• Tenet reported a net loss from continuing operations of $44 million and earnings per share from continuing operations was a loss of $0.44.
  • Adjusted EBITDA was $617 million and Adjusted diluted earnings per share from continuing operations was $0.38.
  • Same-hospital patient revenue grew 4.4% in the second quarter, driven by 0.5% growth in adjusted admissions and 3.9% growth in revenue per adjusted admission. Hospital segment Adjusted EBITDA totaled $415 million.
  • Ambulatory Care segment revenue increased 11.7% on a pro forma same-facility system-wide basis in the second quarter, with cases increasing 5.2% and revenue per case increasing 6.1%. Adjusted EBITDA for the ambulatory segment was $139 million, a 20.9% increase on a pro forma basis.
  • Revenue from Conifer Health Solutions increased 13.5% in the second quarter with revenue from third parties increasing 28.0%. Conifer generated $63 million of Adjusted EBITDA in the second quarter, representing a margin of 16.3%.
  • Net cash provided by operating activities in the first half of 2016 was $582 million, a $229 million improvement when compared to $353 million of cash provided by operating activities in the first half of 2015. Adjusted Free Cash Flow was $268 million in the first half of 2016, a $180 million improvement when compared to $88 million in the first half of 2015.
  • Tenet believes that it has reached an agreement in principle with the government to resolve the Clinica de la Mama criminal investigation and civil litigation for $514 million.
  • Reiterated Adjusted EBITDA Outlook for 2016.

Tenet Healthcare Corporation (NYSE:THC) reported a net loss from continuing operations of $44 million in the second quarter of 2016, a $16 million improvement when compared to a $60 million net loss from continuing operations in the second quarter of 2015. Adjusted EBITDA was $617 million in the second quarter of 2016, an increase of $49 million, or 8.6 percent, compared to $568 million in the second quarter of 2015.

“Our strategic investments in high-acuity service lines helped us to grow same-hospital patient revenue and revenue per adjusted admission,” said Trevor Fetter, chairman and chief executive officer. “Our Conifer Health and USPI subsidiaries performed well and both achieved double-digit revenue growth. We are pleased with the progress we are making on our core strategies across all three business segments and remain on track to meet our Adjusted EBITDA Outlook for the year.”

Hospital Operations and Other Segment

Net operating revenue in the hospital operations and other segment increased to $4.202 billion, up 0.6 percent from $4.175 billion in the second quarter of 2015. On a same-hospital basis, patient revenue increased to $3.743 billion, up 4.4 percent from $3.586 billion in the second quarter of 2015. The increase was driven by a 0.5 percent increase in adjusted patient admissions and a 3.9 percent increase in net patient revenue per adjusted admission.

Adjusted EBITDA in Tenet’s hospital segment was $415 million, representing a decline of 9.6 percent as compared to $459 million in the second quarter of 2015. The decline was primarily driven by divestitures and a decline in electronic health record incentives, and was partially offset by acquisitions.

Total hospital segment selected operating expenses, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 3.4 percent per adjusted admission in the quarter. Approximately half of the 3.4 percent increase was attributable to a $47 million increase in expense at Tenet’s health plan business, which was substantially offset by higher plan premium revenues, and incremental expense related to our discounted malpractice liabilities as a result of the decline in Treasury rates.

Exchanges

Tenet’s same-hospital exchange admissions were 5,478 in the second quarter of 2016, up 14.9 percent from the second quarter of 2015. Same-hospital exchange outpatient visits were 52,020, up 30.5 percent from the second quarter of 2015.

Uncompensated Care

Tenet’s provision for doubtful accounts was $352 million in the second quarter of 2016, representing a ratio of 6.7 percent of revenues before bad debt, as compared to $352 million in the second quarter of 2015, or 7.3 percent of revenues before bad debt. Tenet’s uncompensated care cost, defined as the sum of the provision for doubtful accounts, charity care write-offs and uninsured discounts, was $1.210 billion and $1.226 billion in the second quarters of 2016 and 2015, respectively, including $858 million and $874 million, respectively, of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients. Uncompensated care represented 19.9 percent of revenue before bad debts, uninsured discounts and charity care write-offs in the second quarter of 2016, down from 21.4 percent in the second quarter of 2015. Nearly all of Tenet’s uncompensated care is associated with the Hospital Operations and other segment.

Uninsured plus charity admissions increased by 688 admissions, or 7.9 percent on a same-hospital basis in the second quarter of 2016 compared to the second quarter of 2015. Uninsured plus charity outpatient visits decreased by 692 visits, or 0.6 percent, on a same-hospital basis.

Ambulatory Care Segment

The results of many of the facilities in which the Ambulatory Care segment has an investment are not consolidated by Tenet. To help analyze the segment’s results of operations, management uses system-wide measures which include revenues and cases of both consolidated and unconsolidated facilities. Tenet’s acquisition of a majority interest in USPI and all of Aspen on June 16, 2015 makes the year-over-year comparisons less meaningful since they were not owned for the entire year. In order to improve comparability, Tenet is presenting the results for the Ambulatory Care segment on a pro forma basis, including the results of USPI and Aspen in each comparable period.

During the second quarter of 2016, the Ambulatory segment produced net operating revenue of $442 million, representing an increase of 37.3 percent as compared to $322 million in the second quarter of 2015 on a pro forma basis. On a pro forma same-facility system-wide basis, revenue in the Ambulatory segment increased 11.7 percent, with cases increasing 5.2 percent and revenue per case increasing 6.1 percent.

Tenet’s Ambulatory segment generated Adjusted EBITDA of $139 million in the second quarter of 2016, up 20.9 percent from $115 million in the second quarter of 2015 on a pro forma basis.

Conifer Segment

During the second quarter of 2016, Conifer’s revenue increased 13.5 percent to $386 million, up from $340 million in the second quarter of 2015, and Conifer’s revenue from third party customers increased by 28.0 percent to $224 million. Conifer generated $63 million of Adjusted EBITDA in the second quarter of 2016, up 5.0 percent from $60 million in the second quarter of 2015.

Net Income and Earnings Per Share

Tenet reported a net loss from continuing operations of $44 million, or $0.44 per share, in the second quarter of 2016 compared to a net loss of $60 million, or $0.60 per share, in the second quarter of 2015.

After adjusting for certain items which are listed on Table #2, Tenet generated Adjusted net income from continuing operations of $38 million, or $0.38 per diluted share, during the second quarter of 2016. During the second quarter of 2015, the Company generated Adjusted net income from continuing operations of $76 million, or $0.75 per diluted share.

A reconciliation of GAAP net income available (loss attributable) to Tenet Healthcare Corporation common shareholders to Adjusted net income from continuing operations and Adjusted diluted earnings per share from continuing operations is contained in Table #2 at the end of this release.

Cash Flow and Liquidity

Cash and cash equivalents were $656 million at June 30, 2016 compared to $728 million at March 31, 2016. The Company had no outstanding borrowings on its $1 billion credit line as of June 30, 2016. Accounts receivable days outstanding were 51.1 at June 30, 2016 compared to 50.6 at March 31, 2016 and 49.5 at December 31, 2015. The increase in accounts receivable days outstanding was primarily attributable to receivables that were retained from divested hospitals, including the sale of the Company’s hospitals in the Atlanta area and North Carolina.

