Exhibit 99.1
LifePoint Hospitals Reports Second Quarter 2007 Results
Revises Guidance for Third and Fourth Quarters 2007
BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 23, 2007--LifePoint
Hospitals, Inc. (NASDAQ: LPNT) today announced results for the second
quarter and six months ended June 30, 2007.
For the second quarter ended June 30, 2007, revenues from
continuing operations were $654.3 million, up 16.8% from $560.2
million for the same period a year ago. Income from continuing
operations for the quarter was $24.6 million, or $0.43 per diluted
share, compared with income from continuing operations for the second
quarter of 2006 of $37.2 million, or $0.66 per diluted share. Net
income for the quarter was $13.4 million, or $0.23 per diluted share,
compared with net income of $34.8 million, or $0.62 per diluted share,
for the prior-year period.
For the first half of 2007, revenues from continuing operations
were $1.3 billion, up 15.3% from $1.1 billion for the first half of
2006. Income from continuing operations for the six months ended
June 30, 2007, decreased 12.6% to $63.3 million, or $1.11 per diluted
share, compared with income from continuing operations for the six
months ended June 30, 2006, of $72.4 million, or $1.29 per diluted
share. Net income for the first half of 2007 decreased 40.8% to $43.2
million, or $0.76 per diluted share. Net income for the first half of
2006 was $72.9 million, or $1.30 per diluted share.
As a result of its sale on July 1, 2007, Coastal Carolina Medical
Center, a 41-bed acute care hospital in Hardeeville, South Carolina,
has been reflected as discontinued operations. During the three months
and six months ended June 30, 2007, the Company recognized impairment
charges of $8.5 million and $16.4 million, net of income taxes, or
$0.15 and $0.29 per diluted share, respectively, related to the
disposal plans for Coastal Carolina Medical Center and for Colorado
River Medical Center in Needles, California, which was identified as
discontinued operations during the first quarter of 2007.
In commenting on the results, William F. Carpenter III, president
and chief executive officer of LifePoint Hospitals, said, "While we
are not satisfied with our second quarter performance, a significant
portion of our results are primarily driven by three areas - bad debt,
contract labor costs and professional fees, and medical malpractice
insurance expense - and we are taking appropriate actions to address
these issues. Our entire industry continues to face strong headwinds
in these areas, and some of them impacted us more significantly in
this quarter than in past quarters.
"As we continue to implement our short- and long-term initiatives
designed to deliver sustainable growth, we remain keenly focused on
expense management. We have a solid team in place with the skills and
expertise needed to continue executing our strategy. We are confident
that by investing in and working closely with the communities in which
we operate, we will be able to provide the highest quality care for
our patients and at the same time drive enhanced value for our
shareholders. We are confident in the future success of our business
and our ability to grow and provide quality patient care at reasonable
prices."
The Company also announced that it is revising its previously
issued guidance. The Company now expects earnings from continuing
operations as follows:
(In millions, except
diluted earnings per Third Fourth
share) Quarter Quarter 2007
------------- ------------- -------------------
Revenues $645 - $655 $660 - $670 $2,628.6 - $2,648.6
EBITDA $103 - $108 $109 - $114 $439.2 - $449.2
Earnings per share
(fully diluted) $0.50 - $0.55 $0.55 - $0.60 $2.15 - $2.25
In addition, the Company now expects the following metrics:
(Dollars in millions) 2007
-----------------
Admissions growth 0.0% - 1.0%
Bad debt 12.0% - 13.0%
Interest expense $95.0
Tax rate 41.0% - 41.5%
During the second quarter, the Company completed its previously
announced sale of 325-bed St. Joseph's hospital in Parkersburg, West
Virginia. Proceeds from the transaction were used primarily to repay a
portion of the indebtedness under the Company's credit agreement.
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 today, July 23, 2007,
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 in 18 states.
Of the Company's 49 hospitals, 46 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 an outstanding environment for employees; providing unmatched
community value; and ensuring fiscal responsibility. Headquartered in
Brentwood, Tennessee, LifePoint Hospitals is affiliated with
approximately 21,000 employees. More information about LifePoint
Hospitals can be found on its website, www.lifepointhospitals.com.
