##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







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

For the Quarterly Period Ended June 30, 2009

OR



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

Commission File Number 001-12111





MEDNAX, INC.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 26-3667538                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1301 Concord Terrace

Sunrise, Florida 33323

(Address of principal executive offices)

(Zip Code)

(954)
384-0175

(Registrants telephone number, including area code)

Not Applicable

(Former name, former address and fiscal year, if changed since
last report)





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

Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈  N/A

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  | x |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date:

Shares of common stock outstanding as of July 31, 2009: 46,377,623









---

##### Table of Contents

MEDNAX, INC.

INDEX



|                               |  |                                                                                                                   |  |     
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------- |  | ----
|                               |  |                                                                                                                   |  | Page
|PART I - FINANCIAL INFORMATION |  |                                                                                                                  
|                               |  |                                                                                                                  
|ITEM 1.                        |  | Financial Statements                                                                                              |  | 3   
|                               |  |                                                                                                                  
|                               |  | Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008 (Unaudited)                       |  | 3   
|                               |  |                                                                                                                  
|                               |  | Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2009 and 2008 (Unaudited) |  | 4   
|                               |  |                                                                                                                  
|                               |  | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008
(Unaudited)       |  | 5   
|                               |  |                                                                                                                  
|                               |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                  |  | 6   
|                               |  |                                                                                                                  
|ITEM 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                             |  | 14  
|                               |  |                                                                                                                  
|ITEM 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                        |  | 19  
|                               |  |                                                                                                                  
|ITEM 4.                        |  | Controls and Procedures                                                                                           |  | 19  
|                               | 
|PART II - OTHER INFORMATION    |  |                                                                                                                  
|                               |  |                                                                                                                  
|ITEM 1.                        |  | Legal Proceedings                                                                                                 |  | 20  
|                               |  |                                                                                                                  
|ITEM 1A.                       |  | Risk Factors                                                                                                      |  | 21  
|                               |  |                                                                                                                  
|ITEM 4.                        |  | Submission of Matters to a Vote of Security-Holders                                                               |  | 22  
|                               |  |                                                                                                                  
|ITEM 6.                        |  | Exhibits                                                                                                          |  | 22  
|                               | 
|SIGNATURES                     |  | 23                                                                                                               
|                               | 
|EXHIBIT INDEX                  |  | 24                                                                                                               



2



---

##### Table of Contents

PART I - FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

MEDNAX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                                                       |  |                |           |                   |   |          
|---------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | ----------------- | - | ---------
|                                                                                                                       |  | June 30, 2009  |           | December 31, 2008
|                                                                                                                       |  | (in thousands)
|                                                                                                                       |  |               
|ASSETS                                                                                                                 |  |                |           |                   |   |          
|Current assets:                                                                                                        |  |                |           |                   |   |          
|Cash and cash equivalents                                                                                              |  | $              | 18,600    |                   | $ | 14,346   
|Short-term investments                                                                                                 |  |                | 12,590    |                   |   | 20,764   
|Accounts receivable, net                                                                                               |  |                | 163,435   |                   |   | 162,395  
|Prepaid expenses                                                                                                       |  |                | 6,078     |                   |   | 5,813    
|Deferred income taxes                                                                                                  |  |                | 76,474    |                   |   | 70,384   
|Other assets                                                                                                           |  |                | 16,195    |                   |   | 11,199   
|                                                                                                                       |  |                |           |                   |   |          
|Total current assets                                                                                                   |  |                | 293,372   |                   |   | 284,901  
|Investments                                                                                                            |  |                | 26,634    |                   |   | 16,241   
|Property and equipment, net                                                                                            |  |                | 42,128    |                   |   | 38,807   
|Goodwill                                                                                                               |  |                | 1,192,852 |                   |   | 1,127,959
|Other assets, net                                                                                                      |  |                | 28,459    |                   |   | 28,966   
|                                                                                                                       |  |                |           |                   |   |          
|                                                                                                                       |  |               
|Total assets                                                                                                           |  | $              | 1,583,445 |                   | $ | 1,496,874
|                                                                                                                       |  |                |           |                   |   |          
|                                                                                                                       |  |               
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                   |  |                |           |                   |   |          
|Current liabilities:                                                                                                   |  |                |           |                   |   |          
|Accounts payable and accrued expenses                                                                                  |  | $              | 273,356   |                   | $ | 302,584  
|Current portion of long-term debt and capital lease obligations                                                        |  |                | 270       |                   |   | 258      
|Income taxes payable                                                                                                   |  |                | 15,999    |                   |   | 14,283   
|                                                                                                                       |  |                |           |                   |   |          
|Total current liabilities                                                                                              |  |                | 289,625   |                   |   | 317,125  
|                                                                                                                       |  |                |           |                   |   |          
|Line of credit                                                                                                         |  |                | 152,000   |                   |   | 139,500  
|Long-term debt and capital lease obligations                                                                           |  |                | 314       |                   |   | 356      
|Deferred income taxes                                                                                                  |  |                | 49,970    |                   |   | 46,873   
|Other liabilities                                                                                                      |  |                | 35,001    |                   |   | 27,882   
|                                                                                                                       |  |                |           |                   |   |          
|Total liabilities                                                                                                      |  |                | 526,910   |                   |   | 531,736  
|                                                                                                                       |  |                |           |                   |   |          
|Commitments and contingencies                                                                                          |  |                |           |                   |   |          
|                                                                                                                       |  |               
|Shareholders equity:                                                                                                  |  |                |           |                   |   |          
|Preferred stock; $.01 par value; 1,000 shares authorized; none issued                                                  |  |                |          |                   |   |         
|Common stock; $.01 par value; 100,000 shares authorized; 46,340 and 45,642 shares issued and outstanding, respectively |  |                | 463       |                   |   | 456      
|Additional paid-in capital                                                                                             |  |                | 569,414   |                   |   | 555,293  
|Retained earnings                                                                                                      |  |                | 486,658   |                   |   | 409,389  
|                                                                                                                       |  |                |           |                   |   |          
|Total shareholders equity                                                                                             |  |                | 1,056,535 |                   |   | 965,138  
|                                                                                                                       |  |                |           |                   |   |          
|Total liabilities and shareholders equity                                                                             |  | $              | 1,583,445 |                   | $ | 1,496,874
|                                                                                                                       |  |                |           |                   |   |          

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



3



---

##### Table of Contents

MEDNAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------------------------- |  | ------------------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                |  | Three Months EndedJune 30,            |         |   | Six Months EndedJune 30, |  
|                                                                |  | 2009                                  |         |   | 2008                     |   |         | 2009 |  |   | 2008    |  
|                                                                |  | (in thousands, except per share data) |        
|                                                                |  |                                       |         |  
|Net patient service revenue                                     |  | $                                     | 319,815 |   |                          | $ | 257,704 |      |  | $ | 623,700 |   |  | $ | 503,277 |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Operating expenses:                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Practice salaries and benefits                                  |  |                                       | 191,756 |   |                          |   | 150,696 |      |  |   | 385,764 |   |  |   | 302,056 |  
|Practice supplies and other operating expenses                  |  |                                       | 12,798  |   |                          |   | 10,529  |      |  |   | 25,439  |   |  |   | 20,243  |  
|General and administrative expenses                             |  |                                       | 36,295  |   |                          |   | 31,016  |      |  |   | 72,945  |   |  |   | 60,772  |  
|Depreciation and amortization                                   |  |                                       | 4,187   |   |                          |   | 2,939   |      |  |   | 8,150   |   |  |   | 5,755   |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total operating expenses                                        |  |                                       | 245,036 |   |                          |   | 195,180 |      |  |   | 492,298 |   |  |   | 388,826 |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income from operations                                          |  |                                       | 74,779  |   |                          |   | 62,524  |      |  |   | 131,402 |   |  |   | 114,451 |  
|Investment income                                               |  |                                       | 429     |   |                          |   | 645     |      |  |   | 870     |   |  |   | 1,958   |  
|Interest expense                                                |  |                                       | (824    | ) |                          |   | (335    | )    |  |   | (1,835  | ) |  |   | (720    | )
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income from continuing operations before income taxes           |  |                                       | 74,384  |   |                          |   | 62,834  |      |  |   | 130,437 |   |  |   | 115,689 |  
|Income tax provision                                            |  |                                       | 31,167  |   |                          |   | 24,662  |      |  |   | 53,168  |   |  |   | 45,388  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income from continuing operations                               |  |                                       | 43,217  |   |                          |   | 38,172  |      |  |   | 77,269  |   |  |   | 70,301  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|(Loss) income from discontinued operations, net of income taxes |  |                                       |        |   |                          |   | (1,158  | )    |  |   |        |   |  |   | 22,519  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                      |  | $                                     | 43,217  |   |                          | $ | 37,014  |      |  | $ | 77,269  |   |  | $ | 92,820  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                                |  |                                       |         |  
|Per common and common equivalent share data:                    |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income from continuing operations:                              |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                           |  | $                                     | 0.95    |   |                          | $ | 0.82    |      |  | $ | 1.70    |   |  | $ | 1.49    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                         |  | $                                     | 0.93    |   |                          | $ | 0.80    |      |  | $ | 1.68    |   |  | $ | 1.46    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|(Loss) income from discontinued operations:                     |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                           |  | $                                     |        |   |                          | $ | (0.02   | )    |  | $ |        |   |  | $ | 0.48    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                         |  | $                                     |        |   |                          | $ | (0.02   | )    |  | $ |        |   |  | $ | 0.46    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income:                                                     |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                           |  | $                                     | 0.95    |   |                          | $ | 0.80    |      |  | $ | 1.70    |   |  | $ | 1.97    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                         |  | $                                     | 0.93    |   |                          | $ | 0.78    |      |  | $ | 1.68    |   |  | $ | 1.92    |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Weighted average shares:                                        |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                           |  |                                       | 45,446  |   |                          |   | 46,481  |      |  |   | 45,360  |   |  |   | 47,027  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                         |  |                                       | 46,253  |   |                          |   | 47,654  |      |  |   | 46,088  |   |  |   | 48,293  |  
|                                                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



