Wells Fargo 2015 Healthcare Conference September 2015 1
Forward Looking Statement Statements made in this presentation that are not historical facts and that reflect the current view of Team Health Holdings, Inc. (the Company ) about future events and financial performance are hereby identified as forward looking statements. Some of these statements can be identified by terms and phrases such as anticipate, believe, intend, estimate, expect, continue, could, should, may, plan, project, predict and similar expressions. The Company cautions that such forward looking statements, including without limitation, those relating to the Company s future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this presentation or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward looking statements. Factors that could cause our actual results to differ materially from those expressed or implied in such forward looking statements, include but are not limited to current or future government regulation of the healthcare industry, exposure to professional liability lawsuits and governmental agency investigations, the adequacy of insurance coverage and insurance reserves, as well as those factors detailed from time to time in the Company s filings with the Securities and Exchange Commission. The Company s forward looking statements speak only as of the date hereof and the date they are made. The Company disclaims any intent or obligation to update forward looking statements made in this presentation to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time. 2
Our Company A leading provider of outsourced physician staffing solutions for hospitals Serves approximately 1,000 civilian and military hospitals, clinics, and physician groups in 47 states Affiliated with more than 14,000 healthcare professionals Attractive suite of core service lines An industry leader in emergency medicine ( EDs ) and anesthesia management Among top providers of inpatient services (2) outsourcing Value proposition drives client/physician satisfaction 98% client retention rate (1) 94% physician retention rate (1) Experienced management team IPO completed December 2009 (NYSE: TMH) $4.2 billion market cap as of June 30, 2015 Anesthesia Pediatrics Our Service Offerings Locum Tenens Emergency Medicine Military Staffing Inpatient Services Urgent Care (1) Calculated on a preceding 12 months basis as of June 30, 2015 for ED operations, calculated as full year 2014 minus the six months ended 6/30/14 plus the six months ended 6/30/15. (2) Hospitalists comprising the specialties of internal medicine, orthopedic surgery, general surgery and OB/GYN. 3
Recent Achievements Announced highly strategic acquisition of IPC Healthcare Generated net revenue growth of 18.3% in 2014 and 30.5% in the first six months of 2015 20 acquisitions completed in 2014 and YTD 2015, including 13 ED, 4 anesthesia, 1 ED/ hospital medicine,1 hospital medicine, and 1 scribes staffing organization representing operations in the CA, DC, FL, MI, MO, NE, NJ, NV, NY, OH, SC, TN, TX, and WV markets Market capitalization increased to $4.2 billion as of June 30, 2015 (1) Well positioned to take advantage of healthcare reform as evidenced by a decline in the percentage of self-pay patients in 2014 and 2015 Refinanced existing credit facility on October 2, 2014 that resulted in an increased borrowing capacity, extended maturities, and a reduced average borrowing rate on the new facility Reduced total leverage from 4.1x as of year end 2009 to 2.4x as of LTM 6/30/15 (2) (1) Based upon 72.4 million shares outstanding at June 30, 2015 (2) Based on 2009 Adjusted EBIDTA of $149.7 million and LTM 6/30/15 Adjusted EBITDA of $355.9 million. See reconciliation of Adjusted EBITDA to net earnings in the attached Appendix. 4
5 IPC Transaction
