
    option costs


73.8Direct transaction costs


30.1$
1,797.8    7




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   No. 99-12). No. 99-12,
      Accounts receivable, net

$
122.1Inventories


20.9Prepaid expenses


4.6Other current assets


15.5Property and equipment


609.8Other long-term assets


5.6Goodwill


1,187.4Total assets acquired, excluding
    cash


1,965.9Accounts payable


34.9Accrued salaries


28.1Other current liabilities


32.8Long-term debt


511.6Deferred income taxes


47.5Professional and general liability
    claims and other liabilities


25.6Minority interests in equity of
    consolidated entities


2.0Total liabilities assumed


682.5Net assets acquired

$
1,283.4     Other
    2005 Acquisitions
     8




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Pending
    Acquisition
    Note 3.
    Discontinued
    Operations  Three
    Former Province Hospitals
      Smith
    County Memorial Hospital
    Bartow
    Memorial Hospital
   9




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2005


2006Revenues

$
13.3


$
10.8Income (loss) before income taxes


1.7



(0.2
)       Current


Property andAssets


Equipment


Goodwill


TotalBalance at December 31, 2005

$
1.6


$
14.7


$
5.7


$
22.0Sale of Smith County


(0.3
)


(6.0
)


(5.7
)


(12.0
)Balance at March 31, 2006

$
1.3


$
8.7


$



$
10.0   Note 4.
    Goodwill
    and Intangible Assets    Balance at December 31, 2005

$
1,449.9Consideration adjustments and
    adjustments to purchase price allocations for 2005 acquisitions


28.8Balance at March 31, 2006

$
1,478.7  10




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      GrossCarrying


Accumulated


NetAmount


Amortization


TotalContract-based physician
    minimum revenue guarantees:Balance at December 31, 2005

$



$



$
Additions


2.6







2.6Amortization expense






(0.1
)


(0.1
)Balance at March 31, 2006

$
2.6


$
(0.1
)

$
2.5Certificates of need:Balance at December 31, 2005

$
1.4


$



$
1.4Additions


0.5







0.5Balance at March 31, 2006

$
1.9


$



$
1.9Non-competition
    agreements:Balance at December 31, 2005

$
5.9


$
(3.1
)

$
2.8Additions


0.1







0.1Amortization expense






(0.4
)


(0.4
)Balance at March 31, 2006

$
6.0


$
(3.5
)

$
2.5Total intangible
    assets:Balance at December 31, 2005

$
7.3


$
(3.1
)

$
4.2Additions


3.2







3.2Amortization expense






(0.5
)


(0.5
)Balance at March 31, 2006

$
10.5


$
(3.6
)

$
6.9   Contract-based
    Physician Minimum Revenue Guarantees
  No. 45-3, FIN 45-3), FIN 45-3, FIN 45-3 FIN 45-3
  FIN 45-3 FIN 45-3
 11




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   FIN 45-3,
  FIN 45-3
  Three MonthsEnded March 31,2006Increase of income from continuing
    operations before income taxes (included in other operating
    expenses)

$
0.7Provision for income taxes


(0.3
)Increase of income from continuing
    operations

$
0.4Increase of income per share from
    continuing operations:Basic

$
0.01Diluted

$
0.01   Certificates
    of Need and Non-Competition Agreements
      Amount2006
    (April  December 31)

$
1.52007


1.52008


0.72009


0.72010


0.6$
5.0  12




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 5.
    Earnings
    Per Share    Three Months EndedMarch 31,2005


2006Numerator:Numerator for basic earnings per
    share  income from continuing operations

$
25.8


$
33.8Interest on convertible notes, net
    of taxes


1.7



Numerator for diluted earnings per
    share  income from continuing operations


27.5



33.8Income from discontinued
    operations, net of income taxes






3.6Cumulative effect of change in
    accounting principle, net of income taxes






0.7$
27.5


$
38.1Denominator:Denominator for basic earnings per
    share  weighted average shares outstanding


37.8



55.5Effect of dilutive securities:Employee stock benefit plans


0.9



0.6Convertible notes


4.7



Denominator for diluted earnings
    per share  adjusted weighted average shares


43.4



56.1Basic earnings per share:Continuing operations

$
0.68


$
0.61Discontinued operations






0.07Cumulative effect of change in
    accounting principle






0.01Net income

$
0.68


$
0.69Diluted earnings per share:Continuing operations

$
0.63


$
0.60Discontinued operations






0.07Cumulative effect of change in
    accounting principle






0.01Net income

$
0.63


$
0.68   Note 6.
    Recently
    Issued Accounting Pronouncements   13




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 7.
    Stock-Based
    Compensation      Impact of the Adoption of SFAS No. 123(R)
   Three Months EndedMarch 31, 2006Reduction of income from
    continuing operations before income taxes (included in salaries
    and benefits)

$
1.3Income tax benefit


(0.5
)Reduction of income from
    continuing operations

$
0.8Reduction of income per share from
    continuing operations:Basic

$
0.01Diluted

$
0.01  14




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              Description
    of Stock-Based Compensation Plans
  1998
    Long-Term Incentive Plan
   15




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Outside
    Directors Stock and Incentive Compensation Plan
        ESPP
   16




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    MSPP
    Stock
    Options
  Change in
    Valuation Model
    Valuation
      Three Months Ended
    March 31,2005

2006Expected volatility

N/A

33.0%Risk free interest rate (range)

N/A

4.38% - 4.69%Expected dividends

N/A

Average expected term (years)

N/A

5.4   Population
    Stratification
   17




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Expected
    Volatility
    Risk-Free
    Interest Rate
    Expected
    Dividends
    Pre-Vesting
    Forfeitures
    Post-Vesting
    Cancellations
    Expected
    Term
   18




