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“SERVING THE NON-URBAN COMMUNITY”“SERVING THE NON-URBAN COMMUNITY”
FORWARD-LOOKING STATEMENTSFORWARD-LOOKING STATEMENTS
This presentation 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 our future results are beyond our ability to control or predict with accuracy. Such forward-looking statements, particularly those statements regarding the effects of the proposed merger between LifePoint Hospitals and Province Healthcare Company, reflect LifePoint Hospitals’ current expectations and beliefs, are not guarantees of performance of LifePoint Hospitals or the newly formed combined entity 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. For example, such risks, uncertainties, assumptions and other factors include, without limitation, the possibility that (1) the companies may be unable to obtain the required stockholder approvals; (2) problems may arise in successfully integrating the businesses of the two companies; (3) the acquisition may involve unexpected costs; (4) the combined company may be unable to achieve cost-cutting synergies; (5) the businesses may suffer as a result of uncertainty surrounding the acquisition; and (6) the combined company may be subject to future regulatory or legislative actions. These forward-looking statements are also subject to various risks and uncertainties, including, without limitation, (i) reduction in payments to healthcare providers by government and commercial third-party payors, as well as cost-containment efforts of insurers and other payors; (ii) the possibility of adverse changes in, and requirements of, applicable laws, regulations, policies and procedures, including those required by our corporate integrity agreement; (iii) our ability to manage healthcare risks and the lack of state and federal tort reform; (iv) uncertainty associated with compliance with HIPAA regulations; (v) our ability to enter into and renew payor arrangements on acceptable terms; (vi) our ability to maintain and increase patient volumes and control costs; (vii) the availability, cost and terms of insurance coverage; (viii) the highly competitive nature of the healthcare business, including the competition to recruit and retain physicians; (ix) the ability to attract and retain qualified management and personnel; (x) the geographic concentration of our operations; (xi) our ability to acquire hospitals on favorable terms and to complete budgeted capital improvements successfully; (xii) our ability to operate and integrate newly acquired facilities successfully; (xiii) the availability and terms of capital to fund our business strategy; (xiv) changes in our liquidity or indebtedness; (xv) the potential adverse impact of government investigations and litigation involving the business practices of healthcare providers; (xvi) the successful development and license of software and management information systems; (xvii) changes in generally accepted accounting principles or practices; (xviii) volatility in the market value of our common stock; (xix) changes in general economic conditions and changes in the manner in which employers provide healthcare coverage to their employees; (xx) our reliance on information technology systems maintained by HCA Inc.; (xxi) our ability to comply with all aspects of the Sarbanes-Oxley law; and (xxii) those risks and uncertainties described from time to time in our filings with the SEC, including those related to the proposed transaction between LifePoint Hospitals and Province Healthcare. Therefore, our future results may differ materially from those described in this release. We undertake 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.
