Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNITED SURGICAL PARTNERS INTERNATIONAL INC | d85085e8vk.htm |
Exhibit 99.1
| USPI October 2011 |
| SAFE HARBOR STATEMENT This presentation contains forward-looking statements, including those regarding United Surgical Partners International, Inc. and the services it provides. Investors are cautioned not to place an undue reliance on these forward-looking statements, which will speak only as of the date of this presentation. United Surgical Partners International, Inc. undertakes no obligation to publicly revise these forward-looking statements. |
| NON-GAAP MEASUREMENT We have used the non-GAAP financial measurement term "EBITDA." EBITDA is calculated as operating income plus net gain (loss) on deconsolidations, disposals, impairments and depreciation and amortization. USPI uses EBITDA and EBITDA less noncontrolling interests as analytical indicators for purposes of allocating resources and assessing performance. EBITDA is commonly used as an analytical indicator within the health care industry and also serves as a measure of leverage capacity and debt service ability. EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from EBITDA could be significant components in understanding and assessing financial performance. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculation methods, EBITDA as presented by USPI may not be comparable to similarly titled measures of other companies. |
| COMPANY OVERVIEW Leading operator of short-stay multi-specialty surgical facilities in the United States and U.K. Strategic partnerships with local physicians and prominent not-for-profit health systems Strong focus on patient safety, physician efficiency and cost management $2.1 billion of revenues under management for 204 facilities Attractive business model with strong cash flow and modest exposure to government reimbursement Industry positioned as low cost, high quality solution for reform initiatives |
| U.S. INDUSTRY OVERVIEW ASCs have been widely successful and are a significant presence in the U.S. healthcare delivery system Advantages in patient safety and physician efficiency are meaningful Significant savings to patients, government and commercial payors Typically a savings to commercial insurers Medicare savings >40% Medicare beneficiary savings >50% Industry largely unconsolidated Top ten companies own less than 20% Growth of new facilities has slowed in recent years |
| BENEFITS OF ASCs All Constituents Benefit PHYSICIANS Freestanding environment more conducive to meeting high volume physicians' requirements Significant administrative, clinical and economic benefits to physicians PATIENTS Allows higher patient satisfaction as a result of more comfortable setting, scheduling flexibility and consistent staffing HOSPITAL PARTNERS Allows hospital systems to expand their capacity and geographic reach with lower capital use than traditional acute care facilities HIGH QUALITY CARE 92% patient satisfaction Superior patient outcomes Comprehensive regulatory standards PAYORS In general, ASC represent a discount of 20 - 30% compared with HOPD reimbursement |
| GROWING MARKET Source: Verispan report and Wall Street research Freestanding Facility Outpatient Surgeries Hospital Outpatient 94% 10% 17% 25% 29% 32% 83% 75% 71% 68% 6% 90% 43% 57% 1981 1985 1990 1995 2002 2005 2007 Continued shift of outpatient surgery to freestanding outpatient facilities 48% 2009 52% |
| KEY MARKETS Major Market Facilities USPI operates 199 facilities in the United States and five in the United Kingdom Denver 6 facilities Centura Health Partnership Oklahoma City 2 facilities INTEGRIS Health Partnership St. Louis 18 facilities New Jersey 10 facilities Meridian Health Partnership Nashville 21 facilities St. Thomas Partnership Atlanta 6 facilities Houston 19 facilities Memorial Hermann Partnership Austin 4 facilities Seton Partnership San Antonio/Corpus Christi 3 facilities CHRISTUS Health Partnership Dallas/Ft. Worth 32 facilities Baylor Health Care System Partnership Phoenix/Las Vegas 11 facilities Catholic Healthcare West Partnership Los Angeles 6 facilities Catholic Healthcare West Providence Partnership Kansas City 6 facilities North Kansas City Hospital Ascension Partnership Chicago 5 facilities NorthShore University HealthSystem, Adventist Partnership |
| UNITED KINGDOM USPI entered the U.K. market in 2000 and currently operates three private hospitals, a cancer center in greater London and an outpatient clinic in Edinburgh, Scotland Approximately 30% of the population in the Greater London market accesses the private healthcare market Strategically located facilities Physician-driven healthcare Inherent limitations of National Health System Strong management team London Area Map Parkside Hospital & Parkside Oncology (Wimbledon) Highgate Hospital Holly House Hospital (Buckhurst Hill) Facilities |
