##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number: 000-51251
 
  Delaware
    
    20-1538254(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)103 Powell Court 
Brentwood, Tennessee
    
    37027(Address of Principal Executive Offices)
    
    (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
 o o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    42Item 4. Controls and Procedures
    
    
    43PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    44Item 1A. Risk Factors
    
    
    44Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    44Item 6. Exhibits
    
    
    45EX-31.1EX-31.2EX-32.1EX-32.2




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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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(as adjusted)
    
    
    
    
    
    (as adjusted)Revenues
    
    $
    745.0
    
    
    $
    675.1
    
    
    $
    2,215.8
    
    
    $
    2,025.9Salaries and benefits
    
    
    295.8
    
    
    
    265.6
    
    
    
    875.0
    
    
    
    797.5Supplies
    
    
    102.3
    
    
    
    93.0
    
    
    
    304.2
    
    
    
    279.3Other operating expenses
    
    
    134.4
    
    
    
    128.3
    
    
    
    405.7
    
    
    
    372.2Provision for doubtful accounts
    
    
    98.7
    
    
    
    78.9
    
    
    
    281.1
    
    
    
    234.7Depreciation and amortization
    
    
    35.1
    
    
    
    32.2
    
    
    
    106.1
    
    
    
    97.8Interest expense, net
    
    
    25.5
    
    
    
    27.0
    
    
    
    77.2
    
    
    
    80.7Impairment charge
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    1.2691.8
    
    
    
    625.9
    
    
    
    2,049.3
    
    
    
    1,863.4Income from continuing operations before income taxes
    
    
    53.2
    
    
    
    49.2
    
    
    
    166.5
    
    
    
    162.5Provision for income taxes
    
    
    20.5
    
    
    
    20.1
    
    
    
    64.2
    
    
    
    64.6Income from continuing operations
    
    
    32.7
    
    
    
    29.1
    
    
    
    102.3
    
    
    
    97.9Discontinued operations, net of income taxes:Loss from discontinued operations
    
    
    (0.7
    )
    
    
    (3.3
    )
    
    
    (3.9
    )
    
    
    (6.5
    )Impairment charge
    
    
    
    
    
    
    (16.8
    )
    
    
    
    
    
    
    (14.5
    )Loss on sale of hospital
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.3
    )Loss from discontinued operations
    
    
    (0.7
    )
    
    
    (20.1
    )
    
    
    (4.5
    )
    
    
    (21.3
    )Net income
    
    
    32.0
    
    
    
    9.0
    
    
    
    97.8
    
    
    
    76.6Less: Net income attributable to noncontrolling
interests
    
    
    (0.6
    )
    
    
    (0.5
    )
    
    
    (1.7
    )
    
    
    (1.6
    )Net income attributable to LifePoint Hospitals, Inc.
    
    $
    31.4
    
    
    $
    8.5
    
    
    $
    96.1
    
    
    $
    75.0Basic earnings (loss) per share attributable to
LifePoint Hospitals, Inc. stockholders:Continuing operations
    
    $
    0.60
    
    
    $
    0.55
    
    
    $
    1.91
    
    
    $
    1.82Discontinued operations
    
    
    (0.01
    )
    
    
    (0.39
    )
    
    
    (0.08
    )
    
    
    (0.40
    )Net income
    
    $
    0.59
    
    
    $
    0.16
    
    
    $
    1.83
    
    
    $
    1.42Diluted earnings (loss) per share attributable to
LifePoint Hospitals, Inc. stockholders:Continuing operations
    
    $
    0.59
    
    
    $
    0.54
    
    
    $
    1.88
    
    
    $
    1.80Discontinued operations
    
    
    (0.01
    )
    
    
    (0.38
    )
    
    
    (0.08
    )
    
    
    (0.40
    )Net income
    
    $
    0.58
    
    
    $
    0.16
    
    
    $
    1.80
    
    
    $
    1.40Weighted average shares and dilutive securities
outstanding:Basic
    
    
    53.0
    
    
    
    51.7
    
    
    
    52.7
    
    
    
    52.7Diluted
    
    
    53.9
    
    
    
    52.8
    
    
    
    53.5
    
    
    
    53.7Amounts attributable to LifePoint Hospitals, Inc.
stockholders:Income from continuing operations, net of income
taxes
    
    $
    32.1
    
    
    $
    28.6
    
    
    $
    100.6
    
    
    $
    96.3Loss from discontinued operations, net of income
taxes
    
    
    (0.7
    )
    
    
    (20.1
    )
    
    
    (4.5
    )
    
    
    (21.3
    )Net income
    
    $
    31.4
    
    
    $
    8.5
    
    
    $
    96.1
    
    
    $
    75.0
  3




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share amounts)
 September 30,
    
    
    December 31,2009
    
    
    2008 (a)(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    119.5
    
    
    $
    75.7Accounts receivable, less allowances for doubtful accounts of $428.5 and $374.4
at September 30, 2009 and December 31, 2008, respectively
    
    
    332.3
    
    
    
    315.9Inventories
    
    
    72.5
    
    
    
    69.6Assets held for sale
    
    
    
    
    
    
    21.6Prepaid expenses
    
    
    14.0
    
    
    
    12.0Income taxes receivable
    
    
    2.6
    
    
    
    19.9Deferred tax assets
    
    
    124.0
    
    
    
    103.4Other current assets
    
    
    20.3
    
    
    
    19.2685.2
    
    
    
    637.3Property and equipment:Land
    
    
    74.9
    
    
    
    71.1Buildings and improvements
    
    
    1,355.4
    
    
    
    1,257.2Equipment
    
    
    811.6
    
    
    
    737.9Construction in progress (estimated cost to complete and equip after September
30, 2009 is $71.0)
    
    
    34.6
    
    
    
    39.72,276.5
    
    
    
    2,105.9Accumulated depreciation
    
    
    (786.4
    )
    
    
    (689.9
    )1,490.1
    
    
    
    1,416.0Deferred loan costs, net
    
    
    25.5
    
    
    
    31.3Intangible assets, net
    
    
    71.3
    
    
    
    68.8Other
    
    
    5.4
    
    
    
    10.4Goodwill
    
    
    1,524.2
    
    
    
    1,516.5Total assets
    
    $
    3,801.7
    
    
    $
    3,680.3LIABILITIES AND EQUITYCurrent liabilities:Accounts payable
    
    $
    72.1
    
    
    $
    92.3Accrued salaries
    
    
    76.6
    
    
    
    73.2Other current liabilities
    
    
    111.9
    
    
    
    94.5Current maturities of long-term debt
    
    
    1.1
    
    
    
    1.1261.7
    
    
    
    261.1Long-term debt
    
    
    1,393.6
    
    
    
    1,392.1Deferred income tax liabilities
    
    
    150.4
    
    
    
    153.2Reserves for self-insurance claims and other liabilities
    
    
    139.4
    
    
    
    146.2Long-term income tax liability
    
    
    60.3
    
    
    
    59.4Total liabilities
    
    
    2,005.4
    
    
    
    2,012.0Redeemable noncontrolling interests
    
    
    12.0
    
    
    
    12.8Equity:LifePoint Hospitals, Inc. stockholders 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; 60,250,679 and
58,787,009 shares issued at September 30, 2009 and December 31, 2008,
respectively
    
    
    0.6
    
    
    
    0.6Capital in excess of par value
    
    
    1,241.5
    
    
    
    1,212.6Accumulated other comprehensive loss
    
    
    (21.7
    )
    
    
    (28.3
    )Retained earnings
    
    
    710.5
    
    
    
    614.4Common stock in treasury, at cost, 5,474,030 and 5,346,156 shares at
September 30, 2009 and December 31, 2008, respectively
    
    
    (150.3
    )
    
