Good morning. My name is Julianne, and I will be yourconference operator today. At this time, I would like to welcome everyone tothe Community Health System's Third Quarter Conference Call. All lines havebeen placed on mute to prevent any background noise. After the speaker'sremarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Mr. WayneSmith, Chairman, President and Chief Executive Officer of Community Health Systems.Please go ahead sir.

Good morning and thank you for joining us for CommunityHeath System's quarterly conference call. Larry, our Executive Vice Presidentand Chief Financial Officer, is on the call with me today. The purpose of thiscall is to review our financial and operating results for the quarter and thenine months ended, September 30, 2007. We issued a press release and an 8-Kafter the market closed yesterday that included our financial statements. Forthose of you listening to the live broadcast of this conference call on ourwebsite, a slide presentation accompanies our prepared remarks. I would like tobegin the call with some comments about the quarter and then turn the call overto Larry who will follow with a more detailed account of our financial results. Before I begin, I would like to read the followingstatements. Statements contained in this conference call regarding respectedoperating results, acquisitions, transactions and other events areforward-looking statements that involve risks and uncertainties. Actual futureevents or results may differ materially from these statements. Suchforward-looking statements are made pursuant to the Safe Harborprovisions of the Private Securities Litigation Reform Act of 1995, and aremade based on Management's current expectations or beliefs, as well asassumptions made by and information currently available to Management. We referto the documents filed by Community Health Systems, Inc. with the Securitiesand Exchange Commission including the Company's annual reports on form 10-K,quarterly reports on form 10-Q and current reports on form 8-K. These filingsidentify important risk factors and other uncertainties that could cause actualresults to differ from those contained in the forward-looking statements. As you know, this is the first quarter that we have reportedour compound operations with Triad. Our third quarter and year-to-dateconsolidated results include the Triad numbers from the acquisition date ofJuly 25, 2007. 2006 consolidated third quarter and year-to-date numbersrepresent last year performance of CHS only. Our…

Thank you, Wayne.Consolidated admissions were 141,847 in the third quarter 2007, adjustedadmissions were 236,136. Our same store admissions decreased 3 tenths of apercent, this is against a very tough combined comp of 3.2% for same periodyear ago. When adjusted for service closures, futurereclassifications, some new hospitals competition in the CHS markets and adecrease in self-pay admissions, we had a decrease of 0.7 tenths of a percent.Same store adjusted admissions decreased 0.6 tenths of a percent, again this isagainst a tough combined comp of 2.3%. Same store non-government, non self-pay admissions were flatfor the quarter. Same store self-pay admissions decreased approximately 12%year-over-year or 70 basis points, and this primarily incurred in about 12hospitals in ten different states, with Texasbeing the largest state. Net revenues in the third quarter were $2.352 billion, anincrease of over 110%. On a same store basis, net revenue increased 5.7%, withoutpatient revenue up 9.2% and inpatient revenue up 2.7%. Same store surgeriesdecreased 1.2%. Approximately 60% drop in same store surgeries can beattributed to two new surgery centers in separate locations, one of which weare a minority invested in. Our same store net revenue per adjusted admission for thequarter of 2007 versus third quarter 2006 increased 6.3%, $8534 versus $8028.Our combined same store Medicare case mix declined solidly for quarter, with aslightly increase in CHS facility. EBITDA was $303.6 million, an increase of 228%. On a samestore basis, EBITDA was $283.6 million, an increase of 27% compared to the sameperiod a year ago. On a same store basis and excluding the $65 million changein bad debt estimate. The Community recorded in the third quarter 2006, EBITDAwould have decreased $4.8 million or 1.7% for the quarter, with a stock-basedcompensation of about $6 million. EBITDA margin for the third quarter,on a consolidated basis is 12.9%, which compares favorably to the…

Thanks Larry. Well, we are pleased with the progress madewith our integration of Triad and just a few months there, still we have muchleft to accomplish and our management teams continue to work diligently tointegrate these assets, but we are definitely on the right track, and for someof you, we had not experienced any cultural meltdowns. So with that, I will be glad to open the call to questions.

Thank you. (Operator Instructions) Your first question is from the line of Ken Weakley withCredit Suisse.

Thanks and good morning everyone. I was just curious on yourpricing stats obviously look pretty strong. Can you give us a sense of eitherwhat you have done differently or what's changing volume, the pricing, I thinkit was above 6%, may be above 7% for adjusted admissions. So where is thatgreat pricing coming from given the surgical volume fall off?

Well, the 6.3% for the quarter, it's actually 5.5%year-to-date, so just a little bit above what year-to-date will be. As theadmissions dropped, what usually happens, its less than 10 submissions

Okay.