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Option Activity
    WeightedAverageWeighted


Weighted


Total





RemainingAverage


Average


Fair


Aggregate


ContractualNumber


Exercise


Fair


Value


Intrinsic Value


TermStock Options

of Shares


Price


Value


(in millions)


(in millions)


(in years)Outstanding at
    December 31, 2005(a)


3,560,504


$
30.02


$
12.26


$
43.7


$
32.3



7.17Exercisable at
    December 31, 2005(a)


2,787,855


$
26.62


$
10.27


$
28.6


$
32.3



N/AGranted


809,495



33.02



11.11



9.0



N/A



N/AForfeited (pre-vest cancellation)


48,916



40.82



17.79



0.9



N/A



N/AExercised


18,104



17.96



6.50



0.1



0.2



N/AExpired (post-vest cancellation)


7,628



29.93



11.19



0.1



N/A



N/AVested


















N/A



N/AOutstanding at March 31, 2006


4,295,351


$
30.51


$
12.01


$
51.6


$
20.2



6.91Exercisable at March 31, 2006


2,762,123


$
26.67


$
10.30


$
28.4


$
20.2



5.49     (a)
    
    Certain prior period adjustments were made to the amounts at
    December 31, 2005.      Nonvested
    Stock
   19




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted


TotalAverage


Fair


AggregateNumber


Fair


Value


Intrinsic ValueNonvested shares

of Shares


Value


(In millions)


(In millions)Outstanding at December 31,
    2005(a)


865,284


$
42.77


$
37.0


$
32.5Granted


348,324



33.02



11.5



N/AVested














Forfeited (pre-vest cancellation)


40,150



42.54



1.7



N/AOutstanding at March 31, 2006


1,173,458


$
39.87


$
46.8


$
36.5     (a)
    
    Certain prior period adjustments were made to the outstanding
    amounts at December 31, 2005.     20




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comparable
    Disclosures
    Three Months EndedMarch 31,2005


2006Net income, as reported in prior
    period(a)

$
25.8Add: Stock-based compensation
    expense included in reported net income, net of income taxes


0.3Less: Stock-based compensation
    expense determined under fair value based method for all awards,
    net of income taxes(b)


(1.7
)Net income, including stock-based
    compensation(c)


24.4



38.1Interest on Convertible Notes, net
    of taxes


1.7



Net income used for diluted
    earnings per share

$
26.1


$
38.1Net income per share:Basic  as reported
    in prior period(a)

$
0.68Basic  including
    stock-based compensation(c)

$
0.64


$
0.69Diluted  as
    reported in prior period(a)

$
0.63Diluted  including
    stock-based compensation(c)

$
0.60


$
0.68     (a)
    
    Net income and net income per share as reported for periods
    prior to January 1, 2006 did not include stock-based
    compensation expense for stock options and the Companys
    ESPP because it did not adopt the recognition provisions of
    SFAS No. 123.(b)
    
    Stock-based compensation expense for periods prior to
    January 1, 2006 is calculated based on the pro forma
    application of SFAS No. 123.(c)
    
    Net income and net income per share including stock-based
    compensation for periods prior to January 1, 2006 are based
    on the pro forma application of SFAS No. 123.  Note 8.
    Contingencies  Americans
    with Disabilities Act Claim
  facility-by-facility
 21




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Corporate
    Integrity Agreement
    Legal
    Proceedings and General Liability Claims
      Physician
    Commitments
   22




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Capital
    Expenditure Commitments
          40-year
    Tax
    Matters
   23




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##### Table of Contents



LIFEPOINT
    HOSPITALS, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Acquisitions
   24




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Form 10-K.
  Overview
    Three Months EndedMarch 31,2005


2006Revenues

$
272.0


$
589.6Income from continuing operations

$
25.8


$
33.8Diluted earnings per share from
    continuing operations

$
0.63


$
0.60   Hospital
    Acquisitions
  Business, Form 10-K Form 10-K
  Business
    Combination with Province Healthcare Company
    Discontinued
    Operations
   25




---



##### Table of Contents



held-for-sale
    Three Months EndedMarch 31,2005


2006Revenues

$
13.3


$
10.8Income (loss) from discontinued
    operations

$
0.8


$
(0.2
)Gain (loss) on sale of hospitals


(0.8
)


3.8Income from discontinued operations

$



$
3.6Diluted earnings per share from
    discontinued operations

$



$
0.07   Key
    Challenges
  
    Integration of Recently Acquired Hospitals.  We
    acquired 21 hospitals from Province and two other hospitals in
    separate transactions during 2005. The process of integrating
    the operations of these hospitals could cause an interruption
    of, or loss of momentum in, the activities of our business.
    However, we are dedicated to devoting significant management
    attention and resources to integrating the business practices
    and operations of our recently acquired hospitals.
    Medicare Changes.  We are experiencing changes
    with respect to governmental reimbursement that are affecting
    our growth. Effective October 1, 2005, CMS expanded the
    post-acute transfer policy from 30 diagnosis related groups
    (DRGs) to 182 DRGs. We estimate the expansion in the
    post-acute transfer policy resulted in a reduction of
    approximately $2.0 million in our Medicare inpatient
    Prospective Payment System payments for the first quarter of
    2006. On February 8, 2006, President Bush signed the
    Deficit Reduction Act of 2005 (DRA) into law. This
    law includes measures related to specialty hospitals, quality
    reporting and
    pay-for-performance,
    the inpatient rehabilitation facility 75% Rule and Medicaid
    cuts. Part I, Item 1. Business,Sources
    of Revenuein our 2005 Annual Report on
    Form 10-K
    contains a detailed discussion of provisions that affect our
    Medicare reimbursement.
    States Implementing Medicaid Cost Containment
    Measures.  A number of states have incurred budget
    deficits within recent years. To address these budget deficits,
    certain states have reduced spending and increased taxes. State
    cost containment activity continues to focus on reducing
    provider payments and limiting eligible enrollees under the
    state Medicaid programs. The following is a summary of four
    states where there have been significant developments in 2006:  Tennessee:
    
