<PAGE>   1
 
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
<TABLE>
<S>                    <C>
     (MARK ONE)
         [X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL
                       YEAR ENDED DECEMBER 31, 1998
                                                OR
         [ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
</TABLE>
 
                         COMMISSION FILE NUMBER 0-19946
 
                             LINCARE HOLDINGS INC.
             (Exact name of registrant as specified in its charter)
 
<TABLE>
    <S>                                                      <C>
                    DELAWARE                                        51-0331330
        (State or other jurisdiction of                          (I.R.S. Employer
         incorporation or organization)                       Identification Number)

          19337 US 19 NORTH, SUITE 500                                33764
              CLEARWATER, FLORIDA                                   (Zip Code)
    (Address of principal executive office)
</TABLE>
 
       Registrant's telephone number, including area code: (727) 530-7700
 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 
                     Common Stock, $.01 par value per share
 
     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.   X  Yes         No
                                          -----       -----
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
 
     The aggregate market value of the registrant's common stock, $.01 par
value, held by non-affiliates of the registrant, based on the closing sale price
of the common stock on February 28, 1999, as reported in the NASDAQ National
Market System, was approximately $2,071,362,437.
 
     As of February 28, 1999, there were 58,362,532 outstanding shares of the
registrant's common stock, par value $.01, which is the only class of capital
stock of the registrant outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     The information called for by Part III of this Form 10-K is incorporated by
reference to the definitive Proxy Statement for the 1999 Annual Meeting of
Stockholders of Lincare Holdings Inc. which will be filed with the Securities
and Exchange Commission not later than 120 days after December 31, 1998.
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<PAGE>   2
 
                                     PART I
 
ITEM 1.  BUSINESS
 
GENERAL
 
     Lincare Holdings Inc. and subsidiaries ("Lincare" or the "Company") is one
of the nation's largest providers of oxygen and other respiratory therapy
services to patients in the home. The Company's customers typically suffer from
chronic obstructive pulmonary disease ("COPD"), such as emphysema, chronic
bronchitis or asthma, and require supplemental oxygen or other respiratory
therapy services in order to alleviate the symptoms and discomfort of
respiratory dysfunction. Lincare currently serves over 180,000 customers in 42
states through 378 operating centers.
 
THE HOME RESPIRATORY MARKET
 
     The Company estimates that the home respiratory therapy market (including
home oxygen equipment and respiratory therapy services) had revenues of
approximately $3.5 billion in 1998, having grown by an estimated 8% to 10% per
year over the last five years. This growth reflects the significant increase in
the number of persons afflicted with COPD, which is largely attributable to the
increasing proportion of the population over the age of 65. Growth in the home
respiratory market is further driven by the continued trend towards treatment of
patients in the home as a lower cost alternative to the acute care setting.
 
BUSINESS STRATEGY
 
     The Company's strategy is to increase its market share through internal
growth and acquisitions. Lincare focuses primarily on growth within its existing
geographic markets, which the Company believes is generally more profitable than
adding additional operating centers in new markets. In addition, the Company
expands into new geographic markets on a selective basis, either through
acquisitions or by opening new operating centers, when it believes such
expansion will enhance its business. In 1998, Lincare acquired 24 local and
regional competitors with combined annual revenues of approximately $58.0
million. These acquisitions established Lincare in three new states and expanded
its presence in other states where the Company had existing locations.
 
     Revenue growth will be dependent upon the overall growth rate of the home
respiratory care market, as well as on opportunities to increase market share
through effective marketing efforts and selective acquisitions of local or
regional competitors. The Company believes that the growing cost containment
efforts of government and private insurance reimbursement programs have created
an increasingly competitive environment, accelerating consolidation trends
within the home health care industry.
 
     The Company will continue to concentrate on providing oxygen and other
respiratory therapy services to patients in the home and to provide home medical
equipment and other services where it believes such services will enhance the
Company's primary business. In 1998, oxygen and other respiratory therapy
services accounted for approximately 90% of the Company's revenues.
 
PRODUCTS AND SERVICES OF LINCARE
 
     Lincare primarily provides oxygen and other respiratory therapy services to
patients in the home. Lincare also provides a variety of infusion therapies in
certain geographic markets. When a patient is referred to one of the Company's
operating centers by a physician, hospital discharge planner or other source,
the Company's customer representative obtains the necessary medical and
insurance coverage information and coordinates the delivery of patient care. The
prescribed therapy is administered by one of the Company's representatives in
the customer's home, where instructions and training are given to the customer
and the customer's family regarding appropriate equipment use and maintenance
and the therapy to be administered. Following the initial setup, Company
representatives make periodic visits to the customer's home, the frequency of
which is dictated by the type of therapy. The Company's services are coordinated
with the customer's physician. During the period that the Company performs
services for a customer, the customer remains under the
 
                                        1
<PAGE>   3
 
physician's care and medical supervision. The Company employs respiratory
therapists and nurses to perform certain training and other functions in
connection with the Company's services. The respiratory therapists and nurses
are licensed where required by applicable law.
 
     HOME OXYGEN EQUIPMENT.  The major types of oxygen delivery equipment are
liquid oxygen systems and oxygen concentrators. Each method of delivery has
different characteristics that make it more or less suitable to specific patient
applications.
 
          Liquid oxygen systems are thermally insulated containers of liquid
     oxygen, consisting of a stationary unit and a portable unit, which are most
     commonly used by ambulatory patients.
 
          Oxygen concentrators are stationary units that provide a continuous
     flow of oxygen by filtering ordinary room air. Concentrators are most
     commonly used by patients confined to the home or with only minimal
     mobility.
 
     OTHER RESPIRATORY THERAPY SERVICES.  Other respiratory therapy services
offered by the Company include the following:
 
          Nebulizers and associated respiratory medications provide aerosol
     therapy for patients suffering from COPD and asthma;
 
          Non-invasive ventilation provides nocturnal ventilatory support for
     neuromuscular and COPD patients. This therapy improves daytime function and
     decreases incidents of acute illness;
 
          Apnea monitors provide respiratory alarm systems for infants at risk
     for sudden infant death syndrome;
 
          Ventilators support respiratory function in severe cases of
     respiratory failure where the patient can no longer sustain the mechanics
     of breathing without the assistance of a machine;
 
          Continuous positive airway pressure devices maintain open airways in
     patients suffering from obstructive sleep apnea by providing airflow at
     prescribed pressures during sleep;
 
     INFUSION THERAPY.  Lincare provides a variety of infusion therapies
including the following:
 
          Parenteral nutrition involves the intravenous feeding of
     life-sustaining nutrients to patients with impaired or altered digestive
     tracts or conditions that prohibit adequate oral nutritional support;
 
          Intravenous antibiotic therapy is the infusion of anti-infective
     medications into the patient's bloodstream for the treatment of a variety
     of infectious diseases;
 
          Enteral nutrition is administered to patients who cannot eat as a
     result of an obstruction to the upper gastrointestinal tract or other
     medical condition;
 
          Chemotherapy is the administration of cytotoxic drugs to patients
     suffering from various types of cancer;
 
          Dobutamine infusions are provided to patients to treat chronic end
     stage congestive heart failure that has not responded to standard drug
     therapy. These patients require a long-term venous access device and
     frequent blood chemistry monitoring;
 
          Immune globulin (IVIG) therapy is utilized for a variety of immune
     disorders such as B-cell and T-cell immune deficiency, acute infections,
     post transplant immunodeficiency and burns;
 
          Continuous pain management is the administration of analgesic drugs to
     patients suffering from acute or chronic pain;
 
          Central catheter management provides monitoring and supplies to
     patients requiring access via a peripherally inserted line into the
     superior vena cava.
 
     Lincare also supplies home medical equipment, such as hospital beds,
wheelchairs and other supplies that may be required by patients.
 
                                        2
<PAGE>   4
 
COMPANY OPERATIONS
 
     Management.  The Company is managed at the executive level as a portfolio
of local businesses. Decentralization of managerial decision-making enables the
Company's operating centers to respond promptly and effectively to local market
demands and opportunities. The Company believes that the personalized nature of
customer requirements and referral relationships characteristic of the home
health care business mandate the Company's localized operating structure.
 
     Each of the Company's 378 operating centers is managed by a center manager
who has responsibility and accountability for the operating and financial
performance of the center. Service and marketing functions are performed at the
local operating level, while strategic development, financial control and
operating policies are administered at the executive level. Reporting mechanisms
are in place at the operating center level to monitor performance and ensure
field accountability.
 
     A team of area managers directly supervises individual operating center
managers, serving as an additional mechanism for assessing and improving
performance of the Company's operations. The Company's operating centers are
served by 18 billing centers which control all of the Company's billing and
reimbursement functions.
 
     MIS Systems.  The Company believes that the proprietary management
information systems developed by the Company are one of its key competitive
advantages and provide management with a critical asset in measuring and
evaluating performance levels throughout the Company. Management reviews monthly
reports containing information critical to the evaluation process, including
revenues and profitability by individual center, accounts receivable and cash
collection management, equipment controls and utilization, customer activity,
and manpower trends. The Company has a staff of 17 full-time computer
programmers which permits the Company to continually enhance its computer
systems in order to provide timely financial and operational information and to
respond promptly to changes in reimbursement regulations and policies.
 
     Accounts Receivable Management.  The Company derives a majority of its
revenues from reimbursement by third party payors. The Company accepts
assignment of insurance benefits from customers and, in most instances, invoices
and collects payments directly from Medicare, Medicaid and private insurance
carriers, as well as directly from customers under co-insurance provisions. The
following table sets forth, for the periods indicated, the Company's payor mix.
 
<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              1998     1997     1996
                           PAYORS                             -----    -----    -----
<S>                                                           <C>      <C>      <C>
Medicare and Medicaid programs..............................    62%      63%      61%
Private insurance...........................................    29       25       27
Direct payment..............................................     9       12       12
                                                               ---      ---      ---
                                                               100%     100%     100%
                                                               ===      ===      ===
</TABLE>
 
     Reimbursement is a complicated process which involves submission of claims
to multiple payors, each having its own claims requirements. To operate
effectively in this environment, the Company has designed and implemented
proprietary computer systems to decrease the time required for the submission
and processing of third party payor claims. The Company's systems are capable of
tailoring the submission of claims to the specifications of the individual
payors. The Company's in-house MIS capability also enables it to adjust quickly
to any regulatory or reimbursement changes. These features serve to decrease the
processing time of claims by payors, resulting in a more rapid turnover of
accounts receivable. In addition, the Company is capable of submitting claims
electronically to any Medicare carrier or other third party payor that can
receive electronic claims submissions.
 
     The Company's net accounts receivable in terms of days sales outstanding
was 59 days as of December 31, 1998 and 52 days as of December 31, 1997.
 
                                        3
<PAGE>   5
 
SALES AND MARKETING
 
     Favorable trends affecting the U.S. population and home health care have
created an environment which should produce increasing demand for the services
provided by Lincare. The average age of the American population is increasing
and, as a person ages, more health care services are required. Well-documented
changes occurring in the health care industry show a trend toward home care
rather than institutional care.
 
