ADPT News - For Immediate Release

ADEPTUS HEALTH REPORTS FOURTH QUARTER AND YEAR END 2015 RESULTS AND PROVIDES 2016 GUIDANCE

Systemwide Revenue Increased 82% for Fourth Quarter

Adjusted EBITDA Increased 107% for Fourth Quarter

Adjusted EPS Increased 400% for Fourth Quarter

Lewisville, Texas (February 24, 2016) — Adeptus Health Inc. (NYSE: ADPT) (“ADPT” or the “Company”), the largest operator of freestanding emergency rooms in the U.S., announced its results for the fourth quarter and full year ended December 31, 2015. All comparisons included in this release are for the same period in the prior year, unless otherwise noted. See “Non-GAAP Financial Measures Description and Reconciliation” for further information related to Systemwide Revenue, Adjusted EBITDA and Adjusted earnings per share.

Fourth Quarter 2015 Highlights:

Year End 2015 Highlights:

2016 Guidance

We expect systemwide net patient services revenue, which includes revenue from our unconsolidated joint ventures, of $635.0 million to $665.0 million for the full year 2016. We expect Adjusted EBITDA of $108.0 million to $113.0 million and Adjusted earnings per share of $2.50 to $2.60 for the full year 2016.

Results of Operations for the Fourth Quarter 2015

Thomas S. Hall, Chairman and CEO, stated, “2015 was a year of significant accomplishments for Adeptus Health. We doubled our revenue, grew Adjusted EBITDA by 169%, and opened 26 new freestanding emergency rooms and two hospitals, while at the same time earning the Press Ganey Guardian of Excellence Award in patient satisfaction for the third consecutive year. Our openings included a hospital and four new facilities with our partner Dignity Health. We also announced partnerships with UCHealth in Colorado, Ochsner Health in Louisiana and most recently with Mount Carmel Health Systems, which is part of Trinity Health, in Ohio.”

During the fourth quarter, ADPT opened eight new facilities, including five freestanding emergency facilities and one hospital in Texas, one freestanding emergency facility in Colorado, which is part of our partnership with University of Colorado Health, and one freestanding emergency facility in Arizona with partner, Dignity Health. Additionally, construction has begun on two hospitals in Colorado, one in Louisiana and one in Houston, Texas.

For the fourth quarter of 2015, ADPT generated total net operating revenue of $105.4 million, an increase of 50%. Net operating revenue excludes revenue from 15 facilities in Colorado,  nine of which were consolidated in the prior year, and the Arizona hospital and its four freestanding facilities, which are accounted for as equity method investments. The increase was primarily attributable to the impact of patient volumes from the expansion of the number of consolidated freestanding facilities from 46 to 62 and annual gross charge increases, offset by the deconsolidation of our Colorado locations due to the UCHealth joint venture.

ADPT generated net income of $2.1 million for the quarter, of which $1.3 million was attributable to Adeptus Health Inc., compared to a net loss of $1.5 million from the prior year, of which net income of $0.3 million was attributable to Adeptus Health Inc. The increase in net income was due to an increase of $35.4 million in net operating revenue and a $2.4 million increase in equity in earnings of unconsolidated joint ventures. This increase was partially offset by increases in salaries, wages and benefits and other costs related to our growth initiatives, a $5.0 million loss on extinguishment of debt, an increase in depreciation and amortization expense and the impact of taxes on higher earnings.

Adjusted EBITDA increased 107% to $21.1 million. This increase was primarily attributable to a $35.4 million increase in net operating revenue and a $2.4 million increase in equity in earnings of unconsolidated joint ventures, partially offset by increases in salaries, wages and benefits and other costs related to our growth initiatives. See "Non-GAAP Financial Measures Description and Reconciliation" and "Reconciliation of Adjusted EBITDA to Net Income (Loss)" below for further information related to Adjusted EBITDA and its reconciliation to net income (loss).

