10/29/2024 | Press release | Distributed by Public on 10/29/2024 04:53
DALLAS--(BUSINESS WIRE)-- Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended September 30, 2024.
"Our businesses continue to produce strong results and generate robust free cash flow with same store revenue growth and profitability well above our expectations due to the focused execution of our strategy and disciplined operations," said Saum Sutaria, M.D., Chairman and Chief Executive Officer of Tenet. "We have furthered our portfolio transformation and are well-positioned to deliver enhanced value to our patients, physician partners, and shareholders."
Tenet's results for third quarter 2024 versus third quarter 2023 are as follows:
Three Months Ended |
Nine Months Ended |
|||
($ in millions, except per share results) |
2024 |
2023 |
2024 |
2023 |
Net operating revenues |
$5,122 |
$5,066 |
$15,593 |
$15,169 |
Net income available to Tenet common shareholders |
$472 |
$101 |
$2,882 |
$367 |
Net income available to Tenet common shareholders per diluted share |
$4.89 |
$0.94 |
$29.27 |
$3.41 |
Adjusted EBITDA 1 |
$978 |
$854 |
$2,947 |
$2,529 |
Adjusted diluted earnings per share 1 |
$2.93 |
$1.44 |
$8.47 |
$4.30 |
Balance Sheet and Cash Flows
Recent Transaction
Ambulatory Care (Ambulatory) Segment
Tenet's Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of September 30, 2024, USPI had interests in 520 ambulatory surgery centers (376 consolidated) and 24 surgical hospitals (seven consolidated) in 37 states.
Three Months Ended |
Nine Months Ended |
|||
Ambulatory segment results ($ in millions) |
2024 |
2023 |
2024 |
2023 |
Revenues |
||||
Net operating revenues |
$1,139 |
$941 |
$3,275 |
$2,788 |
Same-facility system-wide net patient service revenues 2 |
$1,895 |
$1,744 |
$5,516 |
$5,133 |
Volume Changes versus the Prior-Year Period |
||||
Same-facility system-wide surgical cases 2 |
1.0 % |
4.1 % |
0.4 % |
6.2 % |
Same-facility system-wide surgical cases on same-business day basis 2 |
(0.6) % |
5.8 % |
(0.1) % |
6.8 % |
Adjusted EBITDA, Margins and NCI |
||||
Adjusted EBITDA |
$439 |
$370 |
$1,280 |
$1,080 |
Adjusted EBITDA margin |
38.5% |
39.3% |
39.1% |
38.7% |
Adjusted EBITDA less NCI |
$265 |
$233 |
$779 |
$678 |
Hospital Operations and Services (Hospital) Segment
Tenet's Hospital business segment is primarily comprised of acute care and specialty hospitals, imaging centers, ancillary outpatient facilities, micro-hospitals and physician practices. It also provides comprehensive end-to-end and focused point services, including hospital and physician revenue cycle management, patient communications and engagement support and value-based care solutions.
Three Months Ended |
Nine Months Ended |
|||
Hospital segment results ($ in millions) |
2024 |
2023 |
2024 |
2023 |
Revenues |
||||
Net operating revenues |
$3,983 |
$4,125 |
$12,318 |
$12,381 |
Same-hospital net patient service revenues 3 |
$3,383 |
$3,190 |
$10,298 |
$9,507 |
Same-Hospital Volume Changes versus the Prior-Year Period |
||||
Admissions |
5.2% |
0.6% |
4.9% |
2.6% |
Adjusted admissions 4 |
2.7% |
0.4% |
2.3% |
3.3% |
Outpatient visits (including outpatient ER visits) |
0.5% |
(2.0)% |
0.1% |
(1.0)% |
Emergency Room visits (inpatient and outpatient) |
(0.2)% |
(0.9)% |
1.8% |
1.3% |
Hospital surgeries |
0.6% |
(0.7)% |
-% |
0.5% |
Adjusted EBITDA |
||||
Adjusted EBITDA |
$539 |
$484 |
$1,667 |
$1,449 |
Adjusted EBITDA margin |
13.5% |
11.7% |
13.5% |
11.7% |
2024 Outlook 1
Tenet's Outlook for full year 2024 ( consolidated and by segment) and fourth quarter 2024 follows. This outlook reflects the sale of three Coastal South Carolina hospitals on January 31, 2024, the sale of six California hospitals on March 31, 2024, and the sale of five Alabama hospitals on September 30, 2024.
