EXHIBIT 99
TEXT OF INVESTOR RELATIONS SLIDESHOW IN USE
BEGINNING JUNE 11, 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.
- --------------------------------------------------------------------------------
LEADING HEALTHCARE PROVIDER
o Approximately 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 $4.4 Billion in LTM Revenue with $1.2 Billion LTM EBITDA
- --------------------------------------------------------------------------------
OUTPATIENT REHAB
#1 Market Share - 1,419 Locations
10% of $10 Billion Market
[Graphic omitted]
- --------------------------------------------------------------------------------
OUTPATIENT SURGERY
#1 Market Share - 208 Locations
16% of $6 Billion Market
[Graphic omitted]
- --------------------------------------------------------------------------------
DIAGNOSTIC IMAGING
#1 Market Share - 134 Locations
4% of $8 Billion Market
[Graphic omitted]
- --------------------------------------------------------------------------------
INPATIENT REHABILITATION
#1 Market Share - 117 Locations
22% of 35,000 Bed Market (7,564 Beds)
[Graphic omitted]
- --------------------------------------------------------------------------------
HEALTHSOUTH CORPORATION
National Footprint with Approximately 1,900 Locations
[Graphic omitted]
- --------------------------------------------------------------------------------
HEALTHSOUTH CORPORATION
Current MSA Coverage
[Graphic omitted]
- --------------------------------------------------------------------------------
HEALTHSOUTH CORPORATION
Backfill Opportunities
[Graphic omitted]
- --------------------------------------------------------------------------------
TOP PAYOR COVERAGE
[Graphic omitted]
- --------------------------------------------------------------------------------
LEADING SPORTS RELATIONSHIPS
Unique National Presence
STRONG BRAND EQUITY AND RELATIONSHIPS WITH LEADING PROFESSIONAL
AND AMATEUR SPORTS ORGANIZATIONS
[Graphic omitted]
- --------------------------------------------------------------------------------
JV AND STRATEGIC RELATIONSHIPS
[Graphic omitted]
- --------------------------------------------------------------------------------
HEALTHSOUTH INTEGRATED WORKSITE SERVICES
o Largest Provider of Worksite Health and Disability Management
Services in North America
o Provide Physical Therapy, Fitness, Wellness, Case Management,
Occupational Health and Ergonomic Services to over 425 Worksite Locations
- --------------------------------------------------------------------------------
WORKSITE CASE STUDY
o Delta Operations Center
- Internal Audit conducted January, 2002
- Before the HEALTHSOUTH Ergonomic Awareness Program
o Six Departments Had a Total of 16 Back Injuries.
- After the HEALTHSOUTH Ergonomic Awareness Program was Implemented
o Only 2 Back Injuries
o Reduction in Total Worker's Comp Costs of $350,000 Over Two Years.
o Lost Work Days Reduced from 14 per Claim to 7
- --------------------------------------------------------------------------------
EMPLOYER CONTRACTS
Direct Employer Contracts with Fortune 1000 Companies
[Graphic omitted]
- --------------------------------------------------------------------------------
PROVIDER OF CHOICE
o Unique National Presence
o Demographics Favor Outpatient Services Over Traditional
Acute-Care Offerings
o Our Integrated Service Model Moves the Patient Through the
System More Efficiently
o HEALTHSOUTH Is a Leader in Technological Advances
- --------------------------------------------------------------------------------
HEALTHSOUTH 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
- --------------------------------------------------------------------------------
HEALTHSOUTH ADDS VALUE
TO PATIENTS
o Superior Clinical
Care
- --------------------------------------------------------------------------------
HEALTHSOUTH ADDS VALUE
TO PATIENTS
o Convenience of Ambulatory Setting
- --------------------------------------------------------------------------------
HEALTHSOUTH ADDS VALUE
TO PATIENTS
o Pristine Facilities
- --------------------------------------------------------------------------------
PRISTINE AUDIT
o Unannounced Audit of Every HEALTHSOUTH Facility
o 50 Point Checklist
o Conducted by Ernst & Young
o Overall Score of 98
- --------------------------------------------------------------------------------
RECOGNIZED CLINICAL EXCELLENCE
2001 JCAHO Survey Results:
HEALTHSOUTH Facility Scores vs. National Average Scores
National Hospital Organizations 91
National Ambulatory Organizations 93
HEALTHSOUTH Rehabilitation 94
HEALTHSOUTH Surgery Centers 95
HEALTHSOUTH Diagnostic 96
Source: 2001 JCAHO SURVEY RESULTS
- --------------------------------------------------------------------------------
HEALTHSOUTH ADDS VALUE
TO PAYORS
o Lower Cost Per Episode
o Ambulatory Setting More Cost Efficient
PROCEDURE HEALTHSOUTH 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
- --------------------------------------------------------------------------------
PAYOR MIX
[Graphic omitted]
- --------------------------------------------------------------------------------
HEALTHSOUTH REVENUE
BY PRODUCT LINE
