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Tenet Healthcare 8-K Report, Financial Results (Feb 8, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 8, 2024
Period End
February 8, 2024
Security
THC
In the record · 2016–202610-K1110-Q338-K176

THC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 176 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jan ’19Jan ’19
  2. Deal closed8-K · Dec ’20Dec ’20
  3. Leadership change8-K · Oct ’22Oct ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed February 8, 2024. Cited figures are marked; the original filing is the authoritative source.

Tenet Healthcare Corporation reported fourth quarter 2023 results in a press release furnished under Item 2.02 of Form 8-K.

Net income available to Tenet common shareholders from continuing operations was $244 milliona, or $2.30 per diluted share, versus $102 million, or $0.92 per diluted share, in the fourth quarter of 2022. Consolidated Adjusted EBITDA was $1.012 billion for the quarter, compared with $897 million a year earlier, and full-year 2023 Adjusted EBITDA was $3.541 billion versus $3.469 billion in 2022. Net operating revenues for the full year 2023 were $20.548 billion, up from $19.174 billion.

The company's Ambulatory Care segment (USPI) posted fourth-quarter Adjusted EBITDA of $464 millionb, and the Hospital Operations and Services segment posted $548 million. Cash flow from operations for 2023 was $2.374 billion, and free cash flow from continuing operations was $1.623 billion. The net debt to Adjusted EBITDA ratio improved to 3.89x from 4.10x.

The company repurchased $200 millionc of common stock during 2023. Looking ahead, Tenet provided 2024 guidance with full-year Adjusted EBITDA of $3.285 billion to $3.485 billion.

The outlook reflects the completed sale of three South Carolina hospitals to Novant Health for approximately $2.4 billiond, and assumes the pending sale of four California hospitals to UCI Health for approximately $975 million closes on March 31, 2024. The company estimates these sales will favorably affect 2024 income tax expense by about $190 million through lower interest expense limitations.

02—Key points

Key Highlights

  1. Q4 2023 net income available to common shareholders from continuing operations was $244 million, or $2.30 per diluted share, up from $102 million, or $0.92 per diluted share, in Q4 2022.
  2. Q4 2023 Adjusted diluted EPS from continuing operations was $2.68, versus $1.96 in Q4 2022; full-year 2023 was $6.98 versus $6.80.
  3. Q4 2023 Consolidated Adjusted EBITDA was $1.012 billion, compared with $897 million in Q4 2022.
  4. Ambulatory Care Q4 2023 same-facility system-wide surgical cases rose 3.9%, and Hospital same-hospital admissions rose 1.0%.
  5. Full-year 2023 free cash flow from continuing operations was $1.623 billion, versus $321 million in 2022; net debt to Adjusted EBITDA improved to 3.89x from 4.10x.
  6. 2024 guidance calls for net operating revenues of $19.9 billion to $20.3 billion and Adjusted EBITDA of $3.285 billion to $3.485 billion.
  7. Portfolio changes: South Carolina hospital sale to Novant Health (about $2.4 billion) completed February 1, 2024; California hospital sale to UCI Health (about $975 million) expected to close in spring 2024.

03—Questions

Frequently Asked Questions

  1. How did Tenet perform in the fourth quarter of 2023?

    Net operating revenues were $5.379 billion, up from $4.990 billion. Net income available to common shareholders from continuing operations was $244 million, or $2.30 per diluted share, compared with $102 million, or $0.92 per diluted share, a year earlier. Consolidated Adjusted EBITDA reached $1.012 billion, up from $897 million.

  2. What is the company's 2024 financial outlook?

    For full-year 2024, Tenet expects net operating revenues of $19.9 billion to $20.3 billion, Adjusted EBITDA of $3.285 billion to $3.485 billion, and Adjusted diluted EPS from continuing operations of $5.76 to $6.90. The first-quarter 2024 outlook calls for Adjusted EBITDA of $800 million to $850 million.

  3. How are the recent hospital divestitures expected to affect Tenet?

    Tenet completed the sale of three South Carolina hospitals to Novant Health for about $2.4 billion, or about $1.75 billion after tax, on February 1, 2024. It also agreed to sell four California hospitals to UCI Health for about $975 million, or about $800 million after tax, with closing expected in spring 2024. The company estimates the pre-tax book gains will reduce interest expense limitations and lower 2024 income tax expense by about $190 million.

  4. How strong is Tenet's cash generation and balance sheet?

    Cash flow from operating activities was $2.374 billion in 2023, compared with $1.083 billion in 2022. Free cash flow from continuing operations was $1.623 billion. The net debt to Adjusted EBITDA ratio was 3.89x at December 31, 2023, down from 4.10x a year earlier. Tenet repurchased $200 million of common stock during 2023.

  5. What drove segment performance in the fourth quarter?

    Ambulatory Care net operating revenues rose 15.4% to $1.077 billion, and its Adjusted EBITDA rose 14.0% to $464 million, driven by same-facility surgical case growth, acquisitions, de novo facilities and improved pricing. Hospital Operations and Services net operating revenues rose 6.0% to $4.302 billion, and its Adjusted EBITDA was $548 million, compared with $490 million a year earlier. Fourth-quarter results included a $52 million favorable pre-tax impact from Medicaid supplemental revenue program adjustments in California and Texas.

04—Continue

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