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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-Q

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|(MARK ONE)
|----------
|          
|x         
|          
|          
|          
|          
|          
|o         

Commission File Number 0-19946

|LINCARE   HOLDINGS INC.                                 
|--------------------------------------------------------
|                                                        
|(Exact   name of registrant as specified in its charter)

|Delaware                                                             |  | 51-0331330                            
|-------------------------------------------------------------------- |  | --------------------------------------
|                                                                     |  |                                       
|(State or   other jurisdiction of incorporation or organization)     |  | (I.R.S.   Employer Identification No.)
|                                                                     |  |                                       
|19387 US 19 North    Clearwater, FL                                  |  | 33764                                 
|                                                                     |  |                                       
|(Address   of principal executive offices)                           |  | (Zip Code)                            
|                                                                     |  |                                       
|Registrants telephone number, including area code:   (727) 530-7700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
x  No   
o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes
x  No   
o

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

|Class                           |  | Outstanding   at    October 31, 2004
|------------------------------- |  | ------------------------------------
|                                |  |                                     
|Common   Stock, $0.01 par value |  | 100,347,216 shares                  

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LINCARE HOLDINGS INC. AND SUBSIDIARIES FORM 10-Q For The Quarterly Period Ended September 30, 2004 INDEX

|                  |                                                                                         |     | Page
|----------------- | --------------------------------------------------------------------------------------- | --- | ----
|                  |                                                                                         |     |     
|PART I.           | FINANCIAL INFORMATION                                                                   |     |     
|Item 1.           | Financial Statements (unaudited)                                                        |     | 3   
|                  | Condensed consolidated balance sheets                                                   |     | 3   
|                  | Condensed consolidated statements of operations                                         |     | 4   
|                  | Condensed consolidated statements of cash flows                                         |     | 5   
|                  | Notes to unaudited condensed consolidated financial statements                          |     | 6   
|Item 2.           | Managements Discussion and Analysis of Financial Condition and   Results of Operations |     | 9   
|Item 3.           | Quantitative and Qualitative Disclosures About Market Risk                              |     | 20  
|Item 4.           | Controls and Procedures                                                                 |     | 20  
|                  |                                                                                         |     |     
|PART II.          | OTHER INFORMATION                                                                       |     |     
|Item 1.           | Legal Proceedings                                                                       |     | 21  
|Item 2.           | Unregistered Sales of Equity Securities and Use of Proceeds                             |     | 21  
|Item 3.           | Defaults Upon Senior Securities                                                         |     | 21  
|Item 4.           | Submission of Matters to a Vote of the Security Holders                                 |     | 21  
|Item 5.           | Other Information                                                                       |     | 21  
|Item 6.           | Exhibits                                                                                |     | 21  
|SIGNATURE         |                                                                                         | 22 
|INDEX OF EXHIBITS |                                                                                         | S-1

2



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

LINCARE HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

|                                                        |  | September   30,   2004 |           | December   31,   2003 |  
|------------------------------------------------------- |  | ---------------------- | --------- | --------------------- | -
|                                                        |  |                        |           |                       |  
|Current   assets:                                       |  |                        |           |                       |  
|Cash and cash equivalents                               |  | $                      | 177,149   |                       | $
|Restricted cash                                         |  |                        | 2,359     |                       |  
|Accounts and notes receivable, net                      |  |                        | 146,378   |                       |  
|Income tax receivable                                   |  |                        | 0         |                       |  
|Inventories                                             |  |                        | 2,316     |                       |  
|Prepaid and other current assets                        |  |                        | 4,084     |                       |  
|                                                        |  |                        |           |                       |  
|Total current assets                                    |  |                        | 332,286   |                       |  
|                                                        |  |                        |           |                       |  
|Property and   equipment                                |  |                        | 665,401   |                       |  
|Accumulated   depreciation                              |  |                        | (372,023  | )                     |  
|                                                        |  |                        |           |                       |  
|Net property and equipment                              |  |                        | 293,378   |                       |  
|                                                        |  |                        |           |                       |  
|Other   assets:                                         |  |                        |           |                       |  
|Goodwill                                                |  |                        | 989,948   |                       |  
|Covenants not-to-compete, net                           |  |                        | 3,293     |                       |  
|Other                                                   |  |                        | 8,490     |                       |  
|                                                        |  |                        |           |                       |  
|Total other assets                                      |  |                        | 1,001,731 |                       |  
|                                                        |  |                        |           |                       |  
|Total assets                                            |  | $                      | 1,627,395 |                       | $
|                                                        |  |                        |           |                       |  
|Current   liabilities:                                  |  |                        |           |                       |  
|Current installments on long-term obligations           |  | $                      | 56,889    |                       | $
|Accounts payable                                        |  |                        | 30,584    |                       |  
|Accrued expenses:                                       |  |                        |           |                       |  
|Compensation and benefits                               |  |                        | 25,981    |                       |  
|Retained insurance risk                                 |  |                        | 12,230    |                       |  
|Other current liabilities                               |  |                        | 7,146     |                       |  
|Income taxes payable                                    |  |                        | 13,590    |                       |  
|                                                        |  |                        |           |                       |  
|Total current liabilities                               |  |                        | 146,420   |                       |  
|                                                        |  |                        |           |                       |  
|Long-term   obligations, excluding current installments |  |                        | 275,323   |                       |  
|Deferred income   taxes                                 |  |                        | 133,862   |                       |  
|Minority   interest                                     |  |                        | 726       |                       |  
|                                                        |  |                        |           |                       |  
|Total liabilities                                       |  |                        | 556,331   |                       |  
|                                                        |  |                        |           |                       |  
|Stockholders   equity:                                 |  |                        |           |                       |  
|Common stock                                            |  |                        | 1,238     |                       |  
|Additional paid-in capital                              |  |                        | 256,299   |                       |  
|Unearned compensation                                   |  |                        | (6,140    | )                     |  
|Retained earnings                                       |  |                        | 1,342,896 |                       |  
|Treasury stock                                          |  |                        | (523,229  | )                     |  
|                                                        |  |                        |           |                       |  
|Total stockholders equity                              |  |                        | 1,071,064 |                       |  
|                                                        |  |                        |           |                       |  
|Total liabilities and stockholders equity              |  | $                      | 1,627,395 |                       | $
|                                                        |  |                        |           |                       |  

See accompanying notes to unaudited condensed consolidated financial statements.

3



LINCARE HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)

|                                                                                    |  | For The   Three Months Ended |             | For The   Nine Months Ended |  
|----------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | --------------------------- | -
|                                                                                    |  |                              |             |                             |  
|                                                                                    |  | September   30,    2004      |             | September   30,   2003      |  
|                                                                                    |  |                              |             |                             |  
|Net revenues                                                                        |  | $                            | 322,010     |                             | $
|                                                                                    |  |                              |             |                             |  
|Costs and   expenses:                                                               |  |                              |             |                             |  
|Cost of goods and services                                                          |  |                              | 45,628      |                             |  
|Operating expenses                                                                  |  |                              | 67,473      |                             |  
|Selling, general and administrative expenses                                        |  |                              | 65,091      |                             |  
|Bad debt expense                                                                    |  |                              | 4,830       |                             |  
|Depreciation expense                                                                |  |                              | 21,897      |                             |  
|Amortization expense                                                                |  |                              | 383         |                             |  
|                                                                                    |  |                              |             |                             |  
|                                                                                    |  |                              | 205,302     |                             |  
|                                                                                    |  |                              |             |                             |  
|Operating income                                                                    |  |                              | 116,708     |                             |  
|                                                                                    |  |                              |             |                             |  
|Other income   (expense):                                                           |  |                              |             |                             |  
|Interest income                                                                     |  |                              | 901         |                             |  
|Interest expense                                                                    |  |                              | (4,498      | )                           |  
|Net loss on disposal of property and equipment                                      |  |                              | (205        | )                           |  
|                                                                                    |  |                              |             |                             |  
|                                                                                    |  |                              | (3,802      | )                           |  
|                                                                                    |  |                              |             |                             |  
|Income before income taxes                                                          |  |                              | 112,906     |                             |  
|Income tax   expense                                                                |  |                              | 42,498      |                             |  
|                                                                                    |  |                              |             |                             |  
|Net income                                                                          |  | $                            | 70,408      |                             | $
|                                                                                    |  |                              |             |                             |  
|Basic earnings per common share                                                     |  | $                            | 0.71        |                             | $
|                                                                                    |  |                              |             |                             |  
|Diluted earnings per common share                                                   |  | $                            | 0.69        |                             | $
|                                                                                    |  |                              |             |                             |  
|Weighted   average number of common shares outstanding                              |  |                              | 99,807,228  |                             |  
|                                                                                    |  |                              |             |                             |  
|Weighted   average number of common shares and common share equivalents outstanding |  |                              | 102,028,443 |                             |  
|                                                                                    |  |                              |             |                             |  

See accompanying notes to unaudited condensed consolidated financial statements.

