8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________

FORM 8-K

________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 3, 2020

____________

R1 RCM Inc.

(Exact Name of Registrant as Specified in Charter)  

 ____________

Delaware	001-34746	02-0698101
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

401 North Michigan Avenue	60611
Suite 2700
Chicago
Illinois
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 324-7820

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))     

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	RCM	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐        

Item 2.02 Results of Operations and Financial Condition.

On November 3, 2020, R1 RCM Inc. (the “Company”) announced its financial results for its fiscal quarter ended September 30, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The slide presentation to be used in conjunction with the investor conference call referenced in the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K and will be posted on the Company’s website.

The information in this Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibit Number	Description
	99.1	Press Release of R1 RCM Inc., dated November 3, 2020
	99.2	November 3, 2020 Slide Presentation
	104	Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document.

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	November 3, 2020
		R1 RCM Inc.
		By:	/s/ Rachel Wilson
			Rachel Wilson
			Chief Financial Officer

EX-99.1

Exhibit 99.1

R1 RCM Reports Third Quarter 2020 Results

CHICAGO - November 3, 2020 - R1 RCM Inc. (NASDAQ: RCM), a leading provider of technology-enabled revenue cycle management services to healthcare providers, today announced results for the three months ended September 30, 2020.

Third Quarter 2020 Results:

•Revenue of $307.2 million, up $6.0 million and 2.0% compared to the same period last year

•GAAP net income of $5.2 million, compared to net income of $9.2 million in the same period last year

•Adjusted EBITDA of $50.4 million, up $1.5 million compared to the same period last year

“I am incredibly proud of the team's continued dedication in delivering outstanding performance to our customers during these challenging times. Given our learnings over the past several months, we are very well prepared to help customers navigate challenges presented by the pandemic going forward,” said Joe Flanagan, President and Chief Executive Officer of R1. “We continue to see strong demand for our solutions and are pleased to have signed end-to-end agreements covering $5 billion in annual net patient revenue to date in 2020, well ahead of the $3 billion target we set at the start of the year.”

“Our third quarter results reflect continued strong execution by the team. The quarter was noteworthy as we absorbed the peak of Covid-19 pressure and delivered results ahead of our expectations,” added Rachel Wilson, Chief Financial Officer and Treasurer. “The fundamentals of the business are strong and we look forward to our continued growth, driven by the new business we have signed this year.”

Outlook

For 2020, R1 expects to generate:

•Revenue of between $1,250 million and $1,260 million

•GAAP operating income of $90 million to $110 million

•Adjusted EBITDA of $230 million to $240 million

Conference Call and Webcast Details

R1’s management team will host a conference call today at 8:00 a.m. Eastern Time to discuss its financial results and business outlook. To participate, please dial 833-968-2190 (778-560-2796 outside the U.S. and Canada) using conference code number 1778649. A live webcast and replay of the call will be available at the Investor Relations section of the Company’s web site at ir.r1rcm.com.

Non-GAAP Financial Measures

In order to provide a more comprehensive understanding of the information used by R1’s management team in financial and operational decision making, the Company supplements its GAAP consolidated financial statements with certain non-GAAP financial performance measures, including adjusted EBITDA and net debt. Adjusted EBITDA is defined as GAAP net income before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, share-based compensation expense, expense arising from debt extinguishment, strategic initiatives costs, transitioned employee restructuring expense, digital transformation office expenses, and certain other items. Net debt is defined as debt less cash and cash equivalents, inclusive of restricted cash.

Our board of directors and management team use adjusted EBITDA as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations and (ii) a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation programs for employees.

Tables 4 through 9 present a reconciliation of GAAP financial measures to non-GAAP financial measures, including adjusted EBITDA. Adjusted EBITDA should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP.