Net cash provided by operating activities in the six months ended June 30, 2016 was $582 million, representing a $229 million improvement compared to $353 million in the comparable period in 2015. After subtracting $413 million and $359 million of capital expenditures in the six months ended June 30, 2016 and June 30, 2015, respectively, Free Cash Flow was $169 million in the six months ended June 30, 2016, representing a $175 million improvement compared to a $6 million outflow in the comparable period in 2015. Adjusted Free Cash Flow was $268 million in the six months ended June 30, 2016, representing a $180 million improvement from $88 million in the comparable period in 2015.

Net cash provided by investing activities was $54 million in the six months ended June 30, 2016 compared to $985 million of net cash used in investing activities in the comparable period in 2015. Net cash used in financing activities was $336 million in the six months ended June 30, 2016 compared to $738 million of net cash provided by financing activities in the comparable period in 2015.

Reconciliations of net cash provided by (used in) operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.

Clinica de la Mama Update

The Company believes that it has reached an agreement in principle with the government to resolve the Clinica de la Mama criminal investigation and civil litigation for $514 million. Based on the agreement in principle, we have increased our reserve from $407 million to $516 million to reflect the monetary components of the agreement in principle and certain other costs. This amount is reflected in Tenet’s consolidated balance sheet as of June 30, 2016 as accrued legal settlement costs. The increase in reserve lowered net income by approximately $67 million or $0.67 per share during the second quarter of 2016. Tenet expects the payment to be made as early as the third quarter of 2016, and to be funded through general corporate sources of liquidity, including cash on the balance sheet and borrowings under the Company’s revolving credit facility.

In addition to the monetary component, the agreement in principle includes the following non-monetary terms: (i) the execution of a Non-Prosecution Agreement, which includes the appointment of a corporate monitor for a period of three years; (ii) the agreement of the two indirect, wholly owned subsidiaries that previously operated Atlanta Medical Center and North Fulton Hospital, and which currently have no operating assets, to each plead guilty to a single-count indictment; and (iii) the execution of a corporate integrity agreement. The final resolution is subject to the negotiation and execution of definitive agreements. For additional information regarding these and other terms of the agreement in principle, see Note 10 to the Consolidated Financial Statements included in the Company’s Form 10-Q for the three months ended June 30, 2016.

Outlook

The Company’s Outlook for 2016 includes:

  • Revenue of $19.5 billion to $19.8 billion,
  • Net loss from continuing operations ranging from a loss of $65 million to a loss of $30 million,
  • Adjusted EBITDA of $2.4 billion to $2.5 billion,
  • Net cash provided by operating activities of $1.2 billion to $1.3 billion,
  • Adjusted Free Cash Flow of $400 million to $600 million,
  • Loss per share from continuing operations ranging from a loss of $0.66 to a loss of $0.30 per basic share, and
  • Adjusted diluted earnings per share from continuing operations of $1.32 to $1.67.

The Outlook for calendar year 2016 assumes equity in earnings of unconsolidated affiliates of $110 million to $130 million, electronic health record incentives of $25 million to $35 million, net income attributable to noncontrolling interests of $330 million to $350 million (excluding the additional $18 million of noncontrolling interests recorded by USPI in the first quarter of 2016, as discussed in our first quarter earnings release) and an average diluted share count of 102 million.

The Company’s Outlook for the third quarter of 2016 includes:

  • Revenue of $4.75 billion to $4.85 billion,
  • Net income from continuing operations of $10 million to $25 million,
  • Adjusted EBITDA of $550 million to $600 million,
  • Earnings per diluted share from continuing operations of $0.10 to $0.25, and
  • Adjusted diluted earnings per share from continuing operations of $0.10 to $0.25.

The Outlook for the third quarter assumes equity in earnings of unconsolidated affiliates of approximately $25 million, electronic health record incentives of less than $5 million, net income attributable to noncontrolling interests of $80 million to $90 million and an average diluted share count of 102 million.

Additional details on Tenet’s Outlook for both the third quarter and calendar year 2016 are available in Tables 4 and 5 at the end of this press release and in an accompanying slide presentation that is accessible through the Company’s website at www.tenethealth.com/investors.

Management’s Webcast Discussion of Second Quarter Results

Tenet management will discuss the Company’s second quarter 2016 results on a webcast scheduled for 10:00 a.m. EDT (9:00 a.m. CDT) on August 2, 2016. Investors can access the webcast through Tenet’s website at www.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, is available on the Quarterly Results section of the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-Q report for the three months ended June 30, 2016, which will be filed with the Securities and Exchange Commission and posted on the Tenet website before the webcast. This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income from continuing operations, Adjusted diluted earnings per share from continuing operations, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measure are contained in the tables at the end of this release.

Tenet Healthcare Corporation is a diversified healthcare services company with 130,000 employees united around a common mission: to help people live happier, healthier lives. Through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, the Company operates 79 general acute care hospitals, 20 short-stay surgical hospitals and over 470 outpatient centers in the United States, as well as nine facilities in the United Kingdom. Tenet’s Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visit www.tenethealth.com.

The terms "THC", "Tenet Healthcare Corporation", "the Company", "we", "us" or "our" refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.

This release contains “forward-looking statements” – that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “assume,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2015 and other filings with the Securities and Exchange Commission. Among other things, these factors include adverse regulatory developments, government investigations or litigation, including the payment of civil and criminal monetary penalties and other conditions required in connection with the proposed settlement and resolution of the Clinica de la Mama civil litigation and criminal investigation described in Note 10 to the Consolidated Financial Statements included in our Form 10-Q for the three months ended June 30, 2016. The settlement and resolution of the Clinica de la Mama matters is subject to the execution of definitive documents and court acceptance. Although the Company believes it will reach a final resolution of the Clinica de la Mama matters, there can be no assurance that such a resolution will be reached or that judicial acceptance of the resolution terms will be received. If a resolution is not reached or accepted, or if the terms of the final resolution are materially different than the agreement in principle, the eventual loss related to these matters could materially exceed the amount reserved and could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Tenet uses its Company website to provide important information to investors about the Company including the posting of important announcements regarding financial performance and corporate developments.

    TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)   (Dollars in millions except per share amounts)     Three Months Ended June 30, 2016     %     2015     %     Change Net operating revenues: Net operating revenues before provision for doubtful accounts $ 5,220 $ 4,844 7.8 % Less: Provision for doubtful accounts   352     352   - % Net operating revenues 4,868 100.0 % 4,492 100.0 % 8.4 % Equity in earnings of unconsolidated affiliates 30 0.6 % 16 0.4 % 87.5 % Operating expenses: Salaries, wages and benefits 2,316 47.6 % 2,185 48.6 % 6.0 % Supplies 773 15.9 % 707 15.7 % 9.3 % Other operating expenses, net 1,213 24.9 % 1,081 24.1 % 12.2 % Electronic health record incentives (21 ) (0.4 )% (33 ) (0.7 )% (36.4 )% Depreciation and amortization 215 4.4 % 197 4.4 % Impairment and restructuring charges, and acquisition-related costs 22 0.4 % 193 4.3 % Litigation and investigation costs 114 2.3 % 14 0.3 % Gains on sales, consolidation and deconsolidation of facilities   (1 ) — %   —   — % Operating income 267 5.5 % 164 3.7 % Interest expense (244 ) (217 ) Investment earnings (losses)   2     (1 ) Net income (loss) from continuing operations, before income taxes 25 (54 ) Income tax expense   16     27   Net income (loss) from continuing operations, before discontinued operations 41 (27 ) Discontinued operations: Loss from operations (2 ) (2 ) Income tax benefit   —     1   Net loss from discontinued operations   (2 )   (1 ) Net income (loss) 39 (28 ) Less: Net income attributable to noncontrolling interests   85     33   Net loss attributable to Tenet Healthcare Corporation common shareholders $ (46 ) $ (61 ) Amounts attributable to Tenet Healthcare Corporation common shareholders Net loss from continuing operations, net of tax $ (44 ) $ (60 ) Net loss from discontinued operations, net of tax   (2 )   (1 ) Net loss attributable to Tenet Healthcare Corporation common shareholders $ (46 ) $ (61 ) Loss per share attributable to Tenet Healthcare Corporation common shareholders: Basic Continuing operations $ (0.44 ) $ (0.60 ) Discontinued operations   (0.02 )   (0.01 ) $ (0.46 ) $ (0.61 ) Diluted Continuing operations $ (0.44 ) $ (0.60 ) Discontinued operations   (0.02 )   (0.01 ) $ (0.46 ) $ (0.61 ) Weighted average shares and dilutive securities outstanding (in thousands): Basic 99,341 99,244 Diluted* 99,341 99,244

*Had we generated income from continuing operations in the three months ended June 30, 2016 and 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,386 shares and 2,673 shares, respectively.

    TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)   (Dollars in millions except per share amounts)     Six Months Ended June 30, 2016     %     2015     %     Change Net operating revenues: Net operating revenues before provision for doubtful accounts $ 10,640 $ 9,631 10.5 % Less: Provision for doubtful accounts   728     715   1.8 % Net operating revenues 9,912 100.0 % 8,916 100.0 % 11.2 % Equity in earnings of unconsolidated affiliates 54 0.5 % 20 0.2 % 170.0 % Operating expenses: Salaries, wages and benefits 4,718 47.6 % 4,310 48.3 % 9.5 % Supplies 1,584 16.0 % 1,394 15.6 % 13.6 % Other operating expenses, net 2,455 24.8 % 2,174 24.4 % 12.9 % Electronic health record incentives (21 ) (0.2 )% (39 ) (0.4 )% (46.2 )% Depreciation and amortization 427 4.3 % 404 4.5 % Impairment and restructuring charges, and acquisition-related costs 50 0.4 % 222 2.5 % Litigation and investigation costs 287 2.9 % 17 0.2 % Gains on sales, consolidation and deconsolidation of facilities   (148 ) (1.5 )%   —   — % Operating income 614 6.2 % 454 5.1 % Interest expense (487 ) (416 ) Investment earnings (losses)   3     (1 ) Net income from continuing operations, before income taxes 130 37 Income tax benefit (expense)   (51 )   11   Net income from continuing operations, before discontinued operations 79 48 Discontinued operations: Loss from operations (7 ) — Income tax benefit   1     —   Net loss from discontinued operations   (6 )     Net income 73 48 Less: Net income attributable to noncontrolling interests   178     62   Net loss attributable to Tenet Healthcare Corporation common shareholders $ (105 ) $ (14 ) Amounts attributable to Tenet Healthcare Corporation common shareholders Net loss from continuing operations, net of tax $ (99 ) $ (14 ) Net loss from discontinued operations, net of tax   (6 )   —   Net loss attributable to Tenet Healthcare Corporation common shareholders $ (105 ) $ (14 ) Net loss per share attributable to Tenet Healthcare Corporation common shareholders: Basic Continuing operations $ (1.00 ) $ (0.14 ) Discontinued operations   (0.06 )   —   $ (1.06 ) $ (0.14 ) Diluted Continuing operations $ (1.00 ) $ (0.14 ) Discontinued operations   (0.06 )   —   $ (1.06 ) $ (0.14 ) Weighted average shares and dilutive securities outstanding (in thousands): Basic 99,054 98,972 Diluted* 99,054 98,972

*Had we generated income from continuing operations in the six months ended June 30, 2016 and 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,477 shares and 2,423 shares, respectively.

