Tenet Healthcare (THC) 30 Apr 242024 Q1 Earnings call transcript

Good morning. Welcome to Tenet Healthcare's First Quarter 2024 Earnings Conference Call. [Operator Instructions]. I'll now turn the call over to your host, Mr. William McDowell, Vice President of Investor Relations. Mr. begin. may you McDowell,

of and McDowell, for Relations. Vice you a to everyone, as XXXX call discussion Chief today's Executive I We're today's President Sun Executive be as Officer; participating a am Tenant and have management discussion for Sutaria, Vice us Officer. Will our and President of well Dr. Chief join first outlook. thank Saum financial senior morning, quarter joining results you call. pleased Tenet's in Good of will and Financial Chairman Investor Park,

morning no forward Tenet today's could has Form risk certain based Investors to that in recent subsequent XX-K information. this section and based is materially. and expectations forward-looking looking plans statement this our the the available webcast of Exchange filings factors any and included includes posted Relations Securities differ are advised are note statements Our cautionary represent Actual a statements under as Commission. management's with made slide which Investor results to most the currently Listeners on as and call on been during presentation, our the well our slide take obligation information. tenethealth.com. should website, today discussed to update other of presentation in discussion

turn to that, Saum. over it With I'll

Thank you, Will, and good morning, everyone.

first to ambulatory for In ratio and We we sale debt transformation hospitals our our have invest leverage strategic significantly enabled X quarter in leading of proceeds pretax while of XXXX, the $X the lower our portfolio. of the of billion. substantially retired continuing program. accelerated closed This

enterprise. capital more efficient, Tenet result, value-based a As care profitable is and

we deliver value. the specialty exceptional care well are deliver positioned and to We communities serve shareholder in to high-quality

core with contributions Tenet performance, from completed Importantly, anticipated ambulatory M&A. strong ] our [

the sales a on more We ] asset expect our lost [ expectations. rate spend our replace in minute. hospital in time run I'll EBITDA from only essentially the to transformation

improvement utilization well of ] payer In guidance. performance we revenues XX% represents significant first Consolidated through quarterly revenue review was in levels by the of adjusted $X.XX favorable well increase of first acuity But XXXX. Strong and delivered high results. supported the initial which of billion, growth as quick quarter We EBITDA quarter as our drove net recovery first, first billion. [ mix carried and a $X.X over continued an a XX.X%. excess of quarter, XXXX of in EBITDA adjusted the operating margin our the

over $XXX start let's a expansion, and elevated in performance, USPI drove We with first quarter the with mix quarter payer adjusted great of terms XX% acuity favorable representing In million organic had XXXX. growth USPI. EBITDA, growth. strong all

continue of replacement surgeries to an and over growth were year. for up be excellent source XX% Joint us prior

had an our start active year terms We development in of to also pipeline. USPI the

over still USPI past quarter. have to proud in highly new market with meaningful what a to grown is are We fragmented centers XXX additions this

We centers to $XX these of acquired ownership. months EBITDA newly in million the expect XX of first deliver approximately

activity In to those the also USPI's de currently in NCI continues or year ultimately syndication X addition, expect construction. synergized development minus we with X for centers EBITDA X novo multiple to XX centers. in nearly strong realize stages of

generate We cost the we deploy returns. lower for communities pleased more very capital in they points provide are access operate, to which also to attractive

of Same-store Adjusted of continued the hospital XXXX in Turning remained Acuity that quarter the we within strong to year. revenue up admission adjusted last recovery $XXX with admissions to year. first first segment. million demonstrating XX% levels X.X% quarter grew the per our utilization grew over X.X%, hospital saw EBITDA XXXX. prior of

markets. a in capacity have up opened number We to our demand meet of

their and financial proud management successful critical initiatives. frontline contributions and managers, to workforce, leaders recruiting our directors rewards post-pandemic and investment field are many the to to ongoing other incremental in these in for to that XXXX. supervisors, have believe We retention addition strongly our our we layers with In are professional recovery recognized development

Additionally, hospital end in year. the on we specialty Westover continue to Antonio invest new in open our remain the of near San second Hills, quarter, to high track services. acuity Plans this a

the Over acuity capital. returns year, to line growth capital allocate further the of to development balance markets into existing with for we strong our more organic high plan on service drive

early USPI not that Change but do to I'd client team in like our colleagues some, special Conifer and own tirelessly hospitals, it the to all take our have cybersecurity the at thank respond part of Healthcare and utilized who with We worked at in or Change Conifer this the utilize Tenet and we attack year. not of business. our a physician of took to place to moment

result a the of and function to the change As clearinghouse the payers. claims ability many incident, to send impacted

