Exhibit 99.1
LifePoint Hospitals Reports Second Quarter 2005 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 27, 2005--LifePoint
Hospitals, Inc. (NASDAQ:LPNT) today announced results for the second
quarter and six months ended June 30, 2005.
The Company completed its previously announced business
combination with Province Healthcare Company ("Province") on April 15,
2005. The results of operations of the Province hospitals subsequent
to the combination date are included in the Company's consolidated
results. As a result of the combination with Province, the Company
recognized a pretax charge for transaction costs of $44.6 million, or
$0.57 per diluted share. In addition to the transaction costs of $44.6
million, the Company recognized pretax debt retirement costs of $10.0
million, or $0.15 per diluted share, in the second quarter of 2005.
For the second quarter ended June 30, 2005, revenues from
continuing operations were $467.6 million, up 96.3% from $238.2
million for the same period a year ago. Loss from continuing
operations for the quarter was $2.8 million, or $0.05 per diluted
share, including the aforementioned charges for transaction costs
($0.57 per diluted share) and debt retirement costs ($0.15 per diluted
share), compared with income from continuing operations of $19.5
million, or $0.50 per diluted share, for the prior-year period. Net
loss for the quarter was $7.1 million, or $0.13 per diluted share,
compared with net income of $18.7 million, or $0.48 per diluted share,
for the prior-year period.
The consolidated financial results for the second quarter ended
June 30, 2005, reflect a 78.3% increase in total admissions from
continuing operations and a 73.5% increase in equivalent admissions
from continuing operations compared with the second quarter of 2004.
On a same-hospital basis, total admissions from continuing operations
increased 3.2% compared with the same period last year, and equivalent
admissions from continuing operations increased 1.1% over the
prior-year period.
For the first half of 2005, revenues from continuing operations
were $743.5 million, up 53.1% from $485.7 million for the first half
of 2004. Income from continuing operations for the six months ended
June 30, 2005, decreased 46.9% to $23.2 million, or $0.51 per diluted
share, including the non-recurring items, compared with income from
continuing operations of $43.7 million, or $1.11 per diluted share,
for the prior-year period. Net income for the first half of 2005
decreased 56.1% to $18.7 million, or $0.41 per diluted share,
including the non-recurring items, compared with net income of $42.6
million, or $1.08 per diluted share, for the first half of 2004.
The consolidated financial results for the six months ended June
30, 2005, reflect a 39.9% increase in total admissions from continuing
operations and a 38.4% increase in equivalent admissions from
continuing operations compared with the first half of 2004. On a
same-hospital basis, total admissions from continuing operations
increased 2.9% compared with the same period last year, and equivalent
admissions from continuing operations increased 1.5% over the
prior-year period.
During the second quarter of 2005, the Company committed to a plan
of disposal related to three of the hospitals acquired in the Province
merger. The three facilities to be divested are: Medical Center of
Southern Indiana, a 96-bed hospital in Charlestown, Indiana; Ashland
Regional Medical Center, a 123-bed hospital in Ashland, Pennsylvania;
and Palo Verde Hospital, a 51-bed facility located in Blythe,
California. As a result of the disposal plan, the Company has
reflected the assets to be divested and the operations of these three
hospitals as discontinued operations. The Company recognized a second
quarter 2005 impairment charge of $4.7 million, net of income taxes,
or $0.09 per diluted share, related to the disposal plan.
In commenting on the second quarter results, Kenneth C. Donahey,
chairman, president and chief executive officer of LifePoint
Hospitals, said, "Obviously, our second quarter financial results
reflect certain costs related to the business combination with
Province and other transactions. In terms of operational performance,
our people are doing an outstanding job of managing our ongoing
business while successfully integrating the Province hospitals and
other recent acquisitions. This has been an historical quarter for us.
We have achieved record earnings from continuing operations before
transaction and debt retirement costs. In addition, we have remained
active on the acquisition front with recent announcements of other
complementary transactions. We are very excited about the potential
for continued success in each of our communities."
