Exhibit 99.1
LifePoint Hospitals Reports Second Quarter 2006 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 27, 2006--LifePoint Hospitals, Inc.
(NASDAQ: LPNT) today announced results for the second quarter and six months
ended June 30, 2006. The Company's consolidated results include the operations
of Province hospitals subsequent to the combination date of April 15, 2005.
For the second quarter ended June 30, 2006, revenues from continuing
operations were $569.2 million, up 22.6% from $464.4 million for the same period
a year ago. Income from continuing operations for the quarter was $36.4 million,
or $0.65 per diluted share, compared with a loss from continuing operations for
the second quarter of 2005 of $3.1 million, or $0.06 per diluted share,
including a pretax charge for transaction costs of $44.6 million ($0.57 per
diluted share) and pretax debt retirement costs of $10.0 million ($0.15 per
diluted share.) Income from continuing operations for the second quarter ended
June 30, 2006, includes a pretax reduction of depreciation expense of $13.5
million ($0.14 per diluted share) related to the finalization of the purchase
price allocations for 2005 acquisitions. In addition, the second quarter of 2006
results include additional pretax compensation expense of $2.0 million ($0.02
per diluted share) and $1.3 million ($0.01 per diluted share) of pretax cost
related to a shareholder lawsuit. Net income for the quarter was $34.8 million,
or $0.62 per diluted share, compared with a net loss of $7.1 million, or $0.13
per diluted share, for the prior-year period.
For the first half of 2006, revenues from continuing operations were
$1,158.8 million, up 57.4% from $736.4 million for the first half of 2005.
Income from continuing operations for the six months ended June 30, 2006,
including the non-recurring items discussed above, increased 208.7% to $70.2
million, or $1.25 per diluted share, compared with income from continuing
operations of $22.7 million, or $0.50 per diluted share, for the prior-year
period. Net income for the first half of 2006, including the non-recurring
items, increased 289.2% to $72.9 million, or $1.30 per diluted share, compared
with net income of $18.7 million, or $0.41 per diluted share, for the first half
of 2005.
In commenting on the second quarter results, William F. Carpenter III,
president and chief executive officer of LifePoint Hospitals, said, "We are
pleased with our results for the second quarter. We understand the challenges
facing our industry and will continue to address these issues by focusing on the
basics such as improving operations, expanding services, physician recruiting
and fiscal discipline. LifePoint has a solid base of hospitals that have
excellent potential for additional growth and market penetration, as well as an
outstanding team of executives and healthcare professionals who are committed to
its mission."
During the second quarter, LifePoint Hospitals announced the completion,
effective July 1, 2006, of its previously announced acquisition of four
hospitals from HCA Inc. LifePoint will classify two of the four hospitals as
assets held for sale/discontinued operations, consistent with the provisions of
SFAS No. 144.
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, 2006, 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 53
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 compassionate, 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 22,300 employees. More information
about LifePoint Hospitals can be found on its website,
www.lifepointhospitals.com.
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 may also be 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 or the ability to acquire
hospitals on favorable terms and complete budgeted capital improvements
successfully; (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; (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) changes in the Company's
operating or expansion strategy; (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)
possible adverse rulings, judgments, settlements and other outcomes of pending
litigation; and (xx) those risks and uncertainties described from time to time
in LifePoint Hospitals' filings with the Securities and Exchange Commission.