XXXX. had delays have billings have We the near-term to strong impact start All our cash all, experienced our will to we some estimate temporary expect that this a a of only the in to and hospitals resolve in over that have year. very course flows

for effective. forward, of Looking sales, $X.X were guidance prior or are $X.X to which full revenue the earned original and that midpoint at over X% billion, $XXX order in [ ] portfolio range to hospital our increase we reimbursement sales. in the structural EBITDA million of adjusted to of our additions guidance, are in clear, a in hospital represents ensure range that reductions increases XXXX which our of guidance not we our XXXX, raising already assumptions the we In our that asset ASC billion have impact reflects was year an to quite our increase

but addressing guidance organic increased stage. this We business our acknowledge at in our QX are units in during outperformance the underlying not also

the year. We early are in

in of deliver the the in increased network, pleased the our that are ability future. we'll this our in demand confident for these very with to are we seeing We're We expectations component expectations. full year on and address our

have made the in Before we to I'd our Sun, progress some I turn the call spend time portfolio to transformation. over like discussing

established the era new of a on As for have transactions dawn the mentioned Tenet. previously, I that have executed we

very completed billion have We which transactions, X have sale proceeds. $X gross generated hospital attractive in

the a service provision in commercial relationship sales, have cases, these most Within with buyer. we maintained, enhanced and

attractive We expect come. be relationships years contributor these to to earnings will for an

have and in to have commitment the quarter billion first sheet retired alone. $X.X in debt We a balance deleverage the

$XXX quarter, start financial expansion minus towards of At first ratio NCI that the of our was We've our year leverage we and XXXX. from the flexibility top Xx by EBITDA decrease the priority, approximately end approximately capital of ambulatory business. capital significant demonstrated had X.Xx at a our this attractive allocating million and of

$XXX shareholders to almost capital returned repurchases first in have we via the million quarter Additionally, alone.

not the new a serve compassionate are has quality, essentially communities we changed, in we provide to mission our While company. healthcare

we've of efficient more in The margins and our with repositioned free facilities an predictable analytics-driven Our portfolio is businesses flow. by discipline and that cash differentiated atonal each of instilled enabled culture capital is results. attractive producing

a Tenet's financial This which story deleveraged. to has challenged enduring a sheet, shareholders. us once well feel flexibility drive significant future. patients, part been balance We for our a value was of strong turn, our with capital partners and provides business in and of the and positioned foundation the Our amount our for

will Sun? detailed that, now results. with review financial our Sun more of a provide And

Saum, morning, and good you, Thank everyone.

coming well operating a revenues represent total driven These a EBITDA Our billion EBITDA In the strong first guidance range. adjusted XX% increase adjusted patient quarter, effective and we of our start were high results quarter of cost year strong continued payer above same-store net billion, first over in quarter $X.XX the $X.X acuity first mix XXXX. controls. by financial favorable and consolidated revenues, in to with the results generated

up delivered our a same-facility X.X%, operating in to like net line key XXXX, USPI acuity. EBITDA compared to case X.X% X.X%, I'd continues delivered quarter. to high revenue strong each very same-facility our have compared at USPI's USPI, Now with segments, first modest by volume its of with of in margin be items quarter levels in expectations. per last system-wide This strong and adjusted first revenues a grew driven quarter was to results beginning in offset by with the which year, EBITDA system-wide of surgical increase XX.X%. again for partially adjusted first decrease of XX% case,

As we quarter of significant to in to the saw are noted due cases we last the growth performance quarter, expecting XXXX. the first year, we build over in volume

Now hospital segment. turning our to

EBITDA grew XXX and basis XX% over adjusted XX.X%. with margins year adjusted up last EBITDA hospital at points quarter First

demonstrating same-hospital inpatient quarter First payer mix per X.X%, continued adjusted strong increased and high admissions acuity levels. grew admission X.X% and revenue

management. reflect our of in X% in take in towards from SWNB, consolidated first reductions 'XX. of the 'XX. expense quarter, first terms In salary, XX% of XX.X% and substantially the in benefits labor X.X% were a the continued management, wages expense of revenues material quarter we The our labor of approach than that lower which And was disciplined consolidated the first reduction costs net quarter contract was

quarter addition $XX In funding revenues performance of Hospital short. Michigan Agent amount quarter our the in of ] million for the [ increased half related is for results Medicaid fourth hospital include About of to strong HRA to segment, with of Rate also associated our additional or the operating Program, CMS' this approval first XXXX.