And especially in the commercial side of the business. Plusif you look at our volume growth, we did have a flat growth on thenon-government, non self-pay admissions, which is your best profitabilityperspectives clear to self-pay but hard that component of revenue. And I thinkis the fact with the 3% volume growth activity. The surgeries were down 1.2%but actually the better and what the big volume year-to-date and some of thesurgical growth was in some outpatient surgeries centers that products usuallydon't take out the highest business. We continue to have a very good job on theoutpatient revenue growth, so it was over 9% versus year-to-date at 8%, andthat's for both companies. So, I think the outpatient growth, while theadmissions were not as strong, we did have pretty good adjust admissions inoutpatient growth.

Larry, given an opinion on the impact of the, I would sayvery dusty DRGs for pricing or profitabilities, I am sure, can you forecast,but what specifically do you think needs some choosing?

Overall, I think the Medicare increased to be around 2%, Iknow there are few people that think to be less than that, but one of goodvalues of the Triad, they will have about two-thirds of the hospitals to beurban and a third, non-urban, we were -- ours is probably a third, and non-urbana two-thirds. So that happens in that perspective. We've got the [0.6] behavioradjusted which led to work to sort of offset, but I think all in, we should doabout a 2% price increase which, its been a little bit higher in previousquarters, but its managed for, and I think that’s still to enter our revenueguidance for 5% to 6% for 2008.

And, on the income statement, the equity and earnings, canyou remind me what's in there?

Yeah, we've got a joint venture of 28% or so. And I think inLas Vegas, we've got another joint venture makein Georgia.We've got one in Arkansasfor another group, and they did have a pretty good quarter. That is pre-taxedor some confusion out there, I saw some analysts thought that was an after taxnumber, that’s a pretax number and that equity, I feel it is included in ourEBITDA guidance for 2008, and we put that in EBITDA, but we exclude minorityinterest.

Okay. Thanks so much

Sure, Ken.

Your next question is from the line of Matthew Borsch withof Goldman Sachs.

Hi. Yes, hi, good morning. Could just talk on to the extentyou have visibility on how trends are shaping up preliminarily for the fourthquarter, if you have any view on that?

We usually don't talk about month-to-month or somethingwe've seen the issues, because clearly October is going to be a little bettermonth, if you look at the seasonality of it. You pick up a Tuesday and drop aSunday, which helps a lot on that activity. And then of course, you've got theholidays coming, and then our practice is not to get in the month-to-monthdiscussions. We have not seen any flu yet, which have got to be, most peopleare aware of, it's some pretty nice weather in the New Year and most of themarkets we operate in, but we usually don’t discuss the month-to-month trends.

Alright, fair enough. How about an update on the numbersthat you shared, if they’ve changed at all from the last quarter, on bad debt,I think you said 70% pure, uninsured 30% coinsurance, and that your collectionswere running at 10% on the first and 50% on the second?

Yeah, I think on the CYH, which is where that came from.That those are hanging in there, the assumptions are a little bit more thanthat for Triad which is some of the assumptions we are trying to, that we workon. I’m trying to make sure its right. Triad does have a fine self-pay discountwhich could increase percentages a little bit, but the CYH look at that isholding pretty well to cash receipts versus net revenue, and bad debts areabout 103%. So, the 70% or 30% I think will hold and we do work for that. And also I believe our deductibles in coinsurance has beenunder, based on our managed care analysis that we do. It's down to about 12% ofthe payments and they continue to have trend through the third quarter.

Got it. And last question here, can you just talk to whatyou see as the key drivers for positive same store admission growth for nextyear?

Yeah, Larry has this, and I think he's been through thiswith some of you all, the issues that we had in terms of volume for thisquarter, some have to do with self-pay admissions down, a couple of hundredclosings from services, some more competition in some of our markets, andprobably somehow there could be a little bit of transition in terms of focus onall other [factors] and procedures that are going on. But having said all that,I think we are clearly on the right track here in terms of now getting thefocus. We are back now to getting our focus on volume and improving volume. Weconcentrate a lot on expenses just to make sure we have the expenses undercontrol to start with. So we've had a lot of work going on that. We now haveturned our attention back to the volume side of this. We've put some incentiveplans in. I think we will see, as we look to next year as well. I think we arereally more concerned about ’08 now, and trying make sure we have everything inplace in terms of growth. We had a very strong quarter in terms of physicianrecruiting. We think we will have a big year next year, as far as physicianrecruitment, we've already identified by our Triad facility opportunities forphysician recruiting. We have been working hard on our ER initiatives and a lotof work on our emergency rooms now where we get a lot of our volume as youknow. So we feel fairly confident that we’ll get back on track in terms ofvolume here, starting, clearly for 2008. We’ll see what the fourth quarterbrings. And by the way, we've gotten great acceptance in terms of medicalstaffs across the board. They’re enthusiastic about what we are doing, and webrought a lot of resources in to be helpful to the facilities, as well as themedical staff. So, we feel pretty good about it.

