Good day, and welcome to the Community Health Systems Q3 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ross Comeaux, Vice President of Investor Relations. Please go ahead. Thank you. Good morning, everyone, and welcome to Community Health Systems Q3 of 2022 Conference Call. Joining me on today's call are Tim Hingtgen, Chief Executive Officer, Kevin Hammons, President and Chief Financial Officer, and Dr. Lynn Simon, President of Clinical Operations and Chief Medical Officer. Before I turn the call over to Tim, I'd like to remind everyone that this conference call may contain certain forward-looking statements, including all statements that do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which are described in headings such as Risk Factors in our annual report on Form 10-K and other reports filed with or furnished to the Securities and Exchange Commission. As a consequence, actual results may differ significantly from those expressed in any forward-looking statements in today's discussion. We do not intend to update any of these forward-looking statements. Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of Adjusted EBITDA and Adjusted EPS. For those of you listening to a live broadcast of this conference call, a supplemental slide presentation has been posted on our website. We will refer to those slides during this earnings call. All calculations we will discuss also exclude loss or gain from early extinguishment of debt, impairment expense, as well as gain or losses on the sale of businesses, expense from government and other legal settlements and related costs, expense related to employee termination benefits and other restructuring charges, and gain on sale of equity interest in Macon Healthcare LLC. With that said, I'd like to turn the call over to Tim Hingtgen, Chief Executive Officer. Thank you, Ross. Good morning, everyone, and welcome to our Q3 conference call. During today's call, I will share highlights of some of the progress being made across our organization, and I'll discuss why we believe our strategies continue to position the company for long-term growth. Despite current industry dynamics, we are producing incremental and sequential improvements in many key areas. I'll also cover some of the adjustments we are making in light of inflationary pressures and other factors impacting healthcare operations. First, I want to acknowledge and express gratitude to our healthcare leaders and teams in Florida who did a truly remarkable job before, during, and after Hurricane Ian. Our presence along the west coast of Florida includes eight hospitals and more than 80 outpatient sites of care. Our ShorePoint Health Network, which includes affiliated hospitals in Port Charlotte and Punta Gorda, were most directly impacted by the hurricane. While our facilities sustained damage, our team maintained operations and continued to care for patients throughout the storm. In the aftermath, they worked around the clock to ensure emergency, surgical, and other services would be available to their community. For several days, ShorePoint Health was functioning as the sole healthcare provider within a 30-mile radius. While ShorePoint provided emergency and acute care services, we experienced significant disruption to elective procedures, which continued into early October. Work is ongoing to restore full operations, including affiliated and independent physician practices. One other important note. We are pleased with the progress we made across the capital structure. During the quarter, we took additional steps to improve our capital structure with a successful open market debt repurchase program, extinguishing approximately $267 million of notes outstanding during the quarter. We continue to pursue our opportunities to lower our overall debt and leverage. Kevin will share more details in his remarks. Now I will turn to our Q3 results. As we shared last quarter and continuing into this quarter, demand for non-COVID healthcare services has returned more slowly and later than most predicted, leading to softer than anticipated volumes during the middle of the year. Moving through the Q3, we did see volumes, especially surgery and outpatient visits, pick up by mid-August, coinciding with the end of summer travel, return to school, and more normal schedules. Those improvements continued throughout the rest of the quarter. In the Q3, same-store admissions were down 2.2% on a year-over-year basis, reflecting a lower COVID impact, as well as continued migration of certain surgical and cardiac procedures to outpatient status. For comparison, COVID-related inpatient admissions were 5% this quarter compared to 13% in the Q3 of last year. Our focus on expanding outpatient access and volumes, as well as capturing procedural cases that shifted from inpatient to outpatient classification, resulted in a same-store adjusted admissions increase of 5.2%. Same-store surgeries increased 5.3% and continue to beat the 2019 pre-pandemic baseline. We ended the quarter with surgeries at 101% compared to 2019. Even though we are seeing a shift of some procedures to outpatient, we are also experiencing higher surgical acuity overall as we focus on service line investments. Surgical case mix increased 5% compared to the 2019 baseline. Across service line categories, we saw the strongest growth in orthopedics, spine, neuro, GI, and colorectal procedures. ED volumes are rebounding versus the 2019 baseline too, ending the Q3 at 99%. We continue to invest in ER services and capacity, freestanding emergency departments, EMS partnerships, and ER marketing and outreach programs in our communities. While improving sequentially, net revenue in the Q3 declined year-over-year due to both lower admissions and lower acuity of inpatient admissions versus prior