Transaction Overview Transaction Synergies $80.25 per share in cash to IPC Healthcare s shareholders Total transaction value of $1.6 billion - Represents 10.7x LTM 6/30/15 PF Adj. EBITDA including run-rate synergies (1) Strong operational overlap creates significant synergy opportunities Initially identified at least $60mm of annual synergies to be realized within 3 years - ~$25mm of cost and operational synergies - ~$35mm driven by identified new revenue and enhanced growth opportunities Potential upside from BPCI opportunity given IPC Healthcare s market leading post-acute platform and infrastructure investment Financial Impact Accretive to 2016 Adjusted EPS Enhances TeamHealth s revenue and Adjusted EBITDA growth profile Financial / Leverage Financing transaction supported by a 100% commitment from Citi Significant capacity to continue to grow business through disciplined acquisition strategy Robust cash flow and delevering profile targeting low 4x leverage by end of 2016 Expected Close Q4 2015 Subject to regulatory approval and customary closing conditions (1) IPC Healthcare pro forma Adjusted EBITDA excludes stock-based compensation and includes $7.8 million of adjustments for full year impact of previously closed acquisitions and one-time transaction costs. 6
IPC Transaction Rationale Highly Strategic Transaction Combines Two Physician-Centric Companies to Create the Nation s Leading Physician Services Organization Establishes a Leading Position in the Large and Increasingly Strategic Post-Acute Setting Creates Attractive Growth Opportunities by Combining Highly Synergistic Emergency Medicine and Hospital Medicine Capabilities Effectively Positions TeamHealth to Capitalize on Migration to Value Based Payment (e.g. BPCI, Combined ~$2 Billion of Medicare Spend) Attractive Financial Attributes Create Both Near and Long-term Value for TeamHealth Shareholders 7
Unmatched National Platform of Critical Physician Services Pro Forma Operating Statistics Complementary National Presence Presence in 48 states Operates over 3,100 facilities ~15,000 affiliated clinicians PF 6/30/15 LTM Revenue of ~$4.0bn (1) PF 6/30/15 LTM Adj. EBITDA of $527mm (2) Combined free cash flow of ~$230mm (3) Significant complementary services within markets / limited facility overlap Acute / PAC Hospitalists 12% IPC Region Anesthesiology 11% Other Hospitalists 9% 100% TeamHealth Regional Office Pro Forma Business Mix (5) Acute / PAC Hospitalists 29% TeamHealth Contract Location(4) Anesthesiology 9% Other 7% Emergency Department 68% Emergency Department 55% Standalone TMH (1) Includes $35mm of revenue synergies. (2) Standalone figures exclude stock-based compensation and include full year benefit of acquisitions. Pro Forma Adj. EBITDA includes $60mm of synergies. (3) Represents sum of standalone 2014 free cash flow for both TeamHealth and IPC Healthcare. (4) Represents contracts from all service lines (ED, Hospitalists, Anesthesiology, Other). (5) Represents 2014 business mix. TMH + IPCM 8
IPC Healthcare Represents a Truly Unique and Attractive Asset Business Highlights Payor Mix (1) Largest pure-play hospitalist player Founded in 1995 by hospitalist physicians >7 million annual patient encounters ~2,000 affiliated providers 48,000+ referring physicians Serving ~2,370 facilities in 28 states Powerful Value Proposition Post-acute as future driver of growth - ~2,000 post-acute facilities - >15,000 facility market highly fragmented Compelling model for both hospitalists and facilities Physicians - Significant clinical autonomy within a national group practice - Alleviates administrative burden - Leading proprietary technology (IPC Link) - Attractive compensation opportunity Facilities - Enhanced care coordination - Improved patient experience Note: YTD data as of 6/30/15. (1) Based on patient encounters. (2) Based on revenue. (3) Encounters in millions. Self Pay 4% Medicaid 5% 791 443 Private Insurers 42% 1,168 811 Medicare 49% 1,949 1,537 2,370 1,980 348 357 412 390 2010 2012 2014 2015 YTD 3.8 Point of Care Mix (2) 5.5 Post- Acute 26% Acute 74% Facilities Patient Encounters (3) Acute Post-Acute +28% CAGR +17% CAGR 7.1 3.5 3.9 2010 2012 2014 1H '14 1H '15 9