Fantastic. Thank you.

Your next question is from the line of Tom Galucci withMerrill Lynch.

Thank you. Just first, following up on that volume question,maybe I missed it. But did you talk at all about sort of the relative trends inthe core community portfolio versus Triad in the quarter?

No. We really haven’t sort of broken that out, even thoughwe just said that our facilities, the CHS hospitals had a little less volumefor the third quarter than the Triad facilities. We don't think there is anynice significant data. We haven’t found any issues there. We have identified,we have gone by through the facility, looked at every physician and admissionstrends by our physician throughout the facilities. So, we don’t see anythingthere that’s systemic, that should keep us from moving forward.

I would add there Tom. Most of the adjustments that go from3% to 0.7% were CYH adjustments and because they don't want specialty serviceclosures, although there was one hospital closed and system there in Ohio for Triad, but mostof those adjustments worked.

Okay. And then just on the investigation, it sounds like,you've had some discussions there, have they quantified it all for you, theamount of claims that are sort of being in question, just to sort to be able toframe it a little bit?

Let me say, Tom, first, that we have reviewed all activitiesin our hospitals related to this investigation. We don't believe that ourcompany or any of our employees or officers have [violated] Civil False ClaimsAct. And we clearly intend to make these points and defend this vigorously ifwe have to go to court. So, we don't think that this is really a problem for us, butwe will just have to deal with it. Whether we have to go to court, we don'tknow what they will end up doing? I think Larry, if you quantify this?

Yeah, I think, in previous filings, we have stated that theNYMEX, there were three states, which right now thus focuses on one state. Inour SEC filings, we would quantify this, 30 basis points from overall netoperating revenue for 2006 which [accrued] for this program.

Sure, that's helpful. And then may be just last one, onCapEx, Larry, you noted it's little below 7% in '08. Is that sort of asustainable number you are saying because there is sort of some shifting of anyprojects or it's mostly just the pairing down or sort of what might have beenexpected and we should think about that as a good number sort of in the longerrun as well?

What we did mostly what I think had expected to be higherthan that probably even some people as much as a $1 billion, so we're workinghard to rationalize the spinning early in 2008. If you back out the replacementhospitals, it gets down about 6% and I think our statement was we try to run thecombined company even though I believe Triad may run in 9% to 10%. We probablyrun closer to 5%. We tried to run the combined company about 6%. Other thanreplacement hospitals, there is a couple of other replacement hospitals, somewe don't have some a certificate or needs that we have even started on yet, arethe appropriate other approvals and then there is one in California I think hadto do by 2011. But other than that we're probably working our way down about 6%is what I would expect it to be in the beginning and when we start replacementhospitals.

And we are making really good progress in terms of managingthe CapEx and we're getting a lot of support from the facilities. We're notreally having any issues as we work on these big projects and reducing the[scope] problem in trying to redesign all of those kinds of things are workingwell for us.

Great, thank you.

Your next question is from the line of Adam Feinstein withLehman Brothers.

Okay, thank you. Good morning everyone. I guess fewquestions here. Wayne,can you give us a lot of sense in terms of a pro forma EBITDA as if you don'ttry it for the whole quarter. I mean obviously we can back into numbers and Iam sure post-half, but just curios if you can provide any feed back there?

Yeah, I would say the revenue shortfall, it is probably $350million range for 24 days and EBITDA is probably between $40 million and $45million again that's 24 days. Not a pretty good account of it. It's pretty hardto get that right on 24 days, but that would be a rough estimate of what wethink it to be.

Okay, thank you.

And I think just one other point, am I? You didn't ask thequestion, but I would like to point out the profit was about $38 million ofinterest and about $20 million depreciation because that has been -- we havenot provided guidance, we provided some various performance and clearly sort ofquarter would be something like $175 million, $178 million of interest and$125million, $126 million depreciation, which will help people think about2008, in addition to our guidance. We do want to have a good run rate for thethird quarter.

Sure. Okay, great. That's very helpful. Thank you. And justhave a follow-up question here, I appreciate all the details on the guidance. Iguess, as we think about the guidance and we try to look at the variouscomponents, I guess there's just two questions. One, you outlined $150 millionin synergies, may be if you just provide more details and just bridge that fromthe 84, you've talked about previously. And secondly, just with respect to the debt, I know you'vesaid that you're assuming interest rate stay relatively stable, but what aboutthe outstanding debt balance. So I guess is there any debt pay down assumed inthe guidance? Thank you.