CONSOLIDATED ($ in millions, except per share amounts) |
FY 2024 Outlook |
Fourth Quarter |
Net operating revenues |
$20,600 to $20,800 |
$5,007 to $5,207 |
Net income available to Tenet common stockholders |
$3,093 to $3,193 |
$211 to $311 |
Adjusted EBITDA |
$3,900 to $4,000 |
$953 to $1,053 |
Adjusted EBITDA margin |
18.9% to 19.2% |
19.0% to 20.2% |
Diluted income per common share |
$31.56 to $32.58 |
$2.20 to $3.24 |
Adjusted net income |
$1,090 to $1,150 |
$258 to $318 |
Adjusted diluted earnings per share |
$11.12 to $11.73 |
$2.69 to $3.31 |
Equity in earnings of unconsolidated affiliates |
$260 to $270 |
$78 to $88 |
Depreciation and amortization |
$820 to $840 |
$195 to $215 |
Interest expense |
$820 to $830 |
$197 to $207 |
Income tax expense 5 |
$1,185 to $1,215 |
$84 to $114 |
Net income available to NCI |
$835 to $855 |
$225 to $245 |
Weighted average diluted common shares |
~98 million |
~96 million |
NCI cash distributions |
$725 to $775 |
|
Net cash provided by operating activities 6 |
$1,775 to $2,125 |
|
Adjusted net cash provided by operating activities 6 |
$1,950 to $2,250 |
|
Capital expenditures |
$800 to $900 |
|
Free cash flow 6 |
$975 to $1,225 |
|
Adjusted free cash flow 6 |
$1,150 to $1,350 |
Ambulatory Segment ($ in millions) |
FY 2024 Outlook |
Net operating revenues |
$4,375 to $4,425 |
Adjusted EBITDA |
$1,760 to $1,800 |
NCI |
$690 to $710 |
Adjusted EBITDA less NCI |
$1,070 to $1,090 |
Changes versus prior year 7 : |
|
Surgical cases volumes |
Up 0.0% to 1.0% |
Net revenues per surgical case |
Up 6.0% to 7.0% |
Hospital Segment ($ in millions) |
FY 2024 Outlook |
Net operating revenues |
$16,225 to $16,375 |
Adjusted EBITDA |
$2,140 to $2,200 |
NCI |
$145 to $145 |
Changes versus prior year 7 : |
|
Inpatient admissions |
Up 4.0% to 5.0% |
Adjusted admissions |
Up 1.5% to 2.5% |
Management's Webcast Discussion of Results
Tenet management will discuss the Company's third quarter 2024 results in a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on October 29, 2024. Investors can access the webcast through the Company's website at www.tenethealth.com/investors.
The slide presentation associated with the webcast referenced above, a copy of this earnings press release, and a related supplemental financial disclosures document will be available on the Company's Investor Relations website on October 29, 2024.
Cautionary Statement
This release contains "forward-looking statements" - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company's expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "assume," "believe," "budget," "estimate," "forecast," "intend," "plan," "predict," "project," "seek," "see," "target," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause the Company's actual results to be materially different than those expressed in the Company's forward-looking statements include, but are not limited to the factors disclosed under "Forward-Looking Statements" and "Risk Factors" in our Form 10-K for the year ended December 31, 2023 and other filings with the Securities and Exchange Commission.
Footnotes
About Tenet Healthcare
Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas. Our care delivery network includes United Surgical Partners International, the largest ambulatory platform in the country, which operates ambulatory surgery centers and surgical hospitals. We also operate a national portfolio of acute care and specialty hospitals, other outpatient facilities, a network of leading employed physicians and a global business center in Manila, Philippines. Our Conifer Health Solutions subsidiary provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.
Non-GAAP Financial Measures
The Company believes the non-GAAP measures described below are useful to investors and analysts because they present additional information on the Company's financial performance. Investors, analysts, Company management and the Company's Board of Directors utilize these non-GAAP measures, in addition to GAAP measures, to track the Company's financial and operating performance and compare the Company's performance to its peer companies, which use similar non-GAAP financial measures in their presentations and earnings releases. The Human Resources Committee of the Company's Board of Directors also uses certain of these measures to evaluate management's performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specific non-GAAP measures used in this release is set forth below.
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 estimated fair value of shares of the Company's common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.
The Company uses, and believes investors use, Free Cash Flow and Adjusted Free Cash Flow as supplemental non-GAAP measures to analyze cash flows generated from the Company's operations. The Company believes these measures are useful to investors in evaluating its ability to fund distributions paid to noncontrolling interests or for acquisitions, purchasing equity interests in joint ventures or repaying debt.
