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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 FOR THE YEAR ENDED DECEMBER 31, 2007
 COMMISSION FILE NUMBER: 0-29302
 
 TLC VISION CORPORATION
  NEW BRUNSWICK, CANADA
    
    980151150(State or jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)5280 SOLAR DRIVE, SUITE 300
    
    L4W 5M8MISSISSAUGA, ONTARIO
    
    (Zip Code)(Address of principal executive offices)Registrants telephone, including area code:
    
    (905) 602-2020
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  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
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    Smaller Reporting Company o
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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANTPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESPART IIITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESEXHIBIT INDEXAmendment No. 1 to the Amended and Restated Credit AgreementList of the Company's SubsidiariesConsent of Independent Registered Public Accounting FirmConsent of Independent Registered Public Accounting FirmCEO's Certification Required by Rule 13A-14(a)CFO's Certification Required by Rule 13A-14(a)CEO's Certification Pursuant to Section 906CFO's Certification Pursuant to Section 906 Vision
 
  
       
    
    Myopia (nearsightedness) means the eye is longer than normal resulting in difficulty
seeing distant objects as clearly as near objects.
    
    Hyperopia (farsightedness) means the eye is shorter than normal resulting in difficulty
seeing near objects as clearly as distant objects.
    
    Astigmatism means the cornea is oval-shaped resulting in blurred vision.
    
    Presbyopia is the loss of lens and eye muscle flexibility due to the natural aging
process, causing difficulty in focusing on near objects and usually corrected by reading
glasses. Because vision
correction surgery cannot reverse the aging process, presbyopia cannot be corrected
surgically. However, there are surgical and non-surgical techniques available that can
effectively manage presbyopia.
  Eyeglasses.
 2




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Contact Lenses.
 Surgical Procedures. Vision
 
    
    LASIK (Laser In Situ Keratomileusis). LASIK corrects nearsightedness, farsightedness
and astigmatism by using an excimer laser to reshape the cornea. Because LASIK creates a
corneal flap to reshape the cornea and does not disrupt the front surface of the cornea,
it generally is less painful, has a quicker recovery period and shorter post-operative
need for steroid eye drops than other surgical procedures. LASIK is currently the most
common vision correction surgery and may be the treatment of choice for patients desiring
a more rapid visual recovery.
    
    CustomLASIK. Widely introduced in 2003, CustomLASIK is a technologically supported
advancement to LASIK. CustomLASIK involves increased pre-operative diagnostic
capabilities that measure the eye from front to back using wavefront technology to
create a three dimensional corneal map. The information from that map guides the laser in
customizing the laser ablation to an individuals visual irregularities, beyond myopia and
hyperopia. CustomLASIK using wavefront technology has the potential to improve not only
how much a person can see, in terms of visual acuity measured by the standard 20/20 eye
chart, but also how well an individual can see in terms of contrast sensitivity and fine
detail. This translates to a reduced occurrence of night vision disturbances post-LASIK.
    
    PRK (Photorefractive Keratectomy). PRK corrects nearsightedness, farsightedness and
astigmatism by using an excimer laser to reshape the cornea without making a flap. PRK
removes the protective surface layer of the cornea to reshape the cornea. The risk of
pain, infection and corneal scarring is higher with PRK than with LASIK; however, the
intra-operative risks are lessened with PRK because no corneal flap is created.
    
    LASEK (Laser Assisted Sub-Epithelial Keratectomy). LASEK corrects nearsightedness,
farsightedness and astigmatism by using an excimer laser to reshape the cornea. Unlike
LASIK that creates a corneal flap, LASEK loosens and folds the protective outer layer of
the cornea (the epithelium) during the procedure and, as a result, combines the advantages
of LASIK with the safety of PRK. The risk of pain, infection and corneal scarring is
higher with LASEK than with LASIK; however, the intra-operative risks are lessened with
LASEK because the flap which is created is only in the epithelium. The United States Food
and Drug Administration (FDA) has not yet approved use of the excimer laser for LASEK.
    
    AK (Astigmatic Keratotomy). AK corrects astigmatism by making microscopic incisions in
the cornea to relax and change the shape of the cornea.
    
    INTACS. INTACS corrects very low levels of nearsightedness (1.00 diopters to 3.00
diopters) by implanting rings in the cornea to reshape it rather than surgically altering
the cornea. INTACS may also be used to correct irregularities in the shape of the cornea.
    
    CK (Conductive Keratoplasty). For patients age 40 and older, CK is designed for the
temporary reduction of farsightedness (+.75 to +3.25 diopters) and uses radio frequency
instead of a laser to reshape the cornea.
    
    PTK (Phototherapeutic Keratectomy). PTK treats abrasions, scars or other abnormalities
of the cornea caused by injury or surgery. PTK uses an excimer laser to remove
superficial opacities and irregularities of the cornea to improve vision or reduce
symptoms of pain or discomfort due to an underlying eye condition.
    
    Refractive IOL Procedures. Intraocular lenses (IOLs) are permanent or semi-permanent,
artificial lenses that are implanted to replace or supplement the eyes natural
crystalline lens. While not a common procedure for correcting refractive errors, the
placement of a refractive IOL can help patients who are not candidates for LASIK. IOLs
have been used in the United States since the late 1960s to restore visual function to
cataract patients, and more recently are being used in refractive surgery procedures.
There are several types of refractive IOLs: phakic IOLs, multi-focal IOLs and
accommodating IOLs. Patient suitability and quality of visual outcome for each of these
lens options varies.
 3




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Vision
 4




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Vision Business
Corporations Act
  Vision
 Refractive Centers
  
    
    a value-oriented pricing strategy that includes an attractive entry-level price
point and logical upgrades based on technology;
    
    direct-to-consumer communication that creates both brand awareness and potential
LASIK patients, utilizing broad-reach media, Internet, telephone, direct mail, email,
alumni and referral programs;
    
    continued commitment to the co-management model, which allows primary care doctors
to provide the best clinical outcomes for their patients while retaining them in their
practices;
 5




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
    
    continuing clinical education to ophthalmologists and optometrists, as well as
practice development education and tools focused on educating their staffs;
    
    additional marketing to health plans and health plan members for increased
penetration in the managed care market;
    
    quality patient outcomes support through the TLCVisionquality assurance and
improvement system; and
    
    selected geographic expansion into new and existing markets.
 Doctors Services and Eye Care
  
    
    expand the Companys existing service and product offerings;
    
    grow the number of mobile customers and seek complementary acquisitions to
accelerate this growth;
    
    integrate the mobile cataract and mobile refractive operational teams; and
    
    grow its optometric practice franchising organization, Vision Source, by increasing
the number of affiliated practice franchises and related services, and pursuing
complementary opportunities to expand that business model.
 Enhanced Shareholder Value
     Vision Vision Vision
 Vision Vision Vision
 6




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Vision Vision www.tlcvision.com Vision
 Vision Vision
  Vision
   Vision Vision
 Vision
 Vision
 7




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Vision
  Vision Vision-
   Vision
   8




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Vision
  Vision
   TM TM
 TM
  Vision Vision
 Vision
 Vision
 9




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Vision
   Vision Vision
 
    
    Under standard refractive mobile access agreements with surgeons, TLCVisionprovides
some or all of the following: laser platform and microkeratome equipment, certain related
supplies for the equipment (such as laser gases, per procedure cards and microkeratome
blades), laser operator, microkeratome technicians, maintenance and certain technology
upgrades. In addition, the Company may provide marketing assistance, coordination of
surgeon training and other support services. This access is provided on agreed upon dates
at either the surgeons offices or a third partys facility. In return, the surgeons pay a
per procedure fee for access services and generally agree to exclusively use TLCVisions
equipment for refractive surgery. The Company does not provide medical services to the
patients or any administrative services to the access surgeon customer.
    
    Under standard refractive fixed access agreements with surgeons, TLCVisiongenerally
provides the following: a fixed-base laser platform and microkeratome equipment, certain
related supplies for the equipment (such as laser gases, per procedure cards and
microkeratome blades), periodic maintenance and certain technology upgrades. In return,
the surgeons pay either a per procedure fee and guarantee a minimum number of procedures
per month, or a flat monthly fee plus the cost of per procedure cards and blades. In
addition, the surgeons generally agree to use exclusively TLCVisions equipment for
refractive surgery. The Company does not provide a laser operator, microkeratome
technician, medical services or any administrative services to the access surgeon
customer.
    
    Under joint venture arrangements, TLCVisiondirectly or indirectly provides either
mobile or fixed-base laser access and the following: microkeratome equipment, certain
related supplies for the equipment (such as laser gases, per procedure cards and
microkeratome blades), laser operator, microkeratome technician, maintenance and certain
technology upgrades, the laser facility, management services which include administrative
services such as billing and collections, staffing for the refractive practice, marketing
assistance and funds and other support services. TLCVisionreceives an access fee and
management services fees in addition to being reimbursed for the direct costs paid by the
Company for the laser facility operations. In return, the surgeons generally agree to
exclusively use its equipment for refractive surgery and/or not to compete with the
Company within a certain area. Neither TLCVisionnor the joint ventures provide medical
services to the patients.
  Vision
  10




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Vision www.tlcvision.com www.lasik.com Vision www.tlcv.com
 Vision Vision www.sec.gov
       11




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Vision
 Vision
   United States
  Vision
   12




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Canada
   United States
  Vision
 Federal Law.
  13




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
    
    Privacy Regulations designed to protect and enhance the rights of patients by providing
patient access to their PHI and controlling the use of their PHI;
    
    Security Regulations designed to protect electronic health information by mandating
certain physical, technical and administrative safeguards;
    
    Electronic Transactions and Code Sets Regulations designed to standardize electronic
data interchange in the health care industry;
    
    Standard Unique Employer Identifier Regulations designed to standardize employer
identification numbers used in certain electronic transactions; and
    
    Standard Unique Health Identifier for Health Care Providers Regulations designed to
standardize the identification of health care providers used in electronic transactions.
 14




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State Law.
     Canada
 Vision
  15




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Vision
 Vision Vision
      Vision
    16




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
    
    demand for our services;
    
    market acceptance of our value-oriented pricing strategy;
    
    our ability to control costs;
    
    our ability to execute our business strategy and effectively integrate acquired
businesses and assets;
    
    our ability to obtain adequate insurance against malpractice claims and reduce the
number of claims;
    
    economic conditions in the markets in which we compete, including the availability
of discretionary income;
    
    concerns about the safety and effectiveness of laser vision correction;
    
    competitive factors;
    
    regulatory developments;
    
    our ability to retain and attract qualified personnel; and
    
    doctors ability to obtain adequate insurance against malpractice claims at
reasonable rates.
     17




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
    
    its cost, particularly since laser vision correction typically is not covered by
government or private insurers;
    
    general resistance to surgery;
    
    the fact that effective and less expensive alternative methods of correcting
refractive vision disorders are widely available;
    
    the lack of long-term follow-up data;
    
    the possibility of unknown side effects; and
    
    reported adverse events or other unfavorable publicity involving patient outcomes
from laser vision correction.
   18




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
    
    foreign body sensation;
    
    pain or discomfort;
    
    sensitivity to bright lights;
    
    blurred vision;
    
    dryness or tearing;
    
    fluctuation in vision;
    
    night glare;
    
    poor or reduced visual quality;
    
    overcorrection or under-correction;
    
    regression; and
    
    corneal flap or corneal healing complications.
         