IPC Healthcare: An Attractive, High Growth Platform Strong financial performance paired with sustainable, consistent growth - >9% increase in same-market revenue in each of the last 3 years - 15% CAGR in provider headcount since 2012 - Adj. EBITDA CAGR >11% since 2011 despite significant investment in corporate infrastructure Natural acquiror of acute & post-acute groups - ~$260mm cumulative acquisition spend since 2012 - Attractive pro forma EBITDA purchase multiples - Pipeline remains strong Headcount Growth Key Revenue Driver Provider Headcount 2,030 1,867 1,765 1,418 2012 2013 2014 YTD 2015 Strong Track Record of Value Enhancing, Capital Efficient M&A Typical Year 1 Purchase Multiple 4x-6x ($ in Millions) $104 ($ in Millions) Robust Revenue & Adj. EBITDA Growth Revenue Adj. EBITDA (1) $714 $78 $63 $48 $46 $363 $45 2012 2013 2014 YTD 2015 (1) Excludes stock-based compensation. 2010 LTM 6/30/15 2010 LTM 6/30/15 10
Establishes a Leading Position in the Large and Increasingly Strategic Post-Acute Setting Post-acute setting represents the most impactable, expensive part of healthcare delivery - ~21% of Medicare patients are discharged from acute care facilities to post-acute IPC Healthcare is the leading national platform in postacute Provides services in ~2,000 post-acute facilities across 28 states - ~500 medical directorships in SNFs - ~30% of IPC encounters - ~25% of IPC revenues Substantial growth opportunity in very large industry - Higher acuity patients being discharged to postacute sooner - Unpenetrated market with >15,000 facilities Makes TeamHealth the natural acquiror of post-acute focused practices - Substantial identified pipeline Significant Consolidation Opportunity in Large and Fragmented Industry Facilities Skilled Nursing Rehab (Inpatient/Psych) Assisted Living Nursing Homes Specialties Post-Acute Hospitalist Psychology Psychiatry Geriatrics Readmission Reduction 10% Increasing Strategic Importance of Post-Acute Services BPCI Value Drivers 20% Other IPC 15,000 Post- Acute Facilities 70% Post-Acute Management ~2,000 Post-Acute 11
Transaction Positions TeamHealth to Capitalize on Key Trends Impacting Healthcare Industry Move to Value Based Reimbursement Increases the need for more effective and efficient coordination of patient care within and beyond the hospital Growing Importance of Post-Acute Management Health Systems Looking for Partners with Scale, Breadth and Expertise Cost focus increasingly expanding to include post-acute setting (bundled payments & readmission penalties) Looking to address multiple pain points in an integrated and coordinated way Payor Consolidation Scale across multiple service lines and sites enhances value 12
Effectively Positions TeamHealth to Capitalize on Migration to Value Based Payments BPCI initiative underscores the growing opportunity for providers who can effectively manage care both inside the hospital setting and beyond Combined company offers differentiated services across Emergency Medicine, Hospitalists and Post-Acute services Select TeamHealth and IPC Healthcare provider groups began participation in phase II of BPCI program effective July 1, 2015 Participation via Model 2 - Covers both inpatient and post-acute costs in selected episodes of care Leveraging state-of-the-art proprietary technology and infrastructure to manage - ~$2 billion of combined TeamHealth & IPC Healthcare Medicare spend Post-acute expertise expected to drive significant portion of savings opportunity Procedural containment efforts Key Drivers of Savings Opportunity Focus on clinically appropriate discharge timing and locations Reduction in average length of stay Reduction in readmit rates Combines IPC s 20 Tax ID Numbers ( TIN ) participating with TeamHealth s 15 participating TINs 13
14 TeamHealth Overview
% Growth A Balanced and Proven Growth Platform Net Revenue Growth Year-over-Year Revenue Growth and Contribution by Growth Strategy CAGR: 19.1% $3,221 30.5% ($ in millions) $2,820 5.6% $2,384 $1,745 $2,069 18.5% 3.5% 15.2% 18.3% 5.0% 20.3% 2.9% 11.0% 9.1% 11.3% 2011 2012 2013 2014 LTM 6/30/15 4.0% 2012 2013 2014 YTD 2015 Net New Contracts 3.2% 1.9% Acquisitions 4.6% Same Contract 15
