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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. ACCOUNTING FOR STOCK-BASED COMPENSATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock-based compensation awards are granted under the Community Health Systems, Inc. Amended
and Restated 2000 Stock Option and Award Plan (the “2000 Plan”) and the Community Health Systems,
Inc. 2009 Stock Option and Award Plan (the “2009 Plan”).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2000 Plan allows for the grant of incentive stock options intended to qualify under
Section 422 of the Internal Revenue Code (“IRC”), as well as stock options which do not so qualify,
stock appreciation rights, restricted stock, restricted stock units, performance-based shares or
units, phantom stock and other share awards. Persons eligible to receive grants under the 2000 Plan
include the Company’s directors, officers, employees and consultants. To date, all options granted
under the 2000 Plan have been “nonqualified” stock options for tax purposes. Generally, vesting of
these granted options occurs in one-third increments on each of the first three anniversaries of
the award date. Options granted prior to 2005 have a 10-year contractual term, options granted in
2005 through 2007 have an eight-year contractual term and options granted in 2008 through 2010 have
a 10-year contractual term. The exercise price of all options granted under the 2000 Plan is equal
to the fair value of the Company’s common stock on the option grant date. As of June 30, 2010,
1,084,763 shares of unissued common stock were reserved for future grants under the 2000 Plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2009 Plan, which was adopted by the Board of Directors of the Parent as of March 24, 2009
and approved by stockholders on May 19, 2009, provides for the grant of incentive stock options
intended to qualify under Section 422 of the IRC and for the grant of stock options which do not so
qualify, stock appreciation rights, restricted stock, restricted stock units, performance-based
shares or units and other share awards. Persons eligible to receive grants under the 2009 Plan
include the Company’s directors, officers, employees and consultants. The duration of any option
granted under the 2009 Plan will be determined by the Company’s compensation committee. Generally,
however, no option may be exercised more than 10 years from the date of grant, provided that the
compensation committee may provide that a stock option may, upon the death of the grantee, be
exercised for up to one year following the date of death even if such period extends beyond 10
years. As of June 30, 2010, no grants had been made under the 2009 Plan, with 3,500,000 shares of
unissued common stock remaining reserved for future grants.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table reflects the impact of total compensation expense related to stock-based
equity plans on the reported operating results for the respective periods (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect on income from continuing
operations before income taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,655</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,519</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(20,418</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(24,805</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect on net income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,473</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7,605</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,404</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,069</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2010, $64.1 million of unrecognized stock-based compensation expense was expected
to be recognized over a weighted-average period of 26 months. Of that amount, $14.7 million related
to outstanding unvested stock options expected to be recognized over a weighted-average period of
25 months and $49.4 million related to outstanding unvested restricted stock, restricted stock
units and phantom shares expected to be recognized over a weighted-average period of 26 months.
There were no modifications to awards during the three and six months ended June 30, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of stock options was estimated using the Black Scholes option pricing model
with the following assumptions and weighted-average fair values during the three and six months
ended June 30, 2010 and 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.3</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">44.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">33.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">40.2</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividends
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected term
</div></td>
<td> </td>
<td colspan="2" align="right">3 years</td>
<td> </td>
<td> </td>
<td colspan="2" align="right">4 years</td>
<td> </td>
<td> </td>
<td colspan="2" align="right" nowrap="nowrap">3.1 years</td>
<td> </td>
<td> </td>
<td colspan="2" align="right">4 years</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.20</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.75</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.47</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.63</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In determining expected term, the Company examined concentrations of option holdings and
historical patterns of option exercises and forfeitures, as well as forward looking factors, in an
effort to determine if there were any discernable employee populations. From this analysis, the
Company identified two employee populations, one consisting primarily of certain senior executives
and the other consisting of all other recipients.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The expected volatility rate was estimated based on historical volatility. In determining
expected volatility, the Company also reviewed the market-based implied volatility of actively
traded options of its common stock and determined that historical volatility did not differ
significantly from the implied volatility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The expected term computation is based on historical exercise and cancellation patterns and
forward-looking factors, where present, for each population identified. The risk-free interest rate
is based on the U.S. Treasury yield curve in effect at the time of the grant. The pre-vesting
forfeiture rate is based on historical rates and forward-looking factors for each population
identified. The Company adjusts the estimated forfeiture rate to its actual experience.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Options outstanding and exercisable under the 2000 Plan as of June 30, 2010, and changes
during each of the three-month periods following December 31, 2009 were as follows (in thousands,
except share and per share data):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted -</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted -</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Intrinsic</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Value as of</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">8,954,081</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30.19</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,255,500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33.90</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(891,366</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">26.93</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited and cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69,012</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">28.09</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at March 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">9,249,203</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31.02</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">57,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39.66</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,183,524</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">25.02</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited and cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(118,851</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">29.14</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at June 30, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">8,003,828</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31.99</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">6.1 years</td>