    
    our ability to effectively penetrate the laser vision correction market;
    
    success of our value-oriented pricing strategies;
    
    perception of the potential for rheopheresis for dry age-related macular
degeneration;
    
    our ability to execute our business strategy;
    
    new technological innovations and products;
    
    changes in government regulations;
 19




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
    
    adverse regulatory action;
    
    public concerns about the safety and effectiveness of laser vision correction;
    
    loss of key management;
    
    announcements of non-routine events such as acquisitions or litigation;
    
    variations in our financial results;
    
    fluctuations in competitors stock prices;
    
    the issuance of new or changed stock market analyst reports and recommendations
concerning our common shares or competitors stock;
    
    changes in earnings estimates by securities analysts;
    
    our ability to meet analysts projections;
    
    changes in the market for medical services; or
    
    general economic, political and market conditions.
        
    
    cost-effectively generate procedures through advertising programs;
    
    develop consumer advertising as a core competency in the Company; and
    
    maintain a reliable contact management center, including call center operations and
lead follow-up programs.
    
    
    the integration of operations and technologies into existing platforms;
    
    hiring and training personnel to staff the center;
    
    developing and implementing effective marketing programs to attract potential
patients to the center; and
    
    managing the losses incurred during the development and ramp-up period.
  20




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
    
    identifying unanticipated liabilities and contingencies;
    
    diversion of management attention; and
    
    possible adverse effects on operating results resulting from:
 
    
    possible future goodwill impairment;
    
    increased interest costs;
    
    the issuance of additional securities; and
    
    increased costs resulting from difficulties related to the integration of the
acquired businesses.
  
    
    the availability of attractive acquisition opportunities;
    
    the availability of capital to complete acquisitions;
    
    the availability of working capital to fund the operations of acquired businesses;
and
    
    the effect of existing and emerging competition on operations.
    
    
    implement upgraded operations, information technologies and financial systems,
procedures and controls;
    
    hire and train new staff and managerial personnel;
    
    adapt or amend our business structure to comply with present or future legal
requirements affecting our arrangements with doctors, including state prohibitions on
fee-splitting, corporate practice of optometry and medicine and referrals to facilities
in which doctors have a financial interest;
    
    obtain regulatory approvals, where necessary, and comply with licensing requirements
applicable to doctors and facilities operated, and services offered, by doctors; and
    
    successfully integrate acquisitions into our existing business model.
       21




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Vision Vision Vision
           25




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Visions
 Vision
 Vision Vision,
  26




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THETORONTO
    
    NASDAQSTOCK
    
    GLOBALEXCHANGE
    
    MARKETHIGH
    
    LOW
    
    HIGH
    
    LOW2006First Quarter March 31, 2006
    
    Cdn$9.13
    
    Cdn$6.33
    
    $
    7.93
    
    
    $
    5.57Second Quarter June 30, 2006
    
    
    7.50
    
    
    4.82
    
    
    6.63
    
    
    
    4.33Third Quarter September 30, 2006
    
    
    6.27
    
    
    4.62
    
    
    5.70
    
    
    
    4.12Fourth Quarter December 31, 2006
    
    
    6.32
    
    
    4.41
    
    
    5.43
    
    
    
    3.932007First Quarter March 31, 2007
    
    Cdn$7.13
    
    Cdn$6.02
    
    $
    6.00
    
    
    $
    5.10Second Quarter June 30, 2007
    
    
    6.80

    
    
    5.45
    
    
    6.06
    
    
    
    5.10Third Quarter September 30, 2007
    
    
    5.45

    
    
    3.17
    
    
    5.21
    
    
    
    3.06Fourth Quarter December 31, 2007
    
    
    3.71

    
    
    2.02
    
    
    3.79
    
    
    
    2.08
    The information contained in this Performance Graph section shall not be deemed to be
soliciting material or filed or incorporated by reference in future filings with the SEC, or
subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into a document filed under the Securities Act of 1933,
as amended, or the Exchange Act.
  27




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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
 
 
 *
    
    $100 invested on 12/31/02 in stock or index-including reinvestment of dividends.Fiscal year ending December 31. 12/31/02
    
    
    12/31/03
    
    
    12/31/04
    
    
    12/31/05
    
    
    12/31/06
    
    
    12/31/07TLC Vision Corporation
    
    
    $
    100.00
    
    
    
    $
    630.83
    
    
    
    $
    991.44
    
    
    
    $
    613.70
    
    
    
    $
    497.62
    
    
    
    $
    316.84S&P/TSX Composite Index
    
    
    $
    100.00
    
    
    
    $
    126.72
    
    
    
    $
    145.07
    
    
    
    $
    180.08
    
    
    
    $
    211.16
    
    
    
    $
    231.92NASDAQ Health Services
Stocks Index
    
    
    $
    100.00
    
    
    
    $
    135.61
    
    
    
    $
    168.24
    
    
    
    $
    184.41
    
    
    
    $
    186.06
    
    
    
    $
    181.42
   28




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Vision
 YEAR ENDED(U.S. dollars, in thousands except per share
    
    DECEMBER 31,amounts and operating data)
    
    2003(2)
    
    2004(3)
    
    2005(4)
    
    2006(5)
    
    2007(6)STATEMENT OF OPERATIONS DATANet revenues
    
    $
    197,508
    
    
    $
    242,481
    
    
    $
    255,547
    
    
    $
    277,853
    
    
    $
    298,414Cost of revenues (excluding amortization)
    
    
    147,765
    
    
    
    168,796
    
    
    
    178,572
    
    
    
    192,937
    
    
    
    209,084Gross profit
    
    
    49,743
    
    
    
    73,685
    
    
    
    76,975
    
    
    
    84,916
    
    
    
    89,330General and administrative
    
    
    26,914
    
    
    
    26,747
    
    
    
    36,458
    
    
    
    34,476
    
    
    
    34,819Marketing and sales
    
    
    18,779
    
    
    
    18,702
    
    
    
    21,714
    
    
    
    27,791
    
    
    
    42,979(Loss) income from continuing operations,
net of tax
    
    
    (10,922
    )
    
    
    41,402
    
    
    
    7,169
    
    
    
    13,680
    
    
    
    (35,300
    )Income (loss) from discontinued operations,
net of tax
    
    
    1,523
    
    
    
    1,072
    
    
    
    950
    
    
    
    (2,161
    )
    
    
    (8,214
    )Net (loss) income
    
    
    (9,399
    )
    
    
    42,474
    
    
    
    8,119
    
    
    
    11,519
    
    
    
    (43,514
    )(Loss) income per share from continuing
operations, diluted
    
    $
    (0.17
    )
    
    $
    0.58
    
    
    $
    0.10
    
    
    $
    0.20
    
    
    $
    (0.60
    )(Loss) income per share, diluted
    
    $
    (0.15
    )
    
    $
    0.60
    
    
    $
    0.11
    
    
    $
    0.17
    
    
    $
    (0.74
    )Weighted average number of Common Shares
outstanding, diluted
    
    
    64,413
    
    
    
    71,088
    
    
    
    71,380
    
    
    
    69,580
    
    
    
    59,139
 29




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YEAR ENDEDDECEMBER 31,2003(2)
    
    2004(3)
    
    2005(4)
    
    2006(5)
    
    2007(6)OPERATING DATA (unaudited)Number of majority owned eye care
centers at end of period (7)
    
    
    70
    
    
    
    59
    
    
    
    64
    
    
    
    67
    
    
    
    66Number of minority owned eye care
centers at end of period (1)
    
    
    1
    
    
    
    9
    
    
    
    9
    
    
    
    9
    
    
    
    14Number of TLCVision branded eye care
centers at end of period
    
    
    71
    
    
    
    68
    
    
    
    73
    
    
    
    76
    
    
    
    80Number of access service sitesRefractive
    
    
    269
    
    
    
    326
    
    
    
    318
    
    
    
    327
    
    
    
    327Mobile Cataract
    
    
    359
    
    
    
    371
    
    
    
    563
    
    
    
    689
    
    
    
    444Number of laser vision correction
procedures:Majority owned centers
    
    
    100,500
    
    
    
    99,100
    
    
    
    101,000
    
    
    
    101,000
    
    
    
    105,700Minority owned centers
    
    
    1,900
    
    
    
    18,700
    
    
    
    20,000
    
    
    
    20,300
    
    
    
    21,400Total TLCVision branded center
procedures
    
    
    102,400
    
    
    
    117,800
    
    
    
    121,000
    
    
    
    121,300
    
    
    
    127,100Access
    
    
    73,700
    
    
    
    78,600
    
    
    
    69,900
    
    
    
    65,900
    
    
    
    59,500Total TLCVision branded refractive
procedures
    
    
    176,100
    
    
    
    196,400
    
    
    
    190,900
    
    
    
    187,200
    
    
    
    186,600Mobile Cataract
    
    
    40,700
    
    
    
    43,700
    
    
    
    49,000
    
    
    
    55,700
    
    
    
    56,900
 DECEMBER 31,2003(2)
    
    2004(3)
    
    2005(4)
    
    2006(5)
    
    2007(6)BALANCE SHEET DATACash and cash equivalents
    
    $
    21,580
    
    
    $
    33,435
    
    
    $
    31,729
    
    
    $
    28,917
    
    
    $
    12,925Working capital
    
    
    10,868
    
    
    
    131,195
    
    
    
    66,896
    
    
    
    40,015
    
    
    
    (11,141
    )Total assets
    
    
    190,748
    
    
    
    304,007
    
    
    
    301,043
    
    
    
    294,302
    
    
    
    237,810Long-term debt, excluding current portion
    
    
    19,242
    
    
    
    9,991
    
    
    
    12,665
    
    
    
    15,122
    
    
    
    98,417STOCKHOLDERS EQUITYCommon stock
    
    
    397,878
    
    
    
    458,959
    
    
    
    450,703
    
    
    
    450,133
    
    
    
    337,473Option and warrant equity
    
    
    8,143
    
    
    
    2,872
    
    
    
    1,861
    
    
    
    1,806
    
    
    
    837Accumulated other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (784
    )Accumulated deficit
    
    
    (294,752
    )
    
    
    (252,278
    )
    
    
    (244,159
    )
    
    
    (232,640
    )
    
    
    (275,404
    )Total stockholders equity
    
    
    111,269
    
    
    
    209,553
    
    
    
    208,405
    
    
    
    219,299
    
    
    
    62,122
 
 (1)
    
    Minority owned centers primarily represent the Companys 30% interest in LECC centers. Prior
to January 1, 2004, these centers were majority owned.(2)
    
    In fiscal 2003, the selected financial data of the Company included an adjustment to the fair
value of long-term receivables of $0.2 million.(3)
    
    In fiscal 2004, the selected financial data of the Company included: (a)
    
    an adjustment to the fair value of long-term receivables of $1.2 million;(b)
    
    other income of $25.8 million from the gain on sale of OccuLogix stock; and(c)
    
    an executive severance charge of $2.6 million.
 (4)
    
    In fiscal 2005, the selected financial data of the Company included:
 (a)
    
    a write-down of $1.1 million in the fair value of intangibles and an adjustment to the fair
value of long-term liabilities of $0.2 million; and(b)
    
    OccuLogix inventory and accounts receivable write-downs of $1.6 million after minority
interests.
 30




---



##### 



(5)
    