of the leading the area. to for and Southeast services we community. will are care funds And this the provide We provider that safety healthcare Michigan of the support net Detroit people these greater

disciplined fundamental Excluding growth X.X%, reflecting grew and very both year in expense start result. this a additional to strong had We've still strong the a admissions adjusted funding, USPI management. revenue revenue per attractive and hospitals, same-store

of balance line first And the sheet senior $X.X M&A free [ quarter quarter, billion multiples. hand due well. structure. we finally, XXXX will mentioned, And returns We and notes enhanced an during for the retired of cash of X.X few outstanding repurchased had USPI at as we acquisitions our borrowings of that our facility million on on were XX, ] million flow our secured [ next no March we first acquisitions Next, deliver billion with nearly of on we We invested $XXX We as million. capital $X.X ]. billion in shares these post-synergy over the the active cash cash Saum to and for flow attractive on front on $XXX years. previously $X.X in as and million $XXX expect first quarter. discuss And unsecured stock generated had of first

outstanding hospital less made XX, ratios. or year-end. performance. our from have proceeds yet X.XXx are Our NCI, the leverage as the note our a these Reflecting from current I well received leverage not payments ratio impact the was sales substantial hospital improvement would from as X.XXx we that gains our reflected payments on not that of as the March XXXX, in tax EBITDA divestitures operational and EBITDA of tax we

and until made have we and fixed substantial have we have secured capital Finally, significant sheet XXXX no our transforming of the interest progress debt and outstanding balance aggregate, In all notes unsecured maturities senior structure. rates. our

and flexibility years financial are a positioned of We to flow support come. well with generation allocation priorities to capital the cash in degree high our

outlook turn let Now me to our for XXXX.

For XXXX, to revenue now billion billion. of operating the expect net in consolidated we range $XX $XX.X

$XXX increase are to adjusted following the to reflecting $XXX start we is outlook structural mentioned, the million EBITDA in Saum As range our by $X.X of our $X.X billion, changes the The year. by strong driven billion million guidance. to

million the Medicaid First, incremental $XXX revenues associated with program. Michigan net of HRA

EBITDA to above ASC quarter, our first Second, had Adventist, of [ sale previously incremental guidance. in was the the assumed we in $XXX acquisitions reflected from in $XX not California ] that year-over-year million And hospitals headwind previously what finally, million of a we which guidance. made in

the expected midpoint 'XX year, normalized a over our of basis, now XX% EBITDA adjusted is full to On range. last year our grow

midpoint. the of of at consolidated continued net $XXX quarter of we second USPI year after includes expect quarter range demonstrates these now USPI's performance divestitures. range midpoint. million in from which taxes to announced million. at our the $XXX this outlook even second $X.XXX represents midpoint in of flow of cash related EBITDA anticipate billion of our to would payment that will tax in full in billion, we $XXX EBITDA Cash XX.X% an range loss guidance to our XX% the free hospitals. to EBITDA increase EBITDA the the adjusted $X.X cash This to be the the flows, of Finally, divested free expect at million be payments, $XX Adjusting of million for strong the million $XXX flow the

plans. flow cash years performance over As cash the to balance past generate our in while the demonstrate we ability executing this sheet, to continue on several flow also last our businesses we growth substantially deleveraging our quarter, and investments improved has making and key stated

XXXX. as deployment have finally, And priorities for a our capital changed reminder, not

First, we through prioritize continue to capital grow will to investments USPI M&A.

hospital acuity investee expect our we growth Second, on including opportunities, focus service higher offerings.

depending on finally, and opportunities approach to share evaluate opportunities. debt conditions and refinance will retire investment market and/or we a Third, to repurchases, balanced other

the our we have year with We the portfolio. are start progress the significant made strong pleased with to and

'XX deliver for We outlook are we continue serve. communities on ability as for in our in confident care we increased the to our high-quality those provide to

Q&A. we're And ready that, with to Operator? begin the

[Operator Instructions].