A listen-only simulcast, as well as a 30-day replay, of LifePoint
Hospitals' second quarter conference call will be available on line at
www.lifepointhospitals.com and www.earnings.com on July 28, 2005,
beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. is a leading hospital company focused on
providing healthcare services in non-urban communities. Of the
Company's 52 hospitals, 49 are in communities where LifePoint
Hospitals is the sole community hospital provider. LifePoint
Hospitals' non-urban operating strategy offers continued operational
improvement by focusing on its five core values: delivering high
quality patient care, supporting physicians, creating excellent
workplaces for its employees, providing community value and ensuring
fiscal responsibility. Headquartered in Brentwood, Tennessee,
LifePoint Hospitals is affiliated with approximately 19,000 employees.
Important Legal Information
This release includes forward-looking statements based on current
management expectations. Numerous factors exist which may cause
results to differ from these expectations. Many of the factors that
will determine LifePoint Hospitals' future results are beyond
LifePoint Hospitals' ability to control or predict with accuracy. Such
forward-looking statements reflect the current expectations and
beliefs of the management of LifePoint Hospitals, are not guarantees
of performance of LifePoint Hospitals, and are subject to a number of
risks, uncertainties, assumptions and other factors that could cause
actual results to differ from those described in the forward-looking
statements. These forward-looking statements are also subject to other
risks and uncertainties, including, without limitation, (i) the
possibility that problems may arise in successfully integrating the
businesses of LifePoint Hospitals and Province and achieving
cost-cutting synergies; (ii) reduction in payments to healthcare
providers by government and commercial third-party payors, as well as
changes in the manner in which employers provide healthcare coverage
to their employees; (iii) the possibility of adverse changes in, and
requirements of, applicable laws, regulations, policies and
procedures, including those required by LifePoint Hospitals' corporate
integrity agreement; (iv) the ability to manage healthcare risks,
including malpractice litigation, and the lack of state and federal
tort reform; (v) the availability, cost and terms of insurance
coverage; (vi) the highly competitive nature of the healthcare
business, including the competition to recruit and retain physicians
and other healthcare professionals; (vii) the ability to attract and
retain qualified management and personnel; (viii) the geographic
concentration of LifePoint Hospitals' operations; (ix) the ability to
acquire hospitals on favorable terms and complete budgeted capital
improvements successfully; (x) the ability to operate and integrate
newly acquired facilities successfully; (xi) the availability and
terms of capital to fund LifePoint Hospitals' business strategies;
(xii) changes in LifePoint Hospitals' liquidity or the amount or terms
of its indebtedness and in its credit ratings; (xiii) the potential
adverse impact of government investigations and litigation involving
the business practices of healthcare providers, including
whistleblowers investigations; (xiv) changes in or interpretations of
generally accepted accounting principles or practices; (xv) volatility
in the market value of LifePoint Hospitals' common stock; (xvi)
changes in general economic conditions in the markets LifePoint
Hospitals serves; (xvii) LifePoint Hospitals' reliance on information
technology systems maintained by HCA Inc.; (xviii) the costs of
complying with the Americans with Disabilities Act; (xix) LifePoint
Hospitals' ability to comply with all aspects of the Sarbanes-Oxley
Act and regulations promulgated thereunder; and (xx) those risks and
uncertainties described from time to time in LifePoint Hospitals'
filings with the Securities and Exchange Commission (SEC). Therefore,
LifePoint Hospitals' future results may differ materially from those
described in this release. LifePoint Hospitals undertakes no
obligation to update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new
information, future events or otherwise.