    We estimate that the reduction in the TennCare Medicaid program
    negatively impacted us by approximately $1.5 million for
    the first quarter of 2006.Alabama:
    
    The state of Alabama has implemented rate changes and eliminated
    disproportionate share hospital-type payments. These changes
    negatively impacted our earnings by approximately
    $1.4 million for the first quarter of 2006. 26




---



##### Table of Contents



Louisiana:
    
    Effective January 1, 2006, the state of Louisiana
    implemented Medicaid reductions of approximately 12% to 17%.
    However, the DRA provided approximately $2.0 billion in
    Hurricane Katrina-related Medicaid relief, which offset the
    previously announced reductions.Kentucky:
    
    Kentucky Medicaid implemented increased co-payments effective
    July 1, 2005. We estimate this negatively impacted our
    earnings by approximately $0.2 million in the first quarter
    of 2006.  Business, Sources of Revenue Form 10-K
  
    Increases in Provision for Doubtful
    Accounts.  We have experienced an increase in our
    provision for doubtful accounts during recent years. These
    increases were the result of an increased number of uninsured
    patients and an increase in co-payments and deductibles from
    healthcare plan design changes. These changes increase
    collection costs and reduce overall cash collections. Our
    provision for doubtful accounts was as follows for the periods
    presented (in millions):  Provision for Doubtful
    Accounts2005


2006First Quarter

$
22.9


$
68.4Second Quarter


41.3



N/AThird Quarter


63.9



N/AFourth Quarter


62.1



N/A$
190.2


$
68.4     Self-Pay Revenues2005


2006First Quarter

$
24.2


$
73.6Second Quarter


47.6



N/AThird Quarter


71.5



N/AFourth Quarter


66.7



N/A$
210.0


$
73.6     Charity and Indigent Care
    Write-Offs2005


2006First Quarter

$
1.8


$
6.1Second Quarter


5.6



N/AThird Quarter


7.6



N/AFourth Quarter


9.0



N/A$
24.0


$
6.1  27




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##### Table of Contents



Revenue Days Outstanding inAccounts Receivable2005


2006March 31


37.2



40.3June 30


37.6



N/ASeptember 30


42.0



N/ADecember 31


42.3



N/A     December 31, 2005


March 31, 2006Insured receivables


40.6
%


40.1
%Uninsured receivables (including
    copayments and deductibles)


59.4



59.9100.0
%


100.0
%     December 31, 2005


March 31, 20060 to 60 days


51.4
%


51.5
%61 to 150 days


20.9



20.7Over 150 days


27.7



27.8100.0
%


100.0
%     
    Substantial Indebtedness.  We have substantial
    indebtedness. Our consolidated debt was $1,516.2 million as
    of March 31, 2006, and we incurred $23.2 million of
    interest expense in the quarter ended March 31, 2006. We
    estimate we will incur a higher amount of interest expense in
    2006 because of increasing interest rates. Our substantial
    indebtedness increases our cost of capital, decreases our net
    income and reduces the amount of funds available for operations,
    capital expenditures and future acquisitions. We are in
    compliance with our financial debt covenants as of
    March 31, 2006 and believe we will be in compliance with
    these throughout 2006. It is not our intent to maintain large
    cash balances, and we will focus on reducing our indebtedness
    during 2006.
    Start-up
    Costs at Our Two De Novo Hospitals.  Each of our
    two newly-constructed hospitals, Valley View Medical Center in
    Fort Mohave, Arizona and Coastal Carolina Medical Center in
    Hardeeville, South Carolina has incurred significant
    start-up
    costs and will attempt to build market share over time. In
    addition, as of the date of this report, we have not received
    Medicare certification at Valley View Medical Center. We cannot
    bill Medicare and Medicaid for services provided until we
    receive the Medicare certification. As a result, these de novo
    facilities have decreased our earnings and profitability in the
    quarter ended March 31, 2006 by $0.07 per diluted share,
    and are expected to adversely affect our earnings in the
    remainder of 2006.
    Physician Recruitment and
    Retention.  Recruiting and retaining both primary
    care physicians and specialists for our non-urban communities is
    a key to increasing revenues and patient volumes. The medical
    staffs at our hospitals are typically small and our revenues may
    be negatively affected by the loss of one or more of our
    physicians. Our management believes that continuing to add
    specialists should help our hospitals increase volumes by
    offering new services. We plan to spend $35.2 million to
    recruit 28




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##### Table of Contents



approximately 182 new admitting physicians during 2006. For the
    quarter ended March 31, 2006, we recruited 59 new admitting
    physicians and spent $5.8 million in cash on physician
    recruitment.    AdmittingPhysiciansDecember 31, 2005


