##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Fiscal Year Ended December 31, 2006
Commission File Number 000-22217
 AMSURG CORP.
 (Exact Name of Registrant as Specified in Its Charter)
 Tennessee(State or Other Jurisdiction of Incorporation or Organization)
    
    62-1493316(I.R.S. Employer Identification No.)20 Burton Hills Boulevard, Nashville, TN(Address of Principal Executive Offices)
    
    37215(Zip Code)
 (615) 665-1283  (Registrants Telephone Number, Including Area Code)
 Securities registered pursuant to Section 12(b) of the Act:
    Common Stock, no par value
    Nasdaq Global Select Market(Title of class)
    (Name of each exchange on which registered)
 None
  þ o
  o þ
  þ o
 þ
  þ o o
  o þ
  Documents Incorporated by Reference




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##### 



Table of Contents to Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2006
 Part IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    14Item 1B. Unresolved Staff Comments
    
    
    19Item 2. Properties
    
    
    20Item 3. Legal Proceedings
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Executive Officers of the Registrant
    
    
    21Part IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    21Item 6. Selected Financial Data
    
    
    22Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    23Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 8. Financial Statements and Supplementary Data
    
    
    34Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    57Item 9A. Controls and Procedures
    
    
    57Item 9B. Other Information
    
    
    59Part IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    59Item 11. Executive Compensation
    
    
    59Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    59Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    59Item 14. Principal Accounting Fees and Services
    
    
    60Part IVItem 15. Exhibits, Financial Statement Schedules
    
    
    60Signatures
    
    
    63Ex-10.22 Non-Employee Director CompensationEX-21.1 Subsidiary ListEx-23.1 Consent of Independent AuditorsEx-31.1 Section 302 Certification of the CEOEx-31.2 Section 302 Certification of the CFOEx-32.1 Section 906 Certification of the CEO and CFO




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##### Table of Contents



Part I
 
 Item 1. Business
   Industry Overview
    Cost-Effective Alternative.
 Physician and Patient Preference.
 New Technology.
 1




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##### Table of Contents



Item 1. Business  (continued)
 Strategy
  
    
    selectively acquire practice-based ASCs with substantial minority physician ownership;
    
    develop, in partnership with physicians, new practice-based ASCs; and
    
    grow revenues and profitability at our existing surgery centers.
  Acquisition and Development of Surgery Centers
    
    
    market position of the center and the physicians affiliated with the center;
    
    payor and case mix;
    
    growth opportunities;
    
    staffing and supply review; and
    
    equipment assessment.
  2




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Item 1. Business  (continued)
  
    
    financial feasibility pro forma analysis;
    
    assistance in the state CON approval process, if needed;
    
    site selection;
    
    assistance in space analysis and schematic floor plan design;
    
    analysis of local, state and federal building codes;
    
    financing for equipment and buildout;
    
    equipment budgeting, specification, bidding and purchasing;
    
    construction financing;
    
    architectural oversight;
    
    contractor bidding;
    
    construction management; and
    
    assistance with licensing, Medicare certification and contracting with third-party payors.
      3




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Item 1. Business  (continued)
 Growth in Revenues at Existing Facilities
  
    
    growth in the number of physicians performing procedures at our centers;
    
    obtaining new or more favorable managed care contracts for our centers;
    
    marketing our centers to referring physicians, payors and patients; and
    
    achieving efficiencies in center operations.
 Growth in the number of physicians performing procedures.
 
    
    advising the physician practices affiliated with the ASCs in recruiting new physicians to their practices;
    
    identifying additional physicians or physician practices to join the partnerships that own the ASCs; and
    
    recruiting non-partner physicians in the same or other specialties to use excess capacity at the ASCs.
  Obtaining new or more favorable managed care contracts.
 Marketing our centers to referring physicians, payors and patients.
 
    
    marketing our ASCs to referring physicians emphasizing the quality and high patient
satisfaction and lower cost at our ASCs;
    
    increasing awareness of the benefits of our ASCs with employers and patients through
health fairs and screening programs, including local marketing programs designed to educate
employers and patients as to the health and cost benefits of detecting colon cancer in its
early stages through routine endoscopy procedures; and
    
    communicating with existing patients regarding follow-up procedures through care
coordination programs.
 Achieving efficiencies in center operations.
 
    
    physician scheduling enhancements;
    
    specially trained clinical staff focused on improved patient flow; and
    
    improved operating room turnover.
  Surgery Center Operations
  4




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Item 1. Business  (continued)
   
    
    gastroenterology  colonoscopy and other endoscopy procedures;
    
    ophthalmology  cataracts and retinal laser surgery; and
    
    orthopedic  knee arthroscopy and carpal tunnel repair.
  Accreditation
  Surgery Center Locations
  Operating orAcquisition/
    