    
    (147.3
    )Total LifePoint Hospitals, Inc. stockholders equity
    
    
    1,780.6
    
    
    
    1,652.0Noncontrolling interests
    
    
    3.7
    
    
    
    3.5Total equity
    
    
    1,784.3
    
    
    
    1,655.5Total liabilities and equity
    
    $
    3,801.7
    
    
    $
    3,680.3
 
 (a)
    
    Derived from audited consolidated financial statements, as adjusted (see Note 2).  4




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LIFEPOINT HOSPITALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In millions)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(as adjusted)
    
    
    
    
    
    (as adjusted)Cash flows from operating activities:Net income
    
    $
    32.0
    
    
    $
    9.0
    
    
    $
    97.8
    
    
    $
    76.6Adjustments to reconcile net income to net cash provided by
operating activities:Loss from discontinued operations
    
    
    0.7
    
    
    
    20.1
    
    
    
    4.5
    
    
    
    21.3Stock-based compensation
    
    
    5.9
    
    
    
    5.5
    
    
    
    16.5
    
    
    
    17.6ESOP expense (non-cash portion)
    
    
    
    
    
    
    2.2
    
    
    
    
    
    
    
    6.1Depreciation and amortization
    
    
    35.1
    
    
    
    32.2
    
    
    
    106.1
    
    
    
    97.8Amortization of physician minimum revenue guarantees
    
    
    3.5
    
    
    
    2.6
    
    
    
    9.7
    
    
    
    6.8Amortization of convertible debt discounts
    
    
    5.3
    
    
    
    5.0
    
    
    
    15.6
    
    
    
    14.6Amortization of deferred loan costs
    
    
    2.1
    
    
    
    1.8
    
    
    
    5.8
    
    
    
    5.5Deferred income tax benefit
    
    
    (14.2
    )
    
    
    (13.0
    )
    
    
    (24.9
    )
    
    
    (6.9
    )Reserves for self-insurance claims, net of payments
    
    
    0.7
    
    
    
    (0.2
    )
    
    
    11.8
    
    
    
    7.9Increase (decrease) in cash from operating assets and
liabilities, net of effects from acquisitions and
divestitures:Accounts receivable
    
    
    5.3
    
    
    
    (9.5
    )
    
    
    (10.1
    )
    
    
    (12.3
    )Inventories and other current assets
    
    
    (0.5
    )
    
    
    (6.3
    )
    
    
    (3.4
    )
    
    
    (1.8
    )Accounts payable and accrued expenses
    
    
    (13.4
    )
    
    
    10.3
    
    
    
    (19.1
    )
    
    
    6.4Income taxes payable/receivable
    
    
    6.3
    
    
    
    21.5
    
    
    
    17.3
    
    
    
    17.5Other
    
    
    1.5
    
    
    
    0.9
    
    
    
    1.7
    
    
    
    3.2Net cash provided by operating activities  continuing
operations
    
    
    70.3
    
    
    
    82.1
    
    
    
    229.3
    
    
    
    260.3Net cash provided by (used in) operating activities 
discontinued operations
    
    
    3.9
    
    
    
    (6.1
    )
    
    
    1.0
    
    
    
    (11.2
    )Net cash provided by operating activities
    
    
    74.2
    
    
    
    76.0
    
    
    
    230.3
    
    
    
    249.1Cash flows from investing activities:Purchase of property and equipment
    
    
    (33.7
    )
    
    
    (37.5
    )
    
    
    (118.8
    )
    
    
    (111.5
    )Acquisitions, net of cash acquired
    
    
    
    
    
    
    (1.3
    )
    
    
    (79.7
    )
    
    
    (10.6
    )Other
    
    
    
    
    
    
    (4.9
    )
    
    
    3.9
    
    
    
    (4.9
    )Net cash used in investing activities  continuing operations
    
    
    (33.7
    )
    
    
    (43.7
    )
    
    
    (194.6
    )
    
    
    (127.0
    )Net cash provided by (used in) investing activities 
discontinued operations
    
    
    9.1
    
    
    
    
    
    
    
    19.5
    
    
    
    (5.0
    )Net cash used in investing activities
    
    
    (24.6
    )
    
    
    (43.7
    )
    
    
    (175.1
    )
    
    
    (132.0
    )Cash flows from financing activities:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.4Payments on borrowings
    
    
    
    
    
    
    (10.0
    )
    
    
    (13.5
    )
    
    
    (10.0
    )Repurchases of common stock
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    (3.0
    )
    
    
    (118.2
    )Proceeds from exercise of stock options
    
    
    0.3
    
    
    
    3.3
    
    
    
    9.9
    
    
    
    3.4Proceeds from employee stock purchase plans
    
    
    0.6
    
    
    
    0.5
    
    
    
    1.0
    
    
    
    0.8Distributions to noncontrolling interests, net of proceeds
    
    
    (0.7
    )
    
    
    (1.4
    )
    
    
    (1.4
    )
    
    
    (2.4
    )Proceeds from (purchase of) redeemable noncontrolling
interests
    
    
    
    
    
    
    2.2
    
    
    
    (0.8
    )
    
    
    2.2Capital lease payments and other
    
    
    (1.9
    )
    
    
    0.1
    
    
    
    (3.6
    )
    
    
    (4.9
    )Net cash used in financing activities
    
    
    (2.1
    )
    
    
    (5.4
    )
    
    
    (11.4
    )
    
    
    (118.7
    )Change in cash and cash equivalents
    
    
    47.5
    
    
    
    26.9
    
    
    
    43.8
    
    
    
    (1.6
    )Cash and cash equivalents at beginning of period
    
    
    72.0
    
    
    
    24.6
    
    
    
    75.7
    
    
    
    53.1Cash and cash equivalents at end of period
    
    $
    119.5
    
    
    $
    51.5
    
    
    $
    119.5
    
    
    $
    51.5Supplemental disclosure of cash flow information:Interest payments
    
    $
    15.7
    
    
    $
    17.5
    
    
    $
    54.4
    
    
    $
    58.6Capitalized interest
    
    $
    0.2
    
    
    $
    0.3
    
    
    $
    0.8
    
    
    $
    0.6Income taxes paid, net
    
    $
    24.9
    
    
    $
    13.3
    
    
    $
    68.5
    
    
    $
    55.0
  5




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 CONDENSED CONSOLIDATED STATEMENT OF EQUITY
For the Nine Months Ended September 30, 2009
Unaudited
(In millions)
 LifePoint Hospitals, Inc. StockholdersAccumulatedCapital in
    
    
    OtherCommon Stock
    
    
    Excess of
    
    
    Comprehensive
    
    
    Retained
    
    
    Treasury
    
    
    NoncontrollingShares
    
    
    Amount
    
    
    Par Value
    
    
    Income (loss)
    
    
    Earnings
    
    
    Stock
    
    
    Interests
    
    
    TotalBalance at December 31, 2008 (a)
    
    
    53.4
    
    
    $
    0.6
    
    
    $
    1,212.6
    
    
    $
    (28.3
    )
    
    $
    614.4
    
    
    $
    (147.3
    )
    
    $
    3.5
    
    
    $
    1,655.5Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96.1
    
    
    
    
    
    
    
    1.7
    
    
    
    97.8Net change in fair value of
interest rate swap, net of
tax provision of $3.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.6Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104.4Exercise of stock options and
tax benefits of stock-based
awards
    
    
    0.8
    
    
    
    
    
    
    
    11.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.3Stock activity in connection
with employee stock purchase
plan
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.0Stock-based compensation
    
    
    0.8
    
    
    
    
    
    
    
    16.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.5Repurchases of common stock, at
cost
    
    
    (0.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (3.0
    )Cash proceeds from (cash
distributions to)
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.5
    )
    
    
    (1.4
    )Balance at September 30, 2009
    
    
    54.8
    
    
    $
    0.6
    
    
    $
    1,241.5
    
    
    $
    (21.7
    )
    
    $
    710.5
    
    
    $
    (150.3
    )
    
    $
    3.7
    
    
    $
    1,784.3
 
 (a)
    
    Derived from audited consolidated financial statements, as adjusted (see Note 2).  6




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2009
Unaudited
 Note 1. Basis of Presentation
   TM TM
   Note 2. New Accounting Standards
 ASC 810-10-65-1, Transition Related to FASB Statement No. 160 Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51
  7




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  
    
    The Company reclassified a portion of its noncontrolling interests from the
mezzanine section of its accompanying condensed consolidated balance sheets to equity.
As of December 31, 2008, this reclassification totaled $3.5 million. Certain of the
Companys noncontrolling interests will continue to be classified in the mezzanine
section of its accompanying condensed consolidated balance sheets as these
noncontrolling interests include redemption features that cause these interests not to
meet the requirements for classification as equity in accordance with ASC 480-10-S99-3.
Redemption of these interests features would require the delivery of cash.
    