4



LINCARE HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

|                                                                                    |  | For The   Nine Months Ended |         
|----------------------------------------------------------------------------------- |  | --------------------------- | --------
|                                                                                    |  |                             |         
|                                                                                    |  | September   30,   2004      |         
|                                                                                    |  |                             |         
|Cash flows   from operating activities:                                             |  |                             |         
|Net income                                                                          |  | $                           | 200,720 
|Adjustments to reconcile net income to net cash provided by operating   activities: |  |                             |         
|Provision for losses on accounts and notes receivable                               |  |                             | 14,164  
|Depreciation expense                                                                |  |                             | 65,022  
|Loss on disposal of property and equipment                                          |  |                             | 209     
|Amortization expense                                                                |  |                             | 1,141   
|Accretion of gain on interest swap contracts                                        |  |                             | (414    
|Compensation earned under restricted stock awards                                   |  |                             | 2,108   
|Deferred income tax benefit                                                         |  |                             | 19,172  
|Minority interest in net earnings of subsidiary                                     |  |                             | 65      
|Change in assets and liabilities net of effects of acquired   businesses:           |  |                             |         
|Increase in accounts and notes receivable                                           |  |                             | (8,775  
|Decrease in inventories                                                             |  |                             | 250     
|Decrease (increase) in prepaid and other current assets                             |  |                             | 468     
|Increase (decrease) in accounts payable                                             |  |                             | (4,719  
|Increase (decrease) in accrued expenses                                             |  |                             | (967    
|Increase in income taxes payable                                                    |  |                             | 31,651  
|                                                                                    |  |                             |         
|Net cash provided by operating activities                                           |  |                             | 320,095 
|                                                                                    |  |                             |         
|Cash flows   from investing activities:                                             |  |                             |         
|Proceeds from sale of property and equipment                                        |  |                             | 94      
|Capital expenditures                                                                |  |                             | (67,919 
|Decrease (increase) in other assets                                                 |  |                             | 566     
|Business acquisitions, net of cash acquired                                         |  |                             | (40,884 
|Cash restricted for future payments                                                 |  |                             | (576    
|                                                                                    |  |                             |         
|Net cash used by investing activities                                               |  |                             | (108,719
|                                                                                    |  |                             |         
|Cash flows   from financing activities:                                             |  |                             |         
|Proceeds from issuance of debt                                                      |  |                             | 253     
|Repayments of debt                                                                  |  |                             | (57,253 
|Payments to minority interests                                                      |  |                             | (89     
|Proceeds from issuance of common stock                                              |  |                             | 12,007  
|Proceeds from issuance of treasury stock                                            |  |                             | 1,040   
|Payments to acquire treasury stock                                                  |  |                             | 0       
|                                                                                    |  |                             |         
|Net cash used by financing activities                                               |  |                             | (44,042 
|                                                                                    |  |                             |         
|Net increase in cash and cash equivalents                                           |  |                             | 167,334 
|Cash and   cash equivalents, beginning of period                                    |  |                             | 9,815   
|                                                                                    |  |                             |         
|Cash and   cash equivalents, end of period                                          |  | $                           | 177,149 
|                                                                                    |  |                             |         

See accompanying notes to unaudited condensed consolidated financial statements.

5



LINCARE HOLDINGS INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1.  Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q.  They should be read in conjunction with the consolidated financial statements and related notes to the financial statements of Lincare Holdings Inc. and Subsidiaries (the Company) on Form 10-K for the fiscal year ended December 31, 2003. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

Note 2.  Business Combinations

Lincare routinely acquires the business and related assets of local and regional companies as an ongoing strategy to increase sales within its respective markets. Lincare arrives at a negotiated purchase price taking into account such factors including, but not limited to, the acquired companys historical and projected revenue growth, operating cash flow, product mix, payor mix, service reputation and geographical location.

During
     the nine months ended September 30, 2004, the Company acquired certain
     assets of seventeen companies in
     separate transactions. In addition, Lincare acquired the remaining equity
     interests of two companies in which it had previously acquired partial
     ownership through a prior acquisition.  Each acquisition was accounted
     for as a purchase. The results of the acquired companies are included in
     the accompanying consolidated statements of operations since the respective
     dates of acquisition.

The aggregate cost of the acquisitions described above was as follows:

|                                                         |  | (In   thousands) |       
|-------------------------------------------------------- |  | ---------------- | ------
|                                                         |  |                  |       
|Cash                                                     |  | $                | 40,884
|Deferred   acquisition obligations                       |  |                  | 8,995 
|Assumption   of liabilities                              |  |                  | 999   
|                                                         |  |                  |       
|                                                         |  | $                | 50,878
|                                                         |  |                  |       
|The   aggregate purchase price was allocated as follows: |  |                  |       
|Current   assets                                         |  | $                | 846   
|Property and   equipment                                 |  |                  | 2,661 
|Intangible   assets                                      |  |                  | 210   
|Goodwill                                                 |  |                  | 47,161
|                                                         |  |                  |       
|                                                         |  | $                | 50,878
|                                                         |  |                  |       

Unaudited pro forma supplemental information on the results of operations for the nine months ended September 30, 2004 and September 30, 2003, is provided below and reflects the acquisitions as if they had been combined at the beginning of each respective period.

|                           |  | For The   Nine Months    Ended September 30, |        
|-------------------------- |  | -------------------------------------------- | -------
|                           |  |                                              |        
|                           |  | 2004                                         |        
|                           |  |                                              |        
|                           |  | (In thousands,   except per share data)      |        
|Net revenues               |  | $                                            | 955,465
|                           |  |                                              |        
|Net income                 |  | $                                            | 203,171
|                           |  |                                              |        
|Income per   common share: |  |                                              |        
|Basic                      |  | $                                            | 2.04   
|                           |  |                                              |        
|Diluted                    |  | $                                            | 2.00   
|                           |  |                                              |        

6



LINCARE HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

The unaudited pro forma financial information is not necessarily indicative of either the results of operations that would have occurred had the transactions been effected at the beginning of the respective preceding periods or of future results of operations of the combined companies.

Note 3.  Income Per Common Share

Basic income per common share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted income per common share reflects the potential dilution of securities, including securities that may be issued on exercise of outstanding stock options, that could share in the Companys earnings. When the exercise of stock options is anti-dilutive, they are excluded from the calculation. For the three-month periods ended September 30, 2004 and 2003, the number of shares excluded was 2,523 and 0, respectively.

The effect of 5,156,662 common shares issuable upon conversion of the Companys 3.0% Convertible Senior Debentures due 2033 (the Debentures) was not included in the computation of diluted earnings per share for the quarter ended September 30, 2004, since none of the conditions that would permit conversion of the Debentures had been satisfied during the period.

In July
     2004, the Emerging Issues Task Force (EITF) reached a tentative
     consensus on EITF Issue No. 04-08, The Effect of Contingently
     Convertible Debt on Diluted Earnings per Share, that the impact of
     contingently convertible debt, such as the Debentures, should be included
     in diluted earnings per share computations regardless of whether the market
     price conversion condition has been met. If the EITFs tentative
     consensus is ratified by the Financial Accounting Standards Board, the provisions are expected to be
     effective for reporting periods ending after December 15, 2004. All prior
     period earnings per share amounts presented would be restated to conform to
     the provisions of the final EITF.

A reconciliation of the numerators and the denominators of the basic and diluted earnings per common share computations is as follows:

|                                                                                       |  | For The   Three Months    Ended September 30, |         | For The   Nine Months    Ended September 30, |  
|-------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | -------------------------------------------- | -
|                                                                                       |  |                                               |         |                                              |  
|                                                                                       |  | 2004                                          |         | 2003                                         |  
|                                                                                       |  |                                               |         |                                              |  
|                                                                                       |  | (In   thousands,    except per share data)    |         | (In   thousands,    except per share data)   |  
|Numerator:                                                                             |  |                                               |         |                                              |  
|Basic  Income available to common stockholders                                        |  | $                                             | 70,408  |                                              | $
|Effect of dilutive securities                                                          |  |                                               | 0       |                                              |  
|                                                                                       |  |                                               |         |                                              |  
|Diluted  Income available to common stockholders and holders of   dilutive securities |  | $                                             | 70,408  |                                              | $
|                                                                                       |  |                                               |         |                                              |  
|Denominator:                                                                           |  |                                               |         |                                              |  
|Weighted average shares                                                                |  |                                               | 99,807  |                                              |  
|Effect of dilutive securities:                                                         |  |                                               |         |                                              |  
|Restricted stock                                                                       |  |                                               | 134     |                                              |  
|Stock options                                                                          |  |                                               | 2,087   |                                              |  
|                                                                                       |  |                                               |         |                                              |  
|Adjusted weighted average shares                                                       |  |                                               | 102,028 |                                              |  
|                                                                                       |  |                                               |         |                                              |  
|Per share amount:                                                                      |  |                                               |         |                                              |  
|Basic                                                                                  |  | $                                             | 0.71    |                                              | $
|                                                                                       |  |                                               |         |                                              |  
|Diluted                                                                                |  | $                                             | 0.69    |                                              | $
|                                                                                       |  |                                               |         |                                              |  

7



LINCARE HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 4.  Stock Plans

The Company issues stock options and other stock-based awards to key employees and directors under stock-based compensation plans, which are described more fully in Note 8 to the consolidated financial statements in the Companys 2003 Annual Report on Form 10-K.