There is not any debt pay down in the guidance, because wedo have the acquisitions which we expect to close in the first quarter. We haveassumed that the divestitures that we have disclosed do generate some cash, butno future ones other than that and there could be some activity on that line. And so the debt will probably slightly move up, possibly andwe will give more specifics about that at the next call. On the $150 million,what I'd say is, probably originally supplies were about $35 million of the $84million, that's probably up to about $50 million and then probably you've got,not the corporate overhead and productive -- the last part is less than a halfof it and the rest of it is probably split equal between IAS and managed caremarketing and home health. So clearly, we think supplies would be a littlebetter overall for the activity and overhead move up a little bit from where itwas and what we've added new would be the confidence that was thepro-termination, we can get some higher synergies on managed care marketing andhome health.

Okay. Andthen just finally, I guess you've talked before about you are going through thereview process for the bad debt, may be if you could just verify a little bitmore detail in terms of what that process entails? And then at the same timejust in terms of asset impairment charges that we sometimes see with largemergers; just curious at your thoughts there, and I guess just bringing upsince Triad always had a very high book value relative to where stock pricewas. So, just curious if you had any thoughts in terms of some of thoseintangibles that Triad had on the books? Thank you.

Yeah, what we'll do is, is a substance receipts test. We'vebought 55 hospitals over the last 10 years, and anyone without receivables,we've gone back and valued the receivable balances based on the actual cashreceived the in first year run off and when we got comfortable with it. Andthen of course we adopted our method a pretty quick. That always would end up,probably being a goodwill adjustment here, at least until we have to runthrough earnings, and we are in the process of starting that, and we use(inaudible), and again, we are working hard to get that done by the end of theyear review done for the auditors. We have taken some efforts in our guidance for 2008 to tryand take any change that took place, and also to observe it. Bad debtadjustments do not necessarily mean a substantial impact on the run rate.Usually, whatever the adjustment is, it's 15% or 20% effective on run ratepossibly. For the impairment of assets, you got some position recruitment,which you have to determine the fair market value of the physician loans. Itrelates to fixed assets, we doing a price on all the property that we gotthere, and have got a price on, I think its supposed to be back primarily, herein the fourth quarter, but probably won't be a final price of this, sometime inthe second or third quarter of 2008, and whenever we get information, we will-- the next appropriate reporting time we will disclose what it is, and it hasan effect on our good word of the appreciation and we will make adjustmentsthere. I clearly try, it probably has got a lot of assets, we had a lot ofexcess land, we got excess land which does. It’s just like a normal thing wedoing now, selling assets that have value to try to reduce debt. The longerassets probably have been bound or built in the last few years. So, I willthink that will pretty well hold the value for the most part, although some ofthem are under performance. So we just have to wait and get the evaluation. Andthat will all go to purchase accounting there, either increasing or decreasingland building equipment or going to goodwill.

Okay. Thankyou very much.

Your next question is from the line of Gary Lieberman withStanford Group.

Thanks. Larry, if I could just test your accounting skills,maybe one more time. If we were to look at the additional equity inunconsolidated investments for the additional 24 days from Triad, where do youthing that would have come in?

Well, probably another $3 million or $4 million, a couple ofmillion dollars more. They had a pretty good, what happened was, they had areally good stub period there, in the two months we had all, this was a prettygood month, the way it felt, the seasonality for everybody, if you just followthe calendar, September a little weaker, and then July with the holiday, andthe way it felt it wasn’t that strong. So, it wouldn’t be quite as proportionalas much. I think we've two months and seven days in there. And clearly in ourguidance, we may have been a little bit less conservative on what we think theywould be, but those are two pretty good operations we make in Georgia and in Las Vegas.

Okay. And then, I just want to make sure I understand theguidance on the synergies through '08, should we be -- is the 84 plus the 150is 234 or am I not looking at that correctly?

No. What we did was take the 84 and it was the first cut atit, and then we looked at, and we have achieved a pretty good percentage ofthat going forward. And now we think we’ll receive 150 [million] of synergieslooking at what we bought. And on top of that you would have the stuff likecontinuing improved Community Health supplier, recently acquired hospitals,genuine work on other operating elements of it. But these are synergies moretied to what predominantly was part of [happen here] to the supplies orcorporate office reductions. We still have a fair amount of people doing some work andhelping us. They are doing a good job for us down and playing all right now,which that would not last forever, and then we've got the opportunity in theareas of managed care, home health and case management and marketing in the ISthat will add to the sort of 150s that was sort of built into where our runrate is running right now.

So, I am still unsure if I fully understand it. So the 84 isincluded in the 150?

84 was the first year through June 30th of 2008. We wouldaccomplish some percentage of that through at end of 2007, and we've gotanother $150 million of used synergies that we should be able to recognizepredominantly in 2008.