    Net income attributable to noncontrolling interests is no longer deducted to
arrive at net income. Instead, net income is attributed to the controlling and
noncontrolling interests in the accompanying condensed consolidated statements of
operations. As a result, net income for the three and nine months ended September 30,
2008 increased by $0.5 million and $1.6 million, respectively, from net income
previously reported. These changes had no impact on the Companys earnings per share
calculations.
 ASC 470-20, Debt with Conversion and Other Options
 1 2 1 2 1 4 1 4 1 2 1 4 1 2 1 4
 8




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  As Originally
    
    Adjustments for the
    
    As CurrentlyReported
    
    Adoption of ASC 470-20
    
    ReportedCondensed consolidated balance sheet as of
December 31, 2008:Long-term debt
    
    $
    1,515.6
    
    
    $
    (123.5
    )
    
    $
    1,392.1Deferred income tax liabilities
    
    $
    103.1
    
    
    $
    50.1
    
    
    $
    153.2Capital in excess of par value
    
    $
    1,116.3
    
    
    $
    96.3
    
    
    $
    1,212.6Retained earnings
    
    $
    637.3
    
    
    $
    (22.9
    )
    
    $
    614.4Condensed consolidated statement of operations for the
three months ended September 30, 2008:Interest expense, net
    
    $
    22.1
    
    
    $
    4.9
    
    
    $
    27.0Provision for income taxes
    
    $
    22.1
    
    
    $
    (2.0
    )
    
    $
    20.1Net income attributable to LifePoint Hospitals, Inc.
    
    $
    11.4
    
    
    $
    (2.9
    )
    
    $
    8.5Basic earnings per share attributable to LifePoint
Hospitals, Inc. stockholders
    
    $
    0.22
    
    
    $
    (0.06
    )
    
    $
    0.16Diluted earnings per share attributable to
LifePoint Hospitals, Inc. stockholders
    
    $
    0.22
    
    
    $
    (0.06
    )
    
    $
    0.16Condensed consolidated statement of operations for the
nine months ended September 30, 2008:Interest expense, net
    
    $
    66.2
    
    
    $
    14.5
    
    
    $
    80.7Provision for income taxes
    
    $
    70.4
    
    
    $
    (5.8
    )
    
    $
    64.6Net income attributable to LifePoint Hospitals, Inc.
    
    $
    83.7
    
    
    $
    (8.7
    )
    
    $
    75.0Basic earnings per share attributable to LifePoint
Hospitals, Inc. stockholders
    
    $
    1.59
    
    
    $
    (0.17
    )
    
    $
    1.42Diluted earnings per share attributable to
LifePoint Hospitals, Inc. stockholders
    
    $
    1.56
    
    
    $
    (0.16
    )
    
    $
    1.40
  September 30, 2009
    
    
    December 31, 200831/2% Notes:Principal balance
    
    $
    575.0
    
    
    $
    575.0Unamortized discount
    
    
    (86.0
    )
    
    
    (97.4
    )Net carrying balance
    
    $
    489.0
    
    
    $
    477.631/4% Debentures:Principal balance
    
    $
    225.0
    
    
    $
    225.0Unamortized discount
    
    
    (21.9
    )
    
    
    (26.1
    )Net carrying balance
    
    $
    203.1
    
    
    $
    198.9
 1 2 1 4 1 2 1 4 1 4
 9




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    200831/2% Notes:Contractual cash interest expense
    
    $
    5.0
    
    
    $
    5.0
    
    
    $
    15.1
    
    
    $
    15.1Non-cash interest expense (discount
amortization)
    
    
    3.9
    
    
    
    3.6
    
    
    
    11.4
    
    
    
    10.6Total interest expense
    
    $
    8.9
    
    
    $
    8.6
    
    
    $
    26.5
    
    
    $
    25.731/4% Debentures:Contractual cash interest expense
    
    $
    1.9
    
    
    $
    1.9
    
    
    $
    5.5
    
    
    $
    5.5Non-cash interest expense (discount
amortization)
    
    
    1.4
    
    
    
    1.4
    
    
    
    4.2
    
    
    
    4.0Total interest expense
    
    $
    3.3
    
    
    $
    3.3
    
    
    $
    9.7
    
    
    $
    9.5
 ASC 805-10, Business Combinations, (ASC 805-10) and ASC 805-20, Identifiable Assets and
Liabilities, and Any Noncontrolling Interest, (ASC 805-20)
   ASC 820-10, Fair Value Measurements and Disclosures, (ASC 820-10)
  10




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   ASC 815-10, Derivatives and Hedging, (ASC 815-10)
  ASC 825-10, Financial Instruments, (ASC 825-10)
  Cash and Cash Equivalents, Accounts Receivable and Accounts Payable
 LongTerm Debt. 1 2 1 4
 Carrying Amount
    
    Fair ValueSeptember 30,
    
    December 31,
    
    September 30,
    
    December 31,2009
    
    2008
    
    2009
    
    2008Term B Loans
    
    $
    692.9
    
    
    $
    706.4
    
    
    $
    672.1
    
    
    $
    586.331/2% Notes, excluding unamortized discount
    
    $
    575.0
    
    
    $
    575.0
    
    
    $
    495.2
    
    
    $
    387.331/4% Debentures, excluding unamortized discount
    
    $
    225.0
    
    
    $
    225.0
    
    
    $
    195.8
    
    
    $
    162.0
 1 4 1 2
 11




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Interest Rate Swap.
  ASC 855-10, Subsequent Events, (ASC 855-10)
  Note 3. Acquisition
    Accounts receivable
    
    $
    12.2Inventories
    
    
    2.1Prepaid expenses and other current assets
    
    
    0.6Property and equipment
    
    
    71.4Goodwill
    
    
    8.6Total assets acquired, excluding cash
    
    
    94.9Accounts payable
    
    
    6.2Accrued salaries
    
    
    3.6Other current liabilities
    
    
    1.2Capital leases
    
    
    1.3Total liabilities assumed
    
    
    12.3Net assets acquired
    
    $
    82.6
   12




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 4. Discontinued Operations
      Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Revenues
    
    $
    0.2
    
    
    $
    11.5
    
    
    $
    16.3
    
    
    $
    42.3Loss before income tax benefits
    
    $
    (1.1
    )
    
    $
    (5.0
    )
    
    $
    (6.8
    )
    
    $
    (10.1
    )Net loss
    
    $
    (0.7
    )
    
    $
    (3.3
    )
    
    $
    (3.9
    )
    
    $
    (6.5
    )
 Note 5. Repurchases of Common Stock
  13




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note 6. Goodwill and Intangible Assets
 Goodwill
   Contract-Based Physician Minimum Revenue Guarantees
   Non-Competition Agreements
  Certificates of Need
  14