Important Legal Information
Certain statements contained in this release are based on current
management expectations and are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and are intended to qualify for the safe harbor protections from
liability provided by the Private Securities Litigation Reform Act of
1995. Numerous factors exist which may cause results to differ from
these expectations. Many of the factors that will determine
LifePoint's future results are beyond LifePoint's ability to control
or predict with accuracy. Such forward-looking statements reflect the
current expectations and beliefs of the management of LifePoint, are
not guarantees of performance 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)
future increases in "bad debt" or the cost of proving care to
uninsured or underinsured persons who are not able to pay all or any
part of such costs, the collectibility of patient due and uninsured
accounts receivable and the adequacy of our reserves for bad debt;
(ii) efforts by government and commercial third-party payors to reduce
healthcare spending, including changes in the manner in which amounts
that payors reimburse healthcare provided to covered individuals,
including "high deductible" plans, increased co-pays and deductibles;
(iii) possible changes or reductions in Medicare and Medicaid
reimbursement payments; (iv) the increasing cost of supplies used in
the Company's hospitals; (v) the availability, cost and terms of
contractual labor and healthcare service providers including nurses
and certain physicians such as anesthesiologists, radiologists and
emergency room physicians; (vi) the possibility of adverse changes in
or requirements of state and federal laws, regulations, policies and
procedures applicable to the Company; (vii) whether capital
expenditures and other aspects of our business plan intended, at least
in part, to allow our hospitals to provide a larger portion of the
healthcare services sought by residents in our markets will be
effective, and whether we are able to execute strategies to
significantly grow patient volumes and revenues; (viii) the highly
competitive nature of the healthcare business, including competition
from outpatient facilities, physicians on the medical staffs of our
hospitals, physician offices and facilities in larger towns and
cities; (ix) our ability to make acquisitions or divestitures, and to
enter into joint ventures, on favorable terms and conditions, and to
successfully integrate and operate acquired facilities; (x) the
increasing pressure to allow physicians to own a portion of our
hospitals, and our ability to effectively manage hospitals with
physician partners; (xi) our ability to recruit and retain physicians,
other healthcare professionals and management personnel; (xii) the
geographic concentration of LifePoint's operations and changes in
general economic conditions in the Company's markets; (xiii) changes
in the Company's operating or expansion strategy and, if made, our
ability to successfully execute such changed strategies; (xiv) our
ability to successfully operate and integrate de novo facilities; (xv)
the availability and terms of capital and liquidity to fund
LifePoint's business strategies; (xvi) the Company's substantial
indebtedness and changes in interest rates, our credit ratings and the
amount or terms of our indebtedness; (xvii) changes in or
interpretations of generally accepted accounting principles or
practices; (xviii) volatility in the market value of LifePoint's
common stock; (xix) the ability to manage healthcare risks, including
those that could result in losses to us because we are significantly
self-insured, as well as the availability, cost and terms of insurance
coverage, malpractice litigation and governmental investigations; (xx)
LifePoint's reliance on information technology systems maintained by
HCA - Information Technology and Services, Inc. and the cost and other
difficulties associated with converting facilities from one
information system to another; (xxi) the costs of complying with the
Americans with Disabilities Act and related litigation; and (xxii)
those other risks and uncertainties described from time to time in
LifePoint's filings with the Securities and Exchange Commission.