    In fiscal 2006, the selected financial data of the Company included: (a)
    
    an impairment of goodwill of $4.1 million, which related to discontinued operations;(b)
    
    gain on sales and issuances of subsidiary stock of $1.8 million;(c)
    
    severance charges totaling $1.0 million ($0.6 million net of minority interests);(d)
    
    net write-downs of assets and liabilities of $1.9 million ($1.1 million net of minority
interests);(e)
    
    income tax benefit of $5.3 million related to a partial reversal of the deferred tax
asset valuation allowance;(f)
    
    income tax benefit of $0.9 million related to IRC Section 382 and $1.5 million related to
deductible interest expense adjustments; and(g)
    
    consolidated results of OccuLogix for the three months ended March 31, 2006 before
deconsolidation effective April 1, 2006.
 (6)
    
    In fiscal 2007, the selected financial data of the Company included:
 (a) impairments of goodwill and other assets of $9.6 million and $7.4 million, respectively,
which are inclusive of impairments related to discontinued operations;(b) the repurchase of 20.0 million of the Companys outstanding common shares at a price of $5.75
per share, plus various transaction related costs;(c) a new $110.0 million credit facility, which included $85.0 million of senior term debt and
available borrowings of an additional $25.0 million under a revolving credit facility; and(d) severance charges totaling $1.3 million.
 (7)
    
    The Company reviews its definition of centers when there is a change in its level of
operating control and/or ownership at the center, or if the mode of service delivery at the
location is significantly altered. As a result, prior year figures may vary from previously
reported financials in order to better reflect changes in the Companys current portfolio of
centers.
     Vision
  31




---



##### 



32




---



##### 



33




---



##### 



Visions
        34




---



##### 



35




---



##### 



36




---



##### 



37




---



##### 



38




---



##### 



39




---



##### 



40




---



##### 



PAYMENTS DUE BY PERIODLESS
    
    
    
    
    
    
    MORETHAN 1
    
    
    1 TO 3
    
    
    THAN 3CONTRACTUAL OBLIGATIONS
    
    TOTAL
    
    
    YEAR
    
    
    YEARS
    
    
    YEARSLong-term debt
    
    $
    110,149
    
    
    $
    11,732
    
    
    $
    9,466
    
    
    $
    88,951Operating leases
    
    
    32,423
    
    
    
    7,914
    
    
    
    12,930
    
    
    
    11,579Inventory purchases
    
    
    14,600
    
    
    
    7,300
    
    
    
    7,300
    
    
    
    Marketing contracts
    
    
    2,000
    
    
    
    2,000
    
    
    
    
    
    
    
    Total
    
    $
    159,172
    
    
    $
    28,946
    
    
    $
    29,696
    
    
    $
    100,530
         41




---



##### 



42




---



##### 



/s/ Ernst & Young LLP 
 43




---



##### 



YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Revenues:Refractive centers
    
    $
    174,816
    
    
    $
    161,822
    
    
    $
    150,709Doctor services
    
    
    97,087
    
    
    
    93,171
    
    
    
    85,373Eye care
    
    
    26,511
    
    
    
    22,860
    
    
    
    19,465Total revenues
    
    
    298,414
    
    
    
    277,853
    
    
    
    255,547Cost of revenues (excluding amortization expense shown below):Refractive centers
    
    
    126,804
    
    
    
    114,883
    
    
    
    106,895Doctor services
    
    
    70,281
    
    
    
    66,662
    
    
    
    60,178Eye care
    
    
    11,999
    
    
    
    11,392
    
    
    
    11,499Total cost of revenues (excluding amortization expense shown
below)
    
    
    209,084
    
    
    
    192,937
    
    
    
    178,572Gross profit
    
    
    89,330
    
    
    
    84,916
    
    
    
    76,975General and administrative
    
    
    34,819
    
    
    
    34,476
    
    
    
    36,458Marketing and sales
    
    
    42,979
    
    
    
    27,791
    
    
    
    21,714Research and development, clinical and regulatory
    
    
    
    
    
    
    1,475
    
    
    
    5,250Amortization of intangibles
    
    
    3,398
    
    
    
    3,451
    
    
    
    4,006Impairment of goodwill and other assets
    
    
    7,659
    
    
    
    
    
    
    
    Other expenses, net
    
    
    2,753
    
    
    
    874
    
    
    
    76991,608
    
    
    
    68,067
    
    
    
    68,197Operating (loss) income from continuing operations
    
    
    (2,278
    )
    
    
    16,849
    
    
    
    8,778Gain on sale of OccuLogix, Inc. stock
    
    
    899
    
    
    
    1,450
    
    
    
    Interest income
    
    
    1,621
    
    
    
    2,330
    
    
    
    4,280Interest expense
    
    
    (5,778
    )
    
    
    (1,455
    )
    
    
    (1,710
    )Minority interests
    
    
    (8,921
    )
    
    
    (6,513
    )
    
    
    (677
    )(Loss) earnings from equity investments
    
    
    (12,367
    )
    
    
    (2,636
    )
    
    
    2,545(Loss) income from continuing operations before income taxes
    
    
    (26,824
    )
    
    
    10,025
    
    
    
    13,216Income tax (expense) benefit
    
    
    (8,476
    )
    
    
    3,655
    
    
    
    (6,047
    )(Loss) income from continuing operations
    
    
    (35,300
    )
    
    
    13,680
    
    
    
    7,169(Loss) income from discontinued operations, net of tax
    
    
    (8,214
    )
    
    
    (2,161
    )
    
    
    950Net (loss) income
    
    $
    (43,514
    )
    
    $
    11,519
    
    
    $
    8,119(Loss) earnings per share  basic
    
    $
    (0.74
    )
    
    $
    0.17
    
    
    $
    0.12(Loss) earnings per share  diluted
    
    $
    (0.74
    )
    
    $
    0.17
    
    
    $
    0.11Weighted-average number of common shares outstanding  basic
    
    
    59,139
    
    
    
    68,907
    
    
    
    69,721Weighted-average number of common shares outstanding  diluted
    
    
    59,139
    
    
    
    69,580
    
    
    
    71,380
  44




---



##### 



DECEMBER 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,925
    
    
    $
    28,917Short-term investments
    
    
    
    
    
    
    11,575Accounts receivable, net
    
    
    18,076
    
    
    
    19,315Deferred tax asset
    
    
    
    
    
    
    7,153Prepaid expenses, inventory and other
    
    
    14,882
    
    
    
    13,911Total current assets
    
    
    45,883
    
    
    
    80,871Restricted cash
    
    
    1,101
    
    
    
    1,035Investments and other assets, net
    
    
    17,524
    
    
    
    38,857Goodwill
    
    
    94,346
    
    
    
    96,148Other intangible assets, net
    
    
    17,020
    
    
    
    20,503Fixed assets, net
    
    
    61,936
    
    
    
    56,888Total assets
    
    $
    237,810
    
    
    $
    294,302LIABILITIESCurrent liabilities:Accounts payable
    
    $
    17,177
    
    
    $
    12,314Accrued liabilities
    
    
    28,115
    
    
    
    20,231Current maturities of long-term debt
    
    
    11,732
    
    
    
    8,311Total current liabilities
    
    
    57,024
    
    
    
    40,856Other long-term liabilities
    
    
    5,023
    
    
    
    4,442Long-term debt, less current maturities
    
    
    98,417
    
    
    
    15,122Minority interests
    
    
    15,224
    
    
    
    14,583Total liabilities
    
    
    175,688
    
    
    
    75,003STOCKHOLDERS EQUITYCommon stock, no par value; unlimited number authorized
    
    
    337,473
    
    
    
    450,133Option and warrant equity
    
    
    837
    
    
    
    1,806Accumulated other comprehensive loss
    
    
    (784
    )
    
    
    Accumulated deficit
    
    
    (275,404
    )
    
    
    (232,640
    )Total stockholders equity
    
    
    62,122
    
    
    
    219,299Total liabilities and stockholders equity
    
    $
    237,810
    
    
    $
    294,302
   /s/ JAMES C. WACHTMAN
    
    
    
    /s/ WARREN S. RUSTANDJames C. Wachtman, Director
    
    
    
    Warren S. Rustand, Director
 45




---



##### 



YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005OPERATING ACTIVITIESNet (loss) income
    
    $
    (43,514
    )
    
    $
    11,519
    
    
    $
    8,119Adjustments to reconcile net income to net cash from operating
activities:Depreciation and amortization
    
    
    18,859
    
    
    
    16,392
    
    
    
    16,353Reimbursements of investments in research and development arrangements
    
    
    
    
    
    
    (300
    )
    
    
    (300
    )Deferred taxes
    
    
    7,172
    
    
    
    (5,241
    )
    
    
    5,067Minority interests
    
    
    9,423
    
    
    
    7,022
    
    
    
    1,343Gain on sales and issuances of subsidiary stock
    
    
    (899
    )
    
    
    (1,799
    )
    
    
    Loss (gain) on sales of subsidiaries
    
    
    233
    
    
    
    
    
    
    
    (319
    )Loss from equity investments
    
    
    12,367
    
    
    
    2,636
    
    
    
    (2,545
    )(Gain) loss on sales and disposals of fixed assets
    
    
    (11
    )
    
    
    140
    
    
    
    (92
    )Non-cash compensation expense
    
    
    1,115
    
    
    
    1,444
    
    
    
    1,438Write-down of OccuLogix inventory
    
    
    
    
    
    
    1,625
    
    
    
    1,982Adjustments to the fair values of long-lived assets and liabilities
    
    
    
    
    
    
    294
    
    
    
    888Impairment of goodwill and other assets
    
    
    16,950
    
    
    
    4,087
    
    
    
    Other
    
    
    275
    
    
    
    84
    
    
    
    182Changes in operating assets and liabilities, net of acquisitions and dispositions:Accounts receivable
    
    
    392
    
    
    
    632
    
    
    
    (2,956
    )Prepaid expenses, inventory and other current assets
    
    
    (280
    )
    
    
    (3,165
    )
    
    
    (3,873
    )Accounts payable and accrued liabilities
    
    
    9,248
    
    
    
    (1,882
    )
    
    
    (2,761
    )Cash from operating activities
    
    
    31,330
    
    
    
    33,488
    
    
    
    22,526INVESTING ACTIVITIESPurchases of fixed assets
    
    
    (13,279
    )
    
    
    (11,493
    )
    
    
    (8,321
    )Proceeds from sales of fixed assets
    
    
    1,114
    
    
    
    681
    
    
    
    1,779Proceeds from divestitures of investments and subsidiaries, net
    
    
    1,619
    
    
    
    
    
    
    
    3,430Proceeds from sale of OccuLogix, Inc. stock, net
    
    
    2,000
    
    
    
    2,456
    
    
    
    Distributions and loan payments received from equity investments
    
    
    2,846
    
    
    
    3,613
    
    
    
    3,039Reimbursements from research and development arrangements
    
    
    
    
    
    
    300
    
    
    
    300Acquisitions and equity investments
    
    
    (4,815
    )
    
    
    (7,839
    )
    
    
    (67,573
    )OccuLogix, Inc. cash balance at time of deconsolidation
    
    
    
    
    
    
    (14,814
    )
    
    
    Proceeds from sales of short-term investments
    
    
    17,375
    
    
    
    10,325
    
    
    
    129,750Purchases of short-term investments
    
    
    (5,800
    )
    
    
    (5,425
    )
    
    
    (57,095
    )Other
    
    
    123
    
    
    
    (12
    )
    
    
    13Cash from investing activities
    
    
    1,183
    
    
    
    (22,208
    )
    
