Change Healthcare — Merger or Acquisition (February 2020)
27 slides from Change Healthcare's merger presentation, Feb 24, 2020
Slide 1: Inspiring a Better Healthcare System Roadshow Presentation
Exhibit 99.1 Inspiring a Better Healthcare System Roadshow Presentation © © 20 2020 20 C Cha hange nge H He ea allt thc hca are re LLC LLC a and nd/ /or or on one e of of iit ts s su sub bsi sidi dia ar riie es. s. A Allll R Riight ghts s R Re ese serv rve ed. d. Exhibit 99.1 Inspiring a Better Heal
Slide 2: Legal: Cautionary Notice Regarding Forward Looking Statements
Legal CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS: This presentation may contain certain statements about McKesson Corporation (“McKesson”), PF2 SpinCo, Inc. (“SpinCo”), Change Healthcare LLC (“Change Healthcare”) and Change Healthcare Inc. (“Change”) that are “forward-looking statements”
Slide 3: Exchange Offer Summary
Exchange Offer Summary Issuer: Change Healthcare Inc. (CHNG) Target Discount on CHNG 7% Upper Limit: 15% (based on 2/7/20 closing prices) rd th Averaging Period: March 3 – 5 th Expiration: March 9 NASDAQ / CHNG Exchange / Ticker: NYSE / MCK Minimum Condition: None © 2020 Change Healthcare LLC and/or
Slide 4: Investment Highlights
Investment Highlights Leading Independent Healthcare Technology Company Providing Data and Analytics Driven Solutions For Payers, Providers and Consumers $3 Billion 31% $1 Trillion 88% 14 Billion 1 2 3 1,4 1 Revenue Adj. EBITDA Margin Market Opportunity Recurring Revenue Transactions Largest Indepen
Slide 5: Change Has Delivered on Key Objectives Since IPO
Change Has Delivered on Key Objectives Since IPO ü ü 1 2 Delivering on Topline Growth Adj. EBITDA Margin Expansion Software & Network Technology +102bps 31.0 % Analytics Solutions Enabled Services 29.9 % 5.3% 5.0% 2.5% Driven by Payment Volume Growth New Customer Accuracy and Decision Across Network
Slide 6: Well Positioned to Capitalize on Industry Tailwinds
Well Positioned to Capitalize on Industry Tailwinds Inspiring a Better Healthcare System Increasing Consumerism Consolidation and Vertical Growing Integration Government Influence Rise of Value- New Entrants & Based Care Competitors System Reducing Building a Focusing on Inefficiency healthcare’s co
Slide 7: Innovating From the Center of the Healthcare Ecosystem
Innovating From the Center of the Healthcare Ecosystem Technology Partner of Data and Connectivity Comprehensive Solutions Choice Well positioned at the center of Serving payers, providers, labs, 700 industry-leading partners to the healthcare ecosystem pharmacies, consumers, others drive innovation
Slide 8: Improving Outcomes Through Differentiated Solutions
Improving Outcomes Through Differentiated Solutions Enhance engagement & access Technology Software & Network Enabled Services: Analytics: Solutions: Improve clinical outcomes Services to support Solutions across Leverages our financial and revenue cycle, network to enable administrative payment acc
Slide 9: Offering a Full Suite of Modular Integrated Solutions
Offering a Full Suite of Modular Integrated Solutions Comprehensive suite of solutions allows modular or enterprise delivery / sales Strategic leverage between solutions All solutions necessary to solve emerging issues - Change Healthcare is partner of choice Technology-Enabled Services Providers Pa
Slide 10: Our Platform Delivers Unique Value for Payers, Providers and Consumers
Our Platform Delivers Unique Value for Payers, Providers and Consumers Provided Innovation & Differentiation Leads to More through Customers & APIs and • Coding Advisor Partners SaaS APIs • InterQual AutoReview ™ and Interoperable Solutions IQ Connect ™ Platform Technology for Healthcare Enabled Sol
Slide 11: Creating Highly Differentiated Competitive Advantages
Creating Highly Differentiated Competitive Advantages End-to-end payment accuracy solution Pre-Pay Insight & Review Identify and review abnormal billings Payer Connectivity Services Integrated Repricing Network Correct claim submission data to Reprice OON claims based on optimal network improve auto
Slide 12: Delivering Innovation and Value Through Artificial Intelligence
Delivering Innovation and Value Through Artificial Intelligence TM CARESELECT October 2019 CHARGE CAPTURE September 2019 PROPENSITY TO DENY Enhance EHR June 2019 workflow efficiency CLAIMS LIFECYCLE AI to help physicians February 2019 Increase detection of HEALTH FIDELITY streamline imaging missing
Slide 13: Producing Data-Driven Next Generation Enterprise Imaging
Producing Data-Driven Next Generation Enterprise Imaging The only cloud native EI solution designed for the era of data and AI Leverage Data Simplify Imaging Financial Predictability Easily leverage AI to transform Fully managed solution, No capital investment is data into actionable insights signif