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,
--------------------------------------
2006 2005
------------------ ------------------
Amount Ratio Amount Ratio
-------- -------- -------- --------
Revenues $569.2 100.0% $464.4 100.0%
Salaries and benefits 228.8 40.3 184.4 39.7
Supplies 77.9 13.7 60.1 13.0
Other operating expenses 101.8 17.7 78.8 17.0
Provision for doubtful accounts 59.0 10.4 41.1 8.8
Depreciation and amortization 16.0 2.9 26.6 5.7
Interest expense, net 24.5 4.3 15.4 3.3
Debt retirement costs -- -- 10.0 2.1
Transaction costs -- -- 44.6 9.6
-------- -------- -------- --------
508.0 89.3 461.0 99.2
-------- -------- -------- --------
Income from continuing
operations before minority
interests and income taxes 61.2 10.7 3.4 0.8
Minority interests in earnings
of consolidated entities 0.4 -- 0.2 0.1
-------- -------- -------- --------
Income from continuing
operations before income taxes 60.8 10.7 3.2 0.7
Provision for income taxes 24.4 4.3 6.3 1.4
-------- -------- -------- --------
Income (loss) from
continuing operations 36.4 6.4 (3.1) (0.7)
-------- -------- -------- --------
Discontinued operations,
net of income taxes:
Income (loss) from
discontinued operations (1.3) (0.3) 0.6 0.1
Impairment of assets -- -- (4.7) (0.9)
Gain (loss) on
sale of hospitals (0.3) -- 0.1 --
-------- -------- -------- --------
Income (loss) from
discontinued operations (1.6) (0.3) (4.0) (0.8)
Cumulative effect of change
in accounting principle,
net of tax benefit -- -- -- --
-------- -------- -------- --------
Net income (loss) $34.8 6.1% $(7.1) (1.5)%
======== ======== ======== ========
Basic earnings (loss)
per share:
Continuing operations $0.65 $(0.06)
Discontinued operations (0.02) (0.07)
Cumulative effect of change
in accounting principle -- --
-------- --------
Net income (loss) $0.63 $(0.13)
======== ========
Diluted earnings (loss)
per share:
Continuing operations $0.65 $(0.06)
Discontinued operations (0.03) (0.07)
Cumulative effect of change
in accounting principle -- --
-------- --------
Net income (loss) $0.62 $(0.13)
======== ========
Six Months Ended June 30,
--------------------------------------
2006 2005
------------------ ------------------
Amount Ratio Amount Ratio
-------- -------- -------- --------
Revenues $1,158.8 100.0% $736.4 100.0%
Salaries and benefits 459.9 39.7 294.0 39.9
Supplies 160.6 13.9 96.0 13.0
Other operating expenses 197.5 17.0 123.6 16.8
Provision for doubtful accounts 127.4 11.0 64.0 8.7
Depreciation and amortization 47.9 4.1 39.8 5.4
Interest expense, net 47.7 4.1 17.8 2.4
Debt retirement costs -- -- 10.0 1.4
Transaction costs -- -- 44.6 6.1
-------- -------- -------- --------
1,041.0 89.8 689.8 93.7
-------- -------- -------- --------
Income from continuing
operations before minority
interests and income taxes 117.8 10.2 46.6 6.3
Minority interests in earnings
of consolidated entities 0.7 0.1 0.5 --
-------- -------- -------- --------
Income from continuing
operations before income taxes 117.1 10.1 46.1 6.3
Provision for income taxes 46.9 4.0 23.4 3.2
-------- -------- -------- --------
Income (loss) from
continuing operations 70.2 6.1 22.7 3.1
-------- -------- -------- --------
Discontinued operations,
net of income taxes:
Income (loss) from
discontinued operations (1.5) (0.1) 1.4 0.2
Impairment of assets -- -- (4.7) (0.7)
Gain (loss) on
sale of hospitals 3.5 0.3 (0.7) (0.1)
-------- -------- -------- --------
Income (loss) from
discontinued operations 2.0 0.2 (4.0) (0.6)
Cumulative effect of change
in accounting principle,
net of tax benefit 0.7 -- -- --
-------- -------- -------- --------
Net income (loss) $72.9 6.3% $18.7 2.5%
======== ======== ======== ========
Basic earnings (loss)
per share:
Continuing operations $1.26 $0.51
Discontinued operations 0.04 (0.09)
Cumulative effect of change
in accounting principle 0.01 --
-------- --------
Net income (loss) $1.31 $0.42
======== ========
Diluted earnings (loss)
per share:
Continuing operations $1.25 $0.50
Discontinued operations 0.04 (0.09)
Cumulative effect of change