    
    5,322FINANCING ACTIVITIESRestricted cash movement
    
    
    (66
    )
    
    
    (60
    )
    
    
    (43
    )Proceeds from debt financing
    
    
    89,717
    
    
    
    441
    
    
    
    1,992Principal payments of debt financing and capital leases
    
    
    (11,998
    )
    
    
    (6,479
    )
    
    
    (9,504
    )Capitalized debt costs
    
    
    (1,960
    )
    
    
    
    
    
    
    Distributions to minority interests
    
    
    (9,454
    )
    
    
    (9,197
    )
    
    
    (8,440
    )Purchases of treasury stock
    
    
    (117,569
    )
    
    
    
    
    
    
    (15,868
    )Proceeds from issuances of OccuLogix, Inc. stock, net and cash acquired upon
consolidation
    
    
    
    
    
    
    233
    
    
    
    329Proceeds from issuances of common stock
    
    
    2,825
    
    
    
    970
    
    
    
    1,980Cash from financing activities
    
    
    (48,505
    )
    
    
    (14,092
    )
    
    
    (29,554
    )Net decrease in cash and cash equivalents during the period
    
    
    (15,992
    )
    
    
    (2,812
    )
    
    
    (1,706
    )Cash and cash equivalents, beginning of period
    
    
    28,917
    
    
    
    31,729
    
    
    
    33,435Cash and cash equivalents, end of period
    
    $
    12,925
    
    
    $
    28,917
    
    
    $
    31,729
  46




---



##### 



OPTION
    
    
    
    
    
    
    
    
    
    
    ACCUMULATEDAND
    
    
    
    
    
    
    
    
    
    
    OTHERCOMMON STOCK
    
    
    WARRANT
    
    
    TREASURY STOCK
    
    
    COMPREHENSIVE
    
    
    ACCUMULATEDSHARES
    
    
    AMOUNT
    
    
    EQUITY
    
    
    SHARES
    
    
    AMOUNT
    
    
    LOSS
    
    
    DEFICIT
    
    
    TOTALBalance December 31, 2004
    
    
    70,086
    
    
    $
    458,959
    
    
    $
    2,872
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (252,278
    )
    
    $
    209,553Shares issued as part of the
employee share purchase plan and
401(k) plan
    
    
    63
    
    
    
    486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486Exercise of stock options
    
    
    709
    
    
    
    2,935
    
    
    
    (1,003
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,932Options expired or forfeited
    
    
    
    
    
    
    8
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Escrow shares returned to the Company
    
    
    (171
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,000
    )
    
    
    (15,868
    )
    
    
    
    
    
    
    
    
    
    
    (15,868
    )Retirement of treasury stock
    
    
    (2,000
    )
    
    
    (15,868
    )
    
    
    
    
    
    
    2,000
    
    
    
    15,868
    
    
    
    
    
    
    
    
    
    
    
    Value of shares issued upon meeting
certain earnings criteria
    
    
    
    
    
    
    181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181Shares issued as part of acquisition
    
    
    4
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24Reversal of deferred tax asset
valuation allowance for excess
stock-based compensation tax
deductions
    
    
    
    
    
    
    3,116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,116Stock based compensation
    
    
    
    
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600Changes in subsidiaries
stockholders equity
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,119
    
    
    
    8,119Balance December 31, 2005
    
    
    68,691
    
    
    $
    450,703
    
    
    $
    1,861
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (244,159
    )
    
    $
    208,405Shares issued as part of the
employee share purchase plan and
401(k) plan
    
    
    142
    
    
    
    740
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    740Exercise of stock options
    
    
    258
    
    
    
    647
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    597Options expired or forfeited
    
    
    
    
    
    
    5
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjustment of utilized net operating
loss carry forwards
    
    
    
    
    
    
    (3,116
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,116
    )Stock based compensation
    
    
    
    
    
    
    983
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    983Changes in subsidiaries
stockholders equity
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,519
    
    
    
    11,519Balance December 31, 2006
    
    
    69,091
    
    
    $
    450,133
    
    
    $
    1,806
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (232,640
    )
    
    $
    219,299Shares issued as part of the
employee share purchase plan and
401(k) plan
    
    
    70
    
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264Exercise of stock options
    
    
    979
    
    
    
    3,222
    
    
    
    (661
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,561Options expired or forfeited
    
    
    
    
    
    
    308
    
    
    
    (308
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    1,115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,115Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    (117,569
    )
    
    
    
    
    
    
    
    
    
    
    (117,569
    )Retirement of treasury stock
    
    
    (20,000
    )
    
    
    (117,569
    )
    
    
    
    
    
    
    (20,000
    )
    
    
    117,569
    
    
    
    
    
    
    
    
    
    
    
    Adjustment related to adoption of
FIN 48 (see note 18)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750
    
    
    
    750Comprehensive
lossDeferred hedge loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (784
    )
    
    
    
    
    
    
    (784
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,514
    )
    
    
    (43,514
    )Balance December 31, 2007
    
    
    50,140
    
    
    $
    337,473
    
    
    $
    837
    
    
    
    
    
    
    $
    
    
    
    $
    (784
    )
    
    $
    (275,404
    )
    
    $
    62,122
  47




---



##### 



Vision
       2007
    
    
    2006
    
    
    2005Total revenues
    
    $
    3,535
    
    
    $
    3,973
    
    
    $
    4,478Gross profit
    
    
    1,739
    
    
    
    1,861
    
    
    
    2,325Impairment of goodwill
    
    
    9,291
    
    
    
    4,087
    
    
    
    Operating (loss) income
    
    
    (7,796
    )
    
    
    (2,405
    )
    
    
    2,253(Loss) income from discontinued operations before income taxes
    
    
    (8,214
    )
    
    
    (2,914
    )
    
    
    1,560Income tax benefit (expense)
    
    
    
    
    
    
    753
    
    
    
    (610
    )(Loss) income from discontinued operations, net of tax
    
    $
    (8,214
    )
    
    $
    (2,161
    )
    
    $
    950
 48




---



##### 



2006Current assets
    
    $
    1,751Non-current assets
    
    
    10,354Total assets
    
    $
    12,105Current liabilities
    
    $
    64Non-current liabilities
    
    
    305Total liabilities
    
    $
    369
              Buildings
    
    - 40 yearsComputer equipment and software
    
    - three to four yearsFurniture, fixtures and equipment
    
    - seven yearsLaser and medical equipment
    
    - five to seven yearsLeasehold improvements
    
    - shorter of useful life or initial term of the leaseVehicles and other
    
    - five years
 49




---



##### 



50




---



##### 



51




---



##### 




    
    Recognize, with certain exceptions, 100 percent of the fair values of assets acquired,
liabilities assumed, and noncontrolling interests in acquisitions of less than a 100
percent controlling interest when the acquisition constitutes a change in control of the
acquired entity.
    
    Measure acquirer shares issued in consideration for a business combination at fair
value on the acquisition date.
    
    Recognize contingent consideration arrangements at their acquisition-date fair values,
with subsequent changes in fair value generally reflected in earnings.
    
    Expense, as incurred, acquisition-related costs.
    
    Capitalize acquisition-related restructuring costs under limited circumstances.
        52




---



##### 



YEAR ENDEDDECEMBER 31, 2005Net income, as reported
    
    $
    8,119Add stock-based employee compensation cost included in reported net income
    
    
    Add OccuLogixs stock-based employee compensation cost included in
reported net income, net of minority interests
    
    
    29Less stock-based employee compensation cost determined under fair value
based method for all awards, net of related tax effects
    
    
    (3,140
    )Less OccuLogixs stock-based employee compensation cost determined under
fair value based method for all awards, net of minority interests
    
    
    (3,348
    )Pro forma net income
    
    $
    1,660Pro forma earnings per share  basic
    
    $
    0.02Pro forma earnings per share  diluted
    
    $
    0.02
      53




---



##### 



DECEMBER 31,2007
    
    
    2006Refractive centers
    
    $
    848
    
    
    $
    930Doctor servicesRefractive access
    
    
    3,631
    
    
    
    5,038Mobile cataract
    
    
    4,083
    
    
    
    5,034Other
    
    
    3,315
    
    
    
    3,050Eye careOptometric franchising
    
    
    4,312
    
    
    
    3,90316,189
    
    
    
    17,955Other corporate receivables
    
    
    1,887
    
    
    
    1,360$
    18,076
    
    
    $
    19,315
  
    
    Refractive centers accounts receivable are due principally from open-access surgeons
who utilize the Companys facilities and staff on a per-use basis (pursuant to their
contractual agreement). While the Company offers consumer financing options for LASIK
surgery, the credit risk is borne by the Companys third-party providers who perform an
independent credit evaluation on each potential patient before extending credit.
    
    Doctor services accounts receivable are generally due from surgeon and medical
facility partners who contract with the Company to use its mobile technology platform.
    
    Eye care accounts receivable represent fees due from franchisees
pursuant to their franchise agreements.
    DECEMBER 31,2007
    
    
    2006Prepaid expenses
    
    $
    3,758
    
    
    $
    4,601Inventory
    
    
    8,986
    
    
    
    6,916Other current assets
    
    
    2,138
    
    
    
    2,394$
    14,882
    
    
    $
    13,911
 54




---



##### 



DECEMBER 31,2007
    
    
    2006Equity method investments
    
    $
    7,022
    
    
    $
    29,944Cost method investments
    
    
    3,625
    
    
    
    3,625Long-term receivables
    
    
    4,071
    
    
    
    4,085Capitalized debt costs
    
    
    1,785
    
    
    
    Other
    
    
    1,021
    
    
    
    1,203$
    17,524
    
    
    $
    38,857
  INVESTMENT % ATDECEMBER 31,2007
    
    2006OccuLogix, Inc.
    