4



---

##### Table of Contents

MEDNAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                                |  |                          |          |   |      |   |          |  
|----------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---- | - | -------- | -
|                                                                                                |  | Six Months EndedJune 30, |         
|                                                                                                |  | 2009                     |          |   | 2008 |  
|                                                                                                |  | (in thousands)           |         
|Cash flows from operating activities:                                                           |  |                          |          |   |      |   |          |  
|Net income                                                                                      |  | $                        | 77,269   |   |      | $ | 92,820   |  
|Adjustments to reconcile net income to net cash provided from operating activities:             |  |                          |          |   |      |   |          |  
|Depreciation and amortization                                                                   |  |                          | 8,150    |   |      |   | 5,894    |  
|Stock-based compensation expense                                                                |  |                          | 11,414   |   |      |   | 9,889    |  
|Deferred income taxes                                                                           |  |                          | (2,993   | ) |      |   | 9,979    |  
|Gain on sale of assets                                                                          |  |                          |         |   |      |   | (36,237  | )
|Changes in assets and liabilities:                                                              |  |                          |          |   |      |   |          |  
|Accounts receivable                                                                             |  |                          | (1,040   | ) |      |   | (3,139   | )
|Prepaid expenses and other assets                                                               |  |                          | (5,261   | ) |      |   | (1,859   | )
|Other assets                                                                                    |  |                          | 766      |   |      |   | 370      |  
|Accounts payable and accrued expenses                                                           |  |                          | (30,781  | ) |      |   | (40,863  | )
|Income taxes payable                                                                            |  |                          | 1,726    |   |      |   | 118      |  
|Other liabilities                                                                               |  |                          | 2,475    |   |      |   | (6,990   | )
|                                                                                                |  |                          |          |   |      |   |          |  
|Net cash provided from operating activities                                                     |  |                          | 61,725   |   |      |   | 29,982   |  
|                                                                                                |  |                          |          |   |      |   |          |  
|Cash flows from investing activities:                                                           |  |                          |          |   |      |   |          |  
|Acquisition payments, net of cash acquired                                                      |  |                          | (62,223  | ) |      |   | (47,654  | )
|Purchase of investments                                                                         |  |                          | (13,894  | ) |      |   | (8,690   | )
|Proceeds from maturities of investments                                                         |  |                          | 11,675   |   |      |   | 10,284   |  
|Purchase of property and equipment                                                              |  |                          | (8,058   | ) |      |   | (8,187   | )
|Proceeds from sale of assets                                                                    |  |                          |         |   |      |   | 66,000   |  
|                                                                                                |  |                          |          |   |      |   |          |  
|Net cash (used in) provided from investing activities                                           |  |                          | (72,500  | ) |      |   | 11,753   |  
|                                                                                                |  |                          |          |   |      |   |          |  
|Cash flows from financing activities:                                                           |  |                          |          |   |      |   |          |  
|Borrowings on line of credit                                                                    |  |                          | 262,000  |   |      |   | 76,700   |  
|Payments on line of credit                                                                      |  |                          | (249,500 | ) |      |   | (19,200  | )
|Payments on capital lease obligations                                                           |  |                          | (175     | ) |      |   | (362     | )
|Excess tax benefit related to stock option exercises and restricted stock vestings              |  |                          | 268      |   |      |   | 3,951    |  
|Reduction of excess tax benefit related to stock option exercises and restricted stock vestings |  |                          | (797     | ) |      |   |         |  
|Repurchases of common stock                                                                     |  |                          |         |   |      |   | (199,997 | )
|Proceeds from issuance of common stock                                                          |  |                          | 3,233    |   |      |   | 8,585    |  
|                                                                                                |  |                          |          |   |      |   |          |  
|Net cash provided from (used in) financing activities                                           |  |                          | 15,029   |   |      |   | (130,323 | )
|                                                                                                |  |                          |          |   |      |   |          |  
|Net increase (decrease) in cash and cash equivalents                                            |  |                          | 4,254    |   |      |   | (88,588  | )
|Cash and cash equivalents at beginning of period                                                |  |                          | 14,346   |   |      |   | 102,843  |  
|Cash held by discontinued operating unit at beginning of period                                 |  |                          |         |   |      |   | 50       |  
|Cash held by discontinued operating unit on sale date                                           |  |                          |         |   |      |   | (72      | )
|                                                                                                |  |                          |          |   |      |   |          |  
|Cash and cash equivalents at end of period                                                      |  | $                        | 18,600   |   |      | $ | 14,233   |  
|                                                                                                |  |                          |          |   |      |   |          |  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



5



---

##### Table of Contents

MEDNAX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2009

(Unaudited)



|1. | Basis of Presentation:
|-- | ----------------------

Effective December 31,
2008, MEDNAX, Inc. and Pediatrix Medical Group, Inc., a Florida corporation (Pediatrix), completed a holding company formation transaction that established MEDNAX, Inc. as the parent company of Pediatrix. In the transaction, each
outstanding share of Pediatrix common stock, par value $0.01 per share, and attached preferred share purchase right was converted into one share of MEDNAX, Inc. common stock, par value $0.01 per share, and attached preferred share purchase right.
The preferred share purchase rights and related plan expired on March 31, 2009.

The accompanying unaudited Condensed Consolidated
Financial Statements of the Company and the notes thereto presented in this Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) applicable to interim financial
statements, and do not include all disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, these financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair presentation of the results of interim periods. The financial statements include all the accounts of MEDNAX, Inc. and its consolidated subsidiaries (collectively, MDX)
together with the accounts of MDXs affiliated professional associations, corporations and partnerships (the affiliated professional contractors). MDX has contractual management arrangements with its affiliated professional
contractors, which are separate legal entities that provide physician services in certain states and Puerto Rico. The terms MEDNAX and the Company refer collectively to MEDNAX, Inc., its subsidiaries, and the affiliated
professional contractors.

On February 29, 2008, the Company completed the sale of its newborn metabolic screening laboratory business
in a cash transaction. In accordance with Statement of Financial Accounting Standards No. 144 (FAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets, the business operations of the newborn metabolic
screening laboratory are reported separately as income from discontinued operations, net of income taxes, for all periods presented. See Note 10 to the Condensed Consolidated Financial Statements for more information on the Companys
discontinued operations.

The consolidated results of operations for the interim periods presented are not necessarily indicative of the
results to be experienced for the entire fiscal year. In addition, the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes
thereto included in the Companys most recent Annual Report on Form 10-K (the Form 10-K).



|2. | Summary of Significant Accounting Policies:
|-- | -------------------------------------------

Accounting Pronouncements

In April 2009, the Financial Accounting Standards Board (the FASB) issued Staff
Position (FSP) FAS No. 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends Statement of Financial Accounting Standards No. 107, Disclosures about the Fair Value
of Financial Instruments to require disclosure about the fair value of financial instruments in interim financial statements. This FSP is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted
for periods ending after March 15, 2009. The Company adopted this FSP beginning with the interim period ended June 30, 2009. The Companys required disclosures under this FSP are provided under Fair Value of Financial
Instruments below.

In April 2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2 (FSP 115-2),
Recognition and Presentation of Other-Than-Temporary Impairments. FSP 115-2 establishes a new method of recognizing and reporting other-than-temporary impairments of debt securities. The guidance provided in FSP 115-2 is effective for
the Company in the current quarter. FSP 115-2 did not have an impact on the Companys Condensed Consolidated Financial Statements for the second quarter of 2009.

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165 (FAS 165), Subsequent Events. FAS 165 provides terminology changes and additional required disclosures
related to subsequent events, including required disclosure of the date through which the reporting entity has evaluated subsequent events and whether that evaluation date is the date of issuance or the date the financial statements were available
to be issued. The adoption of FAS 165 in the current quarter did not have a significant impact on the Companys subsequent event disclosures.



6



---

##### Table of Contents

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168 (FAS
168), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. The FASB Accounting Standards Codification (the Codification) will become the source of
authoritative United States Generally Accepted Accounting Principles recognized by the FASB to be applied by nongovernmental entities. The Codification will be effective for the Company beginning with the third quarter of 2009.

Fair Value of Financial Instruments

In accordance with Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measures, the Company carries its money market funds and the cash surrender value of life insurance related to its
deferred compensation arrangements at fair value. Under FAS 157, the fair value of these instruments is determined using a three-tier fair value hierarchy. Based on this hierarchy, the Company determined the fair value of its money market funds and
the cash surrender value of life insurance using quoted market prices, a Level 1 or an observable input as defined under FAS 157. The investments underlying the cash surrender value of life insurance consist primarily of exchange-traded equity
securities and mutual funds with quoted prices in active markets. At June 30, 2009, the Companys money market funds and the cash surrender value of life insurance had carrying amounts of $16.8 million and $9.2 million, respectively. At
December 31, 2008, the Companys money market funds and the cash surrender value of life insurance had carrying amounts of $12.8 million and $10.0 million, respectively.

