Investor Call Presentation July 17, 2012

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Emily Lester
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1 Investor Call Presentation July 17, 2012

2 Disclaimer This Investor Call Presentation was prepared exclusively for the benefit of and internal use by the recipient for the purpose of considering the transaction or transactions contemplated herein. This Investor Call Presentation is not an offer to sell or a solicitation of an offer to buy the Bonds and does not purport to be a complete statement of all material facts relating to the Bonds. The offering is made only by means of the Official Statement. If you are viewing this Investor Presentation after July 17, 2012, there may be events that have occurred subsequent to such date that have had a material adverse effect on the financial information that is presented herein. Please be advised that neither the Issuer nor the Underwriter nor any of its affiliates has undertaken or assumed any duty to update any such information and are under no obligation to update any such information. By accessing this Investor Call Presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record, produce, publish or distribute this Investor Call Presentation in any form whatsoever. No assurance can be given that any transaction or transactions contemplated herein could in fact be executed. The material contained herein is not a product of any research department of the Underwriter or any of its affiliates. Nothing herein constitutes a recommendation of any security regarding any issuer, nor is it intended to provide information sufficient to make an investment decision. The information contained in this communication has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made by the Underwriter, its affiliates or any other person as to its accuracy, completeness or correctness. Nothing in this communication constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation and may have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The investments or services contained in this communication may not be suitable for you and it is recommended that you consult an independent attorney, investment advisor, or tax advisor if you are in doubt about the suitability of such investments or services. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every province in Canada, state in the United States of America, and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any specific securities discussed in this communication may not be eligible for sale in some jurisdictions. This communication is not, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. To the fullest extent permitted by law, none of the Underwriter, any of its affiliates, or any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this communication or the information contained herein. 2

3 Participants Robert A. DeMichiei Senior Vice President and Chief Financial Officer C. Talbot Heppenstall, Jr. Senior Vice President, Treasurer and Chief Investment Officer UPMC UPMC James B. Konieczny Assistant Treasurer UPMC Stephen W. Simpson, Jr. Director RBC 3

4 Fiscal Year 2012 through March 2012 Key Financial Indicators ($ in millions) Financial Results Actual Budget Prior Year Operating Revenues $7,215 $7,064 $6,469 Operating Income $290 $233 $313 Operating Margin % 4.0% 3.3% 4.8% Rating Agency Operating Income $194 $115 $215 Rating Agency Margin % 2.7% 1.6% 3.3% Operating EBIDA $584 $531 $605 Operating EBIDA % 8.1% 7.5% 9.4% Investment Revenue (Loss) $41 $154 $366 Interest Expense (91) (110) (91) Investment Income (Loss) ($50) $44 $275 Net Income $234 $269 $630 Liquidity Cash & Investments $4,127 $4,140 $3,951 Unrestricted Cash over Debt $359 $466 $245 Days Cash on Hand Days in AR

5 Fiscal Year 2012 through March 2012 Key Operational Indicators Provider Services Actual Budget Prior Year Medical/Surgical Admissions 139, , ,577 Observation Visits 39,070 35,963 32,917 Subtotal 178, , ,494 Psychiatric Admissions 6,240 6,145 6,073 Rehabilitation Admissions 2,578 2,774 2,848 SNF/Other Specialty Admissions 2,256 2,396 2,274 Total Admissions and Observation Visits 189, , ,689 Medical/Surgical ALOS Medical/Surgical Case Mix Index Transplants Insurance Services Insurance Plan Members 1,811,785 1,675,402 1,570,032 Insurance Plan Medical Expense Ratio 88% 89% 89% Consolidated UPMC Total FTE 48,303 48,996 46,967 Overtime (% of total hours) 2.41% 2.25% 2.39% 5

6 Fiscal Year 2012 through March 2012 Statement of Cash Flows ($ in millions) Cash and Investments at June 30, 2011 $3,951 Operating Activities Operating Income 290 Investment Loss, other (56) Depreciation and amortization 294 Change in operating assets and liabilities, net Investing Activities Purchase of property and equipment (390) Acquisitions, joint venture investments (26) (416) Financing Activities Borrowings 320 Extinguishment and repayments of long term debt (281) 39 Net change in cash and equivalents from operating, investing and financing activities 176 Cash and Investments at March 31, 2012 $4,127 6

POS UPDATE Page A-10: U.S. News Rankings U.S. News & World Report released its best hospitals rankings on July 17, 2012.

10 in the nation, a truly remarkable accomplishment. UPMC also has been ranked No.

7 POS UPDATE Page A-10: U.S. News Rankings U.S. News & World Report released its best hospitals rankings on July 17, UPMC is extremely pleased to share that UPMC is now ranked No. 10 in the nation, a truly remarkable accomplishment. UPMC also has been ranked No. 1 in Pennsylvania and in the Pittsburgh Metro Area. Further, nine of our specialties are ranked in the national top 10 list. 7

8 Market Share UPMC Inpatient Medical-Surgical Market Share 60% 50% 56.6% 60.5% FY11 Q1 FY12 Q1 (including UPMC Hamot) 40% 37.7% 40.2% 35.8% 30% 30.9% 20% 10% 0% Allegheny County Southwestern PA (10- County) Service Areas Western PA (29-County) 8

9 UPMC 2012 Bonds - Use of Proceeds Amount Capital Projects $204,000,000 Refundings - PHEFA 1999A (Fixed) $76,445,000 - ACHDA Senior Living 2003 (Variable) $37,500,000 - ACIDA 2004A (Variable) $75,510,000 - ECHA 2008 Hamot (Variable) $6,805,000 $400,260,000 9

10 10 Questions

FISCAL YEAR 2014 FINANCIAL RESULTS AUGUST 20, 2014

FISCAL YEAR 2014 FINANCIAL RESULTS AUGUST 20, 2014 UPMC S FINANCIAL PICTURE Strong balance sheet allows UPMC to continue meeting the region s health care needs Provide top-ranked clinical care while operating