    
    33
    %
    
    
    41
    %LECC
    
    
    30
    
    
    
    30Liberty ASC
    
    
    49
    
    
    
    49Rockland ASC
    
    
    38
    
    
    
    38Eastern Oregon Regional Surgery Center
    
    
    49
    
    
    
    49Summit Ambulatory Surgical Center LLP
    
    
    24
    
    
    
    25TLC Oklahoma Doctors LLC
    
    
    25
    
    
    
    25TLC Northwest Ohio LLC
    
    
    25
    %
    
    
    25
    %
   YEAR ENDED
    
    NINE MONTHS ENDEDDECEMBER 31, 2007
    
    DECEMBER 31, 2006Net sales
    
    $
    91
    
    
    $
    174Gross loss
    
    
    (2,307
    )
    
    
    (1,705
    )Net loss from continuing operations
    
    
    (32,710
    )
    
    
    (74,929
    )Net loss from discontinued operations
    
    
    (35,429
    )
    
    
    (1,542
    )Net loss
    
    $
    (68,139
    )
    
    $
    (76,471
    )
    55




---



##### 



DOCTOR SERVICES
    
    
    EYE CAREREFRACTIVE
    
    
    REFRACTIVE
    
    
    MOBILE
    
    
    
    
    
    OPTOMETRICCENTERS
    
    
    ACCESS
    
    
    CATARACT
    
    
    OTHER
    
    
    FRANCHISING
    
    
    TOTALDecember 31, 2005
    
    
    49,656
    
    
    
    16,124
    
    
    
    9,807
    
    
    
    17,710
    
    
    
    6,105
    
    
    
    99,402Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,087
    )
    
    
    
    
    
    
    (4,087
    )Reversal of deferred tax asset valuation allowance
    
    
    
    
    
    
    (4,929
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,929
    )Acquired during the period
    
    
    4,091
    
    
    
    
    
    
    
    999
    
    
    
    672
    
    
    
    
    
    
    
    5,762December 31, 2006
    
    $
    53,747
    
    
    $
    11,195
    
    
    $
    10,806
    
    
    $
    14,295
    
    
    $
    6,105
    
    
    $
    96,148Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,636
    )
    
    
    
    
    
    
    (9,636
    )Acquired during the period
    
    
    8,521
    
    
    
    
    
    
    
    338
    
    
    
    
    
    
    
    
    
    
    
    8,859Disposals and other during the period
    
    
    (193
    )
    
    
    
    
    
    
    (93
    )
    
    
    (739
    )
    
    
    
    
    
    
    (1,025
    )December 31, 2007
    
    $
    62,075
    
    
    $
    11,195
    
    
    $
    11,051
    
    
    $
    3,920
    
    
    $
    6,105
    
    
    $
    94,346
 2007 Goodwill Impairment
      2007 Acquired Goodwill
  56




---



##### 



2006 Goodwill Impairment
      2007
    
    
    2006GROSS CARRYING
    
    
    ACCUMULATED
    
    
    GROSS CARRYING
    
    
    ACCUMULATEDAMOUNT
    
    
    AMORTIZATION
    
    
    AMOUNT
    
    
    AMORTIZATIONPractice management agreements
    
    $
    23,015
    
    
    $
    18,366
    
    
    $
    23,015
    
    
    $
    16,614Deferred contract rights
    
    
    11,081
    
    
    
    7,740
    
    
    
    11,081
    
    
    
    6,996Trade names
    
    
    5,870
    
    
    
    797
    
    
    
    5,870
    
    
    
    504Other
    
    
    5,500
    
    
    
    1,543
    
    
    
    5,698
    
    
    
    1,047Total
    
    $
    45,466
    
    
    $
    28,446
    
    
    $
    45,664
    
    
    $
    25,161
  2008
    
    $
    3,0002009
    
    
    2,7002010
    
    
    2,7002011
    
    
    2,0002012
    
    
    1,400
   DECEMBER 31,2007
    
    
    2006Land and buildings
    
    $
    12,285
    
    
    $
    12,195Computer equipment and software
    
    
    14,483
    
    
    
    15,522Furniture, fixtures and equipment
    
    
    7,587
    
    
    
    8,327Laser and medical equipment
    
    
    95,360
    
    
    
    87,401Leasehold improvements
    
    
    24,640
    
    
    
    23,659Vehicles and other
    
    
    4,701
    
    
    
    3,730159,056
    
    
    
    150,834Less accumulated depreciation
    
    
    97,120
    
    
    
    93,946Net book value
    
    $
    61,936
    
    
    $
    56,888
   57




---



##### 



DECEMBER 31,2007
    
    
    2006Senior term loan; weighted average interest rate of 8.16% at December 31,
2007
    
    $
    82,748
    
    
    $
    Capital lease obligations, payable through 2013, interest at various rates
    
    
    17,389
    
    
    
    13,945Sale-leaseback debt  interest imputed at 6.25%, due through October
2016, collateralized by building (Cdn $7.4 million and $7.9 million at
December 31, 2007 and 2006 respectively)
    
    
    6,297
    
    
    
    5,706Other
    
    
    3,715
    
    
    
    3,782110,149
    
    
    
    23,433Less current portion
    
    
    11,732
    
    
    
    8,311$
    98,417
    
    
    $
    15,122
  2008
    
    $
    11,7322009
    
    
    4,6262010
    
    
    4,8402011
    
    
    4,5042012
    
    
    4,245Thereafter
    
    
    80,202Total
    
    $
    110,149
 New Credit Facility dated June 2007
      58




---



##### 



2008
    
    $
    3,5902009
    
    
    8502010
    
    
    8502011
    
    
    8502012
    
    
    850Thereafter
    
    
    75,758Total
    
    $
    82,748
   Credit Facility dated November 2003
  Capital Lease Obligations
  2008
    
    $
    6,5762009
    
    
    4,5812010
    
    
    3,3472011
    
    
    2,9302012
    
    
    1,902Thereafter
    
    
    641Total
    
    
    19,977Less interest portion
    
    
    2,588$
    17,389
 Sale-leaseback Transaction
   59




---



##### 



2008
    
    Cdn$1,0502009
    
    
    1,0502010
    
    
    1,0502011
    
    
    1,0552012
    
    
    1,110Thereafter
    
    
    4,228Cdn$9,543
  Visions
         60




---



##### 



OUTSTANDING
    
    
    EXERCISABLEWEIGHTEDAVERAGE
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDREMAINING
    
    
    AVERAGE
    
    
    
    
    
    AVERAGEPRICE RANGE
    
    NUMBER OF
    
    
    CONTRACTUAL
    
    
    EXERCISE
    
    
    NUMBER OF
    
    
    EXERCISE(CDN $)
    
    OPTIONS
    
    
    LIFE
    
    
    PRICE
    
    
    OPTIONS
    
    
    PRICE$  1.43  -  $
  3.87
    
    
    159
    
    
    4.0 years
    
    Cdn$2.46
    
    
    71
    
    
    Cdn$1.82$  4.75  -  $
  6.67
    
    
    52
    
    
    5.7 years
    
    
    5.36
    
    
    
    14
    
    
    
    5.50$  7.51  -  $
  9.80
    
    
    103
    
    
    1.8 years
    
    
    7.71
    
    
    
    67
    
    
    
    7.81$11.02  -  $
15.49
    
    
    64
    
    
    1.6 years
    
    
    12.71
    
    
    
    64
    
    
    
    12.71378
    
    
    3.3 years
    
    Cdn$6.03
    
    
    216
    
    
    Cdn$7.15
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTEDAVERAGE
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDREMAINING
    
    
    AVERAGE
    
    
    
    
    
    AVERAGEPRICE RANGE
    
    NUMBER OF
    
    
    CONTRACTUAL
    
    
    EXERCISE
    
    
    NUMBER OF
    
    
    EXERCISE(U.S. $)
    
    OPTIONS
    
    
    LIFE
    
    
    PRICE
    
    
    OPTIONS
    
    
    PRICE$0.90  -  $  2.65
    
    
    188
    
    
    0.6 years
    
    $
    1.47
    
    
    
    173
    
    
    $
    1.37$3.02  -  $  4.94
    
    
    2,220
    
    
    6.0 years
    
    
    3.63
    
    
    
    563
    
    
    
    3.72$5.95  -  $  6.81
    
    
    1,084
    
    
    2.4 years
    
    
    6.34
    
    
    
    590
    
    
    
    6.27$8.19  -  $11.64
    
    
    755
    
    
    1.8 years
    
    
    10.41
    
    
    
    752
    
    
    
    10.424,247
    
    
    4.1 years
    
    $
    5.43
    
    
    
    2,078
    
    
    $
    6.67
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTEDAVERAGE
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDREMAINING
    
    
    AVERAGE
    
    
    
    
    
    AVERAGEPRICE RANGE
    
    NUMBER OF
    
    
    CONTRACTUAL
    
    
    EXERCISE
    
    
    NUMBER OF
    
    
    EXERCISE(CDN $)
    
    OPTIONS
    
    
    LIFE
    
    
    PRICE
    
    
    OPTIONS
    
    
    PRICE$  1.43  -  $  3.87
    
    
    283
    
    
    0.4 years
    
    Cdn$3.13
    
    
    249
    
    
    Cdn$3.31$  4.75  -  $  6.67
    
    
    53
    
    
    6.6 years
    
    
    5.36
    
    
    
    3
    
    
    
    5.95$  7.51  -  $  9.80
    
    
    104
    
    
    3.2 years
    
    
    7.71
    
    
    
    44
    
    
    
    7.85$11.02  -  $15.49
    
    
    64
    
    
    2.9 years
    
    
    12.71
    
    
    
    64
    
    
    
    12.71504
    
    
    1.9 years
    
    Cdn$5.53
    
    
    360
    
    
    Cdn$5.56
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTEDAVERAGE
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDREMAINING
    
    
    AVERAGE
    
    
    
    
    
    AVERAGEPRICE RANGE
    
    NUMBER OF
    
    
    CONTRACTUAL
    
    
    EXERCISE
    
    
    NUMBER OF
    
    
    EXERCISE(U.S. $)
    
    OPTIONS
    
    
    LIFE
    
    
    PRICE
    
    
    OPTIONS
    
    
    PRICE$0.90  -  $   2.62
    
    
    718
    
    
    1.0 years
    
    $
    1.32
    
    
    
    543
    
    
    $
    1.37$3.02  -  $   4.94
    
    
    1,638
    
    
    4.7 years
    
    
    4.45
    
    
    
    689
    
    
    
    4.17$6.03  -  $   6.81
    
    
    1,358
    
    
    3.4 years
    
    
    6.35
    
    
    
    398
    
    
    
    6.19$8.19  -  $11.64
    
    
    872
    
    
    2.9 years
    
    
    10.40
    
    
    
    866
    
    
    
    10.424,586
    
    
    3.4 years
    
    $
    5.66
    
    
    
    2,496
    
    
    $
    6.05
 61




---



##### 



WEIGHTEDAVERAGE
    
    
    WEIGHTED
    
    
    AGGREGATE
    
    
    AGGREGATEEXERCISE
    
    
    AVERAGE
    
    
    INTRINSIC
    
    
    INTRINSICPRICE
    
    
    EXERCISE PRICE
    
    
    VALUE
    
    
    VALUEOPTIONS
    
    
    PER SHARE
    
    
    PER SHARE
    
    
    CDN OPTIONS
    
    
    US OPTIONSDecember 31, 2004
    
    
    4,203
    
    
    Cdn$
    5.04
    
    
    US$
    5.08Granted
    
    
    176
    
    
    
    8.53
    
    
    
    7.52Exercised
    
    
    (709
    )
    
    
    3.89
    
    
    
    2.71Forfeited
    
    
    (112
    )
    
    
    11.32
    
    
    
    9.69Expired
    
    
    (22
    )
    
    
    9.39
    
    
    
    6.20December 31, 2005
    
    
    3,536
    
    
    Cdn$
    5.26
    
    

    US$
    5.53Granted
    
    
    1,902
    
    
    
    6.39
    
    
    
    5.51Exercised
    
    
    (258
    )
    
    
    3.97
    
    
    
    1.91Forfeited
    
    
    (51
    )
    
    
    4.80
    
    
    
    4.92Expired
    
    
    (39
    )
    
    
    11.28
    
    
    
    8.63December 31, 2006
    
    
    5,090
    
    
    Cdn$
    5.53
    
    
    US$
    5.66Granted
    
    
    1,366
    
    
    
    2.98
    
    
    
    3.21Exercised
    
    
    (979
    )
    
    
    3.57
    
    
    
    2.41Forfeited
    
    
    (454
    )
    
    
    8.51
    
    
    
    5.52Expired
    
    
    (398
    )
    
    
    4.75
    
    
    
    6.57December 31, 2007
    
    
    4,625
    
    
    Cdn$
    6.03
    
    
    US$
    5.43
    


    Cdn$
    153


    
    US$
    720Exercisable at December
31, 2007
    
    
    2,294
    
    
    Cdn$
    7.15
    
    
    US$
    6.67
    
    

    Cdn$
   114
    
    

