EXHIBIT 99.2
THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS
THAT INCLUDE THE WORDS "BELIEVES," "EXPECTS," "ANTICIPATES," "INTENDS,"
"PROJECTS," OR SIMILAR EXPRESSIONS AND STATEMENTS REGARDING OUR PROSPECTS. ALL
STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS
PRESENTATION ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT
THE EXPECTATIONS REFLECTED IN SUCH STATEMENTS ARE REASONABLE, IT CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. MATTERS THAT
COULD FURTHER IMPACT FUTURE RESULTS AND FINANCIAL CONDITION INCLUDE
REIMBURSEMENT FOR HEALTHCARE SERVICES, PARTICULARLY REIMBURSEMENT FOR
CHEMOTHERAPY AGENTS, INTEGRATION OF FORMERLY SEPARATE OPERATIONS IN CONNECTION
WITH THE AOR-PRN MERGER, GOVERNMENT REGULATION AND THE OPERATIONS OF THE
COMPANY'S AFFILIATED PHYSICIAN GROUPS. PLEASE REFER TO THE COMPANY'S 1999 ANNUAL
REPORT AND FORM 10-K AND ITS FORMS 10-Q FOR THE FIRST, SECOND AND THIRD QUARTERS
OF 2000 FOR FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE COMPANY'S EXPECTATIONS.
1
Agenda
. Mission, Vision, Challenge
. US Oncology Today
. Strategy
. Financial Review
. Outlook
[US ONCOLOGY LOGO]
2
"Our mission is to increase
access to and advance the
delivery of high quality
cancer care in America"
[US ONCOLOGY LOGO]
3
Premier cancer treatment
and research network
. Network of "premier" oncologists
. Focused outpatient delivery system
. Significant local and national market share
. Vast ancillary opportunities
. Significant market opportunities
. Operating growth in excess of 28%
[US ONCOLOGY LOGO]
4
The cancer challenge . . .
. Second leading cause of death
. $37 billion for direct medical costs
. 1 in every 4 deaths is from cancer
. Men - 1 in 2 lifetime risk, 1 in 3 women
. 552,200 are expected to die of cancer this year - 1,500 per day
. 1.2 million new invasive cancer cases diagnosed annually
Source: American Cancer Society
. . . is significant
[US ONCOLOGY LOGO]
5
US Oncology Today
6
Largest Cancer Treatment And Research Network
. Over 8,000 employees, with 850 oncology specialists
. Providing cancer care to over 500,000 patients annually
. Treats 200,000 new cases annually
. 15% share of the cancer treatment market
. $1.7 billion net patient revenue
[US ONCOLOGY LOGO]
7
National Network
[Map of United States showing US Oncology
Locations appears here]
DATA AS OF 1/01/01 As Of January 1, 2001
. 26 STATES
. 72 Cancer Centers * 72 Cancer Centers
. 4 PET Installations [ ] 4 PET Installations
. 450 Sites of Service
[US ONCOLOGY LOGO]
8
Comprehensive Range Of Cancer Care Services
BASED ON SEPTEMBER 2000 YTD REVENUES OF $968 MILLION
[pie chart showing type of service
performed appears here with following data:
MEDICAL ONCOLOGY
81%
(Hematology,
Pediatric and
Gynecologic Oncology)
Radiation Oncology
15%
Diagnostics/Others
4%]
[US ONCOLOGY LOGO]
9
Network Stability
. 102 physicians added in 2000
. High barriers to entry
- Significant local market share
- High investment in technology and facilities
. Expanded earnings opportunities
[US ONCOLOGY LOGO]
10
US Oncology Strategy
11
Network Strategy
. Leverage local and national size of network
- Managed care contracting
- Drug and equipment purchasing
. Ancillary growth from existing medical and radiation oncology network
- Cancer Centers
- PET
- Clinical research/drug development
. Support rational cancer reimbursement reform
[US ONCOLOGY LOGO]
12
Building On Local Market Leadership
[ ] Cancer Center Sites
. Aurora
. Denver
. Littleton
. Thornton
. Colorado Springs (04/01/01)
[Map of local sites of service in the [ ] Practice Sites
Denver Area and in Colorado statewide . Aurora
appears here] . Boulder
. Colorado Springs
. Denver
. Englewood
. Fort Collins
. Lakewood
. Littleton
. Longmont
. Loveland
. Pueblo
. Thornton
[ ] 72 Physicians
[US ONCOLOGY LOGO]
13
Market share versus managed care reimbursement
MARKET SHARE MEANS LEVERAGE
[Graph with y-axis showing reimbursement rate for
managed care as a percentage of Medicare and x-axis
