Greetings! Welcome to the Tenet Healthcare Analyst Conference Call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press * 0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Will McDowell, Tenet's Vice President of Investor Relations. Thank you. 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 announcement of our accretive Conifer transaction. Tenet senior management participating in today's call will be Saum Sutaria, Chairman and Chief Executive Officer, and Sun Park, Executive Vice President and Chief Financial Officer. 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. Tenet is under no obligation to update any forward-looking statements based on subsequent information. Investors should take note of the cautionary statement in today's press release, as well as the risk factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission. One note before I turn the call over to Saum. As we discussed in today's release, our fourth quarter, 2025 Adjusted EBITDA is expected to be at the upper end of the guidance range that we had previously provided on October 28, 2025, driven by continued strength in same-store revenues and disciplined expense management in both the hospitals and USPI. We will not make any further comments about 2026 guidance or other details about 2025 results on this call. With that, I'll turn the call over to Saum. All right, thank you, Will, and good morning, everyone. I'm very pleased to announce that we have closed an accretive asset sale regarding Conifer's revenue cycle management services contract with CommonSpirit. Conifer has been providing high-quality services under this contract since 2012. This transaction results in total value to Tenet of $2.65 billion, comprised of a mix of cash payments, reduction of material balance sheet liabilities, and the value of a, of the additional 23.8% of Conifer equity that we acquired as part of this transaction. This amounts to an approximate, just under 14x multiple on the impacted 2025 Adjusted EBITDA less NCI. We've spoken in the past about our belief that there was hidden value in Conifer relative to our overall equity value. This transaction is a clear example of that. Now, while this is another example of an attractive asset sale, this is a complex transaction that may not have been expected by the public markets, and as such, we wanted to have this call to provide a more fulsome discussion about the value we have generated. I'm now gonna turn the call over to Sun, so he can provide some details about the transaction. Sun? Thank you, Saum, and good morning, everyone. I'd like to spend a minute to walk through the mechanics of the transaction so you can understand the economics and the value that we have generated as a result. There are several components, so we'll review them step by step. The key components of the transaction are as follows: First, Conifer will continue to provide revenue cycle services to CommonSpirit through the end of 2026, at financial terms that are consistent with the existing contract. Said another way, we expect the same amount of adjusted EBITDA in 2026 from our services that we would have recognized had the transaction not taken place. For context, estimated annual adjusted EBITDA less NCI from this contract in 2025 was approximately $190 million. Second, because the equity transfer of CommonSpirit's stake in Conifer is retroactively effective as of January 1, 2026, we will not record any income available for non-controlling interests or NCI expenses related to CommonSpirit. All of Conifer's economics will be recognized by Tenet in 2026, such that our NCI expense will be lower by approximately $100 million. Third, CommonSpirit will pay $1.9 billion to Tenet over the next three years. $540 million in first quarter of 2026, followed by three equal annual installments of $453 million at the beginning of the first quarters in 2027, 2028, and 2029, respectively. Fourth, in the first quarter of 2026, Tenet will pay $540 million to CommonSpirit to address the elimination of CommonSpirit's capital account and execute the redemption of their 23.8% equity stake in Conifer. Again, effective as of January 1, 2026. This $540 million payment to CommonSpirit will offset the $540 million first installment payment due to Tenet in 2026. CommonSpirit's capital account of $885 million is largely reflected on Tenet's balance sheet in the line item, Redeemable Non-Controlling Interest in the Equity of Consolidated Subsidiaries. We will reduce this balance in the first quarter of 2026. And finally, Tenet's additional paid-in capital balance will increase by $305 million as a result of the transaction. With that, I will turn the call back to Saum. All right, thank you, Sun. We understand CommonSpirit's desire to insource their revenue cycle and support their broader transformation objectives. For over a decade, this has been an excellent relationship for Conifer, and we have supported CommonSpirit's ministries and contributed to a strong revenue cycle foundation for their future. We're proud of the work we've done for them, and we look forward to seeing them continue to advance their important mission in the communities they serve. Conifer is