EXHIBIT 99
TEXT OF INVESTOR RELATIONS SLIDESHOW IN USE
BEGINNING JANUARY 29, 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.
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Company Overview
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Leading Healthcare Provider
o Over 1,900 Facilities in all 50 States and Every Major Metropolitan
Market
o Largest Operator of:
- Inpatient and Outpatient Rehabilitation Facilities
- Freestanding Outpatient Surgery Centers
- Freestanding Diagnostic Centers
o Over $4.3 Billion in Revenue with $1.2 Billion EBITDA Run Rate
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Significant Presence in Every Major Market
[Graphic omitted]
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Leading Healthcare Provider
o Strong Growth Potential
o Up to 100,000 Patients Treated per Day
o Approximately 85,000 Referring Physicians
o Excellent Relationships with National and Regional Payors
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Leading Franchise
o No One Can Duplicate What HRC Has Built Over the Last 18 Years
o HRC is Dominant Player in Ambulatory Healthcare Delivery
o HRC is Dominant Player in Freestanding Inpatient Rehabilitation Care
o HRC Leads the Industry in All Core Business Lines
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HEALTHSOUTH Facilities
by Product Line
Market
Type Facilities Position
---- ---------- --------
Outpatient Rehab 1,435 #1
Surgery Centers 217 #1
Diagnostic Centers 137 #1
Inpatient Rehab Facilities 122 #1
As of 9/30/01
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Provider of Choice
o Demographics Favor Outpatient Services Over Traditional Acute-Care
Offerings
o Our Integrated Service Model Moves the Patient Through the System More
Efficiently
o HRC Is a Leader in Technological Advances
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Aggressively Market Our Services
o Emphasize Superior Clinical Care
o Stress Convenience of Ambulatory Setting
o Benefit from Sports Affiliations and Other Branding Methods
o Promote Private Pay Procedures (Plastics)
o Leverage Nationwide Network
Result: Greater Throughput for HRC and Physician Base
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Marketing the HEALTHSOUTH Brand
o Unique National Presence
o Strong Brand Equity and Relationships with Leading Professional and
Amateur Sports Organizations
[Graphic omitted]
o Low-Cost, Efficient Provider
o Superior Clinical Outcomes with Exceptional Patient Satisfaction
o Nationwide Credentialing Program
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HRC's Key Constituents
o Patients
o Physicians
o Payors
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HRC Adds Value to Patients
o Superior Clinical Care
o Convenience of Ambulatory Setting
o Pristine Facilities
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Recognized Clinical Excellence
2002 JCAHO Survey Results:
HEALTHSOUTH Facility Scores vs. National Average Scores
HRC Rehabilitation Hospitals 95
National Hospital Organizations 91
HRC Surgery Centers 95
HRC Diagnostic Centers 95
National Ambulatory Organizations 93
Source: 2001 JCAHO Survey Results
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Pristine Audit
o Unannounced Audit of Every HEALTHSOUTH Facility
o 50 Point Checklist
o Conducted by Ernst & Young
o Overall Score of 98
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Inpatient Rehab:
Higher Acuity, Better Outcomes
[Graphic omitted - HRC Admission FIM Scores vs. National Average]
o FIM Score Measures Level of Assistance Patient Requires (Acuity)
o HRC's Lower Admission Scores Indicate Sicker, More Medically Complex
Patients than Other Rehab Facilities
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Inpatient Rehab:
Higher Acuity, Better Outcomes
[Graphic omitted - HRC Discharge FIM Scores vs. National Average]
o HRC's Higher Discharge Scores Indicate Healthier, Less Medically
Complex Patients than Other Rehab Facilities
o HRC Consistently Shows Greater Patient Improvement
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HRC 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
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HRC Adds Value to Payors
o Lower Cost Per Episode
o Ambulatory Setting More Cost Efficient
Procedure HRC 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
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Business Overview
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Substantial and Diversified Revenue Base
LTM TOTAL REVENUE: $4,342 MILLION
[Graphic omitted]
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Outpatient Rehabilitation
Services provided include rehabilitation programs for orthopaedic, sports and
work-related injuries
o Market Size = $10 Billion
o Estimated Annual Industry Growth Rate of 5%
o Payor Mix = 5% Medicare; 95% Non-Medicare
o HEALTHSOUTH:
- #1 Market Share (10%)
- 1,435 Outpatient Rehabilitation Centers in All 50 States and the UK
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Outpatient Rehabilitation: Focus Areas
o Functional Capacity Evaluations (FCEs)
- Market Size of Approximately $800MM
o Evaluate Fitness Center Pilot Programs
o Increase Number of Referring Physicians from 85,000 to 100,000
o Increase Number of Annual Referrals per Physician from 35 to 40
- Result: 33% Increase in New Patient Volume
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Outpatient Surgery
Provider of orthopaedic, plastic, ENT and other surgical procedures on an