The carrying amounts of cash equivalents, short-term investments, accounts receivable and accounts payable and accrued expenses approximate fair value due
to the short maturities of these items. The carrying value of long-term investments, long-term debt and capital lease obligations approximates fair value.



|3. | Cash Equivalents and Investments:
|-- | ---------------------------------

Effective
January 1, 2008, certain cash equivalents carried by the Company are subject to the provisions of FAS 157. Under FAS 157, the Company is required to measure the fair value of its financial assets using a three-tier fair value hierarchy. Based
on this hierarchy, the Company determined the fair value of its money market funds using quoted market prices, a Level 1 or an observable input as defined under FAS 157. As of June 30, 2009 and December 31, 2008, the Companys cash
equivalents consisted entirely of money market funds with a fair value of $16.8 million and $12.8 million, respectively.

Investments
consist primarily of municipal debt securities, federal home loan securities, U.S. Treasury securities and other securities issued by agencies of the United States government. Investments with remaining maturities of less than one year are
classified as short-term investments. Investments classified as long-term have maturities of one to six years.

The Company intends and has
the ability to hold its held-to-maturity securities to maturity, and therefore carries such investments at amortized cost in accordance with the provisions of Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Held-to-maturity securities are not subject to the fair value requirements of FAS 157.

The
Companys investments held at June 30, 2009, and December 31, 2008, are summarized as follows (in thousands):



|                                       |  |               |        |                   |   |            |  |           |        |  |   |       
|-------------------------------------- |  | ------------- | ------ | ----------------- | - | ---------- |  | --------- | ------ |  | - | ------
|                                       |  | June 30, 2009 |        | December 31, 2008
|                                       |  | Short-Term    |        | Long-Term         |   | Short-Term |  | Long-Term
|                                       |  |               |        |                  
|Municipal Debt Securities              |  | $             | 12,089 |                   | $ | 26,134     |  | $         | 18,756 |  | $ | 14,741
|Federal Home Loan Securities           |  |               | 501    |                   |   | 500        |  |           | 1,004  |  |   | 1,500 
|U.S. Treasury Securities               |  |               |       |                   |   |           |  |           | 504    |  |   |      
|Federal Farm Credit Bank Discount Note |  |               |       |                   |   |           |  |           | 500    |  |   |      
|                                       |  |               |        |                   |   |            |  |           |        |  |   |       
|                                       |  | $             | 12,590 |                   | $ | 26,634     |  | $         | 20,764 |  | $ | 16,241
|                                       |  |               |        |                   |   |            |  |           |        |  |   |       



7



---

##### Table of Contents

|4. | Accounts Receivable:
|-- | --------------------

Accounts receivable consist
of the following (in thousands):



|                                                         |  |               |          |   |                   |   |          |  
|-------------------------------------------------------- |  | ------------- | -------- | - | ----------------- | - | -------- | -
|                                                         |  | June 30, 2009 |          |   | December 31, 2008 |  
|                                                         |  |              
|Gross accounts receivable                                |  | $             | 541,279  |   |                   | $ | 531,841  |  
|Allowance for contractual adjustments and uncollectibles |  |               | (377,844 | ) |                   |   | (369,446 | )
|                                                         |  |               |          |   |                   |   |          |  
|                                                         |  | $             | 163,435  |   |                   | $ | 162,395  |  
|                                                         |  |               |          |   |                   |   |          |  



|5. | Business Acquisitions:
|-- | ----------------------

During the six months ended
June 30, 2009, the Company acquired six physician group practices for total consideration of $61.5 million consisting of $54.5 million in cash and $7.0 million of contingent consideration. In connection with these acquisitions, the Company
recorded goodwill of $57.3 million, other identifiable intangible assets consisting of physician and hospital agreements of $3.9 million and fixed assets of $300,000. These acquisitions will expand the Companys national network of physician
practices, and the Company expects to improve the results of these physician practices through improved managed care contracting, improved collections, identification of growth initiatives, as well as, operating and cost savings based upon the
significant infrastructure it has developed.

The contingent consideration of $7.0 million recorded during the six months ended
June 30, 2009 is related to an agreement to pay additional amounts based on the achievement of certain performance measures for each of the five years ending after the acquisition date. The accrued contingent consideration related to this
acquisition was recorded at acquisition-date fair value using the income approach with assumed discount rates ranging from 3.0% to 5.25% over the five-year term and an assumed payment probability of 100% for each of the five years. The range of the
undiscounted amount the Company could pay under the contingent consideration agreement is between $0 and $8.0 million.

During the six
months ended June 30, 2009, the Company paid approximately $8.7 million for contingent consideration related to certain prior-period acquisitions. In connection with prior-period acquisitions, the Company also recorded additional fixed assets
of $65,000 during the six months ended June 30, 2009. The Company expects that approximately $63.1 million of the total goodwill of $64.9 million recorded during the six months ended June 30, 2009 will be deductible for tax purposes. The
Company is still in the process of evaluating the fair value of intangible and fixed assets related to certain physician practice acquisitions completed during the past 12 months.

The results of operations of the six practices acquired during the six months ended June 30, 2009 have been included in the Companys Condensed
Consolidated Financial Statements from their respective dates of acquisition. The following unaudited pro forma information combines the consolidated results of operations of the Company and the physician group practice operations acquired during
2009 and 2008 as if the transactions had occurred at the beginning of the respective periods (in thousands, except for per share data):



|                                             |  |                            |         |                          |   |         |  |      |         |  |   |        
|-------------------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                             |  | Three Months EndedJune 30, |         | Six Months EndedJune 30,
|                                             |  | 2009                       |         | 2008                     |   | 2009    |  | 2008
|                                             |  |                            |         |                         
|Net patient service revenue                  |  | $                          | 323,714 |                          | $ | 309,088 |  | $    | 635,900 |  | $ | 612,718
|Income from continuing operations            |  | $                          | 44,407  |                          | $ | 44,802  |  | $    | 81,000  |  | $ | 84,691 
|Net income                                   |  | $                          | 44,407  |                          | $ | 43,644  |  | $    | 81,000  |  | $ | 107,480
|Income from continuing operations per share: |  |                            |         |                          |   |         |  |      |         |  |   |        
|Basic                                        |  | $                          | 0.98    |                          | $ | 0.96    |  | $    | 1.78    |  | $ | 1.80   
|Diluted                                      |  | $                          | 0.96    |                          | $ | 0.94    |  | $    | 1.76    |  | $ | 1.77   
|Net income per share:                        |  |                            |         |                          |   |         |  |      |         |  |   |        
|Basic                                        |  | $                          | 0.98    |                          | $ | 0.94    |  | $    | 1.78    |  | $ | 2.28   
|Diluted                                      |  | $                          | 0.96    |                          | $ | 0.92    |  | $    | 1.76    |  | $ | 2.23   



8



---

##### Table of Contents

The pro-forma results do not necessarily represent results which would have occurred if the acquisitions
had taken place at the beginning of the period, nor are they indicative of the results of future combined operations.



|6. | Accounts Payable and Accrued Expenses:
|-- | --------------------------------------

Accounts
payable and accrued expenses consist of the following (in thousands):



|                                             |  |               |         |                   |   |        
|-------------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                                             |  | June 30, 2009 |         | December 31, 2008
|                                             |  |              
|Accounts payable                             |  | $             | 7,896   |                   | $ | 10,585 
|Accrued salaries and bonuses                 |  |               | 82,791  |                   |   | 124,883
|Accrued payroll taxes and benefits           |  |               | 20,607  |                   |   | 18,042 
|Accrued professional liability risks         |  |               | 105,300 |                   |   | 93,088 
|Accrual for uncertain tax positions (Note 8) |  |               | 39,404  |                   |   | 38,781 
|Other accrued expenses                       |  |               | 17,358  |                   |   | 17,205 
|                                             |  |               |         |                   |   |        
|                                             |  | $             | 273,356 |                   | $ | 302,584
|                                             |  |               |         |                   |   |        

The net decrease in accrued salaries and bonuses from $124.9 million at December 31, 2008, to
$82.8 million at June 30, 2009, is primarily due to the payment of performance-based incentive compensation during the first quarter of 2009, partially offset by performance-based incentive compensation accrued during the six months ended
June 30, 2009. A majority of the Companys payments for performance-based incentive compensation is paid annually in the first quarter of each year.



|7. | Stock Incentive Plans and Stock Purchase Plans:
|-- | -----------------------------------------------

On
May 23, 2008, the Companys shareholders approved the 2008 Incentive Compensation Plan (the 2008 Incentive Plan). The terms of the 2008 Incentive Plan provide for grants of stock options, stock appreciation rights, restricted
stock, deferred stock, and other stock-related awards and performance awards that may be settled in cash, stock or other property. As provided in the 2008 Incentive Plan, no additional grants can be made from the Companys prior incentive
plans, except that new awards will be permitted under the 2004 Incentive Compensation Plan (the 2004 Incentive Plan) to the extent that shares previously granted under the 2004 Incentive Plan are forfeited, expire or terminate. Under the
2008 Incentive Plan, a total of six million shares are available for the granting of awards, inclusive of the number of shares remaining available for grant under the 2004 Incentive Plan. To date, the only equity awards made by the Company under the
2008 Incentive Plan are for stock options, restricted stock and deferred stock. Collectively, the Companys prior incentive plans and the 2008 Incentive Plan are referred to as the Stock Incentive Plans.