deeply committed to innovation in its work and automation to reduce the cost to collect in its operating model for both Tenet hospitals and third-party clients. As we look to the future, we see opportunities to leverage Conifer's scale to advance offshoring, automation, and apply AI to drive greater efficiencies and enhance capabilities to better serve clients. It is imperative these investments continue and in a manner that is aligned throughout our organization. This transaction returns full strategic control of our growth and future in Conifer to Tenet. In summary, this transaction further strengthens our cash flow position over the next several years. As we step into 2026, we will be focused on actively deploying capital to generate shareholder value, with share repurchase being an important priority for us, in addition to continued M&A in the ambulatory space and capital expenditures to fuel organic growth, all the while maintaining a deleveraged balance sheet. With that, we're ready to begin the Q&A. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press * 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * key. We ask that you please limit yourself to one question. One moment, please, while we poll for your questions. Our first question comes from the line of Brian Tanquilut with Jefferies. Please proceed with your question. Hey, good morning, guys, and congrats on the quarter. But just maybe to focus on this Conifer topic today. You know, as we think about the remaining partners and equity holders within the Conifer book of business, I mean, how are those conversations going? Obviously, this is a big client that's transitioning away, so just curious if you're hearing any reactions or what you can share with us, Saum, in terms of how we should feel confident that you'd be able to retain the remaining portfolio of clients? Thanks. I don't think that's even a topic of conversation. I mean, Conifer's client service and results, including Tenet, have been excellent and continue to be excellent. You guys see that every quarter in terms of what we report. You know, from our standpoint, we have new clients coming on board, so, we expect to substantially to redeploy resources, you know, at the end of this year for our growth objectives. So, I wouldn't think of this as anything other than a highly accretive asset sale, happened to be a contract rather than what we've done in the past, which are hospitals. but from our standpoint, the return of strategic control of Conifer fully to Tenet is important for the types of investments we're going to be making in the future. So, we fully believe in the opportunity in this market and our ability to grow. Got it. Thank you. Thank you. Our next question comes from the line of Josh Raskin with Nephron Research. Please proceed with your question. Hey, good morning. This is actually Marco on for Josh. I appreciate you taking the question. Just one quick one to start. I know you stopped disclosing Conifer-level results back in 2023, but it would just be helpful if you could frame where that business currently sits relative to the revenue and EBITDA contribution. Then the real question is just, you know, you spoke to expansion of investments in AI, automation, and on some other areas in Conifer. Can Can you just recap where investment spending has been focused over the past year or two, and then just give a little bit more detail on the magnitude of that ramp-up that you're speaking to and, and what functionalities you're actually trying to improve moving forward? Thanks. Okay, let me, let me answer. There's a lot of questions in there. Let me give you a brief answer to some of them. First of all, we're not going to talk more about... You know, you can imagine the ink is just dry on this, so, how we think about Conifer beyond the numbers that Sun gave you around, you know, EBITDA minus NCI, impacted EBITDA minus NCI for 2025 of $190 million, is pretty much the extent of what we're going to do today. We obviously have an earnings call coming up and more, you know, after, during and after that, where we'll have some more detail, about that with respect to, how we see the Conifer, you know, how we see Conifer playing out over the year. Obviously, we're going to need to make that clear. Look, from our standpoint, I've been talking about this for the better part of a year and a half in terms of some of the investments that we've been making in the business to support the revenue cycle for ourselves and for our clients at Conifer, in particular, you know, improving the conversion of automated scribe-based notes and other things into appropriate claims, areas like coding, where we have been investing in automation, areas like denials management, where we have been investing in AI-driven solutions to improve the speed and veracity.... of dispute management with the insurers, and also enhancements that have been made with automation technology, some of which are powered by AI, some of which are powered more by advanced analytics, to enhance our automated workflow tools, which is one of the things that makes Conifer so, efficient and reliable in the work that it does. So, from our standpoint, none of