Okay. And then I just wondered.

I think the 84

The remainder at 84 is in 150, sort of got away from theline.

Okay. I think I got it now.

And then we outlined.

You need a non-accountant to explain it to you.

And then you've also got to take -- I think we had $275million of other stuff which is our [improvement], our base margins andhospitals we've done. Thought which we'd done a good job, and then alsocontinuing to work on improving the margins of the Triad back to where we were.And then more importantly, I think it was a $450 million of CapEx that’s beenspent, such as our facilities, single part. I have said Austin, Texas,Clarksville, our facility in Petersburg, plus it's like that when they open up,which will open up in the early '08 and mid '08, we should drive some prettygood EBITDA of flattish, just about all of the new facilities that have prettygood growth in EBITDA.

Okay. And then finally on the bad debt guidance, it actuallylooks like the self-pay admissions went in your favor this quarter and youcited some of the same store margin improvement from better bad debts. Yourguidance for the combined operations for bad debts is 11.7% to 12.2% for nextyear, which is higher than whereCommunity and Triad separately had been historically. So is that just thehealthy dose of conservatism baked in there or I am afraid you will [have it]in a different way?

Well, generally what happens is as you raise rates unlessyou have got some discount policy, as you raise rates, the uninsured probablywould cause bad debts because the revenue is higher and it grows up by fasterthan net revenue, I think I have also said it if you just had a perfectcontinuation raise in rates, 7% or 8%, your bad debts probably grow up 20 or 30basis points. All things being equal, and I think that's built into it. We havedone a pretty good job of qualifying people for Medicaid which is set to someof our self-pay business here. I wouldn't want people to think we think ourself-pay business will continue to decline, but we are working trying to findways to either qualify from Medicaid or not give the service somewhat.

The other area that's going up since inpatient admissionswere not as to outpatient services in most like in terms of the ER. It's worsewhile we go. The bad debts, there are couple a bit.

Thanks a lot.

Thank you.

Your next question is from the line of Christine Arnold withMorgan Stanley.

Good morning. Thank you. You said the 68% of your debt hasbeen secured and kind of locked in, at what rate did you lock that in relativeto kind of where that debt were now ?

I believe we did rates range from 4.7% and 5.2 %, so it'sprobably somewhere in the range of about 5% or slightly less.

Okay. And then we have LIBOR and then we will add the 225.

Yes.

Okay. And then as far as the self-pay bad debt trends, doesyour expectation just to clarify the last question, assume that the number ofpeople walking through the door remained stable at this quarter's level ornormalizes or what are you assuming there?

I want to you give some of the events or some of theactivities where people -- we were not going to get a job or qualify forMedicaid, and once you start to get anniversary debt which I think a [couple oftaxes and have it in this year] -- end of the year, we will probably thinkstuff like this, generally grow a little faster than overall volume business.

(inaudible).

Yeah, and of course, Triad, we think we maybe can do alittle bit better job on qualifying people to Medicaid them, but generally it'sa admission to self-pay, grow little faster than the overall volume.

Okay. And then last question on pricing. The pricing wasvery good this quarter and you are guiding for not to kind of remain at thislevel kind of going forward. What kind of opportunities you see on the managedcare side pricing and does that included in pricing or in synergies?

Synergy is just a term that flows to the income statement asrevenue down the EBITDA, so I assume it's in pricing because that's what it hasbeen from that perspective. I would say that we do think there are someopportunities of managed care for Triad. I had a group of people who worked onit. They were little separated as they had hospitals in same states indifferent divisions. We've not done that which we think helps us to deal withthe managed care companies collectively in the state. We've had pretty goodsuccess. I think we still average 4% to 7% overall managed care increases in2008.

And was there any benefit this quarter from say taking bestcontracts because there lot of overlap, but I don't know if you have somenational contracts. So you can kind of take best, was there any benefit fromthe merger in the 6.3 adjustments?

Well, what you got is that there's ongoing negotiations butsince we both start we assume all those contracts have any negotiations or anybenefits or part of come into the future or anything was done prior to ourownership. So most of this is primarily mix.

And clearly about standardized centralized approach they arestill in -- central location in having all the contracts loaded and making surethat we compare and doing on the step-by-step basis as opposed to doing moreindividual hospital basis will be helpful.

But we haven't seen any of that yet?

Well, we actually started a little bit before, we did someadvice a little bit before, we actually did the close and sort of given some ofthat but not substantially the [key amount] is only couple of months.

Okay, thank you.

Your next question is from line of Bill Bonello withWachovia.

Good morning. Just a couple of follow-up questions, I guess,first, should we think your previous comments that mean that you are stillcomfortable with the prospects for $200 million of margin expansion inhospitals in year two and three and the $75 million of expected returns onprevious investments?