Forward Looking Statements

This press release includes information that may constitute “forward-looking statements,” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future, not past, events and often address our expected future growth, plans and performance or forecasts. These forward-looking statements are often identified by the use of words such as “anticipate,” “believe,” “designed,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “will,” or “would,” and similar expressions or variations, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about the potential impacts of the COVID-19 pandemic, our strategic initiatives, our capital plans, our costs, our ability to successfully deliver on our commitments to our customers, our ability to deploy new business as planned, our ability to successfully implement new technologies, our future financial performance, and our liquidity. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Subsequent events and developments, including actual results or changes in our assumptions, may cause our views to change. We do not undertake to update our forward-looking statements except to the extent required by applicable law. Readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by these cautionary statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, the severity, magnitude and duration of the COVID-19 pandemic; responses to the pandemic by the government and healthcare providers and the direct and indirect impacts of the pandemic on our customers and personnel; the disruption of national, state and local economies as a result of the pandemic; the impact of the pandemic on our financial results, including possible lost revenue and increased expenses; and the factors discussed under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2019 and any other periodic reports that the Company files with the Securities and Exchange Commission.

About R1 RCM

R1 is a leading provider of technology-enabled revenue cycle management services which transform a health system’s revenue cycle performance across settings of care. R1’s proven and scalable operating models seamlessly complement a healthcare organization’s infrastructure, quickly driving sustainable improvements to net patient revenue and cash flows while reducing operating costs and enhancing the patient experience. To learn more, visit: r1rcm.com

Contact:

R1 RCM Inc.

Investor Relations:

Atif Rahim

312-324-5476

investorrelations@r1rcm.com

Media Relations:

Natalie Joslin

678-585-1206

media@r1rcm.com

Table 1
R1 RCM Inc.
Consolidated Balance Sheets
(In millions)
	(Unaudited)
	September 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	106.3	$	92.0
Accounts receivable, net of $3.6 million and $2.8 million allowance	76.7		52.3
Accounts receivable, net of $0.1 million and $0.0 million allowance - related party	35.5		30.8
Prepaid expenses and other current assets	62.4		41.6
Assets held for sale	101.5		—
Total current assets	382.4		216.7
Property, equipment and software, net	102.8		116.9
Operating lease right-of-use assets	63.5		77.9
Intangible assets, net	175.7		164.7
Goodwill	375.3		253.2
Non-current deferred tax assets	54.5		64.2
Non-current portion of restricted cash equivalents	1.0		0.5
Other assets	49.3		35.0
Total assets	$	1,204.5	$	929.1
Liabilities
Current liabilities:
Accounts payable	$	21.8	$	20.2
Current portion of customer liabilities	18.8		14.0
Current portion of customer liabilities - related party	22.6		34.1
Accrued compensation and benefits	54.5		95.1
Current portion of operating lease liabilities	12.9		12.8
Current portion of long-term debt	29.0		16.3
Other accrued expenses	55.6		40.0
Liabilities held for sale	25.3		—
Total current liabilities	240.5		232.5
Non-current portion of customer liabilities - related party	17.2		18.6
Non-current portion of operating lease liabilities	73.6		82.7
Long-term debt	529.2		337.7
Other non-current liabilities	35.8		10.4
Total liabilities	896.3		681.9
Preferred Stock	245.7		229.1
Stockholders’ equity:
Common stock	1.3		1.3
Additional paid-in capital	384.0		372.7
Accumulated deficit	(240.1)		(277.8)
Accumulated other comprehensive loss	(7.9)		(4.5)
Treasury stock	(74.8)		(73.6)
Total stockholders’ equity	62.5		18.1
Total liabilities and stockholders’ equity	$	1,204.5	$	929.1

