Encompass Health Corporation · NYSE:EHC
Encompass Health — HealthSouth — Corporate Update (December 2005)
32 slides from Encompass Health's corporate update, Dec 13, 2005
Slide 1: Business Update
Exhibit 99 Business Update December 13, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information contained in this presentation includes certain estimates and other forward- looking information that reflect our current views with respect to future events and financial performance These estimates and other forward-looking information are based on assump
Slide 3: Forward-Looking Statements (cont.)
Forward-Looking Statements (cont.) Some factors that may affect the accuracy of such forward-looking statements are as follows: Regulatory changes, including the implementation of the 75% Rule and the recently- adopted rule updating the IRF-PPS for federal fiscal year 2006 Resolution of outstanding
Slide 4: Cautionary Statements Regarding Presentation
Cautionary Statements Regarding Presentation References may be made to information relating to periods up to and including December 31, 2004 and information relating to periods after December 31, 2004 Information relating to periods up to and including December 31, 2004 is taken from the financial s
Slide 5: Cautionary Statements Regarding Presentation (cont'd)
Cautionary Statements Regarding Presentation (cont’d) Amounts shown for periods after December 31, 2004 were prepared on a basis consistent with amounts shown for periods up to and including December 31, 2004, with the following exceptions. Amounts shown for periods after December 31, 2004: Exclude
Slide 6: Notes Regarding Presentation of Non-GAAP Financial Measures
Notes Regarding Presentation of Non- GAAP Financial Measures The financial data contained herein includes non-GAAP financial measures, including “Adjusted EBITDA,” to assist in assessing projected and actual operating performance and to facilitate quantification of planned business activities As use
Slide 7: Notes Regarding Presentation of Non-GAAP Financial Measures (cont'd)
Notes Regarding Presentation of Non- GAAP Financial Measures (cont’d) Adjusted EBITDA may be useful to stakeholders because it is commonly used as an analytical indicator within the healthcare industry to measure leverage capacity and debt service ability. While it may be useful to measure debt serv
Slide 8: Considerations Involving Our Current Situation
Considerations Involving Our Current Situation There are a number of disclaimers and other cautionary statements set forth in the filings we have made with the Securities and Exchange Commission. We urge you to carefully review those statements, particularly those contained in our 2004 Form 10-K, wh
Slide 9: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 10: I. Opening Remarks: 3Q 2005 Results
I. Opening Remarks 3Q 2005 Results(a) (dollars in millions) 3Q 2005 3Q Year-to-Date (c) (c) Actual Budget Actual Budget Net Revenue $828.8 $915.4 $2,626.2 $2,748.5 Expenses: Personnel Costs 378.3 422.9 1,176.8 1,251.9 Cost of Sales 76.3 87.7 256.1 262.3 Other 219.2 230.5 678.2 690.1 Recovery of Adva
Slide 11: 75% Rule Update
Moran Report: 52,000 Medicare beneficiaries 75% Rule Update affected in 2005 -13.8% IRF 3Q 2004 vs. Discharges 3Q 2005 -14.0% 3Q 2002 vs. 3Q 2005 Suspension of Enforcement of 75% Rule Percentages reflect variance from corresponding prior year quarter Data derived from facilities reporting discharges
Slide 12: 75% Rule Update: Clinical Differences of Post-Acute Care Settings
75% Rule Update Clinical Differences of Post-Acute Care Settings Characteristic IRF SNF 1. Attending physician visits 2-3 times/week At least every 30 days 2. Multi-disciplinary team approach; Required Not required Coordinated Program of Care 3. MD or DO designated as Rehabilitation Required Not req
Slide 13: 75% Rule Update: Advocacy
75% Rule Update Advocacy Participating with coalition to implement meaningful 75% Rule reform We support S.1932 which would maintain the Rule at the 50% threshold until July 2007 During this time, research should be conducted to provide clinical data from which policy decisions can be made $2.5 mill
Slide 14: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 15: II. Operations Update – Inpatient