Under the 2004 Stock Plan, certain key employees may be granted restricted stock at nominal cost to them. Restricted stock is measured at fair value on the date of the grant, based on the number of shares granted and the quoted price of the Companys common stock. Such value will be recognized as compensation expense ratably over the corresponding employees specified service period. Restricted stock vests upon fulfillment of specified performance and service-based conditions. On July 1, 2004, the Company granted 260,000 shares of restricted stock to certain key employees.

Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, establishes financial accounting and reporting
standards for stock-based compensation plans. SFAS No. 123 allows two
alternative accounting methods: (1) a fair-value-based method, or (2) an
intrinsic-value-based method which is prescribed by Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB No.
25) and related interpretations. The Company has elected to account for its
stock options under APB No. 25, and has adopted the
disclosure requirements of SFAS No. 123, as amended by SFAS No. 148,
Accounting for Stock-Based CompensationTransition and
Disclosure. Had the Company determined compensation cost based on the fair
value at the grant date for stock options under SFAS No. 123, the Companys
net income and earnings per share would have been reduced to the pro forma
amounts indicated below:

|                                                                                                                                                      |  | For The Three
        Months
        Ended September 30, |        | For The Nine
        Months
        Ended September 30, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------- | ------ | ------------------------------------------------------- | -
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|                                                                                                                                                      |  | 2004                                                     |        | 2003                                                    |  
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|                                                                                                                                                      |  | (In thousands,
        except per share data)            |        | (In thousands,
        except per share data)           |  
|Net
        income:                                                                                                                                   |  |                                                          |        |                                                         |  
|As
        reported                                                                                                                                   |  | $                                                        | 70,408 |                                                         | $
|Add:
        Stock-based employee compensation expense included in net income, net
        of related tax effects                                     |  |                                                          | 1,314  |                                                         |  
|Deduct:
        Total stock-based employee compensation expense determined under fair
        value method for all awards, net of related tax effects |  |                                                          | (5,136 | )                                                       |  
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|Pro
        forma                                                                                                                                     |  | $                                                        | 66,586 |                                                         | $
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|Earnings
        per common share:                                                                                                                    |  |                                                          |        |                                                         |  
|Basicas
        reported                                                                                                                             |  | $                                                        | 0.71   |                                                         | $
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|Dilutedas
        reported                                                                                                                           |  | $                                                        | 0.69   |                                                         | $
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|Basicpro
        forma                                                                                                                               |  | $                                                        | 0.67   |                                                         | $
|                                                                                                                                                      |  |                                                          |        |                                                         |  
|Dilutedpro
        forma                                                                                                                             |  | $                                                        | 0.65   |                                                         | $
|                                                                                                                                                      |  |                                                          |        |                                                         |  

8



LINCARE HOLDINGS INC. AND SUBSIDIARIES

Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition

Medicare Reimbursement

As a supplier of home oxygen and other respiratory therapy services for the home health care market, we participate in Medicare Part B, the Supplementary Medical Insurance Program, which was established by the Social Security Act of 1965. Providers of home oxygen and other respiratory therapy services have historically been heavily dependent on Medicare reimbursement due to the high proportion of elderly suffering from respiratory disease. Durable medical equipment (DME), including oxygen equipment, is traditionally reimbursed by Medicare based on fixed fee schedules.

On December 8, 2003, the President of the United States signed into law the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, codified at Public Law 108-173 (MMA). The legislation, among other things, provides expanded Medicare prescription drug coverage, modifies payments to Medicare providers and institutes administrative reforms intended to improve Medicare program operations. MMA includes sweeping changes that will impact a broad spectrum of health care industry participants, including physicians, pharmacies, manufacturers, pharmacy benefit managers, as well as other Medicare suppliers and providers including Lincare.

MMA contains provisions that directly impact reimbursement for the primary respiratory and other DME products provided by Lincare. Among other things, MMA:

|(1) | Significantly reduces reimbursement for
inhalation drug therapies. Historically, prescription drug coverage under
Medicare has been limited to drugs furnished incident to a physicians
services and certain self-administered drugs, including inhalation drug
therapies. Prior to MMA, Medicare reimbursement for covered drugs, including the
inhalation drugs that we provide, had been limited to 95 percent of the
published average wholesale price (AWP) for the drug. MMA
establishes new payment limits and procedures for drugs reimbursed under
Medicare Part B. Payments for inhalation drugs furnished during 2004 declined to
80 percent of the AWP in effect as of April 1, 2003, a reduction of
approximately 15.8%. Beginning in 2005, inhalation drugs furnished to Medicare
beneficiaries will be reimbursed at 106 percent of the volume-weighted average
selling price (ASP) of the drug, as determined from data to be
provided by drug manufacturers under a specific formula described in the
legislative text.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|    | On July 27, 2004, CMS issued a proposed
rule, CMS-1429-P, which, among other things, describes the proposed
implementation of the MMA provisions affecting payment for inhalation
drugs.  CMS proposes to establish a separate dispensing fee that will be
paid in addition to the payment amount for the drug.  In issuing the
proposed rule, CMS sought comments that would assist the agency in setting an
appropriate dispensing fee that reflects the costs of the shipping, handling,
compounding and other pharmacy activities required to furnish inhalation drug
therapy to Medicare beneficiaries.  The Government Accountability Office
(GAO) is directed under MMA to conduct a study to examine the
adequacy of reimbursement for inhalation drug therapy under the Medicare program
and submit the results of the study in a report to Congress within one year of
the effective date of MMA.  On October 13, 2004, the GAO released a report
entitled Appropriate Dispensing Fee Needed for Suppliers of Inhalation
Therapy Drugs, recommending that the Administrator of CMS evaluate the
costs of dispensing inhalation therapy drugs and modify the dispensing fee, if
warranted, to ensure that the fee appropriately accounts for the costs necessary
to dispense the drugs.  The CMS Administrator, in his October 8, 2004
comment letter to the GAO report, agreed with the GAOs recommendation and
concluded that, after reviewing the comments to CMSs proposed rule and the
information from the GAO report and other public sources, a reasonable range for
a 2005 dispensing fee is $55.00 to $64.00 per month.



On November 3, 2004,
CMS issued its final rule, CMS-1429-FC, which establishes a monthly dispensing
fee of $57.00 per customer for inhalation drug therapy. The rule also
establishes an alternative dispensing fee of $80.00 per customer when dispensed
in 90-day increments. Payment rates for inhalation drugs will be updated
quarterly based on the manufacturer ASP calculated for the most recent calendar
quarter for which data are available. Manufacturer ASP submissions are due to
CMS not later than 30 days after the last day of each calendar quarter.
Inhalation drug payment rates in the first quarter of 2005 will therefore be
based on ASP data from the third quarter of 2004, which are not yet available.
ASP data for the second quarter of 2004 have been published by CMS and indicates
substantially reduced payment rates for inhalation drugs. For example, the
payment rates for the two most prevalent inhalation drugs, albuterol sulfate and
ipratropium bromide, based on the second quarter ASP data would be reduced from
$0.39 and $2.82 per milligram to $0.05 and $0.46, respectively, representing
reductions of 84% to 87%.