These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in the Company's financial statements, they do not provide a complete measure of the Company's operating performance. For example, the Company's definitions of Free Cash Flow and Adjusted Free Cash Flow do not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows from Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, or (ii) distributions paid to noncontrolling interests. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company's financial performance.
See corresponding reconciliations of the non-GAAP financial measures referred to above to the most comparable GAAP financial measures in Tables #1 - 6 below.
Tenet Healthcare Corporation |
|
Financial Statements and Reconciliations |
|
Third Quarter Earnings Release |
|
Table of Contents |
|
Description |
Page |
Consolidated Statements of Operations |
12 |
Consolidated Balance Sheets |
14 |
Consolidated Statements of Cash Flows |
15 |
Segment Reporting |
17 |
Table #1 - Reconciliations of Net Income to Adjusted Net Income |
18 |
Table #2 - Reconciliations of Net Income to Adjusted EBITDA |
19 |
Table #3 - Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow |
20 |
Table #4 - Reconciliations of Outlook Net Income to Outlook Adjusted Net Income |
21 |
Table #5 - Reconciliations of Outlook Net Income to Outlook Adjusted EBITDA |
22 |
Table #6 - Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow and Outlook Adjusted Free Cash Flow |
23 |
TENET HEALTHCARE CORPORATION |
|||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(Dollars in millions, except per share amounts) |
Three Months Ended September 30, |
||||||||||||||||
2024 |
% |
2023 |
% |
Change |
|||||||||||||
Net operating revenues |
$ |
5,122 |
100.0 |
% |
$ |
5,066 |
100.0 |
% |
1.1 |
% |
|||||||
Grant income |
4 |
0.1 |
% |
3 |
0.1 |
% |
33.3 |
% |
|||||||||
Equity in earnings of unconsolidated affiliates |
62 |
1.2 |
% |
51 |
1.0 |
% |
21.6 |
% |
|||||||||
Operating expenses: |
|||||||||||||||||
Salaries, wages and benefits |
2,218 |
43.3 |
% |
2,288 |
45.2 |
% |
(3.1 |
)% |
|||||||||
Supplies |
881 |
17.2 |
% |
877 |
17.3 |
% |
0.5 |
% |
|||||||||
Other operating expenses, net |
1,111 |
21.6 |
% |
1,101 |
21.7 |
% |
0.9 |
% |
|||||||||
Depreciation and amortization |
209 |
4.1 |
% |
224 |
4.5 |
% |
|||||||||||
Impairment and restructuring charges, and acquisition-related costs |
19 |
0.4 |
% |
47 |
0.9 |
% |
|||||||||||
Litigation and investigation costs |
9 |
0.2 |
% |
14 |
0.3 |
% |
|||||||||||
Net losses (gains) on sales, consolidation and deconsolidation of facilities |
(348 |
) |
(6.8 |
)% |
1 |
- |
% |
||||||||||
Operating income |
1,089 |
21.3 |
% |
568 |
11.2 |
% |
|||||||||||
Interest expense |
(202 |
) |
(227 |
) |
|||||||||||||
Other non-operating income, net |
35 |
4 |
|||||||||||||||
Income before income taxes |
922 |
345 |
|||||||||||||||
Income tax expense |
(241 |
) |
(79 |
) |
|||||||||||||
Net income |
681 |
266 |
|||||||||||||||
Less: Net income available to noncontrolling interests |
209 |
165 |
|||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
472 |
$ |
101 |
|||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: |
|||||||||||||||||
Basic |
$ |
4.93 |
$ |
0.99 |
|||||||||||||
Diluted |
$ |
4.89 |
$ |
0.94 |
|||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): |
|||||||||||||||||
Basic |
95,665 |
101,544 |
|||||||||||||||
Diluted |
96,652 |
104,425 |
TENET HEALTHCARE CORPORATION |
|||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(Dollars in millions, except per share amounts) |
Nine Months Ended September 30, |
||||||||||||||||
2024 |
% |
2023 |
% |
Change |
|||||||||||||
Net operating revenues |
$ |
15,593 |
100.0 |
% |
$ |
15,169 |
100.0 |
% |
2.8 |
% |
|||||||
Grant income |
9 |
0.1 |
% |
14 |
0.1 |
% |
(35.7 |
)% |
|||||||||
Equity in earnings of unconsolidated affiliates |
