Tenet Healthcare Corporation

Good morning and welcome to Tenet Healthcare's first quarter 2025 earnings conference call. After the speaker's 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 1 on your telephone keypad. Tenet respectfully asks that analysts limit themselves to one question each. I'll now turn the call over to your host, Mr. Will McDowell, Vice President, Investor Relations. Mr. McDowell, you may begin.

Good morning, everyone, and thank you for joining today's call. I am Will McDowell, Vice President of Investor Relations. We're pleased to have you join us for a discussion of Tenet's first quarter 2025 results, as well as a discussion of our financial outlook. Tenet Senior Management participating in today's call will be Dr. Sam Sartoria, Chairman and Chief Executive Officer, and Sun Park, Executive Vice President and Chief Financial Officer. Our webcast this morning includes a slide presentation, which has been posted to the Investor Relations section of our website, TenetHealth.com. Listeners to this call are advised that certain statements made during our discussion today are forward-looking and represent 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 recently filed Form 10-K and other filings with the Securities and Exchange Commission. And with that, I'll turn the call over to Sam.

Thank you, Will, and good morning, everyone. We reported first quarter 2025 net operating revenues of $5.2 billion in consolidated adjusted EBITDA of $1.163 billion, which represents growth of 14% over 2024. Adjusted EBITDA margin of 22.3% in first quarter 2025, a 320 basis point improvement over the prior year, demonstrates our strong growth and continued operating discipline. USPI had a nice start to the year as we generated $456 million in adjusted EBITDA, which represents 16% growth over first quarter 2024. Same facility revenues grew 6.8% in the first quarter and were highlighted by a 12% growth in total joint replacements in the ASCs over the prior year. Turning to our hospital segment, adjusted EBITDA grew 12% to $707 million in the first quarter of 2025. same-store hospital admissions were up 4.4% as we continue to open up capacity to respond to the strong utilization environment. Acuity and payer mix remained strong with first quarter 2025 revenue per adjusted admission up 2.8% over the prior year. In all, our first quarter results were above our expectations driven by fundamental outperformance, continued strength in same-store revenue growth due to customer demand, high acuity, and effective cost management. Regarding our 2025 full year guidance, we are not addressing the underlying outperformance in our business units during the first quarter. We're early in the year, and while we are very pleased with both our fundamental outperformance and the continued demand for our services and momentum we carry into the balance of the year, we'll address our full year expectations in the future. Turning to capital deployment, We are well positioned to create value for shareholders through effective capital deployment of the cash flows that our portfolio of business generates. We have demonstrated an ability to flex our operations during challenging times, and our transformed portfolio is better positioned to handle economic stresses. We continue to see significant opportunity for M&A in the ambulatory space and intend to invest a baseline of approximately $250 million towards this opportunity each year. During the quarter, we added six new centers, including a strategic partnership with Choice Care Surgery Center in Midland, Texas. Choice Care is a 16,000-square-foot, state-of-the-art, multispecialty surgery center with a focus on orthopedic surgery and urology, among other service lines. Our cash flows have enabled us to make incremental investments in capital expenditures to fuel organic growth, such as our expanded L&D department at our Abrazo West campus in Arizona. Our top tier medical professionals and latest medical technology reflect our commitment to delivering exceptional care to women and their families in one of the fast-growing communities in the United States. We have significantly deleveraged our balance sheet with a net debt to EBITDA minus NCI ratio of 3.1 as of March 31st, 2025, competitive with our leading peers. We remain committed to a deleveraged balance sheet as it provides us the flexibility to actively deploy capital to create value. We believe that our current valuation is disjointed relative to our growth prospects, strong operating capabilities, and transformed portfolio of businesses. We see this as an opportunity that we can capitalize on via share repurchase. We repurchased 2.6 million shares in the first quarter of 2025, for $348 million. And going forward, we plan to be active repurchasers of our shares, particularly at our current valuation multiple, leveraging the significant cash flow generation of our business. In summary, we've had a strong start to the year based on fundamental growth and cost management. We are executing effectively on our growth strategy with an intense focus on serving our patients and delivering value with our physician partners. Importantly, we are not altering our business strategy because of healthcare policy uncertainty that the industry is currently facing. We will steadily execute on our growth strategies with consistent capital investments and continued demonstration of our strong operating capabilities. We see significant opportunity for growth, which we believe translates into attractive free cash flow generation that we can deploy across our discussed priorities to generate value for shareholders. And with that, Son will provide a more detailed review of our financial results. Son?