This presentation 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 our future results are beyond our ability to control or predict with accuracy. Such forward-looking statements, particularly those statements regarding the effects of the proposed merger between LifePoint Hospitals and Province Healthcare Company, reflect LifePoint Hospitals’ current expectations and beliefs, are not guarantees of performance of LifePoint Hospitals or the newly formed combined entity 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. For example, such risks, uncertainties, assumptions and other factors include, without limitation, the possibility that (1) the companies may be unable to obtain the required stockholder approvals; (2) problems may arise in successfully integrating the businesses of the two companies; (3) the acquisition may involve unexpected costs; (4) the combined company may be unable to achieve cost-cutting synergies; (5) the businesses may suffer as a result of uncertainty surrounding the acquisition; and (6) the combined company may be subject to future regulatory or legislative actions. These forward-looking statements are also subject to various risks and uncertainties, including, without limitation, (i) reduction in payments to healthcare providers by government and commercial third-party payors, as well as cost-containment efforts of insurers and other payors; (ii) the possibility of adverse changes in, and requirements of, applicable laws, regulations, policies and procedures, including those required by our corporate integrity agreement; (iii) our ability to manage healthcare risks and the lack of state and federal tort reform; (iv) uncertainty associated with compliance with HIPAA regulations; (v) our ability to enter into and renew payor arrangements on acceptable terms; (vi) our ability to maintain and increase patient volumes and control costs; (vii) the availability, cost and terms of insurance coverage; (viii) the highly competitive nature of the healthcare business, including the competition to recruit and retain physicians; (ix) the ability to attract and retain qualified management and personnel; (x) the geographic concentration of our operations; (xi) our ability to acquire hospitals on favorable terms and to complete budgeted capital improvements successfully; (xii) our ability to operate and integrate newly acquired facilities successfully; (xiii) the availability and terms of capital to fund our business strategy; (xiv) changes in our liquidity or indebtedness; (xv) the potential adverse impact of government investigations and litigation involving the business practices of healthcare providers; (xvi) the successful development and license of software and management information systems; (xvii) changes in generally accepted accounting principles or practices; (xviii) volatility in the market value of our common stock; (xix) changes in general economic conditions and changes in the manner in which employers provide healthcare coverage to their employees; (xx) our reliance on information technology systems maintained by HCA Inc.; (xxi) our ability to comply with all aspects of the Sarbanes-Oxley law; and (xxii) those risks and uncertainties described from time to time in our filings with the SEC, including those related to the proposed transaction between LifePoint Hospitals and Province Healthcare. Therefore, our future results may differ materially from those described in this release. We undertake 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.
WHO WE ARE AND HOW WE ARE DIFFERENTWHO WE ARE AND HOW WE ARE DIFFERENT
Spin-off of 23 hospitals from HCA on May 11, 1999, with full indemnification
“Pure Play” non-urban, community-based healthcare provider
Employees are shareholders through ESOP and ESPP
Entered into Corporate Integrity Agreement with OIG (Office of Inspector General) in December 2000
Sole acute care facility in 28 of 29 markets
OPERATING PHILOSOPHY OPERATING PHILOSOPHY “High Five”“High Five”