On September 24, 2008, the Companys shareholders approved an amendment to the Companys 1996 Non-Qualified Employee Stock Purchase Plan
(the Non-Qualified Plan) to increase the number of shares issuable under the Non-Qualified Plan from 1.5 million to 2.5 million shares. The approved amendment also expanded participation in the Non-Qualified Plan to all
employees who formerly participated in the 1996 Qualified Employee Stock Purchase Plan (the Qualified Plan), which was terminated in August 2008. Collectively, the Non-Qualified Plan and the Qualified Plan are referred to as the Stock
Purchase Plans. Under the Non-Qualified Plan, employees are permitted to purchase the Companys common stock at 85% of market value on January 1st, April 1st, July 1st and October 1st of each year.

Under the 2008 Incentive Plan, options to purchase shares of common stock may be granted at a price not less than the fair market value of the shares on
the date of grant. The options must be exercised within 10 years from the date of grant and generally become exercisable on a pro rata basis over a three-year period from the date of grant. Restricted stock awards generally vest over periods of
three years upon the fulfillment of specified service-based conditions and in certain instances performance-based conditions. Deferred stock awards vest on a cliff basis over a term of five years upon the fulfillment of specified service-based and
performance-based conditions. The Company recognizes compensation expense related to its restricted stock and deferred stock awards ratably over the corresponding vesting periods. During the six months ended June 30, 2009, the Company granted
552,632 shares of restricted stock and 122,269 stock options to its employees under the Stock Incentive Plans. At June 30, 2009, the Company had approximately 3.2 million shares available for future grants and awards under the 2008
Incentive Plan. During the six months ended June 30, 2009, approximately 111,000 shares were issued under the Non-Qualified Plan. At June 30, 2009, the Company had approximately 867,000 shares reserved for issuance under the Non-Qualified
Plan.



9



---

##### Table of Contents

During the three and six months ended June 30, 2009 and 2008, the Company recognized approximately
$5.7 million and $11.4 million, and $4.9 million and $9.9 million, respectively, of stock-based compensation expense related to the Stock Incentive Plans and the Stock Purchase Plans. The net reduction in the Companys pool of excess tax
benefits recognized in additional paid-in capital related to the vesting of restricted stock and the exercise of stock options for the six months ended June 30, 2009 was approximately $519,000.



|8. | Accounting for Uncertain Tax Positions:
|-- | ---------------------------------------

As of
June 30, 2009 and December 31, 2008, the Companys liability for unrecognized tax benefits, excluding accrued interest and penalties, was $48.3 million and $47.6 million, respectively. The Company had approximately $19.9 million and
$18.9 million of unrecognized tax benefits that, if recognized, would favorably impact its effective tax rate at June 30, 2009 and December 31, 2008, respectively.

During the six months ended June 30, 2009, the Company increased its liability for uncertain tax positions by a total of approximately $700,000,
which is primarily related to state tax positions.

At June 30, 2009, accounts payable and accrued expenses and other liabilities as
presented in the Companys Condensed Consolidated Balance Sheet include $39.4 million and $20.9 million, respectively, related to the Companys total liability for unrecognized tax benefits of $60.3 million. At December 31, 2008,
accounts payable and accrued expenses and other liabilities as presented in the Companys Condensed Consolidated Balance Sheet include $38.8 million and $18.4 million, respectively, related to the Companys total liability for unrecognized
tax benefits of $57.2 million. As of June 30, 2009 and December 31, 2008, the Companys accrued liability for interest and penalties totaled $12.0 million and $9.6 million, respectively. The Company includes interest and penalties
related to income tax liabilities in income tax expense.

The Companys liability for uncertain tax positions could be reduced over the
next 12 months by approximately $12.9 million, excluding accrued interest and penalties, due to the expiration of statutes of limitation or settlements with taxing authorities. Additionally, the Company anticipates that its liability for uncertain
tax positions will be increased over the next 12 months by additional taxes of approximately $1.1 million. Although the Company anticipates additional changes in its liability for uncertain tax positions related to certain temporary differences, an
estimate of the range of such changes cannot be made at this time.

The Company is currently subject to U.S. Federal and various state
income tax examinations for the tax years 2004 through 2007.



|9. | Common and Common Equivalent Shares:
|-- | ------------------------------------

Basic net
income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common and
potential common shares outstanding during the applicable period. Potential common shares consist of the dilutive effect of outstanding options and non-vested restricted and deferred stock calculated using the treasury stock method. Under the
treasury stock method, the Company calculates the assumed excess tax benefits related to the potential exercise or vesting of its stock-based awards using the difference between the average market price for the applicable period less the option
price, if any, and the fair value of the stock-based award on the date of grant multiplied by the applicable tax rate.

The calculation of
shares used in the basic and diluted net income per share calculation for the three and six months ended June 30, 2009 and 2008 is as follows (in thousands):



|                                                                           |  |                           |  |                         |  |        |  |       
|-------------------------------------------------------------------------- |  | ------------------------- |  | ----------------------- |  | ------ |  | ------
|                                                                           |  | Three Months EndedJune 30 |  | Six Months EndedJune 30
|                                                                           |  | 2009                      |  | 2008                    |  | 2009   |  | 2008  
|                                                                           |  |                           |  |                        
|Weighted average number of common shares outstanding                       |  | 45,446                    |  | 46,481                  |  | 45,360 |  | 47,027
|                                                                           |  |                           |  |                        
|Weighted average number of dilutive common shares equivalents              |  | 807                       |  | 1,173                   |  | 728    |  | 1,266 
|                                                                           |  |                           |  |                         |  |        |  |       
|Weighted average number of common and common equivalent shares outstanding |  | 46,253                    |  | 47,654                  |  | 46,088 |  | 48,293
|                                                                           |  |                           |  |                         |  |        |  |       



10



---

##### Table of Contents

For the three months ended June 30, 2009 and 2008, the Company had approximately 1.9 million
and 51,000 anti-dilutive outstanding employee stock options, respectively. For the six months ended June 30, 2009 and 2008, the Company had approximately 2.1 million and 50,000 anti-dilutive outstanding employee stock options,
respectively. For the three months ended June 30, 2009 and 2008, the Company had approximately 645,000 and 224,000 shares of anti-dilutive unvested restricted and deferred stock, respectively. For the six months ended June 30, 2009 and
2008, the Company had approximately 653,000 and 224,000 shares of anti-dilutive unvested restricted and deferred stock, respectively. All anti-dilutive stock options and shares of restricted and deferred stock are excluded from the computation of
diluted earnings per share.



|10. | Discontinued Operations:
|--- | ------------------------

The Company completed the
sale of its newborn metabolic screening laboratory business on February 29, 2008 in a cash transaction for gross proceeds of approximately $66.0 million and recorded an after-tax gain on the sale of $23.2 million during the three months ended
March 31, 2008. During the three months ended June 30, 2008, the Company adjusted certain deferred taxes related to the sale of its newborn metabolic screening laboratory resulting in a decrease in the after-tax gain of $1.2 million. In
November 2008, the acquiring entity made certain tax elections that resulted in additional proceeds to the Company of $2.3 million. The additional proceeds of $2.3 million were directly offset by an increase in the Companys tax provision and
had no impact on the Companys after-tax gain on the sale. The Companys gain on the sale of its newborn metabolic screening laboratory business, net of income taxes, was $22.0 million for the year ended December 31, 2008. The Company
has retained contingent liabilities relating to certain unresolved legal matters as of the sale date. The Company believes that the outcome of these legal matters will not have a material adverse effect on its business, financial condition or
results of operations.

In accordance with FAS 144, the business operations of the newborn metabolic screening laboratory are considered
discontinued operations for all periods presented.

Income from discontinued operations, net of income taxes, as reported in the
Companys Condensed Consolidated Statements of Income for the six months ended June 30, 2008, includes net patient service revenue of $2.5 million. Pretax profit, excluding the pretax gain on sale, included in income from discontinued
operations for the six months ended June 30, 2008 was $864,000. Pretax loss included in income from discontinued operations for the three months ended June 30, 2008 of $1.9 million is related to the deferred tax adjustment described above.
The pretax gain on sale included in income from discontinued operations for the six months ended June 30, 2008 was $36.2 million.



|11. | Commitments and Contingencies:
|--- | ------------------------------

In July 2007, the
Audit Committee of the Companys Board of Directors concluded a comprehensive review of the Companys historical practices related to the granting of stock options. At the commencement of the review, the Company voluntarily contacted the
staff of the SEC regarding the Audit Committees review and subsequently the SEC commenced a formal investigation into the Companys stock option granting practices. In March 2009, the Company reached a settlement with the SEC with respect
to its investigation by consenting to the entry of a permanent injunction against future violations of the anti-fraud, reporting, books and records, and internal accounting control provisions of the federal securities laws. The settlement did not
require the payment of any civil penalty, fine or money damages and resolves completely the SECs investigation into the matter.

In
connection with the Audit Committees review, the Company also had discussions with the U.S. Attorneys office for the Southern District of Florida concerning the matters covered by the review and, in response to a subpoena, provided the
office with various documents and information related to the Companys stock option granting practices. Although the Company intends to continue full cooperation with the U.S. Attorneys office, it cannot predict the outcome of this
matter.

