36th Annual J.P. Morgan Healthcare Conference Arial 40 Nick - PowerPoint PPT Presentation

36th Annual J.P. Morgan Healthcare Conference Arial 40 Nick Turkal, MD President and Chief Executive Officer Gail Hanson Chief Financial Officer

Presentation disclaimer This presentation is provided as of January 9, 2018 in connection with Aurora Health Care, Inc.’s (“Aurora”) participation at the JP Morgan Healthcare Conference. It has been prepared for informational purposes only. The information contained herein is subject to completion and amendment. If you are viewing this presentation after the date stated above, events may have occurred that have a material adverse effect on the financial information presented. This presentation does not constitute nor does it form part of an offer to sell or purchase, or the solicitation of an offer to sell or purchase, any securities. This presentation contains “forward - looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward-looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice. Information provided in this presentation as of and for the nine months ended September 30, 2017 is derived from the unaudited consolidated financial information of Aurora. Unless otherwise noted, the financial ratios set forth in this presentation are calculated in accordance with the methodology set forth in Aurora’s quarterly disclosure, which can be found at emma.msrb.org. THE PRINTING, DUPLICATING, DOWNLOADING, SCREEN CAPTURING, ELECTRONIC STORING, RECORDING, PUBLISHING OR DISTRIBUTING OF THIS PRESENTATION IN ANY MANNER IS STRICTLY PROHIBITED. By viewing this presentation you acknowledge that you understand and agree to the provisions of this page. 3

Background Aurora is a fully integrated health system Our purpose: We help each other live well • We serve 1.2 million unique patients • Over 5 million clinic visits per year • With locations in more than 30 counties • 15 hospitals, 150+ clinics, 70+ pharmacies, 40+ specialties • Serving patients from all 50 states and 29 countries • The largest homecare organization in Wisconsin • 33,000 caregivers including 1,800 employed physicians • $5.1 billion in annual revenue (2016 audited) • Favorable bond ratings: – Fitch upgrade to A+ from A on November 18, 2016 – Moody’s rating of A2 on Jan. 9, 2017 4

Coordinated, patient-centered care * Adjusted prescriptions convert 90-day fills into 3 30-day fills. 5

Our differentiators • Consumer-centricity • Superior value • Creative, innovative partnerships • Population health • High-performing culture 6

Our strategy 2016-2020 7

Our Best People priority Key strategies Highly engaged Diverse and inclusive Exceptional workforce community leadership 8

Our Best Brand priority Key strategies Know the consumer Brand strength The Aurora Signature Experience • • Wisconsin’s leading Convenience & access: Best-in-class insights • Physician ratings brand • • Urgent Care reservations Key driver in patient • acquisition & loyalty V-Visits • Retail health 9

Our Best Value priority Key strategies Population health Value for employers & Innovation consumers • • • Partnerships Care coordination Most cost-effective • • Clinical & non-clinical Information system in footprint • • • Embedded in culture Medications Nurse navigators • Reduced variation in care 10

Value Impact Southeast Wisconsin Quality Achievement/Resource-Efficiency Matrix Statewide Average 1.06 High Quality Achievements High Quality Achievements Low Efficiency High Efficiency More Quality Achievements 1.04 Aurora 1.02 1.00 Statewide Average 0.98 0.96 0.94 Low Quality Achievements Low Quality Achievements Low Efficiency High Efficiency 0.92 1.20 1.18 1.16 1.14 1.12 1.10 1.08 1.06 1.04 1.02 1.00 0.98 0.96 0.94 0.92 0.90 0.88 Greater Resource Efficiency Quality: HCTrends analysis based on December 2016 data downloads from CMS and WCHQ Efficiency: WHIO 16 resource utilization; normalized by episode; commercial payers;, completed episodes only 11

Advocate Aurora Health 12

Arial 40

Advocate Aurora Health • Merger of equals • Single board of directors – equal representation • Co-CEOs/dual headquarters • Combined executive team • Continue existing brands • Consolidated financial statements

Advocate Aurora Health strategic value drivers • Adjacent markets in contiguous states • Complementary expertise • Alignment of strategic plans and culture • Embrace population health • Enhanced scale and operational synergies • Investment yield upside

Corporate structure AAH Board is comprised 50/50 of Advocate/Aurora directors * Advocate Health Care and Aurora Health Care continue to be the nonprofit member of their respective affiliates; however, many of their reserved powers over their affiliates will be permanently transferred to the new parent Advocate Aurora Health.

Financial update 17

Revenue trend millions $5,124.8 $4,930.0 $4,716.1 $4,249.0 $3,927.5 $3,771.7 2013 2014 2015 2016 Q3 2016 2017 Q3 2017 Q3 y-o-y growth = 4.1% 18

Operating margin 17.2% 14.7% 14.6% 14.4% 14.3% 11.8% 10.7% 9.4% 7.3% 7.0% 6.3% 3.7% 2013 2014 2015 2016 Q3 2016 2017 Q3 EBITDA % Operating Margin %

Operating margin 17.2% 14.7% 14.6% 14.4% 14.3% 11.8% 10.7% 9.4% 7.3% 7.0% 6.3% 3.7% 6.1% 5.9% 4.9% 4.8% 4.8% 4.6% 4.1% 4.1% 3.7% 3.4% 3.2% 3.2% 3.0% 3.0% 2.2% 2013 2014 2015 2016 Q3 2016 2017 Q3 A2 Median A1 Median AA2 Median EBITDA % Operating Margin % 20

Unrestricted cash and days cash on hand 250.0 $2,122 235.6 $2,000 222.9 $1,887 $1,832 218.7 $1,607 $1,557 209.7 209.7 $1,500 200.0 209.7 $1,324 164.8 $1,000 151.9 149.7 141.8 150.0 137.4 125.0 $500 $0 100.0 2013 2014 2015 2016 Q3 2016 2017 Q3 Unrestricted Cash & Investments Days Cash on Hand A2 Median 21

Debt to capitalization Aurora debt to capitalization is now better than the A2 median 50.2% 48.6% 42.0% 35.3% 34.4% 30.9% 36.7% 36.7% 36.7% 33.3% 32.2% 31.5% 2013 2014 2015 2016 Q3 2016 2017 Q3 A2 median Aurora 22

Debt and total net assets Continuing trend of strong balance sheet improvement $2,948 $2,602 $2,546 $2,217 $1,791 millions $1,399 $112 $183 $118 $116 $157 $114 $1,655 $1,614 $1,558 $1,570 $1,565 $1,485 2013 2014 2015 2016 Q3 2016 2017 Q3 Debt Pension Deficit Total Net Assets 23

Summary A purpose driven organization… • We help each other live well Differentiators: • Integration and clinical quality • Strong financial position • Superior value • Clear 5-year plan A view to the future: Advocate Aurora Health 24