Our first Bank of of the America. comes Kevin Fischbeck from question with line

on. and volume as on good So the in something a just or to confident is little got good. of to there will quarter as case that point you know day a looks bit goes Then is sound that of the same-store trends really of surgical overall, case number Is you we've visibility goes had on I on? the anything would say looks would anything in tough to that USPI. that, kind guess, be return year year that growth within still me quarter accelerate guys But point that the indicates You guys that volume build for you comp. off there that kind building. or I kind

Yes. Thanks, Kevin.

let So the year or the all, we as past, through we had on. right? goes think first I said clearly mean year the is me that quarter. of expect volume address in I build just to what expected, pretty I this the

But questions strength through simply a growth about, we flat we're grew really no when off centers business up, think issues. worth of based not of we all, more year handful would end XXXX twice the because last an the our than year's when growth the being our I was suggests So that think just We brief implication to important It's the by rebasing be that, rate was remain fundamental down opportunity in at couple say onetime bottoms a it. in of centers, It's year shut demand the than day there were way, doing be is we upon and would the for type deferred number. which way were year in the in year expected. our they longer-term have there to last opposed floor that different and having and I us a care result was that after the the were away. we this just the footnote, drove business very were be, what planning a that so we operating, what this build actually be always which at flat And actually typical bottoms-up volume delighted that weather of this looking is didn't due going tailwind business And mean, to where what been and is to about essentially USPI same-store to downwards? went catch-up was that of then in a were even minds at so to there going you volume that's that correct, are significant the services for look I'll it. strong with as significantly the having go planning.

under GI all the of lines strength that on, you service volumes, of a surface growth. bit look we the the experienced of saw including our focus major we in further When

partnership down volume we joint we're little saw ENT, the other more shoulders procedures. the obviously, that low focused have, So bone attractive bit acuity urology GI, pain in that growing. and But was a on we all was care type orthopedics,

been the are is through get the think it affirmed a I bit year as that grow 'XX. to good. the on. goes quarter is opposed good our story. have So ability activity what But comps as onetime view that We as think in the look purely just to hard belief fundamentals We deferred news little that, The fundamental better last really a they year of year. off the first

Our next of the with question line Wolfe Lake comes Justin from Research.

questions. Just a couple numbers quick of

sales? asset in sure leverage First, want better the debt ASC But -- can really strong, everything adjust you of to the continues not was the conservatism you of in the you you an and deals I those And down kind kind would the ] it for purchase said assuming the intent? the to that a sales, When give where the post the make us internal going think just obviously, on on be I terms asset how at quarter, going of post basis debt with the so, ratios idea repayments? of year. -- your and end and of first [ that if secondly, only think pay normalized forecast? understand year appreciate had much and on the through that we those proceeds. was then were Is you And versus

I'll Tom. it's Justin, first Hi, one. the take

to better the quarter, patients for -- results USPI the than So segment the both segment, hospital and that's our and true The significantly pass were the Sun. quarter I'll demonstrated. results in ex

you just USPI was above substantial. is strength start even our to expectations question, typical and revenue a result be. obviously, Kevin's if revenue So And what pricing, net with which off related building drove and guidance acuity that the would net

good felt covered pretty of we So and I it. I've that about think piece that,

strong volume the hospital payment side, time. acuity good. I'm referring was this it of the over across the to the And that, strength absence On the or changes some absence was good, mix up period reimbursement similarly, of supplemental the the in of was again in The board. it of was

for we better thought quarter. bit than the the performance So a we core was expected quite

on take it second maybe around a Justin, question debt I'll then, your in And and versatile. leverage,

$XXX about ratio to add XX, we -- we -- I change, me. you my pay as probably have that mentioned the and related down March to in script, So tax, right, million debt, will mentioned right, excuse -- as is as leverage we'll you're as of

on yet. prepared you [ can we're we that ] our capital the as And depend as on ratios, priorities run well, the decisions said not ultimately guidance, of not changed. eventual allocation I feel in But throughout comfortable specifically imagine, address year. ranges expecting. will that And as in our the based we the and allocation course with strategies prepared have remarks of to then we're capital made It your that terms my

in then done Saum as our of of terms have Tenet. a deleveraging divestitures, job debt And paydown, great mentioned, hospital finally,

almost from In debt as down time of paying to on debt, 'XX down actually optimal we repayment the execute take look our then we'll tax our committed next obviously, X down really actual which years but note, terms And we'll is February we note So we mentioned. is at just paid stay of now, and way to right? XXXX, that. our

you. Thank

Our comes from next Baxter question of the Fargo. with line Stephen Wells

hospital is driving business, the kind of it'd on it the significant maybe great of quantification on that? in much ] what's exchange the quarter. and your color how some and the more I exchanges over the past we've meets be acuity any to of of from [ guess payer great. sources mix get For be the would years growth seen couple coming after where And

thoughts sure. broad-based. you. was the that for One important think note I very few is Yes, to it's that strength volume A

historically markets performance. which I was in markets, now that the obviously markets, more pleased we've eroding we but can about we're also recovered For that some from broad-based. talked add pretty cost we thoughtfully less strength to capacity different beginning quickly see our without that back to indicated COVID, accommodate volume are and quickly

helped the cost with for important maintaining expansion. was of even the capacity, the margin which story discipline quarter our an we as So our added part