In September 2006, the Company completed a final settlement agreement with the Department of Justice and a relator who initiated a
qui tam complaint against the Company relating to its billing practices for services reimbursed by Medicaid, the Federal Employees Health Benefit program, and the United States Department of Defenses TRICARE program for military
dependents and retirees (Federal Settlement Agreement). In February 2007, the Company completed separate state settlement agreements with each state Medicaid program involved in the settlement (the State Settlement
Agreements). Under the terms of the Federal Settlement Agreement and State Settlement Agreements, the Company paid $25.1 million to the federal government and participating state Medicaid programs in connection with its billing for neonatal
services provided from January 1996 through December 1999.

As part of the Federal Settlement Agreement, the Company is under a five-year
Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services (the OIG). The Corporate Integrity Agreement



11



---

##### Table of Contents

acknowledges the existence of the Companys comprehensive Compliance Plan, which provides for policies and procedures aimed at promoting the
Companys adherence with FHC Program requirements and requires the Company to maintain the Compliance Plan in full operation for the term of the Corporate Integrity Agreement. In addition, the Corporate Integrity Agreement requires, among other
things, that the Company must comply with the following integrity obligations during the term of the Corporate Integrity Agreement:



| |  |  | maintaining a Chief Compliance Officer and Compliance Committee to administer compliance with FHC Program requirements, the Compliance Plan and the Corporate
Integrity Agreement;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the Code of Conduct previously developed, implemented, and distributed to the Companys officers, directors, employees, contractors,
subcontractors, agents, or other persons who provide patient care items or services (the Covered Persons);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the written policies and procedures previously developed and implemented regarding the operation of the Compliance Plan and the Companys
compliance with FHC Program requirements;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | providing general compliance training to the Covered Persons as well as specific training to the Covered Persons who perform coding functions relating to claims for
reimbursement from any FHC Program;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | engaging an independent review organization to perform annual reviews of samples of claims from multiple hospital units to assist the Company in assessing and
evaluating its coding, billing, and claims-submission practices;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the Disclosure Program previously developed and implemented that includes a mechanism to enable individuals to disclose, to the Chief Compliance Officer
or any person who is not in the disclosing individuals chain of command, issues or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | not hiring or, if employed, removing from the Companys business operations which are related to or compensated, in whole or part, by FHC Programs, persons
(i) convicted of a criminal offense related to the provision of healthcare items or services or (ii) ineligible to participate in FHC Programs or Federal procurement or non-procurement programs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | notifying the OIG of (i) new investigations or legal proceedings by a governmental entity or its agents involving an allegation that the Company has committed
a crime or has engaged in fraudulent activities, (ii) matters that a reasonable person would consider a probable violation of criminal, civil or administrative laws applicable to any FHC Program for which penalties or exclusion may be imposed,
and (iii) the purchase, sale, closure, establishment, or relocation of any facility furnishing items or services that are reimbursed under FHC Programs;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | reporting and returning overpayments received from FHC Programs;
| | - |  | ----------------------------------------------------------------



| |  |  | submitting reports to the OIG regarding the Companys compliance with the Corporate Integrity Agreement; and
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | maintaining for inspection, for a period of six years from the effective date, all documents and records relating to reimbursement from the FHC Programs and
compliance with the Corporate Integrity Agreement.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Failure to comply with the Companys duties under the Corporate
Integrity Agreement could result in substantial monetary penalties and in the case of a material breach, could even result in the Company being excluded from participating in FHC Programs. Management believes that the Company was in compliance with
the Corporate Integrity Agreement as of June 30, 2009.

The Company expects that additional audits, inquiries and investigations from
government authorities and agencies will continue to occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on the
Companys business, financial condition, results of operations, cash flows, or the trading price of its common stock.

In the ordinary
course of business, the Company becomes involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by the Companys affiliated



12



---

##### Table of Contents

physicians. The Companys contracts with hospitals generally require the Company to indemnify them and their affiliates for losses resulting from the
negligence of the Companys affiliated physicians. The Company may also become subject to other lawsuits which could involve large claims and significant defense costs. The Company believes, based upon a review of pending actions and
proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition or results of operations. The outcome of such actions and proceedings, however, cannot be predicted with
certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Companys business, financial condition, results of operations and the trading price of its common stock.

Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company
cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable. With respect to professional liability risk, the Company
generally self-insures a portion of this risk through its wholly owned captive insurance subsidiary. Liabilities in excess of the Companys insurance coverage, including coverage for professional liability and certain other claims, could have a
material adverse effect on the Companys business, financial condition and results of operations.



|12. | Subsequent Events:
|--- | ------------------

The Company has performed a
review of subsequent events through August 5, 2009, the date the financial statements were issued, and concluded there were no events or transactions that occurred during this period that required recognition or disclosure.



13



---

##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion highlights the principal factors that have affected our financial condition and results of operations, as well as our liquidity
and capital resources, for the periods described. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report. In addition, reference is made to
our audited consolidated financial statements and notes thereto and related Managements Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K. As used in this Quarterly
Report, the terms MEDNAX, the Company, we, us and our refer to MEDNAX, Inc. and its consolidated subsidiaries (collectively MDX), together with MDXs affiliated
professional associations, corporations and partnerships (affiliated professional contractors). Certain subsidiaries of MDX have contracts with our affiliated professional contractors, which are separate legal entities that provide
physician services in certain states and Puerto Rico.

Effective December 31, 2008, MEDNAX, Inc. and Pediatrix Medical Group, Inc., a
Florida corporation (Pediatrix), completed a holding company formation transaction that established MEDNAX, Inc. as the parent company of Pediatrix. In the transaction, each outstanding share of Pediatrix common stock, par value $0.01
per share, and attached preferred share purchase right was converted into one share of MEDNAX, Inc. common stock, par value $0.01 per share, and attached preferred share purchase right. The preferred share purchase rights and related plan expired on
March 31, 2009.

The United States is continuing to experience an economic slowdown. During this slowdown, there have been disruptions
in the capital and credit markets, and the number of unemployed workers has increased dramatically. During 2008, our business was impacted by lower neonatal intensive care unit patient volume and a shift in our third party payor mix toward
government-sponsored healthcare programs. Although we have not experienced volume declines or continued adverse payor mix shifts for the first and second quarters of 2009, our patient volume could decline during the remainder of 2009 and there could
be additional shifts toward government-sponsored programs if economic conditions in the United States do not improve.

In addition, federal
and state governments continue to focus significant attention on healthcare reform and the possible creation of new government-sponsored programs and the expansion of existing ones. At the present time, various legislative proposals for reform are
under consideration in the United States House of Representatives and Senate. See Item 1A, Risk Factors, in our most recently filed Form 10-K for additional discussion on possible healthcare reform, the decline of the United States economy and
other potential developments in the healthcare industry that could affect our business.

During the six months ended June 30, 2009, we
completed the acquisition of six physician group practices consisting of four neonatology physician practices, one maternal-fetal physician practice and one pediatric cardiology physician practice. During the six months ended June 30, 2008, we
completed the acquisition of five physician practices consisting of three pediatric cardiology physician practices, one neonatal physician practice and one maternal-fetal physician practice. Based on past results, we expect that we can improve the
results of these practices through improved managed care contracting, improved collections, identification of growth initiatives, as well as operating and cost savings, based upon the significant infrastructure we have developed.

Our results of operations for the six months ended June 30, 2009 and 2008 include the results of operations for these physician group practices from
their respective dates of acquisition and therefore are not comparable in some respects.

During 2008, we completed the sale of our newborn
metabolic screening laboratory business in a cash transaction for approximately $68.3 million. The sale of the laboratory has allowed us to focus more resources to support the continued expansion of our clinical and administrative competencies
within physician services. See Note 10 to the Condensed Consolidated Financial Statements for more information regarding the sale of our newborn metabolic screening laboratory business.

The following discussion contains forward-looking statements. Please see the Companys most recent Annual Report on Form 10-K, including the section
entitled Risk Factors, for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. In addition, please see Caution Concerning Forward-Looking Statements below.

Results of Operations

Three Months Ended
June 30, 2009 as Compared to Three Months Ended June 30, 2008

Our net patient service revenue increased $62.1 million,
or 24.1%, to $319.8 million for the three months ended June 30, 2009, as compared to $257.7 million for the same period in 2008. Of this $62.1 million increase, $50.9 million, or 82.0%, was attributable to revenue generated from acquisitions
completed after March 31, 2008. Same-unit net patient service revenue increased $11.2 million, or 4.4%, for the three months ended June 30, 2009. The change in same-unit net patient service revenue was the result of increased revenue of
$10.2 million from higher patient service volumes across our subspecialties and $1.0 million related to pricing and reimbursement factors. Increased revenue of $10.2 million from higher patient service volumes includes $4.0 million from a 2.5%
increase in neonatal intensive care unit patient days and $6.2 million from volume growth in maternal fetal, pediatric cardiology,



14



---

##### Table of Contents

anesthesiology and other services, including hearing screens and newborn nursery services. The net increase in revenue of $1.0 million related to pricing and
reimbursement factors is primarily due to improved managed care contracting and the flow through of revenue from modest price increases, partially offset by a decrease in revenue caused by an increase in the percentage of our patients being enrolled
in government-sponsored programs. Payments received from government-sponsored programs are substantially less than payments received from commercial insurance payors for equivalent services. Same units are those units at which we provided services
for the entire current period and the entire comparable period.