182 |
1.2 |
% |
155 |
1.0 |
% |
17.4 |
% |
|||||||||
Operating expenses: |
|||||||||||||||||
Salaries, wages and benefits |
6,707 |
43.0 |
% |
6,831 |
45.0 |
% |
(1.8 |
)% |
|||||||||
Supplies |
2,717 |
17.4 |
% |
2,659 |
17.5 |
% |
2.2 |
% |
|||||||||
Other operating expenses, net |
3,413 |
22.0 |
% |
3,319 |
21.9 |
% |
2.8 |
% |
|||||||||
Depreciation and amortization |
625 |
4.0 |
% |
654 |
4.3 |
% |
|||||||||||
Impairment and restructuring charges, and acquisition-related costs |
75 |
0.5 |
% |
84 |
0.6 |
% |
|||||||||||
Litigation and investigation costs |
18 |
0.1 |
% |
28 |
0.2 |
% |
|||||||||||
Net gains on sales, consolidation and deconsolidation of facilities |
(2,906 |
) |
(18.6 |
)% |
(12 |
) |
(0.1 |
)% |
|||||||||
Operating income |
5,135 |
32.9 |
% |
1,775 |
11.7 |
% |
|||||||||||
Interest expense |
(623 |
) |
(674 |
) |
|||||||||||||
Other non-operating income, net |
89 |
8 |
|||||||||||||||
Loss from early extinguishment of debt |
(8 |
) |
(11 |
) |
|||||||||||||
Income before income taxes |
4,593 |
1,098 |
|||||||||||||||
Income tax expense |
(1,101 |
) |
(243 |
) |
|||||||||||||
Net income |
3,492 |
855 |
|||||||||||||||
Less: Net income available to noncontrolling interests |
610 |
488 |
|||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
2,882 |
$ |
367 |
|||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: |
|||||||||||||||||
Basic |
$ |
29.56 |
$ |
3.60 |
|||||||||||||
Diluted |
$ |
29.27 |
$ |
3.41 |
|||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): |
|||||||||||||||||
Basic |
97,505 |
101,869 |
|||||||||||||||
Diluted |
98,518 |
105,021 |
TENET HEALTHCARE CORPORATION |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
(Dollars in millions) |
September 30, |
December 31, |
||||||
2024 |
2023 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
4,094 |
$ |
1,228 |
||||
Accounts receivable |
2,598 |
2,914 |
||||||
Inventories of supplies, at cost |
356 |
411 |
||||||
Assets held for sale |
20 |
775 |
||||||
Other current assets |
1,691 |
1,839 |
||||||
Total current assets |
8,759 |
7,167 |
||||||
Investments and other assets |
3,064 |
3,157 |
||||||
Deferred income taxes |
36 |
77 |
||||||
Property and equipment, at cost, less accumulated depreciation and amortization |
5,552 |
6,236 |
||||||
Goodwill |
10,588 |
10,307 |
||||||
Other intangible assets, at cost, less accumulated amortization |
1,373 |
1,368 |
||||||
Total assets |
$ |
29,372 |
$ |
28,312 |
||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ |
95 |
$ |
120 |
||||
Accounts payable |
1,265 |
1,408 |
||||||
Accrued compensation and benefits |
879 |
930 |
||||||
Professional and general liability reserves |
286 |
254 |
||||||
Accrued interest payable |
248 |
200 |
||||||
Liabilities held for sale |
12 |
69 |
||||||
Income tax payable |
826 |
23 |
||||||
Other current liabilities |
1,927 |
1,756 |
||||||
Total current liabilities |
5,538 |
4,760 |
||||||
Long-term debt, net of current portion |
12,776 |
14,882 |
||||||
Professional and general liability reserves |
855 |
792 |
||||||
Defined benefit plan obligations |
308 |
335 |
||||||
Deferred income taxes |
260 |
326 |
||||||
Other long-term liabilities |
1,560 |
1,709 |
||||||
Total liabilities |
21,297 |
22,804 |
||||||
Commitments and contingencies |
||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries |
2,649 |
2,391 |
||||||
Equity: |
||||||||
Shareholders' equity: |
||||||||
Common stock |
8 |
8 |
||||||
Additional paid-in capital |
4,849 |
4,834 |
||||||
Accumulated other comprehensive loss |
(175 |
) |
(181 |
) |
||||
Retained earnings (accumulated deficit) |
2,690 |
(192 |
) |
|||||
Common stock in treasury, at cost |
(3,538 |
) |
(2,861 |
) |
||||
Total shareholders' equity |
3,834 |
1,608 |
||||||
Noncontrolling interests |
1,592 |
1,509 |
||||||
Total equity |
5,426 |
3,117 |
||||||
Total liabilities and equity |
$ |