    ProcedureLocation
    
    Specialty Practice
    
    Opening Date
    
    RoomsAcquired Centers:Knoxville, Tennessee
    
    Gastroenterology
    
    November 1992
    
    
    8Topeka, Kansas
    
    Gastroenterology
    
    November 1992
    
    
    3Nashville, Tennessee
    
    Gastroenterology
    
    November 1992
    
    
    3Nashville, Tennessee
    
    Gastroenterology
    
    December 1992
    
    
    4Washington, D.C
    
    Gastroenterology
    
    November 1993
    
    
    3Torrance, California
    
    Gastroenterology
    
    February 1994
    
    
    2Maryville, Tennessee
    
    Gastroenterology
    
    January 1995
    
    
    3Miami, Florida
    
    Gastroenterology
    
    April 1995
    
    
    5Panama City, Florida
    
    Gastroenterology
    
    July 1996
    
    
    3Ocala, Florida
    
    Gastroenterology
    
    August 1996
    
    
    3Columbia, South Carolina
    
    Gastroenterology
    
    October 1996
    
    
    4Wichita, Kansas
    
    Orthopedic
    
    November 1996
    
    
    3Crystal River, Florida
    
    Gastroenterology
    
    January 1997
    
    
    3Abilene, Texas
    
    Ophthalmology
    
    March 1997
    
    
    2Fayetteville, Arkansas
    
    Gastroenterology
    
    May 1997
    
    
    3Independence, Missouri
    
    Gastroenterology
    
    September 1997
    
    
    1Kansas City, Missouri
    
    Gastroenterology
    
    September 1997
    
    
    1Phoenix, Arizona
    
    Ophthalmology
    
    February 1998
    
    
    2Denver, Colorado
    
    Gastroenterology
    
    April 1998
    
    
    4Sun City, Arizona
    
    Ophthalmology
    
    May 1998
    
    
    5Baltimore, Maryland
    
    Gastroenterology
    
    November 1998
    
    
    3Naples, Florida
    
    Gastroenterology
    
    November 1998
    
    
    3Boca Raton, Florida
    
    Ophthalmology
    
    December 1998
    
    
    2Indianapolis, Indiana
    
    Gastroenterology
    
    June 1999
    
    
    4
 5




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##### Table of Contents



Item 1. Business  (continued)
 Operating orAcquisition/
    
    ProcedureLocation
    
    Specialty Practice
    
    Opening Date
    
    RoomsChattanooga, Tennessee
    
    Gastroenterology
    
    July 1999
    
    
    3Mount Dora, Florida
    
    Ophthalmology
    
    September 1999
    
    
    2Oakhurst, New Jersey
    
    Gastroenterology
    
    September 1999
    
    
    2Cape Coral, Florida
    
    Gastroenterology
    
    November 1999
    
    
    2La Jolla, California
    
    Gastroenterology
    
    December 1999
    
    
    2Burbank, California
    
    Ophthalmology
    
    December 1999
    
    
    1Waldorf, Maryland
    
    Gastroenterology
    
    December 1999
    
    
    2Las Vegas, Nevada
    
    Ophthalmology
    
    December 1999
    
    
    2Glendale, California
    
    Ophthalmology
    
    January 2000
    
    
    1Las Vegas, Nevada
    
    Ophthalmology
    
    May 2000
    
    
    2Hutchinson, Kansas
    
    Ophthalmology
    
    June 2000
    
    
    2New Orleans, Louisiana
    
    Ophthalmology
    
    July 2000
    
    
    2Kingston, Pennsylvania
    
    Ophthalmology, Pain Management
    
    December 2000
    
    
    3Inverness, Florida
    
    Gastroenterology
    
    December 2000
    
    
    3Columbia, Tennessee
    
    Orthopedic, Ophthalmology
    
    February 2001
    
    
    2Bel Air, Maryland
    
    Gastroenterology
    
    February 2001
    
    
    2Dover, Delaware
    
    Ophthalmology
    
    February 2001
    
    
    3Sarasota, Florida
    
    Ophthalmology
    
    February 2001
    
    
    2Greensboro, North
Carolina
    
    Ophthalmology
    
    March 2001
    
    
    4Ft. Lauderdale, Florida
    
    Ophthalmology
    
    March 2001
    
    
    3Zephyrhills, Florida
    
    Ophthalmology
    
    May 2001
    
    
    2Bloomfield, Connecticut
    
    Ophthalmology
    
    July 2001
    
    
    1Ft. Myers, Florida
    
    Gastroenterology, Pain Management
    
    July 2001
    
    
    2Jackson, Tennessee
    
    Ophthalmology
    
    July 2001
    
    
    4Lawrenceville, New Jersey
    
    Orthopedic
    
    October 2001
    
    
    3Newark, Delaware
    
    Gastroenterology
    
    October 2001
    
    
    5Alexandria, Louisiana
    
    Ophthalmology
    
    December 2001
    
    
    2Akron, Ohio
    
    Gastroenterology
    
    December 2001
    
    
    2Paducah, Kentucky
    
    Ophthalmology
    
    May 2002
    
    
    2Columbia, Tennessee
    
    Gastroenterology
    
    June 2002
    
    
    2Ft. Myers, Florida
    
    Ophthalmology
    
    July 2002
    
    
    2Tulsa, Oklahoma
    
    Ophthalmology
    
    July 2002
    
    
    3Weslaco, Texas
    
    Ophthalmology
    
    September 2002
    
    
    2Peoria, Arizona
    
    Multispecialty
    
    October 2002
    
    
    3Lewes, Delaware
    
    Gastroenterology
    
    December 2002
    
    
    2Rogers, Arkansas
    
    Ophthalmology
    
    December 2002
    
    
    2Winter Haven, Florida
    
    Ophthalmology
    
    December 2002
    
    
    2Mesa, Arizona
    
    Gastroenterology
    
    December 2002
    
    
    4Voorhees, New Jersey
    
    Gastroenterology
    
    March 2003
    
    
    4St. George, Utah
    
    Gastroenterology
    
    July 2003
    
    
    2San Antonio, Texas
    
    Gastroenterology
    
    July 2003
    
    
    4Pueblo, Colorado
    
    Ophthalmology
    
    September 2003
    
    
    2Reno, Nevada
    
    Gastroenterology
    
    December 2003
    
    
    4Edina, Minnesota
    
    Ophthalmology
    
    December 2003
    
    
    1Gainesville, Florida
    
    Orthopedic
    
    February 2004
    
    
    5West Palm, Florida
    
    Gastroenterology
    
    March 2004
    
    
    2Raleigh, North Carolina
    
    Gastroenterology
    
    April 2004
    
    
    4Sun City, Arizona
    
    Gastroenterology
    
    September 2004
    
    
    2Casper, Wyoming
    
    Gastroenterology
    
    October 2004
    
    
    2Rockville, Maryland
    
    Gastroenterology
    
    October 2004
    
    
    5Overland Park, Kansas
    
    Gastroenterology
    
    October 2004
    
    
    3Lake Bluff, Illinois
    
    Gastroenterology
    
    November 2004
    
    
    3San Luis, California
    
    Gastroenterology
    
    December 2004
    
    
    2Templeton, California
    
    Gastroenterology
    
    December 2004
    
    
    2Lutherville, Maryland
    
    Gastroenterology
    
    January 2005
    
    
    2Tacoma, Washington
    
    Gastroenterology
    
    March 2005
    
    
    5Tacoma, Washington
    
    Gastroenterology
    
    March 2005
    
    
    2Tacoma, Washington
    
    Gastroenterology
    
    March 2005
    
    
    2Tacoma, Washington
    
    Gastroenterology
    
    March 2005
    
    
    2
 6




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##### Table of Contents



Item 1. Business  (continued)
 Operating orAcquisition/
    
    ProcedureLocation
    
    Specialty Practice
    
    Opening Date
    
    RoomsOrlando, Florida
    
    Gastroenterology
    
    June 2005
    
    
    1Orlando, Florida
    
    Gastroenterology
    
    June 2005
    
    
    4Ocala, Florida
    
    Ophthalmology
    
    June 2005
    
    
    3Scranton, Pennsylvania
    
    Gastroenterology
    
    August 2005
    
    
    3Towson, Maryland
    
    Gastroenterology
    
    August 2005
    
    
    4Yuma, Arizona
    
    Gastroenterology
    
    October 2005
    
    
    3St. Louis, Missouri
    
    Orthopedic
    
    November 2005
    
    
    2Salem, Oregon
    
    Ophthalmology
    
    December 2005
    
    
    2West Orange, New Jersey
    
    Gastroenterology
    
    December 2005
    
    
    3St. Cloud, Minnesota
    
    Ophthalmology
    
    December 2005
    
    
    2Tulsa, Oklahoma
    
    Gastroenterology
    
    December 2005
    
    
    3Laurel, Maryland
    
    Gastroenterology
    
    December 2005
    
    
    3Torrance, California
    
    Multispecialty
    
    February 2006
    
    
    4Nashville, Tennessee
    
    Ophthalmology
    
    February 2006
    
    
    2Arcadia, California
    
    Gastroenterology
    
    March 2006
    
    
    2Towson, Maryland
    
    Gastroenterology
    
    August 2006
    
    
    2Woodlands, Texas
    
    Gastroenterology
    
    September 2006
    
    
    2Bala Cynwyd, Pennsylvania
    
    Gastroenterology
    
    September 2006
    
    
    2Malvern, Pennsylvania
    
    Gastroenterology
    
    September 2006
    
    
    3Oakland, California
    
    Gastroenterology
    
    October 2006
    
    
    3Developed Centers:Santa Fe, New Mexico
    
    Gastroenterology
    
    May 1994
    
    
    3Tarzana, California
    
    Gastroenterology
    
    July 1994
    
    
    3Beaumont, Texas
    
    Gastroenterology
    
    October 1994
    
    
    5Abilene, Texas
    
    Gastroenterology
    
    December 1994
    
    
    3Knoxville, Tennessee
    
    Ophthalmology
    
    June 1996
    
    
    2Sidney, Ohio
    
    Multispecialty
    
    December 1996
    
    
    4Montgomery, Alabama
    
    Ophthalmology
    
    May 1997
    
    
    2Willoughby, Ohio
    
    Gastroenterology
    
    July 1997
    
    
    2Milwaukee, Wisconsin
    
    Gastroenterology
    
    July 1997
    
    
    3Chevy Chase, Maryland
    
    Gastroenterology
    
    July 1997
    
    
    4Melbourne, Florida
    
    Gastroenterology
    
    August 1997
    
    
    2Lorain, Ohio
    
    Gastroenterology
    
    August 1997
    
    
    2Hillmont, Pennsylvania
    
    Gastroenterology
    
    October 1997
    
    
    2Minneapolis, Minnesota
    
    Gastroenterology
    
    November 1997
    
    
    2Hialeah, Florida
    
    Gastroenterology
    
    December 1997
    
    
    3Cleveland, Ohio
    
    Ophthalmology
    
    December 1997
    
    
    3Cincinnati, Ohio
    
    Gastroenterology
    
    January 1998
    
    
    3Evansville, Indiana
    
    Ophthalmology
    
    February 1998
    
    
    2Shawnee, Kansas
    
    Gastroenterology
    
    April 1998
    
    
    3Salt Lake City, Utah
    
    Gastroenterology
    
    April 1998
    
    
    2Oklahoma City, Oklahoma
    
    Gastroenterology
    
    May 1998
    
    
    4El Paso, Texas
    
    Gastroenterology
    
    December 1998
    
    
    4Toledo, Ohio
    
    Gastroenterology
    
    December 1998
    
    
    3Florham Park, New Jersey
    
    Gastroenterology
    
    December 1999
    
    
    3Minneapolis, Minnesota
    
    Ophthalmology
    
    June 2000
    
    
    2Crestview Hills, Kentucky
    
    Gastroenterology
    
    September 2000
    
    
    3Louisville, Kentucky
    
    Gastroenterology
    
    September 2000
    
    
    3Louisville, Kentucky
    
    Ophthalmology
    
    September 2000
    
    
    2Ft. Myers, Florida
    
    Gastroenterology
    
    October 2000
    
    
    3Seneca, Pennsylvania
    
    Multispecialty
    
    October 2000
    
    
    4Sarasota, Florida
    
    Gastroenterology
    
    December 2000
    
    
    2Tamarac, Florida
    
    Gastroenterology
    
    December 2000
    
    
    2Inglewood, California
    
    Gastroenterology
    
    May 2001
    
    
    3Clemson, South Carolina
    
    Orthopedic
    
    September 2002
    
    
    3Middletown, Ohio
    
    Gastroenterology
    
    October 2002
    
    
    3Troy, Michigan
    
    Gastroenterology
    
    August 2003
    
    
    3
 7




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##### Table of Contents



Item 1. Business  (continued)
 Operating orAcquisition/
    
    ProcedureLocation
    
    Specialty Practice
    
    Opening Date
    
    RoomsKingsport, Tennessee
    
    Ophthalmology
    
    October 2003
    
    
    2Columbia, South Carolina
    
    Gastroenterology
    
    November 2003
    
    
    2Columbus, Ohio
    
    Gastroenterology
    
    February 2004
    
    
    3Greenville, South
Carolina
    
    Gastroenterology
    
    August 2004
    
    
    4Sebring, Florida
    
    Ophthalmology
    
    November 2004
    
    
    2Temecula, California
    
    Gastroenterology
    
    November 2004
    
    
    2Escondido, California
    
    Gastroenterology
    
    December 2004
    
    
    2Tampa, Florida
    
    Gastroenterology
    
    January 2005
    
    
    8Los Alamos, New Mexico
    
    Gastroenterology
    
    March 2005
    
    
    1Rockledge, Florida
    
    Gastroenterology
    
    May 2005
    
    
    3Lakeland, Florida
    
    Gastroenterology
    
    May 2005
    
    
    4Liberty, Missouri
    
    Gastroenterology
    
    June 2005
    
    
    1Knoxville, Tennessee
    
    Gastroenterology
    
    September 2005
    
    
    2Sun City, Arizona
    
    Gastroenterology
    
    November 2005
    
    
    3Port Huron, Michigan
    
    Orthopedic
    
    March 2006
    
    
    2Hanover, New Jersey
    
    Gastroenterology
    
    October 2006
    
    
    3Raleigh, North Carolina
    
    Gastroenterology
    
    December 2006
    
    
    3429
  Revenues
    8




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Item 1. Business  (continued)
   
    
    CMSs estimate that the revised ASC rates would be 62% of the corresponding rates of the
hospital outpatient prospective payment system;
    
    a scheduled phase in of the revised rates beginning January 1, 2008 and fully effective
on January 1, 2009;
    
    an annual increase in the ASC rates beginning in 2010 based on the consumer price index
for urban consumers; and
    
    an expansion of the list of procedures that can be performed in an ASC.
    Competition
  Competition for Center Acquisitions.
 Competition for Joint Venture Development of Practice-Based Centers.
 Competition for Physicians to Utilize our Centers, Patients and Managed Care Contracts.
 9




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Item 1. Business  (continued)
  Government Regulation
  CONs and State Licensing
  Corporate Practice of Medicine
 Certification
 Medicare-Medicaid Fraud and Abuse Provisions
 10