     Sales activities are generally carried out by the Company's full-time sales
representatives located at the Company's operating centers with assistance from
the center managers. In addition to promoting the high quality of the Company's
services, the sales representatives are trained to provide information
concerning the advantages of home respiratory care. Sales representatives are
often licensed respiratory therapists who are highly knowledgeable in the
provision of supplemental oxygen and other respiratory therapies.
 
     The Company primarily acquires new customers through referrals. The
Company's principal sources of referrals are physicians, hospital discharge
planners, prepaid health plans, clinical case managers and nursing agencies. The
Company's sales representatives maintain continual contact with these medical
professionals in order to strengthen these relationships.
 
     The Company's current base of referral sources recognizes the Company's
reputation for providing high-quality service to patients and provides a steady
flow of customers. While the Company views its referral sources as fundamental
to its business, no single referral source accounts for more than 1.0% of the
Company's revenues. The Company has more than 180,000 active customers, and the
loss of any single customer or group of customers would not materially impact
the Company's business.
 
     Joint Commission on Accreditation of Healthcare Organizations,
("JCAHO").  The Company has received accreditation from the JCAHO, a private
not-for-profit organization that has established voluntary standards for the
provision of home health care services, for all of its operating centers.
 
     Accreditation by the JCAHO represents a marketing benefit to the Company's
operating centers and provides for a recognized quality assurance program
throughout the Company. Several proposals have been made to require health care
providers to be accredited or licensed by independent agencies in order to
participate in government reimbursement programs. Many private payors already
require such accreditation.
 
ACQUISITIONS
 
     In 1998, the Company acquired, in unrelated acquisitions, certain operating
assets of 12 local and regional competitors and the common stock of 12 other
local and regional competitors. The operations acquired in 1998 had aggregate
annualized revenues of approximately $58.0 million at the time of acquisition.
These acquisitions resulted in the addition of 31 new operating centers.
 
     In 1997, the Company acquired, in unrelated acquisitions, certain operating
assets of 16 local and regional competitors and, the common stock of eight
companies. The operations acquired in 1997 had aggregate annualized revenues of
approximately $53.0 million at the time of acquisition. These acquisitions
resulted in the addition of 19 new operating centers.
 
QUALITY CONTROL
 
     The Company is committed to providing consistently high quality products
and services. The Company's quality control procedures and training programs are
designed to promote greater responsiveness and sensitivity to individual
customer needs and to provide the highest level of quality assurance and
convenience to the customer and the referring physician. Licensed respiratory
therapists and registered nurses provide professional health care support and
assist in the Company's sales and marketing efforts.
 
SUPPLIERS
 
     The Company purchases its oxygen and equipment from a variety of suppliers.
The Company is not dependent upon any single supplier and believes that its
oxygen and equipment needs can be provided by several manufacturers.
  
                                       4
<PAGE>   6
 
COMPETITION
 
     The home respiratory care market is a fragmented and highly competitive
market that is served by the Company, other national providers and, by Company
estimates, over 2,000 regional and local providers.
 
     Quality of service is the single most important competitive factor within
the home respiratory care market. The relationships between a home respiratory
care company and its customers and referral sources are highly personal. There
is no incentive for either the physician or the patient to alter this
relationship so long as the home respiratory care company is providing
responsive, professional and high-quality service. Other key competitive factors
are strength of local ties to the referral community and efficiency of
reimbursement and accounts receivable management systems.
 
     Home respiratory care companies normally compete based on service.
Reimbursement levels are established by the fee schedules promulgated by
Medicare, Medicaid or by the individual determinations of private insurance
companies. Furthermore, marketing efforts by home respiratory care companies are
directed toward referral sources which do not share financial responsibility for
the payment of services provided to customers.
 
MEDICARE REIMBURSEMENT
 
     As a supplier of home oxygen and other respiratory therapy services for the
home health care market, the Company participates in Medicare Part B, the
Supplementary Medical Insurance Program, which was established by the Social
Security Act of 1965. Suppliers 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.
 
     On August 5, 1997, the Balanced Budget Act of 1997 ("BBA") was signed into
law. The legislation, among other things, reduces Medicare expenditures by $115
billion over five years. The BBA reduced Medicare payment amounts for oxygen and
oxygen equipment furnished after January 1, 1998, to 75 percent of the fee
schedule amounts in effect during 1997. Payment amounts for oxygen and oxygen
equipment furnished after January 1, 1999, and each subsequent year thereafter
are reduced to 70 percent of the fee schedule amounts in effect during 1997.
 
     The BBA freezes the Consumer Price Index (U.S. urban average) update for
covered items of durable medical equipment for each of the years 1998 through
2002 while limiting fees for parenteral and enteral nutrients, supplies and
equipment to 1995 reasonable charge levels over the same period. The BBA reduces
payment amounts for covered drugs and biologicals to 95 percent of the average
wholesale price of such covered items for each of the years 1998 through 2002.
 
     The BBA authorizes the Department of Health and Human Services to conduct
up to five competitive bidding demonstration projects for the acquisition of
durable medical equipment and requires that one such project be established for
oxygen and oxygen equipment. Each demonstration project is to be operated over a
three-year period and is to be conducted in not more than three competitive
acquisition areas. The BBA also includes provisions designated to reduce health
care fraud and abuse including a surety bond requirement for durable medical
equipment providers.
 
     On August 10, 1993, Congress passed the Omnibus Reconciliation Act of 1993
("OBRA 93"). The OBRA 93 legislation, among other things, provided for consumer
price index updates to Medicare fee schedule amounts for durable medical
equipment for 1995 and 1996. A Medicare fee schedule update of 2.8% was
established for durable medical equipment provided in 1997.
 
     Federal and state budgetary and other cost-containment pressures will
continue to impact the home respiratory care industry. The Company cannot
predict what new federal and state budgetary proposals will be adopted and what
effect, if any, such proposals would have on the Company's business.
 
                                        5
<PAGE>   7
 
GOVERNMENT REGULATION
 
     The federal government and all states in which the Company currently
operates regulate various aspects of its business. In particular, the Company's
operating centers are subject to federal laws covering the repackaging of drugs
(including oxygen) and regulating interstate motor-carrier transportation. The
Company's locations 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 the Company's employees are
subject to state laws and regulations governing the ethics and professional
practice of respiratory therapy, pharmacy and nursing.
 
     As a supplier of services under the Medicare and Medicaid programs, the
Company is subject to the Medicare and Medicaid fraud and abuse laws. These
laws, among other things, prohibit any payment, kickback or rebate in return for
the referral of patients receiving benefits from Medicare, Medicaid or other
federally funded health care programs. Violations of these provisions may result
in civil and criminal penalties and exclusion from participation in such
programs.
 
     Health care is an area of rapid regulatory change. Changes in the law or
new interpretations of existing laws can have an effect on permissible
activities, the relative costs associated with doing business, and the amount of
reimbursement by government and third party payors. The Company cannot predict
the future course of federal, state and local regulation or legislation,
including Medicare and Medicaid statutes and regulations, and of possible
changes in national health care policies. Future legislative and regulatory
changes could have an adverse impact on the Company.
 
INSURANCE
 
     The Company currently has in force general liability and product liability
insurance, each with a coverage limit of $10.0 million. In addition, the Company
has professional liability insurance with a coverage limit of $1.0 million per
occurrence and $3.0 million in the aggregate. The Company's product liability
insurance provides coverage on a claims-made basis, while its general and
professional liability insurance are on an occurrence basis. All policies are
subject to annual renewal and the Company anticipates adequate amounts of
insurance coverage to be available at such renewal dates.
 
EMPLOYEES
 
     As of February 28, 1999, the Company had approximately 4,200 employees.
None of the Company's employees are currently covered by collective bargaining
agreements. The Company believes that the relations between the Company's
management and its employees are good.
 
ENVIRONMENTAL MATTERS
 
     Management believes that the Company is currently in compliance, in all
material respects, with applicable federal, state and local statutes and
ordinances regulating the discharge of hazardous materials into the environment.
Management does not believe it will be required to expend any material amounts
in order to remain in compliance with these laws and regulations or that such
compliance will materially affect its capital expenditures, earnings or
competitive position.
 
ITEM 2.  PROPERTIES
 
     All but one of the Company's 378 operating center locations are leased from
third parties. Each operating center is a combination warehouse and office, with
warehouse space generally comprising approximately 50% of the facility.
Warehouse space is used for storage of adequate supplies of equipment necessary
to conduct the Company's business. The Company also leases a headquarters
facility and 18 separate billing centers.
 
ITEM 3.  LEGAL PROCEEDINGS
 
     The Company has received subpoenas from the U.S. Attorney's Office in
Sacramento, California requesting various documents including (i) documents
relating to the provision of home oxygen therapy to

                                        6
<PAGE>   8
 
beneficiaries of certain federally funded health care programs during 1995 and
1996 by five Lincare locations in California and Oregon; (ii) documents
concerning certain marketing programs and practices for oxygen and other
therapies, and certain policies and procedures, in place at these five Lincare
locations from 1995 through June 1998; and (iii) certain information regarding
compliance with the billing and documentation requirements of various federally
funded health care programs by ten Lincare locations in California and Oregon
from 1995 through June 1998. The government has not served the Company with a
complaint nor has it disclosed the basis for its inquiries. Thus, the duration
or outcome of this matter cannot be predicted with any degree of certainty. The
Company is cooperating with the government's request for information.
 
     The Company has received, and expects that, as a health care provider, it
will receive in the future, inquiries from government agencies and fiscal
intermediaries requesting patient records and other documents to support claims
submitted by the Company for payment of services rendered to its customers. The
Company is involved in certain other claims and legal actions arising in the
ordinary course of business. The ultimate disposition of all such matters is not
expected to have a material adverse impact on the Company's financial position,
results of operations or liquidity.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     No matters were submitted to a vote of the Company's stockholders during
the fourth quarter of 1998.
 
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's Common Stock is traded on the NASDAQ National Market System
under the symbol LNCR. The following table sets forth the high and low closing
sale prices as reported by NASDAQ for the periods indicated.
 
<TABLE>
<CAPTION>
                                                               HIGH      LOW
                                                              ------    ------
<S>                                                           <C>       <C>
1998
First quarter...............................................  $35.41    $26.88
Second quarter..............................................   44.00     35.25
Third quarter...............................................   44.38     32.50
Fourth quarter..............................................   41.13     31.63
1997
First quarter...............................................  $22.13    $18.00
Second quarter..............................................   22.25     17.63
Third quarter...............................................   26.88     20.00
Fourth quarter..............................................   29.50     25.00
</TABLE>
 
     There were approximately 222 holders of record of the common stock as of
February 28, 1999.
 
     The Company has not paid any cash dividends on its capital stock and does
not anticipate paying cash dividends in the foreseeable future. It is the
present intention of the Company's Board of Directors to retain all earnings in
the Company in order to support the future growth of the Company's business.
 
ITEM 6.  SELECTED FINANCIAL DATA
 
     The selected consolidated financial data presented below under the caption
"Statements of Operations Data" for the years ended December 31, 1998, 1997,
1996, 1995, and 1994 are derived from the consolidated financial statements of
the Company audited by KPMG LLP, independent certified public accountants.
 
