Encompass Health Corporation · NYSE:EHC
Encompass Health — Citi 2012 North American Credit Conference
12 slides from Encompass Health's conference presentation, Nov 14, 2012
Slide 1: Citi 2012 North American Credit Conference
Citi 2012 North American Credit Conference New York City|November 14, 2012 Doug Coltharp, Executive Vice President and Chief Financial Officer
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 outlook, views and plans with respect to future events, including legislative and regulatory developments, strategy, capit
Slide 3: Our Company Portfolio – As of September 30, 2012
Our Company Portfolio – As of September 30, 2012 Inpatient Rehabilitation Hospitals (“IRF”) 99 • 29 operate as JV’s with Acute Care Hospitals Outpatient Rehabilitation Satellite 26 Clinics 25 Hospital-Based Home Health Agencies 27 + Puerto Rico Number of States ~ 22,500 Employees Key Statistics – Tr
Slide 4: Q4 2012 Observations & Considerations (as of Nov 13, 2012)
Q4 2012 Observations & Considerations (as of Nov 13, 2012) Volume: • As anticipated, October 2012 discharge growth was positively impacted by an increased length of stay at the end of September which rolled discharges into October. • Discharge growth in November and December (holiday season) is alwa
Slide 5: Q4 2012 Observations & Considerations (cont.)
Q4 2012 Observations & Considerations (as of Nov 13, 2012)(cont.) Growth: • Continued construction on a replacement hospital for HealthSouth Rehabilitation Hospital of Western Massachusetts (53-bed) ― This hospital will be owned and will replace an existing leased facility. • Completed construction
Slide 6: Debt Maturity Profile
Debt Maturity Profile HealthSouth is now positioned with a lower-cost, flexible capital structure… Additional debt pre-payment opportunities and flexible covenants (1) No near-term maturities and well-spaced debt maturities Limited exposure to higher interest rates • 10% of the outstanding pri
Slide 7: Priorities for Reinvesting Free Cash Flows
Priorities for Reinvesting Free Cash Flows (millions) 2012 9 Months Growth in core business Assumptions 2012 2011 Bed expansions (80 - 100 beds) $20 to $25 $14.5 $12.5 De novo hospitals (complete Ocala; start 4 others) $50 to $70 $28.8 $15.6 Growth Priorities Acquisitions (target 2/year) - Free stan
Slide 8: Strong and Sustainable Business Fundamentals
Strong and Sustainable Business Fundamentals • Favorable demographic trends Attractive Healthcare Sector • Nondiscretionary nature of many conditions treated in IRFs • Highly fragmented industry • #1 market share: above industry same-store growth and margins Industry Leading Position • Consistent ac
Slide 9: Medicare Spending on Post-Acute Services
Medicare Spending on Post-Acute Services 2.1% 2.2% 2.1% 1.8% 1.9% Inpatient rehabilitation 1.5% 1.4% 1.3% 1.2% 1.2% 1.2% spending (% of total Medicare spending) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Projected 2010 2012 Total Medicare Spending on Post-Acute Services $63.5 billion in
Slide 10: Our Cost-Effectiveness
Our Cost-Effectiveness HealthSouth Total Inpatient Rehabilitation Facilities (IRFs): 1,139 “costs” Medicare less Avg. Est. Total Average Avg. Est. per patient, on Avg. Est. Total average. Payment Total Cost Avg. Medicare per Cost per per Discharges Discharge Beds per Discharge Discharge for FY 2013
Slide 11: CMS: Inpatient Rehabilitation vs. Skilled Nursing
CMS: Inpatient Rehabilitation vs. Skilled Nursing “… MedPAC’s analysis of recent quality measure data related to rehospitalizations suggests that quality of care within SNFs has not been improving … Since 2000, one outcome measure (the risk-adjusted rate of rehospitalization for any of five care-sen
Slide 12: HealthSouth has successfully managed through Medicare payment cuts and an economic recession
HealthSouth has successfully managed through Medicare payment cuts and an economic recession… Adjusted EBITDA ($million) Discharges 31,000 $120 RECESSION 30,500 30,000 $110 29,500 $100 29,000 28,500 $90 28,000 $80 27,500 27,000 $70 26,500 26,000 $60 25,500 $50 25,000 Q108 Q208 Q308 Q408 Q109 Q209 Q3
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