Table 2
R1 RCM Inc.
Consolidated Statements of Operations (Unaudited)
(In millions, except share and per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net operating fees	$	253.7	$	266.6	$	822.4	$	760.8
Incentive fees	25.1		12.3		43.2		41.9
Other	28.4		22.3		76.8		69.4
Net services revenue	307.2		301.2		942.4		872.1
Operating expenses:
Cost of services	255.2		241.9		757.4		725.2
Selling, general and administrative	25.7		28.3		74.5		76.6
Other expenses	15.7		7.4		42.4		26.9
Total operating expenses	296.6		277.6		874.3		828.7
Income from operations	10.6		23.6		68.1		43.4
Loss on debt extinguishment	—		—		—		18.8
Net interest expense	4.4		5.0		13.0		25.1
Income (loss) before income tax provision (benefit)	6.2		18.6		55.1		(0.5)
Income tax provision (benefit)	1.0		9.4		16.6		(4.7)
Net income	$	5.2	$	9.2	$	38.5	$	4.2
Net income (loss) per common share:
Basic	$	—	$	0.02	$	0.10	$	(0.10)
Diluted	$	—	$	0.01	$	0.08	$	(0.10)
Weighted average shares used in calculating net income (loss) per common share:
Basic	115,976,377		112,230,439		115,164,631		111,005,255
Diluted	115,976,377		165,622,407		171,178,086		111,005,255

Basic:
Net income	$	5.2	$	9.2	$	38.5	$	4.2
Less dividends on preferred shares	(5.6)		(5.3)		(16.6)		(15.4)
Less income allocated to preferred shareholders	—		(1.9)		(10.9)		—
Net income (loss) available/allocated to common shareholders - basic	$	(0.4)	$	2.0	$	11.0	$	(11.2)
Diluted:
Net income	$	5.2	$	9.2	$	38.5	$	4.2
Less dividends on preferred shares	(5.6)		(5.3)		(16.6)		(15.4)
Less income allocated to preferred shareholders	—		(1.5)		(8.7)		—
Net income (loss) available/allocated to common shareholders - diluted	$	(0.4)	$	2.4	$	13.2	$	(11.2)

Table 3
R1 RCM Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In millions)
	Nine Months Ended September 30,
	2020		2019
Operating activities
Net income	$	38.5	$	4.2
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	50.9		39.9
Amortization of debt issuance costs	0.8		1.4
Share-based compensation	15.9		12.8
Loss on disposal and right-of-use asset write-downs	5.1		—
Loss on debt extinguishment	—		18.8
Provision for credit losses	1.3		2.3
Deferred income taxes	16.2		(9.4)
Non-cash lease expense	8.7		8.5
Change in value of contingent consideration	1.6		—
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	(47.2)		9.8
Prepaid expenses and other assets	(11.8)		(20.1)
Accounts payable	1.9		10.5
Accrued compensation and benefits	(36.1)		(7.3)
Lease liabilities	(7.8)		(8.9)
Other liabilities	22.5		1.0
Customer liabilities and customer liabilities - related party	(10.0)		(20.2)
Net cash provided by operating activities	50.5		43.3
Investing activities
Purchases of property, equipment, and software	(42.3)		(43.1)
Acquisition of SCI, net of cash acquired and earn-out provision	(189.0)		—
Acquisition of RevWorks, net of contingent consideration	(5.0)		—
Net cash used in investing activities	(236.3)		(43.1)
Financing activities
Issuance of senior secured debt, net of discount and issuance costs	190.6		321.8
Borrowings on revolver	50.0		60.0
Repayment of senior secured debt	(17.0)		(272.7)
Repayment of subordinated notes and prepayment penalty	—		(112.2)
Repayments on revolver	(20.0)		(10.0)
Exercise of vested stock options	11.0		9.5
Shares withheld for taxes	(7.5)		(4.7)
Finance lease payments	(0.8)		(0.6)
Other	(5.0)		—
Net cash provided by (used in) financing activities	201.3		(8.9)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	(0.7)		(0.3)
Net increase (decrease) in cash, cash equivalents and restricted cash	14.8		(9.0)
Cash, cash equivalents and restricted cash, at beginning of period	92.5		65.1
Cash, cash equivalents and restricted cash, at end of period	$	107.3	$	56.1