1,832Recruited and started


14Departed


(14
)March 31, 2006


1,832   
    Shortage of Clinical Personnel and Increased Contract Labor
    Usage.  In recent years, many hospitals, including
    some of the hospitals we own, have encountered difficulty in
    recruiting and retaining nursing and other clinical personnel.
    When we are unable to staff our nursing and clinical positions,
    we are required to use contract labor to ensure adequate patient
    care. Contract labor generally costs more per hour than employed
    labor. We have adopted a number of human resources strategies in
    an attempt to improve our ability to recruit and retain nursing
    and other clinical personnel. However, we expect that the
    staffing issues related to nurses and other clinical personnel
    will continue in the future.
    Increases in Supply Costs.  During the past few
    years, we have experienced an increase in supply costs as a
    percentage of revenues, especially in the areas of
    pharmaceutical, orthopedic, oncology and cardiac supplies. We
    participate in a group purchasing organization in an attempt to
    achieve lower supply costs from our vendors. Because of the
    fixed reimbursement nature of most governmental and commercial
    payor arrangements, we may not be able to recover supply cost
    increases through increased revenues.
    Challenges in Professional and General Liability
    Costs.  In recent years, we have incurred
    favorable loss experience, as reflected in our external
    actuarial reports. We implemented enhanced risk management
    processes for monitoring professional and general liability
    claims and managing in high-risk areas. Professional and general
    liability costs remain a challenge to us, and we expect this
    pressure to continue in the future.
    Increases in Information Technology Costs and Costs of
    Integration.  Our acquisition activity requires
    transitions from, and the integration of, various information
    systems that are used by hospitals we acquire. We rely heavily
    on HCA-IT for information systems integration pursuant to our
    contractual arrangement for information technology services.
    During 2005, we significantly increased the number of hospitals
    we operated. This resulted in significant increases in
    information technology costs and we expect that such costs will
    continue to increase significantly as we integrate our recent
    acquisitions onto the HCA-IT systems. We plan to convert between
    seven to nine hospitals to the Meditech patient accounting
    system in 2006. We have already completed four of these Meditech
    patient accounting system conversions as of March 31, 2006.
    Incremental expenses related to the HCA-IT systems conversions
    were approximately $1.3 million during the quarter ended
    March 31, 2006.  Outlook
     29




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##### Table of Contents



Revenue
    Sources
  Business,   Form 10-K
        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.  Form 10-K
  
    Allowance for doubtful accounts and provision for doubtful
    accounts;
    Revenue recognition and allowance for contractual discounts;
    Goodwill and accounting for business combinations;
    Professional and general liability claims; and
    Accounting for income taxes. 30




---



##### Table of Contents





New
    Critical Accounting Estimate




Accounting for Stock-based Compensation












Impact of the Adoption of SFAS No. 123(R)






|                                                                                                               |  |                    |      |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---- | -
|                                                                                                               |  | Three Months Ended |     
|                                                                                                               |  | March 31, 2006     |     
|                                                                                                              
|Reduction of income from
    continuing operations before income taxes (included in salaries
    and benefits) |  | $                  | 1.3  |  
|Income tax benefit                                                                                             |  |                    | (0.5 | )
|                                                                                                               |  |                    |      |  
|Reduction of income from
    continuing operations                                                             |  | $                  | 0.8  |  
|                                                                                                               |  |                    |      |  
|Reduction of income per share from
    continuing operations:                                                  |  |                    |      |  
|Basic                                                                                                          |  | $                  | 0.01 |  
|                                                                                                               |  |                    |      |  
|Diluted                                                                                                        |  | $                  | 0.01 |  
|                                                                                                               |  |                    |      |  







31



---



##### Table of Contents



















Change in
    Stock Option Valuation Model




HW-II. HW-II








Valuation






32



---



##### Table of Contents



Three Months Ended2005

2006Expected volatility

N/A

33.0%Risk free interest rate (range)

N/A

4.38% - 4.69%Expected dividends

N/A

Average expected term (years)

N/A

5.4   Population
    Stratification
    Expected
    Volatility
    Risk-Free
    Interest Rate
    Expected
    Dividends
    Pre-Vesting
    Forfeitures
   33




---



##### Table of Contents



Post-Vesting
    Cancellations
    Expected
    Term
    Nonvested
    Stock
       34




---



##### Table of Contents



Comparable
    Disclosures
    Three Months EndedMarch 31,2005


2006Net income, as reported in prior
    period(a)

$
25.8Add: Stock-based compensation
    expense included in reported net income, net of income taxes


0.3Less: Stock-based compensation
    expense determined under fair value based method for all awards,
    net of income taxes(b)


(1.7
)Net income, including stock-based
    compensation(c)


24.4



38.1Interest on Convertible Notes, net
    of taxes


1.7



Net income used for diluted
    earnings per share

$
26.1


$
38.1Net income per share:Basic  as reported
    in prior period(a)

$
0.68Basic  including
    stock-based compensation(c)

$
0.64


$
0.69Diluted  as
    reported in prior period(a)

$
0.63Diluted  including
    stock-based compensation(c)

$
0.60


$
0.68     (a)
    
    Net income and net income per share as reported for periods
    prior to January 1, 2006 did not include stock-based
    compensation expense for stock options and our ESPP because we
    did not adopt the recognition provisions of
    SFAS No. 123.(b)
    
    Stock-based compensation expense for periods prior to
    January 1, 2006 is calculated based on the pro forma
    application of SFAS No. 123.(c)
    
    Net income and net income per share including stock-based
    compensation for periods prior to January 1, 2006 are based
    on the pro forma application of SFAS No. 123.  Results
    of Operations
    Admissions.
  bps.
  Continuing operations.
  Emergency room visits.
  Equivalent admissions.
 35




---



##### Table of Contents



ESOP.
  Medicare case mix index.
  N/A. .
  N/M.
  Outpatient surgeries.
  Same-hospital.
  Operating
    Results Summary
    Three Months Ended
    March 31,2005


