EX-99 3 ex99.txt EXHIBIT 99 EXHIBIT 99 TEXT OF INVESTOR RELATIONS SLIDESHOW IN USE BEGINNING MAY 7, 2002 FORWARD-LOOKING STATEMENTS Except for historical information discussed, the statements made today are forward-looking statements that involve risks and uncertainties. Investors are cautioned that such statements are only predictions and that actual events or results may differ materially. These forward-looking statements speak only as of this date. HEALTHSOUTH undertakes no obligation to publicly release the results of any revisions to the forward-looking statements made today to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. Please refer to the company's SEC filings for a description of some of the factors that may affect the accuracy of such forward-looking statements. -------------------------------------------------------------------------------- COMPANY OVERVIEW -------------------------------------------------------------------------------- OUTPATIENT REHAB #1 Market Share - 1,419 Locations 10% of $10 Billion Market [Graphic Omitted] -------------------------------------------------------------------------------- OUTPATIENT SURGERY #1 Market Share - 208 Locations 16% of $6 Billion Market [Graphic Omitted] -------------------------------------------------------------------------------- DIAGNOSTIC IMAGING #1 Market Share - 134 Locations 4% of $8 Billion Market [Graphic Omitted] -------------------------------------------------------------------------------- INPATIENT REHABILITATION #1 Market Share - 117 Locations 22% of 35,000 Bed Market (7,564 Beds) [Graphic Omitted] -------------------------------------------------------------------------------- HEALTHSOUTH CORPORATION National Footprint with Approximately 1,900 Locations [Graphic Omitted] -------------------------------------------------------------------------------- HEALTHSOUTH CORPORATION Current MSA Coverage [Graphic Omitted] -------------------------------------------------------------------------------- HEALTHSOUTH CORPORATION Backfill Opportunities [Graphic Omitted] -------------------------------------------------------------------------------- TOP PAYOR COVERAGE: Blue Cross/Blue Shield, United HealthCare, Aetna, Cigna, Humana [Graphics Omitted] -------------------------------------------------------------------------------- LEADING SPORTS RELATIONSHIPS [Graphic Omitted] -------------------------------------------------------------------------------- LEADING SPORTS RELATIONSHIPS Unique National Presence Strong Brand Equity and Relationships with Leading Professional And Amateur Sports Organizations [Graphic Omitted] -------------------------------------------------------------------------------- JV and Strategic Relationships [Graphic Omitted] -------------------------------------------------------------------------------- HEALTHSOUTH INTEGRATED WORKSITE SERVICES o Largest Provider of Worksite Health and Disability Management Services in North America o Provide Physical Therapy, Fitness, Wellness, Case Management, Occupational Health and Ergonomic Services to over 425 Worksite Locations -------------------------------------------------------------------------------- WORKSITE CASE STUDY o Delta Airlines Operations Center - Internal Audit conducted January, 2002 - Before the HEALTHSOUTH Ergonomic Awareness Program o Six Departments Had a Total of 16 Back Injuries. - After the HEALTHSOUTH Ergonomic Awareness Program was Implemented o Only 2 Back Injuries o Reduction in Total Worker's Comp Costs of $350,000 Over Two Years. o Lost Work Days Reduced from 14 per Claim to 7 -------------------------------------------------------------------------------- WORKSITE COST SAVINGS [Graphic omitted] -------------------------------------------------------------------------------- EMPLOYER CONTRACTS Direct Employer Contracts with Fortune 1000 Companies [Graphic omitted] -------------------------------------------------------------------------------- HEALTHSOUTH REVENUE BY PRODUCT LINE [Graphic omitted] -------------------------------------------------------------------------------- PROVIDER OF CHOICE o Unique National Presence o Demographics Favor Outpatient Services Over Traditional Acute-Care Offerings o Our Integrated Service Model Moves the Patient Through the System More Efficiently o HEALTHSOUTH Is a Leader in Technological Advances -------------------------------------------------------------------------------- HEALTHSOUTH ADDS VALUE TO PHYSICIANS o Superior Clinical Care o Convenience of Ambulatory Setting o Dependable Block Times for Surgeons o Access to