Slide 14: Empowering Consumers to Optimize their Healthcare Shopping Experience
Empowering Consumers to Optimize their Healthcare Shopping Experience ™ Shop Book & Pay : An Integrated eCommerce Solution Book – Integrated Pay – Collect Shop – Optimized Digital Scheduling Payment Upfront Shopping Experience © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights R
Slide 15: Continued Execution on Growth Initiatives
Continued Execution on Growth Initiatives Financials (ASC 605) Commentary • S&A: Strong Performance & Execution Across Segment Q1-3 Q1-3 % Q3 Q3 % – Consistent growth across all solutions, with accelerated FY'20 FY'19 Change FY'20 FY'19 Change ($ in millions) growth in Payment Accuracy and Decision
Slide 16: Strong Performance and Momentum
Strong Performance and Momentum Net DEBT LEVERAGE 1 2 Segment REVENUE Adjusted EBITDA Free CASH FLOW 3 RATIO Software & Analytics +102bps +265.0% (1.0) x Margin Expansion $ 406 $ 385 $ 706 5.7 x $ 214 Q3 FY2019 Q3 FY2020 Network Solutions 4.7 x $ 151 $ 144 $ 678 Q3 FY2019 Q3 FY2020 $ 59 Technology-E
Slide 17: Path to Accelerated Growth
Path to Accelerated Growth Multiple Levers for Growth Across the Income Statement ...which can be further accelerated by ... synergies M&A and improved efficiency to drive incremental earnings growth... …transformation Core businesses leads to growth Investments continue to contribution… complete, c
Slide 18: Predictable Financial Model with Multiple Growth Drivers
Predictable Financial Model with Multiple Growth Drivers Significant white space opportunity Innovation at scale Strong industry tailwinds Operating Cross-selling efficiency and within existing synergies customer base FY’21 Revenue Growth Guidance 4%-6% FY’21 Adjusted EBITDA guidance 6%-8% © 2020 Ch
Slide 19: Appendix
Appendix © © 20 2020 19 C Cha hange nge H He ea allt thc hca are re LLC LLC a and nd/ /or or on one e of of iit ts s su sub bsi sidi dia ar riie es. s. A Allll R Riight ghts s R Re ese serv rve ed. d. Appendix © © 20 2020 19 C Cha hange nge H He ea allt thc hca are re LLC LLC a and nd/ /or or on one
Slide 20: GAAP to Non-GAAP Revenue Reconciliations
GAAP to Non-GAAP Revenue Reconciliations ($ in millions) FY 2019 FY 2020 Q3 Y/Y YTD Growth Growth Revenue Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD GAAP: Software & Analytics 394 381 385 1,160 392 386 406 1,184 Network Solutions 137 136 144 416 142 144 151 437 Technology-Enabled Solutions 253 246 257 761 248 244 24
Slide 21: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Change Healthcare LLC Reconciliation of Net Income (Loss) to Adjusted EBITDA © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 21 Change Healthcare LLC Reconciliation of Net Income (Loss) to Adjusted EBITDA © 2020 Change Healthcare LLC and/or one of its subsidiaries.
Slide 22: Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
Change Healthcare LLC Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 22 Change Healthcare LLC Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) © 2020 Change Healthcare LLC and/or one
Slide 23: Reconciliation of Operating Cash Flow to Free Cash Flow
Change Healthcare LLC Reconciliation of Cash Provided by (Used in) Operating Activities to Free Cash Flow and Adjusted Free Cash Flow © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 23 Change Healthcare LLC Reconciliation of Cash Provided by (Used in) Operating Acti
Slide 24: Consolidated Balance Sheets
Remove see note 6 after WP comes back Change Healthcare LLC Consolidated Balance Sheets (unaudited and amounts in thousands) © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 24 Remove see note 6 after WP comes back Change Healthcare LLC Consolidated Balance Sheets (u
Slide 25: Consolidated Statements of Operations
Change Healthcare LLC Consolidated Statements of Operations (unaudited and amounts in thousands, except unit and per unit amounts) © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 25 Change Healthcare LLC Consolidated Statements of Operations (unaudited and amounts i
Slide 26: Consolidated Statements of Cash Flows
Change Healthcare LLC Consolidated Statements of Cash Flows (unaudited and amounts in thousands) © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 26 Change Healthcare LLC Consolidated Statements of Cash Flows (unaudited and amounts in thousands) © 2020 Change Healthc
Slide 27: Segment Results
Change Healthcare LLC Segment Results © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 27 Change Healthcare LLC Segment Results © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 27
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