2006% of





% ofAmount


Revenues


Amount


RevenuesRevenues

$
272.0



100.0
%

$
589.6



100.0
%Salaries and benefits


109.6



40.4



231.1



39.2Supplies


35.9



13.2



82.7



14.0Other operating expenses


44.8



16.4



95.7



16.2Provision for doubtful accounts


22.9



8.4



68.4



11.6Depreciation and amortization


13.2



4.8



31.9



5.5Interest expense, net


2.4



0.9



23.2



3.9222.8



84.1



533.0



90.4Income from continuing operations
    before minority interests and income taxes


43.2



15.9



56.6



9.6Minority interests in earnings of
    consolidated entities


0.3



0.1



0.3



Income from continuing operations
    before income taxes


42.9



15.8



56.3



9.6Provision for income taxes


17.1



6.3



22.5



3.9Income from continuing operations

$
25.8



9.5
%

$
33.8



5.7
%  36




---



##### Table of Contents



For
    the Quarters Ended March 31, 2005 and 2006
  Revenues
    Three Months Ended





%March 31,


Increase


Increase2005


2006


(Decrease)


(Decrease)Revenues:Same-hospital

$
271.6


$
282.2


$
10.6



3.9
%Former Province hospitals






250.7



250.7



N/M2005 Acquisitions






56.7



56.7



N/MOther


0.4







(0.4
)


(100.0
)$
272.0


$
589.6


$
317.6



116.8Admissions:Same-hospital


25,444



24,355



(1,089
)


(4.3
)Continuing operations


25,444



47,842



22,398



88.0Equivalent admissions:Same-hospital


48,852



47,224



(1,628
)


(3.3
)Continuing operations


48,852



91,235



42,383



86.8Revenues per equivalent admission:Same-hospital

$
5,560


$
5,975


$
415



7.5Continuing operations

$
5,560


$
6,463


$
903



16.2Medicare case mix index:Same-hospital


1.19



1.22



0.03



2.5Continuing operations


1.19



1.24



0.05



4.2Average length of stay (days):Same-hospital


4.1



4.2



0.1



2.4Continuing operations


4.1



4.3



0.2



4.9Inpatient surgeries:Same-hospital


6,596



6,681



85



1.3Continuing operations


6,596



13,534



6,938



105.2Outpatient surgeries:Same-hospital


19,197



18,310



(887
)


(4.6
)Continuing operations


19,197



34,018



14,821



77.2Emergency room visits:Same-hospital


110,114



106,968



(3,146
)


(2.9
)Continuing operations


110,114



204,913



94,799



86.1Outpatient factor:Same-hospital


1.92



1.94



0.02



1.0Continuing operations


1.92



1.91



(0.01
)


(0.5
) 37




---



##### Table of Contents



Three Months Ended





%March 31,


Increase


Increase2005


2006


(Decrease)


(Decrease)Outpatient revenues as a
    percentage of total revenues:Same-hospital


49.5
%


49.9
%


40
bps


N/MContinuing operations


49.4
%


48.6
%


(80
)bps


N/M   Inpatient
    Revenues
    Outpatient
    Revenues
    Other
      Continuing Operations


Same-hospital2005


2006


2005


2006Medicare


38.2
%


36.3
%


38.3
%


37.0
%Medicaid


10.8



9.3



10.7



9.9HMOs, PPOs and other private
    insurers


37.6



37.9



37.7



38.8Self-Pay


8.9



12.5



8.9



10.1Other


4.5



4.0



4.4



4.2100.0
%


100.0
%


100.0
%


100.0
%  38




---



##### Table of Contents



Expenses
  Salaries
    and Benefits
  Three Months Ended
    March 31,% of





% of


Increase


% Increase2005


Revenues


2006


Revenues


(Decrease)


(Decrease)Salaries and benefits (dollars in
    millions):Salaries and wages

$
83.2



30.6
%

$
174.1



29.5
%

$
90.9



109.2
%Stock-based compensation


0.5



0.2



3.2



0.5



2.7



516.6Employee benefits


20.6



7.6



38.6



6.6



18.0



87.5Contract labor


2.7



1.0



10.9



1.9



8.2



298.4ESOP expense


2.6



1.0



4.3



0.7



1.7



58.4$
109.6



40.4
%

$
231.1



39.2
%

$
121.5



110.5Continuing operations:Man-hours
    per equivalent admission


79.2



N/A



88.3



N/A



9.1



11.5Salaries and benefits per
    equivalent admission

$
2,039



N/A


$
2,394



N/A


$
355



17.4Corporate office salaries and
    benefits (dollars in millions)

$
6.9



2.5
%

$
10.3



1.7
%

$
3.4



49.1Same-hospital (dollars in
    millions):Salaries and wages

$
78.0



28.7
%

$
80.1



28.4
%

$
2.1



2.7Stock-based compensation










0.5



0.2



0.5



N/MEmployee benefits


19.7



7.3



20.4



7.2



0.7



3.9Contract labor


2.6



1.0



2.8



1.0



0.2



4.9ESOP expense


2.6



0.9



2.0



0.7



(0.6
)


(22.9
)$
102.9



37.9
%

$
105.8



37.5
%

$
2.9



2.8Same-hospital:Man-hours
    per equivalent admission


79.2



N/A



81.5



N/A



2.3



2.9Salaries and benefits per
    equivalent admission

$
2,039



N/A


$
2,219



N/A


$
180



8.8      39




---



##### Table of Contents



Supplies
  Three Months Ended



%March 31,

Increase

Increase2005

2006

(Decrease)

(Decrease)Continuing operations:Supplies (dollars in millions)