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##### Table of Contents



Item 1. Business  (continued)
     
    
    the limited partnerships and limited liability companies exist to effect legitimate
business purposes, including the ownership, operation and continued improvement of high
quality, cost-effective and efficient services to the patients served;
    
    the limited partnerships and limited liability companies function as an extension of the
group practices of physicians who are affiliated with the surgery centers and the surgical
procedures are performed personally by these physicians without referring the patients
outside of their practice;
    
    our physician partners have a substantial investment at risk in the limited partnerships
and limited liability companies;
    
    terms of the investment do not take into account volume of the physician partners past
or anticipated future services provided to patients of the centers;
    
    the physician partners are not required or encouraged as a condition of the investment
to treat Medicare or Medicaid patients at the centers or to influence others to refer such
patients to the centers for treatment;
    
    the limited partnerships, the limited liability companies, our subsidiaries and our
affiliates will not loan any funds to or guarantee any debt on behalf of the physician
partners with respect to their investment; and
    
    distributions by the limited partnerships and limited liability companies are allocated
uniformly in proportion to ownership interests.
  11




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Item 1. Business  (continued)
      Prohibition on Physician Ownership of Healthcare Facilities and Certain Self-Referrals
  12




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Item 1. Business  (continued)
  The Federal False Claims Act and Similar Federal and State Laws.
  Healthcare Industry Investigations
  Privacy Requirements and Administrative Simplification.
 13




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Item 1. Business  (continued)
  Obligations to Buy Out Physician Partners
 Employees
  Legal Proceedings and Insurance
   Available Information
  
 Item 1A. Risk Factors
  14




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##### Table of Contents



Item 1A. Risk Factors  (continued)
 Our results of operations may be adversely affected by proposed changes in the reimbursement system
for outpatient surgical procedures under the Medicare program.
 
    
    CMSs estimate that the revised ASC rates would be 62% of the corresponding rates of the
hospital outpatient prospective payment system;
    
    a scheduled phase in of the revised rates beginning January 1, 2008 and fully effective
on January 1, 2009;
    
    an annual increase in the ASC rates beginning in 2010 based on the consumer price index
for urban consumers; and
    
    an expansion of the list of procedures that can be performed in an ASC.
   We depend on payments from third-party payors, including government healthcare programs. If these
payments decrease or do not increase as our costs increase, our operating margins and profitability
would be adversely affected.
 Our business would be adversely affected if we fail to maintain good relationships
with the physician partners who use our surgery centers.
 If we fail to acquire and develop additional surgery centers on favorable terms, our future growth
and operating results could be adversely affected.
 15




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Item 1A. Risk Factors  (continued)
 If we are unable to grow revenues at our existing centers, our operating margins and profitability
could be adversely affected.
 If we are unable to manage the growth in our business, our operating results could be adversely
affected.
 If we do not have sufficient capital resources to complete acquisitions and develop new surgery
centers, our growth and results of operations could be adversely affected.
 If we are unable to effectively compete for physician partners, managed care contracts, patients
and strategic relationships, our business would be adversely affected.
  We operate a significant number of surgery centers in Florida, which makes us sensitive to weather
and other factors in Florida.
 16




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Item 1A. Risk Factors  (continued)
 If we fail to comply with applicable laws and regulations, we could suffer penalties or be required
to make significant changes to our operations.
 
    
    physician ownership of our surgery centers;
    
    CON approvals and other regulations affecting the construction or acquisition of
centers, capital expenditures or the addition of services;
    
    the adequacy of medical care, equipment, personnel, and operating policies and procedures;
    
    qualifications of medical and support personnel;
    
    maintenance and protection of records;
    
    billing for services by healthcare providers;
    
    privacy and security of individually identifiable health information; and
    
    environmental protection.
  If a federal or state agency asserts a different position or enacts new laws or regulations
regarding illegal remuneration or other forms of fraud and abuse, we could suffer penalties or be
required to make significant changes to our operations.
   17




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Item 1A. Risk Factors  (continued)
 Providers in the healthcare industry have been the subject of federal and state investigations, and
we may become subject to investigations in the future.
  If regulations or regulatory interpretations change, we may be obligated to buy out interests of
physicians who are minority owners of the surgery centers.
 
    
    make the referral of Medicare and other patients to our surgery centers by physicians
affiliated with us illegal;
    
    create the substantial likelihood that cash distributions from the limited partnership
or limited liability company to the affiliated physicians will be illegal; or
    
    cause the ownership by the physicians of interests in the limited partnerships or
limited liability companies to be illegal.
  We are liable for the debts and other obligations of the limited partnerships that own and operate
certain of our surgery centers.
 18




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##### Table of Contents



Item 1A. Risk Factors  (continued)
 We have a legal responsibility to the minority owners of the entities through which we own our
surgery centers, which may conflict with our interests and prevent us from acting solely in our own
best interests.
 We may write-off intangible assets, such as goodwill.
 The IRS may challenge tax deductions for certain acquired goodwill.
 
 Item 1B. Unresolved Staff Comments
  19




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##### Table of Contents



Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  20




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##### Table of Contents



EXECUTIVE OFFICERS OF THE REGISTRANT
  Name
    
    Age
    
    ExperienceKen P. McDonald
    
    
    66
    
    
    Chief Executive Officer since December 1997;
President and a director since July 1996;
Executive Vice President from December 1994
through July 1996 and Chief Operating Officer
from December 1994 until December 1997.Claire M. Gulmi
    
    
    53
    
    
    Executive Vice President since February 2006;
Chief Financial Officer since September 1994;
Director since May 2004; Senior Vice President
from March 1997 to February 2006; Secretary
since December 1997; Vice President from
September 1994 through March 1997.David L. Manning
    
    
    57
    
    
    Executive Vice President and Chief Development
Officer since February 2006; Senior Vice
President of Development and Assistant Secretary
from April 1992 to February 2006.Frank J. Coll
    
    
    47
    
    
    Senior Vice President of Operations since
February 2005; President and Principal of The
Bottom Line Solution, a private management
consulting company, from November 2001 to
February 2005; Senior Vice President, Operations
for Web MD/Envoy Corporation from November 1999
to October 2001.Royce D. Harrell
    
    
    61
    
    
    Senior Vice President of Corporate Services
since September 2000; Senior Vice President of
Operations from October 1992 until September
2000.
 
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  1st
    
    2nd
    
    3rd
    
    4thQuarter
    
    Quarter
    
    Quarter
    
    Quarter2005:High
    
    $
    29.77
    
    
    $
    29.00
    
    
    $
    29.00
    
    
    $
    28.39Low
    
    $
    22.85
    
    
    $
    23.19
    
    
    $
    25.77
    
    
    $
    21.952006:High
    
    $
    23.99
    
    
    $
    27.00
    
    
    $
    25.45
    
    
    $
    23.91Low
    
    $
    20.61
    
    
    $
    22.18
    
    
    $
    19.68
    
    
    $
    19.94
  21




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##### Table of Contents



Item 6. Selected Financial Data
 Year Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(Dollars in thousands, except per share data)Consolidated Statement of Earnings Data:Revenues
    
    $
    464,592
    
    
    $
    387,798
    
    
    $
    326,679
    
    
    $
    278,761
    
    
    $
    229,696Operating expenses
    
    
    301,450
    
    
    
    245,481
    
    
    
    201,679
    
    
    
    173,819
    
    
    
    145,882Operating income
    
    
    163,142
    
    
    
    142,317
    
    
    
    125,000
    
    
    
    104,942
    
    
    
    83,814Minority interest
    
    
    93,152
    
    
    
    78,441
    
    
    
    68,046
    
    
    
    57,743
    
    
    
    47,039Interest and other expenses
    
    
    7,688
    
    
    
    4,127
    
    
    
    1,949
    
    
    
    1,429
    
    
    
    1,053Earnings from continuing operations before
income taxes
    
    
    62,302
    
    
    
    59,749
    
    
    
    55,005
    
    
    
    45,770
    
    
    
    35,722Income tax expense
    
    
    24,192
    
    
    
    23,422
    
    
    
    21,764
    
    
    
    18,309
    
    
    
    14,291Net earnings from continuing operations
    
    
    38,110
    
    
    
    36,327
    
    
    
    33,241
    
    
    
    27,461
    
    
    
    21,431Earnings (loss) from operations of discontinued
interests in surgery centers, net of income tax
    
    
    92
    
    
    
    (190
    )
    
    
    867
    
    
    
    2,665
    
    
    
    2,591(Loss) gain on disposal of discontinued interests
in surgery centers, net of income tax
    
    
    (463
    )
    
    
    (986
    )
    
    
    5,598
    
    
    
    
    
    
    
    Net earnings
    
    $
    37,739
    
    
    $
    35,151
    
    
    $
    39,706
    
    
    $
    30,126
    
    
    $
    24,022Basic earnings per common share:Net earnings from continuing operations
    
    $
    1.28
    
    
    $
    1.23
    
    
    $
    1.11
    
    
    $
    0.91
    
    
    $
    0.70Net earnings
    
    $
    1.27
    
    
    $
    1.19
    
    
    $
    1.33
    
    
    $
    1.00
    
    
    $
    0.79Diluted earnings per common share:Net earnings from continuing operations
    
    $
    1.25
    
    
    $
    1.20
    
    
    $
    1.09
    
    
    $
    0.90
    
    
    $
    0.69Net earnings
    
    $
    1.24
    
    
    $
    1.17
    
    
    $
    1.30
    
    
    $
    0.98
    
    
    $
    0.77Weighted average number of shares and share
equivalents outstanding (in thousands):Basic
    
    
    29,822
    
    
    
    29,573
    
    
    
    29,895
    
    
    
    30,139
    
    
    
    30,585Diluted
    
    
    30,398
    
    
    
    30,147
    
    
    
    30,507
    
    
    
    30,666
    
    
    
    31,092Operating and Other Financial Data:Continuing centers at end of year
    
    
    156
    
    
    
    145
    
    
    
    121
    
    
    
    106
    
    
    
    98Procedures performed during year
    
    
    851,328
    
    
    
    734,069
    
    
    
    603,259
    
    
    
    519,116
    
    
    