                                        7
<PAGE>   9
 
     The data set forth below is qualified by reference to, and should be read
in conjunction with, the consolidated financial statements, accompanying notes
and Management's Discussion and Analysis of Financial Condition and Results of
Operations included in this report.
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                              ----------------------------------------------------
                                                1998       1997       1996       1995       1994
                                              --------   --------   --------   --------   --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                           <C>        <C>        <C>        <C>        <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues................................  $487,407   $443,181   $348,870   $274,800   $201,142
Cost of goods and services..................    76,367     65,932     53,711     41,329     29,058
Operating expenses..........................   111,222     93,830     75,158     60,272     44,347
Selling, general and administrative
  expenses..................................   107,691     90,225     71,259     57,275     43,249
Bad debt expense............................     5,849      4,432      3,472      2,190      1,546
Depreciation expense........................    34,430     27,603     20,790     16,511     13,403
Amortization expense........................    12,745     14,229     13,128     11,099      7,281
Non-recurring expense(1)....................        --     15,557      3,932      1,921         --
                                              --------   --------   --------   --------   --------
Operating income............................   139,103    131,373    107,420     84,203     62,258
Interest income.............................       447        202        153        294        434
Interest expense............................     1,177      1,161        497        892        473
Gain (loss) on disposal of property and
  equipment.................................      (113)       (93)       (80)        68        101
                                              --------   --------   --------   --------   --------
Income before income taxes..................   138,260    130,321    106,996     83,673     62,320
Income tax expense..........................    52,954     50,173     40,422     32,634     24,367
                                              --------   --------   --------   --------   --------
Net income..................................  $ 85,306   $ 80,148   $ 66,574   $ 51,039   $ 37,953
                                              ========   ========   ========   ========   ========
Income per common share:
  Basic.....................................  $   1.47   $   1.41   $   1.19   $    .93   $    .71
                                              ========   ========   ========   ========   ========
  Diluted...................................  $   1.44   $   1.37   $   1.15   $    .90   $    .67
                                              ========   ========   ========   ========   ========
Weighted average number of common shares
  outstanding...............................    57,992     56,837     55,999     55,021     53,259
                                              ========   ========   ========   ========   ========
Weighted average number of common shares and
  common share equivalents outstanding......    59,435     58,655     57,726     56,744     56,588
                                              ========   ========   ========   ========   ========
</TABLE>
 
---------------
 
(1) In 1997, the Company recorded a non-recurring expense of $15,557,000 of
     which $11,849,000 was related to the write down of impaired capital
     equipment and $3,708,000 was related to an impairment write down of
     intangible assets (see Note 11 to the consolidated financial statements).
     In 1996, the Company recorded a non-recurring expense of $3,932,000 of
     which $2,682,000 was related to the restructuring of certain senior
     management employment agreements and $1,250,000 was related to the
     resolution of an investigation and associated legal expenses. In 1995, the
     Company recorded a non-recurring expense of $1,921,000 related to the
     abandoned merger between the Company and Coram Healthcare Corporation. Such
     non-recurring expense was comprised of (a) $1,448,000 of professional fees,
     (b) $199,000 of printing and mailing expenses, (c) $153,000 of filing fees,
     and (d) $121,000 of other direct costs.
 
<TABLE>
<CAPTION>
                                                                AT DECEMBER 31,
                                              ----------------------------------------------------
                                                1998       1997       1996       1995       1994
                                              --------   --------   --------   --------   --------
                                                                 (IN THOUSANDS)
<S>                                           <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Working capital.............................  $ 49,078   $ 42,106   $ 23,633   $ 16,510   $ 18,517
Total assets................................   582,639    440,388    347,408    260,206    195,778
Long-term obligations, excluding current
  installments..............................    22,258      4,602      8,234      7,383      6,717
Stockholders' equity........................   495,656    393,067    299,248    221,383    162,088
</TABLE>
 
                                        8
<PAGE>   10
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
 
GENERAL
 
     The Company continues to pursue its strategy of increasing market share
within its existing geographical markets through internal growth and selective
acquisitions of regional and local competitors. In addition, the Company will
continue to expand into new geographical markets on a selective basis, either
through acquisitions or by opening new operating centers, when the Company
believes it will enhance its business. The Company's focus remains primarily on
oxygen and other respiratory therapy services, which represent approximately 90%
of the Company's revenues.
 
NET REVENUES
 
     The following table sets forth for the periods indicated a summary of the
Company's net revenues by source:
 
<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                     --------------------------------
                                                       1998        1997        1996
                                                     --------    --------    --------
                                                              (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
Oxygen and other respiratory therapy...............  $433,594    $397,390    $316,816
Home medical equipment and other...................    53,813      45,791      32,054
                                                     --------    --------    --------
          Total....................................  $487,407    $443,181    $348,870
                                                     ========    ========    ========
</TABLE>
 
     Net revenues for the year ended December 31, 1998 increased by $44,226,000
(or 10.0%) over 1997. The Company's revenues were impacted in 1998 by provisions
contained in the Balanced Budget Act of 1997 (the "BBA") which reduced Medicare
payment amounts for certain of the equipment and supplies provided by the
Company. The BBA provisions resulted in a reduction of the Company's revenues by
approximately $73,221,000 (or 16.5%) for the year ended December 31, 1998. (See
table)
 
<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                     --------------------------------
                                                       1998        1997        1996
                                                     --------    --------    --------
                                                              (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
Revenues -- before price cuts......................  $560,628    $443,181    $348,870
Effect of price cuts...............................   (73,221)         --          --
                                                     --------    --------    --------
Actual revenues....................................  $487,407    $443,181    $348,870
                                                     ========    ========    ========
</TABLE>
 
     Excluding the effect on the Company's revenues from the Medicare price
reductions, internally generated growth increased revenues by approximately
$66,600,000 (or 15.0%) for the year ended December 31, 1998. Excluding the
effect on the Company's revenues from the Medicare price reductions, growth due
to acquisitions increased revenues by approximately $50,847,000 (or 11.5%) for
the year ended December 31, 1998.
 
     The Company experienced price increases in the years 1997 and 1996 from
Medicare consumer price index updates for durable medical equipment of 2.8% and
3.0%. The company estimates that price increases from Medicare and other third
party payors increased revenue by $6,800,000 and $4,900,000 in 1997 and 1996.
 
     The Balanced Budget Act of 1997 was signed into law on August 5, 1997. The
legislation, among other things, reduces Medicare expenditures by $115 billion
over five years. The BBA reduced Medicare payment amounts for oxygen and oxygen
equipment furnished after January 1, 1998, to 75 percent of the fee schedule
amounts in effect during 1997. Payment amounts for oxygen and oxygen equipment
furnished after January 1, 1999, and each subsequent year thereafter are reduced
to 70 percent of the fee schedule amounts in effect during 1997.
 
     The BBA freezes the Consumer Price Index (U.S. urban average) update for
covered items of durable medical equipment for each of the years 1998 through
2002 while limiting fees for parenteral and enteral nutrients, supplies and
equipment to 1995 reasonable charge levels over the same period. The BBA reduces
 
                                        9
<PAGE>   11
 
payment amounts for covered drugs and biologicals to 95 percent of the average
wholesale price of such covered items for each of the years 1998 through 2002.
 
     The revenue price cuts attributed to the BBA affected the relationship of
costs and expenses expressed as a percentage of net revenues. (See table)
 
<TABLE>
<CAPTION>
                                                        EXPRESSED AS A PERCENTAGE OF NET REVENUES
                                                ---------------------------------------------------------
                                                                   FOR THE YEAR ENDED
                                                ---------------------------------------------------------
                                                                 RESULTS
                                                                EXCLUDING
                                                                IMPACT OF
                                                   ACTUAL          BBA           ACTUAL         ACTUAL
                                                  RESULTS       PRICE CUTS      RESULTS        RESULTS
                                                DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                    1998           1998           1997           1996
                                                ------------   ------------   ------------   ------------
<S>                                             <C>            <C>            <C>            <C>
Costs of goods and services...................      15.7%          13.6%          14.9%          15.4%
Operating expenses............................      22.8%          19.8%          21.2%          21.5%
Selling, general, and administrative
  expenses....................................      22.1%          19.2%          20.4%          20.4%
</TABLE>
 
COST OF GOODS AND SERVICES
 
     Cost of goods and services as a percentage of net revenues was 15.7% for
the year ended December 31, 1998 and was 14.9% and 15.4% for the years ended
December 31, 1997 and 1996 respectively. Absent the effect of the BBA price
cuts, cost of goods and services as a percentage of net revenues was 13.6% for
the year ended 1998. This improvement is primarily attributed to the
efficiencies gained at the Company's respiratory pharmacy operations which
commenced operations in the fourth quarter of 1996 as well as increased revenues
from rental of capital equipment.
 
OPERATING AND OTHER EXPENSES
 
     Operating expenses, expressed as a percentage of net revenues, were 22.8%
for the year ended December 31, 1998 and were 21.2% and 21.5% for the years
ended December 31, 1997 and 1996 respectively. Adjusted to remove the effect of
the BBA price cuts, operating expenses as a percentage of net revenues were
19.8% for 1998. The improvement was primarily due to the Company's successful
integration of acquired businesses into its existing locations. Selling, general
and administrative expenses, expressed as a percentage of net revenues, for the
years ended December 31, 1998, 1997, and 1996, were 22.1%, 20.4% and 20.4%,
respectively. Expressed as a percentage of net revenues before the price cuts
attributed to the BBA, selling, general and administrative expenses were 19.2%
for the year ended December 31, 1998. The Company has been able to maintain a
cost structure that, with increases in net revenues, allows the Company to
spread its overhead across a larger base of revenues, resulting in improvements
in operating income.
 
     Bad debt expense as a percentage of net revenues was 1.2% for the year
ended December 31, 1998 and 1.0% and 0.8% for the years ended December 31, 1997
and 1996, respectively.
 
     Depreciation expense as a percentage of net revenues was 7.1% for the year
ended December 31, 1998 compared with 6.2% and 6.0% for the years ended December
31, 1997 and 1996. Adjusted to remove the effect of the BBA price cuts,
depreciation expense for the year ended December 31, 1998 was 6.1%.
 
AMORTIZATION EXPENSE
 
     The Company's net intangible assets were $344,359,000 as of December 31,
1998. Of this total, $6,102,000 (consisting of the value assigned to customer
lists) is being amortized over a period of 3 years, $1,772,000 (consisting of
various covenants not to compete) over a period of three to five years and
$336,485,000 (consisting of goodwill) over a period of 40 years.
 
     During 1998, the Company amortized $12,745,000 of its intangible assets
compared to $14,229,000 in 1997 and $13,128,000 in 1996. The decrease in
amortization expense is attributed to the $3,708,000 impairment write down of
intangible assets in 1997 (see Note 11 to the consolidated financial
statements).
 
