Tenet Issues Outlook for 2012 Adjusted EBITDA
January 09 2012 - 8:00AM
Business Wire
Tenet Healthcare Corporation (NYSE:THC) issued its Outlook for
2012 Adjusted EBITDA in a range of $1.200 billion to $1.300
billion. Tenet intends to provide a detailed review of its 2012
Outlook when it releases fourth quarter earnings on February 28,
2012.
“We are pleased to communicate our expectations for continued
earnings growth in 2012,” said Trevor Fetter, president and chief
executive officer. “Our core strategies for growing and deepening
our physician relationships, achieving additional cost efficiencies
through our Medicare Performance Initiative, acquiring outpatient
centers, and growing our Conifer services business are all working
effectively. These growth strategies have more than offset
pressures on government reimbursement and other effects of a soft
economic environment.”
The Company is in the process of finalizing its year-end
financial results for 2011. At this point, it remains unresolved
whether Tenet’s fourth quarter will include the recognition of
certain significant favorable pending reimbursement settlements.
Fourth quarter 2011 results will be adversely impacted, relative to
prior expectations, by the deferred recognition of $12 million in
revenues related to Medicare Healthcare Information Technology
(“HIT”) incentive payments due to a change in accounting method and
$7 million related to a decline in interest rates at quarter-end,
which unfavorably impacted certain discounted liabilities. Neither
of these two adverse items will impact cash. The Company said
achieving the 2011 Outlook range for Adjusted EBITDA of $1.175
billion to $1.275 billion requires recording the pending
reimbursement settlements in the fourth quarter as discussed above.
Results for the fourth quarter of 2011 also will reflect a slight
increase in admissions and approximately flat outpatient visits
relative to the fourth quarter of 2010 and the recording of a $28
million net favorable impact related to the California Provider Fee
Six-Month program which received all necessary approvals prior to
year end.
The 2012 Adjusted EBITDA Outlook range of $1.200 billion to
$1.300 billion includes the adverse impact from the aforementioned
accounting change deferring the recognition in income of certain
HIT incentive payments. The HIT incentives expected to be
recognized in income in 2012 are approximately $31 million less
than the amount that would have been recognized in 2012 prior to
the accounting change. This does not affect the timing of cash
receipt of these incentive payments.
The Company is confirming the prior Outlook range for Adjusted
EBITDA in 2013 of $1.335 billion to $1.535 billion. The Outlook
range for 2015, which includes the increased coverage of the
uninsured pursuant to the Affordable Care Act, is reconfirmed at
$1.75 billion to $2.25 billion.
Tenet Management To Speak at Investor Conference
As previously announced, Tenet management will discuss the
topics addressed in this press release later today in a webcast
scheduled to begin at 2:30 p.m. (ET). This webcast may be accessed
through Tenet’s website at www.tenethealth.com/investors. The
Company expects to announce its final results for the fourth
quarter and full year 2011 on February 28, 2012.
This press release includes certain non-GAAP measures, such as
Adjusted EBITDA. A reconciliation of Adjusted EBITDA to net income
attributable to common shareholders is provided at the end of this
release.
Tenet Healthcare Corporation is a health care services company
whose subsidiaries and affiliates own and operate acute care
hospitals, ambulatory surgery centers and diagnostic imaging
centers. Tenet’s hospitals and related healthcare facilities are
committed to providing high quality care to patients in the
communities they serve. For more information, please visit
www.tenethealth.com.
Some of the statements in this release may constitute
forward-looking statements. Such forward-looking statements are
based on our current expectations and could be
affected by numerous factors and are subject to various
risks and uncertainties discussed
in our filings with the Securities and Exchange
Commission, including our annual report on Form 10-K for
the year ended Dec. 31, 2010, our quarterly reports on Form 10-Q,
and periodic reports on Form 8-K. Do not rely on any
forward-looking statement, as we cannot predict or control many of
the factors that ultimately may affect our ability to achieve the
results estimated. We make no promise to update any forward-looking
statement, whether as a result of changes in underlying factors,
new information, future events or otherwise.
Tenet uses its company web site to provide
important information to investors about the company including the
posting of important announcements regarding financial performance
and corporate developments.
TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP
Disclosures
Table #1 - Reconciliation of Outlook Adjusted EBITDA
to Outlook Net Income Attributable to Tenet Healthcare
Corporation Common Shareholders for Years Ending December
31, 2011, 2012, 2013 and 2015 (Unaudited)
(Dollars in Millions) 2011 2012 2013 2015 Low High
Low High Low High Low High Net Income Attributable to Common
Shareholders $ 64 $ 153 $ 201 $ 272 $ 306 $ 451 $ 578 $ 911 Less:
Net income (loss) from noncontrolling interests (15 ) (10 ) (15 )
(10 ) (15 ) (10 ) (15 ) (10 ) Preferred stock dividends (24 ) (24 )
(18 ) (18 ) 0 0 0 0 Loss from discontinued operations, net of tax
(15 ) (10 ) (10 ) (5 ) (5 )
0 (5 ) 0 Income from continuing
operations 118 197 244 305 326 461 598 921 Income tax expense
(62 ) (113 ) (156 ) (195 ) (209
) (294 ) (382 ) (589 ) Income from continuing
operations, before income taxes 180 310 400 500 535 755 980 1,510
Investment earnings 5 5 0 0 0 0 0 0 Interest expense (385 ) (365 )
(390 ) (370 ) (390 ) (340 ) (360 ) (280 ) Net loss from
extinguishment of long-term debt (120 ) (115 )
0 0 0 0 0
0 Operating income 680 785 790 870 925 1,095
1,340 1,790 Litigation and investigation costs (60 ) (55 ) 0 0 0 0
0 0 Impairment of long-lived assets and goodwill, and restructuring
charges (25 ) (20 ) 0 0 0 0 0 0 Depreciation and amortization
(410 ) (415 ) (410 ) (430 ) (410
) (440 ) (410 ) (460 )
Adjusted EBITDA
$ 1,175 $ 1,275 $
1,200 $ 1,300 $
1,335 $ 1,535 $
1,750 $ 2,250 Table #2
- Reconciliation of Outlook Adjusted EBITDA to Outlook
Normalized Net Income Attributable to Tenet Healthcare
Corporation Common Shareholders for Years Ending December
31, 2011, 2012, 2013 and 2015 (Unaudited)
(Dollars in Millions except per share amounts) 2011
2012 2013 2015 Low High Low High Low High Low High
Adjusted
EBITDA (from Table #1) $ 1,175 $ 1,275 $ 1,200 $ 1,300 $ 1,335
$ 1,535 $ 1,750 $ 2,250 Depreciation and amortization (410 )
(415 ) (410 ) (430 ) (410 ) (440 ) (410 ) (460 ) Interest expense
(385 ) (365 ) (390 ) (370 ) (390
) (340 ) (360 ) (280 ) Normalized income from
continuing operations before income taxes $ 380 $ 495 $ 400 $ 500 $
535 $ 755 $ 980 $ 1,510 Income tax expense (a) (140 )
(185 ) (156 ) (195 ) (209 ) (294 )
(382 ) (589 ) Normalized income from continuing
operations (a) $ 240 $ 310 $ 244 $ 305 $ 326 $ 461 $ 598 $ 921
Preferred stock dividends (24 ) (24 ) (18 ) (18 ) 0 0 0 0 Net
income attributable to noncontrolling interests (15 )
(10 ) (15 ) (10 ) (15 ) (10 )
(15 ) (10 ) Normalized net income attributable to common
shareholders (a) $ 201 $ 276 $ 211 $ 277
$ 311 $ 451 $ 583 $ 911
Weighted average shares outstanding (in millions)
544 (b)
544 (b)
489 (b)
489 (b)
491 491 503 503
Normalized earnings per share - continuing
operations (a)
0.41 0.55 0.47 0.60 0.63 0.92 1.16 1.81 (a) Uses tax rate of
39 percent excluding unusual adjustments. (b) An additional 59
million shares are included as our mandatory convertible preferred
stock is dilutive at this level of earnings and the preferred stock
dividends are excluded for earnings per share computation purposes.
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