All references to "LifePoint Hospitals" as used throughout this
release refer to LifePoint Hospitals, Inc. and its subsidiaries.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in millions, except per share amounts
Three Months Ended June 30,
----------------------------------
2005 2004
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $467.6 100.0% $238.2 100.0%
Salaries and benefits 182.0 38.9 97.7 41.01
Supplies 60.5 12.9 31.1 13.10
Other operating expenses 79.6 17.1 38.8 16.24
Provision for doubtful accounts 41.3 8.8 18.9 8.02
Depreciation and amortization 26.8 5.7 11.4 4.85
Interest expense, net 15.4 3.3 3.2 1.3
Debt retirement costs 10.0 2.1 1.5 0.6
Transaction costs 44.6 9.6 -- --
ESOP expense 3.8 0.8 2.5 1.1
------- ------- ------- -------
464.0 99.2 205.1 86.1
------- ------- ------- -------
Income from continuing
operations before minority
interests and income taxes 3.6 0.8 33.1 13.9
Minority interests in earnings
of consolidated entities 0.2 0.1 0.3 0.1
------- ------- ------- -------
Income from continuing
operations before income taxes 3.4 0.7 32.8 13.8
Provision for income taxes 6.2 1.3 13.3 5.6
------- ------- ------- -------
Income (loss) from
continuing operations (2.8) (0.6) 19.5 8.2
Discontinued operations,
net of income taxes:
Income (loss) from
discontinued operations 0.3 0.1 (0.8) (0.3)
Impairment of assets of
hospital held for sale (4.7) (1.0) -- --
Gain (loss) on sale of hospital 0.1 -- -- --
------- ------- ------- -------
Loss from
discontinued operations (4.3) (0.9) (0.8) (0.3)
------- ------- ------- -------
Net income (loss) $(7.1) (1.5%) $18.7 7.9%
======= ======= ======= =======
Earnings (loss) per share-basic:
Continuing operations $(0.05) $0.53
Discontinued operations (0.08) (0.02)
------- -------
Net income (loss) $(0.13) $0.51
======= =======
Earnings (loss) per share-diluted:
Continuing operations $(0.05) $0.50
Discontinued operations (0.08) (0.02)
------- -------
Net income (loss) $(0.13) $0.48
======= =======
Six Months Ended June 30,
----------------------------------
2005 2004
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $743.5 100.0% $485.7 100.0%
Salaries and benefits 290.6 39.1 194.6 40.1
Supplies 96.7 13.0 63.2 13.0
Other operating expenses 125.4 16.9 79.8 16.4
Provision for doubtful accounts 64.3 8.6 39.6 8.2
Depreciation and amortization 40.0 5.4 22.4 4.5
Interest expense, net 17.9 2.4 6.6 1.4
Debt retirement costs 10.0 1.3 1.5 0.3
Transaction costs 44.6 6.0 -- --
ESOP expense 6.5 0.9 4.8 1.0
------- ------- ------- -------
696.0 93.6 412.5 84.9
------- ------- ------- -------
Income from continuing
operations before minority
interests and income taxes 47.5 6.4 73.2 15.1
Minority interests in earnings
of consolidated entities 0.5 0.1 0.6 0.1
------- ------- ------- -------
Income from continuing
operations before income taxes 47.0 6.3 72.6 15.0
Provision for income taxes 23.8 3.2 28.9 6.0
------- ------- ------- -------
Income (loss) from
continuing operations 23.2 3.1 43.7 9.0
Discontinued operations,
net of income taxes:
Income (loss) from
discontinued operations 0.9 0.1 (1.1) (0.2)
Impairment of assets of
hospital held for sale (4.7) (0.6) -- --
Gain (loss) on sale of hospital (0.7) (0.1) -- --
------- ------- ------- -------
Loss from
discontinued operations (4.5) (0.6) (1.1) (0.2)
------- ------- ------- -------
Net income (loss) $18.7 2.5% $42.6 8.8%
======= ======= ======= =======
Earnings (loss) per share-basic:
Continuing operations $0.52 $1.19
Discontinued operations (0.10) (0.03)
------- -------
Net income (loss) $0.42 $1.16
======= =======
Earnings (loss) per share-diluted:
Continuing operations $0.51 $1.11
Discontinued operations (0.10) (0.03)
------- -------
Net income (loss) $0.41 $1.08
======= =======
LIFEPOINT HOSPITALS, INC.