showing market share appears here, with the following data points:
Market Share Reimbursement
------------ -------------
10% 115%
30% 124%
40% 133%
50% 143%]
Based on Actual % Paid
CORRELATION COEFFICIENT = .976
[US ONCOLOGY LOGO]
14
USON Versus GPO Pricing
SUPPLIER DRUG VARIANCE FROM MARKET
Alza Ethyol 500 mg 17%
Alza Doxil mg/ml 25%
Amgen Neupogen 80 mg 21%
Aventis Anzemet 20 mg/ml 27%
Aventis Taxotere 80 mg 13%
BMS Taxol 300 mg 9%
BMS Paraplatin 450 mg 4%
Novartis Aredia 90 mg 12%
Ortho Biotech Procrit 40,000 units 8%
Shering Intron A 50 MIU 9%
------------
15%
[US ONCOLOGY LOGO]
15
Cancer Center Opportunities
Network Potential for Radiation Treatments (1) 1,400,000
Current Network Annual Volume (600,000)
-------------
Additional Volume Available 800,000
Net Revenue Estimate (Millions) $228,000,000
(Demand Equivalent of 100 Cancer Centers)
(1) Based on US Oncology medical oncology patient volume.
[US ONCOLOGY LOGO]
16
Leveraging Partnerships
Drug Information Practice
. Aventis . Sarcom . Medic Computer
. Amgen . Perot . IDX
. Bristol-Meyers Squibb . MCI . WebMD
. Immunex . Cisco . Enterprise Manager
. Ortho-Biotech . SWB DataCom . PsiMED
. Novartis . Oracle
. Alza Pharmaceuticals . Microsoft Distribution
. Compaq
Equipment . Vignette . Cardinal Health
. InfoCure . McKesson/HBOC
. Varian . ISC
. PET-CTI, Inc.
. Siemens
[US ONCOLOGY LOGO]
17
Cancer Centers
[Photographs of cancer centers listed below appear here]
Littleton, CO Greenville, SC
13,800 Sq. Ft. 30,924 Sq. Ft.
Dallas, TX Westminster, MD
105,810 Sq. Ft. 13,250 Sq. Ft.
[US ONCOLOGY LOGO]
18
Comprehensive Range Of Services
[Photographs of cancer center interiors appear here]
[US ONCOLOGY LOGO]
19
Positron Emission Tomography (PET) Technology
. Superior diagnostic technology
. Target market strategy -
- One million population MSA
- Estimated 35 installations
. Average net reimbursement of $2,200 per procedure
. Breakeven at two visits per day
. Broad coverage signaled by HCFA
. Private payers expected to follow
[US ONCOLOGY LOGO]
20
Positron Emission Tomography (PET)
. One of the world's most advanced
imaging techniques, showing
physiologic changes before they
become anatomic changes
[Photographs comparing CT scan . Provides information for clinical
to PET scan appear here] studies database
. Enables more cost effective treatment
due to earlier identification of
disease
[US ONCOLOGY LOGO]
21
Current And Potential PET Installations
[U.S. map showing current and potential
PET installations appears here]
[US ONCOLOGY LOGO]
22
Sample Of Medications In Development By Therapeutic Class
[Graph showing types of Medications in Development
by Therapeutic Class appears here]
[US ONCOLOGY LOGO]
23
Clinical Research / Drug Development
. Largest Integrated Cancer Research Group
. Complete Phase 1-4 Trials Capability
. 250+ Practice Sites Staffed for Research
. 200+ Completed Clinical Trials
. Currently 90+ trials for over 20 large pharmaceutical and biotech companies
[US ONCOLOGY LOGO]
24
Drug Development Capability
. 300+ FTEs dedicated to research
. Demand far exceeds supply
. Ability to source new molecules
- Existing Trials Being Conducted
- Access to Wide Oncologist Network
. Intellectual property to analyze and evaluate new therapies
[US ONCOLOGY LOGO]
25
US Oncology
Financial Review
26
GAAP Revenue Growth
[Graph showing GAAP revenue growth appears
here with the following data points
1997 $625 million
1998 $837 million
1999 $1,039 million
2000 Annualized $1,291 million]
[US ONCOLOGY LOGO]
27
Components Of Growth
[Pie chart showing components of total growth of 21% from 3rd quarter of 1999 to
3rd quarter of 2000 appears here with the following Data Points
In-Market Acquisitions 3%
Physician Recruitment 4%
Internal Growth 14%]
[US ONCOLOGY LOGO]
28
Pre-distribution EBITDA
[Graph showing EBITDA pre-distribution to
physicians appears here with the following data points
1997 $274 million
1998 $424 million
1999 $497 million
2000 Annualized $576 million
Data excludes one time income and charges, RIT, etc.]
