36th Annual J.P. Morgan Healthcare Conference

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2 36th Annual J.P. Morgan Healthcare Conference Nick Turkal, MD President and Chief Executive Officer Gail Hanson Chief Financial Officer

3 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

4 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,

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

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

7 Our strategy

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

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

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

11 More Quality Achievements Value Southeast Wisconsin Quality Achievement/Resource-Efficiency Matrix Statewide Average Impact 1.06 High Quality Achievements Low Efficiency High Quality Achievements High Efficiency Aurora 1.00 Statewide Average Low Quality Achievements Low Efficiency Low Quality Achievements High Efficiency 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

12 Advocate Aurora Health 12

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14 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

15 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

16 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.

17 Financial update 17

18 Revenue trend millions $4,249.0 $4,716.1 $4,930.0 $3,771.7 $5,124.8 $3, Q Q Q3 y-o-y growth = 4.1% 18

19 Operating margin 17.2% 14.3% 14.7% 14.4% 14.6% 11.8% 10.7% 9.4% 7.0% 7.3% 6.3% 3.7% Q Q3 EBITDA % Operating Margin %

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

21 Unrestricted cash and days cash on hand $2, $2, $1,832 $1,887 $1,557 $1,607 $1,500 $1, $1, $ $ Q Q3 Unrestricted Cash & Investments Days Cash on Hand A2 Median

22 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% 32.2% 31.5% 33.3% 36.7% 36.7% 36.7% Q Q3 A2 median Aurora 22

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

24 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