those changes, right? We're on a multi-year path here to improve, which results over time in reductions in the cost to collect. That's a good thing, because it takes resources away from what you know is an administrative function and allows people to redeploy them into clinical areas, and that makes Conifer more and more competitive in the marketplace over time. So, none of that changes. We are very, very much focused on continuing that journey and doing it with full strategic control of Conifer, so, those decisions can be made by Tenet. Great. Thank you. Thank you. Our next question comes from the line of A.J. Rice with UBS. Please proceed with your question. Hi, everybody. Just trying to understand your comments about, you know, stepping up consideration of offshoring, investing for AI and other capabilities. Were you constrained under the current arrangement by maybe your partners limited will to commit capital on doing things so, that now you have the ability to, as a sole strategic controller of Conifer, to step up spending? Any sense of how much incremental capital outlay you would direct toward Conifer on a go-forward basis? And then often, when you have a restructuring like this, there's expense reduction opportunities. Have you commented on how you might adjust the cost structure beyond 2026 in Conifer? Do you think you can redeploy that into other growth right away? Yeah. So, A.J., a few different things. First of all, I mean, this was a joint venture, so, in a joint venture, both parties work together collaboratively, usually, you know, to make investment decisions and other things. So, I wouldn't characterize that as being constrained. I mean, we had a joint venture partner, and, you know, we made decisions on a variety of these things together. So, I don't want to put any kind of sense of blame that one party was constraining the other. We were in a situation where we both had to make decisions together. We're now not in that situation, but that doesn't mean that both parties didn't have good ideas throughout the life of the joint venture. And, so, you know, we will both be heading in slightly different directions at this point, but I don't want to leave the impression that, you know, one party was constraining the other, because I don't think that's fair to either party. Right now, we are entirely focused, as Sun indicated, you know, 2026 is going to be a busy year because, you know, it's a big account, and we are, you know, responsible for servicing the account through the year. With the same terms and earnings and other things that we would have expected, and then there will obviously be a transition that comes at the end of it. Our current growth agenda is going to allow us to redeploy a lot of our people, technology, resources, very, very quickly from that standpoint. And we continue... In the last part of your question, we continue to grow and increase the amount of activity that we are pursuing offshore, within the Conifer business and, in fact, more broadly within the Tenet business, so that our Global Business Center in Manila is scaling up and has scaled up over the last year. We'll provide an update on that on the earnings call, but, you know, it continues to scale up, and we would anticipate doing the same in 2026. Again, I come back to a very important point here that I've tried to make, which is the ability to combine workflow automation, AI, and offshore, creates a real opportunity to lower the cost to collect over time, progressively in this outsourcing business, which is just going to make Conifer more and more competitive in the marketplace. Separate all of that from, at the end of the day, this is just a highly accretive asset transaction that made sense at this time. Okay, thanks so much. Thank you. Our next question comes from the line of Justin Lake with Wolfe Research. Please proceed with your question. Thanks. Good morning. Appreciate you running through the numbers. I just want to make sure I kind of understand the economic impact here. So, you're saying, I think if you said $190 million of EBITDA minus NCI and $100 million of NCI, you're saying the EBITDA here is around $300, let's say, round numbers, NCI $100. You keep the EBITDA, you lose the NCI in 2026, and then in 2027, the $300 million of EBITDA goes away. First of all, is that, is that the right way to think about it? And then secondly, the all-in cash, when you think about the, the inflows and outflows and maybe the costs of kind of running this thing and exiting it and all that, can you- can, is there a number that you want us to think about, like an after-tax number?... Potentially in terms of kind of a net that we should be thinking about after all is said and done of kind of cash to the company that we should pencil in? Thanks. Okay. So, a few things. Justin, why don't Saum, why don't you walk through the numbers again, and then I can provide some color on, on maybe some of the areas, Justin, that you've asked about? Yeah. Hey, Justin, I think you're largely correct on your first part. Yes, the EBITDA less NCI for this contract was approximately $190 million, as said. The $100 million of NCI reduction that we will see in 2026 