Practice salaries and benefits increased $41.1 million, or 27.2%, to
$191.8 million for the three months ended June 30, 2009, as compared to $150.7 million for the same period in 2008. This $41.1 million increase was attributable to increased costs of $33.2 million associated with new physicians and other staff
to support acquisition-related growth and increased costs of $7.9 million related to growth at our existing units. Practice salaries and benefits for the three months ended June 30, 2009 includes a reduction in medical malpractice insurance
costs of $1.8 million, net of the related impact on incentive compensation, related to favorable retrospective claim adjustments on certain historical policy years.

Practice supplies and other operating expenses increased $2.3 million, or 21.6%, to $12.8 million for the three months ended June 30, 2009, as compared to $10.5 million for the same period in 2008. The increase
was attributable to rent, medical supply and other costs of $1.2 million related to our office-based acquisitions, and practice supply and other costs of $1.1 million related to anesthesiology and other hospital-based acquisitions and growth at our
existing units.

General and administrative expenses include all billing and collection functions and all other salaries, benefits,
supplies and operating expenses not specifically related to the day-to-day operations of our physician group practices. General and administrative expenses increased $5.3 million, or 17.0%, to $36.3 million for the three months ended June 30,
2009, as compared to $31.0 million for the same period in 2008. This increase of $5.3 million is attributable to $2.9 million of salaries, benefits and other general and administrative costs related to the overall growth of the Company and $2.4
million of salaries, benefits and other general and administrative costs specifically related to the Companys expansion into anesthesia services. General and administrative expenses as a percentage of net patient service revenue were 11.3% for
the three months ended June 30, 2009, as compared to 12.0% for the same period in 2008.

Depreciation and amortization expense
increased by $1.3 million, or 42.5%, to $4.2 million for the three months ended June 30, 2009, as compared to $2.9 million for the same period in 2008. This increase was attributable to the amortization of intangible assets related to
acquisitions and the depreciation of fixed asset additions.

Income from operations increased $12.3 million, or 19.6%, to $74.8 million for
the three months ended June 30, 2009, as compared to $62.5 million for the same period in 2008. Our operating margin decreased to 23.4% for the three months ended June 30, 2009, as compared to 24.3% for the same period in 2008. This
decrease of 88 basis points is primarily due to the addition of anesthesia services and growth in our office-based practices which have lower operating margins than neonatal services.

We recorded net interest expense of $395,000 for the three months ended June 30, 2009, as compared to net investment income of $310,000 for the same
period in 2008. The decrease in investment income and the corresponding increase in interest expense are primarily due to the use of available funds and borrowings under our $350 million revolving credit facility (Line of Credit) to
complete stock repurchase programs in 2008 and acquire physician practices in late 2008 and the first half of 2009, combined with a lower rate of return on our investments. Interest expense for the three months ended June 30, 2009 and 2008,
consisted of interest charges, commitment fees and amortized debt costs associated with our Line of Credit.

Our effective income tax rate
was 41.9% for the three months ended June 30, 2009, as compared to 39.25% for the same period in 2008. The increase in our effective income tax rate for the three months ended June 30, 2009 is related to the recognition of a non-deductible
loss and an increase in reserve requirements under FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109.

Income from continuing operations increased $5.0 million, or 13.2%, to $43.2 million for the three months ended June 30, 2009, as compared to $38.2
million for the same period in 2008.

Diluted income from continuing operations per common and common equivalent share was $0.93 on
weighted average shares outstanding of 46.3 million for the three months ended June 30, 2009, as compared to $0.80 on weighted average shares outstanding of 47.7 million for the same period in 2008. The net decrease in weighted
average shares outstanding was primarily due to the impact of shares repurchased in 2008 under repurchase programs approved by our Board of Directors in December 2007 and May 2008 and a decrease in our dilutive common stock equivalents related to
the decline in our stock price, partially offset by an increase in weighted average shares from the vesting of restricted stock, the exercise of employee stock options, and the issuance of shares under our Stock Purchase Plans.



15



---

##### Table of Contents

In February 2008, we completed the sale of our newborn metabolic screening laboratory business in a cash
transaction. Loss from discontinued operations, net of income taxes, of $1.2 million for the three months ended June 30, 2008 is related to the adjustment of certain deferred taxes associated with the sale. See Note 10 to the Condensed
Consolidated Financial Statements for more information regarding the sale of our newborn metabolic screening laboratory business.

Net
income increased to $43.2 million for the three months ended June 30, 2009, as compared to $37.0 million for the same period in 2008. Net income for the three months ended June 30, 2008 includes the after-tax loss on discontinued
operations of $1.2 million.

Diluted net income per common and common equivalent share was $0.93 on weighted average shares outstanding of
46.3 million for the three months ended June 30, 2009, as compared to $0.78 on weighted average shares outstanding of 47.7 million for the same period in 2008.

Six Months Ended June 30, 2009 as Compared to Six Months Ended June 30, 2008

Our net patient service revenue increased $120.4 million, or 23.9%, to $623.7 million for the six months ended June 30, 2009, as compared to $503.3 million for the same period in 2008. Of this $120.4 million
increase, $99.6 million, or 82.7%, was attributable to revenue generated from acquisitions completed after December 31, 2007. Same-unit net patient service revenue increased $20.8 million, or 4.2%, for the six months ended June 30, 2009.
The change in same-unit net patient service revenue was the result of increased revenue of $16.4 million from higher patient service volumes across our subspecialties and $4.4 million related to pricing and reimbursement factors. Increased revenue
of $16.4 million from higher patient service volumes includes $4.4 million from a 1.4% increase in neonatal intensive care unit patient days and $12.0 million from volume growth in maternal fetal, pediatric cardiology, anesthesiology and other
services, including hearing screens and newborn nursery services. Excluding the additional calendar day in February for the 2008 leap year, the increase in neonatal intensive care unit patient days was 1.9%. The net increase in revenue of $4.4
million related to pricing and reimbursement factors is primarily due to improved managed care contracting and the flow through of revenue from modest price increases, partially offset by a decrease in revenue caused by an increase in the percentage
of our patients being enrolled in government-sponsored programs. Payments received from government-sponsored programs are substantially less than payments received from commercial insurance payors for equivalent services. Same units are those units
at which we provided services for the entire current period and the entire comparable period.

Practice salaries and benefits increased
$83.7 million, or 27.7%, to $385.8 million for the six months ended June 30, 2009, as compared to $302.1 million for the same period in 2008. This $83.7 million increase was attributable to increased costs of $65.3 million associated with new
physicians and other staff to support acquisition-related growth and increased costs of $18.4 million related to growth at existing units. Practice salaries and benefits for the six months ended June 30, 2009 includes a reduction in medical
malpractice insurance costs of $1.8 million, net of the related impact on incentive compensation, related to favorable retrospective claim adjustments on certain historical policy years.

Practice supplies and other operating expenses increased $5.2 million, or 25.7%, to $25.4 million for the six months ended June 30, 2009, as
compared to $20.2 million for the same period in 2008. The increase was attributable to practice supply and other costs of $2.8 million related to anesthesiology and other hospital-based acquisitions and growth at our existing units, and rent,
medical supply and other costs of $2.4 million related to our office-based acquisitions.

General and administrative expenses include all
billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our physician group practices. General and administrative expenses increased $12.2 million,
or 20.0%, to $72.9 million for the six months ended June 30, 2009, as compared to $60.8 million for the same period in 2008. This increase of $12.2 million is attributable to $8.1 million of salaries, benefits and other general and
administrative costs related to the overall growth of the Company and $4.1 million of salaries, benefits and other general and administrative costs specifically related to the Companys expansion into anesthesia services. General and
administrative expenses as a percentage of net patient service revenue were 11.7% for the six months ended June 30, 2009, as compared to 12.1% for the same period in 2008.

Depreciation and amortization expense increased by $2.4 million, or 41.6%, to $8.2 million for the six months ended June 30, 2009, as compared to
$5.8 million for the same period in 2008. This increase was attributable to the amortization of intangible assets related to acquisitions and the depreciation of fixed asset additions.

Income from operations increased $17.0 million, or 14.8%, to $131.4 million for the six months ended June 30, 2009, as compared to $114.5 million
for the same period in 2008. Our operating margin decreased to 21.1% for the six months ended June 30, 2009, as compared to 22.7% for the same period in 2008. This decrease of 1.6% is primarily due to the addition of anesthesia services and
growth in our office-based practices which have lower operating margins than neonatal services.



16



---

##### Table of Contents

We recorded net interest expense of $965,000 for the six months ended June 30, 2009, as compared to
net investment income of $1.2 million for the same period in 2008. The decrease in investment income and the corresponding increase in interest expense are primarily due to the use of available funds and borrowings under our $350 million Line of
Credit to complete stock repurchase programs in 2008 and acquire physician practices in late 2008 and the first half of 2009, combined with a lower rate of return on our investments. Interest expense for the six months ended June 30, 2009 and
2008, consisted of interest charges, commitment fees and amortized debt costs associated with our Line of Credit.

Our effective income tax
rate was 40.76% for the six months ended June 30, 2009, as compared to 39.23% for the same period in 2008. The increase in our effective income tax rate is related to the recognition of a non-deductible loss and an increase in reserve
requirements under FIN 48.

Income from continuing operations increased $7.0 million, or 9.9%, to $77.3 million for the six months ended
June 30, 2009, as compared to $70.3 million for the same period in 2008.