    440,349Same-center revenue increase
    
    
    5
    %
    
    
    3
    %
    
    
    4
    %
    
    
    7
    %
    
    
    13
    %Cash flows provided by operating activities
    
    $
    72,021
    
    
    $
    63,421
    
    
    $
    55,452
    
    
    $
    48,095
    
    
    $
    46,919Cash flows used by investing activities
    
    
    (71,794
    )
    
    
    (83,308
    )
    
    
    (61,660
    )
    
    
    (48,384
    )
    
    
    (43,832
    )Cash flows (used in) provided by financing
activities
    
    
    (640
    )
    
    
    25,391
    
    
    
    6,942
    
    
    
    1,227
    
    
    
    (841
    )
 At December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands)Consolidated Balance Sheet Data:Cash and cash equivalents
    
    $
    20,083
    
    
    $
    20,496
    
    
    $
    14,992
    
    
    $
    14,258
    
    
    $
    13,320Working capital
    
    
    66,591
    
    
    
    61,072
    
    
    
    56,302
    
    
    
    46,009
    
    
    
    37,414Total assets
    
    
    590,032
    
    
    
    527,816
    
    
    
    425,155
    
    
    
    356,189
    
    
    
    299,814Long-term debt and other long-term liabilities
    
    
    127,821
    
    
    
    125,712
    
    
    
    88,160
    
    
    
    53,137
    
    
    
    27,884Minority interest
    
    
    52,341
    
    
    
    47,271
    
    
    
    39,710
    
    
    
    36,796
    
    
    
    29,869Shareholders equity
    
    
    343,108
    
    
    
    294,618
    
    
    
    254,149
    
    
    
    232,898
    
    
    
    216,364
 22




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements
 This report contains certain forward-looking statements (all statements other than with
respect to historical fact) within the meaning of the federal securities laws, which are intended
to be covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve known and unknown risks and uncertainties including, without
limitation, those described in Risk Factors, some of which are beyond our control. Although we
believe that the assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate. Therefore, there can be no assurance that
the forward-looking statements included in this report will prove to be accurate. Actual results
could differ materially and adversely from those contemplated by any forward-looking statement. In
light of the significant risks and uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a representation by us
or any other person that our objectives and plans will be achieved. We undertake no obligation to
publicly release any revisions to any forward-looking statements in this discussion to reflect
events and circumstances occurring after the date hereof or to reflect unanticipated events.
Forward-looking statements and our liquidity, financial condition and results of operations may be
affected by the risks set forth in Risk Factors or by other unknown risks and uncertainties.
 Overview
  2006
    
    
    2005
    
    
    2004Centers in operation, beginning of the year
    
    
    149
    
    
    
    128
    
    
    
    116New center acquisitions placed in operation
    
    
    8
    
    
    
    17
    
    
    
    10New development centers placed in operation
    
    
    3
    
    
    
    7
    
    
    
    6Centers disposed
    
    
    (4
    )
    
    
    (3
    )
    
    
    (4
    )Centers in operation, end of the year
    
    
    156
    
    
    
    149
    
    
    
    128Centers under development, end of the year
    
    
    5
    
    
    
    5
    
    
    
    9Development centers awaiting regulatory approval, end of year
    
    
    
    
    
    
    3
    
    
    
    Average number of continuing centers in operation, during
year
    
    
    150
    
    
    
    132
    
    
    
    113Centers under letter of intent, end of year
    
    
    10
    
    
    
    
    
    
    
    7
   23




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Sources of Revenues
     
    
    CMSs estimate that the revised ASC rates would be 62% of the corresponding rates of the
hospital outpatient prospective payment system;
    
    a scheduled phase in of the revised rates over two years, beginning January 1, 2008;
    
    an annual increase in the ASC rates beginning in 2010 based on the consumer price index; and
    
    an expansion of the list of procedures that can be performed in an ASC.
   Critical Accounting Policies
  24




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Principles of Consolidation.
    Revenue Recognition.
 Allowance for Contractual Adjustments and Bad Debt Expense.
 25




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Purchase Price Allocation. Business
Combinations.
 Goodwill. Goodwill and Other Intangible Assets,
 Results of Operations
      26




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
  2006
    
    
    2005
    
    
    2004Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Salaries and benefits
    
    
    29.7
    
    
    
    28.4
    
    
    
    26.8Supply cost
    
    
    11.7
    
    
    
    11.3
    
    
    
    11.2Other operating expenses
    
    
    19.8
    
    
    
    19.7
    
    
    
    19.8Depreciation and amortization
    
    
    3.7
    
    
    
    3.9
    
    
    
    3.9Total operating expenses
    
    
    64.9
    
    
    
    63.3
    
    
    
    61.7Operating income
    
    
    35.1
    
    
    
    36.7
    
    
    
    38.3Minority interest
    
    
    20.0
    
    
    
    20.2
    
    
    
    20.8Interest expense, net of interest income
    
    
    1.7
    
    
    
    1.1
    
    
    
    0.6Earnings from continuing operations before income taxes
    
    
    13.4
    
    
    
    15.4
    
    
    
    16.9Income tax expense
    
    
    5.2
    
    
    
    6.0
    
    
    
    6.7Net earnings from continuing operations
    
    
    8.2
    
    
    
    9.4
    
    
    
    10.2Discontinued operations:Earnings from operations of discontinued interests in
surgery centers, net of income tax
    
    
    
    
    
    
    
    
    
    
    0.3(Loss) gain on sale of discontinued interests in surgery
centers, net of income tax
    
    
    (0.1
    )
    
    
    (0.3
    )
    
    
    1.7Net (loss) earnings from discontinued operations
    
    
    (0.1
    )
    
    
    (0.3
    )
    
    
    2.0Net earnings
    
    
    8.1
    %
    
    
    9.1
    %
    
    
    12.2
    %
 Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
  
    
    19 centers acquired or opened in 2005, which contributed $38.2 million of additional
revenues due to having a full period of operations in 2006;
    
    eight centers acquired and three development centers opened in 2006, which generated
$20.5 million in revenues; and
    
    $18.1 million of revenue growth by 126 centers in our 2006 same-center group, reflecting
a 5% increase, primarily as a result of procedure growth.
  Share-Based Payment (Revised 2004)
 27




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
    
    
    19 centers acquired or opened during 2005, which resulted in an increase of $7.6 million
in other operating expenses;
    
    an increase of $3.9 million in other operating expenses from our 2006 same-center group
resulting primarily from additional procedure volume and general inflationary cost
increases; and
    
    eight centers acquired and three development centers opened during 2006, which resulted
in an increase of $3.8 million in other operating expenses.
      28




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
  Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
  
    
    15 centers acquired or opened in 2004, which contributed $26.4 million of additional
revenues due to having a full period of operations in 2005;
    
    17 centers acquired in 2005, which generated $21.2 million in revenues;
    
    $9.3 million of revenue growth recognized by our 2005 same-center group, reflecting a 3%
increase, primarily as a result of procedure growth; and
    
    four centers developed and opened in 2005, which generated $4.7 million in revenues.
     
    
    17 centers acquired during 2005, which resulted in an increase of $4.8 million in other
operating expenses;
    
    15 additional centers acquired in 2004, which resulted in an increase of $4.1 million in
other operating expenses due to having a full period of operations in 2005;
    
    an increase of $1.5 million in other operating expenses from our 2005 same-center group
resulting primarily from additional procedure volume and general inflationary cost
increases; and
    
    four centers developed and opened during 2005, which resulted in an increase of $1.2
million in other operating expenses.
 29




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
      Liquidity and Capital Resources
  Allowance for Contractual Adjustments and Bad Debt Expense
  
    
    $57.0 million for acquisitions of interests in practice-based ASCs;
    
    $14.2 million for new or replacement property at existing surgery centers, including
$800,000 in new capital leases; and
    
    $5.1 million for surgery centers under development.
 30




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
       31




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
  Payments Due by PeriodLess than
    
    
    
    
    
    More thanTotal
    
    1 Year
    
    1-3 Years
    
    3-5 Years
    
    5 YearsLong-term debt, including
interest (1)
    
    $
    128,964
    
    
    $
    3,148
    
    
    $
    5,203
    
    
    $
    117,256
    
    
    $
    3,357Capital lease obligations,
including interest
    
    
    1,518
    
    
    
    950
    
    
    
    568
    
    
    
    
    
    
    
    Operating leases, including
renewal
option periods
    
    
    286,128
    
    
    
    21,818
    
    
    
    43,385
    
    
    
    41,635
    
    
    
    179,290Construction in progress
commitments
    
    
    1,704
    
    
    
    1,704
    
    
    
    
    
    
    
    
    
    
    
    Other long-term obligations (2)
    
    
    868
    
    
    
    
    
    
    
    347
    
    
    
    347
    
    
    
    174Total contractual cash
obligations
    
    $
    419,182
    
    
    $
    27,620
    
    
    $
    49,503
    
    
    $
    159,238
    
    
    $
    182,821
 
 (1)
    
    Our long-term debt may increase based on acquisition activity expected to occur in the
future. We may use our operating cash flow to repay existing long-term debt under our credit
facility prior to its maturity date.(2)
    
    Other long-term obligations consist of purchase price commitments that are contingent upon
certain events.   Recent Accounting Pronouncements
  Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners
Have Certain Rights
 Accounting for Uncertainty in
Income Taxes  an interpretation of SFAS No. 109,
 32




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Accounting for Income Taxes.
 Fair Value Measurements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   FairValue atYears Ended December 31,
    
    
    
    
    
    
    
    
    
    December 31,2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Total
    
    2006Fixed rate
    
    $
    2,632
    
    
    $
    1,925
    
    
    $
    1,185
    
    
    $
    720
    
    
    $
    50,688
    
    
    $
    292
    
    
    $
    57,442
    
    
    $
    56,424Average interest
rate
    
    
    6.7
    %
    
    
    6.2
    %
    
    
    5.7
    %
    
    
    5.8
    %
    
    
    5.4
    %
    
    
    5.1
    %Variable rate
    
    $
    735
    
    
    $
    765
    
    
    $
    798
    
    
    $
    605
    
    
    $
    64,604
    
    
    $
    2,366
    
    
    $
    69,873
    
    
    $
    69,873Average interest
rate
    
    
    6.1
    %
    
    
    6.1
    %
    
    
    6.1
    %
    
    
    6.2
    %
    
    
    6.1
    %
    
    
    7.0
    %
  33




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Share
Based Payment
 Internal ControlIntegrated Framework
  