Attractive and Differentiated Reimbursement Profile Medicare: While the Sustainable Growth Rate (SGR) has been an overhanging Medicare reimbursement risk to all physicians for many years, recent Congressional action has permanently addressed this issue. Legislation enacted on April 16, 2015 repeals the SGR and provides for an annual 0.5% increase to physician reimbursement rates for a five-year period (from July 1, 2015 through the end of 2019). In 2020 and subsequent years, physician payments will be tied to quality performance and participation in alternative payment models. Final 2015 Medicare rates (established before enactment of the SGR repeal bill) were estimated to be approximately +1.0% for ED and flat for anesthesia services Medicare reflects approximately 17% of consolidated net revenue in 2014; 19% YTD June 2015 Medicaid: Improving state fiscal positions provide support for stabilization of Medicaid payment rates. Medicaid reflects approximately 12% of consolidated net revenue in 2014; 11% YTD June 2015 CHIP: Covers children and pregnant women in families that earn income above Medicaid eligibility levels. In the SGR legislation enacted on April 14, 2015, funding for the CHIP program was extended for two years, through FY 2017 Bundled Payment for Care Improvement (BPCI): Began participation effective July 1, 2015 under Model 2 covering impatient and post-acute episodes. Medicare spending under selected DRGs is approximately $500.0 million. Use of Remedy Partners as our convener. 16
Patient Protection and Affordable Care Act PPACA On March 23, 2010, the PPACA was signed into law and is expected to significantly affect the U.S. healthcare system. One of the key goals of healthcare reform is to increase access to health benefits for the uninsured and underinsured populations. Projections from the Congressional Budget Office (March 2015) reflect a 24 million reduction in the current estimate of 52 million uninsured individuals over the three year period starting in 2015. The additional healthcare coverage is expected to occur through the expansion of Medicaid programs in certain states and the operation of insurance exchanges. Expectations Likely to create reductions in the number of uninsured patients, leading to increased patient volumes, an improved payor mix, and lower bad debt expense EDs, which have more exposure to the uninsured than other medical specialties, are expected to realize a significant improvement in payor mix Could result in a reduction in current ED subsidies by hospitals paid to TMH (ED subsidies currently 2.6% of TMH total YTD net revenue) due to improved payor mix and increased volume It is unclear at this time how many states will ultimately expand their Medicaid programs under PPACA and what the effect will be in states that do not expand their Medicaid programs The timing and ultimate levels of coverage could vary from current CBO estimates depending on the effectiveness of the enrollment process through the insurance exchanges The change in control of the Senate from Democrat to Republican or ongoing legal challenges to the implementation of PPACA could lead to revisions to the law in 2015 or subsequent years Impact to TeamHealth Reduce the uninsured population, leading to increased patient volumes and an improved payor mix, especially for EDs: For the six months ended June 30, 2015: Self-pay declined to 15.2% of total fee for service volume from 18.4% in the same period in 2014 Same contract fee-for-service volume growth of 7.6% Unclear what the long-term impact will be on managed care and commercial pricing 17
Leading Market Positions in Highly Fragmented Markets Emergency Medicine Market (1) Hospital Medicine Market (1) Anesthesia Market (1) ~5,000 Community Hospitals ~5,000 Community Hospitals ~5,000 Community Hospitals ~2,800 Hospitals in TMH s Target Market ~2,800 Hospitals in TMH s Target Market ~2,400 Hospitals in TMH s Target Market 54% 14% 17% 15% 83% 9% 4% 4% 82% 2% 12% 4% TeamHealth Other National Groups Regional Groups Local Groups & Hospital Employed 18 (1) Management Estimates
