Encompass Health Corporation · NYSE:EHC

Encompass Health — HealthSouth — Bank of America Merrill Lynch 2012 Healthcare Conference

13 slides from Encompass Health's conference presentation, May 16, 2012

  1. Slide 1: Bank of America Merrill Lynch 2012 Healthcare Conference

    Bank of America Merrill Lynch 2012 Healthcare Conference Las Vegas| May 16, 2012 Jay Grinney, President and Chief Executive Officer

  2. 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

  3. Slide 3: Our Company Portfolio – As of March 31, 2012

    Our Company Portfolio – As of March 31, 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 ~ 22,000 Employees Key Statistics – Traili

  4. Slide 4: 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% spending (% of total Medicare spending) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Projected 2010 2012 Total Medicare Spending on Post-Acute Services $58.5 billion in 2010 Post-

  5. Slide 5: Q1 2012 Highlights

    Q1 2012 Highlights Discharge Volume (million) Net Operating Revenues 40,000 $600 +6.0% +6.4% 30,871 $538.6 29,127 $506.0 20,000 0 $300 Q1 2012 Q1 2011 Q1 2012 Q1 2011 (million) Adjusted EBITDA (1) Earnings Per Share (2) $0.80 $150 +8.1% $127.0 $117.5 $0.57 $75 $0.40 $0.40 $0 $0.00 Q1 2012 Q1 2011 Q1

  6. Slide 6: Priorities for Reinvesting Free Cash Flows

    Priorities for Reinvesting Free Cash Flows (millions) 2012 Q1 2012 Assumptions Actual •Growth in core business  Bed expansions $20 to $25 $5.5 (80-100 beds) Priorities  De novo hospitals $50 to $70 $9.2 Growth (complete Ocala; start 4 others)  Acquisitions (target 2/year) TBD - − Free standing IR

  7. Slide 7: Strong and Sustainable Business Fundamentals

    Strong and Sustainable Business Fundamentals • Favorable demographic trends Attractive Healthcare Sector • Non-discretionary nature of many conditions treated in IRFs • Highly fragmented industry • #1 market share: above industry same-store growth and margins Industry Leading Position • Consistent a

  8. Slide 8: Appendix

    Appendix HEALTHSOUTH,

  9. Slide 9: Historic Discharge Growth vs. Industry

    Historic Discharge Growth vs. Industry HealthSouth’s volume growth has outpaced competitors’ Same Store HealthSouth vs. Industry Quarterly Discharge Growth Yearly 6.5% UDS Industry Sites (1) 120,000 5.0% HLS Same Store (2) 2.1% Q4 4.7% 5.9% 90,000 3.3% 1.9% 5.9% 2.7% 5.1% Q3 1.8% 1.4% 1.0% 60,000 -1

  10. Slide 10: Reconciliation of Net Income to Adjusted EBITDA

    (1)(3) Reconciliation of Net Income to Adjusted EBITDA 2012 Q1 (in millions, except per share data) Total Per Share Net income $ 56.8 Loss from disc ops, net of tax, attributable to HealthSouth 0.4 Net income attributable to noncontrolling interests (12.6) Income from continuing operations attributa

  11. Slide 11: Reconciliation of Net Income to Adjusted EBITDA

    (1)(3) Reconciliation of Net Income to Adjusted EBITDA 2011 Q1 Q2 Q3 Q4 Full Year (in millions, except per share data) Total Per Share Total Per Share Total Per Share Total Per Share Total Per Share Net income $ 91.5 $ 32.3 $ 68.3 $ 62.5 $ 254.6 (Income) loss from disc ops, net of tax, attributable

  12. Slide 12: Reconciliation Notes for Slides 10-11

    Reconciliation Notes for Slides 10-11 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 financial measure. Management and some members of the investment community utili

  13. Slide 13: Adjusted EBITDA Reconciled to Net Cash Provided by Operating Activities

    Adjusted EBITDA Reconciled to Net Cash Provided by Operating Activities Q1 Full Year (Millions) 2012 2011 2011 2010 Net cash provided by operating activities $ 81.0 $ 89.5 $ 342.7 $ 331.0 Prov ision for doubtful accounts (6.3) (4.8) (21.0) (16.4) Professional fees—accounting, tax, and legal 3.6 3.8

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