 34




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.
Consolidated Balance Sheets
December 31, 2006 and 2005
(Dollars in thousands)
 2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    20,083
    
    
    $
    20,496Accounts receivable, net of allowance of $6,628 and $6,189, respectively
    
    
    51,546
    
    
    
    46,387Supplies inventory
    
    
    6,183
    
    
    
    5,336Deferred income taxes (note 8)
    
    
    915
    
    
    
    809Prepaid and other current assets
    
    
    15,276
    
    
    
    14,644Total current assets
    
    
    94,003
    
    
    
    87,672Long-term receivables and deposits (note 2)
    
    
    4,091
    
    
    
    6,614Property and equipment, net (notes 3, 5 and 6)
    
    
    89,175
    
    
    
    83,254Intangible assets, net (notes 2 and 4)
    
    
    402,763
    
    
    
    350,276Total assets
    
    $
    590,032
    
    
    $
    527,816Liabilities and Shareholders EquityCurrent liabilities:Current portion of long-term debt (note 5)
    
    $
    3,367
    
    
    $
    2,218Accounts payable
    
    
    11,098
    
    
    
    10,413Accrued salaries and benefits
    
    
    11,534
    
    
    
    8,201Other accrued liabilities
    
    
    1,413
    
    
    
    5,768Total current liabilities
    
    
    27,412
    
    
    
    26,600Long-term debt (notes 2 and 5)
    
    
    123,948
    
    
    
    106,044Deferred income taxes (note 8)
    
    
    39,350
    
    
    
    33,615Other long-term liabilities (note 2)
    
    
    3,873
    
    
    
    19,668Minority interest
    
    
    52,341
    
    
    
    47,271Commitments and contingencies (notes 2, 5, 6, 9 and 11)Preferred stock, no par value, 5,000,000 shares authorized, no shares issued or
outstanding (note 7)
    
    
    
    
    
    
    Shareholders equity:Common stock, no par value 70,000,000 shares authorized, 29,933,932 and
29,688,668 shares outstanding, respectively (note 7)
    
    
    143,077
    
    
    
    131,856Accumulated other comprehensive loss, net of income taxes (note 5)
    
    
    (470
    )
    
    
    Retained earnings
    
    
    200,501
    
    
    
    162,762Total shareholders equity
    
    
    343,108
    
    
    
    294,618Total liabilities and shareholders equity
    
    $
    590,032
    
    
    $
    527,816
  35




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.
Consolidated Statements of Earnings
Years Ended December 31, 2006, 2005 and 2004
(In thousands, except earnings per share
 2006
    
    
    2005
    
    
    2004Revenues
    
    $
    464,592
    
    
    $
    387,798
    
    
    $
    326,679Operating expenses:Salaries and benefits (note 9)
    
    
    137,916
    
    
    
    109,998
    
    
    
    87,509Supply cost
    
    
    54,287
    
    
    
    43,777
    
    
    
    36,554Other operating expenses (note 9)
    
    
    91,882
    
    
    
    76,481
    
    
    
    64,826Depreciation and amortization
    
    
    17,365
    
    
    
    15,225
    
    
    
    12,790Total operating expenses
    
    
    301,450
    
    
    
    245,481
    
    
    
    201,679Operating income
    
    
    163,142
    
    
    
    142,317
    
    
    
    125,000Minority interest
    
    
    93,152
    
    
    
    78,441
    
    
    
    68,046Interest expense, net of interest income of $568, $510 and $308,
respectively
    
    
    7,688
    
    
    
    4,127
    
    
    
    1,949Earnings from continuing operations before income taxes
    
    
    62,302
    
    
    
    59,749
    
    
    
    55,005Income tax expense (note 8)
    
    
    24,192
    
    
    
    23,422
    
    
    
    21,764Net earnings from continuing operations
    
    
    38,110
    
    
    
    36,327
    
    
    
    33,241Discontinued operations:Earnings (loss) from operations of discontinued interests in surgery
centers, net of income tax expense (benefit)
    
    
    92
    
    
    
    (190
    )
    
    
    867(Loss) gain on disposal of discontinued interests in surgery centers,
net of income tax (benefit) expense
    
    
    (463
    )
    
    
    (986
    )
    
    
    5,598Net (loss) earnings from discontinued operations
    
    
    (371
    )
    
    
    (1,176
    )
    
    
    6,465Net earnings
    
    $
    37,739
    
    
    $
    35,151
    
    
    $
    39,706Basic earnings per common share (note 7):Net earnings from continuing operations
    
    $
    1.28
    
    
    $
    1.23
    
    
    $
    1.11Net earnings
    
    $
    1.27
    
    
    $
    1.19
    
    
    $
    1.33Diluted earnings per common share:Net earnings from continuing operations
    
    $
    1.25
    
    
    $
    1.20
    
    
    $
    1.09Net earnings
    
    $
    1.24
    
    
    $
    1.17
    
    
    $
    1.30Weighted average number of shares and share equivalents
outstanding (note 7):Basic
    
    
    29,822
    
    
    
    29,573
    
    
    
    29,895Diluted
    
    
    30,398
    
    
    
    30,147
    
    
    
    30,507
  36




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.
Consolidated Statements of Changes in Shareholders Equity
Years Ended December 31, 2006, 2005 and 2004
(In thousands
 AccumulatedOtherCommon Stock
    
    Retained
    
    ComprehensiveShares
    
    Amount
    
    Earnings
    
    Loss
    
    TotalBalance at December 31, 2003
    
    
    20,072
    
    
    $
    144,993
    
    
    $
    87,905
    
    
    $
    
    
    
    $
    232,898Issuance of common stock
    
    
    3
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    81Repurchase and retirement of common
stock
    
    
    (1,290
    )
    
    
    (28,757
    )
    
    
    
    
    
    
    
    
    
    
    (28,757
    )Three-for-two stock split in the form
of a 50% dividend
    
    
    10,036
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock options exercised
    
    
    599
    
    
    
    7,259
    
    
    
    
    
    
    
    
    
    
    
    7,259Tax benefit related to exercise of
stock options
    
    
    
    
    
    
    2,962
    
    
    
    
    
    
    
    
    
    
    
    2,962Net earnings
    
    
    
    
    
    
    
    
    
    
    39,706
    
    
    
    
    
    
    
    39,706Balance at December 31, 2004
    
    
    29,420
    
    
    
    126,538
    
    
    
    127,611
    
    
    
    
    
    
    
    254,149Issuance of common stock
    
    
    4
    
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    83Stock options exercised
    
    
    265
    
    
    
    4,060
    
    
    
    
    
    
    
    
    
    
    
    4,060Tax benefit related to exercise of
stock options
    
    
    
    
    
    
    1,175
    
    
    
    
    
    
    
    
    
    
    
    1,175Net earnings
    
    
    
    
    
    
    
    
    
    
    35,151
    
    
    
    
    
    
    
    35,151Balance at December 31, 2005
    
    
    29,689
    
    
    
    131,856
    
    
    
    162,762
    
    
    
    
    
    
    
    294,618Issuance of common stock
    
    
    3
    
    
    
    87
    
    
    
    
    
    
    
    
    
    
    
    87Stock options exercised
    
    
    242
    
    
    
    3,048
    
    
    
    
    
    
    
    
    
    
    
    3,048Share-based compensation
    
    
    
    
    
    
    7,030
    
    
    
    
    
    
    
    
    
    
    
    7,030Tax benefit related to exercise of
stock options
    
    
    
    
    
    
    1,056
    
    
    
    
    
    
    
    
    
    
    
    1,056Loss on interest rate swap, net of
income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (470
    )
    
    
    (470
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    37,739
    
    
    
    
    
    
    
    37,739Balance at December 31, 2006
    
    
    29,934
    
    
    $
    143,077
    
    
    $
    200,501
    
    
    $
    (470
    )
    
    $
    343,108
  37




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.
Consolidated Statements of Cash Flows
Years Ended December 31, 2006, 2005 and 2004
(In thousands
 2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    37,739
    
    
    $
    35,151
    
    
    $
    39,706Adjustments to reconcile net earnings to net cash provided by
operating activities:Minority interest
    
    
    93,152
    
    
    
    78,441
    
    
    
    68,046Distributions to minority partners
    
    
    (90,668
    )
    
    
    (75,639
    )
    
    
    (66,943
    )Depreciation and amortization
    
    
    17,365
    
    
    
    15,225
    
    
    
    12,790Loss (gain) on disposal of interests in surgery centers
    
    
    92
    
    
    
    1,621
    
    
    
    (9,265
    )Share-based compensation
    
    
    7,030
    
    
    
    
    
    
    
    Excess tax benefit from share-based compensation
    
    
    (1,070
    )
    
    
    
    
    
    
    Deferred income taxes
    
    
    5,918
    
    
    
    7,540
    
    
    
    10,154Loss on long-term note receivable
    
    
    
    
    
    
    
    
    
    
    1,100Increase (decrease) in cash and cash equivalents, net of effects of
acquisitions and dispositions, due to changes in:Accounts receivable, net
    
    
    (1,939
    )
    
    
    (4,460
    )
    
    
    (2,979
    )Supplies inventory
    
    
    (391
    )
    
    
    (438
    )
    
    
    (127
    )Prepaid and other current assets
    
    
    (383
    )
    
    
    1,284
    
    
    
    (270
    )Accounts payable
    
    
    1,382
    
    
    
    1,923
    
    
    
    1,062Accrued expenses and other liabilities
    
    
    4,040
    
    
    
    2,948
    
    
    
    1,158Other, net
    
    
    (246
    )
    
    
    (175
    )
    
    
    1,020Net cash flows provided by operating activities
    
    
    72,021
    
    
    
    63,421
    
    
    
    55,452Cash flows from investing activities:Acquisition of interest in surgery centers
    
    
    (57,029
    )
    