Therefore, LifePoint's future results may differ materially from those
described in this release. LifePoint 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," "LifePoint Hospitals" and the
"Company" 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,
-------------------------------
2007 2006
----------------- -------------
Amount Ratio Amount Ratio
---------- ------ ------ ------
Revenues $654.3 100.0% $560.2 100.0%
Salaries and benefits 257.1 39.3 225.0 40.2
Supplies 89.7 13.7 76.8 13.7
Other operating expenses 123.0 18.8 99.1 17.6
Provision for doubtful accounts 81.2 12.4 56.8 10.2
Depreciation and amortization 34.4 5.3 16.0 2.9
Interest expense, net 25.4 3.9 24.2 4.3
---------- ------ ------ ------
610.8 93.4 497.9 88.9
---------- ------ ------ ------
Income from continuing operations
before minority interests and income
taxes 43.5 6.6 62.3 11.1
Minority interests in earnings of
consolidated entities 0.8 0.1 0.4 0.1
---------- ------ ------ ------
Income from continuing operations
before income taxes 42.7 6.5 61.9 11.0
Provision for income taxes 18.1 2.8 24.7 4.4
---------- ------ ------ ------
Income from continuing operations 24.6 3.7 37.2 6.6
---------- ------ ------ ------
Discontinued operations, net of income
taxes:
Loss from discontinued
operations (2.6) (0.4) (2.1) (0.4)
Impairment of assets (8.5) (1.3) - -
Net (loss) gain on sale of
hospitals (0.1) - (0.3) -
---------- ------ ------ ------
Loss from discontinued
operations (11.2) (1.7) (2.4) (0.4)
---------- ------ ------ ------
Cumulative effect of change in
accounting principle, net of income
taxes - - - -
---------- ------ ------ ------
Net income $13.4 2.0 % $34.8 6.2 %
========== ====== ====== ======
Basic earnings (loss) per share:
Continuing operations $0.44 $0.67
Discontinued operations (0.20) (0.04)
Cumulative effect of change in
accounting principle - -
---------- ------
Net income $0.24 $0.63
========== ======
Diluted earnings (loss) per share:
Continuing operations $0.43 $0.66
Discontinued operations (0.20) (0.04)
Cumulative effect of change in
accounting principle - -
---------- ------
Net income $0.23 $0.62
========== ======
Six Months Ended June 30,
-------------------------------
2007 2006
--------------- ---------------
Amount Ratio Amount Ratio
-------- ------ -------- ------
Revenues $1,315.5 100.0% $1,140.8 100.0%
Salaries and benefits 514.0 39.1 452.1 39.6
Supplies 182.1 13.8 158.6 13.9
Other operating expenses 237.3 18.1 192.5 16.9
Provision for doubtful accounts 154.4 11.7 122.7 10.8
Depreciation and amortization 66.9 5.1 46.6 4.1
Interest expense, net 51.8 3.9 47.1 4.1
-------- ------ -------- ------
1,206.5 91.7 1,019.6 89.4
-------- ------ -------- ------
Income from continuing operations
before minority interests and income
taxes 109.0 8.3 121.2 10.6
Minority interests in earnings of
consolidated entities 1.1 0.1 0.7 -
-------- ------ -------- ------
Income from continuing operations
before income taxes 107.9 8.2 120.5 10.6
Provision for income taxes 44.6 3.4 48.1 4.3
-------- ------ -------- ------
Income from continuing operations 63.3 4.8 72.4 6.3
-------- ------ -------- ------
Discontinued operations, net of income
taxes:
Loss from discontinued
operations (3.5) (0.3) (3.7) (0.3)
Impairment of assets (16.4) (1.2) - -
Net (loss) gain on sale of
hospitals (0.2) - 3.5 0.3
-------- ------ -------- ------
Loss from discontinued
operations (20.1) (1.5) (0.2) -
-------- ------ -------- ------
Cumulative effect of change in
accounting principle, net of income
taxes - - 0.7 0.1
-------- ------ -------- ------
Net income $43.2 3.3 % $72.9 6.4 %
======== ====== ======== ======
Basic earnings (loss) per share:
Continuing operations $1.13 $1.30
Discontinued operations (0.36) -
Cumulative effect of change in
accounting principle - 0.01
-------- --------
Net income $0.77 $1.31
======== ========
Diluted earnings (loss) per share:
Continuing operations $1.11 $1.29
Discontinued operations (0.35) -
Cumulative effect of change in
accounting principle - 0.01
-------- --------
Net income $0.76 $1.30
======== ========
LIFEPOINT HOSPITALS, INC.