    TENET HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)       June 30,     December 31, (Dollars in millions)   2016     2015   ASSETS Current assets: Cash and cash equivalents $ 656 $ 356 Accounts receivable, less allowance for doubtful accounts 2,734 2,704 Inventories of supplies, at cost 316 309 Income tax receivable 3 7 Assets held for sale 2 550 Other current assets   1,282     1,245   Total current assets 4,993 5,171 Investments and other assets 1,317 1,175 Deferred income taxes 797 776 Property and equipment, at cost, less accumulated depreciation and amortization 7,977 7,915 Goodwill 7,291 6,970 Other intangible assets, at cost, less accumulated amortization   1,865     1,675   Total assets $ 24,240   $ 23,682     LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 181 $ 127 Accounts payable 1,272 1,380 Accrued compensation and benefits 843 880 Professional and general liability reserves 179 177 Accrued interest payable 205 205 Liabilities held for sale — 101 Accrued legal settlement costs 525 294 Other current liabilities   1,225     1,144   Total current liabilities 4,430 4,308 Long-term debt, net of current portion 14,320 14,383 Professional and general liability reserves 613 578 Defined benefit plan obligations 594 595 Deferred income taxes 274 37 Other long-term liabilities   582     557   Total liabilities 20,813 20,458 Commitments and contingencies Redeemable noncontrolling interests in equity of consolidated subsidiaries 2,275 2,266 Equity: Shareholders’ equity: Common stock 7 7 Additional paid-in capital 4,791 4,815 Accumulated other comprehensive loss (203 ) (164 ) Accumulated deficit (1,655 ) (1,550 ) Common stock in treasury, at cost   (2,417 )   (2,417 ) Total shareholders’ equity 523 691 Noncontrolling interests   629     267   Total equity   1,152     958   Total liabilities and equity $ 24,240   $ 23,682       TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)       Six Months Ended (Dollars in millions) June 30,   2016         2015   Net Income $ 73 $ 48 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 427 404 Provision for doubtful accounts 728 715 Deferred income tax expense 37 (27 ) Stock-based compensation expense 35 33 Impairment and restructuring charges, and acquisition-related costs 50 222 Litigation and investigation costs 287 17 Gains on sales, consolidation and deconsolidation of facilities (148 ) — Equity in earnings of unconsolidated affiliates, net of distributions received 10 (20 ) Amortization of debt discount and debt issuance costs 21 21 Pre-tax loss (income) from discontinued operations 7 — Other items, net (2 ) (5 ) Changes in cash from operating assets and liabilities: Accounts receivable (725 ) (779 ) Inventories and other current assets (30 ) 36 Income taxes (17 ) 9 Accounts payable, accrued expenses and other current liabilities (106 ) (267 ) Other long-term liabilities 34 40 Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements (99 ) (86 ) Net cash used in operating activities from discontinued operations, excluding income taxes       (8 ) Net cash provided by operating activities 582 353 Cash flows from investing activities: Purchases of property and equipment — continuing operations (413 ) (359 ) Purchases of businesses or joint venture interests, net of cash acquired (94 ) (636 ) Proceeds from sales of facilities and other assets 573 — Proceeds from sales of marketable securities, long-term investments and other assets 24 11 Purchases of equity investments (35 ) (2 ) Other long-term assets (3 ) — Other items, net   2     1   Net cash provided by (used in) investing activities 54 (985 ) Cash flows from financing activities: Repayments of borrowings under credit facility (1,195 ) (1,315 ) Proceeds from borrowings under credit facility 1,195 1,195 Repayments of other borrowings (76 ) (1,992 ) Proceeds from other borrowings — 3,187 Debt issuance costs — (72 ) Distributions paid to noncontrolling interests (95 ) (23 ) Proceeds from sale of noncontrolling interests 15 3 Purchase of noncontrolling interests (177 ) (254 ) Proceeds from exercise of stock options 3 9 Other items, net   (6 )   —   Net cash provided by (used in) financing activities   (336 )   738   Net increase in cash and cash equivalents 300 106 Cash and cash equivalents at beginning of period   356     193   Cash and cash equivalents at end of period $ 656   $ 299   Supplemental disclosures: Interest paid, net of capitalized interest $ (467 ) $ (385 ) Income tax payments, net $ (29 ) $ (8 )     TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)   (Dollars in millions except per patient day,                         per admission, per adjusted admission Three Months Ended June 30, Six Months Ended June 30, and per visit amounts)   2016     2015   Change   2016     2015   Change   Admissions, Patient Days and Surgeries Number of hospitals (at end of period) 75 80 (5 ) * 75 80 (5 ) * Total admissions 193,898 201,908 (4.0 )% 405,697 410,241 (1.1 )% Adjusted patient admissions 342,813 349,145 (1.8 )% 705,632 698,242 1.1 % Paying admissions (excludes charity and uninsured) 183,539 191,373 (4.1 )% 384,975 388,756 (1.0 )% Charity and uninsured admissions 10,359 10,535 (1.7 )% 20,722 21,485 (3.6 )% Admissions through emergency department 122,283 128,570 (4.9 )% 258,339 262,114 (1.4 )% Paying admissions as a percentage of total admissions 94.7 % 94.8 % (0.1 )% * 94.9 % 94.8 % 0.1 % * Charity and uninsured admissions as a percentage of total admissions 5.3 % 5.2 % 0.1 % * 5.1 % 5.2 % (0.1 )% * Emergency department admissions as a percentage of total admissions 63.1 % 63.7 % (0.6 )% * 63.7 % 63.9 % (0.2 )% * Surgeries — inpatient 54,379 55,282 (1.6 )% 110,134 108,992 1.0 % Surgeries — outpatient 75,821 72,241 5.0 % 152,650 139,934 9.1 % Total surgeries 130,201 127,523 2.1 % 262,785 248,926 5.6 % Patient days — total 897,313 929,840 (3.5 )% 1,907,827 1,905,752 0.1 % Adjusted patient days 1,569,272 1,589,659 (1.3 )% 3,283,641 3,208,175 2.4 % Average length of stay (days) 4.63 4.61 0.4 % 4.70 4.65 1.1 % Licensed beds (at end of period) 20,380 20,826 (2.1 )% 20,380 20,826 (2.1 )% Average