$
35.9


$
82.7


$
46.8



130.4
%Supplies as a percentage of
    revenues


13.2
%


14.0
%


80
bps


N/MSupplies per equivalent admission

$
730


$
904


$
174



24.0
%Same-hospital:Supplies (dollars in millions)

$
35.8


$
36.7


$
0.9



2.5
%Supplies as a percentage of
    revenues


13.2
%


13.0
%


(20
)bps


N/MSupplies per equivalent admission

$
730


$
777


$
47



6.5
%     Other
    Operating Expenses
  Three Months Ended
    March 31,% of





% of


Increase


% Increase2005


Revenues


2006


Revenues


(Decrease)


(Decrease)Other operating expenses (dollars
    in millions):Professional fees

$
3.5



1.3
%

$
9.6



1.6
%

$
6.1



177.3
%Utilities


4.4



1.6



12.1



2.0



7.7



171.3Repairs and maintenance


5.4



2.0



11.2



1.9



5.8



106.5Rents and leases


2.4



0.9



5.8



1.0



3.4



139.9Insurance


2.6



1.0



6.5



1.1



3.9



152.9HCA-IT expense


4.5



1.7



6.8



1.1



2.3



49.8Physician recruiting


3.4



1.3



5.0



0.9



1.6



47.4Contract services


8.9



3.2



20.4



3.5



11.5



131.0Non-income taxes


4.5



1.6



7.6



1.3



3.1



70.3Other


5.2



1.8



10.7



1.8



5.5



102.4$
44.8



16.4
%

$
95.7



16.2
%

$
50.9



113.4Corporate office other operating
    expenses (dollars in millions)

$
2.9



1.1
%

$
5.7



1.0
%

$
2.8



92.3 40




---



##### Table of Contents



Three Months Ended
    March 31,% of





% of


Increase


% Increase2005


Revenues


2006


Revenues


(Decrease)


(Decrease)Same-hospital other operating
    expenses (dollars in millions):Professional fees

$
3.4



1.2
%

$
3.7



1.3
%

$
0.3



10.5Utilities


4.4



1.6



5.4



1.9



1.0



21.6Repairs and maintenance


5.4



2.0



5.7



2.0



0.3



5.7Rents and leases


2.2



0.8



2.6



0.9



0.4



16.7Insurance


2.2



0.8



2.0



0.7



(0.2
)


(11.3
)HCA-IT expense


4.4



1.6



4.5



1.6



0.1



3.4Physician recruiting


3.4



1.3



3.1



1.1



(0.3
)


(9.7
)Contract services


8.4



3.1



8.8



3.1



0.4



4.9Non-income taxes


4.4



1.6



4.2



1.5



(0.2
)


(5.2
)Other


3.7



1.4



3.4



1.3



(0.3
)


(6.6
)$
41.9



15.4
%

$
43.4



15.4
%

$
1.5



3.6     FIN 45-3
  Provision
    for Doubtful Accounts
  Three Months EndedMarch 31,

Increase

% Increase2005

2006

(Decrease)

(Decrease)Continuing operations (dollars in
    millions):Provision for doubtful accounts

$
22.9


$
68.4


$
45.5



199.9
%Percentage of revenue


8.4
%


11.6
%


320
bps


N/MCharity care write-offs

$
1.8


$
6.1


$
4.3



235.6
%Same-hospital (dollars in
    millions):Provision for doubtful accounts

$
22.9


$
29.4


$
6.5



28.7
%Percentage of revenues


8.4
%


10.4
%


200
bps


N/MCharity care write-offs

$
1.8


$
2.4


$
0.6



32.7
%    41




---



##### Table of Contents



. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations,   Form 10-K.
  Depreciation
    and Amortization
    Three Months EndedMarch 31,


Increase


% Increase2005


2006


(Decrease)


(Decrease)Same-hospital

$
13.0


$
13.8


$
0.8



9.3
%Former Province hospitals






14.2



14.2



N/M2005 Acquisitions






3.3



3.3



N/MCorporate office


0.2



0.6



0.4



240.1$
13.2


$
31.9


$
18.7



145.1   Interest
    Expense
  Three Months EndedMarch 31,


Increase2005


2006


(Decrease)Interest expense (dollars in
    millions):Prior bank credit facility,
    including commitment fees

$
0.2


$



$
(0.2
)Senior credit facility, including
    commitment fees






20.2



20.241/2% convertible
    notes


2.5







(2.5
)71/2% senior
    subordinated notes






0.1



0.131/4% convertible
    notes






1.8



1.8Other






0.3



0.32.7



22.4



19.7Amortization of deferred loan costs


0.4



1.3



0.9Less:Discontinued operations interest
    expense allocation






(0.1
)


(0.1
)Interest income


(0.2
)


(0.3
)


(0.1
)Capitalized interest


(0.5
)


(0.1
)


0.4$
2.4


$
23.2


$
20.8    42




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##### Table of Contents



Provision
    for Income Taxes
  Three Months EndedMarch 31,

Increase2005

2006

(Decrease)Provision for income taxes (in
    millions)

$
17.1


$
22.5


$
5.4Effective income tax rate


39.8
%


40.0
%


20bps     Liquidity
    and Capital Resources
  Liquidity
      2005


2006Net cash flows provided by
    continuing operating activities

$
61.0


$
55.6Less: Purchase of property and
    equipment


(27.1
)


(50.1
)Free operating cash flow


33.9



5.5Acquisitions


(2.0
)


