United Surgical Partners International (USPI) 8-K This presentation contains forward-looking statements, including those regarding United Surgical

August 2014

Exhibit 99.1

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

use

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.

Safe Harbor & Non-GAAP

Safe Harbor Statement

2

•

Industry

leader

of

health

system

and

physician

partnerships

in

short

stay

facilities

with

both

local

market

strength

and

a

national

presence

(219

facilities

and

~1M

surgeries in 2014)

•

Fifteen

year

history

of

establishing

strategic

partnerships

with

leading

health

systems

which yields additional growth opportunities

•

History

of

strategic

investments

in

infrastructure

and

R&D,

that

has

positioned

the

company well to adapt to environmental changes and opportunities

•

Attractive high quality and high value solution to those paying for health care

(commercial insurance, government, employers, patients)

•

Attractive

experience

and

satisfaction

rates

for

those

accessing

the

system

(high

quality

and

high

satisfaction

rates

for

patients;

efficient,

state-of-the-art

facilities

for

physicians)

•

Attractive

business

model

with

low

risk

cash

flows,

reliable

payors,

high

margins

and

low

capital

intensity.

150+

facilities

in

joint

venture

with

~50

health

system

partners

and approximately $2.4B in systemwide revenues

•

Strong and supportive equity sponsor in Welsh, Carson, Anderson & Stowe

•

Adjusted EBITDA

CAGR of 8% from 2006 to 2013

•

Cumulative Free Cash Flow of $400 million from 2009 to 2013

•

Majority of USPI’s senior management has been with the Company over 10 years

Trusted

Strategic

Partner

Market

Leader

Surgical

Solutions

Financial

Strength

Overview

Consistent

Financial

Performance

Proven

Management

Team

USPI is an experienced and trusted partner in some of the nations most successful surgical networks, well

positioned for current and future environments.

3

Growing complex cases:

Total Joints

Spine

True results (bariatric surgery)

9%

Other

Gynecology

General

GI

6%

Ophthalmology

13%

7%

6%

ENT

2%

Cosmetic

43%

Orthopedic

10%

Pain management

4%

2013 Payor Mix

2%

Self-pay

Government

19%

1%

Private insurance

Other

78%

2013 Revenue Mix

Leading Operator of Hospital and

Outpatient Surgical Facilities

4

Low risk cash flows from high margin

specialties and reliable payors

High margin, elective procedures

•

53% of revenue mix from

orthopedic and pain management

Diversification of specialties insulates

USPI from negative utilization and

specialty pricing changes

78% private insurance

•

Insurance companies favor low cost

providers

•

Modest exposure to government

reimbursement fluctuations

Reliable payors and operating

discipline yields bad debt expense of

~2% of revenues and receivable days

outstanding is under 35

Quality

Industry-leading electronic tracking of quality data

5

Patient Experience

We use Press Ganey

to

benchmark our

facilities, track progress, and ensure the

highest level of service to our patients

Processes of Care

In addition to the core measures required

by CMS, we also track additional safety

measures, conduct culture of safety surveys

annually, and deploy initiatives to focus on

critical processes

Efficiency of Care

Providing efficient care ensures that we can price

our services competitively, but more importantly,

ensures that our physicians have the utmost

confidence in us and our patients receive timely

services and can return to home and work quickly

and safely. 

Outcomes of Care

We are committed to ensuring our patients have

excellent clinical outcomes, and we measure

readmissions, adverse events, and several

procedures-specific outcomes. 

Quality

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%

Able to reduce overall healthcare costs and manage need for surgical

services in an integrated care environment

Industry poised for consolidation

–

Top ten companies own less than 20%

–

Growth of new facilities has slowed in recent years

U.S. Industry Overview

6

Further consolidation likely within the industry and USPI is well-positioned to capitalize

There are over 375 surgery center chains that own 2 or more ASCs.

Top ten companies still own less than 20%

Some ASCs and ASC companies choosing to sell in face of current headwinds

From 2000 –

2012, the percentage of ASCs owned by a multi-facility chain increased from

22% to 40%

Source: CMS 2014 report

2000

3,172

2,468

(78%)

2,136

(36%)

3,740

(64%)

2004

3,957

2,973

(75%)

6,758

2012

2,717

(40%)

4,041

(60%)

2008

5,876

Independent

Multi-facility

USPI facilities

Fragmented Market

7

704

(22%)

984

(25%)

49

87

213

161

USPI’s portfolio includes 204 ASCs and 15 surgical hospitals in 26 states

Local market presence provides for attractive

solutions to those accessing the system

National presence provides for attractive

solutions to those paying for healthcare

Denver

6 facilities

Centura Health

Partnership

Oklahoma City

1 facility

INTEGRIS Health Partnership

St. Louis

18 facilities

New Jersey

12 facilities

Meridian Health

Partnership

Nashville

21 facilities

St. Thomas Partnership

Atlanta

6 facilities

Houston

19 facilities

Memorial Hermann Partnership

Austin

5 facilities

Seton Partnership

San Antonio/Corpus Christi

5 facilities

CHRISTUS Health Partnership

Dallas/Ft. Worth

32 facilities

Baylor Health Care

System Partnership

Phoenix/Las Vegas

14 facilities

Dignity Health

Partnership

Los Angeles

6 facilities

Dignity Health

Partnership

Kansas City

5 facilities

North Kansas City Hospital

Ascension Partnership

Chicago

5 facilities

NorthShore University

HealthSystem, Adventist

Partnership

USPI Facilities

USPI Hospital Locations

Facility Profile

8

Key

Positioned to play an important role in managing increased need for outpatient surgical

services as well as providing ambulatory surgical solutions for strategic networks