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Summary of Intangible Assets
  GrossCarrying
    
    
    Accumulated
    
    
    NetClass of Intangible Asset
    
    Amount
    
    
    Amortization
    
    
    TotalAmortized intangible assets:Contract-based physician minimum revenue guarantees:Balance at December 31, 2008
    
    $
    66.4
    
    
    $
    (16.2
    )
    
    $
    50.2Additions, net of terminations
    
    
    10.4
    
    
    
    2.6
    
    
    
    13.0Amortization expense
    
    
    
    
    
    
    (9.7
    )
    
    
    (9.7
    )Balance at September 30, 2009
    
    $
    76.8
    
    
    $
    (23.3
    )
    
    $
    53.5Non-competition agreements:Balance at December 31, 2008
    
    $
    20.2
    
    
    $
    (8.1
    )
    
    $
    12.1Additions
    
    
    0.2
    
    
    
    
    
    
    
    0.2Amortization expense
    
    
    
    
    
    
    (1.0
    )
    
    
    (1.0
    )Balance at September 30, 2009
    
    $
    20.4
    
    
    $
    (9.1
    )
    
    $
    11.3Indefinite-lived intangible assets:Certificates of need:Balance at December 31, 2008 and September 30, 2009
    
    $
    6.5
    
    
    $
    
    
    
    $
    6.5Total intangible assets:Balance at December 31, 2008
    
    $
    93.1
    
    
    $
    (24.3
    )
    
    $
    68.8Additions, net of terminations
    
    
    10.6
    
    
    
    2.6
    
    
    
    13.2Amortization expense
    
    
    
    
    
    
    (10.7
    )
    
    
    (10.7
    )Balance at September 30, 2009
    
    $
    103.7
    
    
    $
    (32.4
    )
    
    $
    71.3
 Note 7. Stock-Based Compensation
  Stock Options
  15




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Nine Months EndedSeptember 30,2009
    
    
    2008Expected volatility
    
    
    40.3
    %
    
    
    31.9
    %Risk free interest rate (range)
    
    
    0.10% - 3.58
    %
    
    
    1.07% - 3.89
    %Expected dividends
    
    
    
    
    
    
    Average expected term (years)
    
    
    5.4
    
    
    
    5.3Fair value per share of stock options granted
    
    $
    8.01
    
    
    $
    8.15
   Other Stock-Based Awards
     16




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Summary
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Other stock-based awards
    
    $
    4.2
    
    
    $
    3.8
    
    
    $
    11.4
    
    
    $
    12.0Stock options
    
    
    1.7
    
    
    
    1.7
    
    
    
    5.1
    
    
    
    5.6Total stock-based compensation expense
    
    $
    5.9
    
    
    $
    5.5
    
    
    $
    16.5
    
    
    $
    17.6Tax benefits on stock-based compensation expense
    
    $
    2.5
    
    
    $
    2.2
    
    
    $
    7.1
    
    
    $
    7.2
  Note 8. Interest Rate Swap
  Notional AmountDate Range
    
    (In millions)November 30, 2007 to November 28, 2008
    
    $
    750.0November 28, 2008 to November 30, 2009
    
    
    600.0November 30, 2009 to November 30, 2010
    
    
    450.0November 30, 2010 to May 30, 2011
    
    
    300.0
  17




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Balance Sheet Location
    
    
    September 30, 2009
    
    
    December 31, 2008Derivative
designated as a
hedging instrument
under ASC 815-10:Interest rate swap
    
    Reserves for self-insurance claims andother liabilities
    
    
    
    $
    34.9
    
    
    $
    45.0
  Location of gain (loss)
    
    
    Amount of gain (loss)recognized in Income on
    
    
    recognized in Income onAmount of gain (loss)
    
    
    Derivative (Ineffective
    
    
    Derivative (Ineffectiverecognized in OCI on
    
    
    Portion and Amount
    
    
    Portion and AmountDerivative (Effective
    
    
    Excluded from
    
    
    Excluded fromPortion)
    
    
    Effectiveness Testing)
    
    
    Effectiveness Testing)For the Three
    
    
    For the Nine
    
    
    
    
    
    
    For the Three
    
    
    For the NineMonths Ended
    
    
    Months Ended
    
    
    
    
    
    
    Months Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,
    
    
    
    
    
    
    September 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    
    
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Derivative in ASC
815-10 cash flow
hedging
relationships:Interest rate swap
    
    $
    3.2
    
    
    $
    0.4
    
    
    $
    10.1
    
    
    $
    1.6
    
    
    Interest expense, net
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (0.6
    )
 Fair Value
  18




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##### Table of Contents



LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 9. Earnings (Loss) Per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator for basic and diluted earnings per
share attributable to LifePoint Hospitals, Inc.:Income from continuing operations
    
    $
    32.7
    
    
    $
    29.1
    
    
    $
    102.3
    
    
    $
    97.9Less: Net income attributable to noncontrolling
interests
    
    
    (0.6
    )
    
    
    (0.5
    )
    
    
    (1.7
    )
    
    
    (1.6
    )Income from continuing operations attributable to
LifePoint Hospitals, Inc. stockholders
    
    
    32.1
    
    
    
    28.6
    
    
    
    100.6
    
    
    
    96.3Loss from discontinued operations, net of income
taxes
    
    
    (0.7
    )
    
    
    (20.1
    )
    
    
    (4.5
    )
    
    
    (21.3
    )Net income attributable to LifePoint Hospitals, Inc.
    
    $
    31.4
    
    
    $
    8.5
    
    
    $
    96.1
    
    
    $
    75.0Denominator:Weighted average shares outstanding  basic
    
    
    53.0
    
    
    
    51.7
    
    
    
    52.7
    
    
    
    52.7Effect of dilutive securities: stock options and
other stock-based awards
    
    
    0.9
    
    
    
    1.1
    
    
    
    0.8
    
    
    
    1.0Weighted average shares outstanding  diluted
    
    
    53.9
    
    
    
    52.8
    
    
    
    53.5
    
    
    
    53.7Basic earnings (loss) per share
attributable to LifePoint
Hospitals, Inc. stockholders:Continuing operations
    
    $
    0.60
    
    
    $
    0.55
    
    
    $
    1.91
    
    
    $
    1.82Discontinued operations
    
    
    (0.01
    )
    
    
    (0.39
    )
    
    
    (0.08
    )
    
    
    (0.40
    )Net income
    
    $
    0.59
    
    
    $
    0.16
    
    
    $
    1.83
    
    
    $
    1.42Diluted earnings (loss) per
share attributable to LifePoint
Hospitals, Inc. stockholders:Continuing operations
    
    $
    0.59
    
    
    $
    0.54
    
    
    $
    1.88
    
    
    $
    1.80Discontinued operations
    
    
    (0.01
    )
    
    
    (0.38
    )
    
    
    (0.08
    )
    
    
    (0.40
    )Net income
    
    $
    0.58
    
    
    $
    0.16
    
    
    $
    1.80
    
    
    $
    1.40
 1 2 1 4 1 2 1 4
 Note 10. Contingencies
 Legal Proceedings and General Liability Claims
  19




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LIFEPOINT HOSPITALS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Physician Commitments
  Capital Expenditure Commitments
  Acquisitions
  Note 11. Subsequent Events
  20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
     Risk Factors
 Overview
  21




