Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Q3 2023 Earnings Presentation
24 slides from Tenet Healthcare's earnings presentation, Oct 30, 2023
Slide 1: 3rd Quarter 2023 Earnings Release Presentation
3rd Quarter 2023 Earnings Release Presentation October 30, 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 position, operational and strategic initiatives, and developments
Slide 3: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights Consolidated Adjusted EBITDA of $854 million*, above the upper end of our third quarter Outlook range Ambulatory Hospitals Conifer • 16% Adjusted EBITDA growth • 0.6% same-hospital adjusted admission growth • 26.3% Adjusted EBITDA margin • 4.5% same-hospital non-Covid a
Slide 4: FY 2023 Financial Outlook
FY 2023 Financial Outlook ($ in millions) Income Available (Loss Attributable) to Tenet Common Consolidated Adjusted EBITDA Shareholders from Continuing Operations $3,365 to $456 to $3,469 $3,465 $600 $541 $3,500 $100 $410 $300 $3,000 11.5% $3,021 $2,730 Growth* ($226) $0 $2,500 ($300) $2,000 2019 2
Slide 5: Financial Profile Continues to Improve
Financial Profile Continues to Improve ADJUSTED ADJUSTED ADJUSTED FREE CASH LEVERAGE NET REVENUE EBITDA EBITDA FLOW RATIO $20.4B (a) MARGIN $1.238B $3.415B (a) 16.7% 5.9x (1.8)x 7% 40% 390 151% 12.8% bps $2.440B 4.08x $19.1B $0.493B 2017 2023E 2017 2023E 2017 2023E 2017 2023E 2017 Q3 '23 Note: 2023E
Slide 6: Adjusted EBITDA With and Without Grant Income
Adjusted EBITDA With and Without Grant Income ($ in millions) $ In millions Q1’22 Q2’22 Q3’22 Q4’22 2022 Q1’23 Q2’23 Q3’23 2023 YTD Adjusted EBITDA Excluding Grant Income Hospital Segment $510 $339 $378 $360 $1,587 $402 $381 $398 $1,181 Ambulatory Segment $280 $317 $319 $407 $1,323 $340 $369 $370 $1
Slide 7: FY 2023 Adjusted EBITDA Outlook Bridge from 2022
FY 2023 Adjusted EBITDA Outlook Bridge from 2022 ($ 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) ($28) ($181) - ($209) 2021
Slide 8: USPI
USPI
Slide 9: USPI Track Record of Double-Digit Growth and Strong Margins
USPI Track Record of Double-Digit Growth and Strong Margins Net Revenue ($M) Adjusted EBITDA ($M) $1,520 3,815 $1,327 CAGR CAGR 11.9% 13.8% $1,197 $3,248 $2,718 $895 $868 $792 $2,085 $2,158 $2,072 $1,940 $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 5.8% 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% 103 9.7% Service Line Additions 9.0% YTD 2023 6.0% Expansion of High P
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 469 481 8.0x <5.0x <2.0x Initial Acquisition Exceeded Exceeded Multiple Targeted Acquisition Targeted De Novo Effective Multiple Effective Multiple
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 provide us capital allocation financial flexibility: $327M ✓ Ample liquidity and access to capital markets to pursue our growth Third Quarter strategy while returning capital to shareholders 2023 Free Cash Flow ▪ T
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 2026
Debt Maturity Profile - No Significant Maturities Until 2026 Maturity Profile as of September 30, 2023 4,000 $3,450 3,500 $3,100 $3,000 3,000 2,500 2,000 $2,100 1,500 2,000 2,500 $1,712 1,500 $1,400 362 1,000 2,100 1,500 1,400 1,450 1,350 500 600 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 $ in m
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 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 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) Three Months Ended Nine Months Ended September 30, September 30, (Do
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) Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2023 2022 2023 2022 Net income available to T
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) 2023 (Dollars in millions) Q3 YTD Net cash provided by operating activities $ 503 $ 1,550 Purchases of proper
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) Fourth Quarter 2023 FY 2023 (1) The figures shown re
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) Fourth Quarter 2023 FY 2023 (1) The figures shown represent the Company's estimate for (Dollars in millions) 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) (1) The figures shown represent the Company's estimate for (Doll
Slide 24: Tenet Health