                                       10
<PAGE>   12
 
OPERATING INCOME
 
     As shown in the table below, operating income before non-recurring expense
for the year ended December 31, 1998 decreased by $7,827,000 from 1997. In 1997,
the Company recorded a non-recurring expense of $15,557,000 of which $11,849,000
was related to the write down of impaired oxygen rental equipment and $3,708,000
was related to the impairment write down of certain customer list intangible
assets. The charges adjusted the carrying value of certain assets affected by
provisions contained in the Balanced Budget Act of 1997. This legislation
reduced Medicare reimbursement for home oxygen equipment and services by 30
percent over the two year period commencing January 1, 1998. The fair values of
the oxygen rental equipment and customer list were determined based on
discounted cash flows taking into account the reduced reimbursement rates. The
reduction in operating income before non-recurring expense in 1998 is attributed
to the BBA price reductions, which reduced net revenues and operating income by
$73.2 million during the period. Operating income before non-recurring expense
for the year ended December 31, 1997 increased by $35,578,000 over 1996. In
1996, the Company recognized a non-recurring charge of $3,932,000 related to the
restructuring of certain senior management employment agreements and the
resolution of an investigation. The percentage increases in operating income in
1997 are attributable to the Company's continued revenue growth, while
maintaining effective control over expenses.
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                             --------------------------------
                                                               1998        1997        1996
                                                             --------    --------    --------
                                                                      (IN THOUSANDS)
<S>                                                          <C>         <C>         <C>
Operating income before non-recurring expense..............  $139,103    $146,930    $111,352
Percentage of net revenues.................................      28.5%       33.2%       31.9%
</TABLE>
 
INTEREST EXPENSE
 
     Interest expense for the year ended December 31, 1998 was $1,177,000,
compared to $1,161,000 and $497,000 for the years ended December 31, 1997 and
1996, respectively. The respective changes in interest expense for the years
1998, 1997, and 1996 are primarily attributable to fluctuations in the average
borrowings outstanding under the Company's loan agreements.
 
INCOME TAXES
 
     The Company's effective income tax rate was 38.3% for the year ended
December 31, 1998, 38.5% for 1997 and 37.8% for 1996.
 
ACQUISITIONS
 
     In 1998, the Company acquired, in unrelated acquisitions, certain operating
assets of 12 local and regional competitors and the common stock of 12 other
companies. The operations acquired in 1998 had aggregate annualized revenues of
approximately $58.0 million at the time of acquisition. The cost of these
acquisitions was $114.0 million and was allocated to acquired assets as follows:
$6.7 million to current assets, $4.5 million to property and equipment, $4.8
million to intangible assets, and $98.0 million to goodwill. These acquisitions
resulted in the addition of 31 new operating centers.
 
     In 1997, the Company acquired, in unrelated acquisitions, certain operating
assets of 16 local and regional competitors and the common stock of eight other
companies. The operations acquired in 1997 had aggregate annualized revenues of
approximately $53.0 million at the time of acquisition. The cost of these
acquisitions was $79.7 million and was allocated to acquired assets as follows:
$4.5 million to current assets, $3.8 million to property and equipment, $6.9
million to intangible assets, and $64.5 million to goodwill. These acquisitions
resulted in the addition of 19 new operating centers.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     At December 31, 1998, the Company's working capital was $49,078,000, as
compared to $42,106,000 at December 31, 1997, and $23,633,000 at December 31,
1996.
 
                                       11
<PAGE>   13
 
     Net cash provided by operating activities was $145,442,000 for the year
ended December 31, 1998, compared with $126,550,000 for the year ended December
31, 1997, and $106,883,000 for the year ended December 31, 1996. A significant
portion of the Company's assets consists of accounts receivables from third
party payors that are responsible for payment for the services provided by the
Company. Because of the Company's ability to collect its accounts receivable on
a timely basis, the Company has not been required to obtain interim financing of
its accounts receivable to satisfy operating needs.
 
     Net cash used in investing and financing activities was $144,420,000,
$124,013,000 and $106,351,000 for the years ended December 31, 1998, 1997 and
1996, respectively. Activity in the year ended December 31, 1998 included the
Company's investment of $95,704,000 in business acquisitions, investment in
capital equipment of $62,188,000, proceeds of $64,000,000 from its revolving
credit loan and other long-term obligations, and payments of $59,512,000 related
to long-term obligations. The Company anticipates that capital expenditures for
1999 will be approximately $70,000,000 to $80,000,000.
 
     As of December 31, 1998, the Company's principal sources of liquidity
consisted of $49,078,000 of working capital and $78,000,000 available under its
bank credit agreement. On November 25, 1997, the Company entered into a new
revolving credit loan and line of credit, increasing its borrowing capacity from
$50,000,000 to $100,000,000. The Company believes that internally generated
funds, together with funds that may be borrowed under such credit facility, will
be sufficient to meet the Company's anticipated capital requirements and
financial obligations for the foreseeable future.
 
     The Company's future liquidity will continue to be dependent upon its
operating cash flow and management of accounts receivable. The Company is not
aware of any impact on liquidity due to pending litigation arising in the
ordinary course of business.
 
YEAR 2000 REMEDIATION
 
     Certain risks may exist with respect to potential malfunctions of computer
hardware and software and embedded microprocessors due to the upcoming change in
the century (the "Year 2000 problem"). Malfunctions may arise due to the design
of microchips and microprocessors and computer systems that are programmed to
use two rather than four digits to define the applicable year. The Company is
involved in an extensive, ongoing program to identify and remediate potential
issues arising from the Year 2000 problem.
 
     The Company uses a proprietary and internally developed management
information system (MIS) which serves as the platform for the operating and
financial activities of the Company. The MIS system processes billings to, and
collections from, third party payors for services provided by the Company and
supports all of the Company's accounting, finance and general ledger functions.
The system provides management with information used to measure and evaluate
performance levels throughout the Company, including revenues and profitability,
accounts receivable and collections, equipment controls and utilization,
customer activity and manpower trends. The Company has completed, in all
material respects, the conversion of its mission-critical MIS software thereby
mitigating the risk of Year 2000 problems. The costs associated with the
conversion were immaterial and fully expensed in the current and prior fiscal
years.
 
     The Company is assessing its use of ancillary, third party computer
software used to electronically submit medical claims to certain payors. In the
event that the use of this software is impacted by the Year 2000 problem, the
Company's contingency plan includes the submission of paper claims to such
payors. The Company does not believe that this will have a material effect on
the Company's ability to receive payment for services rendered.
 
     Certain medical devices and equipment provided by the Company to its
customers may contain embedded technology such as microprocessors that could be
affected by the Year 2000 problem. The Company has identified those categories
of devices and equipment that may be sensitive to the change in century, and has
developed a plan to determine the Year 2000 status of specific items. In the
event that the Company identifies specific devices and equipment that are not
Year 2000 compliant, or the Company is unable to determine the status of such
items, the Company will remove such items from service and replace them with
therapeutically comparable, Year 2000 compliant equipment from alternative
vendors. The
 
                                       12
<PAGE>   14
 
Company does not believe that the scope and cost of exchanging non-compliant
devices and equipment will have a material impact on the Company's financial
position.
 
     The Company is highly dependent upon certain government and private payors
for payment of claims for services and equipment provided by the Company. The
Company is in the process of determining the Year 2000 compliance of computer
systems used by third party payors to process claims for medical services and
equipment submitted by the Company for payment. The Company cannot be assured of
the timely remediation of third party claims processing and payment systems. The
failure by a significant third party payor to correct Year 2000 problems, to the
extent that such issues delay or prevent timely or appropriate payment of
claims, could have a material impact on the Company's cash flow from operations.
The Company is monitoring the Year 2000 progress of Medicare Part B carriers,
and other government agencies and private payors with which the Company does
significant business, to determine the potential impact to the Company. The
Company is also in the process of determining the contingency plans of these
payors to release payments to providers, such as the Company, in the event of
claims processing system failures. Such plans may include cash advances to
providers based on historical payment trends or processing claims on paper
rather than in an electronic format.
 
NEW ACCOUNTING STANDARDS
 
     In 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components to a full set of financial statements.
The Statement requires only additional disclosures in the financial statements;
it does not affect the Company's financial position or results of operations.
The Company has no components of comprehensive income, therefore the adoption of
this standard did not have any effect on the financial statements.
 
     In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities on the
balance sheet and measure those instruments at fair values. The Company will be
required to adopt this standard for financial statements issued beginning the
first quarter of fiscal year 2000. The Company has no derivative financial
instruments at December 31, 1998, therefore, the adoption of this standard is
not expected to have any effect on the financial statements.
 
INFLATION
 
     The Company has not experienced large increases in either the cost of
supplies or operating expenses due to inflation. Because of restrictions on
reimbursement by government and private medical insurance programs and the
pressures to contain the costs of such programs, the Company bears the risk that
reimbursement rates set by such programs will not keep pace with inflation.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURE REGARDING MARKET RISK
 
     The Company has no derivative securities as of December 31, 1998. The
Company is exposed to changes in interest rates as a result of its bank credit
agreement which is based on the London Interbank Offered Rate.
 
     A 10% increase in interest rates related to the Company's bank credit
agreement would not have a material effect on the Company's earnings over the
next fiscal year or the bank credit agreements fair value.
 
FORWARD LOOKING STATEMENTS
 
     Statements contained in this Form 10-K that are not based on historical
facts are forward looking statements, subject to uncertainties and risks,
including, but not limited to, the constantly changing healthcare environment,
potential reductions in reimbursement by government and third party payors for
the Company's products and services, the demand for the Company's products and
services, economic and competitive conditions, the availability of appropriate
acquisition candidates and the successful completion of acquisitions,
 
                                       13
<PAGE>   15
 
access to borrowed and/or equity capital on favorable terms, and other risks
detailed in the Company's Securities and Exchange Commission filings.
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The financial statements required by this item are listed in Item 14(a)(1)
and are submitted at the end of this Annual Report on Form 10-K. The
supplementary data required by this Item is included on page S-1. The financial
statements and supplementary data are herein incorporated by reference.
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The response to this item will be included in the definitive proxy
statement for the Annual Meeting of Stockholders to be held May 10, 1999, under
"Information Regarding the Board of Directors and Executive Officers" and is
herein incorporated by reference.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
     The response to this item will be included in the definitive proxy
statement for the Annual Meeting of Stockholders to be held May 10, 1999, under
"Executive Compensation" and is herein incorporated by reference.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The response to this item will be included in the definitive proxy
statement for the Annual Meeting of Stockholders to be held May 10, 1999, under
"Security Ownership of Principal Stockholders and Management" and is herein
incorporated by reference.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     None.
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
 
     (a) (1) The following consolidated financial statements of Lincare Holdings
Inc. and subsidiaries are filed as part of this Form 10-K starting at page F-1:
 
        Independent Auditors' Report
 
        Consolidated Balance Sheets -- December 31, 1998 and 1997
 
        Consolidated Statements of Operations -- Years ended December 31, 1998,
        1997, and 1996.
 
        Consolidated Statements of Stockholders' Equity -- Years ended December
        31, 1998, 1997, and 1996
 
        Consolidated Statements of Cash Flows -- Years ended December 31, 1998,
        1997, and 1996
 
        Notes to Consolidated Financial Statements
 
         (2) The following consolidated financial statement schedule of Lincare
Holdings Inc. and subsidiaries is included in this Form 10-K at page S-1:
 
        Schedule VIII -- Valuation and Qualifying Accounts
 
        All other schedules for which provision is made in the applicable
        accounting regulation of the Securities and Exchange Commission are not
        required under the related instructions or are inapplicable, and
        therefore have been omitted.
 
                                       14
<PAGE>   16
 
         (3) Exhibits included or incorporated herein:
 
        See Exhibit Index.
 