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##### Table of Contents



Competitive and Regulatory Environment
      22




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##### Table of Contents



Medicare Reimbursement
  Health Information Practices
  Business Strategy
 ®
 23




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##### Table of Contents



Additional Growth
  24




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##### Table of Contents



Revenue Sources
      Other Events
     25




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##### Table of Contents



Results of Operations
 Managements Discussion
and Analysis of Financial Condition and Results of Operations:
 Acquisition.
 Admissions.
 bps.
 Continuing operations.
 ESOP
 Effective tax rate
 Emergency room visits.
 Equivalent admissions.
 Net revenue days outstanding
 Medicare case mix index.
 N/A. .
 Outpatient surgeries.
 Same-hospital
 26




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##### Table of Contents



Operating Results Summary
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesRevenues
    
    $
    745.0
    
    
    
    100.0
    %
    
    $
    675.1
    
    
    
    100.0
    %
    
    $
    2,215.8
    
    
    
    100.0
    %
    
    $
    2,025.9
    
    
    
    100.0
    %Salaries and benefits
    
    
    295.8
    
    
    
    39.7
    
    
    
    265.6
    
    
    
    39.3
    
    
    
    875.0
    
    
    
    39.5
    
    
    
    797.5
    
    
    
    39.4Supplies
    
    
    102.3
    
    
    
    13.7
    
    
    
    93.0
    
    
    
    13.8
    
    
    
    304.2
    
    
    
    13.7
    
    
    
    279.3
    
    
    
    13.8Other operating expenses
    
    
    134.4
    
    
    
    18.0
    
    
    
    128.3
    
    
    
    19.0
    
    
    
    405.7
    
    
    
    18.3
    
    
    
    372.2
    
    
    
    18.3Provision for doubtful
accounts
    
    
    98.7
    
    
    
    13.3
    
    
    
    78.9
    
    
    
    11.7
    
    
    
    281.1
    
    
    
    12.7
    
    
    
    234.7
    
    
    
    11.6Depreciation and
amortization
    
    
    35.1
    
    
    
    4.8
    
    
    
    32.2
    
    
    
    4.8
    
    
    
    106.1
    
    
    
    4.8
    
    
    
    97.8
    
    
    
    4.8Interest expense, net
    
    
    25.5
    
    
    
    3.4
    
    
    
    27.0
    
    
    
    4.0
    
    
    
    77.2
    
    
    
    3.5
    
    
    
    80.7
    
    
    
    4.0Impairment charge
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    0.1691.8
    
    
    
    92.9
    
    
    
    625.9
    
    
    
    92.7
    
    
    
    2,049.3
    
    
    
    92.5
    
    
    
    1,863.4
    
    
    
    92.0Income from continuing
operations before income
taxes
    
    
    53.2
    
    
    
    7.1
    
    
    
    49.2
    
    
    
    7.3
    
    
    
    166.5
    
    
    
    7.5
    
    
    
    162.5
    
    
    
    8.0Provision for income taxes
    
    
    20.5
    
    
    
    2.7
    
    
    
    20.1
    
    
    
    3.0
    
    
    
    64.2
    
    
    
    2.9
    
    
    
    64.6
    
    
    
    3.2Income from continuing
operations
    
    
    32.7
    
    
    
    4.4
    
    
    
    29.1
    
    
    
    4.3
    
    
    
    102.3
    
    
    
    4.6
    
    
    
    97.9
    
    
    
    4.8Less: Net income
attributable to
noncontrolling
interests
    
    
    (0.6
    )
    
    
    (0.1
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (1.7
    )
    
    
    (0.1
    )
    
    
    (1.6
    )
    
    
    (0.1
    )Income from continuing
operations attributable
to LifePoint Hospitals,
Inc.
    
    $
    32.1
    
    
    
    4.3
    %
    
    $
    28.6
    
    
    
    4.3
    %
    
    $
    100.6
    
    
    
    4.5
    %
    
    $
    96.3
    
    
    
    4.7
    %
 For the Three Months Ended September 30, 2009 and 2008
 Revenues
  Three Months EndedSeptember 30,
    
    Increase
    
    % Increase2009
    
    2008
    
    (Decrease)
    
    (Decrease)Continuing operations:Revenues (dollars in millions)
    
    $
    745.0
    
    
    $
    675.1
    
    
    $
    69.9
    
    
    
    10.4
    %Admissions
    
    
    46,354
    
    
    
    45,980
    
    
    
    374
    
    
    
    0.8Equivalent admissions
    
    
    99,693
    
    
    
    93,885
    
    
    
    5,808
    
    
    
    6.2Revenues per equivalent admission
    
    $
    7,474
    
    
    $
    7,191
    
    
    $
    283
    
    
    
    3.9Medicare case mix index
    
    
    1.29
    
    
    
    1.26
    
    
    
    0.03
    
    
    
    2.4Average length of stay (days)
    
    
    4.2
    
    
    
    4.2
    
    
    
    
    
    
    
    Inpatient surgeries
    
    
    14,036
    
    
    
    13,997
    
    
    
    39
    
    
    
    0.3Outpatient surgeries
    
    
    38,406
    
    
    
    36,926
    
    
    
    1,480
    
    
    
    4.0Emergency room visits
    
    
    242,878
    
    
    
    219,852
    
    
    
    23,026
    
    
    
    10.5Outpatient factor
    
    
    2.15
    
    
    
    2.04
    
    
    
    0.11
    
    
    
    5.4Same-hospital:Revenues (dollars in millions)
    
    $
    714.0
    
    
    $
    675.1
    
    
    $
    38.9
    
    
    
    5.8
    %Admissions
    
    
    44,278
    
    
    
    45,980
    
    
    
    (1,702
    )
    
    
    (3.7
    )Equivalent admissions
    
    
    95,376
    
    
    
    93,885
    
    
    
    1,491
    
    
    
    1.6Revenues per equivalent admission
    
    $
    7,486
    
    
    $
    7,191
    
    
    $
    295
    
    
    
    4.1Medicare case mix index
    
    
    1.30
    
    
    
    1.26
    
    
    
    0.04
    
    
    
    3.2Average length of stay (days)
    
    
    4.2
    
    
    
    4.2
    
    
    
    
    
    
    
    Inpatient surgeries
    
    
    13,368
    
    
    
    13,997
    
    
    
    (629
    )
    
    
    (4.5
    )Outpatient surgeries
    
    
    36,704
    
    
    
    36,926
    
    
    
    (222
    )
    
    
    (0.6
    )Emergency room visits
    
    
    231,848
    
    
    
    219,852
    
    
    
    11,996
    
    
    
    5.5Outpatient factor
    
    
    2.15
    
    
    
    2.04
    
    
    
    0.11
    
    
    
    5.4
 27




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##### Table of Contents



Three MonthsEndedSeptember 30,2009
    
    2008Medicare
    
    
    28.9
    %
    
    
    30.2
    %Medicaid
    
    
    10.5
    
    
    
    9.7HMOs, PPOs and other private insurers
    
    
    44.2
    
    
    
    44.9Self-Pay
    
    
    13.5
    
    
    
    12.6Other
    
    
    2.9
    
    
    
    2.6100.0
    %
    
    
    100.0
    %
    Expenses
 Salaries and Benefits
  Three Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Salaries and benefits (dollars in millions)
    
    $
    295.8
    
    
    
    39.7
    %
    
    $
    265.6
    
    
    
    39.3
    %
    
    $
    30.2
    
    
    
    11.5
    %Man-hours per equivalent admission
    
    
    92.6
    
    
    
    N/A
    
    
    
    92.3
    
    
    
    N/A
    
    
    
    0.3
    
    
    
    0.3
    %Salaries and benefits per equivalent admission
    
    $
    2,924
    
    
    
    N/A
    
    
    $
    2,804
    
    
    
    N/A
    
    
    $
    120
    
    
    
    4.3
    %
  28




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##### Table of Contents



Supplies
  Three Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Supplies (dollars in millions)
    
    $
    102.3
    
    
    
    13.7
    %
    
    $
    93.0
    
    
    