29,372 |
$ |
28,312 |
TENET HEALTHCARE CORPORATION |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
(Dollars in millions) |
Nine Months Ended |
|||||||
September 30, |
||||||||
2024 |
2023 |
|||||||
Net income |
$ |
3,492 |
$ |
855 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
625 |
654 |
||||||
Deferred income tax expense (benefit) |
(29 |
) |
75 |
|||||
Stock-based compensation expense |
52 |
48 |
||||||
Impairment and restructuring charges, and acquisition-related costs |
75 |
84 |
||||||
Litigation and investigation costs |
18 |
28 |
||||||
Net gains on sales, consolidation and deconsolidation of facilities |
(2,906 |
) |
(12 |
) |
||||
Loss from early extinguishment of debt |
8 |
11 |
||||||
Equity in earnings of unconsolidated affiliates, net of distributions received |
(9 |
) |
5 |
|||||
Amortization of debt discount and debt issuance costs |
21 |
25 |
||||||
Net gains from the sale of investments and long-lived assets |
(2 |
) |
(25 |
) |
||||
Other items, net |
(3 |
) |
(1 |
) |
||||
Changes in cash from operating assets and liabilities: |
||||||||
Accounts receivable |
183 |
31 |
||||||
Inventories and other current assets |
10 |
(49 |
) |
|||||
Income taxes |
821 |
(46 |
) |
|||||
Accounts payable, accrued expenses and other current liabilities |
123 |
(38 |
) |
|||||
Other long-term liabilities |
18 |
10 |
||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements |
(119 |
) |
(105 |
) |
||||
Net cash provided by operating activities |
2,378 |
1,550 |
||||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(601 |
) |
(543 |
) |
||||
Purchases of businesses or joint venture interests, net of cash acquired |
(524 |
) |
(110 |
) |
||||
Proceeds from sales of facilities and other assets |
4,965 |
38 |
||||||
Proceeds from sales of marketable securities and long-term investments |
25 |
40 |
||||||
Purchases of marketable securities and long-term investments |
(46 |
) |
(54 |
) |
||||
Other items, net |
(18 |
) |
(7 |
) |
||||
Net cash provided by (used in) investing activities |
3,801 |
(636 |
) |
|||||
Cash flows from financing activities: |
||||||||
Repayments of borrowings |
(2,212 |
) |
(1,478 |
) |
||||
Proceeds from borrowings |
16 |
1,368 |
||||||
Repurchases of common stock |
(672 |
) |
(90 |
) |
||||
Debt issuance costs |
- |
(16 |
) |
|||||
Distributions paid to noncontrolling interests |
(496 |
) |
(425 |
) |
||||
Proceeds from the sale of noncontrolling interests |
13 |
37 |
||||||
Purchases of noncontrolling interests |
(127 |
) |
(127 |
) |
||||
Advances from managed care payers |
342 |
- |
||||||
Repayments of advances from managed care payers |
(160 |
) |
- |
|||||
Other items, net |
(17 |
) |
13 |
|||||
Net cash used in financing activities |
(3,313 |
) |
(718 |
) |
||||
Net increase in cash and cash equivalents |
2,866 |
196 |
||||||
Cash and cash equivalents at beginning of period |
1,228 |
858 |
||||||
Cash and cash equivalents at end of period |
$ |
4,094 |
$ |
1,054 |
||||
Supplemental disclosures: |
||||||||
Interest paid, net of capitalized interest |
$ |
(555 |
) |
$ |
(589 |
) |
||
Income tax payments, net |
$ |
(308 |
) |
$ |
(212 |
) |
TENET HEALTHCARE CORPORATION |
||||||||||||||||
SEGMENT REPORTING |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(Dollars in millions) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
Net operating revenues: |
||||||||||||||||
Ambulatory Care |
$ |
1,139 |
$ |
941 |
$ |
3,275 |
$ |
2,788 |
||||||||
Hospital Operations and Services |
3,983 |
4,125 |
12,318 |
12,381 |
||||||||||||
Total |
$ |
5,122 |
$ |
5,066 |
$ |
15,593 |
$ |
15,169 |
||||||||
Equity in earnings of unconsolidated affiliates: |
||||||||||||||||
Ambulatory Care |
$ |
61 |
$ |
50 |
$ |
175 |
$ |
149 |
||||||||
Hospital Operations and Services |
1 |
1 |
7 |
6 |
||||||||||||
Total |
$ |
62 |
$ |
51 |
$ |
182 |
$ |
155 |
||||||||
Adjusted EBITDA: |