High Performance Hospital-Based Physician Groups Are Vital to the Hospital s Success Emergency Medicine Anesthesia Hospital Medicine $12 billion market (1) $21 billion market (1) $12 billion market (1) Significant revenue source Drives outpatient revenue Source of 50% of inpatient admissions Drives overall market share via increased ED traffic and high patient satisfaction Challenging environment Complex medical care required Regulatory compliance Medical liability Surgery typically the hospital s most profitable service line Strong anesthesia service allows hospital to add new surgical lines and grow market share Surgery is a complex highcost environment serving multiple constituents Hospitalists drive: High-quality, cost-effective inpatient care High satisfaction with patients and medical staff Reduced denials and readmissions Solves problem of unassigned patients Increased reimbursement for quality measures (1) Based on management estimates. 19
TeamHealth Business Model: The Fundamentals Sign exclusive contract with hospital to provide clinical staffing Recruit and maintain a high-quality local physician group Physicians work with hospital staff to provide patient care Provide turn-key practice support to the group, including: Negotiate managed care contracts with payors Bill, code and collect for services provided Provide professional liability insurance Provide value-added consulting services to the hospital client 20
Compelling Value Proposition for Physicians Stable practice opportunities in well-regarded hospitals Competitive compensation Physician-friendly environment Comprehensive practice management services Continuing medical education Opportunities for career advancement Physician leaders throughout all levels within the organization 94% Physician Retention Rate (1) (1) Calculated on a preceding 12 months basis as of June 30, 2015 for ED operations, calculated as full year 2014 minus the six months ended 6/30/14 plus the six months ended 6/30/15. 21
Compelling Value Proposition for Hospitals: Deliver Mission Critical Results via a Robust Operating Platform Deliver exceptional patient care by a stable group of quality physicians and an on-site medical director Supported by a regional multi-disciplinary client service team Supported by national resources and subject matter experts Driven by disciplined processes: Customized plan and committed resources Accountability via metrics Culture of operational excellence Ability to respond to increased demand for bundled services 98% Contract Retention Rate (1) (1) Calculated on a preceding 12 months basis as of June 30, 2015 for ED operations, calculated as full year 2014 minus the six months ended 6/30/14 plus the six months ended 6/30/15. 22
Our Scalable National Infrastructure Drives Value and is a Competitive Advantage 21 Regional Offices Client facing local support Local market knowledge and support sales and acquisitions Physician recruitment Internal operations consulting group Centralized Administrative Functions Consolidated functions include accounting, payroll, human resources, legal and compliance Centralized IT infrastructure with over $60 million in IT investments over last five years Scalable National Infrastructure National Revenue Cycle Four billing centers process approximately 13 million patient claims per year One IT platform across the enterprise National managed care contracting working in tandem with regional operators Centralized Risk & Claims Management and Professional Liability Insurance National Patient Safety Organization (PSO) and clinical data warehouse Centralized aggressive claims management process Captive professional liability insurance program 23
Multi-Faceted Growth Portfolio Drive same contract revenue growth Win new contracts through sales Execute M&A strategy 24
Drive Same Contract Revenue Growth Through Attractive Client Base and Revenue Cycle Performance Patient volumes Attractive client base x Revenue = per visit Revenue cycle performance Same contract growth Same Contract Revenue Growth (1) 6.1% 6.1% 4.6% 4.2% 3.5% 2011 2012 2013 2014 YTD Jun 2015 (1) Represents growth in same contract net revenues. 25
Win New Contracts Through Enhanced Sales Effort Focus on Attractive Core Markets (1) Large and highly fragmented markets $12 billion Emergency Medicine market $21 billion Anesthesia market $12 billion Hospital Medicine market Hospitals continue to face significant pressures and are seeking solutions Well Positioned to Grow and Win Market Share Longstanding customer relationships and outstanding reputation Diverse geographic footprint and multiple service lines supported by 21 regional offices Compelling value proposition and competitive position across specialties provide crossselling opportunities Upgraded sales resources and solid pipeline (1) Based on management estimates. 26