in accounting principle 0.01 --
-------- --------
Net income (loss) $1.30 $0.41
======== ========
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,
------------------ ------------------
2006 2005 (1) 2006 2005 (2)
-------- -------- -------- --------
Income (loss) from
continuing operations $36.4 $(3.1) $70.2 $22.7
Income (loss) from
discontinued operations (1.6) (4.0) 2.0 (4.0)
Cumulative effect of
change in accounting principle -- -- 0.7 --
-------- -------- -------- --------
$34.8 $(7.1) $72.9 $18.7
======== ======== ======== ========
Basic weighted average
number of shares 55.6 51.8 55.5 44.8
Other share equivalents 0.6 -- 0.6 1.0
-------- -------- -------- --------
Diluted weighted average number
of shares and equivalents 56.2 51.8 56.1 45.8
======== ======== ======== ========
Basic earnings (loss)
per share
Continuing operations $0.65 $(0.06) $1.26 $0.51
Discontinued operations:
Income (loss) from
discontinued operations (0.02) 0.02 (0.03) 0.03
Impairment of assets -- (0.09) -- (0.10)
Gain (loss) on
sale of hospitals -- -- 0.07 (0.02)
-------- -------- -------- --------
Income (loss) from
discontinued operations (0.02) (0.07) 0.04 (0.09)
Cumulative effect of change
in accounting principle -- -- 0.01 --
-------- -------- -------- --------
Net income (loss) $0.63 $(0.13) $1.31 $0.42
======== ======== ======== ========
Diluted earnings (loss)
per share:
Continuing operations $0.65 $(0.06) $1.25 $0.50
Discontinued operations:
Income (loss) from
discontinued operations (0.03) 0.02 (0.03) 0.03
Impairment of assets -- (0.09) -- (0.10)
Gain (loss) on
sale of hospitals -- -- 0.07 (0.02)
-------- -------- -------- --------
Income (loss) from
discontinued operations (0.03) (0.07) 0.04 (0.09)
Cumulative effect of change
in accounting principle -- -- 0.01 --
-------- -------- -------- --------
Net income (loss) $0.62 $(0.13) $1.30 $0.41
======== ======== ======== ========
(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,
2006 2005 (1)
-------- --------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $56.3 $30.4
Accounts receivable, less allowances for doubtful
accounts of $287.3 and $252.9 at June 30, 2006
and December 31, 2005, respectively 253.5 256.8
Inventories 58.6 56.9
Assets held for sale -- 22.0
Prepaid expenses 13.9 12.0
Deferred tax assets 52.6 44.2
Other current assets 12.8 11.0
-------- --------
447.7 433.3
Property and equipment:
Land 73.7 64.4
Buildings and improvements 1,020.6 986.9
Equipment 533.8 540.3
Construction in progress 63.9 77.8
-------- --------
1,692.0 1,669.4
Accumulated depreciation (417.2) (373.1)
-------- --------
1,274.8 1,296.3
Deferred loan costs, net 33.1 35.4
Intangible assets, net 13.6 4.2
Other 263.0 5.5
Goodwill 1,470.9 1,449.9
-------- --------
$3,503.1 $3,224.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $73.2 $85.6
Accrued salaries 59.5 58.7
Other current liabilities 84.0 85.3
Current maturities of long-term debt 0.7 0.5
-------- --------
217.4 230.1
Long-term debt 1,760.0 1,515.8
Deferred income taxes 81.3 124.0
Professional and general liability claims
and other liabilities 65.1 60.3
Minority interests in equity
of consolidated entities 6.7 6.6
Stockholders' equity:
Preferred stock -- --
Common stock 0.6 0.6
Capital in excess of par value 1,032.1 1,053.1
Unearned ESOP compensation (8.0) (9.7)
Unearned compensation on non-vested stock -- (31.0)
Accumulated other comprehensive income 0.2 --
Retained earnings 347.7 274.8
-------- --------
1,372.6 1,287.8
-------- --------
$3,503.1 $3,224.6
======== ========
(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,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Cash flows from
operating activities:
Net income (loss) $34.8 $(7.1) $72.9 $18.7
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Loss (income) from
discontinued operations 1.6 4.0 (2.0) 4.0
Cumulative effect of change
in accounting principle,
net of income taxes -- -- (0.7) --
Stock-based compensation 2.6 1.7 5.8 2.2
ESOP expense
(non-cash portion) 2.6 3.9 5.0 6.5
Depreciation and
