(Source: Business Wire)
Tenet Healthcare Corporation (NYSE: THC) today announced revisions to
its outlook for 2009 Adjusted EBITDA to a new range of $900 million to
$950 million. The prior outlook range was $810 million to $875 million.
This new range corresponds to an outlook for net income attributable to
shareholders in a range of $76 million to $141 million. Adjusted EBITDA
is a non-GAAP term defined and reconciled to GAAP net income below.
"Our third quarter results through August were stronger than anticipated
and extended the improving trend evident in our second quarter," said
Trevor Fetter, president and chief executive officer. "Since the summer
months typically represent a seasonal slowdown in our business, this
strength warrants raising our outlook for the balance of the year. In
the last few months we have seen trends in payer and patient mix, bad
debt expense, and volume growth that are favorable relative to our prior
expectations. Our pricing trends remain positive and consistent with
prior expectations."
Adjusted EBITDA in the third and fourth quarters of 2009 is expected to
be approximately equal. The Company's revised 2009 outlook continues to
make allowances for potential deterioration in bad debt expense and
adverse trends in business mix in the remaining months of 2009.
Additional details on revised 2009 outlook assumptions are provided in
Table #1 below.
The Company also provided interim admissions statistics for the period
July 1 to September 8, a time period which represents the first complete
10 weeks, or 70 days, of the third quarter. Comparing volumes in 2009 to
the same 70-day period of 2008: admissions grew by 0.2 percent, paying
admissions were flat, and commercial managed care admissions declined by
4.1 percent. Charity and uninsured admissions grew by 3.5 percent.
For the period July 1 to August 31, total same-hospital outpatient
visits grew by 3.8 percent, paying outpatient visits grew by 4.4
percent, and commercial managed care outpatient visits increased by 0.8
percent. Charity and uninsured outpatient visits declined by 1.0
percent. The July 1 to August 31 time period included 44 weekdays and 18
weekend days in both 2008 and 2009. The reporting period for outpatient
visits differs from the time period for inpatient data due to the
complexity of assembling interim outpatient volume data related to our
various non-hospital outpatient businesses.
The Company expects Adjusted Free Cash Flow from Continuing Operations
to be in the range of negative $45 million to positive $40 million and
Adjusted Net Cash Provided by Operating Activities from Continuing
Operations of $380 million to $440 million for the full year 2009. The
Company's year end cash balance is expected to be in the range of $500
million to $635 million. Adjusted Free Cash Flow from Continuing
Operations and Adjusted Net Cash Provided by Operating Activities from
Continuing Operations are non-GAAP terms defined and reconciled to GAAP
net cash provided by operating activities in Table # 7 below.
Tenet Healthcare Corporation, through its subsidiaries, owns and
operates acute care hospitals and related ancillary health care
businesses, which include ambulatory surgery centers and diagnostic
imaging centers. Tenet's hospitals and related health care facilities
are committed to providing high quality care to patients in the
communities we serve. For more information, please visit www.tenethealth.com.
Some of thestatements in this release may constitute forward-looking
statements. Such statements are based onourcurrent expectationsand
could be affected by numerous factors and are subject to various
risksand uncertaintiesdiscussed inourfilings with the Securities and
Exchange Commission, includingourannual report on Form 10-K for the
year ended Dec. 31, 2008, our quarterly reports on Form 10-Q and
periodic reports on Form 8-K. Do not rely on any forward-looking
statement, as we cannot predict or control many of the factors that
ultimately may affect our ability to achieve the results estimated. We
make no promise to update any forward-looking statement, whether as a
result of changes in underlying factors, new information, future events
or otherwise.
TABLES and EXHIBITS
Table #1 Revised Prior
2009 Outlook Assumptions Assumptions Assumptions
(8/4/09)
Admissions - growth ((a) ) (%) (0.5) - 0.5 (1.0) - 0.0
Outpatient visits - growth ((a)) (%) 2.5 - 4.0 1.5 - 3.0
Net operating revenues - growth (%) 4.5 - 6.0 3.0 - 5.0
Net operating revenues ($Bil) 9.0 -- 9.1 8.9 - 9.1
Controllable operating expenses ($Bil) 7.35 - 7.45 7.3 - 7.4
Bad debt ratio (%) 7.8 - 8.3 7.8 - 8.5
Bad debt expense ($mm) n/c 700 - 750
Adjusted EBITDA ((b)) ($mm) 900 - 950 810 - 875
Depreciation and amortization ($mm) n/c 400 - 420
Interest expense, net ($mm) n/c 460 - 445
Income (loss) from continuing operations before income taxes( (b) ) ($mm) 40 - 85 (50) - 10
Net income (loss) from cont. ops. (normalized at 37.1% tax rate) ((b)) ($mm) 25 - 53 (31) - 6
Net income attributable to non-controlling interests ($mm) n/c (8) - (13)
Net income (loss) attributable to shareholders ((b) ) ($mm) 17 - 40 (39) - (7)
E.P.S. (normalized at 37.1% tax rate, continuing operations) ((b)) ($) 0.04 - 0.08 (0.08) - (0.01)
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(a) Growth versus 2008 (same-hospital)
(b) Excludes impairment of long-lived assets and goodwill, and restructuring charges, litigation and investigation costs, loss from early extinguishment of debt, and net gain on sales of investments.
"n/c" indicates "no change"
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Table #2 -- Bad Prior
Adjusted EBITDA Walk-Forward Revenue Debt Controllable Adjusted Change Outlook
Exp Costs EBITDA (8/4/09)
2008 ((a)) 8,585 (628) (7,218) 739 - 739
Volume -- assuming constant mix ((b)) 65 (5) (35) 25 16 9
- impact from adverse mix shift (37) (2) - (39) 34 (73)
Pricing -- Base line increase ((c)) 292 (28) - 264 - 264
- Managed care ((d)) 49 - - 49 - 49
Costs -- base line inflation ((e)) - - (253) (253) - (253)
- cost reduction initiatives ((f)) - - 188 188 - 188
Bad Debt -- impact of rate differential only ((g)) - (50) - (50) 25 (75)
Other ((h)) 57 (7) (23) 27 - 27
Total -- Upper end of Adjusted EBITDA 9,011 (720) (7,341) 950 75 875
Allowance for risk ((i)) (50) 15 (65)
Total -- Lower end of Adjusted EBITDA 900 90 810
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(a) 2008 restated for NorthShore Regional Medical Center reclassification to discontinued operations.