    
    (66,079
    )
    
    
    (45,140
    )Acquisition of property and equipment
    
    
    (18,468
    )
    
    
    (22,777
    )
    
    
    (22,972
    )Proceeds from sale of interests in surgery centers
    
    
    1,076
    
    
    
    2,400
    
    
    
    4,700Net repayment of long-term receivables
    
    
    2,627
    
    
    
    3,148
    
    
    
    1,752Net cash flows used in investing activities
    
    
    (71,794
    )
    
    
    (83,308
    )
    
    
    (61,660
    )Cash flows from financing activities:Proceeds from long-term borrowings
    
    
    98,855
    
    
    
    108,179
    
    
    
    83,847Repayment on long-term borrowings
    
    
    (103,370
    )
    
    
    (87,726
    )
    
    
    (56,670
    )Net proceeds from issuance of common stock
    
    
    3,048
    
    
    
    4,060
    
    
    
    7,259Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    (28,757
    )Proceeds from capital contributions by minority partners
    
    
    177
    
    
    
    1,322
    
    
    
    1,385Excess tax benefit from share-based compensation
    
    
    1,070
    
    
    
    
    
    
    
    Financing cost incurred
    
    
    (420
    )
    
    
    (444
    )
    
    
    (122
    )Net cash flows (used in) provided by financing activities
    
    
    (640
    )
    
    
    25,391
    
    
    
    6,942Net (decrease) increase in cash and cash equivalents
    
    
    (413
    )
    
    
    5,504
    
    
    
    734Cash and cash equivalents, beginning of year
    
    
    20,496
    
    
    
    14,992
    
    
    
    14,258Cash and cash equivalents, end of year
    
    $
    20,083
    
    
    $
    20,496
    
    
    $
    14,992
  38




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.
Notes to the Consolidated Financial Statements
 1. Summary of Significant Accounting Policies
 a. Principles of Consolidation
     b. Cash and Cash Equivalents
  c. Supplies Inventory
  d. Prepaid and Other Current Assets
  39




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  e. Property and Equipment, net
  f. Intangible Assets
 Goodwill
 Goodwill and Other Intangible Assets,
 Other Intangible Assets
  g. Other Long Term Liabilities
  h. Revenue Recognition
   40




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  i. Operating Expenses
  j. Income Taxes
  k. Earnings Per Share
  l. Fair Value of Financial Instruments
  m. Share-Based Compensation
 Share-Based Payment (Revised
2004). Accounting
for Stock Issued to Employees,
  41




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 Accounting
for Stock-Based Compensation, Transition Election
to Accounting for Tax Effects of Share-Based Payment Awards.
    42




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  2006
    
    2005
    
    2004Applied assumptions:Weighted average fair value of
options at the date of grant
    
    $
    7.61
    
    
    $
    5.40
    
    
    $
    5.42Dividends
    
    
    
    
    
    
    
    
    
    
    Expected term/life of options in years
    
    
    4
    
    
    
    4
    
    
    
    4Forfeiture rate
    
    
    11.4
    %
    
    
    15.0
    %
    
    
    15.0
    %Average risk-free interest rate
    
    
    4.6
    %
    
    
    3.8
    %
    
    
    3.1
    %Volatility rate
    
    
    37.6
    %
    
    
    34.5
    %
    
    
    33.1
    %
 Pro Forma2005
    
    
    2004Net earnings from continuing operations:As reported
    
    $
    36,327
    
    
    $
    33,241Deduct: Total share-based employee compensation expense determined
under fair value based method for all awards, net of related tax
effects
    
    
    (3,218
    )
    
    
    (3,257
    )Pro forma
    
    $
    33,109
    
    
    $
    29,984Net earnings:As reported
    
    $
    35,151
    
    
    $
    39,706Deduct: Total share-based employee compensation expense determined
under fair value based method for all awards, net of related tax
effects
    
    
    (3,218
    )
    
    
    (3,257
    )Pro forma
    
    $
    31,933
    
    
    $
    36,449Net earnings from continuing operations per common share:Basic as reported
    
    $
    1.23
    
    
    $
    1.11Basic pro forma
    
    $
    1.12
    
    
    $
    1.00Diluted as reported
    
    $
    1.20
    
    
    $
    1.09Diluted pro forma
    
    $
    1.10
    
    
    $
    0.98Net earnings per common share:Basic as reported
    
    $
    1.19
    
    
    $
    1.33Basic pro forma
    
    $
    1.08
    
    
    $
    1.22Diluted as reported
    
    $
    1.17
    
    
    $
    1.30Diluted pro forma
    
    $
    1.06
    
    
    $
    1.19
  43




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 n. Use of Estimates
   o. Recent Accounting Pronouncements
 Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited
Partnership or Similar Entity When the Limited Partners Have Certain Rights
 Accounting for Uncertainty in
Income Taxes  an interpretation of SFAS No. 109, Accounting for
Income Taxes.
 Fair Value Measurements
  p. Reclassifications and Restatements
  44




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 2. Acquisitions and Dispositions
 a. Acquisitions
   b. Pro Forma Information
  2006
    
    
    2005Revenues
    
    $
    477,431
    
    
    $
    445,670Net earnings from continuing operations
    
    
    39,203
    
    
    
    40,825Net earnings
    
    
    38,832
    
    
    
    39,649Net earnings from continuing operations per common
share:Basic
    
    $
    1.31
    
    
    $
    1.38Diluted
    
    $
    1.29
    
    
    $
    1.35Net earnings per common share:Basic
    
    $
    1.30
    
    
    $
    1.34Diluted
    
    $
    1.28
    
    
    $
    1.32Weighted average number of shares and share equivalents:Basic
    
    
    29,822
    
    
    
    29,573Diluted
    
    
    30,398
    
    
    
    30,147
 c. Dispositions
  45




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  2006
    
    
    2005
    
    
    2004Revenues
    
    $
    3,014
    
    
    $
    6,325
    
    
    $
    15,044Earnings (loss) before income
taxes
    
    
    152
    
    
    
    (313
    )
    
    
    1,435Net earnings (loss)
    
    
    92
    
    
    
    (190
    )
    
    
    867
 3. Property and Equipment
  2006
    
    
    2005Land and improvements
    
    $
    450
    
    
    $
    450Building and improvements
    
    
    70,782
    
    
    
    60,597Movable equipment
    
    
    100,000
    
    
    
    87,429Construction in progress
    
    
    1,724
    
    
    
    3,636172,956
    
    
    
    152,112Less accumulated depreciation
    
    
    83,781
    
    
    
    68,858Property and equipment, net
    
    $
    89,175
    
    
    $
    83,254
  4. Intangible Assets
  2006
    
    2005Gross
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    
    
    
    
    Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Net
    
    Amount
    
    Amortization
    
    NetDeferred financing cost
    
    $
    2,503
    
    
    $
    1,503
    
    
    $
    1,000
    
    
    $
    2,083
    
    
    $
    1,304
    
    
    $
    779Agreements not to compete
    
    
    1,000
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000
    
    
    
    850
    
    
    
    150Total amortizable
intangible assets
    
    $
    3,503
    
    
    $
    2,503
    
    
    $
    1,000
    
    
    $
    3,083
    
    
    $
    2,154
    
    
    $
    929
  46




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  2006
    
    
    2005Balance, beginning of year
    
    $
    347,424
    
    
    $
    267,759Goodwill acquired during
year
    
    
    50,445
    
    
    
    79,886Goodwill disposed during
year
    
    
    (722
    )
    
    
    (221
    )Balance, end of year
    
    $
    397,147
    
    
    $
    347,424
  5. Long-term Debt
  2006
    
    
    2005$200 million credit agreement at prime, or LIBOR plus 0.50% to 1.50%, or a
combination thereof (average rate of 6.10% at December 31, 2006),
due July 2011
    
    $
    114,000
    
    
    $
    99,200Other debt at an average rate of 6.14%, due through June 2022
    
    
    11,888
    
    
    
    7,596Capitalized lease arrangements at an average rate of 7.61%, due through July
2009
(see note 6)
    
    
    1,427
    
    
    
    1,466127,315
    
    
    
    108,262Less current portion
    
    
    3,367
    
    
    
    2,218Long-term debt
    
    $
    123,948
    
    
    $
    106,044
     47




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 Accounting for
Derivative Investments and Hedging Activities,
 6. Leases
  CapitalizedYear Ended
    
    Equipment
    
    
    OperatingDecember 31,
    
    Leases
    
    
    Leases2007
    
    $
    950
    
    
    $
    21,8182008
    
    
    534
    
    
    
    21,7772009
    
    
    34
    
    
    
    21,6082010
    
    
    
    
    
    
    21,0532011
    
    
    
    
    
    
    20,582Thereafter
    
    
    
    
    
    
    179,290Total minimum rentals
    
    
    1,518
    
    
    $
    286,128Less amounts representing interest at rates ranging from 4.5% to
12.3%
    
    
    91Capital lease obligations
    
    $
    1,427
  7. Shareholders Equity
 a. Common Stock
    48




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  b. Shareholder Rights Plan
  49




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 c. Earnings per Share
  Earnings
    
    Shares
    
    Per Share(Numerator)
    
    (Denominator)
    
    AmountFor the year ended December 31, 2006:Net earnings from continuing operations per share (basic):
    
    $
    38,110
    
    
    
    29,822
    
    
    $
    1.28Effect of dilutive securities options
    
    
    
    
    
    
    576Net earnings from continuing operations (diluted)
    
    $
    38,110
    
    
    
    30,398
    
    
    $
    1.25Net earnings per common share (basic):
    
    $
    37,739
    
    
    
    29,822
    
    
    $
    1.27Effect of dilutive securities options
    
    
    
    
    
    
    576Net earnings per common share (diluted)
    
    $
    37,739
    
    
    
    30,398
    
    
    $
    1.24For the year ended December 31, 2005:Net earnings from continuing operations per share (basic):
    
    $
    36,327
    
    
    
    29,573
    
    
    $
    1.23Effect of dilutive securities options
    
    
    
    
    
    
    574Net earnings from continuing operations (diluted)
    