UNAUDITED EARNINGS (LOSS) PER SHARE CALCULATION
Dollars and shares in millions, except per share amounts
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2005 (1) 2004 2005 (2) 2004
------- ------- ------- -------
Income (loss) from
continuing operations $(2.8) $19.5 $23.2 $43.7
Add: Interest on convertible
notes, net of income taxes -- 1.8 -- 3.8
------- ------- ------- -------
Adjusted income (loss) from
continuing operations (2.8) 21.3 23.2 47.5
Loss from discontinued operations (4.3) (0.8) (4.5) (1.1)
------- ------- ------- -------
$(7.1) $20.5 $18.7 $46.4
======= ======= ======= =======
Weighted average number
of shares-basic 51.8 36.9 44.8 36.8
Add: Shares for conversion of
convertible notes -- 5.2 -- 5.2
Other share equivalents -- 1.0 0.9 0.9
------- ------- ------- -------
Weighted average number of shares
and equivalents - diluted 51.8 43.1 45.7 42.9
======= ======= ======= =======
Earnings (loss) per share-basic:
Continuing operations $(0.05) $0.53 $0.52 $1.19
Discontinued operations:
Income (loss) from discontinued
operations, net of income taxes 0.01 (0.02) 0.02 (0.03)
Impairment of assets of
hospital held for sale,
net of income taxes (0.09) -- (0.10) --
Loss on sale of hospital,
net of income taxes -- -- (0.02) --
------- ------- ------- -------
Loss from
discontinued operations (0.08) (0.02) (0.10) (0.03)
------- ------- ------- -------
Net income (loss) $(0.13) $0.51 $0.42 $1.16
======= ======= ======= =======
Earnings (loss) per share-diluted:
Continuing operations $(0.05) $0.50 $0.51 $1.11
Discontinued operations:
Income (loss) from discontinued
operations, net of income taxes 0.01 (0.02) 0.02 (0.03)
Impairment of assets of
hospital held for sale,
net of income taxes (0.09) -- (0.10) --
Loss on sale of hospital,
net of income taxes -- -- (0.02) --
------- ------- ------- -------
Loss from
discontinued operations (0.08) (0.02) (0.10) (0.03)
------- ------- ------- -------
Net income (loss) $(0.13) $0.48 $0.41 $1.08
======= ======= ======= =======
(1) All of the potentially dilutive securities were excluded from the
calculation of diluted loss per share for the three months ended
June 30, 2005, because the Company incurred a loss from
continuing operations.
(2) The impact of 4.4 million potential weighted average shares of
common stock, if converted, and interest expense related to
convertible notes were not included in the computation of diluted
earnings per share because the effect would have been
anti-dilutive.