Creating an outstanding work environment for employeesCreating an outstanding work environment for employees
Expanding the scope and quality of care for patients
Expanding the scope and quality of care for patients
Strengthening the hospital’s central role within the community
Strengthening the hospital’s central role within the community
Managing financial performance responsibly for stakeholdersManaging financial performance responsibly for stakeholders
Supplying the necessary equipment and resources to physicians
Supplying the necessary equipment and resources to physicians
LIFEPOINT HOSPITALSLIFEPOINT HOSPITALS
CORPORATE OFFICE
Kentucky Kentucky Georgetown (75)Lebanon (75)Mayfield (107)Maysville (101)Paris (58)Russellville (92)Somerset (234)Versailles (25)
Georgetown (75)Lebanon (75)Mayfield (107)Maysville (101)Paris (58)Russellville (92)Somerset (234)Versailles (25)CON StateCON State
Athens (118)Carthage (63)Lawrenceburg (107)Livingston (114)Pulaski (95)Sewanee (41)Winchester (157)
Athens (118)Carthage (63)Lawrenceburg (107)Livingston (114)Pulaski (95)Sewanee (41)Winchester (157)
Tennessee Tennessee
CON StateCON State
Bartow (56)Palatka (141)Bartow (56)Palatka (141)
Florida Florida
CON StateCON State
Andalusia (113)Haleyville (99)Russellville (100)Winfield (71)CON State
Andalusia (113)Haleyville (99)Russellville (100)Winfield (71)CON State
Alabama Alabama
Louisiana Louisiana Ville Platte (102)LaPlace (106)Ville Platte (102)LaPlace (106)
Dodge City (110)Dodge City (110)Kansas Kansas
Price (84)Vernal (39)Price (84)Vernal (39)
Utah Utah
WyomingWyomingLander (89)Riverton (70)Lander (89)Riverton (70)
# of licensed beds shown in ( )
Logan (132)Logan (19)CON State
Logan (132)Logan (19)CON State
West VirginiaWest Virginia
DISCIPLINED APPROACHTO ACQUISITIONSDISCIPLINED APPROACHTO ACQUISITIONS
Market CriteriaMarket Criteria
Non urban hospitals
Sole or significant market provider
Strong community support
Ability to grow adjusted EBITDA margins
Solid existing physician base
Non urban hospitals
Sole or significant market provider
Strong community support
Ability to grow adjusted EBITDA margins
Solid existing physician base
ACQUISITION HISTORYACQUISITION HISTORY
07/04
10/03
12/02
12/02
10/02
12/01
10/01
01/01
07/00
06/00
River Parishes
Spring View
Logan General/ Guyan Valley
Lakeland/ Northwest
Russellville
Ville Platte
Athens
Bluegrass*
Lander
Putnam
LaPlace, LA
Lebanon, KY
Logan, WV
Haleyville/ Winfield, AL
Russellville, AL
Ville Platte, LA
Athens, TN
Versailles, KY
Lander, WY
Palatka, FL
$36
$22
$75
$38
$27
$22
$24
$ 6
$20
$49
$24
$16
$87
$22
$20
$11
$17
$ 1
$30
$49
106
75
151
170
100
116
118
25
81
141
DateAcquired
MarketLocation Revenues
PurchasePrice**
LicensedBeds
($ in millions)
* Operating Lease** Excluding working capital
ExpansionExpansion
RoutineRoutine
FOCUSED CAPITAL EXPENDITURE PROGRAMFOCUSED CAPITAL EXPENDITURE PROGRAM
Capital ExpendituresCapital Expenditures($ in millions)($ in millions)
$19.5$19.5
$16.3$16.3
2001
$35.8$35.8
$18.8$18.8
2002
$60.7$60.7
$41.9$41.9$48.5$48.5
$23.6$23.6
2003
$72.1$72.1
$17.3$17.3
YTD Sep. 03
$52.4$52.4
$35.1$35.1
YTD Sep. 04
$56.7$56.7
$14.5$14.5
$42.2$42.2
TARGETED CAPITAL EXPENDITURE PROGRAMTARGETED CAPITAL EXPENDITURE PROGRAM
($ in millions)($ in millions)
OR
MRI
CT
ER
Rehab
Patient room addition
Cardiac Cath Lab
MOB
Misc. Expansions
12
18
11
5
7
3
5
14
11
$ 6.4
3.0
0.6
1.7
-
-
-
-
0.1
$11.9
4.1
3.6
0.7
0.5
-
-
1.2
0.5
$10.2
8.7
1.3
0.5
2.8
1.4
3.1
6.8
5.6
$ 8.4
6.5
-
3.3
1.7
7.2
2.0
6.4
8.8
No. ofProjects 2000 2001 2002 2003
$ 0.7
3.6
2.3
7.9
2.3
10.3
-
4.4
21.4
2004E
FINANCIAL DRIVERS AND RESULTSFINANCIAL DRIVERS AND RESULTS
NET REVENUE BY QUARTER*NET REVENUE BY QUARTER*
($ in millions)($ in millions)
2002
1st Qtr.2003
$212.9$212.9
$174.4$174.4
22.1%22.1%
2004
$247.5$247.5
16.2%16.2%
2002
4th Qtr.
$194.6$194.6
2003
$229.2$229.2
17.7%17.7%
2002
2nd Qtr.2003
$214.1$214.1
$170.7$170.725.4%25.4%
2004
$238.2$238.2
11.3%11.3%
2003
$219.4$219.4
2002
3rd Qtr.
