Health Management Associates, Inc.
Health Management Associates — Proxy Contest (August 2013)
22 slides from Health Management Associates's proxy contest presentation, Aug 5, 2013
Slide 1: The Rationale for a Complete and Prompt Change of the Board at HMA
The Rationale for a Complete and Prompt Change of the Board at HMA August 2013
Slide 2: Summary of Process to Revitalize HMA
A proposed sale of HMA to Community Health Systems ("Community"), subject to approval from regulators and 70% of HMA shareholders Q2 results well below expectations, with Adjusted EBITDA and EPS falling 18% and 50% below consensus Materially reduced 2013 Guidance, reducing EBITDA and EPS by 12% and
Slide 3: Two Separate & Distinct Votes for HMA Shareholders
PAGE 3 Two Separate & Distinct Votes for HMA Shareholders The vote to replace and refresh the Board of HMA is separate and distinct from the vote regarding the Community Proposal that will come in several months The Glenview Consent Solicitation to Revitalize HMA VOTE 1 Revitalize HMA August 2013 Wh
Slide 4: Building Value at HMA
Declined to $8.23, per HMA Board 1 $150-180 million 2 $13.78 + CVR PAGE 4 Building Value at HMA We believe we must replace the Board promptly to strengthen and secure the Community Proposal and to enhance investor understanding and confidence We believe every company has two values: Its independent
Slide 5: The Value of the Community Proposal is Enhanced by Revitalizing HMA
PAGE 5 The Value of the Community Proposal is Enhanced by Revitalizing HMA We believe the two variable sources of consideration (CYH stock and CVR payment) would be enhanced by the involvement and oversight of the Fresh Alternative Board and an engaged Alvarez & Marsal management team The Community
Slide 6: The August Vote: A Comparison of Results & Capabilities of each Board
PAGE 6 The August Vote: A Comparison of Results & Capabilities of each Board HMA Financial Health HMA Regulatory Challenges Strategic Alternatives 4 additional subpoenas in the past two months Extensive and expensive legal expenditures 9% Y/Y EBITDA decline1 30% Y/Y Earnings decline1 25% decline in
Slide 7: Enhanced energy, focus and capabilities to reverse financial decline
Enhanced energy, focus and capabilities to reverse financial decline and avoid material adverse change Improve financial and operational health of HMA so that its value to Community is maximized, thereby strengthening the value of the equity component of the transaction Attempt to minimize financial
Slide 8: Example of areas of focus in value creation within the Community proposal
PAGE 8 Example of areas of focus in value creation within the community proposal In prior Medicare disputes involving large hospital chains, the settlement payments have been a true-up to prior payments, and as such the settlement amounts have been substantially tax deductible Assuming the potential
Slide 9: Two Separate Votes on Values
PAGE 9 Two Separate Votes on Values Under the Fresh Alternative Board, shareholders can expect: A heightened focus on performance, quality, accountability and cost A fresh perspective and approach to resolving legacy contingent liabilities harnessing the experience and skills of experts Greater fina
Slide 10: Revitalize HMA
PAGE 10 Revitalize HMA We urge all shareholders to promptly consent to remove and replace the Board to Revitalize HMA For information on how to vote, please contact Bruce Goldfarb / Patrick McHugh / Lydia Mulyk at Okapi Partners: (212) 297-0720 or (877) 869-0171
Slide 11: Appendix
PAGE 11 APPENDIX
Slide 12: A Holistic Approach to Addressing the Current Challenges at HMA
PAGE 12 A Holistic Approach to Addressing the Current Challenges at HMA The Fresh Alternative for HMA Proven managers, leaders and professionals capable of tackling the myriad of operating, cultural, financial and regulatory issues at HMA Mary Taylor Behrens Experience in executive compensation, hum
Slide 13: New Proposed HMA Board Structure and Committee Composition
PAGE 13 New Proposed HMA Board Structure and Committee Composition Audit Committee John McCarty (Chair) Kirk Gorman Stephen Guillard Compensation Committee Compensation Committee Governance Committee Steven Epstein (Chair) Stephen Guillard John McCarty Peter Urbanowicz Mary Taylor Behrens (Chair) St
Slide 14: Mary Taylor Behrens
PAGE 14 Mary Taylor Behrens Current President of Newfane Advisors, Inc. Former Head of Merrill Lynch Investment Managers, Americas Region Board member of Sagent Pharmaceuticals, Inc. Career Highlights and Experience Board of Directors Experience Founded Newfane Advisors, a private consulting firm, i
Slide 15: Steven Epstein
PAGE 15 Steven Epstein Founder and Senior Health Partner of Epstein Becker & Green, P.C. Current board member of multiple companies in the healthcare sector Career Highlights and Experience Board of Directors Experience Senior Partner of Epstein Becker & Green, a leading law firm in health care law
Slide 16: Kirk Gorman
PAGE 16 Kirk Gorman Current Executive Vice President and CFO of Jefferson Health System Former Senior Vice President and CFO of Universal Health Services Chairman of the board of CardioNet, Inc. Career Highlights and Experience Board of Directors Experience Currently the Executive Vice President and
Slide 17: Stephen Guillard
PAGE 17 Stephen Guillard Former COO and Executive Vice President of HCR ManorCare, Inc. Former Chairman, President and CEO of Harborside Healthcare Corp. Former Co-Founder, President and CEO of Diversified Health Services Career Highlights and Experience Board of Directors Experience Was responsible
Slide 18: John McCarty
PAGE 18 John McCarty Former Executive Vice President and Chief Financial Officer of SHPS, Inc. Former Chief Financial Officer of LabOne Inc. Former Senior Vice President and CFO of eai Healthcare Staffing Solutions Career Highlights and Experience Additional Relevant Experience Served as a consultan
Slide 19: JoAnn Reed
PAGE 19 JoAnn Reed Current Healthcare Services Consultant Director and Audit Committee member of American Tower, Inc. Career Highlights and Experience Board of Directors Experience Served as Chief Financial Officer of Medco Health Solutions from 1996 to March 2008 and as an advisor to the Company's
Slide 20: Steven Shulman
PAGE 20 Steven Shulman Senior Advisor of Water Street Healthcare Partners Former Chairman, Chief Executive Officer of Magellan Health Services Former Chairman, President and CEO of Prudential Healthcare Inc. Career Highlights and Experience Board of Directors Experience Current Managing Partner at S
Slide 21: Peter Urbanowicz
PAGE 21 Peter Urbanowicz Managing Director at Alvarez & Marsal's Healthcare Group Former Executive VP, General Counsel and Secretary of Tenet Healthcare Former Deputy General Counsel of Dept. of Health and Human Services Career Highlights and Experience Board of Directors Experience Has led Alvarez
Slide 22: Glenview participants and consent solicitation legend
PAGE 22 GLENVIEW CAPITAL PARTNERS, L.P., GLENVIEW CAPITAL MASTER FUND, LTD., GLENVIEW INSTITUTIONAL PARTNERS, L.P., GLENVIEW OFFSHORE OPPORTUNITY MASTER FUND, LTD., GLENVIEW CAPITAL OPPORTUNITY FUND, L.P., GLENVIEW CAPITAL MANAGEMENT, LLC AND LARRY ROBBINS (COLLECTIVELY, "GLENVIEW") TOGETHER WITH TH
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