LIFEPOINT HOSPITALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In millions
June 30, Dec. 31,
2005 2004
------- -------
ASSETS (Unaudited) (1)
Current assets:
Cash and cash equivalents $53.0 $18.6
Accounts receivable, less allowances for doubtful
accounts of $216.8 and $103.6 at June 30, 2005
and December 31, 2004, respectively 215.7 112.0
Inventories 48.7 25.3
Assets held for sale 19.2 33.0
Income taxes receivable 34.6 7.5
Prepaid expenses 13.9 7.1
Deferred income taxes and other current assets 42.0 24.3
------- -------
427.1 227.8
Property and equipment:
Land 66.6 20.5
Buildings and improvements 941.2 385.4
Equipment 462.5 342.0
Construction in progress 111.5 48.6
------- -------
1,581.8 796.5
Accumulated depreciation (330.5) (295.4)
------- -------
1,251.3 501.1
Deferred loan costs, net 30.9 4.9
Intangible assets, net 3.9 3.3
Other 234.9 5.8
Goodwill 1,217.5 144.4
------- -------
$3,165.6 $887.3
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $60.6 $29.5
Accrued salaries 52.5 31.2
Other current liabilities 48.8 18.5
Current maturities of long-term debt 4.2 --
------- -------
166.1 79.2
Long-term debt 1,585.0 221.0
Deferred income taxes 132.2 47.9
Professional and general liability claims
and other liabilities 59.3 28.4
Minority interests in equity
of consolidated entities 3.3 1.3
Stockholders' equity:
Preferred stock -- --
Common stock 0.6 0.4
Capital in excess of par value 1,043.8 332.6
Unearned ESOP compensation (11.1) (12.9)
Unearned compensation on nonvested stock (34.2) (4.5)
Retained earnings 220.6 222.8
Treasury stock -- (28.9)
------- -------
1,219.7 509.5
------- -------
$3,165.6 $887.3
======= =======
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2005 2004 2005 2004
------- ------- ------- -------
Cash flows from
operating activities:
Net income (loss) $(7.1) $18.7 $18.7 $42.6
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Loss from
discontinued operations 4.3 0.8 4.5 1.1
Depreciation and amortization 26.8 11.4 40.0 22.4
Debt retirement costs 10.0 1.5 10.0 1.5
Transaction costs 44.6 -- 44.6 --
ESOP expense 3.8 2.5 6.5 4.8
Minority interests in earnings
of consolidated entities 0.2 0.3 0.5 0.6
Deferred income taxes (benefit) 23.5 (0.4) 24.4 (0.9)
Reserve for professional and
general liability claims, net 1.6 (2.2) 2.0 0.5
Tax benefit from employee
stock plans 5.9 3.8 8.2 4.3
Increase (decrease) in cash
from operating assets and
liabilities, net of effects
from acquisitions and
divestitures:
Accounts receivable (0.2) 3.2 (8.3) (4.2)
Inventories and other
current assets 0.4 (3.2) 3.3 (3.2)
Accounts payable and
accrued expenses (5.0) 1.5 0.6 6.3
Income taxes payable (42.4) (19.7) (28.3) (5.1)
Other 3.0 0.6 3.8 1.2
------- ------- ------- -------
Net cash provided by
operating activities -
continuing operations 69.4 18.8 130.5 71.9
Net cash provided by
operating activities -
discontinued operations 1.9 0.9 1.9 --
------- ------- ------- -------
Net cash provided by
operating activities 71.3 19.7 132.4 71.9
------- ------- ------- -------
Cash flows from
investing activities:
Purchase of property
and equipment (33.3) (20.3) (60.4) (35.4)
Acquisitions, net
of cash acquired (957.7) (24.8) (959.7) (26.5)
Proceeds from sale of hospital -- -- 32.5 --
Other (0.2) (0.3) (0.6) (0.6)
------- ------- ------- -------
Net cash used in
investing activities (991.2) (45.4) (988.2) (62.5)
------- ------- ------- -------
Cash flows from
financing activities:
Proceeds from long-term debt 1,592.0 30.0 1,592.0 30.0
Payments of borrowings (709.2) (29.9) (709.2) (49.9)
Proceeds from exercise
of stock options 31.0 5.9 41.6 7.5
Payment of debt issue costs (31.8) -- (31.8) --
Other (3.3) -- (2.4) 0.8
------- ------- ------- -------
Net cash provided by (used
in) financing activities 878.7 6.0 890.2 (11.6)
