Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q2 2022 Earnings Presentation
21 slides from Tenet Healthcare's earnings presentation, Jul 21, 2022
Slide 1: Second Quarter 2022 Earnings Release Presentation
Second Quarter 2022 Earnings Release Presentation July 21, 2022
Slide 2: Cautionary Statements
Cautionary Statements This presentation includes “forward-looking statements.” These statements relate to future events, including, but not limited to, statements regarding our liquidity, operating results, future earnings, financial position, operational and strategic initiatives, and developments
Slide 3: Second Quarter 2022 Highlights
Second Quarter 2022 Highlights Second Quarter 2022 Achievements ➢ Delivered consolidated Adjusted EBITDA of $843 million, above the midpoint of our Q2’22 Outlook range; consolidated Adjusted EBITDA margin up 140 basis points versus Q2’21 ➢ Maintained discipline through challenging labor conditions;
Slide 4: FY 2022 Financial Outlook ($ in millions)
FY 2022 Financial Outlook ($ in millions) Income Available (Loss Attributable) to Tenet Common Shareholders from Continuing Operations Consolidated Adjusted EBITDA $4,000 $3,375 to $3,483 $3,575 * $1,200 $3,146 $2,730 $915 $3,000 $3,278 $900 Excluding $371 to Grant Income $600 $546 $399 $2,000 $2,24
Slide 5: Financial Profile Continues to Improve
Financial Profile Continues to Improve ADJUSTED ADJUSTED NET REVENUE ADJUSTED EBITDA EBITDA MARGIN FREE CASH FLOW DEBT LEVERAGE $19.1B $19.2B (a) 18.1% $1.508B (b) 5.9x 0.5% $3.475B (a) 530 bps (2.0)x 12.8% 3.9x 42% $2.440B 206% $0.493B 2017 2022E 2017 2022E 2017 2022E 2017 2022E 2017 Q’22 Note: 202
Slide 6: An Increasingly Diversified Business Portfolio
An Increasingly Diversified Business Portfolio Tenet Adjusted EBITDA Mix ~39% ~39% 53% ~49% Hospitals 60% ~48% ~50% ~50% 33% ~40% ~42% USPI 28% Conifer 12% 14% ~11% ~11% ~10% ~11% 2017 2019 2022E End of 2023 Goal Note: 2022E is based upon the mid-point of the Company’s Outlook; end of 2023 goal is o
Slide 7: Targeting ~600 USPI Centers by End of 2025
Targeting ~600 USPI Centers by End of 2025 Illustrative USPI Portfolio Pathway 30-32+ 575 - 600+ 30-40+ 77-90+ 438 12/2021 Surgical Facility SCD Development Additional De End of 2025 Goal Acquisition Goal Partnership Goal Novos Goal Note: 12/2021 USPI surgical facilities includes facilities under de
Slide 8: Adjusted EBITDA With and Without Grant Income ($ in millions)
Adjusted EBITDA With and Without Grant Income ($ in millions) $ In millions Q1'21 Q2 '21 Q3'21 Q4 '21 FY 2021 Q1'22 Q2'22 2022 YTD Adjusted EBITDA Excluding Grant Income Hospital Segment $410 $445 $494 $440 $1,789 $510 $339 $849 Ambulatory Segment $244 $275 $272 $343 $1,134 $280 $317 $597 Conifer Se
Slide 9: Volume Statistics
Volume Statistics (a) Recovery Percent of Pre-COVID Levels Q2’22 versus Q2’21 10% Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 5% 3.8% Admissions ~90% ~91% ~87% ~81% ~83% 0% -0.9% Outpatient Visits (b) ~96% ~93% ~90% ~85% ~86% -5% -5.3% Emergency Room -8.1% -8.0% ~86% ~97% ~89% ~83% ~91% -10% Visits (c) -10.0% -15
Slide 10: Second Quarter 2022 Cash Flows Continue to Support Growth
Second Quarter 2022 Cash Flows Continue to Support Growth $248M(a) 3.92x $1.35B $1.5B Q2’22 Leverage Ratio Cash on Hand Unused Line of Free Cash Flow Credit ▪ Our cash flow and balance sheet position us to drive growth and interest savings: ✓ Ample liquidity and access to capital markets to pursue o
Slide 11: Second Quarter 2022 Cash Flow Analysis
Second Quarter 2022 Cash Flow Analysis Net Cash generated by the business in Q2’22 was $49 million excluding cash received (repaid) from stimulus funding, and cash received from (used for) transactions as listed in the graph below. *Amount is net of $61 million of distributions paid to Baptist Healt
Slide 12: Capital Deployment Priorities
Capital Deployment Priorities We prioritize the deployment of the free cash flow generated by our businesses to the following areas: Investments in our ASC platform M&A and de novo investments – baseline intention is $200 to $250 million per year Investments in our Hospital Continued investment in t
Slide 13: Debt Maturity Profile
Debt Maturity Profile Maturity Profile as of 6/30/22 ($ millions) $3,450 3,500 $3,100 2,000 $3,000 3,000 2,500 $2,100 1,500 2,000 2,500 1,500 $1,370 $1,400 1,000 770 1,500 1,450 500 $362 600 600 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 First Lien Notes Second Lien Notes Unsecured Notes No
Slide 14: Questions and Answers
Questions and Answers Ron Rittenmeyer Executive Chairman Saum Sutaria, M.D. Chief Executive Officer Dan Cancelmi Executive Vice President and Chief Financial Officer 14
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations NON-GAAP FINANCIAL INFORMATION This presentation contains financial measures that are not in accordance accounting principles generally accepted in the United States of America (GAAP). Reconciliations of these non-GAAP measures to the most comparable GAAP measures an
Slide 16: Reconciliation of Net Income to Adjusted Net Income (Table 1)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited) (Dollars in millions except
Slide 17: Reconciliation of Net Income to Adjusted EBITDA (Table 2)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA (Unaudited) (Dollars in millions) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2
Slide 18: Reconciliation to Free Cash Flow (Table 3)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #3 – Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow from Continuing Operations (Unaudited) (Dollars in millions) 2022 (Dollars in millions) 2021 Q2 YTD Q2 YTD N
Slide 19: Outlook Net Income to Outlook Adjusted EBITDA (Table 4)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #4 – Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited) (Dollars in millions) Q3’22 FY 2022 Low High Low High Net income available t
Slide 20: Outlook Adjusted Net Income Reconciliation (Table 5)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited) (Dollars in
Slide 21: Outlook Operating Cash Flow to Free Cash Flow (Table 6)
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #6 – Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow – Continuing Operations and Outlook Adjusted Free Cash Flow – Continuing Operations (Unaudited) (Dollars in millions) FY