09One highlight of 2010 was continued strong growth in our out-patient and diagnostic services. In 2007 we correctly anticipated that by plugging identifiable service gaps in the UK private healthcare market and offering high-quality, easily accessible services to consultants and their patients, we would capture latent demand. We have made significant capital investments since 2007 in this area and are seeing the returns. This can be demonstrated by our diagnostic and out-patient revenues, up by 6.3% year-on-year, making up 29% of Spire's total revenue in 2010. We now have 22 MRI and 18 CT fixed-site scanners installed within our portfolio of hospitals and clinics. This provides our consultants and patients with ready access to high-end diagnostic facilities and is essential for many clinical specialties including growth areas like orthopaedics, general surgery and oncology.A key part of Spire Healthcare's growth strategy continues to be to position ourselves for expansion into specialty areas that allow us to diversify and drive new services. Strong advances in our strategy were achieved during 2010 in the service areas of cancer, pathology, fertility and mental health.Spire Healthcare has a robust network of pathology laboratories, which covers most of the UK. This service supports our own customers' needs but, increasingly, is achieving recognition from other primary and secondary care providers. We have transformed our network of laboratories by upgrading our capabilities, improving the speed of results reporting and increasing our operating efficiency. We succeeded in winning a number of third-party contracts during 2010 and we have continued that success into 2011. We expect that public healthcare reform will generate further opportunities in pathology for Spire.Having completed our third full operating year, I am proud to present Spire Healthcare's 2010 results. We have seen another period of double-digit earnings growth, demonstrating that this business is capable of delivering solid results even in the most challenging economic times. We achieved significant gains across all four key areas of our business: people, service quality, reputation and shareholder value. We did this through continued investment in staff and facilities, building strong relationships, a focus on innovation and driving operating efficiencies. Spire Healthcare is an agile and creative business, focused on delivering high-quality services. Looking forward, I am confident we are positioned to maximise opportunities within the market and we are well on our way to achieving our goal of being the UK's leading private provider of quality healthcare.Shareholder valueWe achieved another year of strong EBITDAR (pre-exceptional items) growth, up 10.5% from 2009 to £169.8 million, and our total revenue increased by 3.7%. This is especially satisfying as our gains have largely been achieved through expanding services and we believe we are taking share in a challenging market for privately insured healthcare. We have been able to increase profitability while also improving quality. Our EBITDAR (pre-exceptional items) margin increased by 1.6 percentage points year-on-year, and has improved from 21.6% in 2008 to 26.4% in 2010. We are constantly challenging ourselves to improve the way we deliver services to patients, including making the most efficient use of working practices, listening to our staff and simplifying procurement of supplies.Our core business of in-patient and day-case admissions remained strong in 2010, with revenue up 3.1% year-on-year, and within that we delivered a year-on-year increase in self-funding work.

10Spire Healthcare Annual Review 2010of the talking therapies, such as cognitive behavioural therapy. We aim for the service, rebranded as The Insight Network, to grow into a national network that is recognised by all major private medical insurers, offering a cost-effective out-patient mental health service. During 2010, we successfully pursued our cancer strategy through further development of services in collaboration with CancerPartnersUK. A dedicated chemotherapy suite, run by Spire Bushey Hospital, was opened within the new Elstree Cancer Centre in Hertfordshire. It provides expanded capacity and a range of services for private chemotherapy treatment, alongside CancerPartnersUK's state-of-the-art image-guided radiotherapy service. This collaboration drives growth of cancer-related surgery, diagnostics and chemotherapy through our hospitals. This was our third site with CancerPartnersUK, with the fourth opened at Spire Little Aston Hospital (Birmingham) in March 2011.PeopleOne of our proudest achievements of 2010 was Spire's employee engagement scores, which showed that 70% of our staff judged Spire to be a 'great place to work'. This compares with 62% one year ago. In addition, the number of staff feeling an increased sense of ownership and accountability for Spire Healthcare's business performance (64%, up from 35% in 2009) is highly gratifying and I am certain this underpins our financial results. We believe we have achieved this high level of engagement by focusing on developing the right culture, driven by sound management capability. We have invested more than £500,000 over the past three years in developing Spire Healthcare's managers and continue to work on transforming the culture to one of strong leadership and high performance. Our focus is on creating the right Our strategy to become the major national private provider of fertility services in the UK is developing well. Following the 2010 launch of IVF Scotland at the new Spire Shawfair Park Hospital in Edinburgh and the acquisition of Harley Street's London Fertility Centre, we are successfully establishing a referring network of Spire hospitals that are able to provide services to a growing number of patients and drive growth in this area of the business. Our entry into this market has been planned to capture the anticipated increasing demand from consumers and coincides with pressure on funding for access to publicly provided fertility services.In late 2010, Spire Healthcare invested in The London Cognitive Behaviour Therapy Centres - an established London-based network of mental health professionals who practise in growth areas Chief Executive's statement continued Employee engagementOur employee engagement is measured across four areas using a ten-point scale. Results are compared to other companies in a benchmark group. More than 5,200 Spire employees completed the survey in September 2010, and the overall result demonstrates we have achieved significant improvements since 2008.Measure2008 result2009 result2010 result2010 benchmark comparisonAutonomy and control6810Significantly above average scoreNature of work7810Significantly above average scoreMy manager6710Significantly above average scoreEngagement5610Significantly above average score