Opportunities for USPI to assist with enhancement

of strategic network capabilities

9

Physician Partners

•

USPI is proven, trusted

partner

•

USPI involvement can

alleviate historical

distrust of hospitals

•

USPI can help provide

targeted solutions for

strategic positioning

Health System Partnerships

•

JV model in place

•

Commitment to highest level of quality service

•

Comfort regarding proper utilization of brand

•

Ability to assist with out-of-hospital strategies

Access to Capital

•

In a rapidly changing

environment, ability to

enhance speed to

market with new

models where there

are capital constraints

Professional Management

•

Proven ability to execute and operate low cost,

high quality facilities

•

Proven ability in managing professional

partnerships

•

Ability to leverage quality management and

decision support systems

Strategic Partnership Model Helps Position

USPI

for Strategic Network Opportunities

Succeed Today in

Fee-for-Service

World

Capture

Opportunities with

New Value-based

Market Segments

Balancing Success

Individual strategic initiatives balance success in current

environment by capturing new market segments.

10

Enhance Organic Growth

Accelerate Cost Transformation

Continue Development Efforts

Enhance Physician Services

Develop Direct Channel Capabilities

Health System Partners

USPI partners with some of the nation’s most progressive health systems yielding additional growth

opportunities in surgical space as well as ancillary opportunities

Robust pipeline provides for additional joint venture and consolidation opportunities

11

Strategic Integration

Inception

End of 2013

On going development

12

•

JV formed in 1998

•

Baylor contributed 2

ASCs / USPI 3 ASCs

•

32 facilities in DFW

•

25 ASCs and 7

physician-owned

hospitals

•

Integration with Baylor

S&W Quality Alliance

•

PCP/Specialist 

Alignment

•

JV formed in 1999

•

1 ASC in Las Vegas

•

18 facilities in N.

California, Las Vegas,

Phoenix

•

Integration with St.

Rose Quality Network

and Arizona ACO

•

JV formed in 1998 in

Nashville

•

21 ASCs and 1

physician-owned

hospital Nashville, K.C.,

Indiana and Austin

•

Integration with

MissionPoint

Health

Partners

•

JV formed in 2003

•

18 ASCs and 3

physician-owned

hospitals in Houston

•

Integration with

MHMD

•

Convenient Care

Centers

•

89 acquisitions

•

27 de novo facility developments

•

18 new health system partners

•

Facility revenue CAGR of 13% from 2006 to 2013

•

Positive each of the past 5 years

•

Same facility revenue + 6.2% for 2011

•

Same facility revenue +5.7% for 2012

•

Same facility revenue +1.1% for 2013

•

Same facility revenue +1.5% YTD 2014

•

Facility EBITDA CAGR of 10% from 2006 through 2013

•

Facility EBITDA margins of 28.9% for 2013 and 27.7% YTD 2014

•

26% SWB as a percent of systemwide revenue

•

2% G&A as a percent of systemwide revenue

•

Installed and continuously improving decision support systems

•

Investing significantly in strategic growth infrastructure and capabilities

•

Improved quality management system

•

EHR Investment

•

44 facilities divested

•

75% of revenue from top 10 markets

Expansion

Facility

revenue growth

Facility EBITDA

Cost management

System enhancements

Portfolio management

Performance Post 2007 LBO

13

Financial Results

14

($ in thousands)

2011

2012

2013

Operating income

$      233,659

$      245,234

$      263,791

Depreciation and amortization

           21,177

           23,955

           27,238

EBITDA

         254,836

         269,189

         291,029

% Growth

6%

8%

Net income attributable to noncontrolling

interests

          (69,929)

          (72,693)

          (78,782)

EBITDA less noncontrolling interests

         184,907

         196,496

         212,247

% Growth

6%

8%

Net (gain) loss on deconsolidations, disposals

and impairments

           (1,529)

            7,588

            5,017

De novo start-up losses

            4,009

               500

  - 

Acquisition / transaction costs

            3,314

            2,200

               200

Equity compensation

            1,237

            1,700

            1,841

Management fee

            2,000

            2,000

            2,000

Adjusted EBITDA

$      193,938

$      210,484

$      221,305

Unaudited Adjusted

Years Ended December 31,

2014 YTD Financial Results

($ in thousands)

2014

2013

Operating Income

119,288

$   

118,839

$   

Depreciation and amortization

13,007

14,075

EBITDA

132,295

132,914

Net income attributable to noncontrolling interests

(35,433)

(35,330)

EBITDA less noncontrolling interests

96,862

97,584

Net loss (gain) on deconsolidations, disposals, and impairments

917

5,399

Equity compensation

1,083

899

Management Fee

1,000

1,000

Adjusted EBITDA

99,862

$     

104,882

$   

Unaudited Adjusted

Six Months Ended June 30

15

At June 30, 2014, total leverage was 6.4x and secured leverage was 4.7x

Leverage Trends

16

Total debt of $1.5 billion

Corporate

level

debt

service

(cash

pay)

in

the

next

12

months

is

approximately

$94M,

including

$10M

principal

and

$84M

interest

Debt Maturities

17