Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Encompass Health Corp | form8k_06072011.htm |
Exhibit 99.1
Volume:
• Q2 2011 discharge growth remains solid
• On track to achieve the higher end of 2.5% to 3.5 % discharge growth (comps
become tougher as the year progresses)
become tougher as the year progresses)
Capital structure:
• The Company has initiated the June 15, 2011 call of $335 million in principal of its
10.75% senior notes.
10.75% senior notes.
− Loss on early extinguishment of debt and interest savings will impact EPS. The
Company will update EPS guidance in its Q2 2011 earnings release.
Company will update EPS guidance in its Q2 2011 earnings release.
• The Company amended its credit agreement and added a $100 million term
loan maturing in 2016 with an initial interest rate of LIBOR plus 2.50 percent.
loan maturing in 2016 with an initial interest rate of LIBOR plus 2.50 percent.
Asset sale:
• The Company announced the sale of its six long-term acute care hospitals for
approx. $120 million.
approx. $120 million.
Q2 2011 Observations & Considerations (as of June 7, 2011)
1
Exhibit 99.1
Transaction summary:
• Sell all six long-term acute care hospitals (LTCHs)
• Purchase price consideration of $120 million
• Expected to be completed in the third quarter of 2011 and is subject to
customary closing conditions, including regulatory approval and third-party
consents
customary closing conditions, including regulatory approval and third-party
consents
Financial impact:
• These hospitals contributed approx. $121.7 million of net operating revenues and
approx. $17.5 million of Adjusted EBITDA in 2010 (associated depreciation and
amortization of approx. $3.3 million).
approx. $17.5 million of Adjusted EBITDA in 2010 (associated depreciation and
amortization of approx. $3.3 million).
• The taxable gain on the transaction will be largely offset by the Company’s
federal and state NOLs. The impact on cash taxes is not expected to be material.
federal and state NOLs. The impact on cash taxes is not expected to be material.
• The LTCHs will be treated as discontinued operations beginning in the second
quarter of 2011(results will be reclassified for all of 2011 and prior periods).
quarter of 2011(results will be reclassified for all of 2011 and prior periods).
Sale of Long-term Acute Care Hospitals (as of June 7, 2011)
2
Even after giving effect to the sale of the LTCHs, the Company affirmed guidance
to be at the high end of, or greater than, the Adjusted EBITDA range of $440
million to $450 million for full-year 2011.
to be at the high end of, or greater than, the Adjusted EBITDA range of $440
million to $450 million for full-year 2011.