Adjusted earnings per share was $0.45 per share and GAAP earnings per share was $0.09 per share for the quarter. Adjusted earnings per share is calculated using a weighted average of both Class A and Class B common shares outstanding, which was an aggregate of 20,767,295 common shares at December 31, 2015. Adjustments for the quarter include $3.8 million of preopening costs associated with new facility openings, $0.9 million of stock compensation expense, $5.0 million related to a loss on debt extinguishment and $1.7 million of other costs associated with our growth initiatives and an adjustment for taxes in order to establish a normalized tax rate of 35% for comparability purposes. See "Non-GAAP Financial Measures Description and Reconciliation" and "Earnings Per Share Reconciliation" below for further information related to Adjusted earnings per share and its reconciliation to net income (loss).

Results of Operations for the Year Ended 2015

During the year ended December 31, 2015, ADPT opened 28 new facilities, including 16 freestanding emergency facilities and one hospital in Texas, six freestanding emergency facilities in Colorado, which are part of our partnership with University of Colorado Health, and one hospital and four freestanding emergency facilities in Arizona with partner, Dignity Health.

For the year ended December 31, 2015, ADPT generated total net operating revenue of $364.7 million, an increase of 73%. Net operating revenue excludes revenue from 15 facilities in Colorado, nine of which were consolidated in the prior year, and the Arizona hospital and its four freestanding facilities, which are accounted for as equity method investments. The increase was primarily attributable to the impact of patient volumes from the expansion of the number of consolidated freestanding facilities from 46 to 62 and annual gross charge increases, offset by the deconsolidation of our Colorado locations due to the UCHealth joint venture.

ADPT generated net income of $32.8 million for the year ended December 31, 2015, of which $13.2 million was attributable to Adeptus Health Inc., compared to a net loss of $17.3 million from the prior year, of which $3.4 million was attributable to Adeptus Health Inc. The increase in net income was due to an increase of $154.0 million in net operating revenue, a $9.8 million increase in equity in earnings of unconsolidated joint ventures, coupled with a $24.3 million gain recognized on the contribution of existing freestanding facilities to the joint venture with University of Colorado Health. This increase was partially offset by increases in salaries, wages and benefits and other costs related to our growth initiatives, a $5.0 million loss on extinguishment of debt, an increase

in depreciation and amortization expense and the impact of taxes on higher earnings.

Adjusted EBITDA increased 169% to $75.9 million. This increase was primarily attributable to a $154.0 million increase in net operating revenue and a $9.8 million increase in equity in earnings of unconsolidated joint ventures, partially offset by increases in salaries, wages and benefits and other costs related to our growth initiatives. See "Non-GAAP Financial Measures Description and Reconciliation" and "Reconciliation of Adjusted EBITDA to Net Income (Loss)" below for further information related to Adjusted EBITDA and its reconciliation to net income (loss).

Adjusted earnings per share was $1.37 per share and GAAP earnings per share was $1.09 per share for the year ended December 31, 2015. Adjusted earnings per share is calculated using a weighted average of both Class A and Class B common shares outstanding, which was an aggregate of 20,747,403 common shares at December 31, 2015. Adjustments for the year ended December 31, 2015 include a $24.3 million gain recognized on the contribution of existing freestanding facilities to the joint venture with University of Colorado Health, $13.0 million of preopening costs associated with new facility openings, $2.8 million of stock compensation expense, $2.1 million related to public offerings of our Class A common stock, $5.0 million related to a loss on debt extinguishment and $3.6 million of other costs associated with our growth initiatives and an adjustment for taxes in order to establish a normalized tax rate of 35% for comparability purposes. See "Non-GAAP Financial Measures Description and Reconciliation" and "Earnings Per Share Reconciliation" below for further information related to Adjusted earnings per share and its reconciliation to net income (loss).

Systemwide Financial Results

For the fourth quarter of 2015, ADPT generated systemwide net patient services revenue of $127.8 million, an increase of 82%. The increase was primarily attributable to the impact of increased patient volumes from the expansion of the number of freestanding facilities from 55 to 81, annual gross charge increases and the opening of hospitals in Texas and Arizona.

For the year ended December 31, 2015, ADPT generated systemwide net patient services revenue of $425.3 million, an increase of 102%. The increase was primarily attributable to the impact of increased patient volumes from the expansion of the number of freestanding facilities from  55 to 81, annual gross charge increases and the opening of hospitals in Texas and Arizona.