[Graphic omitted]
- --------------------------------------------------------------------------------
OUTPATIENT REHAB: GROWTH AREAS
o Functional Capacity Evaluations (FCEs)
- Market Size of Approximately $1 Billion
o Expand Fitness Center Programs
o Increase Number of Referring Physicians
o Increase Number of Annual Referrals per Physician
- --------------------------------------------------------------------------------
OUTPATIENT SURGERY: GROWTH AREAS
o Add Surgeons Through Partnership Syndications
- Added 672 New Surgical Partners to Date; Goal of 1,000
- Same Store Volume Up 7 Consecutive Quarters
o Ensure Maximum Utilization by Surgical Partners
o Highlight Physicians through Various Media Outlets
o Introduce New Technologies To Drive Volume
- --------------------------------------------------------------------------------
DIAGNOSTIC: GROWTH AREAS
o New Diagnostic Applications
- New Technology Allows High-Speed, High Resolution Organ Scans
- Cardiac CT
- PET Scanners
- Virtual Colonoscopy
- --------------------------------------------------------------------------------
INPATIENT REHAB: GROWTH AREAS
o Expand Relationships with Tertiary-care Hospitals
o Expand Product Lines
- Alliance with American Stroke Association
- Neurological Trauma
o Take Advantage of Acute Care Units/Wings that May be Shut Down Due to PPS
o First Time Ever Marketing to Medicare Patient Population
----- ---- ----
- --------------------------------------------------------------------------------
REALIZE THE BENEFITS OF PPS
o Effective January 1, 2002
o Have Received Notification of Payment on Several Thousand Claims
Submitted Under PPS
o Payment Has Been Identical to HEALTHSOUTH's Expected Payment
o Validates HEALTHSOUTH's Analysis of Positive PPS Impact
o Projected Contribution of at Least $0.07 to EPS in 2002
o Upon Full Implementation, Expected Pre-Tax Benefit of Approximately $75MM
- --------------------------------------------------------------------------------
TARGETED POPULATIONS UNDER PPS
Profit Margin HEALTHSOUTH
Population Per Case Case Mix
- ---------- -------- --------
Stroke 33% 15%
Joint Replacement 31% 17%
Hip Fracture 30% 11%
Pulmonary 28% 6%
Cardiac 28% 8%
- --------------------------------------------------------------------------------
OTHER GROWTH INITIATIVES
o Clinical Trials
- Infrastructure in Place
- 54 Trials Currently in Pipeline
o Nationwide Platform To Roll Out New Devices and Technologies
o New Medical Center
- State of the Art Design To Include Integrated Wireless Technologies
- Opening Mid 2004 in Birmingham, Alabama
- --------------------------------------------------------------------------------
REVENUE TREND
[Graphic omitted]
- --------------------------------------------------------------------------------
EBITDA Trend
[Graphic omitted]
- --------------------------------------------------------------------------------
EBITDA MARGIN TREND
[Graphic omitted]
- --------------------------------------------------------------------------------
EPS TREND
[Graphic omitted]
- --------------------------------------------------------------------------------
2002 EPS GUIDANCE
Represents 39% Growth
[Graphic omitted]
- --------------------------------------------------------------------------------
BALANCE SHEET RATIOS
1999 2000 2001 2002
---- ---- ---- ----
Net Debt/Cap 48.2% 46.2% 42.0% 43.6%
EBITDA/Interest 6.9x 5.1x 5.6x 6.0x
Debt/EBITDA 2.6% 2.8x 2.5x 2.4x
Debt $3.11B $3.21B $3.03B $3.02B
[Graphic omitted]
- --------------------------------------------------------------------------------
RECENT EVENTS
o $1B, 10 Year Senior Notes Offering
- Upsized from Initial $500MM Offering
- Priced at Tight End of Range (T+248 bps to yield 7.73%)
o New $1.2B Bank Facility
- 5 Year Revolver - Replaces $1.75B Revolver which Matures June '03
- Expect to Close by the End of 2Q02
o Refinance $207MM in Synthetic Leases
- Includes Corporate Headquarters, 9 Rehab Hospitals, and Digital Hospital
- Bring Back on Balance Sheet Given New FASB Guidelines and Investor
Concerns Over Off-Balance Sheet Items
- Will Appear as $207MM in Capex in 2Q02
- --------------------------------------------------------------------------------
STRONG LIQUIDITY POSITION
o Full Availability Under New Bank Facility
o Cash in Excess of $400MM
o New Facility Will Provide Ample Availability to Take Out Last Remaining
2003 Maturity ($568MM Convert);
No Significant Maturities until 2007
o No Off-Balance Sheet Financing Issues
- --------------------------------------------------------------------------------
FINANCIAL STRATEGY
o 20%+ Hurdle Rate on Growth Opportunities
o Deploy Capital Strategically
o Generate Strong Free Cash Flow
RESULT: SUSTAINABLE, LONG-TERM GROWTH COMPANY
- --------------------------------------------------------------------------------
SUMMARY
o Leading Provider in Core Business Lines and One of the Largest Healthcare
Providers in the US
o Strong Credit Profile Due to Robust Cash Flow Margins
o Solid Balance Sheet with Substantial Liquidity
o Projected 39% Earnings Growth in 2002
o National Network of High-Quality, State-of-the-Art Facilities