Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q1 2024 Earnings Presentation
25 slides from Tenet Healthcare's earnings presentation, Apr 30, 2024
Slide 1: 1st Quarter 2024 Earnings Release Presentation
1st Quarter 2024 Earnings Release Presentation April 30, 2024
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: Financial Profile Continues to Improve
Financial Profile Continues to Improve ADJUSTED ADJUSTED ADJUSTED FREE CASH FLOW LEVERAGE RATIO NET REVENUE EBITDA EBITDA MARGIN (EBITDA-NCI) $1.623B $3.541B 7.0x $20.5B 17.2% 440 45% bps 229% (2.15)x 7% 12.8% $2.440B 4.85x $19.1B $0.493B 2017 2023 2017 2023 2017 2023 2017 2023 2017 Q4'23 Reconcilia
Slide 4: First Quarter 2024 Highlights
First Quarter 2024 Highlights Consolidated Adjusted EBITDA of $1.02 billion, 23.1% above first quarter 2023 and well above the upper end of our first quarter Outlook range Ambulatory Hospitals • 16% Adjusted EBITDA growth • 28% Adjusted EBITDA growth • 6.4% same-facility revenue growth • 4.2% same-h
Slide 5: 2024 Financial Outlook ($ in millions)
2024 Financial Outlook ($ in millions) Income Available (Loss Attributable) to Tenet Common Consolidated Adjusted EBITDA Shareholders from Continuing Operations $4,000 $3,500 to $2,622 to $3,000 $3,700 $2,762 $3,541 $200 $2,500 $3,500 $2,000 $3,198 ~13% $1,500 $3,000 Growth* $1,000 $2,730 $611 $500
Slide 6: 2024 Financial Outlook
2024 Financial Outlook* Net operating revenues $20.0 to $20.4B Changes vs. prior year Ambulatory surgical case volumes Up 1-3% Adjusted EBITDA Ambulatory $1.645 to $1.715B Net revenue per surgical case Up 2-3% Hospitals $1.855 to $1.985B Consolidated $3.500 to $3.700B Inpatient admissions Up 1-3% Ad
Slide 7: FY 2024 Adjusted EBITDA Outlook Bridge from 2023
FY 2024 Adjusted EBITDA* Outlook Bridge from 2023 ($ in millions) ($ in millions) Ambulatory Hospital Total 2023 EBITDA $1,544 $1,997 $3,541 Grant Income in 2023 ($1) ($15) ($16) Income from Cyber Incident Insurance Proceeds Received in 2023 - ($34) ($34) Government Related Reimbursement Reductions
Slide 8: USPI
USPI
Slide 9: USPI Track Record of Double-Digit Growth and Strong Margins
USPI Track Record of Double-Digit Growth and Strong Margins Net Revenue ($M) Adjusted EBITDA ($M) $4,225 $1,680 $3,865 CAGR $1,544 CAGR 13.4% 12.5% $1,327 $3,248 $1,197 $2,718 $895 $868 $2,085 $2,158 $2,072 $792 2018 2019 2020 2021 2022 2023 2024E 2018 2019 2020 2021 2022 2023 2024E Midpoint* Midpoi
Slide 10: USPI Long Term Organic Growth Consistency
USPI Long Term Organic Growth Consistency 5.8% Same-facility System-wide Organic Growth Rates Driven by Revenue CAGR from 2015-2023 USPI Leadership in Strategy & Execution Established Expertise in Starting New Service Lines 14.5% 32 9.7% Service Line Additions 9.2% YTD 2024 6.0% Expansion of High Pa
Slide 11: USPI Case Mix / Clinical Quality
USPI Case Mix / Clinical Quality 2023 Case Mix Commitment to Quality Drives Strong Patient Experience Ophthalmology 10% All Other Specialties 20% Gastrointestinal 38% Musculoskeletal 96.6 32% 2023 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 – 2024 537 8-10x 5-7x <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: 2024 Cash Flows Continue to Support Growth
2024 Cash Flows Continue to Support Growth ▪ Our cash flow and balance sheet position provide us capital allocation financial flexibility: $346M ✓ Ample liquidity and access to capital markets to pursue our growth First Quarter strategy while returning capital to shareholders 2024 Free Cash Flow* ▪
Slide 15: Significant Deleveraging of the Balance Sheet
Significant Deleveraging of the Balance Sheet LEVERAGE RATIO (EBITDA) LEVERAGE RATIO (EBITDA-NCI) 7.0x 5.86x 4.85x 3.89x 3.46x 2.79x 2017 2023 3/31/2024 2017 2023 3/31/2024 Substantial reduction in leverage following significant performance improvement and hospital sales 15
Slide 16: Debt Maturity Profile - No Significant Maturities Until 2027
Debt Maturity Profile - No Significant Maturities Until 2027 Maturity Profile as of March 31, 2024 4,000 $3,450 3,500 $3,000 $3,100 3,000 2,500 2,000 1,500 2,000 $1,712 2,500 1,500 $1,400 362 1,000 1,500 1,400 1,450 1,350 500 600 0 2024 2025 2026 2027 2028 2029 2030 2031 $ in millions First Lien Not
Slide 17: 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 18: 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 accounting principles generally accepted in the United States of America (GAAP). Reconciliations of these non-GAAP measures to the most comparable GAAP measur
Slide 19: 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) Three Months Ended March 31, (Dollars in millions, except per share
Slide 20: 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) Three Months Ended March 31, (Dollars in millions) 2024 2023 Net income available to Tenet Healthcare Corporation common shareholder
Slide 21: 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, 2024 2023 Net cash provided by operating activities $ 586
Slide 22: 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) Second Quarter 2024 FY 2024 (1) The figures shown re
Slide 23: 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) Second Quarter 2024 FY 2024 (1) The figures shown represent the Company's estimate for (Dollars in millions) Low Hig
Slide 24: 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) (1) The figures shown represent the Company's estimate for (Doll
Slide 25: Tenet Health logo