9



|    | While Lincare continues to evaluate the
impact of the final rule on its business, Lincare expects to be able to continue
to provide inhalation drugs to Medicare beneficiaries in 2005. The final rule
states that CMS intends to revisit the payment amount for the  dispensing fee
next year and proceed through notice and comment rulemaking in order to
establish an appropriate dispensing fee for 2006. Lincare can not determine the
outcome of any future  rulemaking by CMS nor the impact that such rulemaking
might have on its ability to continue to provide inhalation drugs beyond
2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(2) | Reduces payment amounts for five categories   of DME, including oxygen, beginning in 2005 and freezes payment amounts for   other covered DME items from 2004 to 2007. MMA   contains provisions that will reduce payment amounts in 2005 for oxygen   equipment, standard wheelchairs (including standard power wheelchairs),   nebulizers, diabetic supplies consisting of lancets and testing strips,   hospital beds and air mattresses to the median prices paid under the Federal   Employee Health Plan (FEHP). The legislative text of MMA references   comparative pricing data included in testimony of the Office of Inspector   General (OIG) as the source data for FEHP pricing. However, the referenced   table does not include applicable payment amounts for oxygen. Median FEHP   prices for the non-oxygen DME items included on the table referenced in the   OIG testimony range between 4% and 22% below comparable Medicare fee schedule   amounts. The OIG



may undertake to revise the FEHP pricing data and corresponding   Medicare reimbursement rates for non-oxygen items in a subsequent report. On   September 13, 2004, the OIG released a report entitled, Medicare Payment Rates for Home   Oxygen Equipment, which will serve as the basis for establishing   Medicare payment rates for oxygen in 2005.    In its report, the OIG determined that Medicare allowances are   approximately 15.5% higher for stationary oxygen systems and approximately   11.3% higher for portable oxygen systems when compared with surveyed FEHP   plans, representing a weighted average difference of approximately   15.1%.  The CMS Administrator, in his   August 19, 2004 comment letter to the OIG report, agreed with the OIGs   recommendation to use the pricing information contained in the OIG report to   reduce the rates Medicare pays for home oxygen equipment in 2005.  CMS also concurred with the OIGs   recommendation to consider alternative
methods for determining future   Medicare oxygen payment rates, such as competitive bidding, contracts with   local or national providers, and capped rental arrangements. It is expected   that CMS will issue carrier instructions some time in November or December of   2004 establishing the final payment rates for 2005.  MMA also freezes payment amounts for other covered DME items   from 2004 to 2007.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(3) | Establishes a competitive acquisition   program for DME beginning in 2007. MMA instructs the   Secretary of the Department of Health and Human Services (the Secretary) to   establish and implement programs under which competitive acquisition areas are   established throughout the United States for contract award purposes for the   furnishing of competitively priced items of DME, including oxygen equipment.   The program would be implemented in phases such that competition under the   program occurs in 10 of the largest metropolitan statistical areas (MSAs)   in 2007, 80 of the largest MSAs in 2009, and additional areas after 2009.   Items selected for competitive acquisition may be phased in first among the   highest cost and highest volume items and services or those items and   services that the Secretary determines have the largest savings potential. In   carrying out such programs, the Secretary may exempt rural areas and areas



with low-population density within urban areas that are not competitive,   unless there is a significant national market through mail order for a   particular item or service.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | For each   competitive acquisition area, the Secretary would conduct a competition under   which providers would submit bids to supply certain covered items of DME.   Successful bidders would be expected to meet certain program quality   standards in order to be awarded a contract and only successful bidders could   supply the covered items to Medicare beneficiaries in the acquisition area.   The applicable contract award prices are expected to be less than would be   paid under current Medicare fee schedules and contracts would be re-bid at   least every three years. The Secretary will be required to award contracts to   multiple entities submitting bids in each area for an item or service, but   would have the authority to limit the number of contractors in a competitive   acquisition area to the number needed to meet projected demand. The Secretary   may use competitive bid pricing information to adjust the payment amount   otherwise in effect for an area that
is not a competitive acquisition area.   We can not predict the effect of the competitive acquisition program or the   Medicare payment rates that will be in effect in 2007 and beyond for the   items ultimately subjected to competitive bidding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(4) | Implements quality standards and   accreditation requirements for DME suppliers. MMA   instructs the Secretary to establish and implement quality standards for DME   suppliers to be monitored by recognized independent accreditation   organizations. Suppliers will be required to comply with these standards in   order to receive payment for furnishing any covered item of DME to a Medicare   beneficiary and to receive or retain a supplier                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

10



| | number used   to submit claims for reimbursement. We can not predict the nature or extent   of the quality standards or the effect such standards would have on our   ability to continue to provide products to Medicare beneficiaries.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Until the many issues affecting implementation of the MMA provisions discussed above are finalized, we can not determine the ultimate impact of MMA on our financial position or operating results.

On December 13, 2002, CMS issued an interim final rule establishing a process for adjusting payments for Medicare Part B services (other than physician services), pursuant to the agencys Inherent Reasonableness (IR) authority, when existing payment amounts are determined to be either grossly excessive or deficient. The interim final rule describes the factors CMS or its contractors will consider in making such determinations and the procedures that will be followed in establishing new payment amounts. The interim rule became effective on February 11, 2003, but to date, no payment adjustments have occurred as a result of the IR authority.

The effectiveness of the IR rule itself does not trigger payment adjustments for any items or services. Nevertheless, the IR rule puts in place a process that eventually could have a significant impact on Medicare payments for such Part B services as home oxygen, DME and Part B covered prescription drugs. We can not predict whether, especially in light of MMAs enactment, CMS will exercise its IR authority with respect to certain products and services that we provide to Medicare beneficiaries, or the effect such payment adjustments would have on our financial position or operating results.

Federal and state budgetary and other cost-containment pressures will continue to impact the home respiratory care industry. We can not predict whether new federal and state budgetary proposals will be adopted or the effect, if any, such proposals would have on our business.

Operating Results

The following table sets forth for the periods indicated a summary of the Companys net revenues by source:

|                                       |  | For The   Three Months   Ended September 30, |         | For The   Nine Months   Ended September 30, |  
|-------------------------------------- |  | -------------------------------------------- | ------- | ------------------------------------------- | -
|                                       |  |                                              |         |                                             |  
|                                       |  | 2004                                         |         | 2003                                        |  
|                                       |  |                                              |         |                                             |  
|                                       |  | (In   thousands)                             |         | (In   thousands)                            |  
|Oxygen and   other respiratory therapy |  | $                                            | 294,277 |                                             | $
|Home medical   equipment and other     |  |                                              | 27,733  |                                             |  
|                                       |  |                                              |         |                                             |  
|Total                                  |  | $                                            | 322,010 |                                             | $
|                                       |  |                                              |         |                                             |  

Net revenues for the three months ended September 30, 2004, increased by $25.7 million, an increase of 8.7% compared with the three months ended September 30, 2003.  The 8.7% increase in net revenues was comprised of 6.1% internal growth and 2.6% acquisition growth.  Net revenues for the nine months ended September 30, 2004, increased by $99.7 million, an increase of 11.8% compared with the comparable period of the prior year.  The 11.8% increase in net revenues in the nine-month period was comprised of 7.8% internal growth and 4.0% acquisition growth.  The internal growth in net revenues is attributed to underlying growth in the market for our products and increased market share resulting primarily from our sales and marketing efforts that emphasize high-quality equipment and customer service.  Growth in net revenues in the three and nine months ended September 30, 2004 was
negatively impacted by $14.0 million (or 4.7%) and $39.9 million (or 4.7%), respectively, as a result of Medicare reimbursement reductions for inhalation drugs that took effect in 2004 (see Medicare Reimbursement).  Growth in net revenues from acquisitions is attributed to the effects of acquisitions of local and regional companies and is based on the estimated contribution to net revenues for the four quarters following such acquisitions.  During the three months ended September 30, 2004, we completed the acquisition of four companies with aggregate annual revenues of approximately $5.0 million.  During the nine months ended September 30, 2004, we acquired seventeen

11



companies with annual revenues of approximately $25.0 million and acquired the remaining equity interests of two companies in which we had previously acquired partial ownership through a prior acquisition.

The contribution of oxygen and other respiratory therapy products to our net revenues was 91.4% and 91.2%, respectively, during the three and nine months ended September 30, 2004.  Our strategy is to focus on the provision of oxygen and other respiratory therapy services to patients in the home and to provide home medical equipment and other services where we believe such services will enhance our core respiratory business.

Cost of goods and services as a percentage of net revenues declined to 14.2% and 14.5%, respectively, for the three and nine months ended September 30, 2004, compared with 14.8% and 14.9% for the comparable prior year periods. This improvement is attributed primarily to the achievement of more favorable product pricing terms with our vendors and growth in our respiratory product lines, which generally carry a higher gross margin percentage than other products and services we provide.

Operating expenses expressed as a percentage of net revenues for the three and nine months ended September 30, 2004, declined to 21.0% and 21.1%, respectively, compared with 22.1% and 22.3% for the comparable prior year periods. This improvement was due primarily to our ability to successfully offset the reduction in Medicare payment rates for inhalation drugs with gains in productivity and control over fixed costs during both periods in 2004.

Selling, general and administrative (SG&A) expenses as a percentage of net revenues were 20.2% and 20.5%, respectively, for the three and nine months ended September 30, 2004, compared with 20.6% and 21.0% for the three and nine months ended September 30, 2003. The reductions in SG&A expenses expressed as a percentage of net revenues during the periods resulted from cost controls and productivity gains at our overhead locations, which offset the impact of reductions in Medicare payment rates for inhalation drugs.