    13.8
    %
    
    $
    9.3
    
    
    
    10.1
    %Supplies per equivalent admission
    
    $
    1,022
    
    
    
    N/A
    
    
    $
    987
    
    
    
    N/A
    
    
    $
    35
    
    
    
    3.5
    %
  Other Operating Expenses
  Three Months Ended September 30,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2009
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Professional fees
    
    $
    18.9
    
    
    
    2.5
    %
    
    $
    16.6
    
    
    
    2.5
    %
    
    $
    2.3
    
    
    
    14.2
    %Utilities
    
    
    13.3
    
    
    
    1.8
    
    
    
    14.2
    
    
    
    2.1
    
    
    
    (0.9
    )
    
    
    (6.6
    )Repairs and maintenance
    
    
    16.0
    
    
    
    2.2
    
    
    
    14.6
    
    
    
    2.2
    
    
    
    1.4
    
    
    
    9.8Rents and leases
    
    
    7.1
    
    
    
    1.0
    
    
    
    6.7
    
    
    
    1.0
    
    
    
    0.4
    
    
    
    5.9Insurance
    
    
    9.7
    
    
    
    1.3
    
    
    
    10.4
    
    
    
    1.5
    
    
    
    (0.7
    )
    
    
    (7.0
    )Physician recruiting
    
    
    6.7
    
    
    
    0.9
    
    
    
    6.1
    
    
    
    0.9
    
    
    
    0.6
    
    
    
    8.5Contract services
    
    
    36.2
    
    
    
    4.9
    
    
    
    33.9
    
    
    
    5.0
    
    
    
    2.3
    
    
    
    6.8Non-income taxes
    
    
    10.5
    
    
    
    1.4
    
    
    
    10.4
    
    
    
    1.5
    
    
    
    0.1
    
    
    
    0.7Other
    
    
    16.0
    
    
    
    2.0
    
    
    
    15.4
    
    
    
    2.3
    
    
    
    0.6
    
    
    
    3.7$
    134.4
    
    
    
    18.0
    %
    
    $
    128.3
    
    
    
    19.0
    %
    
    $
    6.1
    
    
    
    4.6
    %
  29




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##### Table of Contents



Provision for Doubtful Accounts
  Three Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Provision for doubtful accounts
    
    $
    98.7
    
    
    
    13.3
    %
    
    $
    78.9
    
    
    
    11.7
    %
    
    $
    19.8
    
    
    
    25.2
    %Related key indicators:Charity care write-offs
    
    $
    16.4
    
    
    
    0.9
    %
    
    $
    13.4
    
    
    
    0.8
    %
    
    $
    3.0
    
    
    
    21.6
    %Self-pay revenues, net of charity care
write-offs and uninsured discounts
    
    $
    100.4
    
    
    
    13.5
    %
    
    $
    85.1
    
    
    
    12.6
    %
    
    $
    15.3
    
    
    
    18.0
    %Net revenue days outstanding (at end of period)
    
    
    41.0
    
    
    
    N/A
    
    
    
    42.6
    
    
    
    N/A
    
    
    
    (1.6
    )
    
    
    (3.8
    )%
 Managements Discussion and Analysis of Financial
Condition and Results of Operations
 Depreciation and Amortization
  Interest Expense
  30




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##### Table of Contents



Provision for Income Taxes
  For the Nine Months Ended September 30, 2009 and 2008
 Revenues
  Nine Months EndedSeptember 30,
    
    Increase
    
    % Increase2009
    
    2008
    
    (Decrease)
    
    (Decrease)Continuing operations:Revenues (dollars in millions)
    
    $
    2,215.8
    
    
    $
    2,025.9
    
    
    $
    189.9
    
    
    
    9.4
    %Admissions
    
    
    141,587
    
    
    
    143,039
    
    
    
    (1,452
    )
    
    
    (1.0
    )Equivalent admissions
    
    
    295,492
    
    
    
    284,218
    
    
    
    11,274
    
    
    
    4.0Revenues per equivalent admission
    
    $
    7,499
    
    
    $
    7,128
    
    
    $
    371
    
    
    
    5.2Medicare case mix index
    
    
    1.28
    
    
    
    1.27
    
    
    
    0.01
    
    
    
    0.8Average length of stay (days)
    
    
    4.3
    
    
    
    4.3
    
    
    
    
    
    
    
    Inpatient surgeries
    
    
    41,245
    
    
    
    41,463
    
    
    
    (218
    )
    
    
    (0.5
    )Outpatient surgeries
    
    
    113,697
    
    
    
    108,982
    
    
    
    4,715
    
    
    
    4.3Emergency room visits
    
    
    703,122
    
    
    
    663,703
    
    
    
    39,419
    
    
    
    5.9Outpatient factor
    
    
    2.09
    
    
    
    1.99
    
    
    
    0.10
    
    
    
    5.0Same-hospital:Revenues (dollars in millions)
    
    $
    2,131.0
    
    
    $
    2,025.9
    
    
    $
    105.1
    
    
    
    5.2
    %Admissions
    
    
    135,814
    
    
    
    143,039
    
    
    
    (7,225
    )
    
    
    (5.1
    )Equivalent admissions
    
    
    284,123
    
    
    
    284,218
    
    
    
    (95
    )
    
    
    Revenues per equivalent admission
    
    $
    7,500
    
    
    $
    7,128
    
    
    $
    372
    
    
    
    5.2Medicare case mix index
    
    
    1.29
    
    
    
    1.27
    
    
    
    0.02
    
    
    
    1.6Average length of stay (days)
    
    
    4.3
    
    
    
    4.3
    
    
    
    
    
    
    
    Inpatient surgeries
    
    
    39,450
    
    
    
    41,463
    
    
    
    (2,013
    )
    
    
    (4.9
    )Outpatient surgeries
    
    
    108,677
    
    
    
    108,982
    
    
    
    (305
    )
    
    
    (0.3
    )Emergency room visits
    
    
    674,720
    
    
    
    663,703
    
    
    
    11,017
    
    
    
    1.7Outpatient factor
    
    
    2.09
    
    
    
    1.99
    
    
    
    0.10
    
    
    
    5.0
  Nine MonthsEndedSeptember 30,2009
    
    2008Medicare
    
    
    29.8
    %
    
    
    31.4
    %Medicaid
    
    
    10.3
    
    
    
    9.6HMOs, PPOs and other private insurers
    
    
    44.1
    
    
    
    44.2Self-Pay
    
    
    13.1
    
    
    
    12.0Other
    
    
    2.7
    
    
    
    2.8100.0
    %
    
    
    100.0
    %
 31




---



##### Table of Contents



Expenses
 Salaries and Benefits
  Nine Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Salaries and benefits (dollars in millions)
    
    $
    875.0
    
    
    
    39.5
    %
    
    $
    797.5
    
    
    
    39.4
    %
    
    $
    77.5
    
    
    
    9.7
    %Man-hours per equivalent admission
    
    
    92.0
    
    
    
    N/A
    
    
    
    92.0
    
    
    
    N/A
    
    
    
    
    
    
    
    
    %Salaries and benefits per equivalent admission
    
    $
    2,944
    
    
    
    N/A
    
    
    $
    2,793
    
    
    
    N/A
    
    
    $
    151
    
    
    
    5.4
    %
    32




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##### Table of Contents



Supplies
  Nine Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Supplies (dollars in millions)
    
    $
    304.2
    
    
    
    13.7
    %
    
    $
    279.3
    
    
    
    13.8
    %
    
    $
    24.9
    
    
    
    9.0
    %Supplies per equivalent admission
    
    $
    1,026
    
    
    
    N/A
    
    
    $
    980
    
    
    
    N/A
    
    
    $
    46
    
    
    
    4.7
    %
  Other Operating Expenses
  Nine Months Ended September 30,% of
    
    
    
    
    
    
    % of
    
    
    Increase
    
    
    % Increase2009
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    (Decrease)
    
    
    (Decrease)Professional fees.
    