    $
    36,327
    
    
    
    30,147
    
    
    $
    1.20Net earnings per common share (basic):
    
    $
    35,151
    
    
    
    29,573
    
    
    $
    1.19Effect of dilutive securities options
    
    
    
    
    
    
    574Net earnings per common share (diluted)
    
    $
    35,151
    
    
    
    30,147
    
    
    $
    1.17For the year ended December 31, 2004:Net earnings from continuing operations per share (basic):
    
    $
    33,241
    
    
    
    29,895
    
    
    $
    1.11Effect of dilutive securities options
    
    
    
    
    
    
    612Net earnings from continuing operations (diluted)
    
    $
    33,241
    
    
    
    30,507
    
    
    $
    1.09Net earnings per common share (basic):
    
    $
    39,706
    
    
    
    29,895
    
    
    $
    1.33Effect of dilutive securities options
    
    
    
    
    
    
    612Net earnings per common share (diluted)
    
    $
    39,706
    
    
    
    30,507
    
    
    $
    1.30
 50




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 d. Stock Options
  WeightedWeighted
    
    
    
    AverageNumber
    
    
    Average
    
    
    
    Remainingof
    
    
    Exercise
    
    
    
    ContractualShares
    
    
    Price
    
    
    
    Term (in years)Outstanding at December 31, 2003
    
    
    2,970,359
    
    
    $
    14.27
    
    
    
    7.9Options granted
    
    
    1,087,595
    
    
    
    24.10Options exercised with total intrinsic value of $7,500,000
    
    
    (599,021
    )
    
    
    12.16Options terminated
    
    
    (184,305
    )
    
    
    18.74Outstanding at December 31, 2004
    
    
    3,274,628
    
    
    
    17.68
    
    
    
    7.8Options granted
    
    
    1,038,353
    
    
    
    25.94Options exercised with total intrinsic value of $2,997,000
    
    
    (265,216
    )
    
    
    15.31Options terminated
    
    
    (209,584
    )
    
    
    22.31Outstanding at December 31, 2005
    
    
    3,838,181
    
    
    
    19.82
    
    
    
    7.4Options granted
    
    
    1,171,532
    
    
    
    21.50Options exercised with total intrinsic value of $2,926,000
    
    
    (241,883
    )
    
    
    12.64Options terminated
    
    
    (178,298
    )
    
    
    24.09Outstanding at December 31, 2006 with total intrinsic value
of $15,322,000
    
    
    4,589,532
    
    
    $
    20.46
    
    
    
    7.1Vested or expected to vest at December 31, 2006 with total
intrinsic value of $15,133,000
    
    
    4,455,977
    
    
    $
    20.35
    
    
    
    7.0Exercisable at December 31, 2006 with total intrinsic value
of $12,440,000
    
    
    2,552,581
    
    
    $
    18.72
    
    
    
    6.1
  51




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  Options Outstanding
    
    
    Options ExercisableWeightedAverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    WeightedContractual
    
    
    Average
    
    
    
    
    
    
    AverageRange of
    
    Number
    
    
    Term
    
    
    Exercise
    
    
    Number
    
    
    ExerciseExercise Prices
    
    Outstanding
    
    
    (in years)
    
    
    Price
    
    
    Exercisable
    
    
    Price$    4.33 - $  6.00
    
    
    36,356
    
    
    2.7
    
    
    $
    4.73
    
    
    
    36,356
    
    
    $
    4.736.01 -   12.00
    
    
    7,500
    
    
    1.2
    
    
    
    6.09
    
    
    
    7,500
    
    
    
    6.0912.01 -   18.00
    
    
    1,667,150
    
    
5.2
    
    
    
    15.43
    
    
    
    1,496,073
    
    
    
    15.5018.01 -   24.00
    
    
    1,128,995
    
    
9.0
    
    
    
    21.32
    
    
    
    217,183
    
    
    
    21.0824.01 -   29.53
    
    
    1,749,531
    
    
7.8
    
    
    
    25.09
    
    
    
    795,469
    
    
    
    24.09$  4.33 - $29.53
    
    
    4,589,532
    
    
7.1
    
    
    $
    20.46
    
    
    
    2,552,581
    
    
    $
    18.72
 8. Income Taxes
  2006
    
    
    2005
    
    
    2004Income from continuing
operations
    
    $
    24,192
    
    
    $
    23,422
    
    
    $
    21,764Discontinued operations
    
    
    431
    
    
    
    (758
    )
    
    
    4,236Shareholders equity
    
    
    (1,359
    )
    
    
    (1,175
    )
    
    
    (2,962
    )Total
    
    $
    23,264
    
    
    $
    21,489
    
    
    $
    23,038
  2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    16,042
    
    
    $
    13,735
    
    
    $
    14,025State
    
    
    3,259
    
    
    
    3,157
    
    
    
    2,385Deferred
    
    
    4,891
    
    
    
    6,530
    
    
    
    5,354Income tax expense
    
    $
    24,192
    
    
    $
    23,422
    
    
    $
    21,764
 52




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  2006
    
    
    2005
    
    
    2004Statutory federal income tax
    
    $
    21,806
    
    
    $
    20,912
    
    
    $
    19,252State income taxes, net of federal income tax
benefit
    
    
    2,631
    
    
    
    3,047
    
    
    
    2,317Increase (decrease) in valuation allowances
    
    
    61
    
    
    
    101
    
    
    
    (83
    )Other
    
    
    (306
    )
    
    
    (638
    )
    
    
    278Income tax expense
    
    $
    24,192
    
    
    $
    23,422
    
    
    $
    21,764
  2006
    
    
    2005Deferred tax assets:Share-based compensation
    
    $
    2,665
    
    
    $
    Allowance for uncollectible accounts
    
    
    960
    
    
    
    848Accrued liabilities and other
    
    
    1,769
    
    
    
    880Operating and capital loss carryforwards
    
    
    1,348
    
    
    
    669Gross deferred tax assets
    
    
    6,742
    
    
    
    2,397Valuation allowances
    
    
    (1,165
    )
    
    
    (669
    )Net deferred tax assets
    
    
    5,577
    
    
    
    1,728Deferred tax liabilities:Prepaid expenses
    
    
    398
    
    
    
    403Property and equipment, principally due to difference in depreciation
    
    
    190
    
    
    
    643Goodwill, principally due to differences in amortization
    
    
    43,424
    
    
    
    33,488Gross deferred tax liabilities
    
    
    44,012
    
    
    
    34,534Net deferred tax liabilities
    
    $
    38,435
    
    
    $
    32,806
  2006
    
    
    2005Current deferred income tax assets
    
    $
    915
    
    
    $
    809Noncurrent deferred income tax
liability
    
    
    39,350
    
    
    
    33,615Net deferred tax liability
    
    $
    38,435
    
    
    $
    32,806
  53




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
 9. Related Party Transactions
      10. Employee Benefit Programs
   11. Commitments and Contingencies
   54




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##### Table of Contents



Item 8.
Financial Statements and Supplementary Data  (continued)
 AmSurg Corp.  Notes to the Consolidated Financial Statements  (continued)
  12. Supplemental Cash Flow Information
  2006
    
    
    2005
    
    
    2004Cash paid during the year for:Interest
    
    $
    8,371
    
    
    $
    4,739
    
    
    $
    2,272Income taxes, net of refunds
    
    
    17,462
    
    
    
    12,075
    
    
    
    15,757Non-cash investing and financing activities:Capital lease obligations incurred to acquire equipment
    
    
    800
    
    
    
    276
    
    
    
    400Notes received for sale of a partnership interest
    
    
    108
    
    
    
    
    
    
    
    12,500Effect of acquisitions:Assets acquired, net of cash
    
    
    62,723
    
    
    
    90,195
    
    
    
    52,550Liabilities assumed
    
    
    (5,694
    )
    
    
    (6,609
    )
    
    
    (3,933
    )Notes payable and other obligations
    
    
    
    
    
    
    (17,507
    )
    
    
    (3,477
    )Payment for assets acquired
    
    $
    57,029
    
    
    $
    66,079
    
    
    $
    45,140
 13. Subsequent Events
  55




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data  (continued)
 Quarterly Statement of Earnings Data (Unaudited)
  2005
    
    
    2006Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4
    
    
    Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4(In thousands, except per share data)Revenues
    
    $
    90,261
    
    
    $
    97,175
    
    
    $
    98,410
    
    
    $
    101,952
    
    
    $
    112,609
    
    
    $
    118,877
    
    
    $
    114,188
    
    
    $
    118,918Earnings
from continuing operations before income taxes
    
    
    14,353
    
    
    
    16,467
    
    
    
    15,048
    
    
    
    13,881
    
    
    
    14,313
    
    
    
    16,538
    
    
    
    15,457
    
    
    
    15,994Net earnings
from continuing operations
    
    
    8,727
    
    
    
    10,011
    
    
    
    9,150
    
    
    
    8,439
    
    
    
    8,702
    
    
    
    10,055
    
    
    
    9,398
    
    
    
    9,955Net (loss)
earnings from discontinued operations
    
    
    (75
    )
    
    
    (330
    )
    
    
    (789
    )
    
    
    18
    
    
    
    23
    
    
    
    49
    
    
    
    (36
    )
    
    
    (407
    )Net earnings
    
    
    8,652
    
    
    
    9,681
    
    
    
    8,361
    
    
    
    8,457
    
    
    
    8,725
    
    
    
    10,104
    
    
    
    9,362
    
    
    
    9,548Diluted net
earnings from continuing operations per common share
    
    $
    0.29
    
    
    $
    0.33
    
    
    $
    0.30
    
    
    $
    0.28
    
    
    $
    0.29
    
    
    $
    0.33
    
    
    $
    0.31
    
    
    $
    0.33Diluted net earnings per common share
    
    $
    0.29
    
    
    $
    0.32
    
    
    $
    0.28
    
    
    $
    0.28
    
    
    $
    0.29
    
    
    $
    0.33
    
    
    $
    0.31
    
    
    $
    0.31
 
 56




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Managements Report on Internal Control over Financial Reporting
    Internal Control  Integrated Framework
  /s/ Ken P. McDonaldKen P. McDonaldPresident and Chief Executive Officer/s/ Claire M. GulmiClaire M. GulmiExecutive Vice President and Chief Financial Officer
 57




