Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Merger or Acquisition (December 2010)
17 slides from Tenet Healthcare's merger presentation, Dec 10, 2010
Slide 1: Community Health Systems and Tenet Healthcare: A Compelling Opportunity for Value Creation
Community Health Systems and Tenet Healthcare: A Compelling Opportunity for Value Creation December 9, 2010
Slide 2: Forward-Looking Statements
Any statements made in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, including any benefits of the proposed acquisition of Tenet Healthcare Corporation ("Tenet"), are forward-looking statements within the meaning of the federal
Slide 3: Additional Information
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This presentation relates to a business combination transaction with Tenet proposed by Community Health Systems, Inc. ("CHS" or "the Company"), whi
Slide 4: Compelling Strategic Rationale
Compelling Strategic Rationale Strong complementary fit with significant synergy potential Opportunity to leverage operating efficiencies and best practices Enhances ability to contract effectively with payors More attractive platform for physician recruitment CHS management team has proven track re
Slide 5: Attractive Offer for Tenet Shareholders
$6.00 offer price per share comprised of $5.00 in cash and $1.00 in CHS stock Offer represents 40% premium to December 9, 2010 closing price for Tenet Stock consideration provides Tenet shareholders the opportunity to participate in future upside from earnings growth and synergy realization Credit S
Slide 6: Combined Company Pro Forma
Combined Company Pro Forma Tenet Note: Revenue as of LTM 9/30/10. Revenue $12.7 billion $9.2 billion $21.9 billion Hospitals 126 50 176 States 29 11 30 Licensed Beds 19,400 13,430 32,830
Slide 7: Transaction Benefits
Transaction Benefits Key Constituents Improved quality of care from standardized best practices and clinical protocols Breadth of platform and stable operations provide attractive practice opportunities Comprehensive range of healthcare services provided in cost-efficient manner Enhances ability to
Slide 8: Favorable Geographic Fit
Favorable Geographic Fit Geographic overlap - only new state is Nebraska CHS in 29 states; Tenet in 11 states; pro forma combined in 30 states Diversified across urban and non-urban markets Potential referral synergies Well positioned with managed care organizations and for future impact of healthca
Slide 9: Combined Company Has a Scale Advantage
CHS / Tenet Combined Increased purchasing power Leverage operating efficiencies Best practices across portfolio Hospital Company Comparison HCA CHS HMA Tenet LifePoint UHS Combined Company Has a Scale Advantage Note: Revenue as of LTM 9/30/10.
Slide 10: CHS Management Team Has a Proven Track Record of Superior Operating Performance
CHS Management Team Has a Proven Track Record of Superior Operating Performance 5.4% 4.1% 9.1% 5.9% Tenet $3,031mm $930mm Superior Organic Growth Average Annual Same-Facility Revenue Growth 2008 - 2010 YTD Average EBITDA* Margin 2008 - 2010 YTD Average EBIT Margin 2008 - 2010 YTD Cumulative Cash Flo
Slide 11: Target Contribution to Combined Company
Target Contribution to Combined Company Tenet Acquisition Relative to Triad Triad Tenet Revenue 56% 42% EBITDA 55% 36% Beds 51% 41% Hospitals 41% 28% LTM as of 12/31/06 LTM as of 9/30/10 CHS has successfully integrated Triad. On a relative basis, Tenet is a smaller acquisition.
Slide 12: CHS Management Significantly Improved Triad's Operating Results
Triad Facilities LTM 6/30/07 0.12 CY 2009 0.148 +280 bps CHS Management Significantly Improved Triad's Operating Results Pre-acquisition Margin Improvement Substantial corporate cost savings and purchasing synergies achieved First Calendar Year: $145 million Peak Synergies: Over $275 million Recruit
Slide 13: Deep and Experienced Management Team
Deep and Experienced Management Team Wayne T. Smith Chairman, President and CEO 30+ President and Chief Operating Officer at Humana W. Larry Cash Executive Vice President and CFO 30+ Vice President and Group CFO at HCA; Senior Vice President of Finance & Operations at Humana William S. Hussey Presid
Slide 14: CHS Has Delivered Consistent Results For Years
CHS Has Delivered Consistent Results For Years 1996 108 1997 122 1998 166 1999 203 2000 251 2001 291 2002 349 2003 429 2004 494 2005 573 2006 572 2007 827 2008 1513 2009 1671 ($MM) 1996 622 1997 742 1998 855 1999 1052 2000 1306 2001 1531 2002 2039 2003 2677 2004 3204 2005 3738 2006 4180 2007 7127 20
Slide 15: Summary
Summary Strong complementary fit with significant synergy potential Offer represents 40% premium to December 9, 2010 closing price for Tenet Stock consideration provides Tenet shareholders the opportunity to participate in future upside from earnings growth and synergy realization CHS management tea
Slide 16: Unaudited Supplemental Information
Unaudited Supplemental Information EBITDA consists of net income attributable to Community Health Systems, Inc. before interest, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, gain/loss from early extinguishment of debt and net
Slide 17: Unaudited Supplemental Information Continued
Unaudited Supplemental Information Continued The following table reconciles ADJUSTED EBITDA, as defined, to our net cash provided by operating activities as derived directly from the condensed consolidated financial statements for the years ended December 31, 2009 and 2008 (in thousands):
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