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Tenet Healthcare 8-K Report, Financial Results (Oct 29, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed October 29, 2024
Period End
October 29, 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 October 29, 2024. Cited figures are marked; the original filing is the authoritative source.

Tenet Healthcare Corporation (NYSE: THC) reported third quarter 2024 results on October 29, 2024, furnished under Item 2.02 via a press release (Exhibit 99.1) that also raises its 2024 Adjusted EBITDA outlook.

Net income available to Tenet common shareholders was $472 milliona, or $4.89 per diluted share, versus $101 million, or $0.94 per diluted share, in the third quarter of 2023. That result includes a pre-tax gain of $348 million ($209 million after-tax, or $2.16 per diluted share), primarily tied to the sale of the Company's 70% majority interest in Brookwood Baptist Health. Adjusted diluted earnings per share was $2.93, compared with $1.44 a year earlier, and Consolidated Adjusted EBITDA was $978 million, up from $854 million.

Net operating revenues were $5.12 billionb for the quarter versus $5.07 billion a year earlier. Ambulatory Care Adjusted EBITDA rose to $439 million from $370 million, and Hospital Operations and Services Adjusted EBITDA rose to $539 million from $484 million. Cash flow improved sharply: nine-month net cash provided by operating activities was $2.378 billion versus $1.550 billion, and free cash flow was $1.777 billion versus $1.007 billion.

The net debt to Adjusted EBITDA ratio fell to 2.22x at September 30, 2024, from 2.61x at June 30, 2024. The Company repurchased 795,112 shares for $124 millionc in the quarter.

Full-year 2024 Adjusted EBITDA outlook is now $3.9 billion to $4.0 billiond, a $50 million increase. The outlook reflects the completed hospital divestitures in South Carolina, California, and Alabama, and includes an estimated $875 million of income tax payments tied to the related gains, of which about $175 million had been paid as of September 30, 2024.

02—Key points

Key Highlights

  1. Q3 2024 net income available to common shareholders of $472 million ($4.89 per diluted share), including a $209 million after-tax gain ($2.16 per diluted share) mainly from the Brookwood Baptist Health sale.
  2. Adjusted diluted EPS of $2.93 in Q3 2024, versus $1.44 in Q3 2023; Consolidated Adjusted EBITDA of $978 million, versus $854 million.
  3. Raised FY 2024 Adjusted EBITDA outlook to $3.9 billion to $4.0 billion, a $50 million increase; FY 2024 Adjusted diluted EPS outlook is $11.12 to $11.73.
  4. Nine-month free cash flow of $1.777 billion versus $1.007 billion a year earlier, supported by operating cash flow of $2.378 billion.
  5. Net debt to Adjusted EBITDA improved to 2.22x at September 30, 2024, from 2.61x at June 30, 2024 and 3.89x at December 31, 2023.
  6. Ambulatory Care Adjusted EBITDA of $439 million (up from $370 million), with same-facility surgical cases up 1.0% and net revenue per case up 7.6%.
  7. Hospital segment Adjusted EBITDA of $539 million (up from $484 million), with admissions up 5.2% on a same-hospital basis; repurchased 5,596,573 shares for $672 million year-to-date.

03—Questions

Frequently Asked Questions

  1. Why did reported net income per share rise so sharply in Q3 2024?

    Results included a pre-tax gain of $348 million ($209 million after-tax, or $2.16 per diluted share), primarily from the sale of the Company's 70% majority interest in Brookwood Baptist Health. Adjusted diluted EPS, which excludes such items, was $2.93 versus $1.44 in Q3 2023.

  2. How did the full-year 2024 outlook change?

    The FY 2024 Adjusted EBITDA outlook is now $3.9 billion to $4.0 billion, a $50 million increase. The FY 2024 net operating revenues outlook is $20.6 billion to $20.8 billion, and Adjusted diluted EPS is expected at $11.12 to $11.73.

  3. What tax obligations affect cash flow after the hospital sales?

    The outlook includes an estimate of approximately $875 million of net income tax payments associated with the gains on the South Carolina, California, and Alabama hospital sales, of which approximately $175 million had been paid as of September 30, 2024. The Company also noted the anticipated payment of approximately $175 million of income taxes tied to the Brookwood sale.

  4. How is the Company's balance sheet and cash generation trending?

    Cash and cash equivalents rose to $4.094 billion at September 30, 2024, from $1.228 billion at December 31, 2023. Net debt to Adjusted EBITDA was 2.22x, down from 2.61x at June 30, 2024. Free cash flow for the nine months was $1.777 billion.

  5. Which segments drove the quarter?

    Ambulatory Care (USPI) Adjusted EBITDA rose to $439 million from $370 million, aided by net revenue per case growth and acquisitions. Hospital Operations and Services Adjusted EBITDA rose to $539 million from $484 million, driven by same-hospital admissions growth, favorable payer mix, and increased Michigan supplemental revenues, partly offset by higher medical fees and divestitures.

04—Continue

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