$175.2$175.2
25.2%25.2%
2004
$253.7$253.7
15.6%15.6%
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
NET REVENUE BY QUARTER – SAME FACILITY*NET REVENUE BY QUARTER – SAME FACILITY*
($ in millions)($ in millions)
2003
1st Qtr.2004
$241.1$241.1
$212.9$212.913.2%13.2%
4th Qtr.2003
$222.9$222.9
2nd Qtr.2003
$214.1$214.1
2004
$232.1$232.1
8.3%8.3%
3rd Qtr.2003
$219.4$219.4
2004
$237.5$237.5
8.4%8.4%
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
EQUIVALENT ADMISSIONS BY QUARTER*EQUIVALENT ADMISSIONS BY QUARTER*
37,70737,707
46,37746,377
2002
4th Qtr.2003
23.0%23.0%35,92435,924
43,30343,303
2002
1st Qtr.2003
20.5%20.5%
2004
9.0%9.0%
47,18847,188
34,46434,464
43,14743,147
2002
2nd Qtr.2003
25.2%25.2%
44,55644,556
2004
3.3%3.3%
42,65142,651
34,44834,448
20032002
3rd Qtr.
23.8%23.8%
46,33146,331
2004
8.6%8.6%
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
2003
1st Qtr.2004
45,71945,71943,30343,303
5.6%5.6%
4th Qtr.2003
44,92844,928
2nd Qtr.2003
43,14743,147
2004
43,17143,171
0.1%0.1%
3rd Qtr.2003
42,65142,651
2004
43,45343,453
1.9%1.9%
EQUIVALENT ADMISSIONS BY QUARTER – SAME FACILITY*EQUIVALENT ADMISSIONS BY QUARTER – SAME FACILITY*
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
ADMISSIONS BY QUARTER*ADMISSIONS BY QUARTER*
2002
4th Qtr.2003
20.9%20.9%
19,629
23,722
2002
1st Qtr.2003
14.8%14.8%
2004
8.6%8.6%19,663
22,577
24,526
2002
2nd Qtr.2003
21.9%21.9%
17,683
21,550
2004
2.1%2.1%
21,997
20032002
3rd Qtr.
19.0%19.0%
20,846
17,513
2004
7.8%7.8%
22,480
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
NET REVENUE PER EQUIVALENT ADMISSION BY QUARTER – SAME FACILITY*
NET REVENUE PER EQUIVALENT ADMISSION BY QUARTER – SAME FACILITY*
2003
1st Qtr.2004
$5,270$5,270$4,917$4,917
7.2%7.2%
4th Qtr.2003
$4,959$4,959
2nd Qtr.2003
$4,961$4,961
2004
$5,372$5,372
8.3%8.3%
3rd Qtr.2003
$5,145$5,145
2004
$5,474$5,474
6.4%6.4%
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
VOLUME – ER VISITS*VOLUME – ER VISITS*
2002
4th Qtr.2003
28.0%28.0%
86,59186,591
110,842110,842
2002
1st Qtr.2003 2004
18.8%18.8%
78,42978,429
93,13793,13798,88298,882
6.2%6.2%
2002
2nd Qtr.2003
22.8%22.8%
81,52181,521
100,115100,115
2004
2.8%2.8%
102,957102,957
2002
3rd Qtr.2003
25.0%25.0%
83,38183,381
104,227104,227
2004
5.9%5.9%
110,369110,369
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
VOLUME – OP SURGERIES*VOLUME – OP SURGERIES*
2002
4th Qtr.2003
11.5%11.5%
16,39816,398
18,27718,277
2002
1st Qtr.2003 2004
11.5%11.5%
7.9%7.9%15,47315,473
17,24617,24618,60418,604
2002
2nd Qtr.2003
15.7%15.7%15,46615,466
17,89117,891
2004
2.9%2.9%
18,40418,404
2002
3rd Qtr.2003
16.3%16.3%
15,54415,544
18,07418,074
2004
7.2%7.2%
19,36719,367
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
VOLUME – IP SURGERIES*VOLUME – IP SURGERIES*
5,7745,7746,2816,281
2002
4th Qtr.2003
8.8%8.8%10.4%10.4%
5,3385,3385,8945,894
2002
1st Qtr.2003 2004
6,6506,650
12.8%12.8%
12.5%12.5%
5,4615,461
6,1416,141
2002
2nd Qtr.2003
8.4%8.4%
6,6586,658
2004