Operating income for the three and nine months ended September 30, 2004, was $116.7 million (36.2% of net revenues) and $334.4 million (35.4% of net revenues), respectively, compared with $101.7 million (34.3% of net revenues) and $284.5 million (33.7% of net revenues) for the comparable three and nine months of the prior year. The increases in operating income are attributed primarily to the continued growth in net revenues, favorable product acquisition costs from vendors, gains in labor productivity and control over operating costs.

Liquidity And Capital Resources

Net cash provided by operating activities increased by 22.0% to $320.1 million for the nine months ended September 30, 2004, compared with $262.3 million for the nine months ended September 30, 2003.  Contributing to the increase in net cash from operating activities was a decrease in net accounts receivable days sales outstanding (DSO) resulting from improved collection performance.  At September 30, 2004, our DSO was 41 days compared with 47 days at September 30, 2003.

Net cash used in investing and financing activities was $152.8 million for the nine months ended September 30, 2004. Activity during the nine-month period ended September 30, 2004, included our investment of $41.5 million in business acquisitions, investment in capital equipment of $67.9 million and $57.3 million used for net payments of debt.  On September 15, 2004, the Company retired its $50 million, 9.01% Senior Secured Notes, Series B.  The Company expects to retire its $45 million, 9.11% Senior Secured Notes, Series C, at maturity on September 15, 2005.

As of September 30, 2004, our principal sources of liquidity consisted of $185.9 million of working capital and up to $200.0 million available under our revolving bank credit facility. We believe that internally generated funds, together with funds that may be borrowed under our revolving credit facility, will be sufficient to meet our anticipated capital requirements and financial obligations.

12



On June 4,
2003, the Board of Directors approved an increase to the size of our previously authorized
share repurchase program, adopted as of February 25, 2003, from $100.0 million
to $225.0 million. The $225.0 million repurchase program was completed in
October of 2003, with a total of 6,706,000 shares of common stock repurchased
under the program. No shares of our common stock were repurchased during the
nine months ended September 30, 2004.  As of September 30, 2004, the total
common stock held in treasury, at cost, was $523.2 million.

On June 11, 2003, we completed the sale of $250.0 million aggregate principal amount of 3.0% Convertible Senior Debentures due 2033 (the Debentures) in a private placement. The Debentures are convertible into shares of our common stock based on a conversion rate of 18.7515 shares for each $1,000 principal amount of Debentures. This is equivalent to a conversion price of approximately $53.33 per share of common stock. On June 23, 2003, we sold an additional $25.0 million principal amount of Debentures pursuant to the exercise in full of an over-allotment option granted to the initial purchasers of the Debentures. The Debentures are convertible into common stock in any calendar quarter if, among other circumstances, the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of our previous
calendar quarter is greater than or equal to $64.00 (120% of the applicable conversion price per share of our common stock) on such last trading day. Interest on the Debentures is payable at the rate of 3.0% per annum on June 15 and December 15 of each year, which payments commenced December 15, 2003. The Debentures are senior unsecured obligations and will mature on June 15, 2033. The Debentures are redeemable by us on or after June 15, 2008 and may be put to us for repurchase on June 15, 2008, 2010, 2013, or 2018.

Future Minimum Obligations

In the normal course of business, we enter into obligations and commitments that require future contractual payments. The commitments primarily result from repayment obligations for borrowings under our senior secured notes, revolving bank credit facility, and Debentures, as well as contractual lease payments for facility, vehicle, and equipment leases and deferred acquisition obligations. The following table presents, in aggregate, scheduled payments under our contractual obligations (in thousands):

|                            |  | Fiscal   Years                |        |      |   |        |  |      |       
|--------------------------- |  | ----------------------------- | ------ | ---- | - | ------ |  | ---- | ------
|                            |  |                               |        |      |   |        |  |      |       
|                            |  | (remaining   3 months   2004) |        | 2005 |   | 2006   |  | 2007 |       
|                            |  |                               |        |      |   |        |  |      |       
|Short-term   debt           |  | $                             | 6,059  |      | $ | 50,413 |  | $    | 0     
|Capital   lease commitments |  |                               | 181    |      |   | 236    |  |      | 0     
|Long-term   debt            |  |                               | 31     |      |   | 92     |  |      | 200   
|Operating   leases          |  |                               | 9,099  |      |   | 27,615 |  |      | 17,431
|                            |  |                               |        |      |   |        |  |      |       
|Total                       |  | $                             | 15,370 |      | $ | 78,356 |  | $    | 17,631
|                            |  |                               |        |      |   |        |  |      |       

New Accounting Standards

In July 2004, the Emerging Issues Task Force (EITF) reached a tentative consensus on EITF Issue No. 04-08, The Effect of Contingently Convertible Debt on Diluted Earnings per Share, that the impact of contingently convertible debt, such as the Debentures, should be included in diluted earnings per share computations regardless of whether the market price conversion condition has been met. If the EITFs tentative consensus is ratified by the FASB, the provisions are expected to be effective for reporting periods ending after December 15, 2004. All prior period earnings per share amounts presented would be restated to conform to the provisions of the final EITF.

Forward Looking Statements

Statements in this report concerning future results, performance or expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All forward-looking statements included in this document are based upon information available to Lincare as of the date hereof

13



and Lincare assumes no obligation to update any such forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Lincares actual results, levels of activity, performance or achievements to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. In some cases, forward-looking statements that involve risks and uncertainties contain terminology such as may, will, should, could, expects, intends, plans, anticipates, believes, estimates, predicts, potential, or continue or variations of these terms or other comparable terminology.

Key factors that have an impact on Lincares ability to attain these estimates include potential reductions in reimbursement rates by government and third-party payors, changes in reimbursement policies, the demand for Lincares products and services, the availability of appropriate acquisition candidates and Lincares ability to successfully complete and integrate acquisitions, efficient operations of Lincares existing and future operating facilities, regulation and/or regulatory action affecting Lincare or its business, economic and competitive conditions, access to borrowed and/or equity capital on favorable terms and other risks described below.

In developing our forward-looking statements, we have made certain assumptions relating to reimbursement rates and policies, internal growth and acquisitions and the outcome of various legal and regulatory proceedings. If the assumptions we use differ materially from what actually occurs, then actual results could vary significantly from the performance projected in the forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report.

Certain Risk Factors Relating to the Companys Business

We operate in a rapidly changing environment that involves a number of risks. The following discussion highlights some of these risks and others are discussed elsewhere in this report. These and other risks could materially and adversely affect our business, financial condition, operating results and cash flows.

A MAJORITY OF OUR CUSTOMERS HAVE
PRIMARY HEALTH COVERAGE UNDER MEDICARE PART B, AND RECENTLY ENACTED AND FUTURE
CHANGES IN THE REIMBURSEMENT RATES OR PAYMENT METHODOLOGIES UNDER THE MEDICARE
PROGRAM COULD MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS.

As a provider of home oxygen and other respiratory therapy services for the home health care market, we have historically depended heavily on Medicare reimbursement as a result of the high proportion of elderly persons suffering from respiratory disease. Medicare Part B, the Supplementary Medical Insurance Program, provides coverage to eligible beneficiaries for DME, such as oxygen equipment, respiratory assistance devices, continuous positive airway pressure devices, nebulizers and associated respiratory medications, hospital beds and wheelchairs for the home setting. Approximately 75 percent of our customers have primary coverage under Medicare Part B. There are increasing pressures on Medicare to control health care costs and to reduce or limit reimbursement rates for home medical equipment and services. Medicare reimbursement is subject to statutory and regulatory changes, retroactive rate
adjustments, administrative and executive orders and governmental funding restrictions, all of which could materially decrease payments to us for the services and equipment we provide.

As discussed herein (see MEDICARE REIMBURSEMENT), the President signed MMA into law on December 8, 2003. This legislation, among other things, provides expanded Medicare prescription drug coverage, modifies payments to Medicare providers and institutes administrative reforms intended to improve Medicare program operations. MMA includes sweeping changes that will impact a broad spectrum of health care industry participants, including physicians, pharmacies, manufacturers, pharmacy benefit managers, as well as other Medicare suppliers and providers, including Lincare.

The MMA legislation contains provisions that directly impact reimbursement for the primary respiratory and other DME products provided by Lincare. Among other things, MMA significantly reduces reimbursement for inhalation drug therapies in 2004 and even more so in 2005, reduces payment amounts for five categories of DME,

14



including oxygen, beginning in 2005, freezes payment amounts for other covered DME items from 2004 to 2007, establishes a competitive acquisition program for DME beginning in 2007, and implements quality standards and accreditation requirements for DME suppliers. The MMA provisions, if fully implemented, could materially and adversely affect our business, financial condition, operating results and cash flows. See MEDICARE REIMBURSEMENT for a full discussion of the MMA provisions.

