Clickhere for title. Click here for subtitle. HFMA Capital Conference Boca Raton Regional Hospital

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1 Clickhere for title Click here for subtitle HFMA Capital Conference Boca Raton Regional Hospital March 27, 2015

2 Overview and Strategic Direction Jerry Fedele, President and CEO

3 Setting the Stage Fiscal Year 2008 Low Point $120 million loss Medical staff and community concern Considered potential sale of Hospital FTI Healthcare Engaged for Assessment and Turn Around Back to basics Focus on operations,,physician engagement and patient satisfaction 3

4 The Initial Improvement Imperative Fiscal Year 2009 Achieved $110 Million Improvement $17 million operating loss $9.5 million bottom line loss Fiscal Year 2010 The Turn Around Continued Continued focus on basics, physician engagement and implementation ofgrowthstrategies Positive net income FTI replaced with permanent management team 4

5 Setting the Strategic Direction: Continued Progress with Financial Turnaround Goals to: Move from break even to profitable Moderate seasonality and Medicare dependence Migrate from local community provider to regional referral center Moving Forward Differentiate Organization by: Provide better quality and service than our competitors Grow our ambulatory care network Develop preferred physician relationships Invest in leading edge technology Develop superior tertiary level programs in select areas Initiate graduate medical education Form strategic affiliations 5

6 Differentiating on Quality and Satisfaction Boca Raton Regional Hospital Quality Accolades 2014 Distinguished Hospital Award for Clinical Excellence TM by Healthgrades for the 10th year in a row only 24 hospitals nationwide id have earned such a consecutive distinctioni i Listed in 2014 America s 50 Best Hospitals by Healthgrades for the fourth year in a row 2014 Maternity Care Excellence Award TM by Healthgrades for the fourth year in a row A rated in the Leapfrog Group s fall 2014 Hospital Safety Score Listed in 2013 by U.S. News & World Report as a Top Ranked Hospital in South Florida for the third year in a row Listed in 2013 America s 100 Best Hospitals for Cardiac Care and Gastrointestinal Care by Healthgrades for the second year in a row 2013 VHA Inc. Leadership Award for Clinical Excellence Named as a Top Performer on Key Quality Measures by The Joint Commission only a third of 1,000 hospitals surveyed by The Joint Commission in 2012 earned this distinction 6

7 Strategic Positioning Advancing Medical Education Medical student training 2011 Residency training Technology Internal medicine residents, July 2014 Surgery residents, July 2016 First to market in Hybrid Operating Room, Positron Emission Mammography & Accu Boost Radiation Therapy, Flash CT and Molecular l Breast timaging Robust robotic surgery program One of the busiest women s health and wellness institutes in the US The only tertiary Neurosciences Institute in South Florida Intraoperative MRI and Intraoperative CT 7

8 Leading Regional and National Programs The Eugene M. and Christine E. Lynn Cancer Institute Barbara and Irving Gutin Center for Robotic Surgery The Marcus Neuroscience Institute The Christine E. Lynn Women s Health and Wellness Institute 8

9 Growing Ambulatory Care Network 5 outpatient imaging locations 3 breast care centers 2 radiation therapy locations Home Health Medicare and private Outpatient rehabilitation Wound care program Pain management services 4 primary care centers Ambulatory care center North Broward location opened in February

10 Clinical Affiliations and Physician Network Strategic Affiliations Affiliation with the H. Lee Moffitt Cancer Center Affiliation with North Shore LIJ Health System Developing Clinically Integrated Network with other regional health systems Growing Physician Network BocaCareprimary care 9 primary care physicians and 3 mid level providers / 4 locations BocaCare specialty care 25 specialty physicians (vascular, cardiac, thoracic, GI, colo rectal, urology, neurosurgery, orthopedics, breast and general surgery) Center for Hematology Oncology (PSA) 13 medical oncologists 10

11 Significant Community Support Fundraising FY 2008 through FY 2014 ($ in thousands) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ $41,627 $39,288 $34,651 $25,748 $12,556 $10,512 $6, (1) Above table reflects the fiscal year in which the Foundation became aware of such pledge, gift or bequest and not the year in which such pledge, gift or bequest was recorded in the financial statements of the System. (2) FY 2013 includes a bequest that management estimated in that year to be $25 million; such amount is subject to final determination. 11

12 Moving Forward Continue building physician network Differentiate based on quality and tertiary programs Move patient experience scores to the next level Redesign processes to eliminate waste, rework, and redundancies Successfully introduce academics Achieve market essentiality for physicians and payers Focus on maximizing i i strategic partnership opportunities ii with Moffit and North Shore LIJ Maintain philanthropic support Continue robust ongoing disclosure and transparency to investors 12

13 Financial and Operating Performance Operating Performance Dawn Javersack, Chief Financial Officer

14 Key Utilization Statistics Utilization statistics have consistently improved across all areas Total Adjusted Admissions 43,000 41,802 42,000 41,000 40,000 39,468 38, ,000 38,000 37, ,600 9,400 9,200 9,000 8,800 8,600 Total Inpatient and Outpatient Surgeries 9,474 9,065 9, ,000 Emergency Room Visits 47, ,000 Outpatient Visits 342,462 46,000 44,000 42,000 40,000 41,917 44, , , , , ,413 38, ,

15 Financial Strategies Driving Improved Results Physician network growth Focus on building tertiary programs Improving patient satisfaction and quality metrics Process redesign and supply chain reengineering to improve efficiencies i i Maintaining focus on productivity standards Improvedrevenuecycle revenue enhancements Demonstrating value to commercial payers Moving toward achieving market essentiality Philanthropic support Debt Refinancing September,

16 Select Financial Results ( Consolidated) Operating Improvement Operating Income ($ in 000s) Operating EBITDA Margin $5,000 $(5,000) $(1,423) $(731) $211 $1,480 10% 5% 3.0% 8.8% 8.6% 8.5% 8.1% 5.3% $(15,000) $(25,000) $(35,000) $(17,073) $(11,562) 0% 5% $(45,000) 10% $(55,000) 15% 13.9% $(65,000) $(61,154) %

17 Select Financial Results ( Consolidated) Focus on Building Balance Sheet Strength $163.4 Unrestricted Cash & Investments ($ in MM) $108.5 $85.2 $89.0 $93.6 $102.7 $ Days Cash on Hand $56.1 $34.7 Capital Expenditures ($ in MM) $14.2 $17.3 $19.8 $31.3 $ % 180.3% Cap. Ex. as % of Dep. Exp % 133.1% 63.3% 75.7% 86.1%

18 Refinanced Outstanding Debt- September 2014 Par Amount: $89.6 million Purpose: Refund all outstanding debt for savings Security: Gross revenue pledge Mortgage MADS covenant: 1.10x Liquidity covenant: 60 DCOH Ratings Upgrades from Both Agencies: S&P: BBB stable Fitch: BBB stable Refunding generated $12.1 million of present value savings or 12.4% of refunded par All in TIC of 3.67% 18

19 Conclusion BRRH is becoming a regional referral center BRRH has achieved national recognition for clinical excellence and patient satisfaction Select tertiary care program growth is a competitive strength Well targeted investment in technology successful in driving growth Primary service area market share is growingg Ambulatory care network and physician integration strategies are succeeding Management team has achieved impressive financial turnaround and continued improvement, and is committed to ongoing transparency and disclosure BRRH s financial flexibility is now significant: Recognized with ihrating upgrades from both hs&p and Fitch Ratings Further enhanced by extraordinary philanthropic support No new debt plans despite significant strategic growth investments Recent refunding further improves ourpositive trajectory 19