As of December 31, 2015,  15 freestanding facilities associated with our joint venture with University of Colorado Health and our Arizona hospital and its four freestanding facilities associated with our joint venture with Dignity Health were accounted for using the equity method. For consolidated subsidiaries, the Company’s financial statements reflect 100% of the revenues and expenses for these subsidiaries, after elimination of intercompany transactions and accounts. For our unconsolidated joint ventures, consolidated statements of operations reflect those earnings in two line items:

As a result of this accounting treatment in our reported results, management supplementally focuses on non-GAAP systemwide metrics to analyze the results of operations. These systemwide metrics include systemwide net patient services revenue. Systemwide metrics treat our unconsolidated facilities as if they were consolidated. While the revenues earned at the unconsolidated facilities are not recorded in our consolidated financial statements, management believes systemwide net patient services revenue growth is important to understand the Company’s financial performance because it is used to interpret the sources of our growth and provide a growth metric incorporating the revenues earned by all affiliated facilities, regardless of the accounting treatment. As we execute on our strategy of partnering with health systems, management expects the number of our facilities accounted for under the equity method to increase relative to the total number of affiliated facilities.

Liquidity

At the end of the fourth quarter, the Company had cash of $16.0 million and $39.8 million available under its revolving credit facility.  Net cash flow from operations was $8.0 million for the fourth quarter, and $13.1 million for the year ended December 31, 2015.  At December 31, 2015, the Company had total long-term debt and capital lease obligations of $128.8 million and debt net of cash of $112.7 million.

In October 2015, the Company closed on a  new $175.0 million senior credit facility.  The new senior credit facility includes a $50.0 million revolver and a $125.0 million term loan. As a result of this new facility our interest rate has been reduced to LIBOR plus 3.75% from LIBOR plus 7.5%. The proceeds from the new credit facility along with a portion of existing cash were used to pay off the previous credit facility.

Market Outlook

We expect to continue to grow our freestanding emergency room network at a rate of opening 24 new sites per year, including both owned and joint venture facilities. Construction on our two hospitals in Colorado remain on schedule to open in the third and fourth

quarter of 2016. Prior to the end of the year, we expect to open our first hospital with Ochsner Health in New Orleans.

ADPT’s growth is addressing the shortage of quality emergency medical care in the U.S. As the most recent American College of Emergency Physicians (ACEP) survey highlights, America's emergency care system remains overstretched as emergency visits continue to rise. Respondents noted that this rise is combined in part with an increase in the acuity of patients’ injuries and/or illnesses. Again, this underscores the growing need for additional access points to high quality, 24/7 emergency care. Our facilities offer just that with convenient neighborhood locations.

“Through joint venture partnerships with leading healthcare systems including Dignity Health, UCHealth, Oschsner Health System and Mount Carmel Health System, as well as the expansion of our network of freestanding facilities, we are helping to transform the delivery of emergency care in the U.S.,” added Hall. “As 2016 unfolds we expect to announce additional joint venture partnerships.”

Conference Call

A live audio webcast to present the fourth quarter and year end 2015 results will take place today at 11:00 am (Eastern Time), hosted by Thomas S. Hall, Chairman and CEO, Timothy Fielding, CFO,  and Graham Cherrington, President and COO.

The audio webcast will be available by accessing:  [https://www.webcaster4.com/Webcast/Page/1069/13148] 

Following the call, an archived recording of the replay will also be available on the Adeptus Health Investor Relations page for 30 days:  http://ir.adeptushealth.com/events-and-presentations/events/default.aspx

About Adeptus Health Inc.