II. Operations Update – Inpatient Division President: Mark Tarr Financial Overview (in millions) Operating Statistics 3Q 2005 3Q 2005 % Actual (a) Budget 3Q 2005 3Q 2004 Change Net Revenue $471.2 $517.0 SS IP Discharges 27,144 30,013 (9.6%) SS OP Visits 474,498 545,066 (12.9%) Personnel costs 224.2
Slide 16: II. Operations Update – Surgery
II. Operations Update – Surgery Division President: Joe Clark Financial Overview (in millions) Operating Statistics 3Q 2005 3Q 2005 % Actual (a) Budget 3Q 2005 3Q 2004 Change Net Revenue Total Cases 164,356 178,366 (7.9%) $198.0 $207.8 SS Cases 155,107 158,416 (2.1%) Personnel costs 67.7 69.1 Rev/Ca
Slide 17: II. Operations Update – Outpatient
II. Operations Update – Outpatient Division President: Diane Munson Financial Overview (in millions) Operating Statistics 3Q 2005 3Q 2005 % (a) (c) 3Q 2005 3Q 2004 Change Actual Budget Total Visits 943,506 1,115,432 (15.4%) Net Revenue $94.6 $107.4 SS Visits 926,509 978,877 (5.3%) Personnel costs 53
Slide 18: II. Operations Update – Diagnostic
II. Operations Update – Diagnostic Division President: Karen Davis Financial Overview (in millions) Operating Statistics 3Q 2005 3Q 2005 % Actual (a) Budget 3Q 2005 3Q 2004 Change Net Revenue $50.4 $56.1 Total Scans 174,650 184,129 (5.1%) SS Scans 174,521 180,338 (3.2%) Personnel costs 14.6 16.3 Rev
Slide 19: II. Operations Update – Corporate/Other
II. Operations Update – Corporate/Other Financial Overview (in millions) Highlights 3Q 2005 3Q 2005 D&A based on restated numbers (a) (c) Actual Budget Net Revenue Transaction with UAB Health System for $14.6 $27.1 purchase of HealthSouth Medical Center Personnel costs 18.2 26.8 proceeding; closing
Slide 20: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 21: III. Filing Timeline
III. Filing Timeline Comprehensive 2000-2003 Form Completed 10-K Filed 2004 Form 10-K Filed Completed 2005 Form 10-K Filed 1Q 2006 Access to 144A Debt Mkts 2Q 2006 Access to Public Mkts 1Q 2007
Slide 22: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 23: IV. 2004 Form 10-K: Operating Earnings
IV. 2004 Form 10-K Operating Earnings (dollars in millions) 2004 2003 2002 Inpatient $437 $437 $341 Surgery $89 ($54) $109 Outpatient $37 ($51) $16 Diagnostic ($10) ($36) ($28) Corporate / Other ($406) ($513) ($598) -------- -------- -------- $147 ($217) ($160) Overall improvement from Surgery, Outp
Slide 24: IV. 2004 Form 10-K (cont'd): Consolidated Adjusted EBITDA
IV. 2004 Form 10-K (cont’d) Consolidated Adjusted EBITDA (dollars in millions) Previously Reported in April Business Update on "Consolidated" Basis $631.9 As Reported in 2004 Form 10-K Consolidated Adjusted EBITDA (p. 74) $621.1 Out-of-Period Adjustments (p. 66) $13.7 Amount Attributable to 2004 $63
Slide 25: IV. 2004 Form 10-K (cont'd): Selected Balance Sheet Highlights
IV. 2004 Form 10-K (cont’d) Selected Balance Sheet Highlights (dollars in millions) 2004 2003 Total Cash $639 $615 Accounts Receivable $452 $499 Property and Equipment $1,405 $1,447 Income Tax Receivable $264 $295 Goodwill, Intangibles $976 $984 All Other $347 $370 Total Assets $4,083 $4,210 Payable
Slide 26: IV. 2004 Form 10-K (cont'd): Selected Cash Flow Highlights
IV. 2004 Form 10-K (cont’d) Selected Cash Flow Highlights (dollars in millions) From Operations 2004 2003 Form 10-K $414 $557 Prof. Restructuring Fees $206 $71 Before Prof. Restructuring Fees $620 $628 Investing Activities ($206) ($60) Financing Activities ($225) ($117)
Slide 27: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 28: V. Liquidity
V. Liquidity (dollars in millions) June 30, 2005 September 30, 2005 Available Cash $132.9 $197.0 Restricted Cash(a) $225.3 $248.3 Consolidated Cash $358.2 $445.3 Interest payments were $34.1 million for 3Q 2005 CMS/DOJ - Civil settlement payments were $22.3 million for 3Q 2005 (a)Restricted cash inc
Slide 29: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 30: Strategic Plan – Summary
Metrics Strategic Plan – Summary Volume growth (SS) Margin expansion Debt reduction Strategic Horizons Phase 3 24 to 48 months Operational, development, Phase 2: and new business focus 12 to 36 months Pay down debt Phase 1: Operational and development focus 0 to 24 months Pay down debt Operational f
Slide 31: Agenda
Agenda I. Opening Remarks Jay Grinney II. Operations Update Mike Snow III. Filing Timeline John Workman IV. 2004 Form 10-K John Workman V. Liquidity John Workman VI. Closing Remarks Jay Grinney VII. Questions & Answers
Slide 32: Business Update
Business Update