Table 4
R1 RCM Inc.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (Unaudited)
(In millions)
	Three Months Ended September 30,				2020 vs. 2019 Change				Nine Months Ended September 30,				2020 vs. 2019 Change
	2020		2019		Amount		%		2020		2019		Amount		%
Net income	$	5.2	$	9.2	$	(4.0)	(43)	%	$	38.5	$	4.2	$	34.3	817	%
Net interest expense	4.4		5.0		(0.6)		(12)	%	13.0		25.1		(12.1)		(48)	%
Income tax provision (benefit)	1.0		9.4		(8.4)		(89)	%	16.6		(4.7)		21.3		453	%
Depreciation and amortization expense	17.3		14.1		3.2		23	%	50.9		39.9		11.0		28	%
Share-based compensation expense	6.8		3.8		3.0		79	%	15.9		12.7		3.2		25	%
Loss on debt extinguishment	—		—		—		—	%	—		18.8		(18.8)		(100)	%
Other expenses	15.7		7.4		8.3		112	%	42.4		26.9		15.5		58	%
Adjusted EBITDA (non-GAAP)	$	50.4	$	48.9	$	1.5	3	%	$	177.3	$	122.9	$	54.4	44	%

Table 5
R1 RCM Inc.
Reconciliation of GAAP Cost of Services to Non-GAAP Cost of Services (Unaudited)
(In millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of services	$	255.2	$	241.9	$	757.4	$	725.2
Less:
Share-based compensation expense	2.7		1.5		6.1		4.3
Depreciation and amortization expense	16.3		12.7		47.7		37.2
Non-GAAP cost of services	$	236.2	$	227.7	$	703.6	$	683.7

Table 6
R1 RCM Inc.
Reconciliation of GAAP Selling, General and Administrative to Non-GAAP Selling, General and Administrative (Unaudited)
(In millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Selling, general and administrative	$	25.7	$	28.3	$	74.5	$	76.6
Less:
Share-based compensation expense	4.1		2.3		9.8		8.4
Depreciation and amortization expense	1.0		1.4		3.2		2.7
Non-GAAP selling, general and administrative	$	20.6	$	24.6	$	61.5	$	65.5

Table 7
R1 RCM Inc.
Consolidated Non-GAAP Financial Information (Unaudited)
(In millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net operating fees	$	253.7	$	266.6	$	822.4	$	760.8
Incentive fees	25.1		12.3		43.2		41.9
Other	28.4		22.3		76.8		69.4
Net services revenue	307.2		301.2		942.4		872.1
Operating expenses:
Cost of services (non-GAAP)	236.2		227.7		703.6		683.7
Selling, general and administrative (non-GAAP)	20.6		24.6		61.5		65.5
Sub-total	256.8		252.3		765.1		749.2
Adjusted EBITDA	$	50.4	$	48.9	$	177.3	$	122.9

Table 8
R1 RCM Inc.
Reconciliation of GAAP Operating Income Guidance to Non-GAAP Adjusted EBITDA Guidance (Unaudited)
(In millions)
	2020
GAAP Operating Income Guidance	$90-110
Plus:
Depreciation and amortization expense	$65-75
Share-based compensation expense	$20-25
Strategic initiatives, severance and other costs	$45-50
Adjusted EBITDA Guidance	$230-240

Table 9
R1 RCM Inc.
Reconciliation of Total Debt to Net Debt (Unaudited)
(In millions)
	September 30,		December 31,
	2020		2019
Senior Revolver	$	70.0	$	40.0
Senior Term Loan	491.0		316.9
	561.0		356.9
Less:
Cash and cash equivalents	106.3		92.0
Non-current portion of restricted cash equivalents	1.0		0.5
Net Debt	$	453.7	$	264.4