Adeptus Health (NYSE:ADPT) is a leading patient-centered healthcare organization expanding access to the highest quality emergency medical care through its network of freestanding emergency rooms and partnerships with premier healthcare providers.  In Texas, Adeptus Health owns and operates First Texas Hospital and First Choice Emergency Room, the nation's largest and oldest network of independent freestanding emergency rooms. In Colorado, in partnership with University of Colorado Health, Adeptus Health operates UCHealth Emergency Rooms. In Arizona, with Dignity Health, the company operates Dignity Health Arizona General Hospital and freestanding emergency rooms. In Louisiana, Adeptus Health has a partnership with Ochsner Health System, the state’s largest healthcare system, to improve access to emergency medical care. In Ohio, Adeptus Health has a partnership with Mount Carmel Health System. All Adeptus Health freestanding facilities are fully equipped emergency rooms with a complete radiology suite of diagnostic technology (CT scanner, ultrasound, and digital X-ray), on-site laboratory, and staffed with board-certified physicians and emergency trained registered nurses. According to patient feedback collected by Press Ganey Associates Inc., Adeptus Health provides the highest quality emergency medical care and received the 2013, 2014 and 2015 Press Ganey Guardian of Excellence Award for exceeding the 95th percentile in patient satisfaction nationwide. For more information please visit us on the web at adhc.com.

Forward-Looking Statements

Certain statements and information herein may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our guidance, objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this press release, and ADPT undertakes no duty to update or revise any such statements except as required by the federal securities laws. Forward-looking statements are not guarantees of future performance and are subject

to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in ADPT’s filings with the U.S. Securities and Exchange Commission (“SEC”) from time to time and which are accessible on the SEC’s website at www.sec.gov, including in the section entitled “Risk Factors” in the Company’s Form 10-K for the fiscal year ended December 31, 2014. Among the factors that could cause future results to differ materially from those provided in this press release are: our ability to implement our growth strategy; our ability to maintain sufficient levels of cash flow to meet growth expectations; our ability to protect our brand; federal and state laws and regulations relating to our facilities, which could lead to the incurrence of significant penalties by us or require us to make significant changes to our operations; our ability to locate available facility sites on terms acceptable to us; competition from hospitals, clinics and other emergency care providers; our dependence on payments from third-party payors; our ability to source and procure new products and equipment to meet patient preferences; our reliance on Medical Properties Trust (“MPT”) and the MPT Master Funding and Development Agreements; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; our ability or the ability of our healthcare system partners to negotiate favorable contracts or renew existing contracts with third-party payors on favorable terms; significant changes in our payor mix or case mix resulting from fluctuations in the types of cases treated at our facilities; significant changes in the rules, regulations and systems governing Medicare and Medicaid reimbursements; material changes in IRS revenue rulings, case law or the interpretation of such rulings; shortages of, or quality control issues with, emergency care-related products, equipment and medical supplies that could result in a disruption of our operations; the intense competition we face for patients, physician use of our facilities, strategic relationships and commercial payor contracts; the fact that we are subject to significant malpractice and related legal claims; the growth of patient receivables or the deterioration in the ability to collect on those accounts; the impact on us of PPACA, which represents a significant change to the healthcare industry; and ensuring our continued compliance with HIPAA, which could require us to expend significant resources and capital; and the factors discussed in the section entitled “Risk Factors” in the Company’s Form 10-K for the fiscal year ended December 31, 2014.

Non-GAAP Financial Measures Description and Reconciliation

This press release includes presentations of Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, further adjusted to eliminate the impact of certain additional items, including, facility pre-opening expenses, stock compensation expense and other non-recurring costs, losses or gains.

This press release also includes presentation of Adjusted earnings (loss) per share, which is defined as earnings (loss) per share related to the Company’s overall operation, including controlling and non-controlling interests, as adjusted to exclude certain additional items, including, facility preopening expenses, stock compensation expense and other non-recurring costs, losses or gains and an adjustment for taxes in order to establish a normalized tax rate of 35% for comparability purposes, divided by the aggregate number of shares of Class A and Class B common stock outstanding as of the end of the period.

In addition, this press release presents systemwide metrics to analyze the results of operations. These systemwide metrics include systemwide net patient services revenue.  Systemwide metrics treat our unconsolidated facilities as if they were consolidated.

These non-GAAP financial measures, Adjusted EBITDA, Adjusted earnings (loss) per share and systemwide metrics, are commonly used by management and investors as performance measures. The Company’s non-GAAP financial measures are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. These non-GAAP financial measures should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance. Reconciliations of non-GAAP financial measures are provided in this press release.  Since these non-GAAP financial measures are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.

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