UNAUDITED EARNINGS (LOSS) PER SHARE CALCULATION
Dollars and shares in millions, except per share amounts
Three Months Six Months
Ended Ended
----------------- ---------------
June 30, June 30,
----------------- ---------------
2007 2006 2007 2006
--------- ------- ------- -------
Income from continuing operations $24.6 $37.2 $63.3 $72.4
Loss from discontinued operations (11.2) (2.4) (20.1) (0.2)
Cumulative effect of change in
accounting principle - - - 0.7
--------- ------- ------- -------
$13.4 $34.8 $43.2 $72.9
========= ======= ======= =======
Basic weighted average number of
shares 56.1 55.6 56.0 55.5
Other share equivalents 1.1 0.6 1.0 0.6
--------- ------- ------- -------
Diluted weighted average number of
shares and equivalents 57.2 56.2 57.0 56.1
========= ======= ======= =======
Basic earnings (loss) per share:
Continuing operations $0.44 $0.67 $1.13 $1.30
Discontinued operations:
Loss from discontinued
operations (0.05) (0.04) (0.06) (0.07)
Impairment of assets (0.15) - (0.29) -
Net gain (loss) on sale of
hospitals - - (0.01) 0.07
--------- ------- ------- -------
Loss from discontinued
operations (0.20) (0.04) (0.36) -
Cumulative effect of change in
accounting principle - - - 0.01
--------- ------- ------- -------
Net income $0.24 $0.63 $0.77 $1.31
========= ======= ======= =======
Diluted earnings (loss) per share:
Continuing operations $0.43 $0.66 $1.11 $1.29
Discontinued operations:
Loss from discontinued
operations (0.05) (0.04) (0.06) (0.07)
Impairment of assets (0.15) - (0.29) -
Net gain on sale of hospitals - - - 0.07
--------- ------- ------- -------
Loss from discontinued
operations (0.20) (0.04) (0.35) -
Cumulative effect of change in
accounting principle - - - 0.01
--------- ------- ------- -------
Net income $0.23 $0.62 $0.76 $1.30
========= ======= ======= =======
LIFEPOINT HOSPITALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In millions
June 30, Dec. 31,
2007 2006(1)
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $13.4 $12.2
Accounts receivable, less allowances for
doubtful accounts of $409.5 and $326.2 at
June 30, 2007 and December 31, 2006,
respectively 307.3 321.6
Inventories 68.6 65.9
Assets held for sale 29.5 155.1
Prepaid expenses 15.9 12.6
Income taxes receivable - 11.2
Deferred tax assets 149.8 49.2
Other current assets 19.0 20.6
----------- ----------
603.5 648.4
Property and equipment:
Land 71.6 76.8
Buildings and improvements 1,151.1 1,061.5
Equipment 622.7 597.7
Construction in progress 75.8 72.0
----------- ----------
1,921.2 1,808.0
Accumulated depreciation (528.9) (468.6)
----------- ----------
1,392.3 1,339.4
Deferred loan costs, net 41.4 31.1
Intangible assets, net 47.0 33.7
Other 4.9 4.5
Goodwill 1,519.1 1,581.3
$3,608.2 $3,638.4
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $74.8 $108.4
Accrued salaries 63.5 68.3
Accrued interest 34.4 11.3
Income taxes payable 16.9 -
Other current liabilities 80.0 115.8
Current maturities of long-term debt 0.5 0.5
----------- ----------
270.1 304.3
Long-term debt 1,525.6 1,668.4
Deferred income taxes 138.0 120.5
Professional and general liability claims and
other liabilities 78.9 82.3
Long-term income tax liability 55.1 -
Minority interests in equity of consolidated
entities 15.6 12.9
Stockholders' equity:
Preferred stock - -
Common stock 0.6 0.6
Capital in excess of par value 1,068.9 1,044.4
Unearned ESOP compensation (4.8) (6.4)
Accumulated other comprehensive loss (3.8) (9.6)
Retained earnings 464.0 421.0
----------- ----------
1,524.9 1,450.0
----------- ----------
$3,608.2 $3,638.4
=========== ==========
(1)Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Six Months
Ended Ended
June 30, June 30,
---------------- ---------------
2007 2006 2007 2006
-------- ------- ------- -------
Cash flows from operating activities:
Net income $13.4 $34.8 $43.2 $72.9
Adjustments to reconcile net
income to net cash provided by
operating activities:
Loss from discontinued
operations 11.2 2.4 20.1 0.2
Cumulative effect of change in
accounting principle, net of
income taxes - - - (0.7)
Stock-based compensation 3.6 2.6 7.2 5.8