year, which again, was a COVID surge period. Inflationary pressures continue to impact operating expenses and margins. While we remain highly confident in the potential of our overall portfolio, the growth in margin development opportunities in a small number of markets have been hindered in this rising cost environment. We are taking swift and necessary steps to mitigate these headwinds. During the Q3, we accelerated efforts to adjust operations in these markets by consolidating or reducing some services or even opting to close facilities. We expect an overall positive impact from these changes as we close the year, and even more long-term impact moving into 2023. Last quarter, we discussed four areas of focus for this year and next, and I'd like to provide some updates now. The focus areas are opportunistic growth, strengthening the workforce, incremental expense reduction initiatives, and leveraging CHS centralized resources. Starting with opportunistic growth, through prioritized capital investments and service line expansions, we continue to add more capacity in both inpatient and outpatient services. For example, the addition of 112 new beds in our Naples, Florida market are slated for phased opening this quarter and into early 2023, adding capacity and service to all three of our campuses. Our new Northwest Medical Center Houghton facility opened in the Tucson market in June, and volumes are ramping up nicely there and should benefit from a favorable seasonal impact in the coming months. We will open a new 120-bed inpatient behavioral health facility, a joint venture with Acadia, in the Fort Wayne market in December. As we've mentioned before, we believe JVs and other partnerships can help accelerate our growth strategies in a number of markets. On the outpatient side of the business, we continue to add new primary care and specialty practices, urgent care centers, and freestanding EDs in select markets with a good pipeline of future development opportunities. We added ambulatory surgery centers in the Tucson and Huntsville markets during the quarter as we continue our focus on ASC growth opportunities. Our balanced growth strategy will remain a central theme as we continue to demonstrate the ability to shift from inpatient to outpatient settings within our systems of care when that is the preferred or most appropriate setting. Our proprietary transfer center is driving admissions, with strong year-over-year and sequential growth in accepted patient placement. However, as requests for placements have increased due to staffing and capacity constraints, some markets have had to occasionally decline some inbound transfers. We expect incremental progress as our capacity optimization and workforce development initiatives open up more available beds in key markets. As a result, we expect volumes from the transfer center to grow further and to be a continued source of incremental high acuity admissions. Regarding capacity optimization, our emphasis on reducing overall length of stay is also working, with a 6% sequential improvement shown in the Q3. Finally, on the subject of opportunistic growth, provider recruitment enables more access and service line development. It is up 9% year to date compared to the prior year and continues to surpass 2019 levels. Moving on to initiatives underway to strengthen our workforce, we are rapidly reducing contract labor. Contract labor declined each month of the Q3 and totaled $100 million in Q3 compared to $150 million last quarter. Our centralized nurse recruitment team is generating solid results, and our retention strategies are also working well. On a year to date basis, RN hiring is up 12% over last year, and our retention rates have improved 300 basis points, resulting in a strong net gain in nursing FTEs overall. Incidentally, as we have hired more RNs and other permanent workers over the past several months, we also incurred higher than normal onboarding and orientation expenses, especially in the Q3. Our Jersey College Nursing School relationship is expanding. We just announced new campuses in Tucson, Arizona, and Scranton, Pennsylvania, and in a matter of days, had more than 900 potential students express interest. Our first cohort of approximately 30 students in our ShorePoint market will graduate in January 2023. When the Jersey College partnership is fully deployed, we expect to graduate approximately 1,000 new nurses every year. Our investments in the Pathways program, which includes enhanced tuition reimbursement and student loan repayment programs, has been very well received, and that it's also having a positive impact on both employee recruitment and retention. Under incremental expense reduction initiatives, I've already mentioned the service consolidation and closure activities in a small number of markets, which will reduce expenses and investments where we simply do not foresee long-term return. These were thoughtful and deliberate decisions, and we have been careful not to disrupt long-term growth potential while recognizing that in today's environment, sometimes some operations are not sustainable given these dynamics. Our margin improvement program, now in its third year, also continues to yield strong results, and Kevin will provide more details in his remarks. Finally, we are leveraging our centralized resources to benefit all of our markets. I've mentioned several of our programs, such as our transfer center, centralized nurse recruitment, and physician recruitment programs. Other centralized programs include utilization review and case management, our patient access centers for physician practice scheduling, ACOs, and managed care contracting. These programs continue to inform best practices, and they help us to achieve efficiencies across the organization. In closing, we