Encompass Health Corporation · NYSE:EHC
Encompass Health — Shareholder Meeting (May 2016)
12 slides from Encompass Health's shareholder meeting presentation, May 5, 2016
Slide 1: 2016 Annual Shareholder Meeting
2016 ANNUAL SHAREHOLDER MEETING May 5, 2016 Inpatient Rehabilitation Hospitals Adult Home Health Locations Hospice Locations Pediatric Home Health Locations Future Inpatient Rehabilitation Hospitals (7 Under Development) 1
Slide 2: 2015: A Year of Significant Growth
2015: A Year of Significant Growth Expansion into Home Health Expansion of IRF Portfolio Acquired Acquired Acquired Acquisitions / Joint December 31, 2014 November 2, 2015 October 1, 2015 Ventures • 4th largest provider of Medicare- • 44 home health and 3 hospice • 11 hospitals with a total of 902 b
Slide 3: … and Significant Achievement
… and Significant Achievement IRF Quality Home Health Quality Percentage of Discharge to Community cases discharged to community, Patient including home Quality of Care Satisfaction and home with Star Ratings UDSMR home health or Star Ratings home hospice HealthSouth care. Higher is better. Quality
Slide 4: … and Significant Achievement
… and Significant Achievement • 2015 was the first year for HealthSouth to be named to Modern Healthcare’s list of best employers in the healthcare industry. • This was Encompass’ fourth year to be named a “Best Places to Work” award winner. Encompass received this honor in 2014, 2013 and 2011. 4
Slide 5: … and Significant Achievement
… and Significant Achievement Revenue Adjusted EBITDA ($ millions) ($ millions) +31.5% +18.2% Adjusted EPS Adjusted Free Cash Flow ($ millions) +8.7% +25.0% 5
Slide 6: Priorities for 2016: Growth
Priorities for 2016 GROWTH • Integrate Reliant and CareSouth ("pause" on additional large acquisitions) • Achieve organic growth at existing hospitals and home health/hospice agencies • Acquire and construct new hospitals and acquire and open new home health/hospice agencies (In Millions) Q1 2016 20
Slide 7: Inpatient Rehabilitation Facilities and Home Health and Hospice
Inpatient Rehabilitation Facilities Home Health and Hospice # of New Beds # of 2016 2017 2018 locations De Novo: December 31, 2015 213 Modesto, CA 50 — — Acquisitions — Pearland, TX — 40 — De Novo 1 Murrieta, CA — — 50 Merged / Closed Locations (1) Joint Ventures: March 31, 2016 213 Hot Springs, AR
Slide 8: Priorities for 2016: Capital Structure
Priorities for 2016 CAPITAL STRUCTURE • Reduce financial leverage (target: < 4.0x by YE 2016) • Continue shareholder distributions 2022 senior notes are fully callable: • Redeemed $50 million in March 2016 • ~$126 million remaining as of March 31, 2016 • Will complete additional $50 million Q1 2016
Slide 9: Priorities for 2016: Operational Initiatives
Priorities for 2016 OPERATIONAL INITIATIVES • Develop coordinated care protocols • Utilize ACE IT to enhance outcomes (e.g., reduce acute care transfers, enhance medication reconciliation) Patient SNFs HLS Admitted Home IRF Where feasible, Patient is assessed Encompass participates in Minimize numbe
Slide 10: Q1 2016 Highlights
Q1 2016 Highlights Growth (In Millions) Q1 2016 Q1 2015 Dollars Percent HealthSouth Consolidated Net operating revenues $ 909.8 $ 740.6 $ 169.2 22.8% Adjusted EBITDA $ 192.1 $ 156.1 $ 36.0 23.1% Adjusted EPS $ 0.61 $ 0.51 $ 0.10 19.6% Adjusted free cash flow $ 129.5 $ 79.4 $ 50.1 63.1% Major takeawa
Slide 11: Full-Year Guidance
Full-Year Guidance Projected Initial 2016 Full-Year Revised 2016 Full-Year Growth Guidance Guidance Over 2015 Net Operating Revenues +$30 Net Operating Revenues 13% million to $3,550 million to $3,650 million $3,580 million to $3,680 million 16% Adjusted EBITDA +$5 Adjusted EBITDA 13% million to $76
Slide 12: HLS: Strong and Sustainable Business Fundamentals
HLS: Strong and Sustainable Business Fundamentals • Favorable demographic trends Attractive Healthcare Sectors • Nondiscretionary nature of many conditions treated • Highly fragmented post-acute industries • #1 market share in inpatient rehabilitation segment • 4th largest provider of Medicare-certi