licensed beds 20,380 20,826 (2.1 )% 20,953 20,823 0.6 % Utilization of licensed beds 48.4 % 49.1 % (0.7 )% * 50.0 % 50.6 % (0.6 )% * Outpatient Visits Total visits 2,038,287 2,063,037 (1.2 )% 4,184,905 4,057,610 3.1 % Paying visits (excludes charity and uninsured) 1,896,394 1,903,403 (0.4 )% 3,880,909 3,740,779 3.7 % Charity and uninsured visits 141,893 159,634 (11.1 )% 303,996 316,831 (4.1 )% Emergency department visits 715,692 742,951 (3.7 )% 1,505,608 1,484,484 1.4 % Paying visits as a percentage of total visits 93.0 % 92.3 % 0.7 % * 92.7 % 92.2 % 0.5 % * Charity and uninsured visits as a percentage of total visits 7.0 % 7.7 % (0.7 )% * 7.3 % 7.8 % (0.5 )% * Revenues Net inpatient revenues $ 2,588 $ 2,623 (1.3 )% $ 5,369 $ 5,314 1.0 % Net outpatient revenues $ 1,460 $ 1,484 (1.6 )% $ 2,974 $ 2,896 2.7 % Revenues on a Per Admission, Per Patient Day and Per Visit Basis Net inpatient revenue per admission $ 13,347 $ 12,991 2.7 % $ 13,234 $ 12,953 2.2 % Net inpatient revenue per patient day $ 2,884 $ 2,821 2.2 % $ 2,814 $ 2,788 0.9 % Net outpatient revenue per visit $ 716 $ 719 (0.4 )% $ 711 $ 714 (0.4 )% Net patient revenue per adjusted patient admission $ 11,808 $ 11,767 0.3 % $ 11,823 $ 11,758 0.6 % Net patient revenue per adjusted patient day $ 2,580 $ 2,585 (0.2 )% $ 2,541 $ 2,559 (0.7 )% Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission $ 10,668 $ 10,314 3.4 % $ 10,600 $ 10,299 2.9 %   Net Patient Revenues from: Medicare 21.7 % 20.7 % 1.0 % * 20.8 % 21.3 % (0.5 )% * Medicaid 7.4 % 8.5 % (1.1 )% * 8.0 % 9.0 % (1.0 )% * Managed care 59.4 % 60.8 % (1.4 )% * 60.4 % 59.9 % 0.5 % * Indemnity, self-pay and other 11.5 % 10.0 % 1.5 % * 10.8 % 9.8 % 1.0 % * (1)   Represents the consolidated results of Tenet’s Hospital Operations and other segment. * This change is the difference between the 2016 and 2015 amounts shown     TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)   (Dollars in millions except per patient day,                         per admission, per adjusted admission Three Months Ended June 30, Six Months Ended June 30, and per visit amounts)   2016     2015   Change   2016     2015   Change   Admissions, Patient Days and Surgeries Number of hospitals (at end of period) 67 67 — * 67 67 — * Total admissions 177,151 179,135 (1.1 )% 362,204 364,282 (0.6 )% Adjusted patient admissions 309,372 307,958 0.5 % 625,159 616,687 1.4 % Paying admissions (excludes charity and uninsured) 167,717 170,389 (1.6 )% 344,003 346,412 (0.7 )% Charity and uninsured admissions 9,434 8,746 7.9 % 18,201 17,870 1.9 % Admissions through emergency department 111,994 113,741 (1.5 )% 230,572 232,067 (0.6 )% Paying admissions as a percentage of total admissions 94.7 % 95.1 % (0.4 )% * 95.0 % 95.1 % (0.1 )% * Charity and uninsured admissions as a percentage of total admissions 5.3 % 4.9 % 0.4 % * 5.0 % 4.9 % 0.1 % * Emergency department admissions as a percentage of total admissions 63.2 % 63.5 % (0.3 )% * 63.7 % 63.7 % — % * Surgeries — inpatient 49,222 49,291 (0.1 )% 97,769 97,586 0.2 % Surgeries — outpatient 65,678 64,407 2.0 % 129,677 124,901 3.8 % Total surgeries 114,900 113,698 1.1 % 227,446 222,487 2.2 % Patient days — total 805,662 817,881 (1.5 )% 1,667,800 1,678,808 (0.7 )% Adjusted patient days 1,394,486 1,391,305 0.2 % 2,851,066 2,812,810 1.4 % Average length of stay (days) 4.55 4.57 (0.4 )% 4.60 4.61 (0.2 )% Licensed beds (at end of period) 18,144 18,244 (0.5 )% 18,144 18,244 (0.5 )% Average licensed beds 18,144 18,244 (0.5 )% 18,142 18,241 (0.5 )% Utilization of licensed beds 48.8 % 49.3 % (0.5 )% * 50.8 % 50.8 % — % * Outpatient Visits Total visits 1,830,522 1,815,393 0.8 % 3,685,257 3,578,261 3.0 % Paying visits (excludes charity and uninsured) 1,707,375 1,691,554 0.9 % 3,436,059 3,330,685 3.2 % Charity and uninsured visits 123,147 123,839 (0.6 )% 249,198 247,576 0.7 % Emergency department visits 640,774 632,470 1.3 % 1,311,452 1,269,330 3.3 % Paying visits as a percentage of total visits 93.3 % 93.2 % 0.1 % * 93.2 % 93.1 % 0.1 % * Charity and uninsured visits as a percentage of total visits 6.7 % 6.8 % (0.1 )% * 6.8 % 6.9 % (0.1 )% * Revenues Net inpatient revenues $ 2,400 $ 2,305 4.1 % $ 4,899 $ 4,687 4.5 % Net outpatient revenues $ 1,343 $ 1,281 4.8 % $ 2,674 $ 2,507 6.7 % Revenues on a Per Admission, Per Patient Day and Per Visit Basis Net inpatient revenue per admission $ 13,548 $ 12,867 5.3 % $ 13,526 $ 12,866 5.1 % Net inpatient revenue per patient day $ 2,979 $ 2,818 5.7 % $ 2,937 $ 2,792 5.2 % Net outpatient revenue per visit $ 734 $ 706 4.0 % $ 726 $ 701 3.6 % Net patient revenue per adjusted patient admission $ 12,099 $ 11,644 3.9 % $ 12,114 $ 11,666 3.8 % Net patient revenue per adjusted patient day $ 2,684 $ 2,577 4.2 % $ 2,656 $ 2,558 3.8 %   Net Patient Revenues from: Medicare 20.1 % 20.7 % (0.6 )% * 20.4 % 21.3 % (0.9 )% * Medicaid 7.8 % 8.3 % (0.5 )% * 8.1 % 8.9 % (0.8 )% * Managed care 62.1 % 61.6 % 0.5 % * 62.0 % 60.4 % 1.6 % * Indemnity, self-pay and other 10.0 % 9.4 % 0.6 % * 9.5 % 9.4 % 0.1 % * (1)   Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the six months ended June 30, 2016 and 2015, associated outpatient facilities and six health plans and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015. * This change is the difference between the 2016 and 2015 amounts shown     TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)   (Dollars in millions except per share amounts)     Three Months Ended     Six Months Ended   3/31/2016         6/30/2016     6/30/2016   Net operating revenues: Net operating revenues before provision for doubtful accounts $ 5,420 $ 5,220 $ 10,640 Less: Provision for doubtful accounts   376     352     728   Net operating revenues 5,044 4,868 9,912 Equity in earnings of unconsolidated affiliates 24 30 54 Operating expenses: Salaries, wages and benefits 2,402 2,316 4,718 Supplies 811 773 1,584 Other operating expenses, net 1,242 1,213 2,455 Electronic health record incentives — (21 ) (21 ) Depreciation and amortization 212 215 427 Impairment and restructuring charges, and acquisition-related costs 28 22 50 Litigation and investigation costs 173 114 287

