Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q1 2017 Earnings Presentation
25 slides from Tenet Healthcare's earnings presentation, May 1, 2017
Slide 1: Quarterly Results Presentation
Quarterly Results Presentation First Quarter of 2017 May 1, 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: Summary of Key Announcements
Summary of Key Announcements Humana agreement All of Tenet’s hospitals, hospital-affiliated outpatient centers and employed physicians will be phased back into Humana’s network between June 1st and October 1st. All of USPIs facilities will be added to Humana’s network on June 1st. The new cont
Slide 4: Q1'17 Financial Highlights
Q1’17 Financial Highlights Adjusted EBITDA was $527 million − Adjusted EBITDA included a previously unanticipated $7 million benefit from a change in pension accounting rules. − The $90 million decline in Adjusted EBITDA as compared to $617 million in Q1’16 was primarily due to: − $57 million of r
Slide 5: Accelerating the Purchase of United Surgical Partners International
Accelerating the Purchase of United Surgical Partners International Summary of Key Terms Advantages Increasing Tenet’s ownership in USPI to 80% on or before July 3. Reduces complexity and lowers the amount of future capital that is pre-committed to completing the buy-up of USPI. Anticipate inc
Slide 6: Revenue and EBITDA by Segment
Revenue and EBITDA by Segment $ in millions Q1'15 Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Hospital Operations and Other Net operating revenues after bad debt (1) $4,246 $4,175 $4,179 $4,423 $17,023 $4,397 $4,202 $4,162 $4,143 $16,904 $4,050 EBITDA $447 $459 $383 $394 $1,683 $414 $4
Slide 7: Health Plan Financial Results
Health Plan Financial Results Health plans are included in the Hospital Operations and Other segment $ in millions Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Net Operating Revenues $108 $104 $106 $105 $127 $136 $122 $97 $65 Equity in earnings of unconsolidated affiliates $0 $0 $0 $0 $0 $0
Slide 8: Same Hospital Growth Rates
Same Hospital Growth Rates Q1'15 Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Adjusted Admissions 4.7% -3.4% 0.7% 0.3% 2.4% 2.2% 0.5% 1.4% -0.5% 0.9% -2.5% Admissions 2.0% 0.1% -0.6% -1.8% 1.1% -0.1% -1.1% 0.4% -0.2% -0.2% -3.3% Revenue Per Adjusted Admission 4.7% 2.4% 5.8% 0.3% 3.1% 3.
Slide 9: Same Hospital Revenue Growth
Same Hospital Revenue Growth Same hospital revenue per adjusted admission growth with and without California Provider Fee revenue $ in millions, except per adjusted admission Q1'15 Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Current Period same-hospital metrics Inpatient revenue $2,648
Slide 10: 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 Q1 '17 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 $5,196 Bad Debt Expense $363 $352 $371 $391 $1,477 $376 $352 $367 $354 $1,449 $383 % of
Slide 11: Ambulatory Care Same-Facility System-Wide Growth
Ambulatory Care Same-Facility System-Wide Growth 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 Q1 '17 Surgical (ASCs, Surg
Slide 12: Ambulatory Care Segment Financials
Ambulatory Care Segment Financials $ in millions Q1'15 Q2'15 Q3'15 Q4'15 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Net operating revenues $295 $322 $329 $397 $1,343 $429 $442 $448 $478 $1,797 $455 % growth 13.9% 12.6% 14.6% 28.9% 17.8% 45.4% 37.3% 36.2% 20.4% 33.8% 6.1% Equity in earnings of unconsoli
Slide 13: Conifer Health Solutions Segment
Conifer Health Solutions Segment Revenue grew 4.4% to $402 million, driven by 11.5% growth in revenue from non-Tenet customers Adjusted EBITDA grew 3.2% year-over-year to $65 million in Q1’17. Third party revenue growth at Conifer includes business retained from hospitals that Tenet has sold.
Slide 14: Tenet Outlook for 2017
Tenet Outlook for 2017 Adjusted EBITDA Outlook range raised by $25 million to reflect a change in pension accounting rules $ in millions, except EPS 2017 Outlook Net Revenue $19,700 - $20,100 (1) Adjusted EBITDA $2,525 - $2,625 (1) Adjusted EBITDA Margin 12.8% - 13.1% (1) Adjusted diluted E.P.S. fro
Slide 15: Segment Outlook for 2017
Segment Outlook for 2017 Hospital segment Adjusted EBITDA Outlook raised by $25 million to reflect a change in pension accounting rules Hospital Operations Ambulatory Conifer and Other Segment Segment Segment Adjusted EBITDA $1.550 - $1.620 billion Adjusted EBITDA $695 - $715 million Adjusted EBITDA
Slide 16: Summary
Summary Adjusted EBITDA was $527 million – at the high end of the Outlook range. Hospital segment same-hospital patient revenue declined 1.0% o Adjusted admissions declined 2.5% and were down 0.8% excluding patients insured by Humana o Revenue per adjusted admission increased 3.0% adjusting for
Slide 17: Appendix and Reconciliation of Non-GAAP Financial Measures
Appendix and Reconciliation of Non-GAAP Financial Measures
Slide 18: 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 19: 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 20: Table #1 – Reconciliation of Adjusted EBITDA to Loss Attributable to Common Shareholders
Table #1 – Reconciliation of Adjusted EBITDA to Loss Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) (Dollars in millions) Three Months Ended March 31, 2017 2016 (Expense) Income Net loss attributable to Tenet Healthcare Corporation common shareholders $ (53) $ (59) Less
Slide 21: 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 (Dollars in millions except per share amounts) March 31, 2017 2016 Adjustments to calculate Adjusted Diluted EPS (Expense) Income Impairment and restructuring charges,
Slide 22: 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 (Dollars in millions) March 31, 2017 2016 Net cash provided by (used in) operating activities $ 186 $ 147 Purchases of property and equipment (198) (208) Free cash flow $ (12) $ (61) Net cash prov
Slide 23: 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) Q2 2017 2017 Low High Low High Net income (loss) attributable to Tenet Healthcare Corporation common shareholders $ (35) $ (25
Slide 24: 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 $ 1,271 $ 1,526 Less: Payments for restructuring charges, acquisition-related costs and (1) litigation costs and settlement
Slide 25: Foru
Foru inet