(3.5
)Proceeds from sale of hospitals


32.5



19.9Proceeds from borrowings






10.0Payments on borrowings






(10.0
)Proceeds from exercise of stock
    options


10.6



0.3Other


0.5



0.9Cash flows from operations
    provided by (used in) discontinued operations


0.1



(0.4
)Net increase in cash and cash
    equivalents

$
75.6


$
22.7      43




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##### Table of Contents



Working
    Capital
    December 31,


March 31,2005


2006Total current assets

$
433.3


$
460.0Total current liabilities


230.1



223.7Net working capital

$
203.2


$
236.3Current ratio


1.88



2.06   Capital
    Expenditures
    2005


2006Capital projects

$
17.8


$
30.4Routine


4.7



14.1Purchase of buildings


3.2



Information systems


1.4



5.6$
27.1


$
50.1Depreciation expense

$
12.9


$
31.5Ratio of capital expenditures to
    depreciation expense


210.1
%


159.0
%     Debt
    Balance as of








Balance as ofDecember 31,


Proceeds from


Payments of


March 31,2005


Debt Borrowings


Borrowings


2006Senior Credit Facility:Term B Loans

$
1,281.9


$



$



$
1,281.9Revolving loan(a)






10.0



(10.0
)


Provinces
    71/2% Senior
    Subordinated Notes


6.1











6.1Provinces
    41/4% Convertible
    Subordinated Notes


0.1











0.131/4% Convertible
    Senior Subordinated Debentures


225.0











225.0Other, including capital leases


3.2







(0.1
)


3.1$
1,516.3


$
10.0


$
(10.1
)

$
1,516.2     (a)
    
    Represents amount we borrowed and repaid for general corporate
    purposes. 44




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##### Table of Contents



December 31,


March 31,


Increase2005


2006


(Decrease)Current portion of long-term debt

$
0.5


$
0.5


$
Long-term debt


1,515.8



1,515.7



(0.1
)Total debt


1,516.3



1,516.2



(0.1
)Total stockholders equity


1,287.8



1,332.4



44.6Total capitalization

$
2,804.1


$
2,848.6



44.5Total debt to total capitalization


54.1
%


53.2
%


(90
)bpsPercentage of:Fixed rate debt


15.5
%


15.5
%Variable rate debt


84.5



84.5100.0
%


100.0
%Percentage of:Senior debt


84.8
%


84.8
%Subordinated debt


15.2



15.2100.0
%


100.0
%   Capital
    Resources
  Senior
    Secured Credit Facilities
    and/or
     45




---



##### Table of Contents



Level atMarch 31,Requirement


2006Minimum Interest Coverage Ratio


33.50:1.00



5.24Maximum Total Leverage Coverage
    Ratio


£4.75:1.00



3.49           Debt
    Ratings
    
    Moodys Investors Service, Inc.
    (Moodys); and
    Standard & Poors Rating Services, a division of
    McGraw-Hill Companies, Inc. (S&P).   46




---



##### Table of Contents



Moodys

S&PSenior

Senior ImpliedUnsecured

Issuer



IssuerDate

Issuer Rating

Rating

Outlook

Rating

OutlookApril 1999














B+



StableOctober 1999






B1



Stable



B+



StableFebruary 2001






B1



Positive



B+



StableMay 2001






Ba3



Stable



B+



StableJune 2001


B2



Ba3



Stable



BB-



StableJune 2002


B2



Ba3



Stable



BB-



StableDecember 2003


B2



Ba3



Stable



BB



StableAugust 2004


B2



Ba3



Negative



BB



NegativeMarch 2005


B2



Ba3



Stable



BB



StableJuly 2005


B2



Ba3



Stable



BB



Negative       Province
    71/2% Senior
    Subordinated Notes
  1 2 1 2 1 2
  1 2 1 2 1 2
  1 2 1 2 1 2 1 2
  Province
    41/4% Convertible
    Subordinated Notes
  1 4 1 4
  31/4% Convertible
    Senior Subordinated Debentures due August 15,
    2025
  1 4 1 4 1 4 1 4
 47




---



##### Table of Contents



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
  Liquidity
    and Capital Resources Outlook
       48




---



##### Table of Contents



Contractual
    Obligations
  Form 10-K.
  Off-Balance
    Sheet Arrangements
    Recently
    Issued Accounting Pronouncements
    Contingencies
    
    Claims made under the Americans with Disabilities Act;
    Our Corporate Integrity Agreement;
    Legal proceedings and general liability claims;
    Physician commitments;
    Capital expenditure commitments;
    Tax matters; and
    Acquisitions.  Forward-Looking
    Statements
    
    projections of our revenues, net income, earnings per share,
    capital expenditures, cash flows, debt repayments, interest
    rates, certain operating statistics and data or other financial
    items;
    descriptions of plans or objectives of our management for future
    operations or services, including pending acquisitions and
    divestitures;
    interpretations of Medicare and Medicaid law; and 49




---



##### Table of Contents




    descriptions of assumptions underlying or relating to any of the
    foregoing.    
    integration of our recent acquisitions;
    future financial performance and condition;
    future liquidity and capital resources;
    future cash flows;
    existing and future debt and equity structure;
    competition with other hospitals;
    our compliance with federal, state and local regulations;
    compliance with our corporate integrity agreement;
    our payment of dividends;
    future acquisitions and dispositions;
    de novo facilities;
    tax-related liabilities;
    reimbursement changes;
    patient volumes and related revenues;
    recruiting and retention of clinical personnel;
    future capital expenditures;
    expected changes in certain expenses;
    the completion of projects under construction;
    the impact of changes in our critical accounting estimates;
    claims and legal actions relating to professional liabilities
    and other matters;
    non-GAAP measures;
    the impact of new accounting standards; and
    physician recruiting and retention.  Risk Factors Form 10-K Form 10-K and/or Form 10-K
    
    problems that may arise in integrating the Province hospitals
    and our other acquired hospitals; 50




