Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q3 2016 Earnings Presentation
20 slides from Tenet Healthcare's earnings presentation, Oct 31, 2016
Slide 1: Quarterly Results Presentation Third Quarter of 2016
Quarterly Results Presentation Third Quarter of 2016 October 31, 2016
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute “forward-looking statements” – that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial con
Slide 3: Q3'16 Financial Highlights
Q3’16 Financial Highlights Adjusted EBITDA was $570 million − Our health plan business lowered Adjusted EBITDA by $5 million this quarter. − We are exiting our health plan business. Same-hospital patient revenue grew 5.3% − Adjusted admissions increased 1.4% on a same-hospital basis. − Admission
Slide 4: Hospital Operations & Other Segment
Hospital Operations & Other Segment <------ Restated (1) ------> <------------------------------- As Reported -------------------------------> Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Adjusted Admissions 4.8% 4.3% 5.9% 2.3% 0.7% 0.3% 2.2% 0.5% 1.4% Admissions 3.9% 4.0% 4.9% 1.7% -0.6% -
Slide 5: Uncompensated Care Trends
Uncompensated Care Trends $ in millions Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Bad Debt Expense $249 $356 $363 $352 $371 $391 $376 $352 $367 % of revenue before bad debt 5.6% 7.4% 7.6% 7.3% 7.3% 7.2% 6.9% 6.7% 7.0% (1) % of adjusted revenue 4.7% 6.2% 6.4% 6.2% 6.2% 6.1% 5.9%
Slide 6: Ambulatory Care Segment
Ambulatory Care Segment <------ USPI only (2) ------> <--------------------------- Pro forma (3) ---------------------------> (1) Same-facility system-wide growth Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Surgical (ASCs, Surgical Hospitals & Aspen) Revenue 5.1% 8.9% 8.8% 6.7% 9.
Slide 7: Ambulatory Care Segment (continued)
Ambulatory Care Segment (continued) $ in millions Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Net operating revenues $287 $308 $295 $322 $329 $397 $429 $442 $448 % growth 13.9% 12.6% 14.6% 28.9% 45.4% 37.3% 36.2% Equity in earnings of unconsolidated affiliates $27 $43 $21 $28 $30 $47 $25 $
Slide 8: Conifer Health Solutions Segment
Conifer Health Solutions Segment Revenue grew 14.7% to $398 million, driven by 30% growth in revenue from non-Tenet customers − EBITDA grew 29.5% year-over-year to $79 million. − The results for the quarter included $9 million of annual customer performance incentives. These incentives were anticipa
Slide 9: Tenet Outlook for 2016
Tenet Outlook for 2016 $ in millions, except EPS 2016 Outlook Net Revenue $19,650 - $19,800 (1) Adjusted EBITDA $2,400 - $2,450 Adjusted EBITDA Margin (1) 12.2% - 12.4% Adjusted diluted E.P.S. from continuing operations (1) $1.16 - $1.21 Adjusted Cash Flow from Operations (1) $1,300 - $1,450 Capital
Slide 10: Segment Outlook for 2016
Segment Outlook for 2016 Hospital Operations Ambulatory Conifer and Other Segment Segment Segment 2016 EBITDA $1.535 - $1.555 billion 2016 EBITDA $600 - $620 million 2016 EBITDA $265 - $275 million Noncontrolling Interest (1) $30 - $35 million Noncontrolling Interest (1) $260 - $270 million Noncontr
Slide 11: Summary
Summary Adjusted EBITDA was $570 million and would have been at the midpoint of our Outlook range excluding $5 million of negative EBITDA from our health plans Hospital segment delivered solid same-hospital patient revenue growth of 5.3% o Adjusted admissions increased 1.4% o Improved acuity con
Slide 12: Appendix and Reconciliation of Non-GAAP Financial Measures
Appendix and Reconciliation of Non-GAAP Financial Measures
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss (income) attributable to noncontrolling i
Slide 14: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued from the prior page) The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the
Slide 15: Table #1 – Reconciliation of Adjusted EBITDA to Net Income
Table #1 – Reconciliation of Adjusted EBITDA to Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders (Unaudited) (Dollars in millions) Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net loss attributable to Tenet Healthcar
Slide 16: Table #2 – Impact of Certain Items on Continuing Operations
Table #2 – Pre-Tax, After-Tax and Earnings Per Share Impact of Certain Items on Continuing Operations (Unaudited) Three Months Ended Nine Months Ended (Dollars in millions except per share amounts) September 30, September 30, 2016 2015 2016 2015 Adjustments to calculate Adjusted Diluted EPS (Expense
Slide 17: Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow
Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow (Unaudited) Three Months Ended Nine Months Ended (Dollars in millions) September 30, September 30, 2016 2015 2016 2015 Net cash provided by (used in) operating activities $ 269 $ 482 $ 851 $ 835 Purchases of property and equipm
Slide 18: Table #4 – Reconciliation of Outlook Adjusted EBITDA
Table #4 – Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) (Dollars in millions) Q4 2016 2016 Low High Low High Net income (loss) attributable to Tenet Healthcare Corporation $ 4 $ 14 $ (109) $ (99) common s
Slide 19: Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow
Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow for the Year Ending December 31, 2016 (Dollars in millions) 2016 Low High Net cash provided by operating activities $ 1,163 $ 1,323 Less: Payments for restructuring charges, acquisition-related costs and (a) litigation costs and settlement
Slide 20: Faru
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