The prior acuity, down Medicaid see last a point, then medical of by saw exchange procedure-based strength your the of ICU service high And the the think did work And and a of way, admissions. care number a this population type which kind probably, acuity to significant of in was was the in markets strength good. especially line spend We little is business over a I'll I year. bit. in we on, lot minute

from probably is So having. and the a short-term the they're I related, phenomenon effect that of this to redeterminations bit think some obviously, seeing we're

to us, markets. in I've contracting out strategy network the for in a be Now plans around we've exchange had pointed our broad-based with before, country

patients helps exchange with ability coverage. probably And to us think so the for up respect those serve pick those that that I to

you. Thank

question the Deutsche next Our Chickering of Pito comes line with from Bank.

job Great the quarter. on

segment, at the hospital the guided On were about margins guide midpoint. XX.X% to now the the be on XX.X%. to be And quarter last

quick of from ] bridge And excluding Michigan, sort of it margins you. asset go XX for help of numbers that in California, margin So [ just Was sales what improvement can up? basis made the the delta. you us bridge points sort question margin a help of those sort then

[ asset the about from year? for land EBITDA for ASCs was contribution these of You the revenue talked sales. the ] What coming

one. Pito, and first -- the thanks I strength support. take fold. it's is for the I'll multiple mean, -- the I margin

done. start covered you of Obviously, discipline, many with of would think the there. we I maintaining importance areas I cost the which have

just improvement volume in second margins. is improves capacity The and utilization

mix being third is payer commercial quarter. the and particular, business, the Medicare to the in and stronger both exchanges in The including mix, related commercial

those And margins then we're falls can of to where obviously, there accretive are focused, the service high be reasons, line into obvious acuity that work for the given which categories. opportunities some

what So of past go sure drove to things the is, balance not performance. divestitures significantly, my of significantly you, than those ahead, that I'm general higher and that I not impression I'm that to the are asset But others. be some Because with Sun. the where being the markets on actually them the for higher-margin sure. -- sales, the from honest in to sure margin. Go would the looked look have accretive actually really

the And revenues. acquired ASC on your about correct. that's Yes, second question Pito,

would mentioned, that X of XX-month our Saum And I is sort about that in months standard USPI margins We for of of EBITDA As of million. business. fiscal assume have in first the obviously equivalent book $XX EBITDA guidance 'XX.

much. Great. Thanks so

Cassorla of line the from Our Jason next question Citi. comes from

really to sure nuances seems What's the differing move cash make be only cash Is or elements, on flow ask free we're free on million. up the that that about I to $XXX related timing just flow side. up that it free to EBITDA the expectations, driving million. just wanted that outlook? and to with divestiture $XXX just good Great. quickly cash the

would we thanks This Sun. effect I taxes mentioned, say as we EBITDA, divestitures expect is then with California the And the for Jason, pay that Yes, we hospital that as to additional have well. addition. obviously question. tax on the we

are those question. Thanks X there. probably for important factors So the your most

the next Hendrik Our question line from of RBC comes with Ben Markets. Capital

question headwind medical called fee out. the that on Just you quick a

how wanted trended about see has Just should to the think how of that through expectations versus trended quarter-to-quarter, and your the end that we year.

on fees. the professional Thanks,

also So pleased assuming for about sequentially it to in as guidance. we before, our for I fiscal will 'XX, for said increase. 'XX and that to of we X% we see 'XX growth year X% quarter. rate moderation saw the of full range we're still last in change here. to 'XX, QX about XX% add saw We're QX, flat then versus versus QX And XX%

for your question. So thanks

LLC. comes the Nephron of Josh Raskin question from next Research Our line with

You about Detroit that new about of the the Medical and sub talked Center specifically changes you payment think market. program way

going in revenue? projects DMC come for if then billions hear just of might to be online forward the have that think terms of still capital about plans it on numbers, in lastly, then and terms change that to is helpful low your I And investment?