     (b) The Company did not file a Current Report on Form 8-K during the three
months ended December 31, 1998.
 
                                       15
<PAGE>   17
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) 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.
 
                                                  /s/  PAUL G. GABOS
                                           -------------------------------------
                                                      Paul G. Gabos
                                              Secretary, Chief Financial and
                                               Principal Accounting Officer
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
                   SIGNATURE                                   POSITION                     DATE
                   ---------                                   --------                     ----
<S>                                               <C>                                  <C>
 
               /s/ JAMES T. KELLY                 Chairman of the Board                 March 29, 1999
------------------------------------------------
                 James T. Kelly
 
               /s/ JOHN P. BYRNES                 Director, President and Chief         March 29, 1999
------------------------------------------------    Executive Officer
                 John P. Byrnes
 
               /s/ PAUL G. GABOS                  Secretary, Chief Financial and        March 29, 1999
------------------------------------------------    Principal Accounting Officer
                 Paul G. Gabos
 
              /s/ CHESTER B. BLACK                Director                              March 29, 1999
------------------------------------------------
                Chester B. Black
 
               /s/ FRANK T. CARY                  Director                              March 29, 1999
------------------------------------------------
                 Frank T. Cary
 
           /s/ WILLIAM F. MILLER, III             Director                              March 29, 1999
------------------------------------------------
             William F. Miller, III
 
               /s/ ANDREW M. PAUL                 Director                              March 29, 1999
------------------------------------------------
                 Andrew M. Paul
 
               /s/ THOMAS O. PYLE                 Director                              March 29, 1999
------------------------------------------------
                 Thomas O. Pyle
</TABLE>
 
                                       16
<PAGE>   18
 
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors and Stockholders
Lincare Holdings Inc.:
 
     We have audited the consolidated financial statements of Lincare Holdings
Inc. and subsidiaries as listed in the index on page 14. In connection with our
audits of the consolidated financial statements, we also have audited the
consolidated financial statement schedule listed in the index on page 14. These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used, and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Lincare
Holdings Inc. and subsidiaries as of December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1998, in conformity with generally accepted accounting
principles. Also, in our opinion, the related consolidated financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
 
                                          KPMG LLP
 
St. Petersburg, Florida
February 9, 1999
 
                                       F-1
<PAGE>   19
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                 1998         1997
                                                              ----------   ----------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
                                       ASSETS
Current assets:
  Cash and cash equivalents.................................   $  5,100     $  4,078
  Accounts and notes receivable (note 2)....................     85,187       68,383
  Income taxes receivable...................................      3,553        2,530
  Inventories...............................................      2,908        1,542
  Prepaid expenses..........................................        478          516
                                                               --------     --------
          Total current assets..............................     97,226       77,049
                                                               --------     --------
Property and equipment (notes 3 and 4)......................    246,033      181,438
Less accumulated depreciation...............................    105,799       73,148
                                                               --------     --------
          Net property and equipment........................    140,234      108,290
                                                               --------     --------
Other assets:
  Goodwill, less accumulated amortization of $24,690 in 1998
     and $16,954 in 1997....................................    336,485      245,600
  Intangible assets, less accumulated amortization of
     $40,035 in 1998 and $36,457 in 1997....................      6,102        5,262
  Covenants not to compete, less accumulated amortization of
     $10,963 in 1998 and $9,531 in 1997.....................      1,772        2,869
  Other.....................................................        820        1,318
                                                               --------     --------
          Total other assets................................    345,179      255,049
                                                               --------     --------
                                                               $582,639     $440,388
                                                               ========     ========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current installments of long-term obligations (note 5)....   $ 12,923     $  8,580
  Accounts payable..........................................     19,169       14,390
  Accrued expenses:
     Compensation and benefits..............................     10,679        8,781
     Other..................................................      5,377        3,192
                                                               --------     --------
          Total current liabilities.........................     48,148       34,943
                                                               --------     --------
Long-term obligations, excluding current installments (note
  5)........................................................     22,258        4,602
Deferred income taxes (note 6)..............................     15,651        6,861
Minority interest...........................................        926          915
Stockholders' equity (notes 6, 7, and 8):
  Common stock, $.01 par value. Authorized 200,000,000
     shares; issued and outstanding 58,354,266 in 1998 and
     57,441,090 in 1997.....................................        583          574
  Additional paid-in capital................................    128,828      110,714
  Retained earnings.........................................    367,085      281,779
  Less treasury stock, at cost: 24,788 shares in 1998.......        840           --
                                                               --------     --------
          Total stockholders' equity........................    495,656      393,067
Commitments and contingencies (notes 4 and 14)..............
                                                               --------     --------
                                                               $582,639     $440,388
                                                               ========     ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-2
<PAGE>   20
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
 
<TABLE>
<CAPTION>
                                                            1998             1997             1996
                                                         -----------      -----------      -----------
                                                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                      <C>              <C>              <C>
Net revenues (note 9)..................................   $487,407         $443,181         $348,870
                                                          --------         --------         --------
Costs and expenses:
  Cost of goods and services...........................     76,367           65,932           53,711
  Operating expenses...................................    111,222           93,830           75,158
  Selling, general and administrative expenses.........    107,691           90,225           71,259
  Bad debt expense.....................................      5,849            4,432            3,472
  Depreciation expense.................................     34,430           27,603           20,790
  Amortization expense.................................     12,745           14,229           13,128
  Non-recurring expense (note 11)......................         --           15,557            3,932
                                                          --------         --------         --------
                                                           348,304          311,808          241,450
                                                          --------         --------         --------
          Operating income.............................    139,103          131,373          107,420
                                                          --------         --------         --------
Other income (expenses):
  Interest income......................................        447              202              153
  Interest expense.....................................     (1,177)          (1,161)            (497)
  Net loss on disposal of property and equipment.......       (113)             (93)             (80)
                                                          --------         --------         --------
                                                              (843)          (1,052)            (424)
                                                          --------         --------         --------
          Income before income taxes...................    138,260          130,321          106,996
Income tax expense (note 6)............................     52,954           50,173           40,422
                                                          --------         --------         --------
          Net income...................................   $ 85,306         $ 80,148         $ 66,574
                                                          ========         ========         ========
Income per common share (note 10):
  Basic................................................   $   1.47         $   1.41         $   1.19
                                                          ========         ========         ========
  Diluted..............................................   $   1.44         $   1.37         $   1.15
                                                          ========         ========         ========
Weighted average number of common shares outstanding...     57,992           56,837           55,999
                                                          ========         ========         ========
Weighted average number of common shares and common
  share equivalents outstanding........................     59,435           58,655           57,726
                                                          ========         ========         ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-3
<PAGE>   21
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
 
<TABLE>
<CAPTION>
                                                        ADDITIONAL                             TOTAL
                                               COMMON    PAID-IN     RETAINED   TREASURY   STOCKHOLDERS'
                                               STOCK     CAPITAL     EARNINGS    STOCK        EQUITY
                                               ------   ----------   --------   --------   -------------
                                                        (DOLLARS IN THOUSANDS)
<S>                                            <C>      <C>          <C>        <C>        <C>
Balances at December 31, 1995................   $554     $ 85,772    $135,057       --       $221,383
Exercise of stock options (note 8)...........     10        4,890          --       --          4,900
Tax benefit related to exercise of employee
  stock options (notes 6 and 8)..............     --        6,391          --       --          6,391
Net income...................................     --           --      66,574       --         66,574
                                                ----     --------    --------     ----       --------
Balances at December 31, 1996................    564       97,053     201,631       --        299,248
Exercise of stock options (note 8)...........     10        7,108          --       --          7,118
Tax benefit related to exercise of employee
  stock options (notes 6 and 8)..............     --        6,553          --       --          6,553
Net income...................................     --           --      80,148       --         80,148
                                                ----     --------    --------     ----       --------
Balances at December 31, 1997................    574      110,714     281,779       --        393,067
Exercise of stock options (note 8)...........      9        9,412          --       --          9,421
Tax benefit related to exercise of employee
  stock options (notes 6 and 8)..............     --        8,702          --       --          8,702
Net income...................................     --           --      85,306       --         85,306
Treasury stock acquired......................     --           --          --      840            840
                                                ----     --------    --------     ----       --------
Balances at December 31, 1998................   $583     $128,828    $367,085     $840       $495,656
                                                ====     ========    ========     ====       ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-4
<PAGE>   22
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
 
<TABLE>
<CAPTION>
                                                                1998        1997        1996
                                                              ---------   ---------   ---------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
  Net income................................................  $  85,306   $  80,148   $  66,574
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Increase in provision for losses on accounts and notes
       receivable...........................................     (2,080)       (750)     (1,433)
     Depreciation expense...................................     34,430      27,603      20,790
     Loss on disposal of property and equipment.............        113          93          80
     Amortization expense...................................     12,745      14,229      13,128
     Amortization of imputed interest.......................         67          22          80
     Deferred income taxes..................................      8,790      (1,549)      1,090
     Minority interest in net earnings of subsidiary........        264         254         252
     Non-recurring expense (note 11)........................         --      15,557          --
     Change in operating assets and liabilities:
       Increase in accounts and notes receivable............     (8,377)    (13,698)     (6,883)
       (Increase) decrease in inventories...................     (1,103)        441        (256)
       (Increase) decrease in prepaid expenses..............       (113)       (118)         81
       Increase (decrease) in accounts payable..............      4,779      (2,568)      6,743
       Increase (decrease) in accrued expenses..............      2,942       2,676        (339)
       Decrease in income taxes.............................      7,679       4,210       6,976
                                                              ---------   ---------   ---------
          Net cash provided by operating activities.........    145,442     126,550     106,883
                                                              ---------   ---------   ---------
Cash flows from investing activities:
  Proceeds from sale of property and equipment..............        158         127         276
  Capital expenditures......................................    (62,188)    (50,676)    (38,241)
  Increase (decrease) in other assets.......................        498        (575)       (524)
  Business acquisitions, net of cash acquired (note 13).....    (95,704)    (66,249)    (64,764)
                                                              ---------   ---------   ---------
          Net cash used by investing activities.............   (157,236)   (117,373)   (103,253)
                                                              ---------   ---------   ---------
Cash flows from financing activities:
  Proceeds from long-term obligations.......................     64,000     101,559      58,000
  Payment of long-term obligations..........................    (59,512)   (115,073)    (65,772)
  Decrease in minority interest.............................       (253)       (244)       (226)
  Proceeds from issuance of common stock....................      9,421       7,118       4,900
  Payment to acquire treasury stock.........................       (840)         --          --
                                                              ---------   ---------   ---------
          Net cash provided (used) by financing
            activities......................................     12,816      (6,640)     (3,098)
                                                              ---------   ---------   ---------
          Net increase in cash and cash equivalents.........      1,022       2,537         532
Cash and cash equivalents, beginning of year................      4,078       1,541       1,009
                                                              ---------   ---------   ---------
Cash and cash equivalents, end of year......................  $   5,100   $   4,078   $   1,541
                                                              =========   =========   =========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-5
<PAGE>   23
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       DECEMBER 31, 1998, 1997, AND 1996
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a) Description of Business
 
     Lincare Holdings Inc. and subsidiaries (the "Company") provides oxygen,
respiratory therapy services, and infusion therapy services to the home health
care market and also supplies home medical equipment, such as hospital beds,
wheelchairs and other medical supplies. The Company's customers are located in
42 states. The Company's supplies are readily available and the Company is not
dependent on a single supplier or even a few suppliers.
 