Diluted income from continuing operations per common and
common equivalent share was $1.68 on weighted average shares outstanding of 46.1 million for the six months ended June 30, 2009, as compared to $1.46 on weighted average shares outstanding of 48.3 million for the same period in 2008.
The net decrease in weighted average shares outstanding was primarily due to the impact of shares repurchased in 2008 under repurchase programs approved by our Board of Directors in December 2007 and May 2008 and a decrease in our dilutive common
stock equivalents related to the decline in our stock price, partially offset by an increase in weighted average shares from the vesting of restricted stock, the exercise of employee stock options, and the issuance of shares under our Stock Purchase
Plans.

In February 2008, we completed the sale of our newborn metabolic screening laboratory business in a cash transaction. Income from
discontinued operations, net of income taxes, of $22.5 million for the six months ended June 30, 2008 includes $22.0 million related to the after-tax gain on the sale of this business and approximately $500,000 related to its operating results.
See Note 10 to the Condensed Consolidated Financial Statements for more information regarding the sale of our newborn metabolic screening laboratory business.

Net income decreased to $77.3 million for the six months ended June 30, 2009, as compared to $92.8 million for the same period in 2008. Net income for the six months ended June 30, 2008 includes $22.0
million related to the after-tax gain on the sale of our newborn metabolic screening laboratory and approximately $500,000 related to the operations of this business.

Diluted net income per common and common equivalent share was $1.68 on weighted average shares outstanding of 46.1 million for the six months ended June 30, 2009, as compared to $1.92 on weighted average
shares outstanding of 48.3 million for the same period in 2008.

Liquidity and Capital Resources

As of June 30, 2009, we had $18.6 million of cash and cash equivalents on hand as compared to $14.3 million at December 31, 2008. In addition,
we had working capital of $3.7 million at June 30, 2009, an increase of $35.9 million from a working capital deficit of $32.2 million at December 31, 2008. This net increase in working capital is primarily due to year-to-date earnings,
borrowings under our Line of Credit and proceeds from the issuance of common stock under our Stock Purchase Plans, partially offset by the use of funds for physician practice acquisition payments and capital expenditures.

Our net cash provided from operating activities was $61.7 million for the six months ended June 30, 2009, as compared to net cash provided from
operating activities of $30.0 million for the same period in 2008. This $31.7 million net improvement in our cash flow from operating activities for the six months ended June 30, 2009 is primarily due to: (i) a net improvement in cash flow
from operations related to changes in our deferred income taxes and income tax liabilities, including our accruals for uncertain tax positions; (ii) improved results from continuing operations; (iii) a net improvement in cash flow from
operations related to changes in the components of our accounts payable and accrued expenses; and (iv) an increase in cash flow from operations related to accounts receivable.

During the six months ended June 30, 2009, cash used in operating activities related to accounts receivable was $1.0 million, compared to $3.1
million for the same period in 2008. This increase in cash flow from operations of $2.1 million for the six months ended June 30, 2009 is due to improved cash collections.

Our accounts receivable are principally due from managed care payors, government payors, and other third-party insurance payors. We track our collections
from these sources, monitor the age of our accounts receivable, and make all reasonable efforts to collect outstanding accounts receivable through our systems, processes and personnel at our corporate and regional billing and collection offices. We
use customary collection practices, including the use of outside collection agencies, for accounts receivable due from private pay patients when appropriate. Almost all of our accounts receivable adjustments consist of contractual adjustments due to
the difference between gross amounts billed and the amounts allowed by our payors. Any amounts written off related to private pay patients are based on the specific facts and circumstances related to each individual patient account.



17



---

##### Table of Contents

Days sales outstanding (DSO) is one of the key factors that we use to evaluate the condition
of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO has
decreased from 50.2 days at December 31, 2008 to 46.5 days at June 30, 2009.

During the six months ended June 30, 2009,
cash used in operating activities related to accounts payable and accrued expenses was $30.8 million, compared to $40.9 million for the same period in 2008. This net improvement of $10.1 million in cash flow from operations related to the components
of our accounts payable and accrued expenses is primarily due to increases in our accruals during the six months ended June 30, 2009, compared to the same period in 2008, for salary, benefits and other liabilities associated with the overall
growth of the Company.

The cash flow changes related to our long-term liability for uncertain tax positions are included under the caption
Other liabilities in our Condensed Consolidated Statements of Cash Flows. During the six months ended June 30, 2009, cash provided from operating activities related to the change in our long-term liability for uncertain tax
positions combined with the changes in our deferred income taxes and income taxes payable was $1.2 million, compared to $3.1 million for the same period in 2008. The $3.1 million in net cash provided from operating activities for the six months
ended June 30, 2008 includes an increase in our current taxes payable of $14.2 million related to the gain on the sale of our newborn metabolic screening laboratory in February 2008. See Note 8 to the Condensed Consolidated Financial Statements
for more information on the changes in our liability for uncertain tax positions.

During the six months ended June 30, 2009, our net
cash used in investing activities of $72.5 million included physician practice acquisition payments and contingent purchase price payments of $62.2 million, capital expenditures of $8.1 million, and net purchases of $2.2 million related to the
purchase and maturity of investments. Our acquisition payments were primarily related to the purchase of four neonatology physician practices, one maternal-fetal physician practice and one pediatric cardiology physician practice. Our capital
expenditures were for medical equipment, leasehold improvements, computer and office equipment, software, furniture and fixtures and other improvements at our office-based practices and our corporate and regional offices.

During the six months ended June 30, 2009, our net cash provided from financing activities of $15.0 million consisted primarily of net borrowings
under our Line of Credit of $12.5 million and proceeds from the issuance of common stock under our Stock Purchase Plans and from the exercise of employee stock options of $3.2 million.

Our $350 million Line of Credit is guaranteed by substantially all of our subsidiaries and includes a $50 million sub-facility for the issuance of
letters of credit and a $25 million sub-facility for swingline loans. In addition, our Line of Credit may be increased to $400 million subject to the satisfaction of specified conditions. At our option, our Line of Credit (other than swingline
loans) bears interest at (1) the alternate base rate, which is defined as the higher of (i) the Federal Funds Rate plus one half of 1% and (ii) the Wachovia Bank, N.A prime rate or (2) the LIBOR rate, plus, in either case, an
applicable margin rate of up to 1.5% based on our consolidated leverage ratio. Swingline loans bear interest at the alternate base rate plus the applicable margin. Our Line of Credit matures on September 3, 2013. We are subject to certain
covenants and restrictions specified in our Line of Credit, including covenants that require us to maintain a minimum fixed charge coverage ratio and to not exceed a specified consolidated leverage ratio, to comply with laws, and restrict us from
paying dividends and making certain other distributions, as specified therein. Failure to comply with these covenants would constitute an event of default under our Line of Credit, notwithstanding our ability to meet our debt service obligations.
Our Line of Credit includes various customary remedies for the lenders following an event of default. Wachovia Bank, N.A., an affiliate of Wells Fargo & Company, as administrative agent, Bank of America, N.A., as syndication agent, and U.S.
Bank, N.A., as documentation agent, have aggregate commitments of $205 million under our Line of Credit, and the remaining commitments of $145 million are held by seven other lenders.

At June 30, 2009, we had an outstanding principal balance of $152.0 million on our Line of Credit. We also had outstanding letters of credit
associated with our professional liability insurance program of $9.0 million which reduced the amount available on our Line of Credit at June 30 2009. We had no outstanding balances related to our $50 million and $25 million sub-facilities at
June 30, 2009. At June 30, 2009, we believe we were in compliance with the financial covenants and other restrictions applicable to us under our Line of Credit. Based on our current expectations, we believe we will be in compliance with
these covenants throughout 2009.

We maintain professional liability insurance policies with third-party insurers, subject to self-insured
retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for
self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss patterns. Our total liability related to professional liability risks at June 30, 2009 was $105.3 million.



18



---

##### Table of Contents

We anticipate that funds generated from operations, together with our current cash on hand and funds
available under our Line of Credit, will be sufficient to finance our working capital requirements, fund anticipated acquisitions and capital expenditures, and meet our contractual obligations for at least the next 12 months.

Caution Concerning Forward-Looking Statements

Certain information included or incorporated by reference in this Quarterly Report may be deemed to be forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans
and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements.
These statements are often characterized by terminology such as believe, hope, may, anticipate, should, intend, plan, will, expect,
estimate, project, positioned, strategy and similar expressions and are based on assumptions and assessments made by our management in light of their experience and their perception of historical
trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this Quarterly Report are made as of the date hereof, and we undertake no duty to update or revise any such
statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results,
developments and business decisions to differ materially from forward-looking statements are described in the Companys most recent Annual Report on Form 10-K, including the section entitled Risk Factors.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

Our Line of Credit is subject to market risk and interest rate changes. Our Line of Credit bears interest at (1) the alternate base rate, which is defined as the higher of (i) the Federal Funds Rate plus one
half of 1% and (ii) the Wachovia Bank, N.A. prime rate or (2) the LIBOR rate, plus, in either case, an applicable margin rate of up to 1.5% based on our consolidated leverage ratio. The outstanding principal balance on our Line of Credit
was $152.0 million at June 30, 2009. Considering the total outstanding balance of $152.0 million, a 1% change in interest rates would result in an impact to income before taxes of approximately $1.5 million per year.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation of Disclosure
Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended) that are designed to provide reasonable assurance that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is (i) recorded, processed, summarized
and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Companys management, including its principal executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls Over Financial Reporting

No changes in our internal control over financial reporting occurred during the quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



19



---

##### Table of Contents

PART II - OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

In July 2007, the Audit
Committee of our Board of Directors concluded a comprehensive review of our historical practices related to the granting of stock options. At the commencement of the review, we voluntarily contacted the staff of the Securities and Exchange
Commission (SEC) regarding the Audit Committees review and subsequently the SEC commenced a formal investigation into our stock option granting practices. In March 2009, we reached a settlement with the SEC with respect to its
investigation by consenting to the entry of a permanent injunction against future violations of the anti-fraud, reporting, books and records, and internal accounting control provisions of the federal securities laws. The settlement did not require
the payment of any civil penalty, fine or money damages and resolves completely the SECs investigation into the matter.