Gains on sales, consolidation and deconsolidation of facilities

  (147 )   (1 )   (148 ) Operating income 347 267 614 Interest expense (243 ) (244 ) (487 ) Investment earnings (losses)   1     2     3   Net income from continuing operations, before income taxes 105 25 130 Income tax benefit (expense)   (67 )   16     (51 ) Net income from continuing operations, before discontinued operations 38 41 79 Discontinued operations: Loss from operations (5 ) (2 ) (7 ) Income tax benefit   1     —     1   Net loss from discontinued operations   (4 )   (2 )   (6 ) Net income 34 39 73 Less: Net income attributable to noncontrolling interests   93     85     178   Net loss attributable to Tenet Healthcare Corporation common shareholders $ (59 ) $ (46 ) $ (105 ) Amounts attributable to Tenet Healthcare Corporation common shareholders Net loss from continuing operations, net of tax $ (55 ) $ (44 ) $ (99 ) Net loss from discontinued operations, net of tax   (4 )   (2 )   (6 ) Net loss attributable to Tenet Healthcare Corporation common shareholders $ (59 ) $ (46 ) $ (105 ) Net loss per share attributable to Tenet Healthcare Corporation common shareholders: Basic Continuing operations $ (0.56 ) $ (0.44 ) $ (1.00 ) Discontinued operations   (0.04 )   (0.02 )   (0.06 ) $ (0.60 ) $ (0.46 ) $ (1.06 ) Diluted Continuing operations $ (0.56 ) $ (0.44 ) $ (1.00 ) Discontinued operations   (0.04 )   (0.02 )   (0.06 ) $ (0.60 ) $ (0.46 ) $ (1.06 ) Weighted average shares and dilutive securities outstanding (in thousands): Basic 98,768 99,341 99,054 Diluted 98,768 99,341 99,054     TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)   (Dollars in millions except per patient day,             per admission, per adjusted admission Three Months Ended Six Months Ended and per visit amounts)   3/31/2016     6/30/2016     6/30/2016     Admissions, Patient Days and Surgeries Number of hospitals (at end of period) 80 75 75 Total admissions 211,799 193,898 405,697 Adjusted patient admissions 362,819 342,813 705,632 Paying admissions (excludes charity and uninsured) 201,436 183,539 384,975 Charity and uninsured admissions 10,363 10,359 20,722 Admissions through emergency department 136,056 122,283 258,339 Paying admissions as a percentage of total admissions 95.1 % 94.7 % 94.9 % Charity and uninsured admissions as a percentage of total admissions 4.9 % 5.3 % 5.1 % Emergency department admissions as a percentage of total admissions 64.2 % 63.1 % 63.7 % Surgeries — inpatient 55,755 54,379 110,134 Surgeries — outpatient 76,829 75,821 152,650 Total surgeries 132,584 130,201 262,785 Patient days — total 1,010,514 897,313 1,907,827 Adjusted patient days 1,714,369 1,569,272 3,283,641 Average length of stay (days) 4.77 4.63 4.70 Licensed beds (at end of period) 21,529 20,380 20,380 Average licensed beds 21,524 20,380 20,953 Utilization of licensed beds 51.6 % 48.4 % 50.0 % Outpatient Visits Total visits 2,146,618 2,038,287 4,184,905 Paying visits (excludes charity and uninsured) 1,984,515 1,896,394 3,880,909 Charity and uninsured visits 162,103 141,893 303,996 Emergency department visits 789,916 715,692 1,505,608 Paying visits as a percentage of total visits 92.4 % 93.0 % 92.7 % Charity and uninsured visits as a percentage of total visits 7.6 % 7.0 % 7.3 % Revenues Net inpatient revenues $ 2,781 $ 2,588 $ 5,369 Net outpatient revenues $ 1,514 $ 1,460 $ 2,974 Revenues on a Per Admission, Per Patient Day and Per Visit Basis Net inpatient revenue per admission $ 13,130 $ 13,347 $ 13,234 Net inpatient revenue per patient day $ 2,752 $ 2,884 $ 2,814 Net outpatient revenue per visit $ 705 $ 716 $ 711 Net patient revenue per adjusted patient admission $ 11,838 $ 11,808 $ 11,823 Net patient revenue per adjusted patient day $ 2,505 $ 2,580 $ 2,541 Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission $ 10,537 $ 10,668 $ 10,600   Net Patient Revenues from: Medicare 20.0 % 21.7 % 20.8 % Medicaid 8.7 % 7.4 % 8.0 % Managed care 61.1 % 59.4 % 60.4 % Indemnity, self-pay and other 10.2 % 11.5 % 10.8 % (1)   Represents the consolidated results of Tenet’s Hospital Operations and other segment.     TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)   (Dollars in millions except per patient day,             per admission, per adjusted admission Three Months Ended Six Months Ended and per visit amounts)   3/31/2016     6/30/2016     6/30/2016     Admissions, Patient Days and Surgeries Number of hospitals (at end of period) 67 67 67 Total admissions 185,053 177,151 362,204 Adjusted patient admissions 315,787 309,372 625,159 Paying admissions (excludes charity and uninsured) 176,286 167,717 344,003 Charity and uninsured admissions 8,767 9,434 18,201 Admissions through emergency department 118,578 111,994 230,572 Paying admissions as a percentage of total admissions 95.3 % 94.7 % 95.0 % Charity and uninsured admissions as a percentage of total admissions 4.7 % 5.3 % 5.0 % Emergency department admissions as a percentage of total admissions 64.1 % 63.2 % 63.7 % Surgeries — inpatient 48,547 49,222 97,769 Surgeries — outpatient 63,999 65,678 129,677 Total surgeries 112,546 114,900 227,446 Patient days — total 862,138 805,662 1,667,800 Adjusted patient days 1,456,580 1,394,486 2,851,066 Average length of stay (days) 4.66 4.55 4.60 Licensed beds (at end of period) 18,144 18,144 18,144 Average licensed beds 18,139 18,144 18,142 Utilization of licensed beds 52.8 % 48.8 % 50.8 % Outpatient Visits Total visits 1,854,735 1,830,522 3,685,257 Paying visits (excludes charity and uninsured) 1,728,684 1,707,375 3,436,059 Charity and uninsured visits 126,051 123,147 249,198 Emergency department visits 670,678 640,774 1,311,452 Paying visits as a percentage of total visits 93.2 % 93.3 % 93.2 % Charity and uninsured visits as a percentage of total visits 6.8 % 6.7 % 6.8 % Revenues Net inpatient revenues $ 2,499 $ 2,400 $ 4,899 Net outpatient revenues $ 1,331 $ 1,343 $ 2,674 Revenues on a Per Admission, Per Patient Day and Per Visit Basis Net inpatient revenue per admission $ 13,504 $ 13,548 $ 13,526 Net inpatient revenue per patient day $ 2,899 $ 2,979 $ 2,937 Net outpatient revenue per visit $ 718 $ 734 $ 726 Net patient revenue per adjusted patient admission $ 12,128 $ 12,099 $ 12,114 Net patient revenue per adjusted patient day $ 2,629 $ 2,684 $ 2,656   Net Patient Revenues from: Medicare 20.6 % 20.1 % 20.4 % Medicaid 8.5 % 7.8 % 8.1 % Managed care 61.5 % 62.1 % 62.0 % Indemnity, self-pay and other 9.4 % 10.0 % 9.5 % (1)   Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the six months ended June 30, 2016 and 2015, associated outpatient facilities and six health plans and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015.     TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)   (Dollars in millions except per patient day,                     per admission, per adjusted admission Three Months Ended Year Ended and per visit amounts)   03/31/15     06/30/15     9/30/2015     12/31/2015     12/31/2015     Admissions, Patient Days and Surgeries Number of hospitals (at end of period) 67 67 67 67 67 Total admissions 185,147 179,135 176,885 176,051 717,218 Adjusted patient admissions 308,729 307,958 305,916 305,436 1,228,039 Paying admissions (excludes charity and uninsured) 176,023 170,389 167,463 166,962 680,837 Charity and uninsured admissions 9,124 8,746 9,422 9,089 36,381 Admissions through emergency department 118,326 113,741 110,235 110,291 452,593 Paying admissions as a percentage of total admissions 95.1 % 95.1 % 95.1 % 95.1 % 95.1 % Charity and uninsured admissions as a percentage of total admissions 4.9 % 4.9 % 4.9 % 4.9 % 4.9 % Emergency department admissions as a percentage of total admissions 63.9 % 63.5 % 62.3 % 62.6 % 63.1 % Surgeries — inpatient 48,295 49,291 49,527 49,239 196,352 Surgeries — outpatient 60,494 64,407 64,985 65,046 254,932 Total surgeries 108,789 113,698 114,512 114,285 451,284 Patient days — total 860,927 817,881 804,181 803,037 3,286,026 Adjusted patient days 1,421,505 1,391,305 1,374,619 1,379,612 5,567,041 Average length of stay (days) 4.65 4.57 4.55 4.56 4.58 Licensed beds (at end of period) 18,244 18,244 18,201 18,130 18,130 Average licensed beds 18,241 18,244 18,233 18,154 18,217 Utilization of licensed beds 52.4 % 49.3 % 47.9 % 48.1 % 49.4 % Outpatient Visits Total visits 1,762,868 1,815,393 1,792,264 1,806,125 7,176,650 Paying visits (excludes charity and uninsured) 1,639,131 1,691,554 1,659,417 1,680,609 6,670,711 Charity and uninsured visits 123,737 123,839 132,847 125,516 505,939 Emergency department visits 636,860 632,470 624,871 626,280 2,520,481 Paying visits as a percentage of total visits 93.0 % 93.2 % 92.6 % 93.1 % 93.0 % Charity and uninsured visits as a percentage of total visits 7.0 % 6.8 % 7.4 % 6.9 % 7.0 % Revenues Net inpatient revenues $ 2,382 $ 2,305 $ 2,289 $ 2,358 $ 9,334 Net outpatient revenues $ 1,226 $ 1,281 $ 1,288 $ 1,308 $ 5,103 Revenues on a Per Admission, Per Patient Day and Per Visit Basis Net inpatient revenue per admission $ 12,865 $ 12,867 $ 12,941 $ 13,394 $ 13,014 Net inpatient revenue per patient day $ 2,767 $ 2,818 $ 2,846 $ 2,936 $ 2,841 Net outpatient revenue per visit $ 695 $ 706 $ 719 $ 724 $ 711 Net patient revenue per adjusted patient admission $ 11,687 $ 11,644 $ 11,693 $ 12,003 $ 11,756 Net patient revenue per adjusted patient day $ 2,538 $ 2,577 $ 2,602 $ 2,657 $ 2,593   Net Patient Revenues from: Medicare 21.9 % 20.7 % 20.2 % 19.9 % 20.7 % Medicaid 9.4 % 8.3 % 8.8 % 8.3 % 8.7 % Managed care 59.1 % 61.6 % 61.7 % 61.8 % 61.1 % Indemnity, self-pay and other 9.6 % 9.4 % 9.3 % 10.0 % 9.5 % (1)   Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the six months ended June 30, 2016 and 2015, associated outpatient facilities and six health plans and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015.     TENET HEALTHCARE CORPORATION SEGMENT REPORTING (Unaudited)               June 30,     December 31,   2016     2015   Assets Hospital Operations and other $ 17,412 $ 17,353 Ambulatory Care 5,673 5,159 Conifer   1,155     1,170   Total

$

24,240

 