<td> </td>
<td align="left">$</td>
<td align="right">30,444</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable at June 30, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">4,906,305</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.56</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">4.8 years</td>
<td> </td>
<td align="left">$</td>
<td align="right">18,256</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average grant date fair value of stock options granted during the three months
ended June 30, 2010 and 2009 was $10.07 and $9.18, respectively, and $8.54 and $6.14 during the six
months ended June 30, 2010 and 2009, respectively. The aggregate intrinsic value (the number of
in-the-money stock options multiplied by the difference between the Company’s closing stock price
on the last trading day of the reporting period ($33.81) and the exercise price of the respective
stock options) in the table above represents the amount that would have been received by the option
holders had all option holders exercised their options on June 30, 2010. This amount changes based
on the market value of the Company’s common stock. The aggregate intrinsic value of options
exercised during the three months ended June 30, 2010 and 2009 was $18.6 million and $3.5 million,
respectively. The aggregate intrinsic value of options exercised during the six months ended June
30, 2010 and 2009 was $28.2 million and $3.5 million, respectively. The aggregate intrinsic value
of options vested and expected to vest approximates that of the outstanding options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has also awarded restricted stock under the 2000 Plan to its directors and
employees of certain subsidiaries. The restrictions on these shares generally lapse in one-third
increments on each of the first three anniversaries of the award date. Certain of the restricted
stock awards granted to the Company’s senior executives contain a performance objective that must
be met in addition to any vesting requirements. If the performance objective is not attained, the
awards will be forfeited in their entirety. Once the performance objective has been attained,
restrictions will lapse in one-third increments on each of the first three anniversaries of the
award date. Notwithstanding the above-mentioned performance objectives and vesting requirements,
the restrictions will lapse earlier in the event of death, disability or termination of employment
by the Company for any reason other than for cause of the holder of the restricted stock, or change
in control of the Company. Restricted stock awards subject to performance standards are not
considered outstanding for purposes of determining earnings per share until the performance
objectives have been satisfied.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Restricted stock outstanding under the 2000 Plan as of June 30, 2010, and changes during each
of the three-month periods following December 31, 2009 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted -</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Grant Date</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unvested at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">1,897,541</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">24.09</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,047,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33.90</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(826,174</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">26.97</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2,000</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">29.22</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unvested at March 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2,116,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.81</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">7,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39.66</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11,500</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">32.75</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unvested at June 30, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2,111,867</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27.83</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On February 25, 2009, under the 2000 Plan, each of the Company’s outside directors received a
grant of shares of phantom stock equal in value to $130,000 divided by the closing price of the
Company’s common stock on that date ($18.18), or 7,151 shares per director (a total of
42,906 shares of phantom stock). Pursuant to a March 24, 2009 amendment to the 2000 Plan, future
grants of this type will be denominated as “restricted stock unit” awards. On May 19, 2009, the
newly elected outside director received a grant of 7,151 restricted stock units under the 2000
Plan, having a value at the time of $180,706 based upon the closing price of the Company’s common
stock on that date of $25.27. On February 24, 2010, six of the Company’s seven outside directors
each received a grant of 4,130 restricted stock units under the 2000 Plan, having a value at the
time of $140,000 based upon the closing price of the Company’s common stock on that date of $33.90.
One outside director, who did not stand for reelection in 2010, did not receive a grant on February
24, 2010. Vesting of these shares of phantom stock and restricted stock units occurs in one-third
increments on each of the first three anniversaries of the award date. During the three months
ended June 30, 2010, 7,151 shares vested at a weighted-average grant date fair value of $20.54.
During the six months ended June 30, 2010, 21,449 shares vested at a weighted-average grant date
fair value of $18.97. None of these grants were canceled during the three and six months ended
June 30, 2010. As of June 30, 2010, there were 53,388 shares of phantom stock and restricted stock
units unvested at a weighted-average grant date fair value of $26.11.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Under the Directors’ Fees Deferral Plan, the Company’s outside directors may elect to receive
share equivalent units in lieu of cash for their directors’ fees. These share equivalent units are
held in the plan until the director electing to receive the share equivalent units retires or
otherwise terminates his/her directorship with the Company. Share equivalent units are converted to
shares of common stock of the Company at the time of distribution. The following table represents
the amount of directors’ fees which were deferred and the share equivalent units into which they
converted for each of the respective periods (in thousands, except units):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Directors’ fees earned
and deferred into plan
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">90</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Share equivalent units
</div></td>
<td> </td>
<td> </td>
<td align="right">1,330.968</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">792.079</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,549.490</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,095.860</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2010, a total of 16,143.82 share equivalent units were deferred in the plan with
an aggregate fair value of $0.5 million, based on the closing market price of the Company’s common
stock at June 30, 2010 of $33.81.
</div>
<!-- Folio -->
<!-- /Folio -->
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<!-- Begin Block Tagged Notefalsefalsefalseus-types:textBlockItemTypetextblockDisclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14
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