are pleased with many sequential improvements in the Q3 and believe this progress bodes well for the future. We will continue to intentionally and aggressively adapt our portfolio, services, and operations to step over inflationary impact and other industry headwinds, which we believe will position us for better results in 2023 and beyond. We are supporting our markets with enhanced resources to accelerate growth and revenue, which we know is essential to address fixed and higher variable costs and to restore stronger earnings and margin performance. Kevin, at this point, let me turn the call over to you. Thank you, Tim, and good morning, everyone. As Tim mentioned, impacts from the top line, including lower admissions and acuity, along with elevated contract labor and wage inflation, continued to affect our EBITDA performance. However, while navigating through these challenges and simultaneously focusing on future growth, we exceeded expectations in outpatient visits, leading to strong year-over-year volume growth in adjusted admissions and surgeries. Sequentially, we saw improvements in admissions, adjusted admissions, and ER visits. We also improved length of stay, reduced contract labor expense, made improvements to our capital structure, maintained strong liquidity, and produced positive free cash flow during the quarter. Moving to the Q3 results, net operating revenues came in at $3.025 billion on a consolidated basis. On a same-store basis, net revenue was down 2.3% compared to the Q3 of 2021. This was the net result of a 5.2% increase in adjusted admissions and a 7.1% decrease in net revenue per adjusted admission, which was negatively impacted by the reduction in COVID cases and lower non-patient net revenue. Adjusted EBITDA was $400 million. During the quarter, we recorded $115 million of pandemic relief funds, compared to $19 million recognized in the prior year period. Excluding pandemic relief funds, adjusted EBITDA was $285 million with an adjusted EBITDA margin of 9.4%. As a reminder, we have not included any pandemic relief funds in our adjusted EBITDA guidance. Further, we do not expect to receive any meaningful pandemic relief funds going forward. Hurricane Ian resulted in an approximate $10 million hit to the Q3 and on a sequential basis. Closure costs and incremental healthcare provider orientations accounted for another $20 million of sequential headwinds. With regard to expenses on the labor expense side, combined salaries, wages, and benefits, and contract labor expense remain elevated on a year-over-year basis. Specifically related to employee costs, we experienced an increase of approximately 5% in our average hourly rate for employees on a year-over-year basis, which was largely offset by a reduction in hours worked from a combination of operational adjustments, lower inpatient days, and conversion of employees to contract labor. On a sequential basis, base pay inflation grew only 1%. However, an additional calendar day, incremental costs associated with onboarding new employees, and costs associated with increased physician starts, which is typical in the Q3, led to an overall sequential increase in salaries, wages, and benefits of 4%. On the contract labor expense, or our contract labor expense, while still elevated over the prior year, continued to show sequential improvement. During the Q3 of 2022, contract labor was approximately $100 million compared to $60 million in the prior year quarter. This compares to $150 million in the Q2 of 2022 and $190 million in the Q1 of 2022. We anticipate continued progress in reducing contract labor going forward. Non-labor related expenses continue to be well managed despite inflationary pressures. We experienced a moderate increase of 2.5% over the prior year. This is the first increase in seven quarters, and it is primarily attributable to medical specialist fees, increases in utility costs, and the timing of certain provider tax payments, while all other increases and decreases netted to zero. We've been able to keep the growth of these costs well below inflationary levels due to the commitment of our employees to execute on our margin improvement program. Turning now to cash flows. Cash flows provided by operations were $291 million in the first nine months of 2022 compared to $400 million in the prior period. Excluding the repaid Medicare accelerated payments made in the first nine months of 2021, cash flows provided by operations were $667 million for the first nine months of 2021. Lower net revenue and higher labor costs contributed to the lower cash flows during the first nine months of this year. That said, it's worth noting that despite lower year-over-year EBITDA, we still delivered positive free cash flow during the quarter. Moving to CapEx. For the first nine months of 2022, our CapEx was $284 million compared to $334 million in 2021. We effectively adjusted our capital expenditures without materially slowing down our growth opportunities. On the capital structure side, we executed an open market debt repurchase program in the quarter, during which we purchased $267 million of debt with $174 million of cash, resulting in an approximate gain of $78 million. The company's net debt to EBITDA increased to 7.3x, due mostly to lower EBITDA impacts attributed to the current operating environment. Our free cash flow was positive in the quarter. As we manage through this environment, we remain focused on our longer-term goals of lowering our leverage and increasing our free cash flow. In terms of liquidity, at the end of the Q3, we have $300 million of cash on the balance sheet, and we have no outstanding borrowings under the ABL with $935 million of borrowing-based capacity. As a reminder, we have no debt maturities due until 2026. We continue to receive