Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q4 2020 Earnings Presentation
25 slides from Tenet Healthcare's earnings presentation, Feb 9, 2021
Slide 1: Fourth Quarter 2020 Earnings Release Presentation
Fourth Quarter 2020 Earnings Release Presentation February 9, 2021
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: Resiliency in Q4 2020
Resiliency in Q4 2020 Resiliency Amidst a COVID Surge COVID inpatient cases peaked in early January at over 3,000; this was greater than the July surge Ended 2020 with ~2,700 inpatient cases and continue to have ~1,900 active cases across our system Maintained staff infection rates in single d
Slide 4: 2020 Financial Summary
2020 Financial Summary Income Available (Loss Attributable) to THC Shareholders from Continuing Operations ($M) Consolidated Adjusted EBITDA ($M) $3,500 $450 $399 $3,146 $200 $101 $3,000 ($716) ($226) $2,730 $2,550 ($50) $2,440 $2,500 ($300) $2,000 ($550) ($800) $1,500 2017 2018 2019 2020 2017 2018
Slide 5: Proactively Managing Liquidity
Proactively Managing Liquidity There was proactive management of liquidity throughout the pandemic Capital budget was reduced and resources were redirected to manage the pandemic impact Conifer focused on cash collections and made significant progress Actions were taken to increase secured deb
Slide 6: A Diversified Healthcare Company
A Diversified Healthcare Company Portfolio Adjusted EBITDA Mix Evolving the portfolio mix as a diversified healthcare company Positioning to grow in a high-growth, high margin ambulatory segment ~35% Increasing benefits of scale in the Global Business Center Hospitals 53% Continuing to repositio
Slide 7: Positioning Conifer for Successful Spin-Off
Positioning Conifer for Successful Spin-Off Initial plans to spin-off Conifer targeted late Q2 2021 Completed all filings to date Significant management focus was placed on strengthening Conifer for the spin-off Recruited external talent for key roles including CEO, COO and Chief Consumer Office
Slide 8: 4Q20 Quarterly Highlights
4Q20 Quarterly Highlights Excluding grant income, we generated $832 million of consolidated Adjusted EBITDA in the 4th quarter, which was substantially better than our forecast despite hospital adjusted admissions and USPI’s surgical cases being only 85% and 95% of our Q4-2019 volumes, respectively,
Slide 9: EBITDA With and Without Grant Income
EBITDA With and Without Grant Income $ In millions Q1'20 Q2'20 Q3'20 Oct Nov Dec Q4'20 FY 2020 Adjusted EBITDA Excluding Grant Income Hospital Segment $342 $18 $297 $119 $153 $159 $431 $1,088 Ambulatory Segment 156 118 228 87 74 129 290 792 Conifer Segment 87 73 96 33 32 46 111 367 Consolidated, Exc
Slide 10: 2020 Volume Statistics
2020 Volume Statistics Initial Outperformance vs. Initial COVID Impact Recovery Percent Change from Prior Year Percent of pre-COVID Levels; Same business day basis Volume YTD March – 2H April May June July Aug Sep Q3 Oct Nov Dec Q4 Statistics (a) February full month March Admissions 1.1% (15.2%) (~2
Slide 11: Improved Financial Position
Improved Financial Position Tenet is well positioned to 2020 make strategic investments to increase free cash flow, Actions Taken ~$2.5B reduce debt and remains Improved cash collection In debt restructured to provide committed to <5x leverage performance; $1.3B of Notes issued ~$50M of interest exp
Slide 12: 4Q20 Cash Analysis
4Q20 Cash Analysis (in millions) ($ in millions) Cash generated by the business in Q4 was $72M excluding $5,000 cash received from stimulus funding and cash used for non- routine transactions as listed in the graph below. $4,000 $3,300 $13 $84 $97 $(5) CASH BALANCE $3,000 $72 $2,446 $(1,115) $2,000
Slide 13: Adjusted EBITDA Bridge from FY 2020 to FY 2021
Adjusted EBITDA Bridge from FY 2020 to FY 2021 ($ in millions) Hospital Ambulatory Conifer Consolidated Tenet FY 2020 Adjusted EBITDA – Actuals $1,911 $868 $367 $3,146 Grant income (823) (76) - (899) Tenet FY 2020 Adj. EBITDA – Actuals excluding Grant Income $1,088 $792 $367 $2,247 USPI acquisition
Slide 14: FY 2021 Outlook – Adjusted EBITDA by Segment
FY 2021 Outlook – Adjusted EBITDA by Segment Hospital Adjusted EBITDA ($B) Conifer Adjusted EBITDA ($M) $1.340 to $1.470 $450 $1.50 $1.449 $386 $350 to $360 $1.00 $300 $0.50 $150 $0.00 $0 2019 2021E 2019 2021E Ambulatory Adjusted EBITDA ($M) Ambulatory Adj. EBITDA less total NCI ($M) $800 $740 to $7
Slide 15: Questions and Answers
Questions and Answers Ron Rittenmeyer Executive Chairman and Chief Executive Officer Saum Sutaria President and Chief Operating Officer Dan Cancelmi Executive Vice President 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: Net Income to Adjusted Net Income 2020
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 for 2020 (Unaudited) (Dollars in million
Slide 18: Net Loss to Adjusted Net Income 2019
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliations of Net Loss Attributable to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2019 (Unaudited) (Dollars in millio
Slide 19: Net Income to Adjusted EBITDA 2020
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2020 (Unaudited) (Dollars in millions) 2020 4th Qtr Full Year Net income available to Tenet Healthca
Slide 20: Net Loss to Adjusted EBITDA 2019
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Loss Attributable to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2019 (Unaudited) (Dollars in millions) 2019 4th Qtr Full Year Net loss attributable to Tenet Health
Slide 21: Operating Cash Flow to Free Cash Flow 2020
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 for 2020 (Unaudited) (Dollars in millions) 2020 4th Qtr Full Year Net cash provid
Slide 22: Operating Cash Flow to Free Cash Flow 2019
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 for 2019 (Unaudited) (Dollars in millions) 2019 4th Qtr Full Year Net cash provid
Slide 23: Outlook Net Income to Outlook Adjusted EBITDA
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #4 – Reconciliations of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited) (Dollars in millions) 1Q21 FY 2021 Low High Low High Net
Slide 24: Outlook Net Income to Adjusted Net Income
Tenet Healthcare Corporation Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliations of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders (Dol
Slide 25: Outlook Operating Cash Flow to Free Cash Flow
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 to Outlook Adjusted Free Cash Flow – Continuing Operations (Unaudited) (Dollars in millions)