Yeah, some of that may have come out as a result of raise inother synergies, but we're still comfortable working improve those Communitymargins and the Triad margins and the return of the capital. The capital hasbeen spent and we know work spent and we are looking to see the capital spent.When we do our 2008 budget, we went through all the spending from the lastthree years and expected spending and took those projects in fact at the end ofthe budgeting and that's what we expect to have achieved on thehospital-by--hospital location.

Okay, so nothing got you to reinvest that. And then just onthe bad debt, just to make sure I understand this, aside from the discountpolicy, I mean, in general, do you feel that you have a handle on the qualityof the receivables and the bad debt trends at Triad, or is there still a gooddeal of uncertainty around that?

There is still some work to be done and the best way todetermine the accuracy of the bad debts is a substance receipts test whichwe've always done on hospitals we acquired, while this is a bigger acquisitionwe're attempting to do that. The differences in like a charity care program'swork, they had an assumption that they would only give 90% of the charitydiscount, which we've got to think about that, because a lot of that’s probablynot collectible, the way Medicaid pining is done. We have already talked aboutthe self-pay discount program, the handling of some of the disproportionateshare programs are done differently. So, there are some differences which wehave to do more work on. And awfully we're going to try to have one approachfor the company, and each for our hospitals to give some accurate informationwhere bad debts are, and give us ourselves [a deal as I have said] I do notbelieve bad debt adjustments, in themselves totally change the run rate. It'soften the affect of the balance sheet going forward, and we are doing the workto get a good method going into 2008.

Okay. And then, just one more bad debt question, just the$10 million of the additional bad debt expense that you added and the Triad,I'm not trying to totally understand that, do we think of that as anon-recurring expense or is that run rate?

It was a little surprise to us when we rolled up what eachhospital had calculated using the previous method. It didn’t give an adequateallowance. It just didn’t do that based on our analysis of it. And so, we hadto book another $10 million. I would hope that wouldn’t keep occurring, one of reasons we are doing the work weare, so when we roll the hospitals up, that’s when we don’t have accurate baddebts and now where they stand is try to have a method, and then create thatkind of issue going forward. So, for the two months, it was a little bit of asurprise, but it was something we did and so we decided to disclose it.

Okay. But it won’t -- we should of think as bad debt expensethat you sort have expect to have that, in other words, you won’t adjust it,but in theory the hospitals will give it to you, at that correct and sort ofhigher level going forward.

What we'll do, is whatever adjustments is from methodologyand others who determine, we try to pick up a method for each hospital to givean accurate answer. So they've got accurate results, which is important to usand then trying to also make sure he gives an accurate answer for the company.But this $10 million was just used in their method and doing the work and itdid not give allowance that we were comfortable enough was enough, when welooked at the amount of self-pay receivable they had.

Okay, great. Thank you.

Your next question is from the line of Miles Highsmith withCredit Suisse.

As couple of questions. Sorry, first of all, wanted to justmake sure that I understand the synergy comments. Am I right to think that,beyond the 150 in 2008 that there will be an incremental 275?

No, if you go in the year's two and three, there is otheropportunities now. We are going to be trying to improve the operations of thecombined company on top of the $150 million normal organic type growth. Butthere should be some synergies from opening the hospitals, its going to openthe CapEx we've done, because we're spending a lot of money on these facilitiesthat all going to open in the next 12 months and they should give someopportunities. So there is some on top of that, and then we are still sort ofcommitted to improve both CYH and Triad as we have briefly discussed.

Okay, let me try it this way then, if I assumed in thebeginning that you 84 kind of first synergies and incremental 275. Could I saythat, if you get the 84, I mean you have 150 for all of 2008 that you have doneanother 66 beyond that 84 towards the 275. So, 66 towards the 275, leavesanother 209 or so in incremental, is that a fair way to think about it?

I don't know, it's almost 66, because you do sort of start overlappingbetween what's the synergy and what's this corporate overhead activity, you cando this clearly, some of that 275 that should flow into then we considered thatpart of our efforts to grow EBITDA and improve our same store margin.

Okay, but generally speaking, you are still reiterating thesame statement that you're comfortable you can do it

We are still aware that we can accomplish there and wethought it's more specific to give a specific number for 2008, and then have a12 month period in the June 30, and year two or three number out there.

Okay. And last one, can you just make any comments aroundshare buyback, is there level where that gets really attractive versus othercapital?

Well, I think we got plenty of debt now to try to resolveour issues around debt. I don’t think we'll be in the share buyback businessanytime soon.

Thanks guys.

Thank you.

Your next question is from the line of Rob Hawkins withStifel Nicolaus.

