Encompass Health Corporation · NYSE:EHC
Encompass Health — HealthSouth — Deutsche Bank 2006 High Yield Conference
12 slides from Encompass Health's conference presentation, Oct 4, 2006
Slide 1: Unlocking Value
Unlocking Value Deutsche Bank 2006 High Yield Conference October 4, 2006 Scottsdale, AZ
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect our current views with respect to future events and financial performance. These estimates, projections and other forward-looking infor
Slide 3: Diversified Healthcare Services Provider
Diversified Healthcare Services Provider National Provider of Healthcare Services Diversified Business Portfolio (b) (c) : % of Net Operating Revenues Diagnostic Other The Company is a leader in each of its four major 6.6% 0.9% operating divisions Outpatient 11.1% Market YTD Net Rev. YTD Op. Earn. (
Slide 4: Accomplishments
Accomplishments Company’s Prior History Q3-02 SEC securities trading investigation New Board of Directors Recruited Q1-03 New Management Recruited DOJ criminal investigation Identified and Mitigated Massive Internal Control Weaknesses SEC files lawsuit vs. Announced HealthSouth and prior Strategic M
Slide 5: Repositioning: Post-Acute; Focus: IRF
Repositioning: Post-Acute; Focus: IRF The Post-Acute Market is Sizeable and Remains Highly Fragmented Post-Acute Usage After Hospital Discharge Post-Acute Growth Opportunity Segment Projected Growth Inpatient Rehab Facilities (IRF) 4-6% Post Acute Care 33% Home Health 5-9% Hospice 12-15% Long Term A
Slide 6: IRF Segment Profile
IRF Segment Profile U. S. IRF (1) Market (2004) 1338 IRFs Post Acute Market (2) Free-standing = 335 (25%) In-hospital Unit = 1003 (75%) HLS All Others For-Profit Not-for-Profit Hospitals Hospitals Number of IRFs 93 242 266 737 Notes: 1. Source: Annual Reports; Verispan data; management analysis 2. T
Slide 7: Inpatient Division
Inpatient Division Overview Payor Mix for the six months ended 6/30/2006 Nation's largest provider of inpatient rehabilitation services 202 locations (94 IRFs, 98 outpatient satellites) 10 LTCH facilities YTD Performance (06/30/06) Net Operating Revenues: $899.9 million Operating Earnings: $194.4 mi
Slide 8: Inpatient Division (cont'd)
Inpatient Division (cont’d) Strong cash flow characteristics Inpatient Division ($ in millions) YTD 6/30/06 2005 Net Operating Revenues $899.9 $1,810.4 Operating Earnings 194.4 393.0 (1) Corporate OH (as a % of revenue) (38.2) (76.9) Depreciation 32.4 66.4 Available Cash Before CAPEX & Debt Service
Slide 9: Growth Opportunities
Growth Opportunities Post divestiture, HealthSouth’s growth will occur through organic and development initiatives 2-3% Pricing Mid-to high-single digit Organic* 1-2% SS Volume EBITDA growth *After full implementation of 75% Rule Development: Current IRF/LTCH pipeline: Development Strategies LTCH IR
Slide 10: Growth Potential – Illustrative Examples
Growth Potential – Illustrative Examples (in thousands) Consolidation - Joint Venture DeNovo - Proforma (40 Bed) (1) (1) Revenue EBITDA % Revenue EBITDA % Stand Alone 10,000 2,000 16% Year 1 8,500 1,275 11% Joint Venture 14,000 3,200 19% Year 2 10,500 2,500 20% - Minority Interest (640) Run Rate 11,
Slide 11: Summary
Summary HealthSouth has emerged from a period of unprecedented uncertainty and upheaval with a new Board, a new management team, a new balance sheet and a new direction. By divesting its non-core assets, the Company will be well-positioned to become a “pure-play” post-acute provider and a consolidat
Slide 12: Appendix: Non-GAAP Financial Reconciliations
Appendix Non-GAAP Financial Reconciliations A reconciliation of net loss to Adjusted Consolidated EBITDA for the six A reconciliation of Adjusted Consolidated EBITDA to net cash used in operating months ended June 30, 2006 is as follows: activities for the six months ended June 30, 2006 is as follow
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