Disciplined Acquisition Strategy Focus on M&A Activity Significant Acquisition Track Record Established track record of acquisitions and seamless integration Leveraged infrastructure to drive immediate financial improvement Historically accretive to earnings Solidifies existing market share and enables entry into new markets Focused and opportunistic M&A strategy: Emergency Medicine Anesthesia Inpatient Services Expanded dedicated M&A team resources Robust opportunities exist in large and fragmented markets Company Date Business Brookhaven Anesthesia Associates Princeton Emergency Physicians Professional Anesthesia Service Ruby Crest Emergency Medicine Capital Emergency Associates EOS Medical Group Certified Anesthesia Services Premier Physician Services PhysAssist Scribes Primary Critical Care Medical Group Emergency Medicine Specialists Florida Gulf to Bay, LLC Heartland Anesthesia Services, PC Trident Emergency Physicians, LLC Teaneck Emergency Physicians, P.A. Emergency Physicians of Mid-Missouri, Inc. Physician Services of Cleveland, LLC Professional Emergency Care, PC Strand Physician Specialists, PA Salutis Emergency Specialists, PLLC Apexx Physicians Medical Corporation, Inc. 7/15 5/15 5/15 2/15 2/15 1/15 12/14 10/14 10/14 10/14 9/14 9/14 9/14 9/14 9/14 8/14 6/14 5/14 4/14 3/14 3/14 Anesthesia ED Anesthesia ED ED/HM ED Anesthesia ED Scribes HM ED Anesthesia Anesthesia ED ED ED ED ED ED ED ED Historical Acquisition Spending $599.4 $ In millions (1) $141.3 $199.0 $188.2 $124.0 2011 2012 2013 2014 YTD July 2015 (1) Total aggregate cash paid for acquisitions including contingent purchase payments; excludes acquired cash 27
28 TeamHealth Financial Overview
Financial Highlights and Overview Strong Financial Performance Net revenues of $3.2bn for LTM 6/30/15 Revenue CAGR: 19.1% (1) Adjusted EBITDA of $355.9mm with 11.0% margin (2) (10.6% excluding parity) Adjusted EBITDA CAGR: 19.8% (1) Significant Free Cash Flow $139.2mm for LTM 6/30/15 Free cash flow CAGR: 10.8% (1)(2) Stable Financial Profile Previously outstanding indebtedness amended with $1.25 billion senior credit facilities in October 2014 $415mm of liquidity as of June 30, 2015 No outstanding term debt maturities until October 2019 Net debt to Adjusted EBITDA of 2.3x as of June 30, 2015 (1) CAGRs represent 2011 to LTM 6/30/15. (2) See reconciliation of Adjusted EBITDA to net earnings and calculation of Free Cash Flow in the attached Appendix. 29
Q2 2015 Highlights Net Revenue increased 30.1% Net Earnings were $28.9 million; $51.2 million after adjustments Diluted Net earnings per share of $0.39 Adjusted EPS increased 14.8% to $0.70 Adjusted EBITDA increased 15.2% to $99.4 million Completed 20 acquisitions in 2014 and YTD June 2015 Projected growth in 2015 Net Revenue increased to a range of 24.0% to 26.0%; Adjusted EBITDA margin remains between 10.5% and 11.0% 30
Consistent Historical Financial Performance Net Revenue Adjusted EBITDA Free Cash Flow CAGR: 19.1% CAGR: 19.8% CAGR: 10.8% ($ in millions) $2,820 $3,221 ($ in millions) $325 $356 ($ in millions) $188 $1,745 $2,069 $2,384 $189 $218 $251 $99 $100 $148 $139 2011 2012 2013 2014 LTM 6/30/15 2011 2012 2013 2014 LTM 6/30/15 2011 2012 2013 2014 LTM 6/30/15 Margin as reported 2011 2012 2013 2014 LTM Jun 2015 10.8% 10.5% 10.5% 11.5% 11.0% Margin excluding parity (1) 10.8% 10.5% 9.9% 10.7% 10.6% Note: CAGR represents 2011 2 nd Quarter 2015. See reconciliation of Adjusted EBITDA to net earnings and calculation of Free Cash Flow in the attached Appendix. (1) Excludes the benefit of Medicaid parity revenue from both Net Revenue and Adjusted EBITDA in 2013 through 6/30/15. Assumes 70% Adjusted EBITDA benefit from parity revenue. 31
Long-Term Relationships Generating Recurring Contractual Revenue ED Contract Longevity 518 contracts as of 6/30/15 10-15 Years 14% >15 Years 24% 7-10 Years 15% 0-2 Years 14% 4-7 Years 16% 2-4 Years 17% 13-year average tenure of top 50 customers by net revenue 32