Hi, Josh.

both So the multiple Hospital of goes facilities all of Center of draw. just Michigan center Rehabilitation the a have large regional that which complex the center are includes multi-asset very health out statewide, Michigan, but of with science suburbs way Medical academic the into Institute of that Detroit Detroit Children's from kind the hospitals way not and the all the is and

multiple complex science large broad center health academic a cetera. a programs, it's et trauma So geography, across pretty

that that under Southeast that other Detroit, the in the Detroit community safety the Medical in Now Center for Michigan and in is particular, is provider both importantly largest thing in the for uninsured community. net

multiple you for been has Medical on there multiple missions to out payment together. in blue, population of will, had accomplishing has been a it that in come the patient basis. on that our years. continue always all really the terms working those us And the increasing in objectives DMC of So at working This Detroit the strategy for there, care gone in mission and with We've state and the the to the effort see managed and to including here what the other of provides available the access leaders in portion essentially have with of the among that the order par portion help Michigan improvements the finding ensuring the under invest in mission brings ways population. to access on the if stakeholders, state to that we for that access the a lot for at states uninsured in doesn't supplemental of of broad be that, to DMC. I way And made in Center to think programs needs improvements has continues sense the serve

always comment made in So being multiple the in focus at your that missions. market question one address on the and DMC operated to investments we'll how have But DMC on would I over made we successful is the forward we look that the the that time. again, I to point back you

more I wholesale than we more there's return going so investments think change what some changes the improves strategy. generate in that our from is be those to

And side? the revenue

I'm sure do not that here. that to the We and markets, our report on there's reason any of don't individual side revenue

from Our Whit the question line comes Leerink Partners. of next with Mayo

presume of on would more Are hospital this, color mix? not but larger the those, bit centers can get helpful. I we Maybe acquired, markets, some this XX back in JV be story, there's on additional the just you partners, sure these any a color if that hit Just is a potential a were maybe little transaction?

that there's don't the systems. centers the health there's -- Yes, are centers Thanks, partnerships where centers majority in vast say all orthopedics, the cases, so problem. ophthalmology. the comprise places across them USPI, of there's tightly necessarily ambulatory GI, today, have Whit. The of a are no that nation. Yes, broad I end centers of to in XX would and we new base typical mean some have centers seeing I some lines the you up space. service would affiliated physicians markets

periods of a what independent the stand-alone some into. that time bought of centers created have the over come describe groups stamp centers bought equity I as would that we and together, over are partnership -- And with more, time

bought the I all believe to of consolidating we up in positions. centers

buy centers "no I there's So know, don't up" in be stop these will I'll strategy there. in required the future. that

covers I that it. think

Our next question comes from the line with of A.J. UBS. Rice

saw I comp Hi, be growth line everybody. growth assuming this business of ambulatory just Is done given expecting -- your revenue that any in you've you're of in that little a that the think about It reason a cetera, mix, positive. there there bridge got start to X%. given said, and is to guess quarter. in the the you're moderate. of first to like investment case year et the looks strength per still your case, EBITDA number? Obviously, that on that any that tougher as per you slightly the case you've about which reason the side, would you conservative organic revenue perhaps Is

if the early a and the have see And hit some first are outpatient-oriented on late at affected And of that? end then April, peers in any read did? procedures. of do maybe Did of calendar this the ask, that March USPI break you the talking also effect lot you about elective I might Easter on the you spring quarter,

Look, we parts just guidance. Yes, a couple and including things impacting A.J. of moving lot things. our this have pieces It's of quarter, a

we're other that the core demand in businesses. seeing really across recognize really outperformance Look, doing ahead that the up board forecast guidance We ownership, both ended guidance with we underlying I could portfolio performance touched XXXX. net and what the looking items. subtractions asset of as to structural we're acknowledge yet. our So the our to those to consistent the the we all And haven't and said, we increasing pleased with revenue additions to was be

Again, and moving of lots parts pieces.

think up that the position a future I in on And come back the We'll performance with today, we're seeing on environment we calls. the that's now with But demand would need future business. be to underlying hopefully to and calls. we're nothing in pleased say, the we'll I we're address right where in really concerning. that again, there's seeing

Okay.

It USPI functions in that on schedule on and lot volumes time, mean question know effect those yes, I cause workday, that. business you from effect spend on because want I of type calendar of address mean, the if The I year-to-year. issues a workday there. of we weekday focused are don't does to some -- a course, -- particular, the

guess yes, have year, I And effect that a say arena. it in to that, we're bit we're I that did -- little So happens. would this it some used

I the message the volumes. longer-term would around reiterate

strength with pleased in last build what confidence we that really are helped can onetime We a It saw high volume the was rebound even for the fact more And was give of to established year that just a upon that But us strength, not year which 'XX tailwinds first the a from very in to volume great year. there the some and we unnaturally off strength sense quarter we've tough what growth fundamentally, relief build look year. of volume comps first that gives us real. are as this progresses, were is business the again, from 'XX. quarter that