  (b) Use of Estimates
 
     Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.
 
  (c) Principles of Consolidation
 
     The consolidated financial statements include the accounts of Lincare
Holdings Inc. and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
 
  (d) Revenue Recognition
 
     Revenues are recognized on an accrual basis in the period in which services
and related products are provided to patients and are recorded at net realizable
amounts estimated to be received from patients and third party payors.
 
  (e) Financial Instruments
 
     The Company believes the book value of its cash equivalents, accounts and
notes receivable, income taxes receivable, accounts payable and accrued expenses
approximate fair value due to their short-term nature. The book value of the
Company's bank credit agreement and long-term obligations approximate their fair
value as the current interest rates approximate rates at which similar types of
borrowing arrangements could be currently obtained by the Company. The Company
had no derivative financial instruments at December 31, 1998 or 1997.
 
  (f) Inventories
 
     Inventories, consisting of equipment, supplies and replacement parts, are
stated at the lower of cost or market. Cost is determined using the first-in,
first-out (FIFO) method.
 
  (g) Property and Equipment
 
     Property and equipment is stated at cost. Depreciation on property and
equipment is calculated on the straight-line method over the estimated useful
lives of the assets as set forth in the table below.
 
<TABLE>
<S>                                                           <C>
Land improvements...........................................  15 years
Building and improvements...................................  5 to 40 years
Equipment and furniture.....................................  3 to 11 years
</TABLE>
 
                                       F-6
<PAGE>   24
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Leasehold improvements are amortized on the straight-line method over the
lesser of the lease term or estimated useful life of the asset. Amortization is
included with depreciation expense.
 
  (h) Other Assets
 
     Goodwill results from the excess of cost over net assets of acquired
businesses and is amortized on a straight-line basis over 40 years.
 
     Intangible assets (customer base) are amortized on a straight-line basis
over the estimated life of three years.
 
     Covenants not to compete are amortized on a straight-line basis over the
life of the respective covenants, three to five years.
 
     The Company periodically evaluates goodwill and other intangible assets by
utilizing an operating income realization test. In addition, the Company
considers the effects of external changes to the Company's business environment,
including competitive pressures, market changes and technological and regulatory
changes.
 
  (i) Income Taxes
 
     Deferred income taxes are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to be
recovered or settled. The effect on deferred taxes of a change in tax rate is
recognized in income in the period that includes the enactment date.
 
  (j) Pension Plan
 
     The Company has a defined contribution pension plan covering substantially
all employees. The Company makes monthly contributions to the plan equal to the
amount accrued for pension expense. Employer contributions (net of applied
forfeitures) were approximately $2,248,000 in 1998, $1,895,000 in 1997, and
$1,362,000 in 1996.
 
  (k) Statements of Cash Flows
 
     For purposes of the statements of cash flows, the Company considers all
short-term investments with a purchased maturity of three months or less to be
cash equivalents.
 
  (l) Stock Options
 
     Prior to January 1, 1995, the Company accounted for its stock option plan
in accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, Accounting for Stock Issued to Employees, and related interpretations.
As such, compensation expense would be recorded on the date of grant only if the
current market price of the underlying stock exceeded the exercise price. On
January 1, 1995, the Company adopted SFAS No. 123, Accounting for Stock-Based
Compensation, which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25, and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in 1995 and
future years as if the fair-value-based method defined in SFAS No. 123 had been
applied. The Company has elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.
 
                                       F-7
<PAGE>   25
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(M) NEW ACCOUNTING STANDARDS
 
     In 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of financial statements.
The Statement requires only additional disclosures in the financial statements;
it does not affect the Company's financial position or results of operations.
The Company has no components of comprehensive income, therefore the adoption of
this standard did not have any effect on the financial statements.
 
(2) ACCOUNTS AND NOTES RECEIVABLE
 
     Accounts and notes receivable at December 31, 1998 and 1997 consist of:
 
<TABLE>
<CAPTION>
                                                               1998      1997
                                                              -------   -------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Trade.......................................................  $94,284   $76,161
Other.......................................................      256       173
                                                              -------   -------
                                                               94,540    76,334
Less allowance for uncollectible accounts...................    9,353     7,951
                                                              -------   -------
                                                              $85,187   $68,383
                                                              =======   =======
</TABLE>
 
(3) PROPERTY AND EQUIPMENT
 
     Property and equipment at December 31, 1998 and 1997 consist of:
 
<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Land and improvements.......................................  $     85   $     85
Building and improvements...................................     1,393      1,151
Equipment and furniture.....................................   244,555    180,202
                                                              --------   --------
                                                              $246,033   $181,438
                                                              ========   ========
</TABLE>
 
     Rental equipment of approximately $187,806,000 in 1998 and $138,667,000 in
1997 are included with equipment and furniture.
 
(4) LEASES
 
     The Company has several noncancelable operating leases, primarily for
buildings, office equipment and vehicles, that expire over the next five years
and provide for purchase or renewal options. Operating lease expense was
approximately $18,739,000 in 1998, $16,012,000 in 1997, and $12,617,000 in 1996.
 
     Future minimum lease payments under noncancelable operating leases as of
December 31, 1998 are as follows:
 
<TABLE>
<CAPTION>
                                                              (IN THOUSANDS)
<S>                                                           <C>
1999........................................................     $16,588
2000........................................................      12,008
2001........................................................       7,120
2002........................................................       2,704
2003........................................................         512
                                                                 -------
          Total minimum lease payments......................     $38,932
                                                                 =======
</TABLE>
 
                                       F-8
<PAGE>   26
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(5) LONG-TERM OBLIGATIONS
 
     Long-term obligations at December 31, 1998 and 1997 consist of:
 
<TABLE>
<CAPTION>
                                                               1998      1997
                                                              -------   ------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Borrowings under revolving credit portion of bank credit
  agreement bearing interest at the Interbank Offered Rate
  (5.82% at December 31, 1998), adjusted for changes in
  reserve requirements, plus an applicable margin based upon
  the Company's consolidated leverage ratio (consolidated
  funded indebtedness to consolidated EBITDA) payable in
  2000......................................................  $22,000   $4,000
Unsecured, deferred acquisition obligations net of imputed
  interest, payable in various installments through 1999....   12,566    8,225
Computer equipment purchases financed through installment
  loans; interest (4.17% to 4.52%) and principal are payable
  monthly through 2000......................................      615      957
                                                              -------   ------
          Total long-term obligations.......................   35,181   13,182
          Less: current installments........................   12,923    8,580
                                                              -------   ------
          Long-term debt, excluding current installments....  $22,258   $4,602
                                                              =======   ======
</TABLE>
 
     The credit agreement with a commercial bank dated November 25, 1997 permits
the Company to borrow amounts up to $75,000,000 on a revolving credit facility
and $25,000,000 on a line of credit facility. The revolving credit facility has
a termination date of three years from the date of the credit agreement
(November 24, 2000) and the line of credit has a termination date of February
28, 2000. Outstanding borrowings under the line of credit at the termination
date of the facility may be converted to a term loan at the option of the
Company and shall mature on the revolving credit facility termination date. At
December 31, 1998, there were no borrowings outstanding on the line of credit.
Upon entering into the credit agreement, an origination fee of $150,000 was paid
and is being amortized over three years. Commitment fees on the unused portion
of the facilities (.175% on the revolving credit facility and .125% on the line
of credit at December 31, 1998) are based upon the Company's consolidated
leverage ratio for the most recent four fiscal quarters. Interest accrued on the
outstanding principal balance that is not termed for repayment is payable
quarterly. The credit agreement contains several financial and other covenants
and is secured by a pledge of the stock of the wholly-owned subsidiaries of
Lincare Holdings Inc.
 
     Unamortized imputed interest on the deferred acquisition obligations and
installment loans at 4.17% to 8.25% was $38,000 in 1998 and $103,000 in 1997.
 
     The aggregate maturities of long-term obligations for each of the five
years subsequent to December 31, 1998 are as follows:
 
<TABLE>
<CAPTION>
                                                              (IN THOUSANDS)
<S>                                                           <C>
1999........................................................     $12,923
2000........................................................      22,258
                                                                 -------
                                                                 $35,181
                                                                 =======
</TABLE>
 
                                       F-9
<PAGE>   27
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(6) INCOME TAXES
 
     The tax effects of temporary differences that account for significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1998 and 1997 are presented below:
 
<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Deferred tax assets:
  Accrued expenses, principally due to deferral for income
     tax reporting purposes.................................  $ (4,113)  $ (3,388)
  Intangible assets and covenants not to compete,
     principally due to differences in amortization.........    (7,575)    (7,927)
  Net operating loss carryforward...........................      (113)      (220)
                                                              --------   --------
          Total gross deferred tax assets...................   (11,801)   (11,535)
                                                              --------   --------
Deferred tax liabilities:
  Accounts receivable, principally due to valuation
     adjustment.............................................     1,688         --
  Property and equipment, principally due to differences in
     depreciation...........................................    14,473      9,524
  Goodwill, principally due to differences in
     amortization...........................................     8,350      6,415
  Other.....................................................     2,941      2,457
                                                              --------   --------
          Total gross deferred tax liabilities..............    27,452     18,396
                                                              --------   --------
          Net deferred tax liability........................  $ 15,651   $  6,861
                                                              ========   ========
</TABLE>
 
     There is no valuation allowance for deferred tax assets. The Company
expects that the results of future operations will generate sufficient taxable
income to allow for the utilization of deferred tax assets.
 
     Income tax expense attributable to operations consists of:
 
<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                            ---------------------------
                                                             1998      1997      1996
                                                            -------   -------   -------
                                                                  (IN THOUSANDS)
<S>                                                         <C>       <C>       <C>
Current:
  Federal.................................................  $36,423   $44,641   $35,149
  State...................................................    3,850     7,081     4,183
                                                            -------   -------   -------
          Total current...................................   40,273   $51,722   $39,332
Deferred:
  Federal.................................................   11,535    (1,347)      959
  State...................................................    1,146      (202)      131
                                                            -------   -------   -------
          Total deferred..................................   12,681    (1,549)    1,090
                                                            -------   -------   -------
          Total income tax expense........................  $52,954   $50,173   $40,422
                                                            =======   =======   =======
Total income tax expense was allocated:
  Income from operations..................................  $52,954   $50,173   $40,422
  Stockholders' equity for compensation expense for tax
     purposes.............................................   (8,702)   (6,553)   (6,391)
                                                            -------   -------   -------
                                                            $44,252   $43,620   $34,031
                                                            =======   =======   =======
</TABLE>
 
                                      F-10
<PAGE>   28
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Total income tax expense differs from the amounts computed by applying a
U.S. federal income tax rate of 35% to income before income taxes as a result of
the following:
 
<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                            ---------------------------
                                                             1998      1997      1996
                                                            -------   -------   -------
                                                                  (IN THOUSANDS)
<S>                                                         <C>       <C>       <C>
Computed "expected" tax expense...........................  $48,391   $45,612   $37,449
State income taxes, net of federal income tax benefit.....    3,247     4,471     2,804
Other.....................................................    1,316        90       169
                                                            -------   -------   -------
          Total income tax expense........................  $52,954   $50,173   $40,422
                                                            =======   =======   =======
</TABLE>
 
(7) STOCKHOLDERS' EQUITY
 
     The Company has 5,000,000 authorized shares of preferred stock, all of
which are unissued. The Board of Directors has the authority to issue up to such
number of shares of preferred stock in one or more series and to fix the rights,
preferences, privileges, qualifications, limitations and restrictions thereof
without any further vote or action by the stockholders.
 