amortization 16.0 26.6 47.9 39.8
Amortization of deferred
loan costs 1.4 1.2 2.7 1.6
Debt retirement costs -- 10.0 -- 10.0
Transaction costs -- 44.6 -- 44.6
Minority interests in
earnings of consolidated
entities 0.4 0.2 0.7 0.5
Deferred income
taxes (benefit) 2.9 23.5 (0.2) 24.4
Reserve for professional
and general liability
claims, net 2.3 1.6 4.1 2.0
Excess tax benefits from
employee stock plans -- 5.9 -- 8.2
Increase (decrease) in cash
from operating assets and
liabilities, net of
effects from acquisitions
and divestitures:
Accounts receivable 5.5 (1.1) (3.9) (5.9)
Inventories and other
current assets (2.6) 0.5 (5.8) 3.4
Accounts payable and
accrued expenses 12.3 (5.0) (4.3) (2.5)
Income taxes payable (21.7) (42.4) (9.0) (28.3)
Other -- 0.1 0.5 --
-------- -------- -------- --------
Net cash provided by
operating activities -
continuing operations 58.1 68.2 113.7 129.2
Net cash provided by
(used in) operating
activities - discontinued
operations 0.2 3.1 (0.2) 3.2
-------- -------- -------- --------
Net cash provided by
operating activities 58.3 71.3 113.5 132.4
-------- -------- -------- --------
Cash flows from
investing activities:
Purchase of property
and equipment (44.9) (33.3) (95.0) (60.4)
Acquisitions, net of
cash acquired (257.1) (957.7) (260.6) (959.7)
Other (0.3) (0.2) (0.6) (0.6)
-------- -------- -------- --------
Net cash used in
investing activities -
continuing operations (302.3) (991.2) (356.2) (1,020.7)
Net cash provided by
investing activities -
discontinued operations
(proceeds from sale
of hospitals) 7.7 -- 27.6 32.5
-------- -------- -------- --------
Net cash used in
investing activities (294.6) (991.2) (328.6) (988.2)
-------- -------- -------- --------
Cash flows from
financing activities:
Proceeds from borrowings 250.0 11,592.0 260.0 1,592.0
Payments of borrowings (10.0) (709.2) (20.0) (709.2)
Proceeds from exercise
of stock options -- 31.0 0.3 41.6
Proceeds from employee
stock purchase plans -- 0.3 1.7 1.1
Payment of debt issue costs -- (31.8) (0.4) (31.8)
Other (0.5) (3.6) (0.6) (3.5)
-------- -------- -------- --------
Net cash provided by
financing activities 239.5 878.7 241.0 890.2
-------- -------- -------- --------
Change in cash and
cash equivalents 3.2 (41.2) 25.9 34.4
Cash and cash equivalents
at beginning of period 53.1 94.2 30.4 18.6
-------- -------- -------- --------
Cash and cash equivalents
at end of period $56.3 $53.0 $56.3 $53.0
======== ======== ======== ========
Supplemental disclosure of
cash flow information:
Interest payments $19.9 $23.0 $45.0 $23.5
======== ======== ======== ========
Capitalized interest $0.2 $0.8 $0.3 $1.2
======== ======== ======== ========
Income taxes paid, net $43.5 $19.4 $56.2 $20.0
======== ======== ======== ========
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended
June 30,
----------------------------
%
2006 2005 Change
-------- -------- --------
Continuing Operations: (1)
Number of hospitals at end of period 49 47 4.3%
Admissions 44,184 38,902 13.6
Equivalent admissions (2) 87,572 76,430 14.6
Licensed beds at end of period 5,216 4,988 4.6
Weighted average licensed beds 5,219 4,546 14.8
Revenues ($ in millions) $569.2 $464.4 22.6
Revenues per equivalent admission $6,500 $6,076 7.0
Outpatient factor (2) 1.98 1.96 1.0
Emergency room visits 207,119 178,126 16.3
Inpatient surgeries 13,478 11,510 17.1
Outpatient surgeries 34,818 30,488 14.2
Average daily census 2,061 1,747 18.0
Average length of stay 4.2 4.1 2.4
Medicare case mix index 1.22 1.21 0.8
Same-Hospital: (3)
Number of hospitals at end of period 28 28 --
Admissions 22,168 23,080 (4.0)
Equivalent admissions (2) 45,171 45,964 (1.7)
Licensed beds at end of period 2,619 2,625 (0.2)
Weighted average licensed beds 2,619 2,625 (0.2)
Revenues ($ in millions) $277.5 $263.2 5.4
Revenues per equivalent admission $6,143 $5,726 7.3
Outpatient factor (2) 2.04 1.99 2.5
Emergency room visits 108,931 107,177 1.6
Inpatient surgeries 6,522 6,749 (3.4)
Outpatient surgeries 18,558 19,395 (4.3)
Average daily census 1,013 1,041 (2.7)
Average length of stay 4.2 4.1 2.4