And question line the next comes from our Mok Barclays. Andrew of with

quarter. you that up wanted XX in the on acquired to Just the follow ASCs

that any ASC remarks contribution think revision your there not of I prepared your contribution development bridge, the in was in from look sure quarter. said line activity quarters. the acquisition you X When if EBITDA over you're closer centers. was million I'm think expecting $XX I at and these to I $XX million

So if material step-up a pretty so, in XQ 'XX. that implies

the should the to to materialize make right that business of it? XXXX. want Is about think way I'm in sure Just about this synergies understanding and cadence that

Andrew, I'll your to of try the different parts question. address

number. he So first ownership XX of a million first all, is comments, mentioned in that of $XX months Saum's

'XX had contribution. our in And in that X QX. months as through happening we assume would So QX guidance, I

I the accomplished last that original Obviously, some development guidance call activity in piece of QX would and towards in that. of acquisition for of activity we is posted our USPI. $XX that goes other we million say when The

So what our parts, you're with goes acquisition seeing acquisition of top for of our a USPI guidance. new of lot activity XXX, towards the calculates in the original QX that assumes that and number development

So that's part one.

the won't what EBITDA long of X the will Xx acquisition. achieve we in to we that minus next over over on multiple we to hard XXXX is feel X-year work X Part yet. comment that NCI term, impact that outlook is But confident

] build all from portfolio set indicated, work ]. realize performance first years Yes. the a will diversity EBITDA NCI. the -- is minus creating related consolidated to that sell grow a buy to X the and as over not plan And importantly, lines This first an and assets. improvement service Again, of -- earnings of opportunities of in buy I up up beginning, [ [ sell attractive

we the digest year. assets of of portfolio So the like the over that up we picked will and course

question Cantor Our from the comes next Fitzgerald. with Sarah of James line

did of were of new just I'm you've base any times if gain to couple on was you is what gain, referrals wondering see and you on higher you've analysis share? guys catchment USPI due volume. it it? share partnerships a sort there off growing growing Or done touched or stronger if to for strategy tell, And trends? that market behind a So area, of to was your of are that today, able

Thanks, Yes. Sarah.

Obviously, we the things. on to general to is [ the mean, you mean as too, with planning market successful et the of what do every going environment necessarily of the I thing a that process. business. how couple right? ] are as relatively and proxies center-by-center have it's number one rich but So a ASC we're bottoms-up partners, do use understand understanding they physician not built our upon is our cetera. some see day we, pulling simple we So as a forecast is I business side, the year where comprehensive pretty strategies, of hospital

a in fourth at of people care you look busy we worked incredibly at XXXX some individual quarter And deliver them patients indicated some call, noted I even of physicians then as years. how of seen measure when and take have prior have our just productivity you hard in these that, were may I also, to and that not level of think simply I these in

Of you're simply we being last forecasting, of not despite course, postpandemic portion left especially saw deferred whether at a significant was with the best question efforts year, care. what onetime our or

quarter, So planning sort bottoms-up from the because first knew -- our elaborate in year. over build growth of on would that's we the it I why that we volume believe

And risk for care growth always that Of is reason be would the there real there the being entirely course, upon based retreat volume year. last a wasn't a planning deferred accurate.

time. focused ability And individually. that I over to that's we that's the I'm confidence not of long why drive because tailwinds I earnings drive for on quarters And point few growth broad-based I'm focused period maybe USPI on that it longer our a as on elaborate that the gives a building and us commented are on why times term. more as it solidly

board able statistic of of is rate across they we're at that look new how physicians and our ramp to other only to addition the able The being measure up.

the of to level did And see little to we physicians year would year comfort reasons last we was the bit the XX busy on despite this USPI ASC. it to a we growth so usually an months portfolio. And one year takes that add had went as of into in confidence the ramp their them year, X

we so okay, above year. we those growth some of latter part thought, beyond see additions, based ought And where the in were upon to the and we

how kind the you So up. That's I planning this don't know, business shapes wanted. how -- color of this than that's more maybe for

Sternick question line next Chase Our from comes & Company. of with JPMorgan Cal the

just of markets. seeing or other that mix maybe quarter know the there just part centers. portfolio the broadly, broad-based color of in for I wanted that across more XX? large in of those sort on what the the the terms you're were any what acuity to deals additions any I And mentioned Were case that is pipeline? XX you in M&A about And centers. ask pretty

Yes. Hi, Cal.

a that fact, what any I multiple the acuity in a I'm just closed than the said, assessing centers we to few that come the of broad One, the did something gave talk We case centers. mix us deal, is through prepared biographically, So in stuff, right? So and comfort as centers for great other single transaction the were, majority detail. all about not diligence and learned in things.

think priority at lower-cost to returns a value described levels course, which by year compliance, these care attractive acquire multiples Sun from Our to will on of using we X. for access is be increase the We the adding communities skills and to USPI. standpoint USPI continuing them that growth in typical the fashion safety, to ultimately focus, quality, management in in acquire assets improving the to additions -- very earnings I things and the to nice and a them

as broader both We that In the agenda novo year terms anticipate goes on. of remain M&A strong. pipeline continuing pipeline, they de to and the through progress

Thank you.