Net Revenue Mix Net Revenue Mix 6/30/15 Net Revenue Mix 6/30/14 Other 1.1% Other 1.6% Contract 21.2% Contract 24.6% Fee-for-service 77.7% Fee-for-service 73.8% 33
Improving Payor Mix Supports Revenue Growth Payor Mix by Volume YTD June 2014 vs. YTD June 2015 31.4% 24.9% 25.5% 28.2% 26.6% 26.5% 18.4% 15.2% 1.9% 1.4% Medicare Medicaid Self-Pay Commerical Other Payor mix by volume is based on fee for service revenue only. Q 2 YTD 2014 Q 2 YTD 2015 Compared to the prior year, we realized significant declines in the percentage of self-pay visits and corresponding increases primarily in the percentage of Medicaid visits 34
Proven Ability to De-Lever with Strong Coverage Ratios Net Debt (2) / Adjusted EBITDA (1) Adjusted EBITDA (1) / Interest 2.2x 2.2x 1.9x 2.4x 2.3x 14.8x 13.4x 16.9x 21.6x 21.2x 2011 2012 2013 2014 LTM 6/30/15 2011 2012 2013 2014 LTM 6/30/15 (1) See reconciliation of Adjusted EBITDA to net earnings in the attached Appendix. (2) Reflects total debt less cash. 35
Solid Financial Condition with Significant Liquidity Capitalization Table ($ in millions) Maturity Actual 12/31/14 Actual 06/30/15 Cash and Cash Equivalents $20.1 $ 51.3 Term Loan A (L+1.75) Revolving Line of Credit - $650.0mm (L+1.75) Oct 2019 Oct 2019 596.3 209.0 588.8 279.5 Total Debt Team Health Shareholders Equity $805.3 420.5 $868.3 522.0 Total Capitalization $1,225.8 $1,390.3 Total Debt / Adjusted EBITDA (1) 2.5x 2.4x Net Debt (2) / Adjusted EBITDA (1) 2.4x 2.3x (1) Based on full year 2014 Adjusted EBITDA of $325.2 million and LTM June 2015 Adjusted EBITDA of $355.9 million. LTM is calculated as full year 2014, minus the six months ended 6/30/14, plus the six months ended 6/30/15. (2) Reflects total debt less cash. 36
Investment Highlights Leading physician services organization in highly fragmented markets with favorable industry dynamics Proven business model delivers significant value Scalable national infrastructure is a competitive advantage Multi-faceted growth portfolio Attractive financial platform supporting future growth 37
38 Appendix
Adjusted EBITDA / Net Earnings Reconciliation and Free Cash Flow Calculation Reported Net Earnings to Adjusted EBITDA Reconciliation YTD Jun YTD Jun LTM Jun ($ in millions) 2011 2012 2013 2014 2014 2015 2015 Net earnings attributable to Team Health Holdings, Inc. $ 65.5 $ 63.8 $ 87.4 $ 97.7 $ 54.1 $ 57.0 $ 100.6 Interest expense, net 12.8 16.3 14.9 15.0 6.9 8.6 16.8 Provision for income taxes 43.3 40.6 56.3 65.2 35.6 42.3 71.9 Depreciation 12.2 14.5 17.1 20.9 9.5 11.1 22.5 Amortization 17.8 29.8 37.6 55.6 22.2 41.5 74.9 Other (income) expenses, net 0.2 (4.8) (4.5) (4.6) (3.8) (2.3) (3.1) Loss on extinguishment and refinancing of debt 6.0 0.2-3.6 - - 3.6 Contingent purchase and other acquisition compensation expense 13.6 36.8 23.9 30.7 19.4 15.8 27.0 Transaction costs 4.1 4.3 3.8 7.2 2.6 3.3 7.9 Equity based compensation expense 4.1 6.8 9.9 16.2 9.3 9.2 16.1 Insurance subsidiary interest income 2.2 1.9 1.8 2.0 1.0 1.0 2.0 Severance and other charges 1.4 2.8 3.1 8.6 1.2 1.2 8.6 Actuarial adjustments associated with prior periods 5.3 5.2-7.1 - - 7.1 Adjusted EBITDA $ 188.5 $ 218.2 $ 251.3 $ 325.2 $ 158.0 $ 188.7 $ 355.9 Free Cash Flow Calculation Net cash provided by operating activities (as reported) $ 96.8 $ 71.6 $ 154.4 $ 198.6 $ 74.6 $ 18.2 $ 142.2 Contingent purchase payments 15.5 31.3 29.1 24.5 1.2 8.9 32.2 Capital expenditures (12.0) (22.0) (21.4) (24.6) (12.0) (17.3) (29.9) Change in investments at insurance subsidiary, net (1) (3.7) 19.5 (13.7) (10.5) (6.2) (1.0) (5.3) Free Cash Flow $96.6 $100.4 $148.4 $188.0 $57.6 $8.8 $139.2 (1) Excludes liquidation of investments from captive subsidiary acquired in 2014 transaction. 39
Investor Contact Information David P. Jones Executive Vice President Chief Financial Officer 265 Brookview Centre Way, Suite 400 Knoxville, TN 37919 Phone: 865-693-1000, ext. 5522 Fax: 865-539-8003 Email: david_jones@teamhealth.com Website: www.teamhealth.com Investor Relations: Phone: 865-293-5299 Email: ir@teamhealth.com 40
41 Emergency Medicine Hospital Medicine Anesthesia Orthopaedic Hospitalist OB/GYN Hospitalist Acute Care Surgery