Tenet Healthcare Corporation

Good morning. Welcome to Tenet Healthcare's fourth quarter 2021 earnings conference call. After the speaker remarks, there will be a question and answer session for industry analysts. At that time, if you'd like to ask a question, please press star one on your telephone keypad. Tenet respectfully ask that analysts limit themselves to one question each. I'll now turn the call over to your host, Mr. Dan Cancelme, Executive Vice President and Chief Financial Officer for Tenet. Mr. Cancelme, you may begin.

Thank you, operator. Good morning. We're pleased to have everyone join us this morning. Tenant senior management with me on today's call include Ron Rittenmeyer, our executive chairman, and Dr. Sam Sataria, our chief executive officer. Our webcast this morning includes a slide presentation, which has been posted to the investor relations section of our website, tenanthealth.com. Listeners to this call are advised that certain statements made during our discussion today are forward-looking and represent tenant management's expectations based on currently available information. Actual results and plans could differ materially. Tenant is under no obligation to update any forward-looking statements based on subsequent information. Investors should take note of the cautionary statement slide included in today's presentation as well as the risk factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission. With that, I'll turn the call over to Ron.

Good morning. Thank you, Dan. And thank all of you for joining us today regarding our fourth quarter earnings and also all of 2021. Before I turn this over to Sam and Dan, briefly I would like to touch on a few aspects of 2021 and highlight what we believe are fundamental and sustainable changes we've made over the last several years that will continue to carry us forward. As I stated in my comments in the earnings release, the fourth quarter delivered strong, consistent results with adjusted EBITDA of approximately $1 billion for the quarter and very strong cash flows, both ending 2021 above guidance. We closed the significant SCD transaction on another 86 centers, established an exclusive development relationship with their team for the next five years and acquired their ASC service group to further muscle build the USPI organization. Additionally, our internal development team also added more than 20 centers. This further solidifies USPI as the market leader, and we are projecting approximately 50% of our earnings to come from this sector of the business by the end of 2023. Hospital performance. except for Massachusetts due to the strike, which is now settled, performed above expectations across the board while dealing with a continued COVID surge. McConifer continues a positive delivery of consistent results while expanding its offerings and gaining additional point solution opportunities in the marketplace. When you reflect on the overall tenant business, it clearly has made a paradigm shift from the end of 2017. The fundamentals built on an analytical database approach coupled with detailed and disciplined expense management in every aspect of our business have proven our ability to handle volatility effectively. Every hospital group has now achieved positive contribution consistently. USPI should, as we said, continue to represent a larger, more impactful portion of our earnings and conifer has improved its margins by over 1,000 basis points in the last four years. Coupled with consistent, strong core growth, detailed and objective portfolio management, as represented by the number of divestitures and ambulatory acquisitions we've successfully accomplished, supported by a stronger and well-designed balance sheet, the tenant enterprise is now positioned to be an organization with multiple consistent sources of revenue, free cash flow, EBITDA growth, quarter after quarter, looking forward, and then year after year. Having said this, I just have to comment. It is somewhat difficult to understand why Tenet remains classified mostly as a hospital company. The recognition of USPI's growing contribution and Conifer's cash flow generation for some reason seem lost in the broader question of Tenet being recognized as more than a hospital company, with corresponding dialogues and our multiples remaining caught in this time lapse. It appears that the transition of what Tenet has become and the deleveraging we've accomplished are not fully recognized in the valuation of the company. We believe it's a point of view worthy of consideration. So with those comments, now I'd like to turn it over to Sam.