Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Investor Presentation (October 2002)
19 slides from Tenet Healthcare's investor presentation, Oct 29, 2002
Slide 1: Top-line Growth Drivers: Managed Care
Top-line Growth Drivers: MANAGED CARE • 44% of THC net revenue • Base rates rising 6-8% • Improvements in terms • Stop-loss payments Top-line Growth Drivers: GOVERNMENT PROGRAMS • Medicare: 32% of THC net revenue • Modest rate increases legislated, after cuts in 1997 • Medicare admissions rising as
Slide 2: Core Growth Drivers: Demographics
Core Growth Drivers: DEMOGRAPHICS
Slide 3: Core Growth Drivers: Demographics
Source: National Hospital Discharge Survey, Center for Disease Control and Prevention, 1999 Core Growth Drivers: DEMOGRAPHICS
Slide 4: Business Development
Core Growth Drivers: BUSINESS DEVELOPMENT • Cap ex • Program development • Capacity expansion • New managed care contracts • Physician recruitment • Rising patient, physician satisfaction Core Growth Drivers: BUSINESS DEVELOPMENT Target 100: Raising the Bar
Slide 5: Clinical: Highest Growth in High Acuity Services
Core Growth Drivers: CLINICAL • De-emphasizing sub-acute services • Developing, enhancing high acuity services • Effect of Partnership for Change Core Growth Drivers: CLINICAL • Growing high intensity core services • Cardiology • Orthopedics • Neurology • Oncology • Focused physician recruitment, pr
Slide 6: AMI Protocols: Tenet Exceeds Benchmark
Core Growth Drivers: CLINICAL AMI Protocols: Tenet Exceeds Benchmark
Slide 7: Better Care = Lower Costs
National Benchmark represents best-available national comparison, which tracks administration within 48 hours. (JAMA 2002 March 13; 287 (10): 1277-1287). Core Growth Drivers: CLINICAL Better Care = Lower Costs
Slide 8: Financial Factors
Source: Tenet data from participating Partnership for Change hospitals. Core Growth Drivers: FINANCIAL FACTORS • Operating leverage from strong top-line growth • Reduced interest costs • FY02 interest down $129mm from FY01 • Share repurchase • Operating leverage from rising capacity utilization Core
Slide 9: Changing Supply/Demand
Core Growth Drivers: CHANGING SUPPLY/DEMAND
Slide 10: Hospital Beds per 100,000 Population, 1975-2000
Source: 2002 Hospital Statistics, American Hospital Association Core Growth Drivers: CHANGING SUPPLY/DEMAND Hospital beds per 100,000 population, 1975-2000
Slide 11: Larger, More Sophisticated Hospitals
Larger, More Sophisticated Hospitals Average beds per facility
Slide 12: Typical National Average Rural Company
Typical —_National al Average Rural Compan
Slide 13: Quarters in a Row Over 20%; Over 25%
11 quarters inarow over 20%; 8 over 25% Qi Q@2 G3 G4 Qi G2 G3 G4 Qi a2 G3 @ ai 2000 2001 2002 2003
Slide 14: Cash Flow
Cash Flow Rolling LTM Net Cash from Operating Activities ($ Millions)
Slide 15: Free Cash Flow
Free Cash Flow Rolling LTM Net Cash from Operations less PP&E ($ Millions)
Slide 16: Returns Improving: Return on Assets
Returns Improving: The Payoff for Investors Return on Assets—LTM
Slide 17: Return on Equity—LTM
Excludes goodwill amortization in all periods Return on Equity—LTM
Slide 18: High Quality Earnings
High Quality Earnings Per Share Results—LTM August '02
Slide 19: Future Expectations
Future Expectations • Over next several years, expect diluted EPS from operations growth: • Mid- to high-teens each year • Potentially higher in some years • Expect fiscal 2003 EPS growth to exceed 25% • Even after increasing FY02 by $0.17 for SFAS 142 EXPECT EXTENDED PERIOD OF OUTSTANDING GROWTH Te
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