EX-99.2

Exhibit 99.2 Third Quarter 2020 Results Conference Call November 3, 2020

Forward-Looking Statements and Non-GAAP Financial Measures This presentation includes information that may constitute “forward-looking statements,” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future, not past, events and often address our expected future growth, plans and performance or forecasts. These forward-looking statements are often identified by the use of words such as “anticipate,” “believe,” “designed,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “will,” or “would,” and similar expressions or variations, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about the potential impacts of the COVID-19 pandemic, our strategic initiatives, our capital plans, our costs, our ability to successfully deliver on our commitments to our customers, our ability to deploy new business as planned, our ability to successfully implement new technologies, our future financial performance and our liquidity. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Subsequent events and developments, including actual results or changes in our assumptions, may cause our views to change. We do not undertake to update our forward-looking statements except to the extent required by applicable law. Readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by these cautionary statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, the severity, magnitude and duration of the COVID-19 pandemic; responses to the pandemic by the government and healthcare providers and the direct and indirect impacts of the pandemic on our customers and personnel; the disruption of national, state and local economies as a result of the pandemic; the impact of the pandemic on our financial results, including possible lost revenue and increased expenses; and the factors discussed under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2019, our quarterly reports on Form 10-Q and any other periodic reports that the Company files with the Securities and Exchange Commission. This presentation includes the following non-GAAP financial measures: adjusted EBITDA, non-GAAP cost of services, non-GAAP SG&A expense and net debt. Please refer to the Appendix located at the end of this presentation for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. 2

Q3 Financial Highlights and 2020 Outlook ThirdThird Quarter Quarter 2020 2020 Financial Financial Highlights Results ▪ Revenue of $307.2 million, up $6.0 million and 2.0% compared to the same period last year ▪ GAAP net income of $5.2 million, compared to GAAP net income of $9.2 million in the same period last year ▪ Adjusted EBITDA of $50.4 million, up $1.5 million compared to the same period last year ▪ Relative to expectations on Q2 earnings call: ▪ Revenue upside driven by higher incentive fees from strong execution performance ▪ EBITDA upside driven by higher incentives fees and cost control actions taken earlier in the year 20202020 Financial Financial Outlook Outlook ▪ Revenue of $1,250 million to $1,260 million ▪ GAAP operating income of $90 million to $110 million ▪ Adjusted EBITDA of $230 million to $240 million 3

Commercial Update NewNew Operating Operating Partner Partner Agreement Agreement with with LifePoint LifePoint Health Health ▪ $2.8 billion in annual net patient revenue (NPR) under management ▪ 10-year term ▪ Onboarding expected to commence in January 2021 ▪ Economics expected to be in line with Operating Partner economics ▪ Opportunity to expand relationship in the future IncreasingIncreasing OnboardingOnboarding CapacityCapacity ▪ Increasing nominal annual deployment capacity to $5 billion in end-to-end NPR; supported by ongoing discussions with prospects CommercialCommercial ActivityActivity OverallOverall RemainsRemains StrongStrong ▪ 11 deals with physician organizations in Q3 ▪ 10 modular deals signed in Q3 including patient experience (PX) solutions ▪ Partnership with Cerner off to a good start. Both teams working closely to coordinate and communicate our value prop to Cerner’s customer base 4

Tech Investments and Extending our Competitive Positioning ▪ Technology is an increasingly important deciding factor in the customer selection process ▪ Current priority areas: 1.PatientPatient Experience Experience Platform Platform (PX) (PX) ▪ Patient engagement is high with net promoter score ≥75 and ~60% self-service rate ▪ Launched new analytics platform in Q3 focused on performance metrics related to scheduling ▪ Partnership with Cerner is advancing PX journey 2.RoboticRobotic Process Process Automation Automation (RPA) (RPA) ▪ Original portfolio of 13 routines fully in production; generating results ahead of expectations ▪ 7 new routines deployed to a subset of customers in Q3, will be rolled out broadly in coming months ▪ 100+ full-time employees dedicated to advancing R1’s RPA and machine learning capabilities 3.MachineMachine Learning Learning ▪ Deployed 1st ML model into production in Q3, designed to predict if a denied claim is unrecoverable and therefore eliminate wasted effort 4.Duration Technology of Onboarding Integration Technology During Onboarding Integration ▪ Through Cerner partnership, anticipate reducing 8-10 week tech integration timeline by up to 60%. 5