18.5%18.5%5,2445,244
6,2126,212
2002
3rd Qtr.2003
3.5%3.5%
6,4276,427
2004
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
REVENUES – PAYOR MIX COMBINED I/P AND O/P*REVENUES – PAYOR MIX COMBINED I/P AND O/P*
Self-PaySelf-Pay
9 Months – 9/30/039 Months – 9/30/03MedicaidMedicaid MedicareMedicare
Commercial and Managed Care
Commercial and Managed Care
39.8%39.8%
36.6%36.6%10.9%10.9%
8.6%8.6%4.1%4.1%OtherOther
Self-PaySelf-Pay
3Q043Q04MedicaidMedicaid MedicareMedicare
Commercial and Managed Care
Commercial and Managed Care
39.2%39.2%
34.5%34.5%11.6%11.6%
10.6%10.6%4.1%4.1%
OtherOther
Self-PaySelf-Pay
3Q033Q03MedicaidMedicaid MedicareMedicare
Commercial and Managed Care
Commercial and Managed Care
40.2%40.2%
35.2%35.2%10.6%10.6%
9.8%9.8%4.2%4.2%OtherOther
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
Self-PaySelf-Pay
MedicaidMedicaid MedicareMedicare
Commercial and Managed Care
Commercial and Managed Care
38.7%38.7%
37.0%37.0%11.1%11.1%
9.4%9.4%3.8%3.8%OtherOther
9 Months – 9/30/049 Months – 9/30/04
Supplies(% of net revenue)
Supplies(% of net revenue)
Labor(% of net revenue)
Labor(% of net revenue)
40.2%
20032002
39.2%
Bad Debt(% of net revenue)
Bad Debt(% of net revenue)
Other(% of net revenue)
Other(% of net revenue)
12.4%13.0%
20032002
7.0%8.5%
20032002
18.1% 17.8%
20032002
EXPENSE MANAGEMENT*EXPENSE MANAGEMENT*
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
EXPENSE MANAGEMENT*EXPENSE MANAGEMENT*Supplies
(% of net revenue)
Supplies(% of net revenue)
Labor(% of net revenue)
Labor(% of net revenue)
3Q043Q03
39.9% 40.3%
Bad Debt(% of net revenue)
Bad Debt(% of net revenue)
Other(% of net revenue)
Other(% of net revenue)
12.8% 12.7%
3Q043Q03
10.2%9.6%
3Q043Q03
17.5% 17.4%
3Q043Q03
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
ADJUSTED EBITDA BY QUARTER*ADJUSTED EBITDA BY QUARTER*
($ in millions)($ in millions)
$46.2$46.2$48.1$48.1
2002
4th Qtr.2003
4.2%4.2%$41.8$41.8$46.0$46.0
2002
1st Qtr.2003 2004
10.4%10.4%
23.4%23.4%
$56.8$56.8
$38.2$38.2$42.5$42.5
2002
2nd Qtr.2003
10.9%10.9%
$51.7$51.7
2004
21.7%21.7%$40.6$40.6
$43.0$43.0
2002
3rd Qtr.2003
5.6%5.6%
$50.9$50.9
2004
18.3%18.3%
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
ADJUSTED EBITDA BY QUARTER – SAME FACILITY*ADJUSTED EBITDA BY QUARTER – SAME FACILITY*
2003
1st Qtr.2004
$56.3$56.3
$45.9$45.921.6%21.6%
2004
$51.2$51.2
20.2%20.2%
2nd Qtr.2003
$42.5$42.5
4th Qtr.2003
$47.7$47.7
($ in millions)($ in millions)
2004
$49.5$49.5
16.3%16.3%
3rd Qtr.2003
$43.1$43.1
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
2003
1st Qtr.2004
23.3%23.3%21.6%21.6%
170bps170bps
4th Qtr.2003
21.4%21.4%
2nd Qtr.2003
19.8%19.8%
2004
22.0%22.0%
220bps220bps
3rd Qtr.2003
19.6%19.6%
2004
21.0%21.0%
140bps140bps
MARGINS BY QUARTER – SAME FACILITY*MARGINS BY QUARTER – SAME FACILITY*
* Excludes Bartow Memorial Hospital, which LifePoint Hospitals is expecting to exchange for another hospital in the fourth quarter of 2004 or first quarter of 2005.