    $
    54.1
    
    
    
    2.4
    %
    
    $
    47.8
    
    
    
    2.3
    %
    
    $
    6.3
    
    
    
    13.4
    %Utilities
    
    
    38.4
    
    
    
    1.7
    
    
    
    38.6
    
    
    
    1.9
    
    
    
    (0.2
    )
    
    
    (0.6
    )Repairs and maintenance
    
    
    48.5
    
    
    
    2.2
    
    
    
    42.1
    
    
    
    2.1
    
    
    
    6.4
    
    
    
    15.1Rents and leases
    
    
    21.3
    
    
    
    1.0
    
    
    
    19.5
    
    
    
    1.0
    
    
    
    1.8
    
    
    
    9.4Insurance
    
    
    35.1
    
    
    
    1.6
    
    
    
    31.6
    
    
    
    1.6
    
    
    
    3.5
    
    
    
    11.0Physician recruiting
    
    
    18.2
    
    
    
    0.8
    
    
    
    16.2
    
    
    
    0.8
    
    
    
    2.0
    
    
    
    12.1Contract services
    
    
    108.7
    
    
    
    4.9
    
    
    
    101.4
    
    
    
    4.9
    
    
    
    7.3
    
    
    
    7.2Non-income taxes
    
    
    31.0
    
    
    
    1.4
    
    
    
    29.1
    
    
    
    1.4
    
    
    
    1.9
    
    
    
    6.4Other
    
    
    50.4
    
    
    
    2.3
    
    
    
    45.9
    
    
    
    2.3
    
    
    
    4.5
    
    
    
    9.9$
    405.7
    
    
    
    18.3
    %
    
    $
    372.2
    
    
    
    18.3
    %
    
    $
    33.5
    
    
    
    9.0
    %
     33




---



##### Table of Contents



Provision for Doubtful Accounts
  Nine Months Ended September 30,% of
    
    
    
    
    
    % of
    
    Increase
    
    % Increase2009
    
    Revenues
    
    2008
    
    Revenues
    
    (Decrease)
    
    (Decrease)Provision for doubtful accounts
    
    $
    281.1
    
    
    
    12.7
    %
    
    $
    234.7
    
    
    
    11.6
    %
    
    $
    46.4
    
    
    
    19.8
    %Related key indicators:Charity care write-offs
    
    $
    44.9
    
    
    
    0.8
    %
    
    $
    40.0
    
    
    
    0.8
    %
    
    $
    4.9
    
    
    
    12.1
    %Self-pay revenues, net of
charity care write-offs and
uninsured discounts
    
    $
    289.5
    
    
    
    13.1
    %
    
    $
    242.4
    
    
    
    12.0
    %
    
    $
    47.1
    
    
    
    19.4
    %Net revenue days outstanding (at
end of period)
    
    
    41.0
    
    
    
    N/A
    
    
    
    42.6
    
    
    
    N/A
    
    
    
    (1.6
    )
    
    
    (3.8
    )%
 Managements Discussion and Analysis of
Financial Condition and Results of Operations
 Depreciation and Amortization
  Interest Expense
  34




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##### Table of Contents



Provision for Income Taxes
  Liquidity and Capital Resources
 Liquidity
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net cash flows provided by continuing operations
    
    $
    70.3
    
    
    $
    82.1
    
    
    $
    229.3
    
    
    $
    260.3Less: Purchase of property and equipment
    
    
    (33.7
    )
    
    
    (37.5
    )
    
    
    (118.8
    )
    
    
    (111.5
    )Free operating cash flow
    
    
    36.6
    
    
    
    44.6
    
    
    
    110.5
    
    
    
    148.8Acquisitions, net of cash acquired
    
    
    
    
    
    
    (1.3
    )
    
    
    (79.7
    )
    
    
    (10.6
    )Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.4Payments on borrowings
    
    
    
    
    
    
    (10.0
    )
    
    
    (13.5
    )
    
    
    (10.0
    )Repurchases of common stock
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    (3.0
    )
    
    
    (118.2
    )Proceeds from exercise of stock options
    
    
    0.3
    
    
    
    3.3
    
    
    
    9.9
    
    
    
    3.4Distributions to noncontrolling interests, net of
proceeds
    
    
    (0.7
    )
    
    
    (1.4
    )
    
    
    (1.4
    )
    
    
    (2.4
    )Proceeds from the issuance (purchase) of redeemable
noncontrolling interests
    
    
    
    
    
    
    2.2
    
    
    
    (0.8
    )
    
    
    2.2Capital lease payments and other
    
    
    (1.9
    )
    
    
    0.1
    
    
    
    (3.6
    )
    
    
    (4.9
    )Other
    
    
    0.6
    
    
    
    (4.4
    )
    
    
    4.9
    
    
    
    (4.1
    )Cash flows from operations used in discontinued
operations
    
    
    3.9
    
    
    
    (6.1
    )
    
    
    1.0
    
    
    
    (11.2
    )Cash flows from investing activities provided by
(used in) discontinued operations
    
    
    9.1
    
    
    
    
    
    
    
    19.5
    
    
    
    (5.0
    )Increase (decrease) in cash and cash equivalents
    
    $
    47.5
    
    
    $
    26.9
    
    
    $
    43.8
    
    
    $
    (1.6
    )
   35




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##### Table of Contents



Capital Expenditures
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Capital projects
    
    $
    21.1
    
    
    $
    28.0
    
    
    $
    79.4
    
    
    $
    78.6Routine
    
    
    9.9
    
    
    
    9.1
    
    
    
    30.9
    
    
    
    31.3Information systems
    
    
    2.7
    
    
    
    0.4
    
    
    
    8.5
    
    
    
    1.6$
    33.7
    
    
    $
    37.5
    
    
    $
    118.8
    
    
    $
    111.5Depreciation expense
    
    $
    34.8
    
    
    $
    31.9
    
    
    $
    105.2
    
    
    $
    96.9Ratio of capital expenditures to depreciation expense
    
    
    96.8
    %
    
    
    117.6
    %
    
    
    112.9
    %
    
    
    115.1
    %
  Debt
  Amortization ofDecember 31,
    
    
    Payments of
    
    
    Convertible Debt
    
    
    
    
    
    
    September 30,2008
    
    
    Borrowings
    
    
    Discounts
    
    
    Other (a)
    
    
    2009Senior Secured Credit Facilities:Term B Loans
    
    $
    706.4
    
    
    $
    (13.5
    )
    
    $
    
    
    
    $
    
    
    
    $
    692.9Revolving Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Province 71/2% Senior Subordinated
Notes
    
    
    6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.131/4% Debentures
    
    
    225.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    225.031/2% Notes
    
    
    575.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    575.0Unamortized discounts on 31/4%
Debentures and 31/2% Notes
    
    
    (123.5
    )
    
    
    
    
    
    
    15.6
    
    
    
    
    
    
    
    (107.9
    )Capital leases
    
    
    4.2
    
    
    
    (1.9
    )
    
    
    
    
    
    
    1.3
    
    
    
    3.6$
    1,393.2
    
    
    $
    (15.4
    )
    
    $
    15.6
    
    
    $
    1.3
    
    
    $
    1,394.7
 
 (a)
    
    Represents the assumption of capital lease obligations in connection with the Companys
acquisition of Rockdale effective February 1, 2009. 36




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##### Table of Contents



September 30,
    
    
    December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease)Current portion of long-term debt
    
    $
    1.1
    
    
    $
    1.1
    
    
    $
    Long-term debt
    
    
    1,393.6
    
    
    
    1,392.1
    
    
    
    1.5Unamortized discounts of convertible debt instruments (a)
    
    
    107.9
    
    
    
    123.5
    
    
    
    (15.6
    )Total debt, excluding unamortized discounts of
convertible debt instruments
    
    
    1,502.6
    
    
    
    1,516.7
    
    
    
    (14.1
    )Total LifePoint Hospitals, Inc. stockholders equity (a).
    