---



##### Table of Contents




    reduction in payments to healthcare providers by government and
    commercial third-party payors, as well as cost-containment
    efforts of insurers and other payors;
    the possibility of adverse changes in, and requirements of,
    applicable laws, regulations, policies and procedures, including
    those required by our corporate integrity agreement;
    our ability to manage healthcare risks and the lack of state and
    federal tort reform;
    the availability, cost and terms of insurance coverage;
    our ability to improve the operations of our de novo hospitals;
    the highly competitive nature of the healthcare business,
    including the competition to recruit and retain physicians and
    other healthcare professionals;
    the ability to attract and retain qualified management and
    personnel;
    the geographic concentration of our operations;
    our ability to acquire hospitals on favorable terms and to
    complete budgeted capital improvements successfully;
    the availability and terms of capital to fund our business
    strategy;
    changes in our operating or expansion strategy;
    changes in our liquidity or the amount or terms of our
    indebtedness and in our debt credit ratings;
    the potential adverse impact of government investigations and
    litigation involving the business practices of healthcare
    providers, including whistleblowers investigations;
    changes in generally accepted accounting principles or practices;
    volatility in the market value of our common stock;
    changes in general economic conditions in the markets we serve
    and changes in the manner in which employers provide healthcare
    coverage to their employees;
    our reliance on information technology systems maintained by
    HCA-IT;
    possible adverse rulings, judgments, settlements and other
    outcomes of pending litigation;
    the costs of complying with the Americans with Disabilities Act
    and the related litigation; and
    those risks and uncertainties described from time to time in our
    filings with the SEC.  Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk.  Interest
    Rates
    1 4
   51




---



##### Table of Contents



Item 4.
    Controls
    and Procedures.  Rule 13a-15
   PART II  OTHER
    INFORMATION Item 1.  Legal
    Proceedings    Item 6.
    Exhibits.  ExhibitNumber

Description3
.1

Amended and Restated Certificate
    of Incorporation of LifePoint Hospitals, Inc.(a)3
.2

Amended and Restated By-Laws of
    LifePoint Hospitals, Inc.(a)4
.1

Indenture, dated August 10,
    2005, between LifePoint Hospitals, Inc. as Issuer and Citibank,
    N.A., as Trustee(b)4
.2

Form of 3.25% Convertible
    Senior Subordinated Debenture due 2025 (included as part of
    Exhibit 4.1)(b)4
.3

Registration Rights Agreement,
    dated August 10, 2005, between LifePoint Hospitals, Inc.
    and Citigroup Global Markets Inc. as Representatives of the
    Initial Purchasers(b)10
.1

Second Amendment to the LifePoint
    Hospitals, Inc. Employee Stock Purchase Plan10
.2

Second Amendment to the LifePoint
    Hospitals, Inc. Outside Directors Stock and Incentive
    Compensation Plan10
.3

Form of LifePoint Hospitals, Inc.
    Outside Directors Restricted Stock Agreement10
.4

Certain senior executive officer
    compensation information(c)31
.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  52




---



##### Table of Contents



(a)
    
    Incorporated by reference to exhibits to the Registration
    Statement on
    Form S-8
    filed by LifePoint Hospitals, Inc. (formerly Lakers Holding
    Corp.) dated April 15, 2005, File
    Number 333-124151.(b)
    
    Incorporated by reference to exhibits to the Current Report on
    Form 8-K
    dated August 10, 2005 of LifePoint Hospitals, Inc., File
    Number 0-51251.(c)
    
    Incorporated by reference to Item 1.01 of the Current Report on
    Form 8-K
    dated March 1, 2006 of LifePoint Hospitals, Inc., File
    Number 0-51251. 53




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Gary D. Willis         54




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description3
.1

Amended and Restated Certificate
    of Incorporation of LifePoint Hospitals, Inc.(a)3
.2

Amended and Restated By-Laws of
    LifePoint Hospitals, Inc.(a)4
.1

Indenture, dated August 10,
    2005, between LifePoint Hospitals, Inc. as Issuer and Citibank,
    N.A., as Trustee(b)4
.2

Form of 3.25% Convertible
    Senior Subordinated Debenture due 2025 (included as part of
    Exhibit 4.1)(b)4
.3

Registration Rights Agreement,
    dated August 10, 2005, between LifePoint Hospitals, Inc.
    and Citigroup Global Markets Inc. as Representatives of the
    Initial Purchasers(b)10
.1

Second Amendment to the LifePoint
    Hospitals, Inc. Employee Stock Purchase Plan10
.2

Second Amendment to the LifePoint
    Hospitals, Inc. Outside Directors Stock and Incentive
    Compensation Plan10
.3

Form of LifePoint Hospitals, Inc.
    Outside Directors Restricted Stock Agreement10
.4

Certain senior executive officer
    compensation information(c)31
.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     (a)
    
    Incorporated by reference to exhibits to the Registration
    Statement on
    Form S-8
    filed by LifePoint Hospitals, Inc. (formerly Lakers Holding
    Corp.) dated April 15, 2005, File
    Number 333-124151.(b)
    
    Incorporated by reference to exhibits to the Current Report on
    Form 8-K
    dated August 10, 2005 of LifePoint Hospitals, Inc., File
    Number 0-51251(c)
    
    Incorporated by reference to Item 1.01 of the Current Report on
    Form 8-K
    dated March 1, 2006 of LifePoint Hospitals, Inc., File
    Number 0-51251.