Medicare case mix index 1.20 1.19 0.8
Six Months Ended
June 30,
----------------------------
%
2006 2005 Change
-------- -------- --------
Continuing Operations: (1)
Number of hospitals at end of period 49 47 4.3%
Admissions 92,026 64,346 43.0
Equivalent admissions (2) 178,807 125,282 42.7
Licensed beds at end of period 5,216 4,988 4.6
Weighted average licensed beds 5,237 3,586 46.0
Revenues ($ in millions) $1,158.8 $736.4 57.4
Revenues per equivalent admission $6,481 $5,878 10.3
Outpatient factor (2) 1.94 1.95 (0.5)
Emergency room visits 412,032 288,240 42.9
Inpatient surgeries 27,012 18,106 49.2
Outpatient surgeries 68,836 49,685 38.5
Average daily census 2,177 1,454 49.7
Average length of stay 4.3 4.1 4.9
Medicare case mix index 1.23 1.20 2.5
Same-Hospital: (3)
Number of hospitals at end of period 28 28 --
Admissions 46,523 48,524 (4.1)
Equivalent admissions (2) 92,395 94,816 (2.6)
Licensed beds at end of period 2,619 2,625 (0.2)
Weighted average licensed beds 2,619 2,625 (0.2)
Revenues ($ in millions) $559.7 $534.8 4.6
Revenues per equivalent admission $6,057 $5,640 7.4
Outpatient factor (2) 1.99 1.95 2.1
Emergency room visits 215,899 217,291 (0.6)
Inpatient surgeries 13,203 13,345 (1.1)
Outpatient surgeries 36,868 38,592 (4.5)
Average daily census 1,081 1,099 (1.6)
Average length of stay 4.2 4.1 2.4
Medicare case mix index 1.21 1.19 1.7
(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 or sold after January 1, 2005.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
Adjusted EBITDA is defined as earnings (loss) before depreciation and
amortization, interest expense, debt retirement costs, transaction
costs, minority interests in earnings of consolidated entities, income
taxes, discontinued operations and cumulative effect of change in
accounting principle, net of income taxes. 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 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, 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.
Effective January 1, 2006, the Company reclassified its ESOP expense
into salaries and benefits expense due to its ESOP expense now
partially consisting of cash payments. ESOP expense for all prior
periods has been reclassified to conform to the 2006 presentation.
Three Months Ended
June 30,
--------------------------------------
2006 2005
------------------ ------------------
Amount Ratio Amount Ratio
-------- -------- -------- --------
Revenues $569.2 100% $464.4 100.0%
Salaries and benefits 228.8 40.3 184.4 39.7
Supplies 77.9 13.7 60.1 13.0
Other operating expenses 101.8 17.7 78.8 17.0
Provision for doubtful accounts 59.0 10.4 41.1 8.8
-------- -------- -------- --------
Adjusted EBITDA $101.7 17.9% $100.0 21.5%
======== ======== ======== ========
Six Months Ended
June 30,
--------------------------------------
2006 2005
------------------ ------------------
Amount Ratio Amount Ratio
-------- -------- -------- --------
Revenues $1,158.8 100.0% $736.4 100.0%
Salaries and benefits 459.9 39.7 294.0 39.9
Supplies 160.6 13.9 96.0 13.0
Other operating expenses 197.5 17.0 123.6 16.8
Provision for doubtful accounts 127.4 11.0 64.0 8.7
-------- -------- -------- --------
Adjusted EBITDA $213.4 18.4% $158.8 21.6%
======== ======== ======== ========
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,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Adjusted EBITDA $101.7 $100.0 $213.4 $158.8
Less:
Depreciation and amortization 16.0 26.6 47.9 39.8
Interest expense, net 24.5 15.4 47.7 17.8
Debt retirement costs -- 10.0 -- 10.0
Transaction costs -- 44.6 -- 44.6
Minority interests in
earnings of consolidated
entities 0.4 0.2 0.7 0.5
Provision for income taxes 24.4 6.3 46.9 23.4
Loss (income) from
discontinued operations 1.6 4.0 (2.0) 4.0
Cumulative effect of change
in accounting principle -- -- (0.7) --
-------- -------- -------- --------
Net income (loss) $34.8 $(7.1) $72.9 $18.7
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CONTACT: LifePoint Hospitals, Inc., Brentwood
Michael J. Culotta, 615-372-8512