Additional Patient Volume o Ideal Platform for Introducing New Procedures and Technologies -------------------------------------------------------------------------------- HEALTHSOUTH ADDS VALUE TO PATIENTS o Superior Clinical Care o Convenience of Ambulatory Setting o Pristine Facilities -------------------------------------------------------------------------------- RECOGNIZED CLINICAL EXCELLENCE 2001 JCAHO Survey Results: HEALTHSOUTH Facility Scores vs. National Average Scores HEALTHSOUTH Rehabilitation 94 National Hospital Organizations 91 HEALTHSOUTH Surgery Centers 95 HEALTHSOUTH Diagnostic 96 National Ambulatory Organizations 93 Source: 2001 JCAHO Survey Results -------------------------------------------------------------------------------- PRISTINE AUDIT o Unannounced Audit of Every HEALTHSOUTH Facility o 50 Point Checklist o Conducted by Ernst & Young o Overall Score of 98 -------------------------------------------------------------------------------- HEALTHSOUTH Adds Value to Payors o Lower Cost Per Episode o Ambulatory Setting More Cost Efficient PROCEDURE HEALTHSOUTH ACUTE CARE SAVINGS --------------------------------------------------------------------------- Knee (ACL) $1,607 $2,768 42% Shoulder $2,259 $4,070 44% Nasal Septum $1,111 $2,327 52% o National Provider Network o Electronic Claims Submission -------------------------------------------------------------------------------- HRC LOST WORK DAY INCIDENCE RATE Per 100 FTE's [Graphic omitted] -------------------------------------------------------------------------------- GROWTH OPPORTUNITIES -------------------------------------------------------------------------------- OUTPATIENT REHAB: GROWTH AREAS o Functional Capacity Evaluations (FCEs) - Market Size of Approximately $800MM o Expand Fitness Center Programs o Increase Number of Referring Physicians o Increase Number of Annual Referrals per Physician -------------------------------------------------------------------------------- OUTPATIENT SURGERY: GROWTH AREAS o Add Surgeons Through Partnership Syndications - Added 665 New Surgical Partners to Date; Goal of 1,000 - Same Store Volume Up 7 Consecutive Quarters o Ensure Maximum Utilization by Surgical Partners o Highlight Physicians through Various Media Outlets o Introduce New Technologies To Drive Volume -------------------------------------------------------------------------------- DIAGNOSTIC: GROWTH AREAS o New Diagnostic Applications - New Technology Allows High-Speed, High Resolution Organ Scans - Cardiac CT - PET Scanners - Virtual Colonoscopy -------------------------------------------------------------------------------- INPATIENT REHAB: GROWTH AREAS o Expand Relationships with Tertiary-care Hospitals o Expand Product Lines - Alliance with American Stroke Association - Neurological Trauma o Take Advantage of Acute Care Units/Wings that May be Shut Down Due to PPS o First Time Ever Marketing to Medicare Patient Population -------------------------------------------------------------------------------- REALIZE THE BENEFITS OF PPS o Effective January 1, 2002 o Have Received Notification of Payment on Several Thousand Claims Submitted Under PPS o Payment Has Been Identical to HEALTHSOUTH's Expected Payment o Validates HEALTHSOUTH's Analysis of Positive PPS Impact o Projected Contribution of at Least $0.07 to EPS in 2002 o Upon Full Implementation, Expected Pre-Tax Benefit of Approximately $75MM -------------------------------------------------------------------------------- TARGETED POPULATIONS UNDER PPS Population Profit Margin Per HealthSouth Case Case Mix Stroke 33% 15% Joint Replacement 31% 17% Hip Fracture 30% 11% Pulmonary 28% 6% Cardiac 28% 8% -------------------------------------------------------------------------------- WHY STROKE? o 600,000-750,000 new strokes each year o 4,400,000 stroke survivors o 300,000 TIA's (mini-strokes) annually o 5,500,000 total patients that could benefit from rehabilitation o Stroke is leading cause of disability in adults o Most stroke survivors do not get adequate rehab -------------------------------------------------------------------------------- INPATIENT DIVISION: Outpatient Growth Areas o Day Program o Sleep Medicine o Stroke o Diabetes -------------------------------------------------------------------------------- OTHER GROWTH INITIATIVES o Clinical Trials - Infrastructure in Place - 54 Trials Currently in Pipeline o Nationwide Platform To Roll Out New Devices and Technologies o New Medical Center - State of the Art Design To Include Integrated Wireless Technologies - Opening Mid 2004 in Birmingham, Alabama -------------------------------------------------------------------------------- HEALTHSOUTH DIGITAL HOSPITAL o HEALTHSOUTH is working with leading software developers and vendors to build the first integrated clinical management system in a new facility that will: - Integrate Manufacturers/Suppliers onto a Single Technological Platform - Reduce Medical Errors -Enhance Building and Technological Efficiencies which will Allow More Time With Patients o Technology Will be Rolled Out to All HEALTHSOUTH Facilities o Site Work is Well Under Way -------------------------------------------------------------------------------- FINANCIAL OVERVIEW -------------------------------------------------------------------------------- REVENUE TREND [Graphic omitted] -------------------------------------------------------------------------------- EBITDA TREND [Graphic omitted] -------------------------------------------------------------------------------- EBITDA MARGIN TREND [Graphic omitted] -------------------------------------------------------------------------------- EPS TREND [Graphic omitted] -------------------------------------------------------------------------------- 2002 EPS GUIDANCE Represents 39% Growth [Graphic omitted] -------------------------------------------------------------------------------- BALANCE SHEET RATIOS 1999 2000 2001 1Q02 ---- ---- ---- ---- DEBT/CAP 49.3% 47.7% 44.4% 43.6% EBITDA/INTEREST 6.9X 5.1X 5.6X 6.0X DEBT/EBITDA 2.6X 2.8X 2.5X 2.4X DEBT $3.11B $3.21B $3.03B $3.02B -------------------------------------------------------------------------------- STRONG LIQUIDITY POSITION o At End of 1Q02 Have Approximately $1.2B in Availability Under Current $1.75B Credit Facility o In Process of Renegotiating $1.75B Credit Facility which Matures June 2003 o Expect to Complete New Bank Facility by End of 2Q02 o New Facility Will Provide Ample Availability to Take Out Last Remaining 2003 Maturity ($568MM Convert) -------------------------------------------------------------------------------- FINANCIAL STRATEGY o 20%+ Hurdle Rate on Growth Opportunities o Deploy Capital Strategically o Delivering 15% or Greater EPS Growth RESULT: SUSTAINABLE, LONG-TERM GROWTH COMPANY -------------------------------------------------------------------------------- MARKETING THE FUTURE OF HEALTHCARE [Graphics omitted] -------------------------------------------------------------------------------- CONSUMER PUBLICATIONS [Graphic omitted] -------------------------------------------------------------------------------- GO FOR IT! [Graphic omitted] -------------------------------------------------------------------------------- HEALTHSOUTH BACK TO HEALTH [Graphic omitted] -------------------------------------------------------------------------------- COMING MAY 7, 2002 HEALTHSOUTH PRESENTS: "BEHIND THE GAME" ON FOX SPORTS NET o Focus on HEALTHSOUTH Star Physicians and Services o Feature HEALTHSOUTH Professional Sports Associations and Athletes o Consumer Focused Health Lifestyle Information That Educates and Builds Demand o Powerful Marketing Tool for HEALTHSOUTH Brand and Its Physicians -------------------------------------------------------------------------------- HEALTHSOUTH MEDIA INITIATIVES [Graphic omitted] -------------------------------------------------------------------------------- CASE STUDY Dr. John McWilliams Los Angeles, CA -------------------------------------------------------------------------------- CASE STUDY o Dr. McWilliams Increased His Cases in HEALTHSOUTH Surgery Center from Average of 8 per Month to 16 Cases per Month after the Back to Health TV Story -------------------------------------------------------------------------------- SIGNIFICANT EVENTS o Digital Hospital Construction Under Way o Announced 42% EPS Growth for 1Q02 o EBITDA Margin Reached 29.1% - Highest Level Since 1999 o Received Clearance from the FDA to Market the AutoAmbulator o Investor Day May 14, 2002 in Birmingham, AL -------------------------------------------------------------------------------- AUTOAMBULATOR [Graphic omitted] -------------------------------------------------------------------------------- SUMMARY o Leading Provider in Core Business Lines & One of the Largest Healthcare Providers in the US o National Network of High-Quality, State-of-the-Art Facilities o Delivering the Highest Quality Patient and Physician Experience Available o Projected 39% Earnings Growth in 2002 o Providing Innovative Marketing Services and Opportunities that Create Consumer Demand and Physician Loyalty o Continue to be an Innovative Healthcare Company