    US$
    403
    Vision Vision
 Vision
 62




---



##### 



DECEMBER 31,2007
    
    
    2006Deferred tax asset:Net operating loss carry forwards
    
    $
    93,742
    
    
    $
    84,467Fixed assets
    
    
    (134
    )
    
    
    1,427Intangibles
    
    
    9,451
    
    
    
    10,939Investments
    
    
    18,259
    
    
    
    11,831Accruals and other reserves
    
    
    4,697
    
    
    
    4,272Tax credits
    
    
    357
    
    
    
    357Other
    
    
    513
    
    
    
    3,859Total deferred tax asset
    
    
    126,885
    
    
    
    117,152Valuation allowance
    
    
    (126,885
    )
    
    
    (109,999
    )Total deferred tax asset, net of
valuation allowance
    
    $
    
    
    
    $
    7,153
      63




---



##### 



YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Income tax (benefit) expense at the Canadian statutory rate of 36.12%
    
    $
    (8,142
    )
    
    $
    6,289
    
    
    $
    4,728Change in valuation allowance
    
    
    15,098
    
    
    
    (6,246
    )
    
    
    (267
    )Expenses not deductible for income tax purposes
    
    
    216
    
    
    
    224
    
    
    
    285State taxes
    
    
    691
    
    
    
    633
    
    
    
    506Canadian income tax
    
    
    632
    
    
    
    180
    
    
    
    350IRC Section 382 adjustments
    
    
    
    
    
    
    (3,415
    )
    
    
    Deductible interest expense adjustments
    
    
    
    
    
    
    (1,464
    )
    
    
    Rate differential on United States operations
    
    
    (19
    )
    
    
    144
    
    
    
    445Income tax expense (benefit) from continuing operations
    
    
    8,476
    
    
    
    (3,655
    )
    
    
    6,047Discontinued operations income tax (benefit) expense
    
    
    
    
    
    
    (753
    )
    
    
    610Income tax expense (benefit)
    
    $
    8,476
    
    
    $
    (4,408
    )
    
    $
    6,657
  YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Current:Canada
    
    $
    632
    
    
    $
    180
    
    
    $
    350United States  federal
    
    
    
    
    
    
    129
    
    
    
    228United States  state
    
    
    691
    
    
    
    524
    
    
    
    475Other
    
    
    (19
    )
    
    
    
    
    
    
    537$
    1,304
    
    
    $
    833
    
    
    $
    1,590Deferred:United States  federal
    
    $
    6,899
    
    
    $
    (4,165
    )
    
    $
    3,799United States  state
    
    
    273
    
    
    
    (323
    )
    
    
    658$
    7,172
    
    
    $
    (4,488
    )
    
    $
    4,457Income tax expense (benefit) from continuing operations
    
    $
    8,476
    
    
    $
    (3,655
    )
    
    $
    6,047
   64




---



##### 



YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Other expenses (income):(Gain) loss on sales and disposals of fixed assets
    
    $
    (11
    )
    
    $
    140
    
    
    $
    (92
    )Adjustments to the fair values of long-lived
assets and liabilities
    
    
    
    
    
    
    294
    
    
    
    888Center closing costs
    
    
    1,352
    
    
    
    234
    
    
    
    1,012Loss (gain) on sales of subsidiaries
    
    
    233
    
    
    
    
    
    
    
    (319
    )Gain on sales and issuances of subsidiary stock
    
    
    
    
    
    
    (349
    )
    
    
    Reimbursements from previous research and
development arrangements
    
    
    
    
    
    
    (300
    )
    
    
    (300
    )Severance accruals for employees under terms of
employment contracts
    
    
    1,268
    
    
    
    229
    
    
    
    OccuLogix severance accruals
    
    
    
    
    
    
    820
    
    
    
    Miscellaneous income
    
    
    (89
    )
    
    
    (194
    )
    
    
    (420
    )$
    2,753
    
    
    $
    874
    
    
    $
    769
    YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Net (loss) income from continuing operations
    
    $
    (35,300
    )
    
    $
    13,680
    
    
    $
    7,169Net (loss) income from discontinued operations
    
    
    (8,214
    )
    
    
    (2,161
    )
    
    
    950Net (loss) income
    
    $
    (43,514
    )
    
    $
    11,519
    
    
    $
    8,119Weighted-average shares outstanding  basic
    
    
    59,139
    
    
    
    68,907
    
    
    
    69,721Stock options
    
    
    
    
    
    
    673
    
    
    
    1,659Weighted-average shares outstanding  diluted
    
    
    59,139
    
    
    
    69,580
    
    
    
    71,380(Loss) earnings per share from continuing
operations
    
    $
    (0.60
    )
    
    $
    0.20
    
    
    $
    0.10(Loss) earnings per share from continuing
operations, diluted
    
    $
    (0.60
    )
    
    $
    0.20
    
    
    $
    0.10(Loss) earnings per share
    
    $
    (0.74
    )
    
    $
    0.17
    
    
    $
    0.12(Loss) earnings per share, diluted
    
    $
    (0.74
    )
    
    $
    0.17
    
    
    $
    0.11
 65




---



##### 



2008
    
    $
    7,9142009
    
    
    6,9972010
    
    
    5,9332011
    
    
    4,1552012
    
    
    2,839Thereafter
    
    
    4,585$
    32,423
  TM TM
     Vision Vision Vision Vision
 66




---



##### 




    
    Refractive Centers: The refractive centers business provides the majority of
the Companys revenue and is in the business of providing corrective laser surgery
(principally LASIK) in fixed sites typically branded under the TLC name.
    
    Doctor Services: The doctor services business provides a variety of services
and products directly to doctors and the facilities in which they perform surgery. It
consists of the following segments:
 
    
    Mobile Cataracts: The mobile cataract segment provides technology and diagnostic
equipment and services to doctors and hospitals to support cataract surgery as well as
other eye diseases.
    
    Refractive Access: The refractive access segment assists surgeons in providing
corrective laser surgery in their own practice location by providing refractive
technology, technicians, service and practice development support at the surgeons
office.
    
    Other: The Company has an accumulation of businesses that manage surgical and
secondary care centers. None of these businesses meets the quantitative criteria to be
disclosed separately as a reportable segment and they are included in Other for
segment disclosure purposes.
 
    
    Eye Care: The eye care business consists of two business segments:
 
    
    Optometric Franchising: The optometric franchising segment provides marketing,
practice development and purchasing power to independently-owned and operated
optometric practices in the United States.
    
    Age-Related Macular Degeneration (AMD): The AMD segment includes the Companys
ownership interest in OccuLogix, which is pursuing commercial applications for
specific eye diseases including dry age-related macular degeneration, glaucoma and
dry-eye syndrome.
 Corporate depreciation and amortization of $2.4 million, $2.6 million, and $2.0 million for 2007,
2006 and 2005, respectively, is included in corporate operating expenses. For purposes of the
depreciation and amortization disclosures shown below, these amounts are included in the
Refractive Centers segment.The Company reviews its definition of centers when there is a change in its level of operating
control and/or ownership at the center, or if the mode of service delivery at the location is
significantly altered. As a result, prior year figures may vary from previously reported
financials in order to better reflect changes in the Companys current portfolio of centers.Assets of the Companys corporate operations, including corporate headquarters, have not been
allocated among the various segments. The amounts are included in the Refractive Centers
segment.The Companys reportable segments are as follows:
 67




---



##### 



YEAR ENDED DECEMBER 31, 2007(IN THOUSANDS)
    
    
    
    
    
    DOCTOR SERVICES
    
    
    EYE CAREREFRACTIVE
    
    
    REFRACTIVE
    
    
    MOBILE
    
    
    
    
    
    
    OPTOMETRICCENTERS
    
    
    ACCESS
    
    
    CATARACT
    
    
    OTHER
    
    
    FRANCHISING
    
    
    AMD
    
    
    TOTALRevenues
    
    $
    174,816
    
    
    $
    35,925
    
    
    $
    37,556
    
    
    $
    23,606
    
    
    $
    26,511
    
    
    $
    
    
    
    $
    298,414Cost of revenues (excluding amortization)
    
    
    126,804
    
    
    
    28,240
    
    
    
    26,889
    
    
    
    15,152
    
    
    
    11,999
    
    
    
    
    
    
    
    209,084Gross profit
    
    
    48,012
    
    
    
    7,685
    
    
    
    10,667
    
    
    
    8,454
    
    
    
    14,512
    
    
    
    
    
    
    
    89,330Segment expenses:Gain on sale of OccuLogix stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (899
    )
    
    
    (899
    )Marketing and sales
    
    
    32,543
    
    
    
    1,372
    
    
    
    4,252
    
    
    
    470
    
    
    
    4,342
    
    
    
    
    
    
    
    42,979G&A, amortization and other
    
    
    11,587
    
    
    
    64
    
    
    
    4,182
    
    
    
    2,198
    
    
    
    167
    
    
    
    
    
    
    
    18,198Impairment goodwill and other assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,659
    
    
    
    
    
    
    
    
    
    
    
    7,659Minority interests
    
    
    1,270
    
    
    
    133
    
    
    
    
    
    
    
    2,981
    
    
    
    4,537
    
    
    
    
    
    
    
    8,921(Earnings) losses from equity investments
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    (1,115
    )
    
    
    
    
    
    
    13,396
    
    
    
    12,367Segment profit (loss)
    
    $
    2,526
    
    
    $
    6,116
    
    
    $
    2,233
    
    
    $
    (3,739
    )
    
    $
    5,466
    
    
    $
    (12,497
    )
    
    $
    105Corporate operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,772
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,157
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,476
    )Net loss from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,300
    )Net loss from discontinued operations*
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,214
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,514
    )Depreciation and amortization from
continuing operations
    
    $
    11,930
    
    
    $
    2,486
    
    
    $
    2,863
    
    
    $
    1,425
    
    
    $
    58
    
    
    $
    
    
    
    $
    18,762Depreciation and amortization from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    18,859Total assets
    
    $
    159,912
    
    
    $
    27,979
    
    
    $
    26,154
    
    
    $
    8,750
    
    
    $
    15,015
    
    
    $
    
    
    
    $
    237,810
 
 *
    
    Note: Net loss from discontinued operations for the year ended December 31, 2007 includes a
goodwill impairment charge of $9.3 million and relates to the Other segment. YEAR ENDED DECEMBER 31, 2006(IN THOUSANDS)
    
    
    
    
    
    DOCTOR SERVICES
    
    
    EYE CAREREFRACTIVE
    
    
    REFRACTIVE
    
    
    MOBILE
    
    
    
    
    
    
    OPTOMETRICCENTERS
    
    
    ACCESS
    
    
    CATARACT
    
    
    OTHER
    
    
    FRANCHISING
    
    
    AMD
    
    
    TOTALRevenues
    
    $
    161,822
    
    
    $
    36,878
    
    
    $
    35,058
    
    
    $
    21,235
    
    
    $
    22,860
    
    
    $
    
    
    
    $
    277,853Cost of revenues (excluding amortization)
    
    
    114,883
    
    
    
    27,641
    
    
    
    24,631
    
    
    
    14,390
    
    
    
    9,733
    
    
    
    1,659
    
    
    
    192,937Gross profit
    
    
    46,939
    
    
    
    9,237
    
    
    
    10,427
    
    
    
    6,845
    
    
    
    13,127
    
    
    
    (1,659
    )
    
    
    84,916Segment expenses:Gain on sale of OccuLogix stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,450
    )
    