In
connection with the Audit Committees review, we also had discussions with the U.S. Attorneys office for the Southern District of Florida concerning the matters covered by the review and, in response to a subpoena, provided the office
with various documents and information related to our stock option granting practices. Although we intend to continue full cooperation with the U.S. Attorneys office, we cannot predict the outcome of this matter.

In September 2006, we completed a final settlement agreement with the Department of Justice and a relator who initiated a qui tam complaint
against us relating to our billing practices for services reimbursed by Medicaid, the Federal Employees Health Benefit program, and the United States Department of Defenses TRICARE program for military dependents and retirees (Federal
Settlement Agreement). In February 2007, we completed separate state settlement agreements with each state Medicaid program involved in the settlement (the State Settlement Agreements). Under the terms of the Federal Settlement
Agreement and State Settlement Agreements, we paid $25.1 million to the federal government and participating state Medicaid programs in connection with our billing for neonatal services provided from January 1996 through December 1999.

As part of the Federal Settlement Agreement, we are under a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement
acknowledges the existence of our comprehensive Compliance Plan, which provides for policies and procedures aimed at promoting our adherence with FHC Program requirements and requires us to maintain the Compliance Plan in full operation for the term
of the Corporate Integrity Agreement. In addition, the Corporate Integrity Agreement requires, among other things, that we must comply with the following integrity obligations during the term of the Corporate Integrity Agreement:



| |  |  | maintaining a Chief Compliance Officer and Compliance Committee to administer compliance with FHC Program requirements, the Compliance Plan and the Corporate
Integrity Agreement;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the Code of Conduct previously developed, implemented, and distributed to our officers, directors, employees, contractors, subcontractors, agents, or
other persons who provide patient care items or services (the Covered Persons);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the written policies and procedures previously developed and implemented regarding the operation of the Compliance Plan and our compliance with FHC
Program requirements;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | providing general compliance training to the Covered Persons as well as specific training to the Covered Persons who perform coding functions relating to claims for
reimbursement from any FHC Program;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | engaging an independent review organization to perform annual reviews of samples of claims from multiple hospital units to assist us in assessing and evaluating its
coding, billing, and claims-submission practices;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintaining the Disclosure Program previously developed and implemented that includes a mechanism to enable individuals to disclose, to the Chief Compliance Officer
or any person who is not in the disclosing individuals chain of command, issues or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | not hiring or, if employed, removing from our business operations which are related to or compensated, in whole or part, by FHC Programs, persons (i) convicted
of a criminal offense related to the provision of healthcare items or services or (ii) ineligible to participate in FHC Programs or Federal procurement or non-procurement programs;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | notifying the OIG of (i) new investigations or legal proceedings by a governmental entity or its agents involving an allegation that we have committed a crime
or have engaged in fraudulent activities, (ii) matters that a reasonable person would consider a probable violation of criminal, civil or administrative laws applicable to any FHC Program for which penalties or exclusion may be imposed, and
(iii) the purchase, sale, closure, establishment, or relocation of any facility furnishing items or services that are reimbursed under FHC Programs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



---

##### Table of Contents

| |  |  | reporting and returning overpayments received from FHC Programs;
| | - |  | ----------------------------------------------------------------



| |  |  | submitting reports to the OIG regarding our compliance with the Corporate Integrity Agreement; and
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | maintaining for inspection, for a period of six years from the effective date, all documents and records relating to reimbursement from the FHC Programs and
compliance with the Corporate Integrity Agreement.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Failure to comply with our duties under the Corporate Integrity
Agreement could result in substantial monetary penalties and in the case of a material breach, could even result in us being excluded from participating in FHC Programs. We believe that we were in compliance with the Corporate Integrity Agreement as
of June 30, 2009.

We expect that additional audits, inquiries and investigations from government authorities and agencies will
continue to occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of
operations, cash flows, or the trading price of our common stock.

In the ordinary course of business, we become involved in pending and
threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by our affiliated physicians. Our contracts with hospitals generally require us to indemnify them and their affiliates
for losses resulting from the negligence of our affiliated physicians. We may also become subject to other lawsuits which could involve large claims and significant defense costs. We believe, based upon a review of pending actions and proceedings,
that the outcome of such legal actions and proceedings will not have a material adverse effect on our business, financial condition or results of operations. The outcome of such actions and proceedings, however, cannot be predicted with certainty
and an unfavorable resolution of one or more of them could have a material adverse effect on our business, financial condition, results of operations and the trading price of our common stock.

Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our
insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable. With respect to professional liability risk, we generally self-insure a portion of
this risk through our wholly owned captive insurance subsidiary. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial
condition and results of operations.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material
changes to the risk factors previously disclosed in the Companys most recent Annual Report on Form 10-K.



21



---

##### Table of Contents

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

At the Companys Annual Meeting of Shareholders on May 6, 2009, the shareholders of record as of March 10, 2009 voted on the following matters:

Proposal 1: Election of Directors:



|                            |  |            |  |            |  |           |  |               
|--------------------------- |  | ---------- |  | ---------- |  | --------- |  | --------------
|Name                        |  | For        |  | Withheld   |  | Abstained |  | BrokerNon-Vote
|                            |  |            |  |           
|Cesar L. Alvarez            |  | 32,932,545 |  | 9,692,823  |  | 0         |  | 0             
|                            |  |            |  |           
|Waldemar A. Carlo, M.D.     |  | 21,868,441 |  | 20,756,927 |  | 0         |  | 0             
|                            |  |            |  |           
|Michael B. Fernandez        |  | 20,547,570 |  | 22,077,798 |  | 0         |  | 0             
|                            |  |            |  |           
|Roger K. Freeman, M.D.      |  | 35,464,881 |  | 7,160,487  |  | 0         |  | 0             
|                            |  |            |  |           
|Paul G. Gabos               |  | 39,485,844 |  | 3,139,524  |  | 0         |  | 0             
|                            |  |            |  |           
|Dany Garcia                 |  | 39,793,370 |  | 2,831,998  |  | 0         |  | 0             
|                            |  |            |  |           
|Pascal J. Goldschmidt, M.D. |  | 37,797,173 |  | 4,828,195  |  | 0         |  | 0             
|                            |  |            |  |           
|Roger J. Medel, M.D.        |  | 38,079,570 |  | 4,545,798  |  | 0         |  | 0             
|                            |  |            |  |           
|Manuel Kadre                |  | 22,085,475 |  | 20,539,893 |  | 0         |  | 0             
|                            |  |            |  |           
|Enrique J. Sosa, Ph.D       |  | 39,487,525 |  | 3,137,843  |  | 0         |  | 0             

Proposal 2: Ratification of the appointment of PricewaterhouseCoopers LLP as the Companys
independent registered public accounting firm for the 2009 fiscal year:



|           |  |           |  |           |  |               
|---------- |  | --------- |  | --------- |  | --------------
|For        |  | Withheld  |  | Abstained |  | BrokerNon-Vote
|           |  |           | 
|41,297,867 |  | 1,323,772 |  | 3,728     |  | 0             



|Item 6. | Exhibits
|------- | --------

See Exhibit Index.



22



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                     |  |              |  |                                                                            
|-------------------- |  | ------------ |  | ---------------------------------------------------------------------------
|                     |  | MEDNAX, INC.
|                     |  |             
|Date: August 5, 2009 |  | By:          |  | /s/ Roger J. Medel, M.D.                                                   
|                     |  |              |  | Roger J. Medel, M.D., Chief Executive Officer (principal executive officer)
|                     |  |             
|Date: August 5, 2009 |  | By:          |  | /s/ Karl B. Wagner                                                         
|                     |  |              |  | Karl B. Wagner, Chief Financial Officer (principal financial officer)      



23



---

##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                   
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                       
|2.1         |  | Agreement and Plan of Merger, dated as of December 29, 2008, between MEDNAX, Inc., Pediatrix Medical Group, Inc. and PMG Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to
MEDNAXs Current Report on Form 8-K dated January 2, 2009).
|            | 
|3.1         |  | Amended and Restated Articles of Incorporation of MEDNAX, Inc. (incorporated by reference to Exhibit 3.1 to MEDNAXs Current Report on Form 8-K dated January 2, 2009).                                                                           
|            | 
|3.2         |  | Articles of Amendment Designating Series A Junior Participating Preferred Stock of MEDNAX, Inc. (incorporated by reference to Exhibit 3.2 to MEDNAXs Current Report on Form 8-K dated
January 2, 2009).                                          
|            | 
|3.3         |  | Amended and Restated By-laws of MEDNAX, Inc. (incorporated by reference to Exhibit 3.3 to MEDNAXs Current Report on Form 8-K dated January 2, 2009).                                                                                             
|            | 
|31.1+       |  | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                
|            | 
|31.2+       |  | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                
|            | 
|32+         |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                           



|+ | Filed herewith.
|- | ---------------



24