Deployment and M&A Update Deployment Activity Penn State Health ▪ Initiated onboarding activities in May, on track to be completed by Q1 2021 ▪ Both teams have collaborated extremely well under a virtual model, early results are very positive Rush University System for Health (RUSH) ▪ Continues to progress on schedule, expect to complete remaining onboarding activities by year-end $700 million NPR Physician Customer (signed in 3Q 2019) ▪ Currently 90% through deployment plan, expect to complete onboarding in Q1 2021 M&A Update SCI Solutions ▪ Integration on track; Roadmap in place to develop the most comprehensive platform for digital engagement with patients and providers RevWorks ▪ Continues to progress on schedule. Ahead of plan in consolidating work performed by third-party vendors Emergency Medical Services (EMS) ▪ Divestiture completed on October 30, 2020 6

COVID-19 Update and Volume Trends Health and Safety of Workforce Remains Top Priority ▪ Vast majority of employees continue to work from home ▪ Productivity, engagement and retention remain at satisfactory levels Operating Environment Remains Dynamic ▪ Patient volumes have trended at 90-95% of pre-Covid levels in recent weeks ▪ Volumes are dynamic given recent rise in cases in many geographies ▪ Working assumption is that volumes remain at current levels until economic activity returns to normal ▪ We and our customers are generally much better prepared to navigate and mitigate the challenges presented by Covid ▪ We remain vigilant and ready to adapt to changes in the operating environment in a way that balances the long-term opportunity we see in the market with near-term conditions 7

3Q’20 non-GAAP Results – Q/Q and Y/Y Comparison ($ in millions) 3Q'20 2Q'20 3Q'19 Key change driver(s) • Q/Q: Impact of Covid pressure on patient volumes from March-April lockdown Revenue $307.2 $314.7 $301.2 • Y/Y: Contribution from new customers and acquisitions, offset by Covid-related volume declines • Q/Q and Y/Y: Costs associated with new Adjusted Cost of Services1 $236.2 $229.8 $227.7 customers as well as acquisitions, offset by actions to reduce cost structure Adjusted SG&A expense1 $20.6 $19.6 $24.6 • Y/Y: Corporate cost control initiatives • Q/Q: Lagging effect of revenue relative to cost structure (peak revenue impact from March-April volume declines experienced Adjusted EBITDA1 $50.4 $65.3 $48.9 in 3Q) • Y/Y: Effect of Covid-related volume declines, offset by cost control actions Note1: Non-GAAP cost of services, non-GAAP SG&A expense and adjusted EBITDA are non-GAAP measures. 8 A reconciliation of non-GAAP to GAAP measures is provided in the Appendix of this presentation.

Additional Commentary Net debt1 of $453.7 million as of 9/30/20, including restricted cash ▪ Up sequentially due to working capital changes, M&A related spend and capital expenditures Sufficient liquidity to withstand a wide range of scenarios ▪ Cash (after giving effect to ~$130 million in proceeds from the EMS divestiture) and revolver availability as of 9/30/20 equate to approximately $270 million in liquidity 2020 Financial Outlook ▪ Revenue of $1,250 million to $1,260 million • $20 million increase from midpoint of prior guidance ▪ Adjusted EBITDA of $230 million to $240 million • Costs associated with onboarding LifePoint are factored into refreshed outlook Note1: Net debt is a non-GAAP measure. A reconciliation of non-GAAP to GAAP measures is provided in the Appendix of this presentation. 9