[US ONCOLOGY LOGO]
29
Cash Flow Distribution
[Graph showing cash flow distribution for Physician Compensation
compared to cash flow distribution for US Oncology
appears here with the following data points
Physician USON
Compensation Distribution
1997 58% 42%
1998 57% 43%
1999 59% 41%
2000 Annualized 63% 37%]
[US ONCOLOGY LOGO]
30
EBITDA Growth
[Graph showing EBITDA by year appears
here with the following data points:
1997 $112.7 million
1998 $160.5 million
1999 $182.3 million
2000 Annualized $178.5 million
data excludes 1999 Merger related costs of $29 million and
1997 PRN Accounts Receivable write-off of $37.8 million]
[US ONCOLOGY LOGO]
31
EPS Growth
[Graph showing annual earnings per share appears here,
with the following data points:
1997 $0.38
1998 $0.60
1999 $0.56
2000 Annualized $0.47
data excludes gain from sale of ILEX stock, 1999 merger-related
costs and 1997 PRN accounts receivable write-offs]
[US ONCOLOGY LOGO]
32
Strong Operating Cash Flow
($ in 000's) YTD Annualized Per Share
-------------- ---------
Net Income (1) $ 47,598 $ 0.47
Dep. & Amort. 74,405 0.73
-------- ------
Operating Cash Flow 122,004 1.20
Less: Maint. Capex (25,000) (0.25)
-------- ------
Total Cash Flow $ 97,004 $ 0.96
-------- ------
(1) Excludes gain from Ilex Sale
[US ONCOLOGY LOGO]
33
Financial Strategy
. Conversion to "profit model"
. Leverage strong liquidity
. Investment in facilities and technology
- High returns
- Increase earnings to shareholders
- Leverage network
[US ONCOLOGY LOGO]
34
Impact Of Model Change On Earnings
Annualized Restated (1) Difference
----------- ------------ -----------
EBITDA(millions) $ 178 $ 203 $ 25
EBITDA % of Net 10.4% 11.9% 1.50%
EPS $0.47 $0.62 $0.15
(1) Restated amounts reflect results as if the prior year's effective profit
split %'s were maintained during the year presented.
[US ONCOLOGY LOGO]
35
Liquidity
1998 1999 2000
------ ------ ------
Debt to Capital 29.0% 35.3% 29.9%
DSO's 75 80 70
Debt to EBITDA 1.6 2.3 1.8
[US ONCOLOGY LOGO]
36
High Returning Investments
($ in thousands) Cancer Center PET
------------- ------
Investment $4,200 $1,500
Annual Revenue $1,650 $2,500
Pre-tax Cash Flow $ 918 $ 400
Pre-tax Cash Flow ROI 21.9% 26.7%
Breakeven Utilization 40% 33%
[US ONCOLOGY LOGO]
37
US Oncology Outlook
38
Uniquely positioned . . .
. Favorable demographics will drive demand
. Nation's largest cancer treatment network
. Local and national market leadership
. Technology and clinical research partnerships
. Focused management team and resources
. Strong Balance Sheet and Operating Cash Flow
. . . to meet the challenge!
[US ONCOLOGY LOGO]
39
[US ONCOLOGY LOGO]
40