interest related to potential divestitures. As this occurs, we analyze the future growth and earnings profile of specific assets and assess the impact potential divestitures would have on our future financial leverage and free cash flow generation. During the quarter, we divested one small facility in Oklahoma. We are engaged in advanced discussions about other potential transactions. If these transactions come to fruition, we believe that in addition to paying down debt, opportunities also exist to reinvest resources, and those can be directed to areas of our portfolio to advance their long-term growth and earnings. Tim highlighted a number of initiatives to deliver growth. Many of these strategies are delivering the desired results now. Some are ramping up or expanding to generate greater returns, and others are in the development phase to enhance our revenues and earnings potential. We remain committed to our objectives and focused on our opportunities, which are designed to position the company for long-term and sustainable success. Ross, at this point, I'll turn the call back to you. Thank you, Kevin. At this point, we're ready to open up the call for questions. We will limit everyone to one question this morning. As always, you can reach us at 615-465-7000. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Brian Tanquilut with Jefferies. Please go ahead. Hi, good morning, everyone. This is Taji Phillips on for Brian. Thanks for taking my question. Just thinking through bridging your year-to-date numbers and your EBITDA guidance for 2023, this is assuming if you back out COVID relief funds, you know, projection for Q4 between $400 million-$500 million. Can you just talk about what's informing that performance for Q4, also within the context of normal seasonality where Q4 is higher? Just providing any color on Q4 EBITDA performance would be great. Thanks. Sure. This is Kevin, and I think I can take that. As we think about Q4, seasonally, Q4 has always been our highest EBITDA quarter of the year, and we would expect that to be the same this year. As we think about our volume trends as we came out of what was really, you know, an impacted Q2 and early part of Q3 with some disruption, we did see improvement throughout the Q3 on those volumes. As we mentioned, as kids return to school, the end of the summer travel season and return to some kinda normalcy, we did see volumes pick up in the back half of the quarter and continuing on into the Q4. We would expect that to continue throughout the remainder of the quarter. A couple other things I'd point out. We did have sequential reduction in contract labor. And the contract labor, even throughout the Q3 each month, had declined each month. We would expect our Q4 results from a contract labor expense to continue to trend in the same direction, albeit probably not reduce as much as the 33% reduction we saw sequentially in Q3. We would still expect Q4 contract labor to be lower than Q4. The other last item maybe I would point out, as we think about inflation and the potential recession that's ahead of us, you know, we think that there's a theory that as most people, you know, try to get healthcare in before the end of the year, before their co-pays and deductibles reset, we think the kinda economic environment will actually add to that pressure this year for people to think about getting their healthcare in before the end of the year. So we think that, you know, again, it's gonna look a little more like what we've seen in the past with more services performed in Q4. Our next question will come from Kevin Fishbeck with Bank of America. Please go ahead. All right. Great. Thank you. I mean, I guess there's been a little bit of confusion, certainly on our part about what you were saying for Q4. Would you just clarify for everyone exactly what the Q4 guidance range actually is? You know, the real question, just about labor costs, you know, I guess everyone seems to be saying that labor is getting better. Everyone seems to be saying it's getting better slower than they thought. I guess, can you give us a sense about how you think about labor trending into 2023? What factors, in retrospect made it improve more slowly than you thought this year? Thanks. Sure. Our full year guidance, which does not include any pandemic relief funds, I think for the Q4 would imply something in the $400 range to get to the low end of our guidance of $1.3. I think hopefully that clarifies that for you. In terms of labor, you know, we did see labor inflation in the Q3 at about 5% on a base pay rate basis. That was a little higher than we had previously expected. Sequentially, the base pay increased only about 1%. If we think about the first couple quarters of the year, we were in the 8%-8.5% year-over-year inflation. We are seeing some moderation in labor. We think going into 2023, although it, you know, probably remain higher than it has been historically, we do think that there will be some continued moderation. We're probably looking at something in the 3%-4% labor inflation range for 2023. Our next question will come from Jason Cassorla with Citi. Please go ahead. Great. Thanks. Good morning. Just wanted to ask a couple of quick questions on your balance sheet and cash flow. Just first on the balance sheet, you know, you extinguished the $267 million in the quarter. You have no maturities until 2026. So I was curious if there's more opportunity for similar actions down the line. On cash flow, you've done just shy about $300 million of operating cash flow year to date on a $1.06 billion EBITDA baseline, including CARES, but you've maintained your cash flow guide. That would suggest also a pretty sizable step up in cash conversion in Q4. I guess anything on your confidence on that conversion in Q4, and how should