| HEALTHCARE SYSTEM PARTNERS Benefits to Healthcare Systems Leverage USPI's operational expertise and singular focus Provides a strategy to promote physician alignment Provides defensive mechanism to maintain short-stay surgical business Provides capital and spreads risk through USPI and physicians' investment Provides an opportunity to expand in new markets at lower capital outlay than a hospital Benefits to USPI Provides long-term strategic stability in the marketplace Provides brand, image, reputation and credibility Accelerates growth Enhances relationships with managed care payors 137 facilities are in a partnership with a healthcare system |
| HEALTHCARE SYSTEM PARTNERS USPI's strategy of partnering with not-for-profit healthcare systems aligns the Company's facilities with strong networks of physicians and hospitals that are prominent in their communities and known for providing high quality care BON SECOURS HEALTH SYSTEM, INC. |
| FAVORABLE REVENUE AND PAYOR MIX High margin, elective procedures 55% of revenue mix from orthopedic and pain management Diversification of specialties insulates USPI from negative utilization and specialty pricing changes Over 80% private insurance Insurance companies favor low cost providers Modest exposure to government reimbursement fluctuations Government payor mix worldwide Reliable payors and operating discipline yields bad debt expense of less than 2% of revenues and receivable days outstanding is under 40 days Low risk cash flows from high margin specialties and reliable payors: Orthopedic Gynecology ENT Gastrointestinal Plastic Ophthalmology Medical/Other Pain Mgmt. 11% 44% 3% 6% 8% 8% 8% 3% 9% 2010 U.S. Revenue Mix Private Insurance Self-pay 16% 82% 2% 2010 U.S. Payor Mix Government General |
| DEVELOPMENT STRATEGY Poised to react to current economic conditions and legislative changes Acquisition of troubled facilities Selective acquisition of strong facilities Selective de novo development Selective acquisition of multi-facility companies Work with existing partners (physicians and hospitals) to grow market share Selectively enter new markets with existing or new partners Attractive demographics and/or payor characteristics Prominent health system that embraces physician alignment strategy Prominent physicians who are influential in the market |
| FINANCIAL PROFILE 2007 2008 2009 2010 20111 (in millions) GAAP Revenue $ 620.9 $ 615.1 $ 593.5 $576.7 $593.7 Operating Income $ 162.4 $ 198.1 $ 198.3 $ 210.5 $224.1 Add: Losses on deconsolidations, disposals and impairments (0.4) 1.8 29.2 6.4 3.3 Add: Depreciation & amortization 35.1 32.3 31.2 29.8 29.9 Less: Noncontrolling interests (63.7) (55.1) (63.7) (60.6) (64.8) Add: LBO costs 25.4 - - - - Add: Non-recurring expenses (detailed in Form 10-K) - - (1.0) 14.0 17.1 Adjusted EBITDA less noncontrolling interests $ 158.8 $ 177.1 $ 194.0 $ 200.1 $209.6 Growth 11.5% 9.5% 3.1% 5.8%2 Other Data: GAAP revenue (0.9%) (3.5%) (2.8%) 5.5%2 Systemwide revenue growth 14.1% 9.4% 7.3% 11.7%2 U.S. same-facility revenue growth 10.7% 7.5% 5.4% 6.1%2 1 TTM 6/30/11 2 Q2 2011 versus Q2 2010 |
| SYSTEMWIDE FINANCIALS 2007 2008 2009 2010 20111 Equity method facilities 21.8% 21.2% 21.5% 21.7% 23.0% Consolidated facilities 46.5% 48.8% 48.1% 46.7% 45.7% Weighted average 32.6% 30.2% 29.4% 28.2% 29.1% 1 As of 6/30/11 USPI Ownership Ownership is stable in each category of facilities; we continue to add a greater number of equity centers versus consolidated facilities |
| CAPITALIZATION (in millions) 2007 2008 2009 2010 20113 Balance sheet data: Cash $ 76.8 $ 49.4 $ 34.91 $60.3 $61.7 Debt 1,098.1 1,097.9 1,069.8 1,065.7 1,043.4 Net debt $1,021.3 $1,048.5 $1,036.6 $1,009.5 $981.7 Adjusted EBITDA less noncontrolling interests2 $ 158.8 $ 177.1 $ 194.0 $ 200.1 $209.64 Debt/EBITDA less noncontrolling interests 6.43x 5.92x 5.34x 5.04x 4.68x 1 On December 1, 2009, the Company paid an $89 million dividend 2 Adjusted to reflect discontinued operations recorded in 2010 3 As of 6/30/11 4 TTM 6/30/11 |
| DEBT MATURITIES Total debt $1.0 billion as of June 30, 2011 |
| SUMMARY USPI is well positioned: low cost, high quality, high customer satisfaction provider Partner with key local not-for-profit hospital systems Strong partnering capabilities will continue to provide opportunities for growth, even in difficult times Focused on key strategic markets with significant market share Stable revenue growth Strong equity sponsor in WCAS Capitalized for growth and flexibility |