Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q4 2019 Earnings Presentation
21 slides from Tenet Healthcare's earnings presentation, Feb 24, 2020
Slide 1: Fourth Quarter 2019 Earnings Release Presentation
Fourth Quarter 2019 Earnings Release Presentation February 24, 2020
Slide 2: Cautionary Statements
Cautionary Statements FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements.” These statements relate to future events, including, but not limited to, statements regarding our future earnings, financial position, operational and strategic initiatives, and developments in
Slide 3: Ron Rittenmeyer, Executive Chairman and CEO
Ron Rittenmeyer Executive Chairman and CEO 3
Slide 4: Earnings Release Summary
Earnings Release Summary 4Q19 Financial results (a) FY 2019 results and FY 2020 Outlook (a) Solid growth in Adjusted EBITDA across FY 2019 $2.706B in Adjusted EBITDA (up 5.7%) the company exceeding mid-point of Company’s Outlook Patient volumes continue to be strong Continued strength in
Slide 5: FY 2019 Accomplishments
FY 2019 Accomplishments ▪ Strategic positioning – Restored organic growth in care delivery platform – Commenced process to spin off Conifer in mid-2021 – Continued evaluation and optimization of portfolio – Improved financial flexibility and free cash flow ▪ Operational excellence – Established real
Slide 6: Driving Growth
Driving Growth Adjusted EBITDA ($B) Adjusted Diluted EPS $2.69 to $3.0 $2.785 to $3.50 $3.35 $2.885 3-year CAGR of 5% 3-year CAGR of at mid-point $3.00 55% at mid-point $2.68 $2.8 $2.706 $2.50 $2.6 $2.560 $2.00 $1.86 $2.444 $1.50 $2.4 $1.00 $0.81 $2.2 $0.50 $2.0 $0.00 2017 2018 2019 2020E 2017 2018
Slide 7: Executing on All Fronts
Executing on All Fronts • Continued growth in Hospital Adjusted Admissions from 2017 at negative 1.2% to a positive 1.9% in 2019 and a range of +1.5% to +2.5% in 2020. • Ambulatory Surgical Case growth from a negative 0.5% in 2017 to a positive 3.3% in 2019 and a range of +3.0% to +3.5% in 2020. • C
Slide 8: Enablers of Future Performance
Enablers of Future Performance ▪ Capturing opportunity and implementing change based on real-time data and analytics ▪ Optimizing asset portfolio, further aligning strategy with community need ▪ Exercising continued rigor with expense management ▪ Building greater cohesion across the business in str
Slide 9: Dan Cancelmi, EVP and Chief Financial Officer
Dan Cancelmi EVP and Chief Financial Officer 9
Slide 10: 2019 Financial Summary
2019 Financial Summary Adjusted EBITDA of $805 million in 4Q19, up 17.7%; $2.706 billion for FY 2019, up 5.7% Hospital segment Adjusted EBITDA growth of 15.6% in 4Q19 and 1.0% in FY 2019 Ambulatory Care segment Adjusted EBITDA growth of 24.1% in 4Q19 and 15.3% in FY 2019 excluding the 2018 dives
Slide 11: FY 2020 Outlook – Consolidated
FY 2020 Outlook – Consolidated (a) Consolidated Adjusted EBITDA ($B) Adjusted Diluted EPS $3.0 $2.785 to $3.60 $2.885 $2.69 to $3.35 $2.8 $2.706 $3.00 $2.6 4.8% $2.68 Growth at mid-point 12.7% $2.4 Growth at mid- $2.40 point $2.2 $2.0 $1.80 2019 2020E 2019 2020E - - - - Indicates mid-point of guidan
Slide 12: FY 2020 Outlook – Adjusted EBITDA by Segment
FY 2020 Outlook – Adjusted EBITDA by Segment (a) Hospital Adjusted EBITDA ($B) Conifer Adjusted EBITDA ($M) $1.6 $1.430 to $450 $1.490 $1.425 $386 $385 to $395 $1.4 2.5% $375 ~5% Growth at mid- Growth point at mid- point (b) $1.2 2019 2020E $300 2019 2020 Ambulatory Adjusted EBITDA ($M) Ambulatory A
Slide 13: Adjusted EBITDA Bridge from FY 2019 to FY 2020
Adjusted EBITDA Bridge from FY 2019 to FY 2020 ($ in millions) Hospitals Ambulatory Conifer Total 2019 Adjusted EBITDA - Actuals $1,425 $895 $386 $2,706 Cost reduction initiatives 110 5 35 150 Medicare DSH cuts mandated by the ACA (33) (33) Medicaid DSH cuts mandated by the ACA (45) (45) Other reduc
Slide 14: Growth in Cash Flows
Growth in Cash Flows Net Cash Provided by Operating Activities ($B) Adjusted Free Cash Flow ($M) $1.8 $1,200 $1.250 to $1.525 $775 to $975 $1.233 $900 $1.2 $1.049 $760 12.5% $600 Above Above mid-point Growth $600 15.1% mid-point of at mid- Growth of Company’s point Company’s at mid- Outlook Outlook
Slide 15: Questions and Answers
Questions and Answers Ron Rittenmeyer Executive Chairman and CEO Saum Sutaria President and COO Dan Cancelmi EVP and Chief Financial Officer 15
Slide 16: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations NON-GAAP FINANCIAL INFORMATION This presentation contains financial measures that are not in accordance with Generally Accepted Accounting Principles (GAAP). Reconciliations of these non-GAAP measures to the most comparable GAAP measures and management’s reasoning fo
Slide 17: Additional Supplemental Non-GAAP disclosures
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Reconciliation of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited) (Dollars in mi
Slide 18: Additional Supplemental Non-GAAP disclosures
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Reconciliation 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 millions exc
Slide 19: Additional Supplemental Non-GAAP disclosures
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Reconciliations of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA (Unaudited) (Dollars in millions) Years Ended December 31, 2017 2018 2019 Net income available
Slide 20: Additional Supplemental Non-GAAP disclosures
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited) (Dollars in millions
Slide 21: Additional Supplemental Non-GAAP disclosures
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Reconciliations of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow from Continuing Operations (Dollars in millions) 2018 2019 2020 Low High Net cash provided by operating activities $ 1,049 $ 1,233 $ 1,250