Hi, good afternoon. I have got a couple of quick questions,I am confused really by some of local newspaper stories on Triad hospitals,they make it seem as itself that some of the joint ventures might be unravelingin certain markets. I know this is kind of touchy subject, maybe an ongoingdiscussion?

It's not that touchy. Can you be more specific?

I thought there was the one up in kind of around the Northof Dallas, the one that's kind of up by DFW kind of (inaudible) area?

Yeah, THR.

Yeah. And then, I am forgetting what the couple of the otherones, perhaps to go back to my notes?

Well, I just point out to two of the divestitures absence --one of them had a 40% joint venture, one had a small percentage, but that’sjust a percentage that we decide to sell.

Okay. So,I mean you guys are driving that, I guess is this process done, I mean do youknow with their call provisions in the Triad joint ventures, how many more arethere? And then were these cost efficiencies...?

I think there was only three, and also three of those of --there's maybe more than those, I am sorry, but there are not a huge number ofthose who would call us. But the one in Arkansasthat we've announced Barberton, Ohio, we've announced, and THR isout there as well. Those three are moving along in terms of process. Those arethe only three, I think that have exercised any of this call provisions oranything so we don't expecting anybody else do anything.

Are the call provision is that a fixed multiple and wouldthat multiple be below what you paid?

The call provision, its an agreement that we are not allowedto disclose the specifics clearly one, it definitely is a good facility, itsembedded in our guidance for 2008 to the extent of something that will adjustour guidance accordingly, but there is lots of moving parts which is going tohappen between now and [start of our guidance].

But when its all set done I don't think this will be allthat material in term of our future.

So just to summarize it soundly like one of two in theguidance and then your are talking may be there is another couple that mighthave other provision down the roads that are not very big related to…

(inaudible)

Yeah, the divestitures were out of guidance, the onesalready out there. and the only one that’s out there to my knowledge that I amaware of aware of right now is the one in Texas and that has not been taken outbecause its well we don't have any transaction. The firms that actually wouldcost us do that from accounting perspective (inaudible) but we don't think itsgoing to be a material overall effect to us to be able achieve the guidance.

And we will work on our way through that one so that oneprobably come out at some one time.

Okay. Another area I have been curious about this is of kindof come down is on the supply side you both were members of the Health TrustGPO and what's going on there, can you give us little color on of how you guyscould be so different, when you are participating in the same GPO which I willassume (inaudible).

Yeah as you probably know we are partner Triad was apartner, now we are bigger partner. The compliance portion of that, we have avery strong compliance in our disciplined approach to this. Triad was good butthere is an opportunity in term of compliance that helps hold it. Also you mayknow that HPG is combining with [Consorta], so all the pricing is going downand so we are getting the benefit of that as well. And then we have alreadystarted to work on our suppliers in terms of the Triad Hospitals and we see alot of opportunities as far our suppliers and consistency and the way that wesome of products all those things will be very helpful to us. I don't know thatLarry has disclosed the actual number in terms of synergies, but it's aprevious base number in the 150 from those suppliers.

And if you look at suppliers for the quarter, we made someprogress in drugs, pacemakers stents, lot of more rebates and (inaudible) soits spread throughout. So, it just shows that at least for first two months wehave made some progress in overall supplier work.

A good example of this, we had all the pharmacies here from– we have the pharmacies from Triad, our advisory community from TriadHospitals and our hospitals are putting together and try to figure out ways sowe get better efficiencies out of these drugs and changing some generics incertain places. All that has gone is really well, and that’s part of all this.

Great, then this one may not be big impact for you, but I amcurious. United Health has been talking about how they made a very big effortto increase their hospital contracts going in the 2008 and [Sanofi] sellinglike 1500 hospitals. Did you all participate in that? Do you guys have sense ofimpact? I know you have got guidance for pricing for next year, but they aretalking about these being kind of a three year contracts. Is there anythingthat you can give us?

We look at each contract to see if it is pricedappropriately, to see if it is going to be the type of contract want to be inand United is a players in similar markets, so, they are not as big as some ofthe other people. But we do contract United, their and I am not sure what theyhave said, but we try to make sure whatever contract we have got, make sensefor us and if it's not a good sensible contract and we will probably not goingto be part of it.

Okay, great, thanks. I will jump back in a queue.

Okay.

Your final question is from the line of Darren Lehrich ofDeutsche Bank.

Thanks. Good morning, everyone. Darren Lehrich fromDeutsche. Thanks for getting all these detail, we do have a few things we liketo run through just to make we areclear. As far as the $150 million number goes really and how the full year awaygoes, Larry, just wanting to get a sense from you as to how that builtthroughout the year and how you see that $150 million number weighted, firsthalf versus second half to make sure we have the ramp up of this accurately?