    
    (1,450
    )Marketing and sales
    
    
    19,639
    
    
    
    413
    
    
    
    3,012
    
    
    
    437
    
    
    
    4,121
    
    
    
    169
    
    
    
    27,791G&A, amortization and other
    
    
    11,621
    
    
    
    265
    
    
    
    4,034
    
    
    
    1,773
    
    
    
    150
    
    
    
    4,083
    
    
    
    21,926Minority interests
    
    
    2,144
    
    
    
    284
    
    
    
    
    
    
    
    2,720
    
    
    
    4,080
    
    
    
    (2,715
    )
    
    
    6,513(Earnings) losses from equity investments
    
    
    (1,356
    )
    
    
    
    
    
    
    
    
    
    
    (1,817
    )
    
    
    
    
    
    
    5,809
    
    
    
    2,636Segment profit (loss)
    
    $
    14,891
    
    
    $
    8,275
    
    
    $
    3,381
    
    
    $
    3,732
    
    
    $
    4,776
    
    
    $
    (7,555
    )
    
    $
    27,500Corporate operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,350
    )Interest income, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    875Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,655Net income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,680Net loss from discontinued operations **
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,161
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,519Depreciation and amortization from
continuing operations
    
    $
    10,017
    
    
    $
    2,146
    
    
    $
    2,683
    
    
    $
    1,337
    
    
    $
    58
    
    
    $
    34
    
    
    $
    16,275Depreciation and amortization from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    16,392Total assets
    
    $
    189,125
    
    
    $
    29,510
    
    
    $
    23,806
    
    
    $
    24,078
    
    
    $
    13,421
    
    
    $
    14,362
    
    
    $
    294,302
 
 **
    
    Note: Net loss from discontinued operations for the year ended December 31, 2006 includes a goodwill impairment charge of $4.1 million and relates to the other segment. 68




---



##### 



YEAR ENDED DECEMBER 31, 2005(IN THOUSANDS)
    
    
    
    
    
    DOCTOR SERVICES
    
    
    EYE CAREREFRACTIVE
    
    
    REFRACTIVE
    
    
    MOBILE
    
    
    
    
    
    
    OPTOMETRICCENTERS
    
    
    ACCESS
    
    
    CATARACT
    
    
    OTHER
    
    
    FRANCHISING
    
    
    AMD
    
    
    TOTALRevenues
    
    $
    150,709
    
    
    $
    35,911
    
    
    $
    31,716
    
    
    $
    17,746
    
    
    $
    17,624
    
    
    $
    1,841
    
    
    $
    255,547Cost of revenues
(excluding amortization)
    
    
    106,895
    
    
    
    26,555
    
    
    
    22,134
    
    
    
    11,489
    
    
    
    7,761
    
    
    
    3,738
    
    
    
    178,572Gross profit
    
    
    43,814
    
    
    
    9,356
    
    
    
    9,582
    
    
    
    6,257
    
    
    
    9,863
    
    
    
    (1,897
    )
    
    
    76,975Segment expenses:Marketing and sales
    
    
    13,928
    
    
    
    529
    
    
    
    2,617
    
    
    
    551
    
    
    
    3,430
    
    
    
    659
    
    
    
    21,714G&A, amortization and other
    
    
    10,071
    
    
    
    280
    
    
    
    3,692
    
    
    
    2,172
    
    
    
    42
    
    
    
    13,934
    
    
    
    30,191Minority interests
    
    
    1,921
    
    
    
    450
    
    
    
    
    
    
    
    2,450
    
    
    
    2,914
    
    
    
    (7,058
    )
    
    
    677(Earnings) losses from equity investments
    
    
    (1,473
    )
    
    
    
    
    
    
    
    
    
    
    (1,072
    )
    
    
    
    
    
    
    
    
    
    
    (2,545
    )Segment profit (loss)
    
    $
    19,367
    
    
    $
    8,097
    
    
    $
    3,273
    
    
    $
    2,156
    
    
    $
    3,477
    
    
    $
    (9,432
    )
    
    $
    26,938Corporate operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,292
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,570Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,047
    )Net income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,169Net income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    950Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,119Depreciation and amortization from
continuing operations
    
    $
    8,632
    
    
    $
    3,480
    
    
    $
    2,649
    
    
    $
    1,275
    
    
    $
    44
    
    
    $
    120
    
    
    $
    16,200Depreciation and amortization from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    16,353Total assets
    
    $
    161,844
    
    
    $
    35,270
    
    
    $
    19,890
    
    
    $
    26,212
    
    
    $
    11,556
    
    
    $
    46,271
    
    
    $
    301,043
  YEAR ENDED DECEMBER 31, 2007
    
    CANADA
    
    
    UNITED STATES
    
    
    TOTALRevenues from continuing operations
    
    $
    14,247
    
    
    $
    284,167
    
    
    $
    298,414Total fixed assets and intangibles
    
    $
    8,445
    
    
    $
    164,857
    
    
    $
    173,302
 YEAR ENDED DECEMBER 31, 2006
    
    CANADA
    
    
    UNITED STATES
    
    
    TOTALRevenues from continuing operations
    
    $
    14,395
    
    
    $
    263,458
    
    
    $
    277,853Total fixed assets and intangibles
    
    $
    7,938
    
    
    $
    165,601
    
    
    $
    173,539
 YEAR ENDED DECEMBER 31, 2005
    
    CANADA
    
    
    UNITED STATES
    
    
    TOTALRevenues from continuing operations
    
    $
    12,937
    
    
    $
    242,610
    
    
    $
    255,547Total fixed assets and intangibles
    
    $
    8,457
    
    
    $
    164,125
    
    
    $
    172,582
      69




---



##### 



YEAR ENDED DECEMBER 31,2007
    
    2006
    
    2005Capital lease obligations relating to equipment purchases
    
    $
    8,513
    
    
    $
    11,129
    
    
    $
    5,667Inventory contributed to OccuLogix
    
    
    
    
    
    
    25
    
    
    
    183Option and warrant reduction
    
    
    969
    
    
    
    55
    
    
    
    1,011Value of shares issued upon meeting certain earnings criteria
    
    
    
    
    
    
    
    
    
    
    181Retirement of treasury stock
    
    
    117,569
    
    
    
    
    
    
    
    15,868Value of shares issued for acquisitions
    
    
    
    
    
    
    
    
    
    
    24
  YEAR ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005Interest
    
    $
    4,771
    
    
    $
    1,453
    
    
    $
    1,426Income taxes
    
    $
    1,443
    
    
    $
    1,814
    
    
    $
    1,187
  Vision Vision
 Vision
  Defined Contribution Plan (401k)
  Employee Stock Purchase Plan
 Vision
    70




---



##### 



THREE MONTHS
    
    THREE MONTHS
    
    THREE MONTHS
    
    THREE MONTHSENDED MARCH 31,
    
    ENDED JUNE 30,
    
    ENDED SEPTEMBER 30,
    
    ENDED DECEMBER 31,2007 (1)
    
    2007 (2)
    
    2007 (3)
    
    2007 (4)Revenues
    
    $
    82,346
    
    
    $
    80,081
    
    
    $
    69,693
    
    
    $
    66,294Gross profit
    
    
    27,834
    
    
    
    25,758
    
    
    
    18,833
    
    
    
    16,905Net income (loss) from
continuing operations
    
    
    3,283
    
    
    
    530
    
    
    
    (13,603
    )
    
    
    (25,510
    )Net income (loss)
    
    
    3,478
    
    
    
    876
    
    
    
    (22,584
    )
    
    
    (25,284
    )Income (loss) per share from
continuing operations
    
    
    0.05
    
    
    
    0.01
    
    
    
    (0.27
    )
    
    
    (0.51
    )Income (loss) per share from
continuing operations, diluted
    
    
    0.05
    
    
    
    0.01
    
    
    
    (0.27
    )
    
    
    (0.51
    )Income (loss) per share
    
    
    0.05
    
    
    
    0.01
    
    
    
    (0.45
    )
    
    
    (0.51
    )Income (loss) per share, diluted
    
    
    0.05
    
    
    
    0.01
    
    
    
    (0.45
    )
    
    
    (0.51
    )
 THREE MONTHS
    
    THREE MONTHS
    
    THREE MONTHS
    
    THREE MONTHSENDED MARCH 31,
    
    ENDED JUNE 30,
    
    ENDED SEPTEMBER 30,
    
    ENDED DECEMBER 31,2006 (5)
    
    2006 (6)
    
    2006 (7)
    
    2006 (8)Revenues
    
    $
    76,472
    
    
    $
    75,117
    
    
    $
    63,555
    
    
    $
    62,709Gross profit
    
    
    24,603
    
    
    
    24,648
    
    
    
    18,566
    
    
    
    17,099Net income from continuing
operations
    
    
    2,435
    
    
    
    10,588
    
    
    
    106
    
    
    
    551Net income (loss)
    
    
    2,712
    
    
    
    10,867
    
    
    
    301
    
    
    
    (2,361
    )Income per share from
continuing operations
    
    
    0.04
    
    
    
    0.15
    
    
    
    0.00
    
    
    
    0.01Income per share from
continuing operations, diluted
    
    
    0.04
    
    
    
    0.15
    
    
    
    0.00
    
    
    
    0.01Income (loss) per share
    
    
    0.04
    
    
    
    0.16
    
    
    
    0.00
    
    
    
    (0.03
    )Income (loss) per share, diluted
    
    
    0.04
    
    
    
    0.16
    
    
    
    0.00
    
    
    
    (0.03
    )
 
 (1)
    
    In the three months ended March 31, 2007, net income includes severance charges totaling $0.4
million.(2)
    
    In the three months ended June 30, 2007, net income includes a $0.9 million gain on sale of
OccuLogix common stock.(3)
    
    In the three months ended September 30, 2007, net loss includes: (a)
    
    a $12.4 million impairment charge to goodwill and other;(b)
    
    $0.2 million related to center closing costs; and(c)
    
    $0.2 million in loss on the sale of subsidiaries.
 
 (4)
    
    In the three months ended December 31, 2007, net loss includes: (a)
    
    a $4.5 million impairment to the Companys investments in the stand-alone ASCs;(b)
    
    severance charges totaling $0.7 million; and(c)
    
    $1.0 million related to center closing costs.
 
 (5)
    
    In the three months ended March 31, 2006, net income includes: (a)
    
    severance charges totaling $0.8 million ($0.4 million net of minority interests); and(b)
    
    a net write-down of inventory of $1.6 million ($0.8 million net of minority interests).
 