(8) STOCK OPTIONS
 
     The Company has five stock option plans that provide for the grant of
options to directors, officers and employees. To date, stock options have been
granted with an exercise price equal to the stock's fair value at the date of
grant. Stock options generally have ten-year terms and generally vest over four
years.
 
     The Company has reserved a total of 5,947,536 shares of common stock for
issuance under its Non-Qualified Stock Option Plan (the "Plan"). At December 31,
1998, there were options for 112,000 shares outstanding and options for 1,960
shares available for issuance under the Plan. The Company has reserved a total
of 3,200,000 shares of common stock for issuance under its 1991 Stock Plan (the
"1991 Plan"). At December 31, 1998 there were options for 603,500 shares
outstanding and options for 7,600 shares available for issuance under the 1991
Plan. The Company has reserved a total of 1,000,000 shares of common stock for
issuance under its 1994 Stock Plan (the "1994 Plan"). At December 31, 1998,
there were options for 780,500 shares outstanding and no options available for
issuance under the 1994 Plan. The Company has reserved a total of 2,000,000
shares of common stock for issuance under its 1996 Stock Plan (the "1996 Plan").
At December 31, 1998, there were options for 1,823,800 shares outstanding and
options for 84,000 shares available for issue under the 1996 Plan. The Company
has reserved a total of 1,000,000 shares of common stock for issuance under its
1998 stock plan (the "1998 Plan"). At December 31, 1998, there were options for
719,000 shares outstanding and options for 281,000 shares available for issue
under the 1998 Plan.
 
     The per share weighted average fair value of stock options granted during
1998, 1997, and 1996 was $23.61, $11.35 and $8.74 on the date of grant using the
Black Scholes option pricing model with the following weighted average
assumptions: 1998 -- expected dividend yield 0%, risk-free interest rate of
5.3%, expected life of 9 years, and volatility of 59.0%; 1997 -- expected
dividend yield 0%, risk-free interest rate of 5.7%, expected life of 9 years,
and volatility of 39.9%; 1996 -- expected dividend yield 0%, risk-free interest
rate of 6.2%, expected life of 7 years, and volatility of 42.2%.
 
     The Company applies APB Opinion No. 25 in accounting for its stock plans
and, accordingly, no compensation cost has been recognized for its stock options
in the financial statements. Had the Company
 
                                      F-11
<PAGE>   29
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
determined compensation cost based on the fair value at the grant date for its
stock options under SFAS No. 123, the Company's net income would have been
reduced to the pro forma amounts indicated below:
 
<TABLE>
<CAPTION>
                                                     1998      1997      1996
                                                    -------   -------   -------
                                                     (IN THOUSANDS, EXCEPT PER
                                                            SHARE DATA)
<S>                                                 <C>       <C>       <C>
Net income:
  As reported.....................................  $85,306   $80,148   $66,574
                                                    =======   =======   =======
  Pro forma.......................................  $78,689   $75,843   $64,093
                                                    =======   =======   =======
Income per common share:
  Basic -- as reported............................  $  1.47   $  1.41   $  1.19
                                                    =======   =======   =======
  Diluted -- as reported..........................  $  1.44   $  1.37   $  1.15
                                                    =======   =======   =======
  Basic -- pro forma..............................  $  1.36   $  1.33   $  1.14
                                                    =======   =======   =======
  Diluted -- pro forma............................  $  1.32   $  1.29   $  1.11
                                                    =======   =======   =======
</TABLE>
 
     Pro forma net income reflects only options granted in 1998, 1997, and 1996.
Therefore, the full impact of calculating compensation cost for stock options
under SFAS No. 123 is not reflected in the pro forma net income or per share
amounts presented above because compensation cost is reflected over the options
vesting period of four years and compensation cost for options granted prior to
January 1, 1995 is not considered.
 
     Information related to the plans is as follows:
 
<TABLE>
<CAPTION>
                                                            NUMBER OF    WEIGHTED AVERAGE
                                                             OPTIONS      EXERCISE PRICE
                                                            ----------   ----------------
<S>                                                         <C>          <C>
Outstanding at December 31, 1995..........................   4,085,958        $ 8.08
Exercised in 1996.........................................  (1,136,318)         4.37
Canceled in 1996..........................................     (58,800)         8.21
Options issued in 1996....................................   1,060,000         16.22
                                                            ----------
Outstanding at December 31, 1996..........................   3,950,840         11.33
Exercised in 1997.........................................    (931,098)         7.57
Canceled in 1997..........................................     (32,000)        15.43
Options issued in 1997....................................     948,000         19.36
                                                            ----------
Outstanding at December 31, 1997..........................   3,935,742         14.22
Exercised in 1998.........................................    (903,942)        10.42
Canceled in 1998..........................................     (83,000)        21.34
Options issued in 1998....................................   1,090,000         33.83
                                                            ----------
Outstanding at December 31, 1998..........................   4,038,800        $19.88
                                                            ==========
</TABLE>
 
     At December 31, 1998, the range of exercise prices and weighted average
remaining contractual life of outstanding options were as follows:
 
<TABLE>
<CAPTION>
                                                               OPTIONS            WEIGHTED
                                                          OUTSTANDING AS OF       AVERAGE
                       RANGE OF                             DECEMBER 31,         REMAINING
                    EXERCISE PRICES                             1998          CONTRACTUAL LIFE
                    ---------------                       -----------------   ----------------
<S>                                                       <C>                 <C>
$ 6.06 -$12.50 ........................................       1,186,000           4.8 years
$12.63 -$18.91 ........................................       1,457,800           5.9 years
$19.50 -$29.38 ........................................         676,000           7.9 years
$35.63 -$35.63 ........................................         719,000           8.4 years
                                                              ---------
$ 6.06 -$35.63 ........................................       4,038,800           6.4 years
                                                              =========
</TABLE>
 
                                      F-12
<PAGE>   30
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     At December 31, 1998, 1997 and 1996 the number of options exercisable was
1,535,800, 1,400,742, and 1,651,840, respectively, and the weighted average
exercise price of those options was $12.61, $9.86, and $7.81 respectively.
 
     In connection with the exercise of certain stock options, the Company
receives a tax deduction for the difference between the fair value of the common
stock at the date of exercise and the exercise price. The related income tax
benefit of approximately $8,702,000 in 1998, $6,553,000 in 1997, and $6,391,000
in 1996 has been recorded as a reduction of income taxes payable and an increase
to additional paid-in capital.
 
(9) NET REVENUES
 
     Included in the Company's net revenues is reimbursement from the federal
government under Medicare, Medicaid and other federally funded programs, which
aggregated approximately 62% in 1998, 63% in 1997, and 61% in 1996 of such net
revenues.
 
(10) INCOME PER COMMON SHARE
 
     A reconciliation of the numerators and the denominators of the basic and
diluted per common share computations is as follows:
 
<TABLE>
<CAPTION>
                                                     INCOME         SHARES       PER SHARE
                                                   (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                                   -----------   -------------   ---------
                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                <C>           <C>             <C>
YEAR ENDED DECEMBER 31, 1998
  Basic:
     Income available to common stockholders....     $85,306        57,992         $1.47
                                                                                   =====
  Effect of Dilutive Securities:
     Stock Options..............................          --         1,443
                                                     -------        ------
  Diluted:
     Income available to common stockholders and
       holders of dilutive securities...........     $85,306        59,435         $1.44
                                                     =======        ======         =====
YEAR ENDED DECEMBER 31, 1997
  Basic:
     Income available to common stockholders....     $80,148        56,837         $1.41
                                                                                   =====
  Effect of Dilutive Securities:
     Stock Options..............................          --         1,818
                                                     -------        ------
  Diluted:
     Income available to common stockholders and
       holders of dilutive securities...........     $80,148        58,655         $1.37
                                                     =======        ======         =====
YEAR ENDED DECEMBER 31, 1996
  Basic:
     Income available to common stockholders....     $66,574        55,999         $1.19
                                                                                   =====
  Effect of Dilutive Securities:
     Stock Options..............................          --         1,727
                                                     -------        ------
  Diluted:
     Income available to common stockholders and
       holders of dilutive securities...........     $66,574        57,726         $1.15
                                                     =======        ======         =====
</TABLE>
 
                                      F-13
<PAGE>   31
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(11) NON-RECURRING EXPENSE
 
     In 1997, the Company recorded a non-recurring expense of $15,557,000 of
which $11,849,000 was related to the write down of impaired oxygen rental
equipment and $3,708,000 was related to the impairment write down of certain
customer list intangible assets. The charges adjusted the carrying value of
certain assets affected by provisions contained in the Balanced Budget Act of
1997. This legislation reduced Medicare reimbursement for home oxygen equipment
and services by 30 percent over the two year period commencing January 1, 1998.
The fair values of the oxygen rental equipment and customer list were determined
based on discounted cash flows taking into account the reduced reimbursement
rates. In 1996, the Company recorded a non-recurring expense of $3,932,000 of
which $2,682,000 was related to the restructuring of certain senior management
employment agreements. The remainder of the charge related to the resolution of
an investigation in the amount of $1,000,000, together with related legal fees
of $250,000.
 
(12) SUPPLEMENTAL STATEMENTS OF CASH FLOWS INFORMATION
 
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                               1998      1997      1996
                                                              -------   -------   -------
                                                                    (IN THOUSANDS)
<S>                                                           <C>       <C>       <C>
Cash paid for:
  Interest..................................................  $ 1,106   $ 1,139   $   414
                                                              =======   =======   =======
  Income taxes..............................................  $37,699   $47,512   $31,566
                                                              =======   =======   =======
</TABLE>
 
(13) BUSINESS COMBINATIONS
 
     During 1998, the Company acquired the outstanding stock or certain assets
of 24 businesses in 24 separate transactions. During 1997, the Company acquired
the outstanding stock or certain assets of 24 businesses in 24 separate
transactions. Consideration for the acquisitions generally included cash,
unsecured non-interest bearing obligations and the assumption of certain
liabilities.
 
     None of the businesses acquired were related to the Company prior to
acquisition. Each acquisition during 1998 and 1997 was accounted for as a
purchase. The results of operations of the acquired companies are included in
the accompanying consolidated statement of operations since the respective dates
of acquisition. Each of the acquired companies conducted operations similar to
that of the Company.
 