is, of course, reduction on the value we get from our revenue cycle services to CommonSpirit, but also to other non-CommonSpirit agreements as well. So, that's on the overall Conifer book. So, I would just make that distinction on the $100 million of NCI expense. We're not commenting specifically on the EBITDA for 2027 yet. As Saum said, we have a lot of work to do to, you know, plan through that. And then, Saum, back over to you. Well, yeah, and then if you want to talk about the two very direct cash components of this, which are the cash payments plus the direct liability reductions on the balance sheet? Maybe just cover those for Justin again, and then, and then I'll comment. Yeah, sorry about that. Yes. Justin, I think that's right. On the $1.9 billion payment to us, that will largely be a normal taxable structure. As a reminder, if we were receiving revenues throughout the rest of the contract, those would have been... The income there would have been, normally taxable revenue streams as well. So, I think it's apples to apples. On the other cash component, where our balance sheet will see a reduction of $885 million of capital account, plus some smaller amounts in other liabilities, you know, I think the tax piece there gets relatively, you know, modest, and, you know, we'll have more information about that as we go. But I think the largest taxable component is the $1.9 billion that I just mentioned. Yeah. And then the last piece, of course, is the direct reduction, you know, on the balance sheet liabilities, which obviously, at the end of this contract, would have been something that we were making payments on, in addition to whatever the cost of redeeming the equity would have been. So, that's how I would think about it. Obviously, by bringing back our 23.8% equity, we obviously pick up other value in the ownership of that equity, right? Because we now own 100% of it. That's the only non-cash portion, Justin, I guess, is the way to answer that. The value of the equity. The rest of it is all a direct benefit. Thank you. Our next question comes from the line of Sarah James with Cantor Fitzgerald. Please proceed with your question. Thank you. Can you talk about Conifer's AI investment strategy a little bit more, and how you're prioritizing opportunities across the front end, mid-cycle, versus back end, of rev cycle in terms of ROI? Well, as I said, we don't think of this as an AI-only environment. I think there are multiple things that go into this, including, you know, automated automation and robotic processing that contribute to this. Some of those technologies may be powered a bit by AI, but there are areas where AI is very helpful in creating efficiencies and generating the, what I would describe as prior paper-based or human capital-based approach to doing things. Sometimes it's augmenting, sometimes it's checking, sometimes it's producing paper-based things in a more automated fashion, like like denials, you know, denials management processes, and coding. There's also just analytics, which don't really get powered by AI, but advanced analytics that drive workflow efficiency. So, if you think about in the revenue cycle, a lot of what helps make the people who are running it more effective is having the algorithms in place for millions and millions of claims to sort them as accurately, efficiently, and quickly as possible in order to generate the highest yield. So, our investments are split between things we're doing to drive automation, things we're doing to improve the reliability and speed of the workflow, and things where we are deploying AI in order to either augment what people are doing or, in some cases, replace what people are doing in a higher fidelity way. And the combination of those three things drives our investment strategy. The objective, of course, is straightforward. It's reduction in the cost to collect, stepwise over time, which makes the business more competitive from a pricing standpoint.... Secondly, improving the yield and the speed at which you realize that yield, which is really the product that Conifer produces for the marketplace. That's how we think about it. Strategically, our investments are focused across those areas, both with our domestic and Global Business Center today. Does that help? Yes. Thank you. Thank you for the question. Thank you. Our next question comes from the line of Whit Mayo with Leerink Partners. Please proceed with your question. Hey, thanks. When CHI obtained its equity stake years ago in Conifer, did they give you cash for that equity stake? I don't think they did. And is that partially why they're paying back to you $1.9 billion to account for the ownership? And can you also just remind us the timeframe that this contract was structured to run through? The contract began in 2012. It would have ended 20 years later, so 2032. With Jason, I don't know if—I don't believe there was a capital contribution at that time, but you may, you may know exactly. I don't think so. I don't think there was not some. And then with the $1.9 billion is related to the revenue cycle contract, not necessarily the equity. That's just the breakup fee. Right. Yes. Thank you. Thank you. Our next