Tenet Reports Fourth Quarter and FY 2022 Results; Provides 2023 Financial Outlook
DALLAS , February 09 /Businesswire/ - Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended December 31, 2022.
"We closed the year with a strong fourth quarter and demonstrated operating discipline in a dynamic environment while providing patient-centered high quality care," said Saum Sutaria, M.D., Chief Executive Officer of Tenet. "Our momentum going into 2023 positions us for continued growth as we remain focused on expanding our industry-leading ambulatory business and investing in technology, innovation, and talent."
Tenet’s results for fourth quarter 2022 versus fourth quarter 2021 are as follows:
|
Three Months Ended
|
Twelve Months
|
||
($ in millions, except per share results) |
2022 |
2021 |
2022 |
2021 |
Net operating revenues |
$4,990 |
$4,856 |
$19,174 |
$19,485 |
Net income available to Tenet common shareholders from continuing operations |
$102 |
$250 |
$410 |
$915 |
Net income available to Tenet common shareholders from continuing operations per diluted share |
$0.92 |
$2.30 |
$3.78 |
$8.43 |
Adjusted EBITDA1 excluding grant income |
$857 |
$877 |
$3,275 |
$3,278 |
Adjusted EBITDA1 |
$897 |
$1,017 |
$3,469 |
$3,483 |
Adjusted diluted earnings per share from continuing operations1 |
$1.96 |
$2.70 |
$6.80 |
$7.58 |
Balance Sheet and Cash Flows
Ambulatory Care (Ambulatory) Segment
Tenet’s Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of December 31, 2022, USPI had interests in 442 ambulatory surgery centers (300 consolidated) and 24 surgical hospitals (eight consolidated) in 35 states. Results for the year ended December 31, 2021 included USPI’s imaging centers (realigned under the Hospital segment as of April 1, 2021) and its urgent care centers (sold in April 2021). For all periods prior to June 30, 2022, the Company owned 95% of the voting stock of USPI.
|
Three Months Ended
|
Twelve Months
|
||
Ambulatory segment results ($ in millions) |
2022 |
2021 |
2022 |
2021 |
Revenues |
|
|
|
|
Net operating revenues |
$933 |
$742 |
$3,248 |
$2,718 |
Same-facility system-wide net patient service revenues2 |
$1,763 |
$1,712 |
$6,241 |
$5,968 |
Volume Changes versus the Prior-Year Period |
|
|
|
|
Same-facility system-wide surgical cases2 |
0.7% |
4.4% |
2.0% |
15.6% |
Same-facility system-wide surgical cases on same-business day basis2 |
0.7% |
6.1% |
1.6% |
16.6% |
Adjusted EBITDA, Margins and Noncontrolling Interest (NCI) |
|
|
|
|
Adjusted EBITDA excluding grant income |
$407 |
$343 |
$1,323 |
$1,134 |
Adjusted EBITDA |
$407 |
$371 |
$1,327 |
$1,197 |
Adjusted EBITDA margin excluding grant income |
43.6% |
46.2% |
40.7% |
41.7% |
Adjusted EBITDA margin |
43.6% |
50.0% |
40.9% |
44.0% |
Adjusted EBITDA less facility-level NCI excluding grant income |
$262 |
$220 |
$865 |
$734 |
Adjusted EBITDA less facility-level NCI |
$262 |
$236 |
$867 |
$770 |
Adjusted EBITDA less total NCI excluding grant income |
$262 |
$214 |
$856 |
$715 |
Adjusted EBITDA less total NCI |
$262 |
$229 |
$858 |
$749 |
Hospital Operations and Other (Hospital) Segment
Tenet’s Hospital business segment is primarily comprised of acute care and specialty hospitals, imaging centers, ancillary outpatient facilities, micro-hospitals and physician practices. Effective April 1, 2021, the Company’s imaging centers that were previously operated under USPI were realigned under the Hospital segment.
