Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q1 2023 Earnings Presentation
24 slides from Tenet Healthcare's earnings presentation, Apr 25, 2023
Slide 1: 1st Quarter 2023 Earnings Release Presentation
1st Quarter 2023 Earnings Release Presentation April 25, 2023
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 NON-GAAP FINANCIAL INFORMATION position, operational and strategic
Slide 3: First Quarter 2023 Highlights
First Quarter 2023 Highlights Consolidated Adjusted EBITDA of $832 million*, above the upper end of our first quarter Outlook range Ambulatory Hospitals Conifer • 21.4% Adjusted EBITDA growth • 6.7% same-hospital adjusted • 3.8% External client revenue excluding grant income admission growth growth
Slide 4: FY 2023 Financial Outlook ($ in millions)
FY 2023 Financial Outlook ($ in millions) Income Available Consolidated Adjusted EBITDA (Loss Attributable) to Tenet Common Shareholders from Continuing Operations $3,469 $3,210 to $3,500 $3,410 $900 $458 to $200 $623 $600 $410 $3,000 $3,032 $2,730 $300 (226) $2,500 $0 ($300) 2019 2022 2023E $2,000
Slide 5: Financial Profile Continues to Improve
Financial Profile Continues to Improve ADJUSTED ADJUSTED ADJUSTED FREE CASH LEVERAGE NET REVENUE EBITDA EBITDA FLOW RATIO $3.310B (a) MARGIN $20.0B (a) $1.225B 16.6% 5.9x 36% (1.7)x 5% $2.440B 380 148% 12.8% bps 4.19x $0.493B $19.1B 2017 2023E 2017 2023E 2017 2023E 2017 2023E 2017 Q1 '23 Note: 2023E
Slide 6: Adjusted EBITDA With and Without Grant Income ($ in millions)
Adjusted EBITDA With and Without Grant Income ($ in millions) $ In millions 2021 Q1’22 Q2 ’22 Q3’22 Q4 ’22 2022 Q1’23 Adjusted EBITDA Excluding Grant Income Hospital Segment $1,789 $510 $339 $378 $360 $1,587 $402 Ambulatory Segment $1,134 $280 $317 $319 $407 $1,323 $340 Conifer Segment $355 $92 $93
Slide 7: FY 2023 Adjusted EBITDA Outlook Bridge from 2022 ($ in millions)
FY 2023 Adjusted EBITDA Outlook Bridge from 2022 ($ in millions) AMBULATORY HOSPITAL CONIFER CONSOLIDATED 2022 Adjusted EBITDA $1,327 $1,777 $365 $3,469 Grant Income 2022 ($4) ($190) - ($194) Gains on Asset Sales in 2022 - ($114) - ($114) Government Funding Reductions (a) ($21) ($177) - ($198) 2021
Slide 8: USPI
USPI
Slide 9: USPI Track Record of Double-Digit Growth and Strong Margins
USPI Track Record of Double-Digit Growth and Strong Margins Net Revenue ($M) Adjusted EBITDA ($M) $3,650 $1,465 $3,248 $1,327 CAGR CAGR 11.1% 13.1% $1,197 $2,718 $895 $868 $2,085 $2,158 $2,072 $1,940 $792 $699 2017 2018 2019 2020 2021 2022 2023E 2017 2018 2019 2020 2021 2022 2023E Midpoint* Midpoint
Slide 10: USPI Long Term Organic Growth Consistency
USPI Long Term Organic Growth Consistency 5.3% Same-facility System-wide Organic Growth Rates Driven by Revenue CAGR from 2015-2022 USPI Leadership in Strategy & Execution Established Expertise in 14.5% Starting New Service Lines 9.7% 102 Service Line Additions Pandemic Shutdown 6% in 2022 4.4% 4.9%
Slide 11: USPI Case Mix / Clinical Quality
USPI Case Mix / Clinical Quality 2022 Case Mix Commitment to Quality Drives Strong Patient Experience Opthalmology 11% All Other Specialties 19% Gastrointestinal 34% Musculoskeletal 96.4 36% Overall Patient Experience Score 11
Slide 12: USPI Acquisitions and De Novos Deliver Significant Returns on Invested Capital
USPI Acquisitions and De Novos Deliver Significant Returns on Invested Capital Total Number of Facilities Achievement of Attractive Returns 2017 – 2023 469 8.0x <5.0x <2.0x Initial Acquisition Exceeded Exceeded Multiple Targeted Acquisition Targeted De Novo Effective Multiple Effective Multiple 267
Slide 13: Cash Flow and Capital
Cash Flow and Capital
Slide 14: 2023 Cash Flows Continue to Support Growth
2023 Cash Flows Continue to Support Growth ▪ Our cash flow and balance sheet position us to drive growth and interest savings: $214M ▪ Ample liquidity and access to capital markets to pursue our growth First Quarter strategy while returning capital to shareholders 2023 Free Cash Flow ▪ First quarter
Slide 15: Capital Deployment Priorities
Capital Deployment Priorities We prioritize the deployment of the free cash flow generated by our businesses to the following areas: M&A and de novo investments – baseline intention is Investments in our ASC platform $250 million per year Continued investment in technology, robotics, and Investments
Slide 16: Debt Maturity Profile – No Significant Maturities Until Third Quarter 2024
Debt Maturity Profile – No Significant Maturities Until Third Quarter 2024 Maturity Profile as of March 31, 2023 $4,000 $3,450 $3,500 $3,100 $3,000 $3,000 $2,500 $2,100 $2,000 $1,400 $1,500 $1,345 $1,000 $362 $500 $0 2023 2024 2025 2026 2027 2028 2029 2030 2031 $ in millions First Lien Notes Second
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations NON-GAAP FINANCIAL INFORMATION This presentation contains financial measures that are not in accordance accounting principles generally accepted in the United States of America (GAAP). Reconciliations of these non-GAAP measures to the most comparable GAAP measures an
Slide 18: Supplemental Non-GAAP disclosures
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 (Unaudited) (Dollars in millions, except per share amounts) Three Months Ended M
Slide 19: Supplemental Non-GAAP disclosures
Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA (Unaudited) (Dollars in millions) Three Months Ended March 31, 2023 2022 Net income available to Tenet Healthcare Corporation common shareholder
Slide 20: Supplemental Non-GAAP disclosures
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 (Unaudited) (Dollars in millions) Three Months Ended March 31, 2023 2022 Net cash provided by operating activities $ 449
Slide 21: Supplemental Non-GAAP disclosures
Supplemental Non-GAAP disclosures Table #4 – Reconciliations 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, except per share amounts) Seco
Slide 22: Supplemental Non-GAAP disclosures
Supplemental Non-GAAP disclosures Table #5 – Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited) (Dollars in millions) Second Quarter 2023 FY 2023 (1) The figures shown represent the Company's estimate for Low Hig
Slide 23: Supplemental Non-GAAP disclosures
Supplemental Non-GAAP disclosures Table #6 – Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow – Continuing Operations and Outlook Adjusted Free Cash Flow – Continuing Operations (Unaudited) (Dollars in millions) FY 2023 (1) The figures shown represent th
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