we think about the EBITDA to operating cash flow conversion down the line as you continue to grow your EBITDA base? Thanks. Yeah. There's a couple things there. Yeah, I mean, we do feel confident in our cash flow for the Q4. I mean, historically, along with the Q4 being the highest EBITDA quarter of the year, historically, cash flows are the strongest quarter of the year is the Q4. We would expect some of the, you know, there's some one-time payments that often come in in the Q4, and generally, your Q4, is your best cash flow quarter of the year. You know, that kinda coming into the Q4 gives us some confidence that we'll continue to. Or we will be able to meet our guidance for that. Again, if you have a question, please press star then one. Our next question will come from Andrew Mok with UBS. Please go ahead. Hi, this is Robin on for Andrew. Can you walk us through the sources of the $115 million in pandemic aid? As some of your peers have indicated, do you think pandemic relief funding has largely ceased? Thanks. Sure. If you recall, there was a rural grant and a phase four grant that was announced back in December of 2021. That was the source of what was paid to us this quarter. It had just been delayed and did not get to us until this quarter, so we recognized it accordingly. You know, going forward, we do not expect there to be any future material pandemic relief fund grants coming from the government. Our next question will come from Stephen Baxter with Wells Fargo. Please go ahead. Yeah. Hi, thanks. Just a couple of questions here. I guess some companies have helped size the magnitude of COVID support received in 2022. You know, as we think about maybe the moving parts going into next year, I'd be curious if you could update us on what your thinking is there. To be clear, I'm thinking about it excluding things like the $115 million that you received this quarter. Like DRG support, you know, sequestration, 340B changes, items like that, just any sizing you could provide on those as we think about next year. We really haven't given any guidance, you know, for next year, particularly kind of the all the moving parts, and there are several, including, you know, some probably the largest increase in inpatient rate lift, as well. You know, I think the way we're thinking about it at this point, maybe what I would say about that as we're thinking about 2023 is we expect, kinda consistent with our medium-term goals that our same-store net revenue growth into 2023 would be in the mid-single digit range. You know, that would be a combination of, you know, kind of the net impact of these programs, as well as the rate lift that we're seeing on commercial payers, which is also higher than we have historically, you know, received in the past. We're probably in the 5% range or 4%-6% range on commercial contracts. All that being said, I would look at it as about a mid-single digit same-store net revenue growth going into next year. This is Tim. I'll jump in, just a little additional color around that. We also believe our focus on driving acuity and service lines will be a net impact, positive impact for 2023. I referenced some of the declines in the transfer center due to capacity, and typically those are, you know, some higher acuity admissions we're able to bring into our locations of care. I also mentioned the large increase in provider recruitment in 2023 that we onboarded. Those, a lot of those are procedural specialists. We should see more surgical acuity growth through that as well. That should really pull forward with some nice uplift in 2023. Our next question will come from Josh Raskin with Nephron Research. Please go ahead. Hi, thanks. Quick one on the divestitures. It sounded like you were in advanced discussions. If you could just flesh out what the potential sizing of that would look like just on, you know, just the ones that are in advanced discussions there. Then my real question just, you know, if you think about the margins of roughly 11% this year and ultimately trying to get to that long-term 16%, could you just refresh, you know, where you think the major buckets of improvement, sort of what line items and obviously a focus on SWB, so less contract labor and maybe what that means for volumes. Then I guess the specific question would be how much progress do you think you can make next year? What's a reasonable assumption for margin improvement in 2023? Starting with the divestitures, I think we're a little early to size it just because there's a couple different deals, and we're probably a little bit early to size that. You know, we'll certainly give more indication, you know, as we continue to progress in those discussions. In terms of some of the other moving parts in improving our margin to next year, I kind of mentioned, you know, a mid-single digit revenue increase and some, you know, higher than historical rate lift that should, you know, help us certainly get there. It's a little early. You know, we've not yet kind of commented on volume trends for next year. If we think about labor, as I mentioned, kind of in the 3%-4% range for labor inflation is how we're thinking about next year. Contract labor is, you know, probably an interesting one and will certainly contribute to the lift in EBITDA and margin next year. If you think about the progress we've made already coming down from, you know, $240 million in the first half of the year, $100 million in the Q3, and continued reduction that we expect in the fourth quarter, I would look at next year, and we believe we'll see a 40%-50% reduction in contract labor compared to 2022. That should give us some meaningful lift. On the, you know, supply side, it's a variable cost that we, with our margin improvement program, with the efforts that our supply chain team has been