Appendix 10

Use of Non-GAAP Financial Measures ▪ In order to provide a more comprehensive understanding of the information used by R1’s management team in financial and operational decision making, the Company supplements its GAAP consolidated financial statements with certain non-GAAP financial performance measures, including adjusted EBITDA, adjusted cost of services, adjusted SG&A expense and net debt. Adjusted EBITDA is defined as GAAP net income before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, share-based compensation expense, expense arising from debt extinguishment, severance and related employee benefits, strategic initiatives costs, transitioned employee restructuring expense, digital transformation office expenses, certain COVID-19 related expenses, and certain other items. Adjusted cost of services is defined as GAAP cost of services before share-based compensation expense and depreciation and amortization expense. Adjusted SG&A expense is defined as GAAP SG&A expense before share-based compensation expense and depreciation and amortization expense. Net debt is defined as total debt less cash and cash equivalents, and restricted cash. ▪ Our board of directors and management team use adjusted EBITDA as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations and (ii) a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation programs for employees. ▪ A reconciliation of GAAP net income to non-GAAP adjusted EBITDA, GAAP cost of services to non-GAAP cost of services, GAAP SG&A expense to non- GAAP SG&A expense and total debt to net debt is provided on the following slides. Adjusted EBITDA, adjusted cost of services, adjusted SG&A expense and net debt should be considered in addition to, but not as a substitute for, the information presented in accordance with GAAP. 11

Reconciliation of GAAP to non-GAAP Financials $ in millions Reconciliation of GAAP Net Income to non-GAAP Adjusted EBITDA Three Months Ended Three Months Ended September 30, June 30, 2020 2019 2020 Net income $ 5.2 $ 9.2 $ 15.1 Net interest expense 4.4 5.0 4.8 Income tax provision 1.0 9.4 5.2 Depreciation and amortization expense 17.3 14.1 17.9 Share-based compensation expense 6.8 3.8 4.3 Other expenses1 15.7 7.4 18.0 Adjusted EBITDA (non-GAAP) $ 50.4 $ 48.9 $ 65.3 Reconciliation of GAAP Cost of Services to Non-GAAP Cost of Services Three Months Ended Three Months Ended September 30, June 30, 2020 2019 2020 Cost of services $ 255.2 $ 241.9 $ 248.3 Less: Share-based compensation expense 2.7 1.5 1.5 Depreciation and amortization expense 16.3 12.7 17.0 Non-GAAP cost of services $ 236.2 $ 227.7 $ 229.8 Reconciliation of GAAP SG&A to Non-GAAP SG&A Three Months Ended Three Months Ended September 30, June 30, 2020 2019 2020 Selling, general and administrative $ 25.7 $ 28.3 $ 23.3 Less: Share-based compensation expense 4.1 2.3 2.8 Depreciation and amortization expense 1.0 1.4 0.9 Non-GAAP selling, general and administrative $ 20.6 $ 24.6 $ 19.6 Note (1): Other expenses are comprised of severance and related employee benefits, strategic initiatives costs, transitioned employees restructuring expense, a portion 12 of DTO costs and appreciation bonuses for the Company’s front-line employees and pandemic response mobilization efforts related to the COVID-19 pandemic.

Reconciliation of GAAP to non-GAAP Financials $ in millions Reconciliation of GAAP Operating Income Guidance to Non-GAAP Adjusted EBITDA Guidance 2020 GAAP Operating Income Guidance $90-110 Plus: Depreciation and amortization expense $65-75 Share-based compensation expense $20-25 Strategic initiatives, severance and other costs $45-50 Adjusted EBITDA Guidance $230-240 Reconciliation of Total Debt to Net Debt September 30, December 31, 2020 2019 Senior Revolver $ 70.0 $ 40.0 Senior Term Loan 491.0 316.9 561.0 356.9 Less: Cash and cash equivalents 106.3 92.0 Non-current portion of restricted cash equivalents 1.0 0.5 Net Debt $ 453.7 $ 264.4 13

XML

Document and Entity Information Document	Nov. 03, 2020
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 03, 2020
Entity Registrant Name	R1 RCM Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-34746
Entity Tax Identification Number	02-0698101
Entity Address, Address Line One	401 North Michigan Avenue
Entity Address, Address Line Two	Suite 2700
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60611
City Area Code	312
Local Phone Number	324-7820
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	RCM
Security Exchange Name	NASDAQ
Entity Central Index Key	0001472595
Amendment Flag	false