Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — 30th Annual J.P. Morgan Healthcare Conference (January 2012)
19 slides from Tenet Healthcare's conference presentation, Jan 9, 2012
Slide 1: Tenet Healthcare Corporation 30th Annual J.P. Morgan Healthcare Conference
Tenet Healthcare Corporation 30th Annual J.P. Morgan Healthcare Conference January 9, 2012
Slide 2: Forward-looking statements
Forward-looking statements Certain statements contained in this presentation constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on management's curre
Slide 3: Business model
99 free-standing outpatient centers 65 imaging centers 25 ambulatory surgery centers 8 urgent care centers 1 free-standing ERs 12 states More than 4 million visits (LTM) 15 centers acquired in 2011 24 centers acquired in 2010 3 Business model 50 hospitals 11 states More than 500,000 admissions (LTM)
Slide 4: Diversified asset portfolio in attractive markets
High growth markets 50 acute care hospitals 99 OP centers (free-standing) Acute Care Hospitals Diagnostic Imaging Centers (DICs) Ambulatory Surgery Centers (ASCs) DIC in development Diversified asset portfolio in attractive markets 4
Slide 5: Market Information: Leading market positions
5 Market Information Of the 24 markets in which we operate: We negotiate our health plan contracts on a state- or nationwide basis to maximize the relevance of Tenet hospitals to the payers Tenet hospitals have an average market share of 20% Tenet holds the number 1 position in 11 markets Tenet hold
Slide 6: Conifer: high growth, high margin services businesses
6 Conifer: high growth, high margin services businesses 5 million patient accounts processed annually 30 states + District of Columbia Conifer brand launched November 2008 Revenue Cycle Services formerly the Patient Financial Services division of Tenet Healthcare Corporation Revenue Cycle Service Ce
Slide 7: Outlook Update
7 Outlook Update 2011 Adjusted EBITDA Outlook range confirmed: $1.175 billion to $1.275 billion 2011 Adjusted EBITDA expected to be adversely impacted by: $12 million revenue deferral related to HIT accounting change $7 million as discount rate lower than anticipated on certain liabilities Achieving
Slide 8: Conservative assumptions drive growth through 2015
Conservative assumptions drive growth through 2015 8 Key assumptions: Volumes: Admissions growth: Maintain assumption of core average annual growth below 1% 2015 admissions modestly higher than last year’s Outlook as starting from a higher 2011 base Outpatient acquisitions only assumed through 2013,
Slide 9: Headwinds and tailwinds in outlook compared to one year ago
9 Headwinds and tailwinds in outlook compared to one year ago Tailwinds No Change Headwinds Aggregate volume growth & strengthening commercial volumes Medicare Performance Initiative (MPI) cost savings New and/or expanded Provider fee programs in Pennsylvania and California Medicare reimbursement ra
Slide 10: Same Hospital Volumes: admissions and outpatient visits
2006 Annual Growth – Same Hospital Volumes: admissions and outpatient visits Improving growth trend through mid-2009 Growth resumes Recession effects 10 O/P Visits Paying(1) 2007 2008 2010 2009 2011 (1) Paying admissions/visits are defined as total admissions/visits less charity and uninsured admiss
Slide 11: Adjusted EBITDA shows attractive organic growth trend
Adjusted EBITDA shows attractive organic growth trend $ Millions Adjusted EBITDA Margin Adjusted EBITDA(1) Adjusted EBITDA Margin 11 (1) Data reflects the results of our existing 50 hospitals. $1,175 / 12.1% 16% CAGR (to low end of 2011 Outlook Range) $1,275 / 12.9% Outlook Range $422 $543 $631 $658
Slide 12: Tenet's consistent EBITDA improvement relative to peers has narrowed the margin gap
12 Tenet’s consistent EBITDA improvement relative to peers has narrowed the margin gap Tenet is on track to exceed current industry average margins (1) Peer Average EBITDA margin of Community Health Systems, Hospital Corporation of America, Health Management Associates, LifePoint, Universal Health S
Slide 13: Tenet's growth record has outperformed its peers
Tenet’s growth record has outperformed its peers Peer Average Admissions Growth 79% 47% 58% 68% 58% 63% EBITDA Growth 58% 68% 63% 58% 47% 58% Percentage of quarters(1) since Q1’07 in which Tenet’s same-hospital growth met or exceeded its peers: 13 (1) Based on 19 quarters from Q1’07 to Q3’11.
Slide 14: Tenet's leverage among the lowest in our sector
Tenet’s leverage among the lowest in our sector HCA HMA Vanguard (2) THC LPNT UHS(3) 2008 September 30, 2011 THC CYH Leverage Ratio(1) 14 (1) Total debt less Cash and Cash Equivalents / LTM EBITDA; (2) Vanguard adjusted for recent major acquisition; (3) UHS adjusted for the Psychiatric Solutions acq
Slide 15: Near-term debt maturities extended and reduced
Near-term debt maturities extended and reduced (millions) December 2008 Existing 12/31/08 debt which remains outstanding Debt issued since 01/01/2009 (millions) 6.5 % 7.375% 9.875% 6.875% 9.25% 10.0%(2) 6.25%(2) 8.875%(2) 8.0% 9.0%(2) Weighted Average Maturity of 7.5 years December 2011(1) 15 (1) 20
Slide 16: Outpatient acquisitions completed in 2010-2011
39 outpatient acquisitions completed in 2010-2011 Emphasis evolved from acquiring imaging centers in 2010 to acquiring surgery centers in 2011, which enhances physician alignment High growth/high margin services business More than 300 clients across Revenue Cycle, Patient Communications and Cap Mana
Slide 17: Health IT incentive payments contribute to aggregate EBITDA growth through 2017
17 Health IT incentive payments contribute to aggregate EBITDA growth through 2017 Incentive revenues ($mm) 2009 2010 2011(1) 2012 2013 2014 2015 2016 2017 Total Current Outlook - - 54 33 74 79 50 24 6 320 Prior Outlook (Nov 1, 2011) - - 65 64 91 62 30 8 - 320 Change Favorable/(Unfavorable) (11) (31
Slide 18: Compelling investment value
$2.2 billion NOL enhances cash flow Proven strategies for further growth Transparent disclosure Diversified earnings streams 18 Compelling investment value Upside potential from economic cycle Investment Value Gap between Tenet’s current multiple and industry’s is worth $2.00/share Track record of s
Slide 19: Reconciliation of EBITDA
Reconciliation of EBITDA Adjusted EBITDA, a non-GAAP term, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) cumulative effect of changes in accounting principle, net of tax, (2) net income attributable to noncontrolling intere
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