ESOP expense (non-cash portion) 2.5 2.6 4.7 5.0
Depreciation and amortization 34.4 16.0 66.9 46.6
Amortization of deferred loan
costs 1.7 1.4 3.0 2.7
Minority interests in earnings
of consolidated entities 0.8 0.4 1.1 0.7
Deferred income taxes (benefit) (16.6) 2.9 (35.0) (0.2)
Reserve for professional and
general liability claims, net 4.6 2.3 4.1 4.1
Increase (decrease) in cash
from operating assets and
liabilities, net of effects
from acquisitions and
divestitures:
Accounts receivable 7.0 6.3 (0.5) (3.8)
Inventories and other
current assets 4.0 (2.6) (7.2) (6.0)
Accounts payable and
accrued expenses 20.5 11.6 (12.8) (5.7)
Income taxes payable (3.5) (21.3) 38.7 (7.7)
Other 0.7 (0.1) 1.8 0.4
-------- ------- ------- -------
Net cash provided by
operating activities -
continuing operations 84.3 59.3 135.3 114.3
Net cash (used in)
provided by operating
activities - discontinued
operations (5.2) (1.0) 7.6 (0.8)
-------- ------- ------- -------
Net cash provided by
operating activities 79.1 58.3 142.9 113.5
-------- ------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment (40.6) (44.9) (72.6) (95.0)
Acquisitions, net of cash acquired - (257.1) - (260.6)
Other 2.0 (0.3) 1.8 (0.6)
-------- ------- ------- -------
Net cash used in investing
activities - continuing
operations (38.6) (302.3) (70.8) (356.2)
Net cash provided by
investing activities -
discontinued operations 72.7 7.7 72.8 27.6
-------- ------- ------- -------
Net cash provided by (used
in) investing activities 34.1 (294.6) 2.0 (328.6)
-------- ------- ------- -------
Cash flows from financing activities:
Proceeds from borrowings 575.0 250.0 615.0 260.0
Payments of borrowings (705.1) (10.0) (757.5) (20.0)
Proceeds from exercise of stock
options 11.1 - 12.1 1.7
Payment of debt issue costs (13.3) - (13.3) (0.4)
Other (0.4) (0.5) - (0.3)
-------- ------- ------- -------
Net cash (used in) provided
by financing activities (132.7) 239.5 (143.7) 241.0
-------- ------- ------- -------
Change in cash and cash equivalents (19.5) 3.2 1.2 25.9
Cash and cash equivalents at
beginning of period 32.9 53.1 12.2 30.4
-------- ------- ------- -------
Cash and cash equivalents at end of
period $13.4 $56.3 $ 13.4 $ 56.3
======== ======= ======= =======
Supplemental disclosure of cash flow
information:
Interest payments $1.4 $19.9 $ 30.2 $ 45.0
======== ======= ======= =======
Capitalized interest $0.7 $0.2 $ 1.4 $ 0.3
======== ======= ======= =======
Income taxes paid, net $38.1 $43.5 $ 40.5 $ 56.2
======== ======= ======= =======
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended
June 30,
------------------------
%
2007 2006 Change
-------- -------- ------
Continuing Operations: (1)
Number of hospitals at end of period 48 47 2.1%
Admissions 48,191 43,727 10.2
Equivalent admissions (2) 96,121 86,267 11.4
Licensed beds at end of period 5,666 5,150 10.0
Weighted average licensed beds 5,666 5,153 10.0
Revenues ($ in millions) $654.3 $560.2 16.8
Revenues per equivalent admission $6,807 $6,493 4.8
Outpatient factor (2) 1.99 1.97 1.0
Emergency room visits 221,645 200,960 10.3
Inpatient surgeries 14,459 13,389 8.0
Outpatient surgeries 37,531 34,528 8.7
Average daily census 2,243 2,040 10.0
Average length of stay 4.2 4.2 -
Medicare case mix index 1.24 1.24 -
Same-Hospital: (3)
Number of hospitals at end of period 46 47 (2.1)
Admissions 43,536 43,727 (0.4)
Equivalent admissions (2) 87,538 86,267 1.5
Licensed beds at end of period 5,166 5,150 0.3
Weighted average licensed beds 5,166 5,153 0.3
Revenues ($ in millions) $603.7 $560.2 7.8
Revenues per equivalent admission $6,896 $6,493 6.2
Outpatient factor (2) 2.01 1.97 2.0
Emergency room visits 205,429 200,960 2.2
Inpatient surgeries 13,190 13,389 (1.5)
Outpatient surgeries 34,333 34,528 (0.6)
Average daily census 2,026 2,040 (0.7)
Average length of stay 4.2 4.2 -
Medicare case mix index 1.25 1.24 0.8
Six Months Ended
June 30,
------------------------
%
2007 2006 Change
-------- -------- ------
Continuing Operations: (1)
Number of hospitals at end of period 48 47 2.1%
Admissions 100,398 91,013 10.3
Equivalent admissions (2) 195,575 176,110 11.1