||||||||||||||||
Ambulatory Care |
$ |
439 |
$ |
370 |
$ |
1,280 |
$ |
1,080 |
||||||||
Hospital Operations and Services |
539 |
484 |
1,667 |
1,449 |
||||||||||||
Total |
$ |
978 |
$ |
854 |
$ |
2,947 |
$ |
2,529 |
||||||||
Adjusted EBITDA margins: |
||||||||||||||||
Ambulatory Care |
38.5 |
% |
39.3 |
% |
39.1 |
% |
38.7 |
% |
||||||||
Hospital Operations and Services |
13.5 |
% |
11.7 |
% |
13.5 |
% |
11.7 |
% |
||||||||
Total |
19.1 |
% |
16.9 |
% |
18.9 |
% |
16.7 |
% |
||||||||
Capital expenditures: |
||||||||||||||||
Ambulatory Care |
$ |
28 |
$ |
20 |
$ |
65 |
$ |
58 |
||||||||
Hospital Operations and Services |
188 |
156 |
536 |
485 |
||||||||||||
Total |
$ |
216 |
$ |
176 |
$ |
601 |
$ |
543 |
||||||||
TENET HEALTHCARE CORPORATION |
||||||||||||||||
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
Table #1 - Reconciliations of Net Income Available to Tenet Healthcare Corporation Common |
||||||||||||||||
Shareholders to Adjusted Net Income Available to Common Shareholders |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(Dollars in millions, except per share amounts) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
472 |
$ |
101 |
$ |
2,882 |
$ |
367 |
||||||||
Less: |
||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs |
(19 |
) |
(47 |
) |
(75 |
) |
(84 |
) |
||||||||
Litigation and investigation costs |
(9 |
) |
(14 |
) |
(18 |
) |
(28 |
) |
||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities |
348 |
(1 |
) |
2,906 |
12 |
|||||||||||
Loss from early extinguishment of debt |
- |
- |
(8 |
) |
(11 |
) |
||||||||||
Tax and noncontrolling interests impact of above items |
(130 |
) |
10 |
(755 |
) |
17 |
||||||||||
Adjusted net income available to common shareholders |
$ |
282 |
$ |
153 |
$ |
832 |
$ |
461 |
||||||||
Diluted earnings per share |
$ |
4.89 |
$ |
0.94 |
$ |
29.27 |
$ |
3.41 |
||||||||
Less: |
||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs |
(0.20 |
) |
(0.45 |
) |
(0.76 |
) |
(0.80 |
) |
||||||||
Litigation and investigation costs |
(0.09 |
) |
(0.13 |
) |
(0.19 |
) |
(0.27 |
) |
||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities |
3.60 |
(0.01 |
) |
29.50 |
0.12 |
|||||||||||
Loss from early extinguishment of debt |
- |
- |
(0.08 |
) |
(0.10 |
) |
||||||||||
Tax and noncontrolling interests impact of above items |
(1.35 |
) |
0.09 |
(7.67 |
) |
0.16 |
||||||||||
Adjusted diluted earnings per share |
$ |
2.93 |
$ |
1.44 |
$ |
8.47 |
$ |
4.30 |
||||||||
Weighted average basic shares outstanding (in thousands) |
95,665 |
101,544 |
97,505 |
101,869 |
||||||||||||
Weighted average dilutive shares outstanding (in thousands) |
96,652 |
104,425 |
98,518 |
105,021 |
TENET HEALTHCARE CORPORATION |
||||||||||||||||
Additional 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) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
472 |
$ |
101 |
$ |
2,882 |
$ |
367 |
||||||||
Less: |
||||||||||||||||
Net income available to noncontrolling interests |
(209 |
) |
(165 |
) |
(610 |
) |
(488 |
) |
||||||||
Net income |
681 |
266 |
3,492 |
855 |
||||||||||||
Income tax expense |
(241 |
) |
(79 |
) |
(1,101 |
) |
(243 |
) |
||||||||
Loss from early extinguishment of debt |
- |
- |
(8 |
) |
(11 |
) |
||||||||||
Other non-operating income, net |
35 |
4 |
89 |
8 |
||||||||||||
Interest expense |
(202 |
) |
(227 |
) |
(623 |
) |
(674 |
) |
||||||||
Operating income |
1,089 |
568 |
5,135 |
1,775 |
||||||||||||
Litigation and investigation costs |
(9 |
) |
(14 |
) |
(18 |
) |
(28 |
) |
||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities |
348 |
(1 |
) |
2,906 |
12 |
|||||||||||
Impairment and restructuring charges, and acquisition-related costs |
(19 |
) |
(47 |
) |
(75 |
) |
(84 |
) |
||||||||
Depreciation and amortization |
(209 |
) |
(224 |
) |
(625 |
) |
(654 |
) |
||||||||
Adjusted EBITDA |
$ |
978 |
$ |
854 |
$ |
2,947 |
$ |