A SIGNIFICANT PERCENTAGE OF OUR BUSINESS IS DERIVED FROM THE SALE AND RENTAL OF MEDICARE-COVERED DME ITEMS, INCLUDING OXYGEN, AND RECENT LEGISLATION REDUCES PAYMENT AMOUNTS FOR FIVE CATEGORIES OF DME, INCLUDING OXYGEN, BEGINNING IN 2005 AND IMPOSES A PAYMENT FREEZE FOR OTHER DME FROM 2004 TO 2007.

MMA contains provisions that would reduce payment amounts, beginning in 2005, for oxygen equipment, standard wheelchairs (including standard power wheelchairs), nebulizers, diabetic supplies consisting of lancets and testing strips, hospital beds and air mattresses to the median prices paid under the Federal Employee Health Plan (FEHP). The legislative text of MMA references comparative pricing data included in testimony of the Office of Inspector General (OIG) as the source data for FEHP pricing. However, the referenced table does not include applicable payment amounts for oxygen. Median FEHP prices for the non-oxygen DME items included on the table referenced in the OIG testimony range between 4% and 22% below comparable Medicare fee schedule amounts. The OIG may also undertake to revise the FEHP pricing data and corresponding Medicare reimbursement rates for these items in a
subsequent report.  On September 13, 2004, the OIG released a report entitled, Medicare Payment Rates for Home Oxygen Equipment, which will serve as the basis for establishing Medicare payment rates for oxygen in 2005.  In its report, the OIG determined that Medicare allowances are approximately 15.5% higher for stationary oxygen systems and approximately 11.3% higher for portable oxygen systems when compared with surveyed FEHP plans, representing a weighted average difference of approximately 15.1%.  The CMS Administrator, in a letter to the OIG dated August 19, 2004, agreed with the OIGs recommendation to use the pricing information contained in the OIG report to reduce the rates Medicare pays for home oxygen equipment in 2005.  CMS also concurred with the OIGs recommendation to consider alternative methods for determining future Medicare oxygen payment rates, such as competitive bidding, contracts with local or national providers, and capped rental



arrangements. It is expected that CMS will issue carrier instructions some time in November or December of 2004 establishing the final payment rates for 2005.  MMA also freezes payment amounts for other covered DME items from 2004 to 2007. Such payment reductions, when implemented in 2005, could have a material adverse effect on our financial position and operating results.

A SIGNIFICANT PERCENTAGE OF OUR BUSINESS IS DERIVED FROM THE SALE OF MEDICARE-COVERED RESPIRATORY MEDICATIONS, AND RECENT LEGISLATION IMPOSES SIGNIFICANT REDUCTIONS IN MEDICARE REIMBURSEMENT FOR SUCH INHALATION DRUGS.

Historically,
prescription drug coverage under Medicare has been limited to drugs furnished
incident to a physicians services and certain self-administered drugs,
including inhalation drug therapies. Prior to MMA, Medicare reimbursement for
covered Part B drugs, including inhalation drugs that we provide, had been
limited to 95 percent of the published average wholesale price (AWP)
for the drug. MMA establishes new payment limits and procedures for drugs
reimbursed under Medicare Part B. Payments for inhalation drugs furnished during
2004 declined to 80 percent of the AWP in effect as of April 1, 2003, a
reduction of approximately 15.8%.  Beginning in 2005, inhalation drugs furnished to Medicare
beneficiaries would be reimbursed at 106 percent of the volume-weighted average
selling price (ASP) of the drug, as determined from data to be
provided by drug manufacturers under a specific formula described in the
legislative text.

On July 27, 2004, CMS issued a proposed rule, CMS-1429-P, which, among other things, describes the proposed implementation of the MMA provisions affecting payment for inhalation drugs.  CMS proposes to establish a separate dispensing fee that will be paid in addition to the payment amount for the drug.  In issuing the

15



proposed rule, CMS sought comments that
would assist the agency in setting an appropriate dispensing fee that reflects
the costs of the shipping, handling, compounding and other pharmacy activities
required to furnish inhalation drug therapy to Medicare beneficiaries.  The
GAO is directed under MMA to conduct a study to examine the adequacy of
reimbursement for inhalation drug therapy under the Medicare program and submit
the results of the study in a report to Congress within one year of the
effective date of MMA. On October 13, 2004, the GAO released a report entitled
Appropriate Dispensing Fee Needed for Suppliers of Inhalation Therapy
Drugs, recommending that the Administrator of CMS evaluate the costs
of dispensing inhalation therapy drugs and modify the dispensing fee, if
warranted, to ensure that the fee appropriately accounts for the costs necessary
to dispense the drugs.  The CMS Administrator, in his October 8, 2004
comment letter to the GAO, agreed with the GAOs recommendation and
concluded that after reviewing the comments to CMSs proposed rule and the
information from the GAO report and other public sources, a reasonable range for
a 2005 dispensing fee is $55.00 to $64.00 per month.

On Novermber 3, 2004, CMS issued its final rule, CMS-1429-FC, which establishes
a monthly dispensing fee of $57.00 per customer for inhalation drug therapy. The
rule also establishes an alternative dispensing fee of $80.00 per customer when
dispensed in 90-day increments. Payment rates for inhalation drugs will be
updated quarterly based on the manufacturer ASP calculated for the most recent
calendar quarter for which data are available. Manufacturer ASP submissions are
due to CMS not later than 30 days after the last day of each calendar quarter.
Inhalation drug payment rates in the first quarter of 2005 will therefore be
based on ASP data from the third quarter of 2004, which are not yet available.
ASP data for the second quarter of 2004 have been published by CMS and indicates
substantially reduced payment rates for inhalation drugs. For example, the
payment rates for the two most prevalent inhalation drugs, albuterol sulfate and
ipratropium bromide, based on the second quarter ASP data would be reduced from
$0.39 and $2.82 per milligram to $0.05 and $0.46, respectively, representing
reductions of 84% to 87%.  Medicare-covered inhalation drugs account for
approximately one quarter of our net revenues.  While Lincare continues to
evaluate the impact of the final rule on its business, Lincare expects to be
able to continue to provide inhalation drugs to Medicare beneficiaries in 2005.
The final rule states that CMS intends to revisit the payment amount for the
dispensing fee next year and proceed through notice and comment rulemaking in
order to establish an appropriate dispensing fee for 2006. Lincare can not
determine the outcome of any future rulemaking by CMS nor the impact that such
rulemaking might have on its ability to continue to provide inhalation drugs
beyond 2005.  Such payment adjustments could have a material adverse effect
on our financial position and operating results.

RECENT REGULATORY CHANGES SUBJECT THE MEDICARE REIMBURSEMENT RATES FOR OUR EQUIPMENT AND SERVICES TO POTENTIAL DISCRETIONARY ADJUSTMENT BY THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS), WHICH COULD REDUCE OUR REVENUES, NET INCOME AND CASH FLOWS.

In February 2003, a final rule governing CMS Inherent Reasonableness, or IR, authority became effective. The IR rule establishes a process for adjusting fee schedule amounts for Medicare Part B services when existing payment amounts are determined to be either grossly excessive or deficient. The rule describes the factors that CMS or its contractors will consider in making such determinations and the procedures that will be followed in establishing new payment amounts. To date, no payment adjustments have occurred or been proposed as a result of the IR rule.

The effectiveness of the IR rule itself does not trigger payment adjustments for any items or services. Nevertheless, the IR rule puts in place a process that could eventually have a significant impact on Medicare payments for our equipment and services. We can not predict whether or when CMS will exercise its IR authority with respect to our equipment and services. Such payment adjustments, if implemented, could reduce our revenues, net income and cash flows.

RECENT LEGISLATION ESTABLISHING A COMPETITIVE BIDDING PROCESS UNDER MEDICARE COULD REDUCE OUR REVENUES, NET INCOME AND CASH FLOWS.

MMA instructs the Secretary to establish and implement programs under which competitive acquisition areas are established throughout the United States for contract award purposes for the furnishing of competitively priced items of DME, including oxygen equipment. The program would be implemented in phases such that competition under the program occurs in 10 of the largest MSAs in 2007, 80 of the largest MSAs in 2009, and additional areas after 2009. Items selected for competitive acquisition may be phased in first among the highest cost and highest volume items and services or those items and services that the Secretary determines have the largest savings potential. In carrying out such programs, the Secretary may exempt rural areas and areas with low-population density within urban areas that are not competitive, unless there is a significant national market through mail order for a particular item or
service.