|
Three Months Ended
|
Twelve Months
|
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Hospital segment results ($ in millions) |
2022 |
2021 |
2022 |
2021 |
Revenues |
|
|
|
|
Net operating revenues (prior to inter-segment eliminations) |
$3,840 |
$3,910 |
$15,061 |
$15,982 |
Grant income |
$40 |
$112 |
$190 |
$142 |
Same-hospital net patient service revenues3 |
$3,486 |
$3,545 |
$13,703 |
$14,043 |
Same-Hospital Volume Changes versus the Prior-Year Period |
|
|
|
|
Admissions |
0.5% |
(3.9)% |
(4.5)% |
(0.1)% |
Adjusted admissions4 |
2.9% |
—% |
(1.2)% |
2.4% |
Outpatient visits (including outpatient ER visits) |
(2.8)% |
8.8% |
(4.8)% |
15.7% |
Emergency Room visits (inpatient and outpatient) |
7.7% |
16.3% |
4.8% |
8.9% |
Hospital surgeries |
(2.5)% |
(1.4)% |
(3.7)% |
6.1% |
Adjusted EBITDA |
|
|
|
|
Adjusted EBITDA excluding grant income |
$360 |
$440 |
$1,587 |
$1,789 |
Adjusted EBITDA |
$400 |
$552 |
$1,777 |
$1,931 |
Adjusted EBITDA margin excluding grant income |
9.4% |
11.3% |
10.5% |
11.2% |
Adjusted EBITDA margin |
10.4% |
14.1% |
11.8% |
12.1% |
Conifer Segment
Tenet’s Conifer business segment provides comprehensive end-to-end and focused-point business process services, including hospital and physician revenue cycle management, patient communications and engagement support and value-based care solutions to hospitals, health systems, physician practices, employers, and other clients.
|
Three Months Ended
|
Twelve Months Ended
|
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Conifer segment results ($ in millions) |
2022 |
2021 |
2022 |
2021 |
Net operating revenues |
$326 |
$324 |
$1,316 |
$1,267 |
Adjusted EBITDA |
$90 |
$94 |
$365 |
$355 |
Adjusted EBITDA margin |
27.6% |
29.0% |
27.7% |
28.0% |
2023 Outlook1
Tenet’s Outlook for full year 2023 (consolidated and by segment) and first quarter 2023 follows:
CONSOLIDATED ($ in millions, except per share amounts) |
FY 2023 Outlook |
First Quarter 2023 Outlook |
Net operating revenues |
$19,700 to $20,100 |
$4,700 to $4,900 |
Income from continuing operations available to Tenet common stockholders |
$420 to $585 |
$90 to $125 |
Adjusted EBITDA |
$3,160 to $3,360 |
$750 to $800 |
Adjusted EBITDA margin |
16.0% to 16.7% |
16.0% to 16.3% |
Diluted income per common share from continuing operations |
$3.89 to $5.43 |
$0.82 to $1.14 |
Adjusted net income from continuing operations |
$505 to $630 |
$110 to $135 |
Adjusted diluted earnings per share from continuing operations |
$4.68 to $5.85 |
$1.00 to $1.23 |
Equity in earnings of unconsolidated affiliates |
$200 to $220 |
$35 to $45 |
Depreciation and amortization |
$850 to $875 |
$210 to $220 |
Interest expense |
$870 to $880 |
$215 to $225 |
Income tax expense5 |
$270 to $300 |
$60 to $70 |
Net income available to NCI |
$620 to $670 |
$135 to $155 |
Weighted average diluted common shares |
~107 million |
~107 million |
NCI cash distributions |
$540 to $580 |
|
Net cash provided by operating activities |
$1,700 to $2,000 |
|
Adjusted net cash provided by operating activities |
$1,825 to $2,075 |
|
Capital expenditures |
$625 to $675 |
|
Free cash flow |
$1,075 to $1,325 |
|
Adjusted free cash flow – continuing operations |
$1,200 to $1,400 |
|
Ambulatory Segment ($ in millions) |
FY 2023 Outlook |
Net operating revenues |
$3,550 to $3,650 |
Adjusted EBITDA |
$1,415 to $1,475 |
Total NCI (Facility level) |
$510 to $540 |
Adjusted EBITDA less total NCI |
$905 to $935 |
Changes versus prior year6: |
|
Surgical cases volumes |
Up 2.0% to 3.0% |
Net revenues per surgical case |
Up 2.0% to 3.0% |
Hospital Segment ($ in millions) |
FY 2023 Outlook |
Net operating revenues (prior to inter-segment eliminations) |
$15,315 to $15,565 |
Adjusted EBITDA |
$1,415 to $1,545 |
NCI |
$20 to $35 |
Changes versus prior year6: |
|
Inpatient admissions |
Up 1.0% to 3.0% |
Adjusted admissions |
Up 2.0% to 4.0% |
Conifer Segment ($ in millions) |
FY 2023 Outlook |
Net operating revenues |
$1,285 to $1,335 |
Adjusted EBITDA |
$330 to $340 |
NCI |
$90 to $95 |
Management’s Webcast Discussion of Results
Tenet management will discuss the Company’s fourth quarter 2022 results in a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 9, 2023. 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 February 9, 2023.
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, especially with regards to developments related to COVID-19. 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 impact of the COVID-19 pandemic and other factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2021, subsequent Form 10-Q filings 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 or has ownership interests in more than 465 ambulatory surgery centers and surgical hospitals. We also operate 61 acute care and specialty hospitals, approximately 110 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.