executing on, we think that we can keep that relatively consistent or offset any inflationary pressures on our supplies, as well as on some of the other non-labor expenses where we've made great progress over the past couple years. We still believe that there's some runway on that to continue to hold prices down. Although we may not have as much success and keep it absolutely flat like we have for a number of quarters, we think we can certainly keep those non-labor expenses increasing at less than inflationary trends. Josh, this is Tim. Good morning. Just a few things to add. In terms of margin improvement for 2023, we really believe that the fixed cost leverage opportunity exists. We saw what happened, obviously with lower revenues on higher costs in the second quarter, and some of that certainly bleeds into the third. As we pointed out, we're working through that with our initiatives, making really good sequential progress. As we grow the volumes and the revenues, obviously we still expect a higher net revenue conversion rate to lift earnings and margin. The other part of that equation is taking some costs out that were not being paid for in terms of length of stay management. We've been very, very vigilant in our efforts to control what we can control, and that goes into our, you know, length of stay or our case management programs as well. We did see great improvement in the Q3 with our non-COVID length of stay, actually it's better than 2019, better than sequential quarters, better than last year at this time. For what we can control, we're definitely making improvements and bringing down patient days that in many cases we're not being reimbursed for. That has another benefit, as I pointed out, in terms of opening up capacity for us to bring in new incremental admissions through the transfer center, through the recruitment initiative that we have in play to further expand our market share and our patient base in our communities. Our next question will come from Jason Cassorla with Citi. Please go ahead. Great. Thanks for the follow-up. I just wanted to ask quickly on that, on that market share argument. You know, clearly the hospital industry in its entirety is realizing heightened inflationary pressures. From a competitive perspective, not-for-profits are also dealing with investment income declines given what's going on in the equity and bond market. I'm curious if you're seeing perhaps opportunities to take share in that context and what it could mean on building out capacity or heightened investment in general, just given the overall backdrop. Thanks. Great, Jason. This is Tim. I'll kick us off on that one. To answer your question, you know, it varies by market. We have some really strong, you know, not-for-profit, non-taxpaying competitors. In other markets, we do see that type of opportunity. We kind of label it as being appropriately opportunistic in this environment, kind of leveraging our ability to shift resources and CapEx into markets where we, you know, have a really good line of sight on long-term growth. We do see some opportunities to accelerate that. I don't wanna call out any markets specifically today, for fear that the competition will know we've got our sights set on them. At the end of the day, we do see some opportunities in that regard. We've demonstrated, I believe, some really good capital controls across the company throughout the course of the last couple of years, in particular. As Kevin pointed out, we were able to moderate the spend quite nicely. We still had a whole host of bed expansion projects, service line additions, robotic program initiatives underway that will, again, I think, bode well for us to really take advantage of this somewhat challenging inflationary operating environment. Yeah. Maybe I just add to that, I think you covered it really well, Tim. The demographics in our markets are improving. If we think about our footprint across the primarily Southeast and Southwest, many of those states being lower tax jurisdictions are benefiting from some of the demographic move as well as some of the economic move as companies are relocating to lower tax jurisdictions. All that we believe bodes well for many of the markets we're in. We think that not only can we capture some incremental market share but we'll also be capturing our share of a larger market. Our last question is a follow-up from Stephen Baxter with Wells Fargo. Please go ahead. Yeah. Hi. Thanks for the follow-up. Just wanted to ask real quick, you know, it was helpful, the commentary on, you know, some of the swing factors as we move from Q3 to Q4. Can you just remind us, are you expecting to record in the fourth quarter any dollars related to any out-of-period Medicaid payments, things like Florida DPP or Texas QIPP, anything of that nature? Just remind us, I guess, how you guys approach accruing for any of those programs, and if there's anything else that we should be considering. Thank you. Sure. You know, we have probably every quarter some puts and takes on those programs. There's nothing material that I would call out for the Q4. This concludes our question-and-answer session. I would like to turn the conference back over to Tim Hingtgen for any closing remarks. Thanks, Matt. Thanks everyone for spending time with us today. Let me end by thanking our local health system and company leadership teams who share in our commitment to achieve the best results possible and who remain optimistic about our company and where we are headed now and into the future. We look forward to updating you on our progress as we move forward and to continue to work diligently to achieve our goals. As always, if you have any additional questions, you can reach us at 615-465-7000. Have a good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.