$

23,682

    Three Months Ended Six Months Ended June 30, June 30,   2016     2015     2016     2015   Capital expenditures: Hospital Operations and other $ 184 $ 166 $ 375 $ 341 Ambulatory Care 16 3 28 7 Conifer   5     6     10     11   Total $ 205   $ 175   $ 413   $ 359     Net operating revenues: Hospital Operations and other $ 4,202 $ 4,175 $ 8,599 $ 8,326 Ambulatory Care 442 142 871 233 Conifer Tenet 162 165 329 325 Other customers   224     175     442     357   Total Conifer revenues   386     340     771     682   Intercompany eliminations   (162 )   (165 )   (329 )   (325 ) Total $ 4,868   $ 4,492   $ 9,912   $ 8,916     Equity in earnings of unconsolidated affiliates: Hospital Operations and other $ 4 $ 10 $ 3 $ 14 Ambulatory Care   26     6     51     6   Total $ 30   $ 16   $ 54   $ 20     Adjusted EBITDA: Hospital Operations and other $ 415 $ 459 $ 829 $ 877 Ambulatory Care 139 49 275 78 Conifer   63     60     126     142   Total $ 617   $ 568   $ 1,230   $ 1,097     Depreciation and amortization: Hospital Operations and other $ 181 $ 178 $ 355 $ 369 Ambulatory Care 22 7 47 11 Conifer   12     12     25     24   Total $ 215   $ 197   $ 427   $ 404       TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS (Unaudited)   (Dollars in millions)     Three Months Ended June 30, 2016     2015        

AmbulatoryCare asReportedUnderGAAP

UnconsolidatedAffiliates

AmbulatoryCare asReportedUnderGAAP

UnconsolidatedAffiliates

Net operating revenues: Net operating revenues before provision for doubtful accounts $ 452 $ 505 $ 327 $ 534 Less: Provision for doubtful accounts   (10)   (14)   (5)   (14) Net operating revenues(1) 442 491 322 520 Equity in earnings of unconsolidated affiliates(2) 26 28 Operating expenses: Salaries, wages and benefits 147 116 104 127 Supplies 91 128 59 133 Other operating expenses, net 91 102 72 112 Depreciation and amortization 22 17 16 20 Impairment and restructuring charges, and acquisition-related costs 3 5 — 3 Gains on sales, consolidation and deconsolidation of facilities   (1)   —   —   — Operating income 115 123 99 125 Interest expense (35) (6) (34) (7) Other   —   1   —   — Net income from continuing operations, before income taxes 80 118 65 118 Income tax expense   (11)   (1)   (13)   (1) Net income

69

$

117

52

$

117

Less: Net income attributable to noncontrolling interests   60   42 Net income attributable to Tenet Healthcare Corporation common shareholders

$

9

$

10

Equity in earnings of unconsolidated affiliates

$

26

$

28

(1)   On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 11.7% during the three months ended June 30, 2016, with cases increasing 5.2% and revenue per case increasing 6.1%. (2) At June 30, 2016, 120 of the 334 facilities in the Company’s newly formed Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 214 facilities and account for these investments as consolidated subsidiaries.     TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS (Unaudited)       Six Months Ended June 30, 2016     2015        

AmbulatoryCare asReportedUnderGAAP

UnconsolidatedAffiliates

AmbulatoryCare asReportedUnderGAAP

UnconsolidatedAffiliates

Net operating revenues: Net operating revenues before provision for doubtful accounts $ 889 $ 984 $ 627 $ 1,020 Less: Provision for doubtful accounts   (18 )   (28 )   (10 )   (26 ) Net operating revenues(1) 871 956 617 994 Equity in earnings of unconsolidated affiliates(2) 51 49 Operating expenses: Salaries, wages and benefits 293 234 202 247 Supplies 177 251 110 256 Other operating expenses, net 177 204 145 220 Electronic health record incentives — — — — Depreciation and amortization 47 35 29 40 Impairment and restructuring charges, and acquisition-related costs 4 1 — 3 Gains on sales, consolidation and deconsolidation of facilities   (30 )   —     —     —   Operating income 254 231 180 228 Interest expense (70 ) (12 ) (68 ) (14 ) Other   —     1     —     —   Net income from continuing operations, before income taxes 184 220 112 214 Income tax expense   (19 )   (3 )   (22 )   (3 ) Net Income

165

$

217

  90 $ 211   Less: Net income attributable to noncontrolling interests(3)   135     76   Net income attributable to Tenet Healthcare Corporation common shareholders $ 30   $ 14   Equity in earnings of unconsolidated affiliates $ 51 $ 49 (1)   On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 11.4% during the six months ended June 30, 2016, with cases increasing 6.9% and revenue per case increasing 4.2%. (2) At June 30, 2016, 120 of the 334 facilities in the Company’s newly formed Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 214 facilities and account for these investments as consolidated subsidiaries. (3) During the six months ended June 30, 2016, the Company recorded $18 million of noncontrolling interests expense related to a $29 million gain on the consolidation of facilities (the gain is not included in Adjusted EBITDA) and an associated $7 million income tax benefit.    

Non-GAAP Financial Measures

Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss (income) attributable to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax benefit (expense), (5) investment earnings (losses), (6) gain (loss) from early extinguishment of debt, (7) interest expense, (8) litigation and investigation (costs) benefit, net of insurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, and (11) depreciation and amortization. Litigation and investigation costs do not include ordinary course of business malpractice and other litigation and related expense.

Adjusted net income from continuing operations, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) impairment and restructuring charges, and acquisition-related costs, (2) litigation and investigation costs, (3) gains on sales, consolidation and deconsolidation of facilities, (4) the associated impact of these three items on taxes and noncontrolling interests, and (5) net income (loss) from discontinued operations. Adjusted diluted earnings per share from continuing operations, a non-GAAP term, is defined by the Company as Adjusted net income from continuing operations divided by the weighted average diluted shares outstanding in the reporting period.

Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) net cash provided by (used in) operating activities, less (2) purchases of property and equipment from continuing operations.

Adjusted Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) Adjusted net cash provided by (used in) operating activities from continuing operations, less (2) purchases of property and equipment from continuing operations. Adjusted net cash provided by (used in) operating activities, a non-GAAP measure, is defined by the Company as cash provided by (used in) operating activities prior to (1) payments for restructuring charges, acquisition-related costs and litigation costs and settlements, and, (2) net cash provided by (used in) operating activities from discontinued operations.

The Company believes the foregoing non-GAAP measures are useful to investors and analysts because they present additional information on the Company’s financial performance. Investors, analysts, Company management and the Company’s Board of Directors utilize these non-GAAP measures, in addition to GAAP measures, to track the company’s financial and operating performance and compare the Company’s performance to its peer companies, which utilize similar non-GAAP measures in their presentations. The Human Resources Committee of the Company’s Board of Directors also uses certain of these measures to evaluate management’s performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specific non-GAAP measures used in this release is set forth below.

The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the estimated fair value of shares of the Company’s common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.

We use, and we believe investors and analysts use, Free Cash Flow and Adjusted Free Cash Flow as supplemental measures to analyze cash flows generated from our operations because we believe it is useful to investors in evaluating our ability to fund distributions paid to noncontrolling interests, acquisitions, purchasing equity interests in joint ventures or repaying debt.

These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in our financial statements, they do not provide a complete measure of our operating performance. For example, the Company’s definitions of Free Cash Flow and Adjusted Free Cash Flow do not account for other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company’s Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company’s financial performance.

A reconciliation of Adjusted EBITDA to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #1 below for the three and six months ended June 30, 2016 and 2015. A reconciliation of Adjusted net income from continuing operations to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #2 below for the three and six months ended June 30, 2016 and 2015. A reconciliation of Free Cash Flow and Adjusted Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP measure, is set forth in Table #3 below for the three and six months ended June 30, 2016 and 2015.