Licensed beds at end of period 5,666 5,150 10.0
Weighted average licensed beds 5,666 5,171 9.6
Revenues ($ in millions) $1,315.5 $1,140.8 15.3
Revenues per equivalent admission $6,726 $6,477 3.8
Outpatient factor (2) 1.95 1.94 0.5
Emergency room visits 443,920 399,715 11.1
Inpatient surgeries 29,430 26,833 9.7
Outpatient surgeries 74,454 68,290 9.0
Average daily census 2,369 2,155 9.9
Average length of stay 4.3 4.3 -
Medicare case mix index 1.24 1.24 -
Same-Hospital: (3)
Number of hospitals at end of period 46 47 (2.1)
Admissions 91,006 91,013 -
Equivalent admissions (2) 178,918 176,110 1.6
Licensed beds at end of period 5,166 5,150 0.3
Weighted average licensed beds 5,166 5,171 (0.1)
Revenues ($ in millions) $1,216.5 $1,140.8 6.6
Revenues per equivalent admission $6,799 $6,477 5.0
Outpatient factor (2) 1.97 1.94 1.5
Emergency room visits 411,899 399,715 3.0
Inpatient surgeries 26,784 26,833 (0.2)
Outpatient surgeries 68,444 68,290 0.2
Average daily census 2,145 2,155 (0.5)
Average length of stay 4.3 4.3 -
Medicare case mix index 1.25 1.24 0.8
(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 46 and 47 hospitals operated
during the three months and six months ended June 30, 2007 and 2006,
respectively. Same-hospital information for the three months and six
months ended June 30, 2006, includes the operations of Guyan Valley
Hospital, which LifePoint voluntarily closed and ceased operations
effective December 29, 2006. Discontinued operations are excluded
from same-hospital information.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
Adjusted EBITDA is defined as earnings before depreciation and
amortization, interest expense, minority interests in earnings of
consolidated entities, income taxes, discontinued operations and
cumulative effect of change in accounting principle. LifePoint's
management and Board of Directors use adjusted EBITDA to evaluate the
Company's operating performance and as a measure of performance for
incentive compensation purposes. LifePoint's credit facilities use
adjusted EBITDA for certain financial covenants. The Company believes
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.
Three Months Ended
June 30,
-------------------------------
2007 2006
--------------- ---------------
Amount Ratio Amount Ratio
-------- ------ -------- ------
Revenues $654.3 100.0% $560.2 100.0%
Salaries and benefits 257.1 39.3 225.0 40.2
Supplies 89.7 13.7 76.8 13.7
Other operating expenses 123.0 18.8 99.1 17.6
Provision for doubtful accounts 81.2 12.4 56.8 10.2
-------- ------ -------- ------
551.0 84.2 457.7 81.7
-------- ------ -------- ------
Adjusted EBITDA $103.3 15.8% $ 102.5 18.3 %
======== ====== ======== ======
Six Months Ended
June 30,
-------------------------------
2007 2006
--------------- ---------------
Amount Ratio Amount Ratio
-------- ------ -------- ------
Revenues $1,315.5 100.0% $1,140.8 100.0%
Salaries and benefits 514.0 39.1 452.1 39.6
Supplies 182.1 13.8 158.6 13.9
Other operating expenses 237.3 18.1 192.5 16.9
Provision for doubtful accounts 154.4 11.7 122.7 10.8
-------- ------ -------- ------
1,087.8 82.7 925.9 81.2
-------- ------ -------- ------
Adjusted EBITDA $227.7 17.3 % $214.9 18.8 %
======== ====== ======== ======
The following table reconciles adjusted EBITDA as presented above
to net income as reflected in the unaudited condensed consolidated
statements of operations:
Three Months Six Months
Ended Ended
---------------- ---------------
June 30, June 30,
---------------- ---------------
2007 2006 2007 2006
-------- ------- -------- ------
Adjusted EBITDA $103.3 $102.5 $227.7 $214.9
Less:
Depreciation and amortization 34.4 16.0 66.9 46.6
Interest expense, net 25.4 24.2 51.8 47.1
Minority interests in earnings of
consolidated entities 0.8 0.4 1.1 0.7
Provision for income taxes 18.1 24.7 44.6 48.1
Loss from discontinued operations 11.2 2.4 20.1 0.2
Cumulative effect of change in
accounting principle - - - (0.7)
-------- ------- -------- ------
Net income $13.4 $34.8 $43.2 $72.9
======== ======= ======== ======
CONTACT: LifePoint Hospitals, Inc.
David M. Dill, Chief Financial Officer, 615-372-8512