For each competitive acquisition area, the Secretary would conduct a competition under which providers would submit bids to supply certain covered items of DME. Successful bidders would be expected to meet certain program quality standards in order to be awarded a contract and only successful bidders could supply the covered

16



items to Medicare beneficiaries in the acquisition area. The applicable contract award prices are expected to be less than would be paid under current Medicare fee schedules and contracts would be re-bid at least every three years. The Secretary will be required to award contracts to multiple entities submitting bids in each area for an item or service, but would have the authority to limit the number of contractors in a competitive acquisition area to the number needed to meet projected demand. The Secretary may use competitive bid pricing information to adjust the payment amount otherwise in effect for an area that is not a competitive acquisition area. We can not predict the outcome of the competitive acquisition program or the Medicare payment rates that will be in effect in 2007 and beyond for the items subject to competitive bidding. Competitive bidding, when implemented, could have a material adverse effect on our financial position and operating
results.

FUTURE REDUCTIONS IN REIMBURSEMENT RATES UNDER MEDICAID COULD REDUCE OUR REVENUES, NET INCOME AND CASH FLOWS.

Due to budgetary shortfalls, many states are considering, or have enacted, cuts to their Medicaid programs, including funding for our equipment and services. These cuts have included, or may include, elimination or reduction of coverage for some or all of our equipment and services, amounts eligible for payment under co-insurance arrangements, or payment rates for covered items. Approximately 5 percent of our customers are eligible for primary Medicaid benefits, and approximately 8 percent of our payments from primary and secondary insurance benefits are funded by state Medicaid programs. Continued state budgetary pressures could lead to further reductions in funding for the reimbursement for our equipment and services which, in turn, could have a material adverse effect on our financial position and operating results.

FUTURE REDUCTIONS IN REIMBURSEMENT RATES FROM PRIVATE PAYORS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND OPERATING RESULTS.

Payors such as private insurance companies and employers are under pressure to increase profitability and reduce costs. In response, certain payors are limiting coverage or reducing reimbursement rates for the equipment and services we provide. Approximately 17 percent of our customers and approximately 26 percent of our primary and secondary payments are derived from private payors. Continued financial pressures on these entities could lead to further reimbursement reductions for our equipment and services that could have a material adverse effect on our financial condition and operating results.

WE DEPEND UPON REIMBURSEMENT FROM THIRD-PARTY PAYORS FOR A SIGNIFICANT MAJORITY OF OUR REVENUES, AND IF WE FAIL TO MANAGE THE COMPLEX AND LENGTHY REIMBURSEMENT PROCESS, OUR BUSINESS AND OPERATING RESULTS COULD SUFFER.

We derive a significant majority of our revenues from reimbursement by third-party payors. We accept assignment of insurance benefits from customers and, in most instances, invoice and collect payments directly from Medicare, Medicaid and private insurance carriers, as well as from customers under co-insurance provisions. In 2003, approximately 60 percent of our revenues were derived from Medicare, 26 percent from private insurance carriers, 7 percent from Medicaid and the balance directly from individual customers and commercial entities.

Our financial condition and results of operations may be affected by the reimbursement process, which in the health care industry is complex and can involve lengthy delays between the time that services are rendered and the time that the reimbursement amounts are settled. Depending on the payor, we may be required to obtain certain payor-specific documentation from physicians and other health care providers before submitting claims for reimbursement. Certain payors have filing deadlines and they will not pay claims submitted after such time. We can not assure you that we will be able to continue to effectively manage the reimbursement process and collect payments for our equipment and services promptly.

17



WE ARE SUBJECT TO EXTENSIVE FEDERAL AND STATE REGULATION, AND IF WE FAIL TO COMPLY WITH APPLICABLE REGULATIONS, WE COULD SUFFER SEVERE CRIMINAL OR CIVIL SANCTIONS OR BE REQUIRED TO MAKE SIGNIFICANT CHANGES TO OUR OPERATIONS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

The federal government and all states in which we operate regulate many aspects of our business. In particular, our operating centers are subject to federal laws that regulate the repackaging of drugs (including oxygen) and interstate motor-carrier transportation. Our operations also are subject to state laws governing, among other things, pharmacies, nursing services, distribution of medical equipment and certain types of home health activities. Certain of our employees are subject to state laws and regulations governing the ethics and professional practices of respiratory therapy, pharmacy and nursing.

As a health care supplier, we are subject to extensive government regulation, including numerous laws directed at preventing fraud and abuse and laws regulating reimbursement under various government programs. The marketing, billing, documenting and other practices of health care companies are all subject to government scrutiny. To ensure compliance with Medicare and other regulations, regional carriers often conduct audits and request customer records and other documents to support our claims for payment. Similarly, government agencies periodically open investigations and obtain information from health care providers pursuant to the legal process. Violations of federal and state regulations can result in severe criminal, civil and administrative penalties and sanctions, including disqualification from Medicare and other reimbursement programs, which could have a material adverse effect on our
business.

Health care is an area of rapid regulatory change. Changes in the law and new interpretations of existing laws may affect permissible activities, the costs associated with doing business, and reimbursement amounts paid by federal, state and other third-party payors. We can not predict the future of federal, state and local regulation or legislation, including Medicare and Medicaid statutes and regulations, or possible changes in national health care policies. Future legislation and regulatory changes could have a material adverse effect on our business.

COMPLIANCE WITH NEW REGULATIONS UNDER THE FEDERAL HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 AND RELATED RULES, OR HIPAA, RELATING TO THE TRANSMISSION AND PRIVACY OF HEALTH INFORMATION COULD IMPOSE ADDITIONAL SIGNIFICANT COSTS ON OUR OPERATIONS.

Numerous federal and state laws and regulations, including HIPAA, govern the collection, dissemination, use and confidentiality of patient-identifiable health information.  HIPAA requires us to comply with standards for the use and disclosure of health information within our company and with third parties. HIPAA also includes standards for common health care electronic transactions and code sets, such as claims information, plan eligibility, payment information and the use of electronic signatures, and privacy and electronic security of individually identifiable health information. Each set of HIPAA regulations has a specified compliance date and requires health care providers, including us, in addition to health plans and clearinghouses, to develop and maintain policies and procedures with respect to protected health information that is used or disclosed.

The HIPAA regulations mandate that standardized transaction and code sets be developed and used for electronic billing purposes by all payors in the United States, including both government and private health plans. While the Medicare program has historically used a uniform set of transaction codes for electronic claim submission and payment, certain billing codes have varied among the different state Medicaid programs and certain health plans. It is currently unknown whether every existing billing code used by Medicare, Medicaid and private health plans for products provided in the home care setting will have a corresponding code in the final HIPAA transaction sets. The absence of certain standardized codes for our equipment and services or the inability of certain payors to accept such electronic codes may preclude us from submitting electronic claims for payment to those payors. Such an outcome would
require the submission of paper claims, which could ultimately result in delays and difficulties in collecting these claims, and could have a material adverse effect on our financial position and operating results.

If we do not comply with existing or new laws and regulations related to patient health information, we could be subject to criminal or civil sanctions. New health information standards, whether implemented pursuant to HIPAA or otherwise, could have a significant effect on the manner in which we handle health care related data and communicate with payors, and the cost of complying with these standards could be significant.

18



WE MAY UNDERTAKE ACQUISITIONS THAT COULD SUBJECT US TO UNANTICIPATED LIABILITIES AND THAT COULD FAIL TO ACHIEVE EXPECTED BENEFITS.

Our strategy is to increase our market share through internal growth and strategic acquisitions. Consideration for the acquisitions has generally consisted of cash, unsecured non-interest bearing obligations and the assumption of certain liabilities.

The implementation of an acquisition strategy entails certain risks, including inaccurate assessment of disclosed liabilities, the existence of undisclosed liabilities, entry into markets in which we may have limited or no experience, diversion of managements attention and human resources from our underlying business, difficulties in integrating the operations of an acquired business or in realizing anticipated efficiencies and cost savings, failure to retain key management or operating personnel of the acquired business, and an increase in indebtedness and a limitation in the ability to access additional capital on favorable terms. The successful integration of an acquired business may be dependent on the size of the acquired business, condition of the customer billing records, complexity of system conversions and execution of the integration plan by local management. If we do not successfully
integrate the acquired business, the acquisition could fail to achieve its expected revenue contribution or there could be delays in the billing and collection of claims for services rendered to customers, which could have a material adverse effect on our financial position and operating results.

WE FACE INTENSE NATIONAL, REGIONAL AND LOCAL COMPETITION AND IF WE ARE UNABLE TO COMPETE SUCCESSFULLY, WE WILL LOSE REVENUES AND OUR BUSINESS WILL SUFFER.