2,529 |
||||||||
Net operating revenues |
$ |
5,122 |
$ |
5,066 |
$ |
15,593 |
$ |
15,169 |
||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues |
9.2 |
% |
2.0 |
% |
18.5 |
% |
2.4 |
% |
||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) |
19.1 |
% |
16.9 |
% |
18.9 |
% |
16.7 |
% |
TENET HEALTHCARE CORPORATION |
||||||||
Additional Supplemental Non-GAAP disclosures |
||||||||
Table #3 - Reconciliations of Net Cash Provided by Operating Activities to |
||||||||
Free Cash Flow and Adjusted Free Cash Flow |
||||||||
(Unaudited) |
||||||||
2024 |
||||||||
(Dollars in millions) |
Q3 |
YTD |
||||||
Net cash provided by operating activities |
$ |
1,045 |
$ |
2,378 |
||||
Purchases of property and equipment |
(216 |
) |
(601 |
) |
||||
Free cash flow |
$ |
829 |
$ |
1,777 |
||||
Net cash provided by investing activities |
$ |
667 |
$ |
3,801 |
||||
Net cash used in financing activities |
$ |
(498 |
) |
$ |
(3,313 |
) |
||
Net cash provided by operating activities |
$ |
1,045 |
$ |
2,378 |
||||
Less: |
||||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements |
(55 |
) |
(119 |
) |
||||
Adjusted net cash provided by operating activities |
1,100 |
2,497 |
||||||
Purchases of property and equipment |
(216 |
) |
(601 |
) |
||||
Adjusted free cash flow |
$ |
884 |
$ |
1,896 |
2023 |
||||||||
(Dollars in millions) |
Q3 |
YTD |
||||||
Net cash provided by operating activities |
$ |
503 |
$ |
1,550 |
||||
Purchases of property and equipment |
(176 |
) |
(543 |
) |
||||
Free cash flow |
$ |
327 |
$ |
1,007 |
||||
Net cash used in investing activities |
$ |
(169 |
) |
$ |
(636 |
) |
||
Net cash used in financing activities |
$ |
(214 |
) |
$ |
(718 |
) |
||
Net cash provided by operating activities |
$ |
503 |
$ |
1,550 |
||||
Less: |
||||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements |
(27 |
) |
(105 |
) |
||||
Adjusted net cash provided by operating activities |
530 |
1,655 |
||||||
Purchases of property and equipment |
(176 |
) |
(543 |
) |
||||
Adjusted free cash flow |
$ |
354 |
$ |
1,112 |
TENET HEALTHCARE CORPORATION |
||||||||||||||||
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
Table #4 - Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common |
||||||||||||||||
Shareholders to Outlook Adjusted Net Income Available to Common Shareholders |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Fourth Quarter 2024 |
FY 2024 |
|||||||||||||||
(Dollars in millions, except per share amounts) |
Low |
High |
Low |
High |
||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
211 |
$ |
311 |
$ |
3,093 |
$ |
3,193 |
||||||||
Less: |
||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements (1) |
(57 |
) |
(7 |
) |
(150 |
) |
(100 |
) |
||||||||
Net gains on sales, consolidation and deconsolidation of facilities (2) |
- |
- |
2,906 |
2,906 |
||||||||||||
Loss from early extinguishment of debt (2) |
- |
- |
(8 |
) |
(8 |
) |
||||||||||
Tax and noncontrolling interests impact of above items |
10 |
- |
(745 |
) |
(755 |
) |
||||||||||
Adjusted net income available to common shareholders |
$ |
258 |
$ |
318 |
$ |
1,090 |
$ |
1,150 |
||||||||
Diluted earnings per share |
$ |
2.20 |
$ |
3.24 |
$ |
31.56 |
$ |
32.58 |
||||||||
Less: |
||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements |
(0.59 |
) |
(0.07 |
) |
(1.53 |
) |
(1.02 |
) |
||||||||
Net gains on sales, consolidation and deconsolidation of facilities |
- |
- |
29.65 |
29.65 |
||||||||||||
Loss from early extinguishment of debt |
- |
- |
(0.08 |
) |
(0.08 |
) |
||||||||||
Tax and noncontrolling interests impact of above items |
0.10 |
- |
(7.60 |
) |
(7.70 |
) |
||||||||||
Adjusted diluted earnings per share |
$ |
2.69 |
$ |
3.31 |
$ |
11.12 |
$ |
11.73 |
||||||||
Weighted average basic shares outstanding (in thousands) |
95,000 |
95,000 |
97,000 |
97,000 |
||||||||||||
Weighted average dilutive shares outstanding (in thousands) |