UNAUDITED SUPPLEMENTAL INFORMATIONUNAUDITED SUPPLEMENTAL INFORMATION
($ in millions) ($ in millions)
Adjusted EBITDA is defined as earnings before depreciation and amortization, interest expense, debt retirement costs, ESOP expense, gain on previously impaired assets, minority interest in earnings of consolidated entity, income taxes and discontinued operations. Our management uses adjusted EBITDA to evaluate our operating performance and as a measure of performance for incentive compensation purposes. 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 accounting principles generally accepted in the United States, 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 accounting principles generally accepted in the United States and is susceptible to varying calculations, adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Debt retirement costs
ESOP expense
Minority interests in earnings of consolidated entities
Provision for income taxes
Loss from discontinued operations, net of income taxes
Net income
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Debt retirement costs
ESOP expense
Minority interests in earnings of consolidated entities
Provision for income taxes
Loss from discontinued operations, net of income taxes
Net income
20022002
$ 166.8
(35.0)
(13.3)
(31.0)
(9.7)
(2.2)
(32.7)
(1.4)
$ 41.5
$ 166.8
(35.0)
(13.3)
(31.0)
(9.7)
(2.2)
(32.7)
(1.4)
$ 41.5
Years Ended December 31,Years Ended December 31,
20032003
$ 179.6
(43.1)
(12.8)
-
(6.9)
(0.7)
(45.9)
(1.7)
$ 68.5
$ 179.6
(43.1)
(12.8)
-
(6.9)
(0.7)
(45.9)
(1.7)
$ 68.5
UNAUDITED SUPPLEMENTAL INFORMATIONUNAUDITED SUPPLEMENTAL INFORMATION
($ in millions)
Adjusted EBITDA is defined as earnings before depreciation and amortization, interest expense, debt retirement costs, ESOP expense, gain on previously impaired assets, minority interests in earnings of consolidated entities, income taxes and discontinued operations. Our management uses adjusted EBITDA to evaluate our operating performance and as a measure of performance for incentive compensation purposes. 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 accounting principles generally accepted in the United States, 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 accounting principles generally accepted in the United States and is susceptible to varying calculations, adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
20032003
$ 131.5
(31.5)
(9.9)
-
(4.9)
(0.5)
(34.2)
(1.3)
$ 49.2
$ 131.5
(31.5)
(9.9)
-
(4.9)
(0.5)
(34.2)
(1.3)
$ 49.2
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Debt retirement costs
ESOP expense
Minority interests in earnings of consolidated entities
Provision for income taxes
Loss from discontinued operations, net of income taxes
Net income
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Debt retirement costs
ESOP expense
Minority interests in earnings of consolidated entities
Provision for income taxes
Loss from discontinued operations, net of income taxes
Net income
20042004
$ 159.4
(34.5)
(9.7)
(1.5)
(7.1)
(0.7)
(42.1)
(1.5)
$ 62.3
$ 159.4
(34.5)
(9.7)
(1.5)
(7.1)
(0.7)
(42.1)
(1.5)
$ 62.3
Nine Months Ended September 30,
Nine Months Ended September 30,
20032003
$ 43.0
(10.2)
(3.3)
-
(1.8)
(0.3)
(11.0)
(0.2)
$ 16.2
$ 43.0
(10.2)
(3.3)
-
(1.8)
(0.3)
(11.0)
(0.2)
$ 16.2
20042004
$ 50.9
(12.1)
(3.1)
-
(2.3)
(0.1)
(13.2)
(0.4)
$ 19.7
$ 50.9
(12.1)
(3.1)
-
(2.3)
(0.1)
(13.2)
(0.4)
$ 19.7
Three Months Ended September 30,
Three Months Ended September 30,
1st Qtr.