    
    1,780.6
    
    
    
    1,652.0
    
    
    
    128.6Total capitalization
    
    $
    3,283.2
    
    
    $
    3,168.7
    
    
    $
    114.5Total debt to total capitalization
    
    
    45.8
    %
    
    
    47.9
    %
    
    (210bps)Percentage of:Fixed rate debt, excluding unamortized discounts of
convertible debt instruments (a)
    
    
    53.9
    %
    
    
    53.4
    %Variable rate debt (b)
    
    
    46.1
    
    
    
    46.6100.0
    %
    
    
    100.0
    %Percentage of:Senior debt
    
    
    46.4
    %
    
    
    46.8
    %Subordinated debt, excluding unamortized discounts of
convertible debt instruments (a)
    
    
    53.6
    
    
    
    53.2100.0
    %
    
    
    100.0
    %
 
 (a)
    
    Effective January 1, 2009, we adopted the provisions of ASC 470-20. The adoption of ASC
470-20 required us to retrospectively restate prior periods to separately reflect the
liability and equity components of our convertible debt instruments and to recognize interest
expense for the related debt at our market rate of borrowing for non-convertible debt
instruments as opposed to the explicit rate of our convertible debt instruments. Please refer
to Note 2 to our accompanying condensed consolidated financial statements included elsewhere
in this report for an additional discussion of the impact the adoption of ASC 470-20 had on
our total debt and stockholders equity.(b)
    
    The above calculation does not consider the effect of our interest rate swap. Our interest
rate swap mitigates a portion of our floating rate risk on our outstanding variable rate
borrowings which converts our variable rate debt to an annual fixed rate of 5.585%. Our
interest rate swap decreases our variable rate debt as a percentage of our outstanding debt
from 46.1% to 6.2% as of September 30, 2009 and from 46.6% to 7.0% as of December 31, 2008.
Please refer to Note 8 to our accompanying consolidated financial statements included
elsewhere in this report for a discussion of our interest rate swap agreement. Capital Resources
 Senior Secured Credit Facilities
 Terms
  37




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##### Table of Contents



Letters of Credit and Availability
  Interest Rates
   Covenants
   Level atRequirement
    
    September 30, 2009Minimum Interest Coverage Ratio
    
    
    33.50:1.00
    
    
    
    6.23Maximum Total Leverage Ratio
    
    
    £4.00:1.00
    
    
    
    3.11
   38




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##### Table of Contents



3 1/2 % Convertible Senior Subordinated Notes due May 15, 2014
 1 2 1 2 1 2 1 2 1 2
 1 2 1 2
 1 2
 1 2 1 2 1 2
 1 2 1 2
 3 1/4 % Convertible Senior Subordinated Debentures due August 15, 2025
 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4
 39




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##### Table of Contents



1 4 1 4
 1 4 1 4 1 4 1 4
 1 4 1 4
 Interest Rate Swap
  Liquidity and Capital Resources Outlook
     40




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##### Table of Contents



Contractual Obligations
  Off-Balance Sheet Arrangements
  Critical Accounting Estimates
  
    
    it requires assumptions to be made that were uncertain at the time the estimate was
made; and
    
    changes in the estimate or different estimates that could have been made could have a
material impact on our consolidated results of operations or financial condition.
  
    
    Revenue recognition/Allowance for contractual discounts;
    
    Allowance for doubtful accounts and provision for doubtful accounts;
    
    Goodwill impairment analysis;
    
    Professional and general liability claims;
    
    Accounting for stock-based compensation; and
    
    Accounting for income taxes.
 Recently Issued Accounting Pronouncements
  41




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##### Table of Contents



Contingencies
  
    
    Legal proceedings and general liability claims;
    
    Physician commitments;
    
    Capital expenditure commitments; and
    
    Acquisitions.
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
 Interest Rates
  Outstanding Debt
   1 2 1 4
 Carrying Amount
    
    Fair ValueSeptember 30,
    
    December 31,
    
    September 30,
    
    December 31,2009
    
    2008
    
    2009
    
    2008Term B Loans
    
    $
    692.9
    
    
    $
    706.4
    
    
    $
    672.1
    
    
    $
    586.331/2% Notes, excluding unamortized discount
    
    $
    575.0
    
    
    $
    575.0
    
    
    $
    495.2
    
    
    $
    387.331/4% Debentures, excluding unamortized discount
    
    $
    225.0
    
    
    $
    225.0
    
    
    $
    195.8
    
    
    $
    162.0
 1 4 1 2
 Cash Balances
  42




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##### Table of Contents



Item 4. Controls and Procedures.
   43




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
   
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  Total Number
    
    Approximateof Shares
    
    Dollar ValuePurchased as
    
    of Shares thatWeighted
    
    Part of a
    
    May Yet beTotal Number
    
    Average
    
    Publicly
    
    Purchasedof Shares
    
    Price Paid
    
    Announced
    
    Under thePeriod
    
    Purchased
    
    per Share
    
    Program (b)
    
    Program (b)(In millions)July 1, 2009 to July 31, 2009 (a)
    
    
    3,955
    
    
    $
    26.38
    
    
    
    
    
    
    $
    August 1, 2009 to August 31, 2009 (a)
    
    
    2,645
    
    
    $
    25.09
    
    
    
    
    
    
    $
    100.0September 1, 2009 to September 30, 2009 (a)
    
    
    7,971
    
    
    $
    26.57
    
    
    
    
    
    
    $
    100.0Total
    
    
    14,571
    
    
    $
    26.25
    
    
    
    
    
    
    $
    100.0
 
 (a)
    
    These relate to shares redeemed for tax withholding purposes upon vesting of certain
previously granted stock awards under the LTIP and MSPP plans.(b)
    
    In August 2009, our Board of Directors authorized the repurchase of up to $100.0 million of
outstanding shares of our common stock either in the open market or through privately
negotiated transactions, subject to certain limitations. We are not obligated to repurchase
any specific number of shares under the program, which expires in January 2011. No
repurchases had been made under the August 2009 repurchase program as of September 30, 2009. 44




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##### Table of Contents



Item 6. Exhibits.
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation (incorporated by
reference from exhibits to the Registration Statement on Form S-8 filed on
April 19, 2005, File No. 333-124093).3.2
    
    Second Amended and Restated Bylaws (incorporated by reference from exhibits
to the Current Report on Form 8-K dated October 16, 2006, File No.
000-51251).3.3
    
    Amendment No. 1 to the Second Amended and Restated Bylaws (incorporated by
reference from exhibits to the Current Report on Form 8-K dated May 20,
2008, File No. 000-51251).31.1
    
    Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 45




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##### Table of Contents



SIGNATURES
  LifePoint Hospitals, Inc.By:
    /s/ Michael S. CogginMichael S. CogginChief Accounting Officer
(Principal Accounting Officer)  46




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation (incorporated by
reference from exhibits to the Registration Statement on Form S-8 filed on
April 19, 2005, File No. 333-124093).3.2
    
    Second Amended and Restated Bylaws (incorporated by reference from exhibits
to the Current Report on Form 8-K dated October 16, 2006, File No.
000-51251).3.3
    
    Amendment No. 1 to the Second Amended and Restated Bylaws (incorporated by
reference from exhibits to the Current Report on Form 8-K dated May 20,
2008, File No. 000-51251).31.1
    
    Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.