     The aggregate cost of the acquisitions described above was as follows:
 
<TABLE>
<CAPTION>
                                                                1998      1997
                                                              --------   -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Cash........................................................  $ 96,250   $66,597
Deferred acquisition obligations............................    16,510    11,583
Assumption of liabilities...................................     1,219     1,475
                                                              --------   -------
                                                              $113,979   $79,655
                                                              ========   =======
</TABLE>
 
                                      F-14
<PAGE>   32
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The aggregate purchase price of the acquisitions described above was
allocated as follows:
 
<TABLE>
<CAPTION>
                                                                1998      1997
                                                              --------   -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Current assets (including cash acquired of $546 in 1998 and
  $348 in 1997).............................................  $  6,708   $ 4,547
Property and equipment......................................     4,459     3,755
Intangible assets...........................................     4,753     6,904
Goodwill....................................................    98,059    64,449
                                                              --------   -------
                                                              $113,979   $79,655
                                                              ========   =======
</TABLE>
 
     The following unaudited pro forma supplemental information on the results
of operations for the years ended December 31, 1998 and 1997 include the
acquisitions as if they had been combined at the beginning of the respective
years.
 
<TABLE>
<CAPTION>
                                                                 1998         1997
                                                              ----------   ----------
                                                                  (IN THOUSANDS,
                                                              EXCEPT PER SHARE DATA)
<S>                                                           <C>          <C>
Net revenues................................................   $520,930     $501,362
                                                               ========     ========
Net income..................................................   $ 90,374     $ 89,597
                                                               ========     ========
Basic -- income per common share............................   $   1.56     $   1.58
                                                               ========     ========
Diluted -- income per common share..........................   $   1.52     $   1.53
                                                               ========     ========
</TABLE>
 
     This 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 years or of future
results of operations of the combined companies.
 
(14) CONTINGENCIES
 
     The Company has received subpoenas from the U.S. Attorney's Office in
Sacramento, California requesting various documents including (i) documents
relating to the provision of home oxygen therapy to beneficiaries of certain
federally funded health care programs during 1995 and 1996 by five Lincare
locations in California and Oregon; (ii) documents concerning certain marketing
programs and practices for oxygen and other therapies, and certain policies and
procedures, in place at these five Lincare locations from 1995 through June
1998; and (iii) certain information regarding compliance with the billing and
documentation requirements of various federally funded health care programs by
ten Lincare locations in California and Oregon from 1995 through June 1998. The
government has not served the Company with a complaint nor has it disclosed the
basis for its inquiries. Thus, the duration or outcome of this matter cannot be
predicted with any degree of certainty. The Company is cooperating with the
government's request for information.
 
     The Company has received, and expects that, as a health care provider, it
will receive in the future, inquiries from government agencies and fiscal
intermediaries requesting patient records and other documents to support claims
submitted by the Company for payment of services rendered to its customers. The
Company is involved in certain other claims and legal actions arising in the
ordinary course of business. The ultimate disposition of all such matters is not
expected to have a material adverse impact on the Company's financial position,
results of operations or liquidity.
 
                                      F-15
<PAGE>   33
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(15) QUARTERLY FINANCIAL DATA (UNAUDITED)
 
     The following is a summary of quarterly financial results for the years
ended December 31, 1998 and 1997:
 
<TABLE>
<CAPTION>
                                                 FIRST      SECOND     THIRD      FOURTH
                                                QUARTER    QUARTER    QUARTER    QUARTER
                                                --------   --------   --------   --------
                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                             <C>        <C>        <C>        <C>
1998:
  Net revenues................................  $111,904   $119,518   $125,691   $130,294
                                                ========   ========   ========   ========
  Operating income............................  $ 29,435   $ 33,582   $ 37,284   $ 38,802
                                                ========   ========   ========   ========
  Net income..................................  $ 18,178   $ 20,724   $ 22,733   $ 23,671
                                                ========   ========   ========   ========
  Income per common share:
  Basic.......................................  $    .32   $    .36   $    .39   $    .41
                                                ========   ========   ========   ========
  Diluted.....................................  $    .31   $    .35   $    .38   $    .40
                                                ========   ========   ========   ========
1997:
  Net revenues................................  $101,012   $108,702   $114,772   $118,695
                                                ========   ========   ========   ========
  Operating income(1).........................  $ 32,825   $ 35,995   $ 38,498   $ 24,055
                                                ========   ========   ========   ========
  Net income(1)...............................  $ 20,055   $ 21,843   $ 23,548   $ 14,702
                                                ========   ========   ========   ========
  Income per common share:
  Basic.......................................  $    .36   $    .39   $    .41   $    .26
                                                ========   ========   ========   ========
  Diluted.....................................  $    .35   $    .37   $    .40   $    .25
                                                ========   ========   ========   ========
</TABLE>
 
---------------
 
(1) The 1997 fourth quarter operating income included a non-recurring expense of
    $15,557,000 ($9,568,000 after-tax) (see note 11).
 
                                      F-16
<PAGE>   34
 
                                                                   SCHEDULE VIII
 
                             LINCARE HOLDINGS INC.
                                AND SUBSIDIARIES
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                        BALANCE AT   CHARGED TO   CHARGED TO
                                        BEGINNING    COSTS AND      OTHER                      BALANCE AT
             DESCRIPTION                OF PERIOD     EXPENSES     ACCOUNTS     DEDUCTIONS    END OF PERIOD
             -----------                ----------   ----------   ----------    ----------    -------------
                                                                  (IN THOUSANDS)
<S>                                     <C>          <C>          <C>           <C>           <C>
YEAR ENDED DECEMBER 31, 1998
Deducted from asset accounts:
  Allowance for uncollectible
     accounts.........................    $7,951       $5,849       $2,632(1)     $7,079(2)      $9,353
                                          ======       ======       ======        ======         ======
YEAR ENDED DECEMBER 31, 1997
Deducted from asset accounts:
  Allowance for uncollectible
     accounts.........................    $5,917       $4,432       $3,724(1)     $6,122(2)      $7,951
                                          ======       ======       ======        ======         ======
YEAR ENDED DECEMBER 31, 1996
Deducted from asset accounts:
  Allowance for uncollectible
     accounts.........................    $4,535       $3,472       $2,788(1)     $4,878(2)      $5,917
                                          ======       ======       ======        ======         ======
</TABLE>
 
---------------
 
(1) To record allowance on business combinations
(2) To record write-offs
 
                                       S-1
<PAGE>   35

                               INDEX OF EXHIBITS



<TABLE>
<CAPTION>
                                                                                                      Sequentially
Exhibit                                                                                                   Numbered
Number                            Exhibit                                                                     Page
------                            -------                                                                     ----
   <S>         <C>                                                                                            <C>
       +3.1-   Amended and Restated Certificate of Incorporation of Lincare Holdings Inc.  . . . .

 *****3.1.1-   Certificate of Amendment to the Amended and Restated Certificate of Incorporation
               of Lincare Holdings Inc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

       +3.2-   Amended and Restated By-Laws of Lincare Holdings Inc. . . . . . . . . . . . . . . .

      +10.6-   Purchase Agreement dated as of September 25, 1991 among the Registrant and the
               several purchasers named therein  . . . . . . . . . . . . . . . . . . . . . . . . .

     +10.10-   Non-Qualified Stock Option Plan of Registrant . . . . . . . . . . . . . . . . . . .

     +10.11-   Lincare Holdings Inc. 1991 Stock Plan . . . . . . . . . . . . . . . . . . . . . . .

     +10.15-   Lincare Inc. 401(k) Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

   +++10.21-   Amendment to Non-Qualified Stock Option Agreement dated December 2, 1992, between
               the Registrant and James T. Kelly . . . . . . . . . . . . . . . . . . . . . . . . .

   +++10.22-   Amendment to Non-Qualified Stock Option Agreement dated December 2, 1992, between
               the Registrant and Howard R. Deutsch  . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>


<PAGE>   36

<TABLE>
<CAPTION>

                                                                                                  Sequentially
Exhibit                                                                                              Numbered
Number                                             Exhibit                                               Page
------                                             -------                                               ----
 <S>           <C>                                                                                       <C>
   +++10.23-   Amendment to Non-Qualified Stock Option Agreement dated December 2, 1992, 
               between the Registrant and James M. Emanuel . . . . . . . . . . . . . . . . . . . 

   ***10.31-   Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
               the Registrant and James T. Kelly . . . . . . . . . . . . . . . . . . . . . . . .         

   ***10.32-   Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
               the Registrant and Howard R. Deutsch  . . . . . . . . . . . . . . . . . . . . . .         

   ***10.33-   Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
               the Registrant and James M. Emanuel . . . . . . . . . . . . . . . . . . . . . . .         

     /10.34-   Employment Agreement dated as of January 1, 1997 between Lincare Holdings Inc.
               and John P. Byrnes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

  ****10.35-   Employment Agreement dated as of January 1, 1997 between Lincare Holdings Inc.
               and James T. Kelly  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         
     
  ****10.38-   Non-Qualified Stock Option Agreements dated as of January 26, 1996, between
               the Registrant and John P. Byrnes . . . . . . . . . . . . . . . . . . . . . . . .         

  ****10.39-   Non-Qualified Stock Option Agreements dated as of July 15, 1996 between   
               the Registrant and John P. Byrnes . . . . . . . . . . . . . . . . . . . . . . . .         

     /10.40-   Employment Agreement dated as of June 1, 1997 between Lincare Holdings Inc. and
               Paul G. Gabos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         

     /10.41-   Employee Stock Purchase Plan  . . . . . . . . . . . . . . . . . . . . . . . . . .         

     /10.42-   Credit Agreement dated November 25, 1997 between Registrant and NationsBank of
               Florida N.A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          

     /10.43-   Form of Non-employee Director Stock Option Agreement  . . . . . . . . . . . . . .         
  
     /10.44-   Form of Non-qualified Stock Option Agreement  . . . . . . . . . . . . . . . . . .         
      
 +++++22.2-    List of Subsidiaries of Lincare Holdings Inc. . . . . . . . . . . . . . . . . . .          

      23.1-    Consent of KPMG Peat Marwick LLP  . . . . . . . . . . . . . . . . . . . . . . . .         

      27.1-    Financial Data Schedule 12/31/98 (for SEC Use Only)   . . . . . . . . . . . . . .    
      27.2-    Financial Data Schedule 12/31/97 (for SEC Use Only)   . . . . . . . . . . . . . .    
      27.3-    Financial Data Schedule 12/31/96 (for SEC Use Only)   . . . . . . . . . . . . . .          
</TABLE>
---------------
+            Incorporated by reference to the corresponding exhibit to the
             Registrant's Registration Statement on Form S-1 (No. 33-44672)



<PAGE>   37

++      Incorporated by reference to Exhibit A to the Registrant's Form 8-K
        dated October 14, 1992.

+++     Incorporated by reference to the corresponding exhibit to the
        Registrant's Registration Statement on Form S-1 (No. 33-55260).

++++    Incorporated by reference to the Registrant's Form 8-K dated April 28,
        1993.

+++++   Incorporated by reference to the Registrant's Form 10-K dated March
        22, 1994.

*       Incorporated by reference to the Registrant's Form 10-K dated
        March 22, 1995.

**      Incorporated by reference to the Registrant's Form 8-K dated May 24,
        1995.

***     Incorporated by reference to the Registrant's Form 10-K dated March 27,
        1996.

****    Incorporated by reference to the Registrant's Form 10-K dated March 25, 
        1997.

*****   Incorporate by reference to the Registrant's Form 10-Q dated August 12,
        1998.

    /   Incorporate by reference to the Registrant's Form 10-K dated March 26,
        1998.