------- ------- ------- -------
Change in cash and
cash equivalents (41.2) (19.7) 34.4 (2.2)
Cash and cash equivalents
at beginning of period 94.2 38.1 18.6 20.6
------- ------- ------- -------
Cash and cash equivalents
at end of period $53.0 $18.4 $53.0 $18.4
======= ======= ======= =======
Interest payments $23.0 $6.1 $23.5 $6.7
======= ======= ======= =======
Capitalized interest $0.8 $0.2 $1.2 $0.4
======= ======= ======= =======
Income taxes paid, net $19.4 $29.1 $20.0 $30.0
======= ======= ======= =======
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended
June 30,
-------------------------
%
2005 2004 Change
------- ------- -------
Continuing Operations: (1)
Number of hospitals at end of period 48 28 71.4%
Admissions 39,226 21,997 78.3
Equivalent admissions (2) 77,215 44,509 73.5
Licensed beds at end of period 5,051 2,631 92.0
Weighted average licensed beds 4,609 2,636 74.8
Revenues ($ in millions) $467.6 $238.2 96.3
Revenues per equivalent admission $6,055 $5,351 13.2
Outpatient factor (2) 1.97 2.02 (2.5)
Emergency room visits 179,410 102,957 74.3
Inpatient surgeries 11,542 6,658 73.4
Outpatient surgeries 30,650 18,404 66.5
Average daily census 1,765 972 81.6
Average length of stay 4.1 4.0 2.5
Medicare case mix index 1.21 1.17 3.4
Same-Hospital: (3)
Number of hospitals at end of period 28 28 --
Admissions 22,697 21,997 3.2
Equivalent admissions (2) 45,004 44,509 1.1
Licensed beds at end of period 2,582 2,631 (1.9)
Weighted average licensed beds 2,582 2,636 (2.0)
Revenues ($ in millions) $255.4 $238.2 7.2
Revenues per equivalent admission $5,676 $5,351 6.1
Outpatient factor (2) 1.98 2.02 (2.0)
Emergency room visits 103,591 102,957 0.6
Inpatient surgeries 6,502 6,658 (2.3)
Outpatient surgeries 18,793 18,404 2.1
Average daily census 1,033 972 6.3
Average length of stay 4.1 4.0 2.5
Medicare case mix index 1.18 1.17 0.9
Six Months Ended
June 30,
-------------------------
%
2005 2004 Change
------- ------- -------
Continuing Operations: (1)
Number of hospitals at end of period 48 28 71.4%
Admissions 65,089 46,523 39.9
Equivalent admissions (2) 126,924 91,697 38.4
Licensed beds at end of period 5,051 2,631 92.0
Weighted average licensed beds 3,654 2,655 37.6
Revenues ($ in millions) $743.5 $485.7 53.1
Revenues per equivalent admission $5,858 $5,297 10.6
Outpatient factor (2) 1.95 1.97 (1.0)
Emergency room visits 290,730 201,839 44.0
Inpatient surgeries 18,152 13,308 36.4
Outpatient surgeries 49,994 37,008 35.1
Average daily census 1,474 1,044 41.2
Average length of stay 4.1 4.1 --
Medicare case mix index 1.20 1.17 2.6
Same-Hospital: (3)
Number of hospitals at end of period 28 28 --
Admissions 47,873 46,523 2.9
Equivalent admissions (2) 93,065 91,697 1.5
Licensed beds at end of period 2,582 2,631 (1.9)
Weighted average licensed beds 2,582 2,655 (2.7)
Revenues ($ in millions) $520.9 $485.7 7.2
Revenues per equivalent admission $5,597 $5,297 5.7
Outpatient factor (2) 1.94 1.97 (1.5)
Emergency room visits 210,054 201,839 4.1
Inpatient surgeries 12,870 13,308 (3.3)
Outpatient surgeries 37,347 37,008 0.9
Average daily census 1,092 1,044 4.6
Average length of stay 4.1 4.1 --
Medicare case mix index 1.18 1.17 0.9
(1) Continuing operations excludes the operations of hospitals that
the Company classifies as discontinued operations.
(2) Management and investors use equivalent admissions as a general
measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient
volumes) by the outpatient factor (the sum of gross inpatient
revenue and gross outpatient revenue divided by gross inpatient
revenue). The equivalent admissions computation "equates"
outpatient revenue to the volume measure (admissions) used to
measure inpatient volume resulting in a general measure of
combined inpatient and outpatient volume.