question comes from the line of Craig Hettenbach with Morgan Stanley. Please proceed with your question. Yes, thanks. Just wanted to circle back on how this could influence your capital allocation strategy. So, first, just as you've delevered the balance sheet, you're still kind of comfortable operating around current leverage ratios. And then on USPI, is kind of the strategy there still mostly focused on tuck-in type deals? Well, the capital allocation priority categories haven't changed, right? I mean, growing USPI, I think we forecast already in 2025, we would be well above our $200 million-$250 million. In capital allocation, we continue to see a very strong pipeline for USPI. Sometimes those are individual tuck-in centers, sometimes those are multi-center, you know, multi-center businesses that we're acquiring. We also have a robust de novo strategy that we're investing in significantly as that ramps up. We've talked about the investments in organic growth that we're making, obviously with better margins and returns on capital in our hospital segment. Of course, within that segment is Conifer, and we've already talked about the capital allocation priorities there. We're cognizant of the fact that, you know, this is, again, a highly accretive transaction and contributes to cash relative to what this asset was being valued at, and that gives us an opportunity, as I indicated, in my comments, first and foremost, around share repurchase, especially given our trading multiples today. So, the categories don't change. We just have an opportunity to accelerate, and we have more cash available to us to redeploy in share purchase. Got it. Thank you. Yep. Thank you. Our last question will come from the line of Kevin Fischbeck with Bank of America. Please proceed with your question. Great, thanks. Just wanted to understand a little bit better, make sure that I understand the EBITDA impacts that you're talking about. I understand that you're not able to fully put a point on 2027 EBITDA, but when you talk about the $290 going away, is that kind of your view about the EBITDA of that business, plus whatever deleveraging? Because you talked a bit about how you're going to redeploy assets. I wasn't sure if that $290 assumes maybe there's some drag of fixed cost leverage or whether that assumes full redeployment of assets. And then this comment about, you know, the investments you're going to be making, are these comments kind of normal course, that these are the types of investments we've seen at Conifer year after year, but you're just kind of, you know, reorienting them in a certain way? Or are you talking about a step-up of investment in 2027 and beyond that might, you know, create a drag in the out years? Thanks. Yeah, Kevin, I just want to clarify, the EBITDA minus NCI, the impact of EBITDA minus NCI that we're talking about is $190 million, and it's upon that $190 million that I described the upfront, approximately 14x multiple of the total value in this transaction, not 290. We haven't commented. I mean, obviously, we haven't commented any further about how this is going to look in 2026, let alone 2027. As I said, the ink is just drying on this, and, you know, we have some work to do to understand how we're gonna manage the business over time. And remember, in 2026, we still have a contract of services that we need to run, and we're gonna generate, in addition to everything we talked about here, the usual revenue and margin on this contract during 2026. It's just that we won't have to share the, any NCI expense given that our equity was redeemed, you know, retroactively... to January first of this year, so, that'll create additional earnings in 2026, as a result. And then in 2027, there will be a change. We haven't said what that change is gonna be. We're obviously mapping our growth opportunities, both from the perspective of clients that are already locked in, that we plan on onboarding and redeployment of resources and assets. But, I mean, if ultimately the question is about, you know, do we realize that there's probably some restructuring activity that's gonna have to take place? Yes, of course. But I mean, from my perspective, you know, we've demonstrated the operating discipline to manage our business effectively and grow our earnings and margins despite having had other asset sales. So, you can fully expect that the level of attention to the operations will be the same. What's different in this situation is that we have growth opportunities that are already in front of us, and so, we expect redeployment of our resources, people, talent, technology, et cetera, as a first priority for Conifer as we come to the end of 2026 and the beginning of 2027, and we'll guide to that at the appropriate time. If anything, you know, if I close, I mean, from a qualitative perspective, all that means is, for us, the actual embedded value in owning 100% of Conifer is even higher given our future growth, that's already locked in with this redeployment that will occur. And, you know, we feel very good about that. Thank you. We have reached the end of our question-and-answer session. With that, ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.