Encompass Health Corporation · NYSE:EHC
Encompass Health — Barclays 2022 Global Healthcare Conference
20 slides from Encompass Health's conference presentation, Mar 16, 2022
Slide 1: Barclays Healthcare Conference
Barclays Healthcare Conference Doug Coltharp Executive Vice President and Chief Financial Officer March 16, 2022
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 Encompass Health’s current outlook, views and plans with respect to future events, including the timing and effects, such as the tax-fr
Slide 3: Company overview Encompass Health
Company overview Encompass Health A leading provider of inpatient rehabilitation hospitals and States and home-based care Puerto Rico 145 251 96 42 IRFs Home Health Hospice locations locations Committed to delivering high-quality, cost-effective care across the healthcare continuum Encompass Health
Slide 4: Company overview Inpatient Rehabilitation
Company overview Inpatient Rehabilitation Largest owner and operator of IRFs 145 Inpatient Rehabilitation Hospitals 24% 31% 54 Operate as joint ventures of Licensed beds* of Medicare with acute care hospitals patients served* 35 125 States & Puerto Rico Hospitals hold one or more disease-specific ce
Slide 5: Company overview Home Health and Hospice
Company overview Home Health and Hospice - 4th largest provider of Medicare-certified skilled home health services - 12th largest provider of hospice services 96% Home health agencies ≥3 stars for quality of care 251 96 34 100% Home Health Hospice States locations locations Home health agencies ≥3 s
Slide 6: The future of home-based healthcare is here
Home health & hospice rebranding The future of home-based healthcare is here Committed to delivering a better way to care for our patients and their loved ones One of Modern Healthcare’s Best Places to Work Industry leader in advanced technologies and predictive analytics Learn more about Enhabit at
Slide 7: Spin off of Enhabit Home Health & Hospice
Spin off of Enhabit Home Health & Hospice Encompass Health plans to spin off its home health and hospice business into an independent publicly traded company • The spin off is expected to be: • tax free to EHC shareholders • completed by the end of Q2 2022 Financial considerations for the spin-off t
Slide 8: All business lines benefit from a demographic tailwind
All business lines benefit from a demographic tailwind: growth in the Medicare beneficiary population Projected Population of Age 65+ • The growth rate of Medicare beneficiaries Millions increased in 2011 to an approx. 3% CAGR Baby Boomer wave reaches as “Baby Boomers” started turning age 65. averag
Slide 9: 2021 Summary
2021 Summary Encompass Health Inpatient Rehabilitation Home Health & Hospice Consolidated Segment Segment NET OPERATING REVENUES ($ millions) 5,121.6 4,644.4 4,015.0 3,566.2 2.6% 10.3% 12.6% 1,106.6 1,078.2 2020 2021 2020 2021 2020 2021 ADJUSTED EBITDA(1) ($ millions) 1,028.0 956.8 211.5 860.3 823.0
Slide 10: 2021 Key operational highlights
2021 Key operational highlights Inpatient Rehabilitation Segment Home Health & Hospice Segment 2021 growth highlights 2021 growth highlights Total licensed bed growth of 4.4% Invested $102 million in acquisitions Opened 8 de novo IRFs (350 beds) Opened 3 de novo locations Added 117 beds to existing
Slide 11: 2022 Guidance
2022 Guidance 2022 Full-Year Guidance* Net operating revenues $5,380 million to $5,500 million Adjusted EBITDA(1)(2) $1,015 million to $1,065 million Adjusted earnings per share from continuing operations attributable to Encompass Health(2)(3) $3.83 to $4.19 The Company's 2022 guidance assumes the c
Slide 12: 2022 Guidance considerations
2022 Guidance considerations Inpatient Rehabilitation Home Health and Hospice ►Estimated increase of 1.9% in Medicare ►Estimated increase of 3.4% in Medicare pricing prior to resumption of pricing for home health prior to sequestration resumption of sequestration ►Revenue reserves related to bad deb
Slide 13: 2022-2026 Growth targets
2022-2026 Growth targets INPATIENT 6 to 10 100 to 150 6% to 8% REHABILITATION De novos bed additions Discharge CAGR per year per year 10%+ 10% to 15% $50 million HOME HEALTH Home Health Hospice to $100 million AND HOSPICE admissions admissions Acquisitions CAGR CAGR per year Strong and sustainable b
Slide 14: Encompass Health
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Slide 15: Appendix
Appendix Encompass Health 15
Slide 16: Reconciliation of net income to Adjusted EBITDA (2021)
Reconciliation of net income to Adjusted EBITDA(1) 2021 Q1 Q2 Q3 Q4 Full Year Per Per Per Per Per ($ in millions, except per share data) Total Share Total Share Total Share Total Share Total Share Net Income $ 132.8 $ 142.0 $ 126.7 $ 115.7 $ 517.2 Loss from disc ops, net of tax, attributable to Enco
Slide 17: Reconciliation of net income to Adjusted EBITDA (2020)
Reconciliation of net income to Adjusted EBITDA(1) 2020 Q1 Q2 Q3 Q4 Full Year Per Per Per Per Per ($ in millions, except per share data) Total Share Total Share Total Share Total Share Total Share Net Income $ 108.7 $ 48.3 $ 100.1 $ 111.7 $ 368.8 Loss (income) from disc ops, net of tax, attributable
Slide 18: Net cash provided by operating activities reconciled to Adjusted EBITDA
Net cash provided by operating activities reconciled to Adjusted EBITDA(1) Q4 Full Year ($ in millions) 2021 2020 2021 2020 Net cash provided by operating activities $ 123.8 $ 279.7 $ 715.8 $ 704.7 Interest expense and amortization of debt discounts and fees 40.1 46.2 164.6 184.2 Equity in net incom
Slide 19: Reconciliation of segment Adjusted EBITDA to income before income tax
Reconciliation of segment Adjusted EBITDA to income from continuing operations before income tax expense Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 ($ in millions) Total segment Adjusted EBITDA $ 288.9 $ 273.5 $ 1,168.3 $ 986.3 General and administrative expenses (60
Slide 20: End notes
End notes (1) Adjusted EBITDA is a non-GAAP financial measure. The Company’s leverage ratio (total consolidated debt to Adjusted EBITDA for the trailing four quarters) is, likewise, a non-GAAP measure. Management and some members of the investment community utilize Adjusted EBITDA as a financial mea
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