   

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #1 – Reconciliation of Adjusted EBITDA to Net Income Available

(Loss Attributable) to Tenet Healthcare Corporation Common Shareholders

(Unaudited)

  (Dollars in millions)     Three Months Ended     Six Months Ended June 30, June 30,   2016         2015     2016         2015   Net loss attributable to Tenet Healthcare Corporation common shareholders $ (46 ) $ (61 ) $ (105 ) $ (14 ) Less: Net income attributable to noncontrolling interests (85 ) (33 ) (178 ) (62 ) Net loss from discontinued operations, net of tax   (2 )   (1 )   (6 )   —   Net income (loss) from continuing operations 41 (27 ) 79 48 Income tax benefit (expense) 16 27 (51 ) 11 Investment earnings (losses) 2 (1 ) 3 (1 ) Interest expense   (244 )   (217 )   (487 )   (416 ) Operating income 267 164 614 454 Litigation and investigation costs (114 ) (14 ) (287 ) (17 ) Gains on sales, consolidation and deconsolidation of facilities 1 — 148 — Impairment and restructuring charges, and acquisition-related costs (22 ) (193 ) (50 ) (222 ) Depreciation and amortization   (215 )   (197 )   (427 )   (404 ) Adjusted EBITDA $ 617   $ 568   $ 1,230   $ 1,097     Net operating revenues $ 4,868   $ 4,492   $ 9,912   $ 8,916     Net income (loss) from continuing operations as a % of operating revenues (0.9 )% (1.4 )% (1.1 )% (0.2 )%   Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) 12.7 % 12.6 % 12.4 % 12.3 %    

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #2 – Pre-Tax, After-Tax and Earnings Per Share Impact of Certain Items on Continuing Operations

(Unaudited)

      Three Months Ended     Six Months Ended (Dollars in millions except per share amounts) June 30, June 30,   2016         2015     2016         2015   Adjustments to calculate Adjusted Diluted EPS (Expense) Income Impairment and restructuring charges, and acquisition-related costs $ (22 ) $ (193 ) $ (50 ) $ (222 ) Litigation and investigation costs (114 ) (14 ) (287 ) (17 ) Gain on sales, consolidation and deconsolidation of facilities   1     —     148     —   Pre-tax impact $ (135 ) $ (207 ) $ (189 ) $ (239 ) Tax impact of above items $ 53   $ 71   $ 25   $ 82   Total after-tax impact $ (82 ) $ (136 ) $ (164 ) $ (157 ) Noncontrolling interests impact   —     —     (18 )   —   Total income (loss) from items above $ (82 ) $ (136 ) $ (182 ) $ (157 )   Net income available (loss attributable) to common shareholders $ (46 ) $ (61 ) $ (105 ) $ (14 ) Less net income (loss) discontinued operations, net of tax   (2 )   (1 )   (6 )   —   Net income (loss) from continuing operations, net of tax $ (44 ) $ (60 ) $ (99 ) $ (14 ) Net loss (income) from adjustments above   82     136     182     157   Adjusted net income (loss) $ 38   $ 76   $ 83   $ 143     Weighted average dilutive shares outstanding (in thousands) 100,727 101,917 100,531 101,395 Diluted earnings per share from continuing operations $ (0.44 ) $ (0.60 ) $ (1.00 ) $ (0.14 )

Adjusted diluted EPS from continuing operations

$ 0.38 $ 0.75 $ 0.83 $ 1.41    

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow

(Unaudited)

      Three Months Ended     Six Months Ended (Dollars in millions) June 30, June 30,   2016         2015     2016         2015   Net cash provided by (used in) operating activities $ 435 $ 410 $ 582 $ 353 Purchases of property and equipment   (205 )   (175 )   (413 )   (359 ) Free cash flow $ 230   $ 235   $ 169   $ (6 )   Net cash provided by (used in) investing activities $ (266 ) $ (798 ) $ 54 $ (985 ) Net cash provided by (used in) financing activities $ (241 ) $ 502 $ (336 ) $ 738   Net cash provided by (used in) operating activities $ 435 $ 410 $ 582 $ 353 Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements (30 ) (53 ) (99 ) (86 ) Net cash used in operating activities from discontinued operations   3     (4 )   —     (8 ) Adjusted net cash provided by operating activities – continuing operations 462 467 681 447 Purchases of property and equipment – continuing operations   (205 )   (175 )   (413 )   (359 ) Adjusted free cash flow – continuing operations $ 257   $ 292   $ 268   $ 88      

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #4 – Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders

(Unaudited)

  (Dollars in millions)     Q3 2016     2016 Low     High Low     High Net income (loss) attributable to Tenet Healthcare Corporation common shareholders $ 5 $ 25 $ (80 ) $ (40 ) Less: Net (income) loss attributable to noncontrolling interests (80 ) (90 ) (350 ) (370 ) Net loss from discontinued operations, net of tax   (5 )   -     (15 )   (10 ) Income from continuing operations 90 115 285 340 Income tax expense   (15 )   (25 )   (115 )   (140 ) Income from continuing operations, before income taxes 105 140 400 480 Interest expense   (240 )   (245 )   (970 )   (980 ) Operating income 345 385 1,370 1,460 Gains on sales, consolidation and deconsolidation of facilities(a) - - 147 147 Impairment and restructuring charges, acquisition-related costs and litigation costs and settlements(a) - - (337 ) (337 ) Depreciation and amortization   (205 )   (215 )   (840 )   (850 ) Adjusted EBITDA $ 550   $ 600   $ 2,400   $ 2,500     Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) 11.6 % 12.4 % 12.3 % 12.6 %   Net income (loss) from continuing operations $ 10 $ 25 $ (65 ) $ (30 )   Net income (loss) from continuing operations as a % of operating revenues 0.2 % 0.5 % (0.3 )% (0.2 )%         Net operating revenues $ 4,750   $ 4,850   $ 19,500   $ 19,800     Adjusted EBITDA $ 550 $ 600 $ 2,400 $ 2,500 Depreciation and amortization (205 ) (215 ) (840 ) (850 ) Interest expense   (240 )   (245 )   (970 )   (980 ) Adjusted income from continuing operations before income taxes 105 140 590 670 Income tax expense   (15 )   (25 )   (125 )   (150 ) Adjusted income from continuing operations 90 115 465 520 Net income attributable to noncontrolling interests   (80 )   (90 )   (330 )   (350 ) Adjusted net income attributable to common shareholders $ 10   $ 25   $ 135   $ 170     Basic weighted average shares outstanding 100 100 99 99   Fully diluted weighted average shares outstanding (in millions) 102 102 102 102   Diluted earnings per share from continuing operations $ 0.10 $ 0.25 $ (0.66 ) $ (0.30 )   Adjusted diluted earnings per share from continuing operations $ 0.10 $ 0.25 $ 1.32 $ 1.67

(a)

  Company does not forecast impairment and restructuring charges, acquisition-related costs and litigation costs and settlements and gains on sales, consolidation and deconsolidation of facilities because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook.    

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow for the Year Ending December 31, 2016   (Dollars in millions)     2016 Low     High Net cash provided by operating activities $ 1,177 $ 1,337 Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(a) (98 ) (98 ) Net cash used in operating activities from discontinued operations   (25 )   (15 ) Adjusted net cash provided by operating activities – continuing operations $ 1,300 $ 1,450 Purchases of property and equipment – continuing operations   (900 )   (850 ) Adjusted free cash flow – continuing operations $ 400   $ 600  

(a)

  Company does not forecast impairment and restructuring charges, acquisition-related costs and litigation costs and settlements because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items may be indeterminable at the time the Company provides its financial Outlook.

Tenet Healthcare CorporationCorporate CommunicationsCharles Nicolas, 469-893-2640mediarelations@tenethealth.comorInvestor RelationsBrendan Strong, 469-893-6992investorrelations@tenethealth.com

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