(3) Same-hospital information includes 28 hospitals operated
throughout both periods and excludes the operations of hospitals
that the Company acquired and sold after January 1, 2004.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2005 2004 2005 2004
------- ------- ------- -------
Components of transaction costs
Adjustment to Province
acquired accounts receivable $26.4 $-- $26.4 $--
Adjustment to Province assumed
liabilities, primarily related
to professional and general
liability claims 8.7 -- 8.7 --
Retention bonuses paid to former
Province employees 4.2 -- 4.2 --
Compensation expense, primarily
restricted stock vesting
from change in control 5.3 -- 5.3 --
------- ------- ------ -------
$44.6 $-- $44.6 $--
======= ======= ====== =======
Adjusted EBITDA is defined as earnings (loss) before depreciation and
amortization, interest expense, debt retirement costs, transaction
costs, ESOP expense, minority interests in earnings of consolidated
entities, income taxes and discontinued operations. Our management and
Board of Directors use adjusted EBITDA to evaluate our operating
performance and as a measure of performance for incentive compensation
purposes. Our credit facilities use adjusted EBITDA, as defined, for
numerous financial covenants. We believe adjusted EBITDA is a measure
of performance used by some investors, equity analysts and others to
make informed investment decisions. In addition, multiples of current
or projected adjusted EBITDA are used to estimate current or
prospective enterprise value. Adjusted EBITDA should not be considered
as a measure of financial performance under U.S. generally accepted
accounting principles, and the items excluded from adjusted EBITDA are
significant components in understanding and assessing financial
performance. Adjusted EBITDA should not be considered in isolation or
as an alternative to net income (loss), cash flows generated by
operating, investing or financing activities or other financial
statement data presented in the consolidated financial statements as
an indicator of financial performance or liquidity. Because adjusted
EBITDA is not a measurement determined in accordance with U.S.
generally accepted accounting principles and is susceptible to varying
calculations, adjusted EBITDA as presented may not be comparable to
other similarly titled measures of other companies.
Three Months Ended
June 30,
----------------------------------
2005 2004
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $467.6 100.0% $238.2 100.0%
Salaries and benefits 182.0 38.9 97.7 41.0
Supplies 60.5 12.9 31.1 13.1
Other operating expenses 79.6 17.1 38.8 16.2
Provision for doubtful accounts 41.3 8.8 18.9 8.0
------- ------- ------- -------
Adjusted EBITDA $104.2 22.3% $51.7 21.7%
======= ======= ======= =======
Six Months Ended
June 30,
----------------------------------
2005 2004
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $743.5 100.0% $485.7 100.0%
Salaries and benefits 290.6 39.1 194.6 40.1
Supplies 96.7 13.0 63.2 13.0
Other operating expenses 125.4 16.9 79.8 16.4
Provision for doubtful accounts 64.3 8.6 39.6 8.2
------- ------- ------- -------
Adjusted EBITDA $166.5 22.4% $108.5 22.3%
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The following table reconciles adjusted EBITDA as presented above to
net income (loss) as reflected in the unaudited condensed consolidated
statements of operations:
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2005 2004 2005 2004
------- ------- ------- -------
Adjusted EBITDA $104.2 $51.7 $166.5 $108.5
Less:
Depreciation and amortization 26.8 11.4 40.0 22.4
Interest expense, net 15.4 3.2 17.9 6.6
Debt retirement costs 10.0 1.5 10.0 1.5
Transaction costs 44.6 -- 44.6 --
ESOP expense 3.8 2.5 6.5 4.8
Minority interests in earnings
of consolidated entities 0.2 0.3 0.5 0.6
Provision for income taxes 6.2 13.3 23.8 28.9
Loss from discontinued operations 4.3 0.8 4.5 1.1
------- ------- ------- -------
Net income (loss) $(7.1) $18.7 $18.7 $42.6
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CONTACT: LifePoint Hospitals, Inc.
Michael J. Culotta, 615-372-8512