Jefferies. line question comes of next Our from the Tanquilut Brian with

Maybe you. my quarter. for question solid a some on Congrats

of payer on of but about And USPI, comments on ASCs you the on that you rate acquired, or about grow, to the of As if made mix prepared revenue you all think about in the should was related your -- I sustainability earlier comment bumps, just maybe made view payer share maybe number on we you level strong how be the color mean, with ortho quarter, right? case this it I we obviously, the us made of thinking continue think and one. per new rate growth, the comment the the impact you revenue to your case some remarks. can right

the revenue more reimbursement setting, the important focused just grow and creating right? that to more the similar main acuity, be done is acuity expensive we're we mix it's could why reducing dimension, to about payer of cost and obviously Yes, It's so in value that's the care is for case stakeholders driver mix important think that that. by strategically, also the which are that. we our per grow think sure. government system a how we on and the and our I that mean Well, I is that objective of more I the obviously in mean because case

that case. low statistic helps of some us acuity capacity time, net business our per helps more But revenue exit in it over also, in The ASCs. create

same-store, the build pain it what the our obviously going of to store. are improvements is we regardless lose a down and move in, can mix joint where our continue When out cases XX to objective is of same I've at to path that the As X obviously it's to same surgery it's we service acuity believe continue of impact line do talked you can on time, do or growth. you you headwind same-store the about, whatever, low or that always them

However, as in we've guidance. said our

the think From the exchange is hospitals. We're that in growth, What's as the flow in of through seeing I population there, much ASC some in seeing just through. perspective, ASC the different a Medicaid. of that business mix the ASC not benefit even that the flow isn't we're It's business, business.

ASC you're So but business, not seeing are side. the and segment seeing you segment the like the you hospital exchange -- would seeing the you're growth the not in on exchange reduction the growth in necessarily

the should just we how not impact it's of And that dilute Does about Or be thinking that? the acquisitions. it?

mean, of other and numbers around, a a in centers that's the these QX Yes, quarter, of them, just of frankly, on the than were having to most QX. QX point around an providing in in had towards opposed impact question. quarter the any I closed through lot I impact the we really end again, are past as mean to And and Sun's good they

until of and and implements we to is dilutive earnings centers obviously The time with margin the multiples be that comes USPI can earnings improvement program improvement. therefore, margin improvements, its standpoint forecast will X margin acquire which from lower over speaking, be fully year a generally how

that's the case. definitely And so

next into know centers what But refinement need company about gotten and into will be. any months there's that to going of it some to what the other whether enough benefit restructuring may the haven't earnings, do projection We long-term also things. We'll of we've have quarter given these the for or in on it feel or pretty that volumes, the XX as we're get visibility provide some impact good partners them the to terms impact we to more to we on earnings. first EBITDA

question with Ann your Hyes Please Securities. with And from our proceed the of next question. Mizuho line comes

you nice a to what goes can into a want to or focus very going debt acuity us just been side. divest on or whether you view decision-making on the I Obviously, of forward? they've market? So And remind do repayment keep hospital on How source a strategically divestitures. divestitures

Yes. question. so -- I I and mean the appreciate --

serving in or overall a way about that the investments are we that a in to versus have needs positive what markets have things it different divestitures impact we does those based or be one growth that strategically, forecast the choices few our upon is, may ongoing may on. our capital assets we other might ability those capital could Obviously, other leadership business our the were return think and we that dependent corporate model, negative upon provide the I spend things things. on and strategy and do money

were then to focused fully assets, the which is, finally, ability we we to And those we full these generate captured built that these proceeds a on work That's think we've in again, what lot what value over assets because of X we that about the how are wanted and thought we've value that the ensure transaction. years for our last them in about. criteria underwent

we today the the build portfolio positions that grow We're, in markets as very I've the today said in. ability comfortable our and to in the and with hold markets have and we that before, we're we're

session. we may concludes today's conference, lines we and the thank your reached time. for And disconnect participation, this also do the and at you your question-and-answer And end you have of this