The home respiratory market is a fragmented and highly competitive industry. We compete against other national providers and, by our estimate, more than 2,000 local and regional providers. Home respiratory companies compete primarily on the basis of service rather than price since reimbursement levels are established by Medicare and Medicaid or by the individual determinations of private health plans.

Our ability to compete successfully and to increase our referrals of new customers are highly dependent upon our reputation within each local health care market for providing responsive, professional and high-quality service and achieving strong customer satisfaction. Given the relatively low barriers to entry in the home respiratory market, we expect that the industry will become increasingly competitive in the future. Increased competition in the future could limit our ability to attract and retain key operating personnel and achieve continued growth in our core business.

INCREASES IN OUR COSTS COULD ERODE OUR PROFIT MARGINS AND SUBSTANTIALLY REDUCE OUR NET INCOME AND CASH FLOWS.

Cost containment in the health care industry, fueled, in part, by federal and state government budgetary shortfalls, is likely to result in constant or decreasing reimbursement amounts for our equipment and services. As a result, we must control our operating cost levels, particularly labor and related costs, which account for approximately 43 percent of our operating costs and expenses. We compete with other health care providers to attract and retain qualified or skilled personnel. We also compete with various industries for lower-wage administrative and service employees. Since reimbursement rates are established by fee schedules mandated by Medicare, Medicaid and private payors, we are not able to offset the effects of general inflation in labor and related cost components, if any, through increases in prices for our equipment and services. Consequently, such cost increases could erode our profit
margins and reduce our net income.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We had no derivative securities as of September 30, 2004. We are exposed to changes in interest rates as a result of our revolving bank credit facility which is based on the London Interbank Offered Rate. A 10% increase in interest rates related to our revolving bank credit facility would not alone have a material adverse effect on our earnings over the next fiscal year or the fair value of our revolving bank credit facility.

The fair value of our debt securities is subject to change as a result of changes in interest rates.  We estimate potential changes in the fair value of interest rate sensitive financial instruments based on a hypothetical decrease (or increase) in interest rates. Our use of this methodology to quantify the market risk of such instruments should not be construed as an endorsement of its accuracy or the accuracy of the related assumptions. The quantitative information about market risk is necessarily limited because it does not take into account anticipated operating and financial transactions.

The following table sets forth the estimated fair value of our long-term obligations and our estimate of the impact from a 10% decrease in interest rates on the fair value of our long-term obligations and the associated change in annual interest expense.

Market Risk Sensitive Instruments  Interest Rate Sensitivity (assuming 10% Decrease in Interest Rates):

|(dollars   in thousands)       |  | Face    Amount |         | Carrying   Amount |   | Fair   Value |  | Estimated   Change in   Fair Value |        
|------------------------------ |  | -------------- | ------- | ----------------- | - | ------------ |  | ---------------------------------- | -------
|                               |  |                |         |                   |   |              |  |                                    |        
|As of   September 30, 2004:    |  |                |         |                   |   |              |  |                                    |        
|Revolving bank credit facility |  | $              | 0       |                   | $ | 0            |  | $                                  | 0      
|Senior secured notes           |  |                | 45,000  |                   |   | 45,000       |  |                                    | 46,726 
|Convertible debt               |  |                | 275,000 |                   |   | 275,000      |  |                                    | 270,188
|Deferred obligations           |  |                | 12,212  |                   |   | 12,212       |  |                                    | 12,212 
|As of   December 31, 2003:     |  |                |         |                   |   |              |  |                                    |        
|Revolving bank credit facility |  | $              | 0       |                   | $ | 0            |  | $                                  | 0      
|Senior secured notes           |  |                | 95,000  |                   |   | 95,000       |  |                                    | 98,875 
|Convertible debt               |  |                | 275,000 |                   |   | 275,000      |  |                                    | 277,750
|Deferred obligations           |  |                | 16,753  |                   |   | 16,753       |  |                                    | 16,753 

Item 4.  Controls and Procedures

The Company has conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report (the Evaluation Date). Based on its evaluation, the Companys principal executive officer and principal financial officer have concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company is recorded, processed, summarized and reported within the required time periods.

No change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d  15(f) under the Securities and Exchange Act of 1934) occurred during the fiscal quarter ended September 30, 2004, that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

20



PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As a health care provider, Lincare is subject to extensive government regulation, including numerous laws directed at preventing fraud and abuse and laws regulating reimbursement under various government programs. The marketing, billing, documenting and other practices of health care companies are all subject to government scrutiny. To ensure compliance with Medicare and other regulations, regional carriers often conduct audits and request patient records and other documents to support claims submitted by the Company for payment of services rendered to customers. Similarly, government agencies periodically open investigations and obtain information from health care providers pursuant to legal process.

Violations of federal and state regulations can result in severe criminal, civil and administrative penalties and sanctions, including disqualification from Medicare and other reimbursement programs.

From time to time, the Company receives inquiries from various government agencies requesting customer records and other documents. It has been Lincares policy to cooperate with all such requests for information. The government has not instituted any proceedings or served Lincare with any complaints as a result of these inquiries.

Private litigants may also make claims against the Company for violations of health care laws in actions known as qui tam suits. In these cases, the government has the opportunity to intervene in, and take control of, the litigation. The Company is a defendant in certain qui tam proceedings. The government has declined to intervene in all unsealed qui tam actions of which the Company is aware. Lincare is vigorously defending these suits.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds -Not Applicable

Item 3.  Defaults Upon Senior Securities -Not Applicable

Item 4.  Submission of Matters to a Vote of the Security Holders -Not Applicable

Item 5.  Other Information -Not Applicable

Item 6.  Exhibits

Exhibits included or incorporated herein: See Exhibit Index.

21



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| | LINCARE HOLDINGS INC.                                                                  
| | ---------------------------------------------------------------------------------------
| |                                                                                        
| | Registrant                                                                             
| |                                                                                        
| | /s/ PAUL G. GABOS                                                                      
| |                                                                                        
| | Paul G.   Gabos   Secretary, Chief Financial Officer   and Principal Accounting Officer

November 9, 2004

22



INDEX OF EXHIBITS

|ExhibitNumber |  | Exhibit                                                                                                                                                                                                                            
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |  |                                                                                                                                                                                                                                    
|3.10   (A)    |  | Amended and   Restated Certificate of Incorporation of Lincare Holdings Inc.                                                                                                                                                       
|3.11   (A)    |  | Certificate   of Amendment to the Amended and Restated Certificate of Incorporation of   Lincare Holdings Inc.                                                                                                                     
|3.20   (B)    |  | Amended and   Restated By-Laws of Lincare Holdings Inc.                                                                                                                                                                            
|4.10   (C)    |  | Lincare   Holdings Inc. Indenture dated as of June 11, 2003                                                                                                                                                                        
|4.20   (C)    |  | Lincare   Holdings Inc. Registration Rights Agreement dated as of June 11, 2003                                                                                                                                                    
|10.1          |  | Non-Qualified   Stock Option Agreement between Lincare Holdings Inc. and John P. Byrnes                                                                                                                                            
|10.2          |  | Non-Qualified   Stock Option Agreement between Lincare Holdings Inc. and Paul G. Gabos                                                                                                                                             
|10.3          |  | Non-Qualified   Stock Option Agreement between Lincare Holdings Inc. and Shawn S. Schabel                                                                                                                                          
|10.4          |  | Restricted   Stock Agreement between Lincare Holdings Inc. and John P. Byrnes                                                                                                                                                      
|10.5          |  | Restricted   Stock Agreement between Lincare Holdings Inc. and Paul G. Gabos                                                                                                                                                       
|10.6          |  | Restricted   Stock Agreement between Lincare Holdings Inc. and Shawn S. Schabel                                                                                                                                                    
|31.1          |  | Certification   Pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities and Exchange Act   of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of   2002, executed by John P. Byrnes, Chief Executive Officer
|31.2          |  | Certification   Pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities and Exchange Act   of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of   2002, executed by Paul G. Gabos, Chief Financial Officer 
|32.1          |  | Certification   Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the   Sarbanes-Oxley Act of 2002, executed by John P. Byrnes, Chief Executive   Officer                                                  
|32.2          |  | Certification   Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the   Sarbanes-Oxley Act of 2002, executed by Paul G. Gabos, Chief Financial   Officer                                                   
|              |  |                                                                                                                                                                                                                                    
|A             |  | Incorporated   by reference to the Registrants Form 10-Q dated August 12, 1998.                                                                                                                                                   
|              |  |                                                                                                                                                                                                                                    
|B             |  | Incorporated   by reference to the Registrants Form 10-Q dated August 13, 2002.                                                                                                                                                   
|              |  |                                                                                                                                                                                                                                    
|C             |  | Incorporated   by reference to the Registrants Form 8-K dated June 12, 2003.                                                                                                                                                      

S-1