Hospital Corporation of America and Subsidiaries - Page 29

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          1991, HealthTrust issued to HCAII approximately 11 percent of               
          Common Stock upon the exercise by HCAII of a portion of its                 
          Common Stock Warrants.  HCAII used a portion of its Preferred               
          Stock to pay the Warrant exercise price.  Additionally, pursuant            
          to that agreement, HealthTrust redeemed the remaining Securities            
          held by HCAII for $600 million in cash.                                     


          Treatment of Sale on HCA Consolidated Returns                               
               On the consolidated returns for tax years ended 1987 and               
          1988,4 petitioners reported long-term capital gains from the sale           
          by HCAII of the stock of the Subsidiaries and the sale of the               
          HealthTrust Common Stock in the amount of $292,086,908 and                  
          $20,436,509, respectively.  In calculating the sales price of the           
          stock of the Subsidiaries, petitioners reported cash received               
          from HealthTrust in the amount of $855,164,281 and bridge loan              
          assumed by HealthTrust in the amount of $729,236,296 (i.e.,                 
          $777,041,795 bridge loan reported assumed by HealthTrust and the            
          Subsidiaries less $47,805,499 reported assumed by the                       




          4  Because of a lawsuit pending during 1987 relating to one of              
          the Hospitals acquired by HealthTrust, the parties to the                   
          Acquisition placed in escrow $26,861,582 of the purchase price,             
          consisting of cash in the amount of $22,888,683 and 129,116                 
          shares of class A preferred stock valued by HCA in the amount of            
          $3,972,899.  During 1988, following settlement of that lawsuit,             
          the sale of the Hospital was finalized, and the escrowed funds              
          were released to HCAII.                                                     




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