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LifePoint Hospitals Inc. (NASDAQ: LPNT)

LifePoint Hospitals Inc. (NASDAQ: LPNT). By: Greg Boehmer Christen Brown Mike Jacobson Bill Schwartz Josh Stanley. LifePoint (LPNT): Overview. NASDAQ: LPNT Own and operate 51 hospitals in 19 states. One of the largest hospital groups in US Focus on non-urban healthcare

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LifePoint Hospitals Inc. (NASDAQ: LPNT)

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  1. LifePoint Hospitals Inc.(NASDAQ: LPNT) By: Greg BoehmerChristen BrownMike JacobsonBill SchwartzJosh Stanley

  2. LifePoint (LPNT): Overview • NASDAQ: LPNT • Own and operate 51 hospitals in 19 states. • One of the largest hospital groups in US • Focus on non-urban healthcare • “… Offers potential for significant operational improvement.” - Website • Medical, surgical, and outpatient services.

  3. LifePoint (LPNT): Overview

  4. LifePoint: History • Spun off from HCA,Inc in 1999. • Agreed to acquire Providence Healthcare Company in August 2004. • $1.7 billion in cash, stock and debt. • Transaction completed in 2005. • 26 new hospitals added.

  5. William F. Carpenter IIIPresident and Chief Executive Officer • Joined in 1999. • Served as executive vice president, general counsel and secretary, chief development officer and corporate governance officer. • Prior member of the Nashville law firm, Waller, Lansden, Dortch & Davis. • Specialized in general corporate and healthcare law. • Board of directors • Federation of American Hospitals • Psychiatric Solutions, Inc.

  6. Michael  J.  CulottaChief Financial Officer • Joined in 2001. • Previously spent 25 years with Ernst & Young LLP. • Became partner in 1999. • Board of Directors - Evolved Digital Systems, Inc. • Previous Chairman of the Board of the Tennessee Valley Region of the American Red Cross Blood Services. • Previous Treasurer of the Nashville Area Chapter of the American Red Cross • Board member for the Nashville Healthcare Counsel and the Nashville Ballet.

  7. William M. GraceyChief Operating Officer • Joined in 1999. • Served in a number of multi-facility executive and hospital CEO positions with HCA. • Fellow - American College of Healthcare Executives. • Board Member of the Tennessee Hospital Association, • Board Member - Board of Governors of the Federation of American Hospitals. • Preceptor of the Year - Virginia Commonwealth University's Healthcare Administration Graduate Program.

  8. Board of Directors • Owen G. Shell Jr.Chairman • William F. Carpenter III • Richard H. Evans • DeWitt Ezell Jr. • Michael P. Haley • Ricki Tigert Helfer • William V. Lapham • John E. Maupin Jr., D.D.S.

  9. Stock Screener (3/20/07)

  10. Percent Return LPNT, CHY, HMA

  11. Competitors

  12. DCF Results

  13. Revenues by Payor Mix

  14. Key Challenges • Increase in provisions for doubtful accounts: Went from 197 to 273 from 05 to 06. • Difficulty in recruiting and retaining physicians • Substantial indebtedness: 1.6 billion in debt • Medicare Changes: changes in regulations and standards by govt. • Integrating acquired hospitals • Shortage of nursing and technician personnel • Changes in company’s Chief Executive Officer and Chairman

  15. Future initiatives and competitive advantages. • Own 52 hospitals nation wide: Plan to acquire 2 more hospitals in 2006-2007 • Will be seeking to add 172 admitting physicians in 2007 • Formed Joint venture with physicians in Lake Havasu • They are sole provider of medical care in all but 5 of their locations • Acquired on April 15, 2005 21 hospitals in non urban communities • Run hospitals in primarily non urban communities because of certain specific advantages. • Less competitive than urban markets: smaller populations fewer hospitals • Community Focus • Acquisition Opportunities- • Paying down debt: Interest rate swap effective Nov 30, 06

  16. LifePoint: Recommendation • Passed initial and secondary screens. • Young company but DCF is positive. • Recommendation (strong sell to strong buy): BUY

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