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##### Table of Contents



Item 9A. Controls and Procedures  (continued)
 Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework Internal ControlIntegrated Framework
 Share Based Payment
  
 58




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##### Table of Contents



Item 9A. Controls and Procedures  (continued)
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  
 Part III
 
 Item 10. Directors, Executive Officers and Corporate Governance
    
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  59




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##### Table of Contents



Item 14. Principal Accounting Fees and Services
  
 Part IV
 
 Item 15. Exhibits, Financial Statement Schedules
 (a)
    
    Financial Statements, Financial Statement Schedules and Exhibits
 (1
    )
    
    Financial Statements: See Item 8 herein.(2
    )
    
    Financial Statement Schedules:Report of Registered Public Accounting Firm
    
    S-1Schedule II  Valuation and Qualifying Accounts
    
    S-2(All other schedules are omitted because they are not applicable or
not required, or because the required information is included in the
consolidated financial statements or notes thereto.)(3
    )
    
    Exhibits: See the exhibit
listing set forth below.
 60




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##### Table of Contents



(3) Exhibits
 Exhibit
    
    
    
    Description3.1
    
    
    
    Second Amended and Restated Charter of AmSurg, as amended (incorporated
by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004)3.2
    
    
    
    Second Amended and Restated Bylaws of AmSurg, as amended (incorporated by
reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004)4.1
    
    
    
    Specimen common stock certificate (incorporated by reference to Exhibit
4.1 to the Registration Statement on Form 10/A-4 (filed with the
Commission on July 13, 2001))4.2
    
    
    
    Second Amended and Restated Rights Agreement, dated as of July 12, 2001,
between AmSurg and SunTrust Bank, Atlanta, including the Form of Rights
Certificate (Exhibit A) and the Form of Summary of Rights (Exhibit B)
(incorporated by reference to Exhibit 1 to Amendment No. 2 to the
Registration Statement on Form 8-A/A (filed with the Commission on July
13, 2001))4.3
    
    
    
    First Amendment to Second Amended and Restated Rights Agreement, dated as
of April 16, 2003, by and between AmSurg and SunTrust Bank, Atlanta
(incorporated by reference to Exhibit 4 of the Quarterly Report on Form
10-Q for the quarter ended June 30, 2003)10.1
    
    *
    
    Form of Indemnification Agreement with directors, executive officers and
advisors (incorporated by reference to Exhibit 10.3 to the Registration
Statement on Form 10 (filed with the Commission on March 11, 1997))10.2
    
    
    
    Third Amended and Restated Revolving Credit Agreement, dated as of July
28, 2006, among AmSurg, SunTrust Bank, as Administrative Agent, and
various banks and other financial institutions (incorporated by reference
to Exhibit 99.1 of the Current Report on Form 8-K dated August 1, 2006)10.3
    
    *
    
    Amended and Restated 1997 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004)10.4
    
    *
    
    First Amendment to Amended and Restated 1997 Stock Incentive Plan
(incorporated by reference to the Current Report on Form 8-K dated
November 21, 2006)10.5
    
    *
    
    Form of Non-Qualified Stock Option Agreement (incorporated by reference
to Exhibit 99.1 to the Current Report on Form 8-K dated February 2, 2005)10.6
    
    *
    
    Form of Employment Agreement with executive officers (incorporated by
reference to Exhibit 10.9 to the Registration Statement on Form 10 (filed
with the Commission on March 11, 1997))10.7
    
    *
    
    Agreement dated April 11, 1997 between AmSurg and David L. Manning
(incorporated by reference to Exhibit 10.12 to the Registration Statement
on Form 10/A-3 (filed with the Commission on November 3, 1997))10.8
    
    *
    
    Medical Director Agreement dated as of January 1, 1998, between AmSurg
and Bergein F. Overholt, M.D. (incorporated by reference to Exhibit 10 of
the Quarterly Report on Form 10-Q for the quarter ended September 30,
1998)10.9
    
    
    
    Lease Agreement dated February 24, 1999 between Burton Hills III, L.L.C.
and AmSurg (incorporated by reference to Exhibit 10.1 of the Quarterly
Report on Form 10-Q for the quarter ended June 30, 1999)10.10
    
    
    
    First Amendment to Lease Agreement dated June 27, 2001 by and between
Burton Hills III, LLC and AmSurg (incorporated by reference to Exhibit 10
of the Quarterly Report on Form 10-Q for the quarter ended September 30,
2002)
 61




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##### Table of Contents



(3) Exhibits
 Exhibit
    
    
    
    Description10.11
    
    
    
    Second Amendment to Lease Agreement dated January 31, 2003 by and between
Burton Hills III Partnership and AmSurg (incorporated by reference to
Exhibit 10.14 to the Annual Report on Form 10-K for the year ended
December 31, 2003)10.12
    
    
    
    Third Amendment to Lease Agreement dated September 1, 2003 by and between
Burton Hills III Partnership and AmSurg (incorporated by reference to
Exhibit 10.15 to the Annual Report on Form 10-K for the year ended
December 31, 2003)10.13
    
    
    
    Fourth Amendment to Lease Agreement dated October 31, 2003 by and between
Burton Hills III Partnership and AmSurg (incorporated by reference to
Exhibit 10.16 to the Annual Report on Form 10-K for the year ended
December 31, 2003)10.14
    
    *
    
    Supplemental Executive Retirement Savings Plan, as amended (incorporated
by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005)10.15
    
    *
    
    Employment Agreement, dated February 28, 2005, between Frank J. Coll and
AmSurg (incorporated by reference to Exhibit 99.1 to the Current Report
on Form 8-K dated February 28, 2005)10.16
    
    *
    
    Form of Restricted Stock Agreement for Non-Employee Directors
(incorporated by reference to Exhibit 10.1 to the Current Report on Form
8-K, dated May 24, 2005)10.17
    
    *
    
    AmSurg Corp. Long Term Care Plan (incorporated by reference to Exhibit
10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30,
2005)10.18
    
    *
    
    First Amendment to Employment Agreement, dated November 22, 2005, between
AmSurg and Ken P. McDonald (incorporated by reference to Exhibit 99 to
the Current Report on Form 8-K dated November 22, 2005)10.19
    
    *
    
    AmSurg Corp. 2006 Stock Incentive Plan (incorporated by reference to
Exhibit 10.1 to the Registration Statement on Form S-8 (filed with the
Commission on June 12, 2006))10.20
    
    *
    
    First Amendment to AmSurg Corp. 2006 Stock Incentive Plan (incorporated
by reference to the Current Report on Form 8-K dated November 21, 2006)10.21
    
    *
    
    First Amendment to Form of Employment Agreement with each of Claire M.
Gulmi, David L. Manning, Royce Harrell, and Frank J. Coll (incorporated
by reference to the Current Report on Form 8-K dated November 21, 2006)10.22
    
    
    
    Schedule of Non-employee Director and Named Executive Officer Compensation21.1
    
    
    
    Subsidiaries of AmSurg23.1
    
    
    
    Consent of Independent Auditors24.1
    
    
    
    Power of Attorney (appears on page 59)31.1
    
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)31.2
    
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)32.1
    
    
    
    Section 1350 Certifications
 
 *
    
    Management contract or compensatory plan, contract or arrangement 62




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##### Table of Contents



Signatures
  AMSURG CORP.February 27, 2007
    By:
    /s/  Ken P. McDonaldKen P. McDonald(President and Chief Executive Officer)   Signature
    
    Title
    
    Date/s/ Ken P. McDonald
    
    President, Chief Executive Officer and
    
    February 27, 2007Ken P. McDonald
    
    Director
(Principal Executive Officer)/s/ Claire M. Gulmi
    
    Executive Vice President, Chief Financial
    
    February 27, 2007Claire M. Gulmi
    
    Officer,
Secretary and Director (PrincipalFinancial and Accounting Officer)/s/ Thomas G. Cigarran
    
    Chairman of the Board
    
    February 27, 2007Thomas G. Cigarran/s/ James A. Deal
    
    Director
    
    February 27, 2007James A. Deal/s/ Steven I. Geringer
    
    Director
    
    February 27, 2007Steven I. Geringer/s/ Debora A. Guthrie
    
    Director
    
    February 27, 2007Debora A. Guthrie/s/ Henry D. Herr
    
    Director
    
    February 27, 2007Henry D. Herr/s/ Kevin P. Lavender
    
    Director
    
    February 27, 2007Kevin P. Lavender/s/ Bergein F. Overholt, M.D.
    
    Director
    
    February 27, 2007Bergein F. Overholt, M.D.
 63




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
   
 S-1




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##### Table of Contents



AmSurg Corp.
Schedule II  Valuation and Qualifying Accounts
For the Years Ended December 31, 2006, 2005 and 2004
(In thousands
 Additions
    
    
    DeductionsBalance at
    
    
    Charged to
    
    
    Charged to
    
    
    Charge-off
    
    
    Balance atBeginning
    
    
    Cost and
    
    
    Other
    
    
    Against
    
    
    End ofof Period
    
    
    Expenses
    
    
    Accounts (1)
    
    
    Allowances
    
    
    PeriodAllowance
for uncollectible accounts included under the
balance sheet caption Accounts receivable:Year ended December 31, 2006
    
    $
    6,189
    
    
    $
    11,418
    
    
    $
    1,149
    
    
    $
    (12,128
    )
    
    $
    6,628Year ended December 31, 2005
    
    $
    5,119
    
    
    $
    9,033
    
    
    $
    1,045
    
    
    $
    (9,008
    )
    
    $
    6,189Year ended December 31, 2004
    
    $
    4,956
    
    
    $
    8,707
    
    
    $
    666
    
    
    $
    (9,210
    )
    
    $
    5,119
 
 (1)
    
    Valuation of allowance for uncollectible accounts as of the acquisition date of physician
practice-based surgery centers, net of dispositions. See Notes to the Consolidated Financial
Statements  Note 2. S-2