$0.13$0.13
$0.36$0.25$0.25
$0.45$0.60
4th Qtr.
$0.27
$0.50$0.44
$0.16
CONSISTENT EARNINGSPER SHARE HISTORYCONSISTENT EARNINGSPER SHARE HISTORY
(a) Includes effect of debt retirement costs of $(0.04) for second quarter 2001 and $(0.04) for full year.
(b) Includes effect of debt retirement costs of $(0.02), $(0.41), $(0.06) and $(0.01) in first, second, third and fourth quarters 2002, respectively, and $(0.50) for full year.
(c) Includes effect of debt retirement costs of $(0.02) for second quarter 2004.
20002001 (a)
2002 (b)
2003
Year
$0.54
$0.90
$1.07
$1.76
2004 (c)
2nd Qtr.
$0.11$0.18
$(0.07)
$0.40$0.48
3rd Qtr.
$0.33$0.20
$0.14
$0.42$0.50
1st Qtr.
$0.13$0.13
$0.38
$0.25$0.25
$0.45
$0.60
4th Qtr.
$0.16
$0.27
$0.45$0.50
Year
$0.54
$0.94
$1.56
$1.76
2nd Qtr.
$0.11
$0.40$0.34
$0.22
$0.50
ADJUSTED EARNINGSPER SHARE HISTORYADJUSTED EARNINGSPER SHARE HISTORY
(a) Excludes effect of debt retirement costs of $(0.04) for second quarter 2001 and $(0.04) for full year.
(b) Excludes effect of debt retirement costs. Represents $(0.02), $(0.41), $(0.06) and $(0.01) in first, second, third and fourth quarters 2002, respectively, and $(0.50) for year.
(c) Excludes effect of debt retirement costs of $(0.02) for second quarter 2004.
Exclusive of Debt Retirement CostsExclusive of Debt Retirement Costs
20002001 (a)
2002 (b)
20032004 (c)
3rd Qtr.
$0.39
$0.20$0.14
$0.42$0.50
CAPITALIZATIONCAPITALIZATION($ in millions)
Total Debt/Capitalization
Total Debt/LTM Adjusted EBITDA
LTM Adjusted EBITDA/Interest Expense
Total Debt/Capitalization
Total Debt/LTM Adjusted EBITDA
LTM Adjusted EBITDA/Interest Expense
31.6%
1.1x
16.5x
31.6%
1.1x
16.5x
40.6%
1.5x
14.0x
40.6%
1.5x
14.0x
Total Debt
Bank Debt
41/2% Convertible Notes
Total Debt
Total Stockholders’ Equity
Total Capitalization
9/30/04
$ -
221.0
221.0
477.7
$698.7
12/31/03
$ 20.0
250.0
270.0
394.3
$664.3
WHY INVEST IN
LIFEPOINT?
WHY INVEST IN
LIFEPOINT?Less than 10% of rural hospitals are
owned by proprietary owners
Community involvement
Solid payor base
Our focus on recruiting quality physicians
Opportunities for physicians and employees to enhance their quality of life in rural communities
Less than 10% of rural hospitals are owned by proprietary owners
Community involvement
Solid payor base
Our focus on recruiting quality physicians
Opportunities for physicians and employees to enhance their quality of life in rural communities
“SERVING THE NON-URBAN COMMUNITY”“SERVING THE NON-URBAN COMMUNITY”
To learn more about LifePoint Hospitals, Inc.please visit our website at
www.lifepointhospitals.com
To learn more about LifePoint Hospitals, Inc.please visit our website at
www.lifepointhospitals.com