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Tenet Healthcare 8-K Report, Financial Results (Apr 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 30, 2024
Period End
April 30, 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 April 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Tenet Healthcare Corporation (NYSE: THC) reported first quarter 2024 results in a press release furnished as Exhibit 99.1 to this Form 8-K, dated April 30, 2024.

Net income available to Tenet common shareholders from continuing operations was $2.151 billiona, or $21.38 per diluted share, versus $143 million, or $1.32 per diluted share, in the prior-year quarter. That figure includes a pre-tax gain of $2.5 billion ($1.856 billion after-tax, or $18.45 per diluted share), primarily tied to the divestiture of three South Carolina hospitals and six California hospitals. Excluding such items, adjusted diluted earnings per share from continuing operations were $3.22, compared with $1.42 a year earlier.

Operating performance also improved. Consolidated Adjusted EBITDA was $1.024 billionb, up from $832 million, and the company cited strong same-hospital admission growth, favorable payer mix, and improved contract labor costs. The quarter included an $88 million favorable pre-tax impact from additional Michigan Medicaid supplemental revenues, about half of which related to the last three months of 2023.

Cash flow from operations rose to $586 millionc from $449 million, and free cash flow reached $346 million. Net debt to Adjusted EBITDA improved to 2.79x from 3.89x at December 31, 2023, aided by the retirement of $2.1 billion of 4.875% senior secured first lien notes due 2026. Tenet raised its full-year 2024 Adjusted EBITDA outlook to $3.5 billion to $3.7 billion, a $215 million increase, and guided second-quarter 2024 Adjusted EBITDA to $835 million to $885 million.

The full-year outlook for net operating revenues is $20.0 billion to $20.4 billiond, and for adjusted diluted earnings per share from continuing operations $8.37 to $9.41. The outlook reflects the completed hospital sales and includes an estimated $687 million of income tax payments tied to those gains.

02—Key points

Key Highlights

  1. Q1 2024 net income available to common shareholders from continuing operations was $2.151 billion ($21.38 per diluted share), including an after-tax gain of $1.856 billion ($18.45 per diluted share) from hospital divestitures.
  2. Adjusted diluted EPS from continuing operations was $3.22, versus $1.42 in Q1 2023.
  3. Consolidated Adjusted EBITDA rose to $1.024 billion from $832 million, with Ambulatory Care Adjusted EBITDA at $394 million and Hospital Adjusted EBITDA at $630 million.
  4. Free cash flow was $346 million, up from $214 million, and the company repurchased 2,811,234 shares for $278 million.
  5. Net debt to Adjusted EBITDA improved to 2.79x from 3.89x at December 31, 2023, after retiring $2.1 billion of 4.875% senior secured first lien notes due 2026, which Tenet expects to reduce annual cash interest by $102 million.
  6. Full-year 2024 Adjusted EBITDA outlook was raised to $3.5 billion to $3.7 billion, a $215 million increase, and second-quarter 2024 Adjusted EBITDA is guided to $835 million to $885 million.
  7. The Q1 results included an $88 million favorable pre-tax impact from additional Michigan Medicaid supplemental revenues, about half of which related to the last three months of 2023.

03—Questions

Frequently Asked Questions

  1. How much of the first-quarter 2024 net income came from one-time gains?

    Net income from continuing operations available to common shareholders was $2.151 billion, and the filing states it included a pre-tax gain of $2.5 billion ($1.856 billion after-tax, or $18.45 per diluted share), primarily from the divestiture of three South Carolina hospitals and six California hospitals.

  2. What underlying operating improvement did Tenet report?

    Adjusted EBITDA increased to $1.024 billion from $832 million, reflecting strong same-hospital admission growth, favorable payer mix, and improved contract labor costs, partially offset by higher medical fees. Adjusted diluted EPS from continuing operations was $3.22 versus $1.42.

  3. Did the first quarter include any unusual items that boosted EBITDA?

    Yes. The company recognized an $88 million favorable pre-tax impact from additional Medicaid supplemental revenues in Michigan, of which approximately half related to the last three months of 2023. The prior-year quarter included $27 million of cybersecurity insurance proceeds.

  4. How did Tenet's balance sheet and cash flow change?

    Operating cash flow was $586 million versus $449 million, and free cash flow was $346 million versus $214 million. Net debt to Adjusted EBITDA fell to 2.79x from 3.89x at December 31, 2023, following the retirement of $2.1 billion of 4.875% senior secured first lien notes due 2026.

  5. What is the updated 2024 guidance?

    Full-year 2024 Adjusted EBITDA is now expected to be $3.5 billion to $3.7 billion, a $215 million increase. Net operating revenues are outlined at $20.0 billion to $20.4 billion, and adjusted diluted EPS from continuing operations at $8.37 to $9.41. The outlook reflects an estimated $687 million of income tax payments tied to the hospital sale gains.

04—Continue

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