Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q4 2016 Earnings Presentation
23 slides from Tenet Healthcare's earnings presentation, Feb 27, 2017
Slide 1: Quarterly Results Presentation Fourth Quarter of 2016
Quarterly Results Presentation Fourth Quarter of 2016 February 27, 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute “forward-looking statements” – that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial con
Slide 3: 2016 Strategic Highlights
2016 Strategic Highlights Strengthened Acute Care Hospital Business Increased percentage of markets with top two share positions to 72% Initiated a process to sell or exit our health plan business Enhanced operational efficiencies through new supply chain agreement with HPG, in-sourcing of purchasin
Slide 4: 2016 Financial Highlights
2016 Financial Highlights Adjusted EBITDA was $2.413 billion, up 6% from 2015 − The results of the health plan business lowered Adjusted EBITDA by $37 million in 2016. − The Company’s initial Adjusted EBITDA Outlook for 2016 of $2.4 billion to $2.5 billion assumed breakeven results from the health
Slide 5: Q4'16 Financial Highlights
Q4’16 Financial Highlights Adjusted EBITDA was $613 million in Q4’16 − The health plan business lowered Adjusted EBITDA by $29 million in Q4’16. − The fourth quarter Adjusted EBITDA Outlook of $600 million to $650 million assumed that the health plan business would lower Adjusted EBITDA by $15 mil
Slide 6: Strategic Priorities in 2017
Strategic Priorities in 2017 Driving hospital organic revenue growth and margin expansion. Growing key service lines Adding patient access points Opening several large hospital construction projects Completing hospital divestitures and allocating the capital to higher return investments ac
Slide 7: Hospital Operations & Other Segment
Hospital Operations & Other Segment Same-hospital growth rates Q1'15 (1) Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Adjusted Admissions 4.7% 2.3% 0.7% 0.3% 2.4% 2.2% 0.5% 1.4% -0.5% 0.9% Admissions 2.0% 1.7% -0.6% -1.8% 1.1% -0.1% -1.1% 0.4% -0.2% -0.2% (2) Revenue Per Adjusted Admission 4.
Slide 8: Uncompensated Care Trends
Uncompensated Care Trends $ in millions Q1 '15 Q2 '15 Q3 '15 Q4 '15 2015 Q1 '16 Q2 '16 Q3 '16 Q4 '16 2016 Net Revenue before bad debt $4,787 $4,843 $5,064 $5,417 $20,111 $5,420 $5,220 $5,216 $5,214 $21,070 Bad Debt Expense $363 $352 $371 $391 $1,477 $376 $352 $367 $354 $1,449 % of revenue before bad
Slide 9: Ambulatory Care Segment
Ambulatory Care Segment USPI only <------------------------------------------ Pro forma (3) ------------------------------------------> (1) (2) Same-facility system-wide growth Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 2016 Surgical (ASCs, Surgical Hospitals & Aspen) Revenue 8.8% 6.7%
Slide 10: Ambulatory Care Segment (continued)
Ambulatory Care Segment (continued) $ in millions Q1'15 Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Net operating revenues $295 $322 $329 $397 $1,343 $429 $442 $448 $478 $1,797 % growth 13.9% 12.6% 14.6% 28.9% 17.8% 45.4% 37.3% 36.2% 20.4% 33.8% Equity in earnings of unconsolidated affiliate
Slide 11: Conifer Health Solutions Segment
Conifer Health Solutions Segment Revenue grew 4.7% to $402 million, driven by 16% growth in revenue from non-Tenet customers Adjusted EBITDA grew 18.0% year-over-year to $72 million in Q4’16. Third party revenue growth at Conifer includes business retained from hospitals that Tenet has sold over
Slide 12: Tenet Outlook for 2017
Tenet Outlook for 2017 $ in millions, except EPS 2017 Outlook Net Revenue $19,700 - $20,100 (1) Adjusted EBITDA $2,500 - $2,600 (1) Adjusted EBITDA Margin 12.7% - 12.9% (1) Adjusted diluted E.P.S. from continuing operations $1.05 - $1.30 Adjusted Cash Flow from Operations (1) $1,300 - $1,550 Capital
Slide 13: Segment Outlook for 2017 and Beyond
Segment Outlook for 2017 and Beyond Outlook for 2017 Hospital Operations Ambulatory Conifer and Other Segment Segment Segment Adjusted EBITDA $1.525 - $1.595 billion Adjusted EBITDA $695 - $715 million Adjusted EBITDA $280 - $290 million (1) (1) (1) Noncontrolling Interest $40 - $45 million Noncontr
Slide 14: Summary
Summary Adjusted EBITDA was $613 million in the quarter and would have exceeded the midpoint of our Outlook range excluding greater than anticipated losses from our health plans Hospital segment delivered solid same-hospital patient revenue growth of 3.2% in the quarter o Adjusted admissions dec
Slide 15: Appendix and Reconciliation of Non-GAAP Financial Measures
Appendix and Reconciliation of Non-GAAP Financial Measures
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss (income) attributable to noncontrolling i
Slide 17: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued from the prior page) The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the
Slide 18: Table #1 – Reconciliation of Adjusted EBITDA to Loss Attributable to Tenet
Table #1 – Reconciliation of Adjusted EBITDA to Loss Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) (Dollars in millions) Three Months Ended Years Ended December 31, December 31, 2016 2015 2016 2015 Net loss attributable to Tenet Healthcare Corporation common shareholde
Slide 19: Table #2 – Pre-Tax, After-Tax and EPS Impact of Certain Items
Table #2 – Pre-Tax, After-Tax and Earnings Per Share Impact of Certain Items on Continuing Operations (Unaudited) Three Months Ended Years Ended (Dollars in millions except per share amounts) December 31, December 31, 2016 2015 2016 2015 Adjustments to calculate Adjusted Diluted EPS (Expense) Income
Slide 20: Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow
Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow (Unaudited) Three Months Ended Years Ended (Dollars in millions) December 31, December 31, 2016 2015 2016 2015 Net cash provided by (used in) operating activities $ (293) $ 191 $ 558 $ 1,026 Purchases of property and equipment
Slide 21: Table #4 – Reconciliation of Outlook Adjusted EBITDA
Table #4 – Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) (Dollars in millions) Q1 2017 2017 Low High Low High Net income (loss) attributable to Tenet Healthcare Corporation common shareholders $ (65) $ (45
Slide 22: Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow
Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow for the Year Ending December 31, 2017 (Dollars in millions) 2017 Low High Net cash provided by operating activities $ 1,295 $ 1,550 Less: Net cash used in operating activities from discontinued operations (5) 0 Adjusted net cash provided b
Slide 23: Faru
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