96,000 |
96,000 |
98,000 |
98,000 |
(1) |
The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. |
(2) |
The Company does not generally forecast net gains on sales, consolidation and deconsolidation of facilities or losses from the early extinguishment of debt because the Company does not believe that it can forecast these items with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to transactions that have already occurred in 2024. |
TENET HEALTHCARE CORPORATION |
||||||||||||||||
Additional 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 2024 |
FY 2024 |
|||||||||||||||
(Dollars in millions) |
Low |
High |
Low |
High |
||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
211 |
$ |
311 |
$ |
3,093 |
$ |
3,193 |
||||||||
Less: |
||||||||||||||||
Net income available to noncontrolling interests |
(225 |
) |
(245 |
) |
(835 |
) |
(855 |
) |
||||||||
Income tax expense |
(84 |
) |
(114 |
) |
(1,185 |
) |
(1,215 |
) |
||||||||
Interest expense |
(207 |
) |
(197 |
) |
(830 |
) |
(820 |
) |
||||||||
Loss from early extinguishment of debt (2) |
- |
- |
(8 |
) |
(8 |
) |
||||||||||
Other non-operating income, net |
26 |
36 |
115 |
125 |
||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities (2) |
- |
- |
2,906 |
2,906 |
||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements (1) |
(57 |
) |
(7 |
) |
(150 |
) |
(100 |
) |
||||||||
Depreciation and amortization |
(195 |
) |
(215 |
) |
(820 |
) |
(840 |
) |
||||||||
Adjusted EBITDA |
$ |
953 |
$ |
1,053 |
$ |
3,900 |
$ |
4,000 |
||||||||
Net income available to Tenet Healthcare Corporation common shareholders |
$ |
211 |
$ |
311 |
$ |
3,093 |
$ |
3,193 |
||||||||
Net operating revenues |
$ |
5,007 |
$ |
5,207 |
$ |
20,600 |
$ |
20,800 |
||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues |
4.2 |
% |
6.0 |
% |
15.0 |
% |
15.4 |
% |
||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) |
19.0 |
% |
20.2 |
% |
18.9 |
% |
19.2 |
% |
(1) |
The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. |
(2) |
The Company does not generally forecast net gains on sales, consolidation and deconsolidation of facilities or losses from the early extinguishment of debt because the Company does not believe that it can forecast these items with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to transactions that have already occurred in 2024. |
TENET HEALTHCARE CORPORATION |
||||||||
Additional Supplemental Non-GAAP disclosures |
||||||||
Table #6 - Reconciliations of Outlook Net Cash Provided by Operating Activities |
||||||||
to Outlook Free Cash Flow and Outlook Adjusted Free Cash Flow |
||||||||
(Unaudited) |
||||||||
FY 2024 |
||||||||
(Dollars in millions) |
Low |
High |
||||||
Net cash provided by operating activities |
$ |
1,775 |
$ |
2,125 |
||||
Purchases of property and equipment |
(800 |
) |
(900 |
) |
||||
Free cash flow |
$ |
975 |
$ |
1,225 |
||||
Net cash provided by operating activities |
$ |
1,775 |
$ |
2,125 |
||||
Less: |
||||||||
Payments for restructuring charges, acquisition-related costs and litigation costs and settlements (1) |
(175 |
) |
(125 |
) |
||||
Adjusted net cash provided by operating activities |
1,950 |
2,250 |
||||||
Purchases of property and equipment |
(800 |
) |
(900 |
) |
||||
Adjusted free cash flow (2) |
$ |
1,150 |
$ |
1,350 |
(1) |
The figures shown represent the Company's estimate for restructuring payments plus the actual year-to-date payments for restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast payments for acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. |
(2) |
The Company's definition of Adjusted Free Cash Flow does not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, and (ii) distributions paid to noncontrolling interests. |
Investor Contact
Will McDowell
469-893-2387
[email protected]
Media Contact
Robert Dyer
469-893-2640
[email protected]