 (6)
    
    In the three months ended June 30, 2006, net income includes: (a)
    
    a gain on sale of subsidiary stock of $1.4 million; and(b)
    
    a $3.4 million decrease to income tax expense, $0.9 million related to prior years and
$2.5 million related to the three months ended March 31, 2006.
 71




---



##### 



(7)
    
    In the three months ended September 30, 2006, net income includes a gain on sale of
subsidiary stock of $0.2 million ($0.1 million net of minority interests).(8)
    
    In the three months ended December 31, 2006, the net loss includes: (a)
    
    an impairment of goodwill of $4.1 million;(b)
    
    a gain on sales and issuances of subsidiary stock of $0.2 million ($0.1 million net of
minority interests);(c)
    
    severance charges totaling $0.2 million;(d)
    
    net write-downs of assets and liabilities of $0.3 million;(e)
    
    income tax benefit of $5.3 million related to a partial reversal of the deferred tax
asset valuation allowance; and(f)
    
    income tax benefit of $1.5 million related to deductible interest expense adjustments.
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
         Internal
Control Integrated Framework.
  72




---



##### 



.
  /s/ Ernst & Young LLP 
 73




---



##### 



Vision
 Number of securitiesremaining available forNumber of securities
    
    
    Weighted-average
    
    
    future issuances underto be issued upon
    
    
    exercise price of
    
    
    equity compensationexercise of
    
    
    outstanding
    
    
    plans (excludingoutstanding options,
    
    
    options, warrants
    
    
    securities reflected inwarrants and rights
    
    
    and rights
    
    
    column (a))Plan category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    4,625
    
    
    $
    5.43
    (1)
    
    
    538Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4,625
    
    
    $
    5.43
    (1)
    
    
    538
 
 (1)
    
    Represents the weighted-average exercise price of outstanding options, warrants and rights
denominated in U.S. dollars. The weighted-average exercise price of outstanding options, warrants
and rights denominated in Canadian dollars was Cdn$6.03.  74




---



##### 



(a)
    
    The following documents are filed as part of the report:(1) Financial statements:Report of Independent Registered Public Accounting Firm.Consolidated Statements of Operations  Years Ended December 31, 2007, 2006 and 2005.Consolidated Balance Sheets as of December 31, 2007 and 2006.Consolidated Statements of Cash Flows  Years Ended December 31, 2007, 2006 and 2005.Consolidated Statements of Stockholders Equity  Years Ended December 31, 2007, 2006 and 2005.Notes to Consolidated Financial Statements(2) Financial statement schedules required to be filed by Item 8 and Item 15(d) of Form 10-K.Schedule II  Valuation and Qualifying Accounts and ReservesExcept as provided below, all schedules for which provision is made in the applicable accounting
regulations of the Commission either have been included in the consolidated financial statements
or are not required under the related instructions, or are inapplicable and therefore have been
omitted.(3) Exhibits required by Item 601 of Regulation S-K and by Item 14(c).See Exhibit Index.(b)
    
    Exhibits required by Item 601 of Regulation S-K.See Exhibit Index.
 75




---



##### 



TLC VISION CORPORATIONBy
    
    /s/ JAMES C. WACHTMANJames C. Wachtman, Chief Executive Officer   SIGNATURE
    
    TITLE
    
    DATED/s/ JAMES C WACHTMAN

James C. Wachtman
    
    Chief Executive Officer and Director
    
    March 17, 2008/s/ STEVEN P. RASCHE

Steven P. Rasche
    
    Chief Financial Officer
    
    March 17, 2008/s/ WARREN S. RUSTAND

Warren S. Rustand
    
    Chairman of the Board of Directors and Director
    
    March 17, 2008/s/ RICHARD L. LINDSTROM, M.D.

Richard L. Lindstrom, M.D.
    
    Director
    
    March 17, 2008/s/ TOBY S. WILT

Toby S. Wilt
    
    Director
    
    March 17, 2008/s/ MICHAEL D. DEPAOLIS, O.D.

Michael D. DePaolis, O.D.
    
    Director
    
    March 17, 2008
 76




---



##### 



BALANCE AT
    
    
    
    
    
    
    
    
    
    DEDUCTIONS-
    
    BALANCE ATBEGINNING
    
    
    
    
    
    
    
    
    
    UNCOLLECTABLE
    
    ENDOF PERIOD
    
    PROVISION
    
    OTHER(1)
    
    AMOUNTS
    
    OF PERIOD2005Provision for contractual allowances and
doubtful accounts receivable
    
    $
    2,327
    
    
    $
    1,648
    
    
    $
    530
    
    
    $
    (276
    )
    
    $
    4,229Provision against investments and other
assets
    
    
    2,312
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2,314Deferred tax asset valuation allowance
    
    
    78,631
    
    
    
    (267
    )
    
    
    (2,757
    )
    
    
    
    
    
    
    75,6072006Provision for contractual allowances and
doubtful accounts receivable
    
    $
    4,229
    
    
    $
    (339
    )
    
    $
    (1,048
    )
    
    $
    (471
    )
    
    $
    2,371Provision against investments and other
assets
    
    
    2,314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,314Deferred tax asset valuation allowance
    
    
    75,607
    
    
    
    (5,875
    )
    
    
    40,267
    
    
    
    
    
    
    
    109,9992007Provision for contractual allowances and
doubtful accounts receivable
    
    $
    2,371
    
    
    $
    (9
    )
    
    $
    (18
    )
    
    $
    (379
    )
    
    $
    1,965Provision against investments and other
assets
    
    
    2,314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,314Deferred tax asset valuation allowance
    
    
    109,999
    
    
    
    7,926
    
    
    
    8,960
    
    
    
    
    
    
    
    126,885
  77




---



##### 



EXHIBITNO.
    
    DESCRIPTION3.1
    
    Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys
10-K filed with the Commission on August 28, 1998)3.2
    
    Articles of Amendment (incorporated by reference to Exhibit 3.2 to the Companys 10-K
filed with the Commission on August 29, 2000)3.3
    
    Articles of Continuance (incorporated by reference to Exhibit 3.6 to the Companys
Registration Statement on Form S-4/A filed with the Commission on March 1, 2002 (file
no. 333-71532))3.4
    
    Articles of Amendment (incorporated by reference to Exhibit 4.2 to the Companys Post
Effective Amendment No. 1 on Form S-8 to the Companys Registration Statement on Form
S-4 filed with the Commission on May 14, 2002 (file no. 333-71532))3.5
    
    By-Laws of the Company (incorporated by reference to Exhibit 3.6 to the Companys
Registration Statement on Form S-4/A filed with the Commission on March 1, 2002 (file
no. 333-71532))4.1
    
    Shareholder Rights Plan Agreement dated March 4, 2005, as amended as of June 16,
2005, between the Company and CIBC Mellon Trust Company (incorporated by reference to
Exhibit 99.2 to the Companys 8-K filed with the Commission on June 20, 2005 (file
no. 000-29302))10.1*
    
    TLC Vision Corporation Amended and Restated Share Option Plan (incorporated by
reference to Exhibit 4.2 to the Companys Registration Statement on Form S-8 filed
with the Commission on June 23, 2004 (file no. 333-116769))10.2*
    
    TLC Corporation 2004 Employee Share Purchase Plan (incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement on Form S-8 filed with the
Commission on June 23, 2004 (file no. 333-116769))10.3*
    
    Employment Agreement with Elias Vamvakas (incorporated by reference to Exhibit
10.1(e) to the Companys 10-K filed with the Commission on August 28, 1998)10.4
    
    Escrow Agreement with Elias Vamvakas and Jeffery J. Machat (incorporated by reference
to Exhibit 10.1(f) to the Companys 10-K filed with the Commission on August 28,
1998)10.5
    
    Consulting Agreement with Excimer Management Corporation (incorporated by reference
to Exhibit 10.1(g) to the Companys 10-K filed with the Commission on August 28,
1998)10.6
    
    Shareholder Agreement for Vision Corporation (incorporated by reference to Exhibit
10.1(l) to the Companys 10-K filed with the Commission on August 28, 1998)10.7*
    
    Employment Agreement with William Leonard (incorporated by reference to Exhibit
10.1(n) to the Companys 10-K filed with the Commission on August 29, 2000)10.8*
    
    Consulting Agreement with Warren Rustand (incorporated by Reference to Exhibit 10.10
to the Companys Amendment No. 2 registration Statement on Form S-4/A filed with the
Commission on January 18, 2002 (file no. 333-71532))10.9*
    
    Employment Agreement with Paul Frederick (incorporated by reference to Exhibit 10.10
to the Companys 10-K for the year ended May 31, 2002)10.10*
    
    Employment Agreement with James C. Wachtman dated May 15, 2002 (incorporated by
reference to Exhibit 10.13 to the Companys 10-K for the year ended May 31, 2002)10.11*
    
    Employment Agreement with Robert W.
May dated May 15, 2002 (incorporated by reference to Exhibit 10.14 to the Companys 10-K for the year ended May 31, 2002)10.12*
    
    Amendment to Employment Agreement with Robert W. May dated September 30, 2003
(incorporated by reference to Exhibit 10.12 to the Companys 10-K for the year ended
December 31, 2003)10.13*
    
    Employment Agreement with B.
Charles Bono dated May 15, 2002 (incorporated by reference to Exhibit 10.15 to the Companys 10-K for the year ended May 31, 2002)10.14*
    
    Amendment to Employment Agreement with B. Charles Bono dated September 30, 2003
(incorporated by reference to Exhibit 10.14 to the Companys 10-K for the year ended
December 31, 2003)10.15*
    
    Supplemental Employment Agreement with John J. Klobnak dated May 15, 2002
(incorporated by reference to Exhibit 10.16 to the Companys 10-K for the year ended
May 31, 2002)10.16*
    
    Severance Agreement with Elias Vamvakas dated October 25, 2004 (incorporated by
reference to Exhibit 10.16 to the Companys 10-K for the year ended December 31,
2004)
 78




---



##### 



EXHIBITNO.
    
    DESCRIPTION10.17*
    
    Employment Agreement with Steve Rasche dated July 1, 2004 (incorporated by reference
to Exhibit 10.17 to the Companys 10-K for the year ended December 31, 2004)10.18*
    
    Employment Agreement with Brian Andrew dated December 31, 2004 (incorporated by
reference to Exhibit 10.18 to the Companys 10-K for the year ended December 31,
2004)10.19
    
    Asset Purchase Agreement By and Among TLC Vision (USA) Corporation, Eyes of the
Future, P.C., and Frederic B. Kremer, M.D., dated as of July 11, 2005 (incorporated
by reference to Exhibit 2.1 to the Companys 10-Q for the three and nine months ended
September 30, 2005)10.20
    
    Asset Purchase Agreement By and Among TLC Vision (USA) Corporation, Frederic B.
Kremer, M.D., P.C., and Frederic B. Kremer, M.D., dated as of July 11, 2005
(incorporated by reference to Exhibit 2.2 to the Companys 10-Q for the three and
nine months ended September 30, 2005)10.21
    
    Agreement and Plan of Merger By and Among TruVision, Inc. and TLC Wildcard Corp. and
TLC Vision Corporation and TLC Vision (USA) Corporation and Lindsay T. Atwood dated
as of October 27, 2005 (incorporated by reference to Exhibit 2.3 to the Companys
10-Q for the three and nine months ended September 30, 2005)10.22
    
    Amended and Restated Credit Agreement By and Among TLC Vision Corporation, TLC Vision
(USA) Corporation, CIT Capital Securities, LLC, CIT Healthcare, LLC and Lenders dated
as of June 21, 2007 (incorporated by reference to Exhibit 12.(B) to the Companys
Schedule TO-I/A filed June 22, 2007)10.23
    
    Amendment No. 1 to the Amended and Restated Credit Agreement dated as of June 21, 200721
    
    List of the Companys Subsidiaries23.1
    
    Consent of Independent Registered Public Accounting Firm23.2
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    CEOs Certification required by Rule 13A-14(a) of the Securities Exchange Act of 1934.31.2
    
    CFOs Certification required by Rule 13A-14(a) of the Securities Exchange Act of 1934.32.1
    
    CEOs Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, U.S.C. Section 135032.2
    
    CFOs Certification of periodic financial report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, U.S.C. Section 1350
 
 *
    
    Management contract or compensatory plan arrangement. 79