Well, certainly the $150 million will be a little bit higherthan the second half of the year than the first half of the year. We wouldprobably bring down and continue work on the corporate overhead and get thatdone in the first quarter of ’08, the most of it. It would not be 25% aquarter, but part be more like 60% to 65% second half of the year and then restof them first half of the year it will be little bit more of it -- moreproportionally ready to rolling that first 35% part of being in the secondquarter, there is going to be some in the first quarter activity that most ofthe second, third and fourth quarter.

Okay. That'shelpful. And then as far as the depreciation amortization guidance, it doesseem quite high to us. I just want to make sure I heard the number right forthe four quarter, I thought you said $175 million third quarter, is thatcorrect?

I think I have said $175 million and -- depreciation was126, interest is 175

I am sorry I heard that wrong, 126. Okay so as far as theoverall guidance goes, I guess the real question is for '08, besides these newhospital opening have you taken into account or assign some probability thatyou will have to right up some things in your review process. I'm just tryingto understand why the D&A numbers seem so high?

Yes, we did. I mean that's actually embedded in these twomonths of estimates, and that's one estimate we would want to keep monitoringand give information on, it would be non-cash estimate, but if the value, thebuilding's equipment comes out higher than we had originally estimated, then wewould have a little bit higher depreciation, and of course we had some of (inaudible)and some going to the goodwill. So there is some estimate, we've gone there already, andwe'll be monitoring that with the first, I guess first shot of that sometime inthe fourth quarter to look at it.

Okay. And then one other thing, just about the operatingmetrics. The revenue per adjusted admission, would you be able to provide thatto us on a consolidated basis for the full quarter, so we have starting pointnumber there, as well as the beds in service, which I just want to make sure wehave that number right for a full quarter on consolidated basis?

The revenue for adjust admission for the quarter was $89 to$39. It is product of the a couple percent less on the full quarter because thefirst few weeks of July were less intense business with the holiday. So it willbe 0.2% less if you had to look at the whole quarter.

That's really helpful. And just the other revenue bucketobviously, we don't QHR is there any thoughts just as to how you might breakthat out in '08, it clearly you know it has a distortion effect on your unitrevenue metrics. So wanted to get your thoughts on that?

QHR will be embedded in the salaries and expenses and thenthe revenue will be in the other category I think its' ever going to doingthat.

Okay.

And then my thoughts on the other sort of would probably beup this quarter, and of course we are restated on a same store basis it will,the consolidated basis have a higher amount of growth and not a revenue. And Iwill hope that QHR starts to have some growth and it’s a good opportunity overthere.

Yeah, my last house keeping question here. Thanks for takingthe questions. Just as far as the proceeds that you have embedded in the cashflow guidance for '08, what is the net proceeds number from the things thatyou've disclosed here? And can you give us a rough estimate as to what the costof the Washington hospitals are in relation to revenue, I think you've talkedabout acquisitions in that nature before?

It’s the sales of the good products.

We cannot, we will once it becomes public in the state ofWashington, based on all these statements and we'll do it and I think most peoplewill think it’s a, as Wayne just said, it’s a good price. And I believe thatthe net proceeds are somewhere between $100 million and $125 million for theassets that we talked about so far.

Okay. Butthe trailing revenues for Empire were about $290 million, so there would besome fraction of that number?

Right, and once it becomes known, as Wayne said, we think its price to the goodprice for us. And we'll expose that as soon as that information is available.

If we think it’s a good price, you know its a good price.

Okay. Thanksvery much.

Thank you.

Ladies and gentleman we have reached the end of the allottedtime for questions and answers. I would now like to turn the call back to overMr. Smith for any closing remarks.

Thank you very much for spending time with us this morning.We believe that our ability to deliver quality health care services continuesto differentiate Community Health Systems in the non-urban and mid-sizehospital markets. We want to specifically thank our management team and staff,Hospital Chief Executive Officers, Chief Financial Officers and Chief NursingOfficers, and Group Operators for their continued support and operatingefficiencies during this challenging operating environment. We'd also like torecognize the courageous efforts of our employees, volunteers and medical staffin Fallbrook Hospital,and Fallbrook skilled nursing facility in Fallbrook,California, who have worked tirelessly toevacuate and secure the facility from the recent San Diego, Californiafires. We've just received file approval to reopen these facilities. In closing, I would say that we are more excited today andsee more opportunities in the Triad transaction than we did when we announcedthis deal in March, and we are absolutely convinced, this was the rightstrategic move for us for us to continue to improve in our success and ourleadership in the healthcare sector. Thank you very much for joining us today,and once again, if you have any questions, you can reach us at area code615-465-7000.

Thank you for participating in today's Community HealthSystems third quarter conference call. You may now disconnect.