outpatient basis
o Market Size = $7 Billion
o Estimated Annual Industry Growth Rate of 7-9%
o Payor Mix = 20% Medicare; 80% Non-Medicare
o HEALTHSOUTH:
- #1 Market Share (16%)
- 217 Surgery Centers in 38 States
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Outpatient Surgery: Focus Areas
o Add Surgeons Through Partnership Syndications
- Added 550 New Surgical Partners to Date
- Same Store Volume Up 5 Consecutive Quarters
o Ensure Maximum Utilization by Surgical Partners
o Highlight Physicians through Various Media Outlets
o Introduce New Technologies To Drive Volume
- Trivex (Varicose Veins)
- BEI (GYN Surgery)
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Diagnostic Imaging
Provider of imaging services, including magnetic resonance imaing (MRI),
computerized tomography (CT), X-rays, ultrasounds, mammography and fluoroscopy
o Market Size = $8 Billion
o Estimated Annual Industry Growth Rate of 8-10%
o Payor Mix = 15% Medicare; 85% Non-Medicare
o HEALTHSOUTH:
- #1 Market Share (4%)
- 137 Diagnostic Centers
- Ideal Strategic and Operational Fit with Other Business Lines
- Significant Cross-Referral Opportunities
- Completes Patient Care Cycle
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Inpatient Rehabilitation
Provider of rehabilitation services for orthopaedic conditions, strokes, brain
and spinal cord injuries, neuromuscular disease and amputees
o Market Size = 35,000 Beds and 450,000 Patients per Year
o Estimated Annual Industry Growth Rate of 4-5%
o Payor Mix = 70% Medicare; 30% Non-Medicare
o HEALTHSOUTH:
- #1 Market Share
- 60% of All Freestanding Inpatient Rehabilitation Facilities
- 22% of All Inpatient Rehabilitation Beds
- 122 Facilities with 7,755 Beds
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Realize the Benefits of PPS
o Effective January 1, 2002
o Received Notification of Payment on First 142 Claims Submitted Under
PPS for Aggregate Payment of $2.4MM
o Payment was Identical to HRC's Expected Payment
o Validates HRC's Analysis of Positive PPS Impact
o Projected Contribution of at Least $0.07 to EPS in 2002
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JV and Strategic Relationships
Facility City State
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Vanderbilt University Medical Center Nashville TN
University of Missouri Columbia MO
Barnes Jewish Christian Health System St. Louis MO
Univ. of Alabama-Birmingham Birmingham AL
University of Virginia Charlottesville VA
St. Barnabas Monmouth NJ
Deaconess Hospital Evansville IN
University of Massachusetts Boston MA
Methodist Health System Memphis TN
Baptist Health System Knoxville TN
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Other Growth Initiatives
o Clinical Trials
- Infrastructure in Place
- 52 Trials Currently in Pipeline
o New Medical Center
- State of the Art Design to Include Wireless Technologies
- Opening Early 2004 in Birmingham, AL
- Will Provide a New Prototype (with Potential for Expansion)
o Evaluate Acquisition Opportunities
- Within Existing Lines of Business
- Complementary Ambulatory Businesses
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Financial Overview
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Revenue Trend
Excluding Occupational Medicine And Richmond Medical Center
[Graphic omitted]
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EBITDA Trend
[Graphic omitted]
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EBITDA Margin Trend
[Graphic omitted]
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2002 Guidance
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Year Ending
12/31/02
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Base Budgeted EPS $ 0.94
PPS Effect +0.07
FAS 142 +0.13
- ------- ------
TOTAL $ 1.14
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Represents 39% Increase over Consensus 2001 Estimates of $.82
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Operating Strategy
o Increase Utilization of Existing Facilities (Minimal CapEx)
o Focus on Key Markets
- Top Expansion Markets Identified
- Development Efforts Prioritized by Impact
- Become Leading Provider in These Markets
o Strict Return Requirements (20% ROE Hurdle Rate)
o Evaluate Strategic Growth Opportunities
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Business Model
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[Several graphics slides omitted, illustrating "500 Sales and Marketing People",
"1,900 Administrators/Community Activists", "85,000 Referring Physicians",
"5,000 Athletic Trainers at Sporting Events", "4,600 Contracts with Payors",
"Fitness Centers", "Onsite Industrial Clinics", "Consumer Magazines", "Consumer
Marketing - Advertising Specific Programs", "Consumer Media - Specific
HealthSouth Content"]
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Case Study
Dr. John McWilliams
Los Angeles, CA
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Case Study
o Dr. McWilliams Increased His Cases in HRC Surgery Center from Average
of 8 per Month to 16 Cases per Month After the Back to Health TV Story
[Graphic omitted]
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Summary
o Leading Provider in Core Business Lines & One of the Largest Healthcare
Providers in the US
o Network of High-Quality, State-of-the-Art Facilities
o Focused on Adding Value to Key Constituents
o Expand HRC Customer Base with New Products and Services
o Maintain Financial Discipline